Wo Ping Ching t/a Waysing Knitting & Embroidery Factory v. Dragon Knitting Factory

CACV000005/1969

IN THE SUPREME COURT OF HONG KONG

(APPELLATE JURISDICTION)

CIVIL APPEAL NO. 5 OF 1969

(On Appeal from O.J. Action No. 339 of 1968)

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Coram: Full Court: Blair-Kerr, Huggins, JJ.

Date of Judgment: 25 February 1970

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JUDGMENT

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Blair-Kerr, J.:-

1. On 31st May, 1965, the appellant (defendant) and the respondents (plaintiffs) signed two contracts (numbered WA-001 and WA-002) in each of which the plaintiffs are described as the "sellers" and the defendants are described as the "buyers". Each contract recites that "the buyers have this day purchased from the sellers the following goods on the terms and conditions contained below and on the back hereof".

2. WA-001 is a contract for the sale and purchase of 1,800 pieces white shell "as per submitted sample"; and, from various documents admitted in evidence, it would appear that white shell is a type of woollen vest. Three styles are mentioned viz. FL-8, 315, and B-4000; and the contract provides for the sale and purchase of 600 pieces of each of these three styles. The sale price of each style is stated in terms of U.S. dollars "F.O.B. Hong Kong less cost of 1200 lbs. of white woollen yarn at HK$9.-per lb. to be supplied by the buyers". Then follow three provisions which read as follows:-

Contract WA-002 provides for the sale and purchase of 3,000 pantsweaters as follows:-

Again, the sale prices are quoted in U.S. dollars "F.O.B. Hong Kong less cost of 2,800 lbs. of white woollen yarn at HK$9.- per lb. to be supplied by the buyers." Then follow three provisions relating to shipment, packing and payment by letter of credit in terms similar to the corresponding provisions in contract WA-001.

3. A further condition of each contract was that the "sellers" would arrange for the issue of all necessary Certificates of Origin.

4. Broadly, what the contracts appear to say is: Provided the defendant shall deliver to the plaintiffs 4,000 lbs. of white woollen yarn, the plaintiffs shall sell to the defendant 4,800 garments of various kinds at specified prices less the cost of the yarn; but the plaintiffs were obliged to pack the garments in a specified way and deliver them on board some unspecified ship or aircraft for conveyance abroad to some unspecified destination. As regards the samples, it would appear that they were additional to, and not included in, the figure 4,800.

5. In their statement of claim, the plaintiffs pleaded that

6. The plaintiffs claimed that they had delivered to the defendant all the garments which they had contracted to deliver; and that the defendant had failed to pay the full contract price therefor. Particulars as given in the statement of claim are as follows:-

7. It transpired during the hearing of the action that the $1,419.80 "Labour charges" had nothing to do with the two contracts WA-001 and WA-002. Nevertheless, the plaintiffs were prepared to give the defendant credit for this sum.

8. The defendant pleaded that the prices of the goods were on the basis of delivery f.o.b.; he denied that he had ever waived this provision in the contracts. He pleaded that the plaintiffs had failed to pack the goods; and that, on balance, the plaintiffs owed him $795.18. The particulars which he gave in his original statement of defence and counter-claim were as follows:-

9. In their Reply, the plaintiffs alleged that:

10. The original statement of defence and counterclaim is dated 29th April 1968, and the Reply is dated 21st May 1968. On 19th December 1968, the defendant filed an amended statement of defence and counterclaim. In it he alleged that the plaintiffs had delivered part only of the goods contracted for; and he amended the particulars of his counterclaim thus:-

11. The plaintiffs sent four invoices to the defendant in respect of the garments which they alleged they had delivered to him. The first (No.2-6-65 dated 28th June 1965) was in respect of the 1800 vests, the subject matter of contract W.A.001. Item (i) of para. 5 of the particulars given in the statement of claim is a precis of the details given in that invoice. Item (ii) of those particulars is a precis of the details given in the next two invoices (No. 3-6-65 of 28th June 1965 and No.4-7-65 of 17th July 1965). They refer to the garments contracted for under W.A.002. Item (iii) of the particulars is a precis of the details given in the fourth invoice dated 12th July 1965.

12. The prices of the garments as given in the four invoices are as follows:-

In the original statement of defence and counterclaim under the heading "price of goods sold by plaintiffs to defendant" the figure is $63,456.12. During the trial the defendant maintained that he was entitled to a discount of 20% on the samples invoice. If the figure $1,942.65 is reduced by 20%, the result is $1,554.12; and if this figure is added to the three amounts shown in the three invoices nos. 2-6-65, 3-6-65 and 4-7-65 above, the total is $63,456.12.

13. It would appear therefore that, in his original statement of defence and counterclaim, the defendant admitted receipt of the garments as enumerated in the four invoices i.e. 4800 under the two contracts as the prices stated in the contracts except that he was maintaining that there should be a reduction of 20% in the price of the additional 148 samples. However, in the amended statement of defence and counterclaim, the figure under the heading "price of goods sold by plaintiffs to defendant" was reduced to $58,728.52. Furthermore, the defendant abandoned his allegation that on 3rd July 1965 he made a payment of $8,000 on account. On the other hand, whereas in his original defence he agreed that he had made four payments to account totalling $15,419.80, in his amended pleading this figure was increased by $3,700 to $19,119.80. He also inserted a new item of $1,290.15 said to be "prices of 105 pieces of woollen yarns taken by plaintiffs from defendant". Both the original and amended pleadings claim "costs of packing paid by the defendant $2,317" and "costs of taking delivery and putting goods on board by defendant $1,200".

14. The learned judge gave judgment for the plaintiffs on their claim for $12,240.17 and dismissed the defendant's counterclaim for $2,512.93. The defendant has appealed against this decision, stating his grounds of appeal in these terms:-

15. In support of the plaintiffs' claim the plaintiffs' managing partner (Leung Shiu Sang) produced a bundle of receipts which had admittedly been signed by members of the defendant's staff on various occasions when garments were delivered to the defendant. These documents make reference to various style numbers; but several of them state simply that a number of "vests" or "woollen garments" had been received by the defendant. If one treats the deliveries of "vests" as relating to contract W.A.001, it would appear that 2685 garments were actually delivered to the defendant under this contract. This total is made up as follows:-

16. If one treats the references to "woollen garments" on the receipts as relating to contract WA-002, it would appear that 3083 garments were delivered under this contract, as follows:-

The receipts also indicate that 24 samples were delivered on the 9th July 1965. Therefore the total number of garments apparently delivered to the defendants is as follows:-

that is to say, 992 garments in excess of the 4,800 garments which the defendant agreed to purchase under the two contracts. Among the plaintiffs' receipts, however, there are two receipts dated 24th and 25th June 1965 which indicate that 96 and 53 (i.e. 149) garments were returned to the plaintiffs. This reduces the figure 992 to 843, or, if one disregards the samples, to 819.

17. Clearly, the style numbers as given on the receipts are inaccurate. It was never suggested by the defendant in evidence that the plaintiff had not delivered any garments of style FL-4 or that they had delivered only 14 garments of style KL-1004 and 12 garments of style KL-7!

18. At the trial the judge endeavoured to elucidate how it came about that the receipts showed many more garments delivered than had been contracted for and the plaintiff was recalled to the witness stand. In his judgment, the learned judge states:-

19. I do not see how the production of receipts by the defendant's customers could have established how many garments the plaintiffs delivered to the defendant. In any event the onus was upon the plaintiffs to prove deliveries in accordance with the terms of the contracts. However, apart from these criticisms of this passage from the judgment I do not think that it was shown that the plaintiffs delivered far more garments than they had contracted to deliver. The receipts clearly indicate that the defendant acknowledged receipt of 819 garments in excess of the number contracted for. But Leung is recorded as having said:-

and in other parts of his evidence, he stated that certain garments were passed to him for ironing after the embroidery process was completed. What he appears to have been endeavouring to say to the court was that in the course of the garments passing to and for, the defendant had probably acknowledged receipt of a certain number of garments twice, that is to say when they were delivered to him for embroidering and later after bleaching and ironing by the plaintiffs. There is nothing in Leung's evidence or in the evidence of the defendant to suggest that (apart from the samples) the plaintiffs delivered a greater number of garments than the number contracted for. Indeed the defendant in evidence maintained that the plaintiff had delivered 345 garments less than the stipulated 4,800; and it is not without significance that when the defendant was shown the bundle of receipts during the trial, he said that some 326 garments appeared to have been acknowledged by his staff twice over.

20. The defendant was cross-examined about the plaintiff's four invoices. The judge's brief note of the defendant's evidence reads:-

"3rd June 1965", "2nd June 1965" and "4th July 1965" appear to be an erroneous way of describing the three invoices Nos. 3-6-65 and 2-6-65 both dated 28th June 1965 and No. 4-7-65 dated 17th July 1965. Another passage from the defendant's cross-examination reads:-

21. From this it would appear that the defendant did not challenge the accuracy of the first two invoices. His main challenge was in regard to the deliveries alleged in the third invoice No.4-7-65. The plaintiffs' invoice alleges that 2,400 garments were delivered. As we understand the evidence, the defendant alleged that only 2,055 garments were delivered to him, i.e. 345 garments less than 2,400.

22. Leung's evidence was to the contrary. At one point he said,

Later the following passage appears in the record of his cross-examination:-

I find this passage very confusing. The last sentence, on the face of it, would appear to indicate an admission on the part of the plaintiffs' managing partner that 2055 (not 2400 garments) were actually delivered under Ex. E; but, if that is so, it is inconsistent with the whole of the remainder of his evidence which was to the effect that he had fulfilled his part of the bargain under the contracts. Towards the end of his cross-examination Leung said in answer to a question by the defendant:-

and the defendant had calculated this figure in his counterclaim on the basis that 2055 (not 2400) garments had been delivered under invoice No. 4-7-65.

23. As regards the samples delivered (that is to say the garments enumerated in the invoice for $1,942.65 dated 12th July 1965 which was admitted in evidence as Ex.G) the defendant cross-examined Leung about this invoice. He apparently put it to Leung that there should be a discount of 20%. The judge's note of Leung's answer reads:-

The judge's note of the defendant's evidence on this subject reads:-

Another passage from the earlier part of his evidence reads:

24. In his judgment the learned judge states:-

"The third invoice is for 148 samples at $1,942.65.

25. The defendant's figure "$58,728.52" in his defence and counterclaim appears to be made up as follows:-

26. The defendant produced the copy of Ex.G which he had received from the plaintiffs. He appears to have written thereon "less 20% $1,546.12." 20% of $1,942.65 is $388.53; and, if this latter figure is deducted from $1,942.65, one gets $1,554.12. The defendant appears to have made a slight miscalculation. But his endorsement of the invoice with the suggestion that he should be given credit for 20% in accordance with an alleged custom of the trade lends no support to his evidence that he was not liable to pay anything at all for the samples.

27. Apart from the receipts signed by the defendant and his staff, the trial Judge had no means of checking the parties' allegations in regard to the number of garments delivered. Although the defendant had acknowledged receipt of considerably more than 4,800 garments, no doubt there was a certain amount of duplication due to the fact that an unknown number of garments, after embroidering, were returned to the plaintiffs for ironing and bleaching, and the garments were then delivered to the defendant for the second time. The reason for the return of the 149 garments to the plaintiffs on the 24th and 25th June is not known; it may have been for the purpose of ironing, bleaching or to rectify some defect. Be that as it may, Leung maintained throughout his evidence that he had delivered 4,800 garments under the two contracts; and in the end, the question for the Judge was one of credibility. In his judgment the learned trial judge said:-

28. The judge saw and heard the witnesses. There was evidence upon which he could find that 4,800 garments plus the samples had been delivered by the plaintiffs to the defendant; and it was open to him to disbelieve the defendant's allegation that there was a deficiency of 345 garments delivered.

29. We agree with the learned judge that there was insufficient evidence of a custom of the trade to warrant any reduction in the amount charged in respect of the samples; and if 4,800 garments plus the samples were manufactured and delivered to the defendant, it follows that the figure $58,728.50 in the defence and counterclaim is inaccurate. The "price of goods sold by plaintiff to defendant" should be the total of the four figures shown on the plaintiffs' four invoices namely:-

30. In their invoice No. 2-6-65, the plaintiffs give the defendant credit for the cost of 1200 lbs. of yarn at $9 per lb. as stipulated for in contract WA-001. On invoice No. 4-7-65 (which relates to contract WA-002) the following endorsement appears:-

In other words the plaintiffs give the defendant credit for having supplied 1200 + 500 + 2438.25 lbs. of wool. The total of these three figures is 4138.25. But they allege that they gave back 101.0625 lbs. of wool to the defendant. In evidence the defendant did not dispute the fact that he had received back 101.0625 lbs. of yarn. He could hardly have done otherwise because the plaintiffs produced receipts signed by his employees; but he maintained that the plaintiffs should pay for the whole amount of wool supplied by him initially; and in his defence and counterclaim the figure $37,264.50 is the price of 4140.5 lbs. at $9 per lb. The figures 4140.5 lbs appear to have been based on certain figures written on a sheet of notepaper belonging to the plaintiffs which was put in evidence as Ex. C. However the difference between 4140.5 and 4138.25 is so small that for the purposes of this appeal we shall assume that the plaintiffs are correct in alleging that they received 4138.25 lbs. initially. We see no reason why the plaintiffs should not take credit for having returned 101.0625 lbs. of wool to the defendant, and we do not propose to question their allegation that it was agreed that the defendant should supply 500 lbs. of wool for $8.70 and not $9 per lb. as stipulated in the contract. The question was not raised in the court below and we are content to regard it as an admission on the part of the plaintiffs that they obtained this quantity of wool at rather less than the contract price. In their statement of claim they have credited the defendant with $36,184.68 ($10,800 + $25,384.68) being the price of 4037.1875 lbs. of wool (4138.25 less 101.0625). In our view $36,184.68 is correct; and the defendants allegation that he should be given credit for $37,264.50 is incorrect.

31. Turning to item 2 of the defendant's counterclaim ("Payments on account by defendant"), as I have already said, in his original statement of defence the defendant admitted that the plaintiffs' figure ($15,419.80) was accurate. But he alleged that he had paid a further $8,000 to the plaintiffs on 3rd July. In his amended statement of defence the defendant abandoned this allegation. However, in evidence, he produced a document (Ex.D) written on the plaintiffs' notepaper addressed to the defendant. It is in Chinese. A translation reads as follows:-

The document bears a 15-cent stamp and this is followed by the figures "$8,000", a signature "Wing" and the plaintiffs' chop.

32. The defendant said that on 3rd July Leung had phoned him and asked him for a loan of $8,000 and gave him "a chit" - presumably Ex.D. He said that he told Leung that he did not have so much cash, but that he gave Leung $3,000 in cash and a $5,000 cheque. A little later in his examination-in-chief he alleged that on 6th October he gave Leung $4,000; and he then gave a list of sums which he alleged he had paid to the plaintiffs, as follows:-

33. It appears from the record that the defendant may have put it to Leung in cross-examination that all these sums had been paid. But the only record made by the judge is as follows:-

There is no record of what, if anything, Leung said in regard to each or any of these alleged payments. Shortly after this, however, the following note appears in the record:-

$61,241.45 is the same figure as the total of items 1 to 5 in the defendant's amended counterclaim; and I suppose it may be said that Leung's refusal to agree that $61,241.45 was accurate implies his non-acceptance of the defendant's allegations in regard to item 2 of the counterclaim. But the record is far from satisfactory.

34. In cross-examination the defendant produced a cheque No. K770052 for $5,000 dated 8th July 1965 drawn on the Nanyang Commercial Bank Ltd. in favour of the plaintiffs (Ex.P). Attached to it there is a bank memo indicating that the cheque had been dishonoured. It is marked: "refer to drawer". On the back of the cheque there appear figures and Chinese characters which (translated) read:-

The record of the defendant's cross-examination on the subject is very difficult to follow. It reads:-

On 15th February, 1966, the plaintiffs wrote to the defendant as follows:-

The statement of account enclosed with that letter reads:-

From this statement of account, it appears that all garments had been delivered by 10th July 1965; that the payment on 28th July was by cheque (not cash) and that the last payment to account by the defendant was made on 6th November, 1965 - not the 11th November as pleaded or the 6th October as stated in the record of the defendant's evidence.

35. The only reply the plaintiff received from the defendant was a short letter dated 21st February 1966 which reads:-

In their statement of claim the plaintiffs acknowledge having received from the defendant:-

The difference between $15,419.80 and the corresponding figure shown in the counterclaim viz. $19,119.30 is $3,700. It may be surmised from the judge's record of the defendant's evidence that the $3,700 is the total of the $3,000 allegedly paid on 3rd July, the $300 allegedly paid on 10th July and the $400 allegedly paid on 30th October, 1965.

36. At page 6 of his judgment, the learned judge states that there was "no evidence to support" item 2 of the counterclaim. This is quite incorrect. The plaintiffs admitted that the defendant had paid $15,419.80 and this figure was agreed by the defendant in his original statement of defence and counterclaim. The plaintiffs did not admit that the defendant had paid the additional $3,700. The defendant appears to have alleged in evidence that the total of the payments made by him to the plaintiffs was $19,119.80; but the judge obviously disbelieved him. In stating, therefore, that there was "no evidence to support" item 2 of the counterclaim, I presume the learned judge meant that there was no evidence acceptable to him to support the defendant's allegations that he had paid $3,000 on 3rd July, $300 on 10th July and $400 on 30th October 1965.

37. Turning to item 5 in the counterclaim, viz. $1,290.15, the record of the defendant's evidence in regard to this item reads as follows:-

38. On the hearing of the appeal we questioned the defendant (who appeared in person) as to what he had said at the trial as we found the record very difficult to comprehend. He told us that the plaintiffs, for some reason which he did not explain, had "taken away" 15 sweaters which he (the defendant) valued at $412.56; that 60 garments supplied by the plaintiff were of such inferior quality that they could not be exported and had to be sold locally and that this resulted in a loss of $526.02; that another lot of vests were also of inferior quality and that the loss on their sale locally was $51.57; and that the plaintiffs owed him $300 which had been awarded to him by way of costs in certain litigation in 1966 (not connected in any way with the two contracts which were the subject matter of this action).

39. The four sums mentioned by him certainly add up to $1,290.15. But how the item comes to be described in the pleading as "prices of 105 pieces of woollen yarns taken by plaintiff from defendant" is not known.

40. In his judgment the learned judge states that there was "no evidence to support" item 5. It is true that there was no evidence to support the defendant's allegation that the $1,290.15 represented the price of "105 pieces of woollen yarn taken by plaintiff from defendants", and there was no reference in the defence and counterclaim to loss on resale of inferior quality garments, or the plaintiff's alleged indebtedness in respect of $300 costs, or that the plaintiffs "took away" a number of sweaters.

41. But apart from any defect in pleading it would appear that the judge disbelieved the defendant. In his judgment the learned judge said:-

I think it is safe to presume that what the judge meant by saying that there was "no evidence to support" item 5 of the counterclaim was that there was no evidence which was acceptable to him even if the defendant had been permitted to amend his pleading in such a way as to make his evidence relevant and intelligible.

42. At this stage, we feel bound to say that we have had the greatest difficulty in understanding the record of the proceedings in the court below. It appears that no shorthand note was taken of the evidence, and what was supplied to this Court was a transcript of the note taken by the judge himself for his personal use. We do not understand why no shorthand note was taken because there is nothing on the record to indicate that the judge ordered otherwise; and we can only assume that the absence of shorthand reporters in his court during the trial escaped his notice.

43. Order 68, rule 1(1) so far as relevant, reads:-

The rule is mandatory. A shorthand note of the evidence given orally in every action or other proceeding in the court must be taken, unless the judge otherwise directs. The judge's discretion to order otherwise is, of course, unfettered. But his direction must appear on the record: and it is certainly desirable that his reasons for so directing should also be recorded. If he is himself able to record a full note, it may be that he would be justified in dispensing with the presence of shorthand writers. But whatever course is adopted the purpose of the rule is clear. It is to ensure that any person who was not present in court may know what the witnesses said, or at least the substance of what they said, by reference to the written record of the proceedings. In this case the note recorded by the judge is clearly the sort of note which judges take to remind themselves of the evidence when preparing to sum up to a jury or deliver a judgment. It is simply not good enough for any person who was not present at the trial to whom it necessarily appears incomplete, ambiguous, and in some places, nonsensical.

44. The defendant's first ground of appeal, namely "that the judgment was against the weight of evidence" is not such a ground as, standing alone, this Court would permit an appellant to argue if he had the assistance of counsel. In this case, however, the defendant was not legally represented; and we have necessarily had to endeavour to ascertain what his grounds of appeal are by listening to his submissions and by putting questions to him.

45. One criticism of the judgment was that there were no clear findings on a number of factual issues. The defendant referred to the evidence which he said he gave regarding inferior garments which he had to sell at a loss; and he pointed out that there was no finding as to whether the garments were defective or whether they were sold at a loss. As I have already said, such matters were not raised on the pleadings; but even if the defendant had been permitted to amend his defence, looking at the judgment as a whole I do not think that it would in any way have affected the result of the trial.

46. The defendant's main contentions were:-

47. As regards the second of these two submissions, clearly the documents which the defendant suggested should have been produced would have been inadmissible as being self-serving evidence.

48. As regards the contention that Leung should have been disbelieved, it has been said over and over again that an appellate court which has not had the advantage of seeing and hearing the witnesses should be slow to interfere with the findings of a trial judge; and that is manifestly good sense. But the trial judge's findings must be based on evidence; and if it is not possible to say with reasonable certainty what evidence was given by the witnesses at the trial, no appellate court can attempt to answer the question: Was the judgment against the weight of the evidence?

49. We have seriously considered whether we should send this case back for retrial. We heard the submissions of the parties on the hearing of the appeal. But, as so often happens when appellants are not professionally represented, the greater part of the submissions consisted of a new presentation of the evidence given at the trial accompanied by an attempt to persuade the court to consider further evidence which was not adduced at the trial. However, having listened to the submissions of both parties and having carefully re-read the record in the light of those submissions, we have come to the conclusion, not without very considerable hesitation, that the decision of the learned judge was not against the weight of the evidence; and, in our view, the first ground of appeal accordingly fails.

50. As regards the second ground of appeal, the learned judge at page 1 of his judgment said:-

and at pages 2 and 3 of the judgment the following passage occurs:-

51. The judge's note of the relevant portion of the defendant's examination-in-chief reads:-

52. The judge's note of part of the defendant's answers to questions in cross-examination reads:-

It was then, apparently, put to him that he had to ship the goods before he was paid by his U.S. buyers and he agreed that that was so: the judge's note continues thus:-

53. The suggestion that the plaintiffs had not delivered all the garments by 6th October is at variance with the statement of account forwarded to the defendant on 15th February 1966, in which it is alleged that all goods under the contracts had been delivered by 10th July. In any event, the judge appears to have rejected the defendant's suggestion. that it was verbally agreed on 6th October that the defendant would arrange for the packing and "transport" and that the plaintiffs would repay him. He accepted the plaintiffs' evidence that no mention was ever made about the plaintiffs packing and shipping the garments till after they had been delivered to the defendant.

54. Towards the close of his cross-examination it was put to the defendant that his U.S. customer was dissatisfied with the garments which the defendant had shipped to him and that he (the defendant) had not been paid by his U.S. customer, the obvious suggestion being that the only reason he was defending this action was because his U.S. customer had not paid him. He agreed that his U.S. customer was dissatisfied with the garments; but he denied that he had not been paid for them; and there was no evidence to the contrary.

55. Obviously, the two contracts WA-001 and WA-002 did not incorporate everything agreed upon verbally by the parties. Clearly, the plaintiffs had been told that the U.S. buyer required embroidered garments and that the defendant would do the embroidery after the garments had been knitted by the plaintiffs. The contracts made no provision for the plaintiffs' returning the garments to the defendant to enable him to complete the embroidery process; and, even if we assume that the plaintiffs knew to whom the garments were to be consigned in the United States (and there was no evidence of that - indeed there was ample evidence to the contrary) what recourse would the defendant have had if the plaintiffs had chosen to ship them in their unembroidered state? In making his submission to this Court Leung put the position in another way. Referring to the date of shipment in the contracts (30th June), he said: "How could anyone in my position have agreed to such a thing? How was I to know how long the defendant would take to embroider the garments and return them to me for shipment?"

56. However, the fact remains that he did sign the two contracts. Although the plaintiffs were legally represented in the court below no application was made to rectify the contracts; and neither the defendant, nor the judge appears to have questioned the admissibility of parol evidence to contradict the writing. What was contended for by the plaintiffs was not a collateral agreement, but an outright rejection of some of the terms contained in the writing. So far as the defendant's evidence goes, he relied upon a collateral agreement; but he admitted that it was not pleaded. Despite that, he was allowed to give evidence of it without objection. According to that evidence it was originally agreed that the plaintiffs should do the packing, but this term had to be changed because of some unspecified delay. The learned judge said the defendant admitted that he was responsible for the packing and shipping of the goods but did not mention that the admission was based upon a collateral agreement rather than upon the original contracts: he found that it was never agreed that the plaintiffs "should bear the cost of the packing and transport of the goods". That simply means that he disbelieved the appellant; and of that there can be no doubt.

57. In our view it was not sufficient for the plaintiffs to plead that 3 terms were mistakenly carried into the contracts from the contract made by the defendant with his overseas buyers; and, in the absence of a successful application for rectification of the contracts, and perhaps a successful application on the part of the defendant to amend his pleadings, we do not think that it was open to the judge to conclude that the written contracts were not contracts at all but "nothing more than a framework within which the parties regulated their conduct ignoring the special conditions which would not apply to them."

58. The question arises as to what this Court should do. It would undoubtedly be more satisfactory if the case were to go back for retrial. However, having regard to the learned judge's views as to the credibility of the witnesses, there appears to be no doubt what his conclusion would have been if the contracts had been rectified and the pleadings amended.

59. A retrial would delay a resolution of the dispute still further and would put the parties to additional expense. It is unlikely that either would be professionally represented at the trial; and therefore, not without hesitation, we have come to the conclusion that we should consider this appeal on the basis that the plaintiffs applied for, and obtained, rectification of the contracts on the lines of their pleadings. We would emphasize however that the course we have decided to adopt in this case should not be treated as creating a precedent. For these reasons the second ground of appeal fails.

60. To summarise, for the reasons we have given, the amounts under items 1 and 2 in the counterclaim should be $36,184.68 and $15,419.80 respectively. The cost of packing and delivery on board (items 3 and 4 of the counterclaim) were the concern of the defendant. The defendant's claim under item 5 necessarily failed; and "the price of goods sold by the plaintiffs to defendant" should be $63,844.65. The position on the counterclaim, therefore, is:-

This is the amount claimed by the plaintiffs in their Statement of Claim.

61. For these reasons the appeal is dismissed.