Mak Ping Kui t/a Yet Hing Knitting Garment Factory v. Millionice Ltd. t/a Blessings Trading Co.

HCA000940/1998

HCA940/1998

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.940 OF 1998

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Coram: Hon Cheung J in Court

Dates of Hearing: 22, 23 and 26 March 2001

Date of Judgment: 25 April 2001

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J U D G M E N T

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The plaintiff's case

1. In this case, the plaintiff seeks the sum of $66,404 and $181,804 respectively from the defendant.

2. The defendant had asked the plaintiff to manufacture garments. The fabrics for the garments were to be supplied by the defendant. The garments were to be sold by the defendant to a buyer in the U.S.A. called Ample Knitwear Resources Inc. ("Ample") who in turn would sell them to customers in Brazil. The garments were manufactured, not by the plaintiff himself, but by a factory called Man Hing Knitting Garment Factory in the Mainland ("Man Hing"). Man Hing was the plaintiff's sub-contractor. Patterns were printed on the fabrics before the fabrics were cut and sewed into garments. The printing was carried out by another factory in the Mainland. The price agreed for each garment was HK$4. This did not include the costs of printing patterns. The defendant agreed to pay the printing costs to the plaintiff separately. The parties agreed that payment would be made one month after delivery of the garments.

3. The defendant placed three orders with the plaintiff for the garments. The orders were in the form of "manufacturing quantity schedule" (製衣數量試算表). The three orders were Orders 703, 810 and 811 respectively. The garments ordered were :

1) 31,500 pieces for Order 703;

2) 31,500 pieces for Order 810; and

3) 15,000 pieces for Order 811.

4. The plaintiff delivered the garments to the defendant in Hong Kong in September and October 1997.

1) Order 703 were delivered on 14 and 27 September 1997 respectively. The quantity delivered was 30,960 pieces.

2) Order 810 were delivered on 1 October 1997; 30,364 pieces were delivered.

3) Order 811 were also delivered on 1 October 1997; 15,088 pieces were delivered.

5. The plaintiff issued an invoice dated 27 September 1997 for Order 703, in the sum of $123,840 ("the first invoice"). On 2 October 1997, he further issued another invoice for $181,804 for Orders 810 and 811 ("the second invoice").

6. When the plaintiff presented the invoices to Mr John Lam ("Mr Lam") of the defendant, he was told that since the garments were just delivered and he had to come back later for the cheque. Later he was given a cheque of $116,404 post-dated to 1 November 1997 ("the first cheque") for the first invoice. A smaller sum was given instead of the invoiced sum of $123,840 because Mr Lam told him that the overseas buyer had stated the quantity delivered was less than the invoiced amount. On 1 November 1997, Mr Lam told the plaintiff not to present the cheque because he had not received payment. The plaintiff also received a letter dated 25 October 1997 from the defendant asking him to postpone presenting of the cheque to 10 November 1997. In this letter, he was also asked to postpone presenting a cheque for printing costs. The cheque for the printing costs at $70,000 was subsequently honoured. The plaintiff was also asked to return the samples of the garments to the defendant. He did.

7. Later, on 9 November 1997, Mr Lam told the plaintiff that he could not pay the cheque all at once. He gave the plaintiff a $50,000 cheque and a cheque of $66,404 post-dated to 30 December 1997. The cheque of $50,000 was honoured.

8. Later, when the plaintiff asked for the payment of Orders 810 and 811, Mr Lam told him his buyer complained of problems with the garments. The plaintiff was asked to go with Mr Lam to inspect the goods in Brazil. The plaintiff declined as he did not have the time or the money to do so. He, however, told Mr Lam to arrange a Hong Kong loss adjuster to inspect the garments or asked the buyer to return the goods to Hong Kong. The plaintiff also received a letter dated 11 December 1997 in which the defendant asked him to go to Brazil to inspect the garments and assess the damage. The letter also asked him to return the cheque of $66,040.

9. The plaintiff did not return this cheque. It was dishonoured on presentation, the defendant having countermanded payment. The plaintiff's claim is based on this cheque and the invoiced price for Orders 810 and 811.

The defendant's case

10. The defendant denied that the plaintiff is entitled to these two sums. It claimed that the garments delivered were defective. Its buyer had rejected these garments. The first cheque of $116,404 was given subject to the condition that it would not be paid until there was "feedback" from the buyer on whether there was problem with the goods. When the defendant issued the two cheques of $50,000 and $66,404 to the plaintiff, it was merely to assist him because of his cash flow problem.

11. In respect of the $66,404 cheque, it would only be honoured if the buyer had acceptd the garments and there was no complaint about them. After payment of the cheque of $50,000, the defendant received complaints in the second half of November 1997 from its buyer about severe defects of the goods.

Counterclaim

12. The defendant counterclaimed for :

1. US$240,351.60 which was the invoiced price of the goods sold by the defendant to Ample and which Ample had refused to pay.

2. US$380,000 which were the damages claimed by Ample.

3. Estimated loss of profit for future contracts with Ample of HK$2,000,000.

4. Additional expenses of HK$6,590 due to the plaintiff's late delivery of the garments.

5. HK$3,563.01 and HK$91,664.62 being extra fabrics and materials used by the plaintiff.

Part of counterclaim admitted by the plaintiff

13. The plaintiff accepted that he is liable to the defendant for $6,590. This was additional expenses charged by transport workers when their truck had to wait for the garments to be loaded. The plaintiff also accepted liability for $3,563.01. This sum of $3,563.01 was in respect of accessories such as labels and buttons which the plaintiff accepted responsibility. During the manufacturing the labels were wrongly cut and they had to be replaced by new ones. The buttons were damaged.

Were the cheques given subject to conditions?

14. I do not accept Mr Lam's evidence that when he gave the first cheque of $116,404 to the plaintiff, it was subject to the condition of receiving feedback from the buyer on whether there was problem with the goods. If the defendant had chosen to impose such a condition, there was no reason why it would honour the cheque for the printing costs of $70,000. This was a substantial sum and the payment was inconsistent with any concern by the defendant about problems with the garments. The defendant's concern at that stage was simply that it had not received payment from its own buyer and that was why the cheque was post-dated to 1 November 1997. I find that when the plaintiff was told not to present the cheque on 1 November 1997, he was simply told that the defendant had not received payment.

15. I further find that when the defendant exchanged the first cheque with the cheques of $50,000 and $66,404, there was no condition imposed. When the defendant issued the written demand that the plaintiff was to return the cheque of $66,404, the letter did not say anything about the condition imposed on the cheque. The eventual payment of $50,000 was again inconsistent with any condition that was supposedly imposed when the two cheques were given. Mr Lam's evidence that $50,000 was given out of goodwill to the plaintiff sounds hollow. It was part of the price for Order 730. If the defendant's concern was really about quality, it should not have allowed the $50,000 to be paid. Mr Lam was an astute businessman. He had demanded the plaintiff to charge for a lesser sum for Order 730. There was really no reason for him to make payment of $50,000.

16. I find that the plaintiff was prepared to accept the delay in payment because Mr Lam told him that he had not received payment from his own customer. There was very choice for him but to accept the arrangement imposed by the defendant. The plaintiff is not a sophisticated person, having received education up to secondary school level 2 in the Mainland. All in all, I think he is an honest person and a truthful witness.

Late delivery

17. Although there seemed to be suggestion of late delivery of the garments by the plaintiff, this was not pursued at the trial. In any event, I find that there was no late delivery as the performance by Man Hing was subject to the prompt delivery of fabrics by the defendant, the printing work and the setting of the prints by the setting factory.

Defective goods

18. The defendant's case is that it was entitled to reject the garments because of defects. The burden of proving the garments were defective lies with the defendant. It was said by Mr Lam that his customer Mr Park was initially not happy with the samples produced by Man Hing. Eventually when Mr Park approved of the samples, he informed the plaintiff that the garments must match the quality of the samples. It was pleaded that the colour of puffs printed on the garment was not of the colour in the samples. The plaintiff had returned the samples to the defendant as requested but the samples were not produced as evidence in the trial by the defendant. Hence, one cannot make any comparison of the garments produced at the trial with any samples.

19. In order to substantiate its claim, the defendant must produce credible evidence about the alleged defects. The plaintiff had delivered over 76,000 pieces of garment to the defendant. The defendant relied on a survey report showing nine pieces of defective garment. While a customer may be justified to reject these nine pieces, the defendant has to show that because of the large percentage of defects, the customer was entitled to reject the whole. The defendant's own quality surveyor stated that there were sampling standards and nine defects out of 75,000 pieces did not fulfill the standard. It has to be recognized that of the 76,000 pieces, there were 11 different styles and three sizes to each style. To rely on nine defective garments to justify the rejection of 76,000 pieces is truly a bold assertion.

20. Mr Lam said he went to Brazil and inspected the garments himself and confirmed that they were defective. He said he had opened some cartons of the garments. He did not say how many cartons he had opened and how many pieces he had inspected. Certainly, he did not keep any record of his inspection. In the letter of 24 November 1997, the defendant complained :

1) the printing quality was poor with overlapping images;

2) poor sewing;

3) the goods were not delivered according to size ratio and insufficient quantity; and

4) the size of the garment does not match the label.

21. The defendant also relied on the letter from Ample dated 20 December 1997 in which it was said that the Brazil customer had refused to accept the garments due to defective quality problem and they had become "non-sellable junks". The problems were said to be :

"The first is poor workmanship. Stitching on garments are too tight which make too much shirring on seams and joints; consequently, the shape of garments are deformed and disfigured seriously.

The second is poor puff print technique. Many puffs turned dirty brown color which is supposed to be light cream color. Also, the puffs are too sticky which would easily glue the fabric piece together. Clearly, these puff print finishing are totally unacceptable.

Other problems such as errors in size specification, incorrect packing list, mix up of different styles, and shortages are commonly found in these shipments. ..."

22. The letter was written by Aaron Lam, the brother of Mr Lam. Aaron Lam did not give evidence. Belatedly on the first day of the trial, the defendant sought to apply for a letter dated 14 January 1998 from Mr Park to be admitted as hearsay evidence. This letter detailed the defects. I rejected the application. This letter which pre-dated earlier letters of complaint were not disclosed in the defendant's lists of documents dated 1 September 1998 and 10 March 2001 respectively. It was only disclosed in the third list of 17 March 2001. It was said that the disclosure was due to change in the personnel of the defendant. This is not convincing at all because if this document was later located, it ought to have been disclosed in the second list. This really is a last minute attempt to fill in some glaring gaps in the evidence. In any event, even if the letter is admitted, how can the accuracy of the complaints be tested if Mr Park did not give evidence.

23. This is a case in which the defendant claimed substantial loss. As Mr Yau, counsel for the plaintiff, submitted the paucity of evidence in support of the size of the claim is breathtaking. The defendant had disclosed the sales contract with Ample, the invoices and weight packing list to Ample. There was no discovery of shipping documents such as bills of lading, export licence and declaration. There was no discovery of contracts between Ample and its Brazilian buyer. Four years after the defendant had informed the plaintiff that the Ample had calculated the loss at US$380,000, no action has been taken by Ample against the defendant for this alleged loss. No attempt was made to substantiate the defendant's allegation of loss of HK$2 million in future contracts with Ample. No evidence was called on the defendant's attempt to mitigate its loss. One is left with a real doubt on the genuineness of the defendant's defence and counterclaim. The defendant had failed to establish the extent of defects which would entitle it to reject the garments.

Inspection

In some cases, a buyer may not have an opportunity of inspecting the products in its manufacturing stage and had to rely on the inspection by its ultimate buyer before it can properly exercise the right of rejection. In this case, the defendant had actually sent two staff to Man Hing to inspect the garments during the manufacturing process. If the defects were as extensive as suggested by Mr Lam, they ought to have been discovered before they were delivered to Hong Kong. The plaintiff accepted that the two staff had produced two reports dated 12 and 29 September 1997 respectively on defects. These were extremely brief reports. For Order 703, it was said that the labels were not properly sewed, the thread ends were not cut, the threads were not sewed properly causing puckering of the garment, a greater part of the printing work was not checked and there were serious pin holes. For Orders 810 and 811, apart from these defects, there were also arm hole defects for style G5, different colour shades for front and back, grease on the garments and style K1028 had stripes at the front. The plaintiff said that after he was informed of such defects, he had removed the defective goods and not shipped them.

24. Mr Lam said that these two staff could not carried out the inspection properly and the finished garments were delivered from other factories to Man Hing at the time of delivery. These two staff were not called to give evidence. In my view, Mr Lam's evidence on this issue is incredible. With the alleged scale of defects, it is just not feasible that the two staff could not have detected them. What the two staff reported just do not support the defendant's case on the scale of the defects. The defendant had the opportunity to inspect and it had accepted the delivery of goods thereby losing the right to reject them.

25. In so far as there was problems with printing, the fact is that the defendant had insisted that the prints be processed by thermo setting at its own designated factory. Surely the defendant could have the opportunity of inspecting the printing work well before the fabrics were cut and manufactured into garments.

Extra fabrics and materials

26. Initially, the defendant counterclaimed against the plaintiff for extra fabrics and materials in the sum of $91,664.62. The defendant's pleaded case is that there was an agreement between the parties that the plaintiff would be responsible for the costs of the fabrics and materials consumed exceeding the allowance specified under the manufacturing orders issued by the defendant. A Debit Note dated 22 October 1997, which was not sent to the plaintiff, asked for the sum of $91,664.62. After the plaintiff had closed its case, the defendant sought to amend the figure of $91,664.62 to $185,521.80. It relied on a new Debit Note dated 22 October 1997. The application was refused by me, coming at such a late stage and without any accompanying evidence on how the new sum was arrived at.

27. Mr Lam of the defendant accepted that he was unable to substantiate the claim for $91,664.62. The defendant's pleaded case on excess fabric is, in essence, in respect of a situation where the plaintiff would require more fabrics to carry out the manufacturing. If that happened, Mr Lam said he would deduct from the price the additional fabric required. Although the pleaded case was based on an agreement, the evidence of Mr Lam revealed that the plaintiff merely made no response to Mr Lam's statement on additional fabric. The situation in the present case is concerned with excess fabric left over after the manufacturing. Mr Lam accepted that there was no discussion on this topic. Instead, he referred to the practice of trade that if the manufacturer delivered the required quantity of goods, he could keep any material left over from the manufacturing. But when the manufacturer did not produce the required amount, he had to return the excess material left over to the buyer and if he did not, then the price had to be deducted.

28. Mr Lam's evidence revealed that the claim for excess fabrics was in fact a claim for fabrics not used in the manufacturing of the garments. It was based on the difference of the amount of fabrics delivered by the defendant to the plaintiff and the fabrics used by the plaintiff in the manufacturing. In order to arrive at the later figure, the defendant relied on the actual number of garments delivered by the plaintiff and multiplied them with a figure which the defendant said represented the yardage that was required to make a single piece of garment.

29. There was never any express agreement between the parties on the yardage for a single piece of garment. The defendant said the plaintiff had agreed with the defendant's customer Mr Park at the early stage of the negotiation on the utilization of the fabrics. The plaintiff had placed markers on a piece of fabric to show how many pieces of cloth can be cut out from that piece of fabric. The number of pieces were agreed. Then there was discussions on the yardage required to make the garments of various styles. The defendant said the plaintiff had agreed on the yardage suggested by Mr Park. It relied on this as its basis of calculation for its claim. The plaintiff denied he had accepted Mr Park's calculation which he claimed was based on theory. Finally, Mr Park agreed to let him calculate the yardage. He was also told to inform Mr Lam of the calculation and then he could start to manufacture. The plaintiff subsequently informed Mr Lam the quantity required and was given the go-ahead by Mr Lam. He had put forward his calculation. I accept the plaintiff's evidence that he had not agreed to Mr Park's calculation. As such, the defendant had adopted a wrong figure as the basis for the calculation of its loss.

30. Further, the discussion between the plaintiff and Mr Park was on the yardage to make four pieces of garment for each style. The sizes were one small, two medium and one large. The actual order for each style of garment was based on five pieces of garment : the sizes were one small, two medium and two large. Mr Lam was unable to explain how the original alleged agreed yardage would be affected by an additional one large size garment. This made the figure of the defendant unreliable. In my view, the defendant had failed to make out a case on the claim for fabrics not used by the plaintiff.

Short delivery

31. The plaintiff admitted that there was short delivery of garments. He referred to the practice of a tolerance of 5% in the quantity delivered but accepted that the short delivery of style G6 of Order 703 was more than the 5% tolerance. He stated there were shortage of fabrics of certain colour and excessive fabric of another colour. Some garments that were found to be defective were removed and not delivered. This account for the short delivery. If the tolerance was more than 5%, the buyer may not accept the goods. In this case, the plaintiff said that Mr Lam was informed of the shortage of certain colour fabric and also of short delivery. However, Mr Lam told him there was no problem and the goods were delivered. Although Mr Lam denied such a discussion, there was no doubt from the defendant's own documents that he was aware that the quantity delivered was less than the ordered quantity. Hence, there was no question of the defendant being entitled to reject because the quantity not delivered for one style was more than 5%.

Unused fabric of 1,838 lbs

32. The plaintiff accepted that there were fabrics left behind and he had asked Mr Lam to take back the goods. Even on the defendant's case, as shown in the original Debit Note of 22 October 1997, there was actual unused fabric of 1,838 lbs. The burden is really on the defendant to show that, given the actual quantity delivered, the fabrics left behind exceeded the 1,838 lbs. To this, it had failed to do so.

33. To keep the matter in perspective, it is necessary to see how many garments the plaintiff had actually produced. For Order 703, the ordered quantity was 31,500 pieces. The plaintiff invoiced for 30,960 pieces. According to the defendant's own summary (C95), the actual delivery was 31,291 pieces, hence the short delivery was only 209 pieces from the ordered quantity of 31,500 pieces. The plaintiff actually charged for 29,101 pieces. He did so, not because he had only delivered 29,101 pieces, but because as the 2,190 garments produced for style G6 of this Order was only 73% of the ordered quantity, the whole of the 2,190 pieces were not included in the delivered quantity leaving a balance of 29,101 pieces. But according to the defendant's invoice to its customer dated 13 September 1997, the goods under style G6 was in fact shipped. Hence this is not a case where the plaintiff should have excessive fabric left behind because it had not produced 2,190 pieces.

34. For Order 810, the ordered quantity was 31,500 pieces, the actual delivery was 30,364 pieces or a shortage of 1,336 pieces.

35. For Order 811, the ordered quantity was 15,000 pieces. The actual delivery was 15,088 pieces. The plaintiff had delivered 88 pieces more.

36. The total shortage was 209 pieces + 1,336 pieces - 88 pieces = 1,457 pieces. The defendant had valued each pound of fabric at 1.85991147 yards. Without accepting the accuracy of this figure, if this factor is used on the 1,838 lbs of fabrics left unused one arrived at 3,418 yards. According to the defendant, the yardage for the garments ranged from 0.55 yard to 1.6425 yard per piece. Even if one adopts the larger 1.6425 yard per piece to the 1,457 pieces, the unused fabric was still sufficient to cover the shortage. The defendant had simply failed to make out its case on unused material.

Nature of the contract

37. This is sufficient to dispose of the case but as counsel had addressed me on the issue of the nature of the contract, I shall deal with it, although by now this is really academic.

38. There is a dispute between the parties as to the nature of the contract. While Mr Yau opened his case on the basis that the contract was a contract for the sale of goods sold and delivered, in his closing submission, he submitted that it was not a contract for sale of goods, but rather a contract for work done and material supplied. However, in a subsequent written submission which I ordered, he maintained his original position that the contract was afterall a contract for sale of goods.

39. Ms Lam, counsel for the defendant, while initially submitted that the contract was a sale of goods contract, argued in her subsequent written submission that the contract was a contract for supply of services rather than a contract for sale of goods. Her reasons are as follows : the defendant agreed with Ample that it was to provide a certain quantity of finished garments and to deliver the garments to Brazil. The defendant subsequently purchased the required fabric for the production of the garments. Once the fabric was obtained, the defendant contracted with the plaintiff to do "CMT" work, meaning that the plaintiff had to perform "cut, make and trim" work on the fabric. In other words, the plaintiff provided a service for the defendant.

40. This topic is not free from controversy. However, I think a good summary can be found in Halsbury's, Laws of England, 4th Edn, Vol.41, at para.603 :

"603. Contract of sale distinguished from contract for work and labour. A contract of sale of goods must be distinguished from a contract for work and labour. The distinction is often a fine one. A contract of sale is a contract the main object of which is the transfer of the property in, and the delivery of the possession of, a chattel as such to the buyer. Where the main object of work undertaken by the payee of the price is not the transfer of a chattel as such, the contract is one for work and labour. The test is whether or not the work and labour bestowed end in anything that can properly become the subject of sale. Neither the ownership of the materials, nor the value of the skill and labour as compared with the value of the materials, is conclusive, although such matters may be taken into consideration in determining in the circumstances of a particular case whether the contract is in substance one for work and labour or one for the sale of a chattel."

41. It is sufficient to refer to five cases :

42. In Clay v. Yates (1856) 1 H. & N. 73, the printer of a book sued the customer who left him the manuscript for printing. It was held that it was a contract for work done and not for goods bargain and sold.

43. In Lee v. Griffin (1861), 1 B. & S. 272; 121 E.R.716; [1861-73] All E.R. Rep. 191, the plaintiff B had contracted to make for A a set of artificial teeth and to fit them to A's mouth. A died after the teeth were made and after A had rejected an appointment for a fitting, and B sued A's executors for goods bargained and sold, for goods sold and delivered, and for work and labour done and materials provided. The defendant relied on the Statute of Frauds as applicable to a contract for the sale of goods, and succeeded both at first instance and on appeal.

44. Crompton J held that "Where the contract is for a chattel to be made and delivered, it is clearly a contract for the sale of goods. There are some cases in which the supply of the materials is ancillary to the contract, as in the case of a printer supplying the paper on which a book is printed. In such a case an action might perhaps be brought for work and labour done and materials provided, as it could hardly be said that the subject matter of the contract was the sale of the chattel; perhaps it is more in the nature of a contract merely to exercise skill and labour. Clay v. Yates (1856), 1 H.& N. 73 turned on its own particular circumstances. I entertain some doubt as to the correctness of that decision; but I certainly do not agree to the proposition that the value of the skill and labour, as compared to that of the materials supplied, is a criterion by which to decide whether the contract be for work and labour or for the sale of a chattel."

45. Hill J held that "Wherever a contract is entered into for the manufacture of a chattel, there the subject matter of the contract is the sale and delivery of the chattel, and the party applying it cannot recover for work and labour."

46. Blackburn J held that "If the contract be such that, when carried out, it would result in the sale of a chattel, the party cannot sue for work and labour; but, if the result of the contract is that the party has done work and labour which ends in nothing that become the subject of a sale, the party cannot sue for goods sold and delivered. The case of an attorney employed to prepare a deed is an illustration of this latter proposition. It cannot be said that the paper and ink he uses in the preparation of the deed are goods sold and delivered ... I do not think that the test to apply to these cases is whether the value of the work exceeds that of the material used in its execution; for, if a sculptor were employed to execute a work of art, greatly as his skill and labour, supposing it to be of the highest description, might exceed the value of the marble in which he worked, the contract would in my opinion nevertheless be a contract for the sale of a chattel."

47. In Robinson v. Graves [1935] 1 KB 579, a portrait painter sued on a contract whereby the defendant orally commissioned him to paint a portrait. It was held that this was not a contract for the sale of goods, but a contract for work and labour. Greer LJ held that "If you find, as they did in Lee v. Griffin, that the substance of the contract was the production of something to be sold by the dentist to the dentist's customer, then that is a sale of goods. But if the substance of the contract, on the other hand, is that skill and labour have to be exercised for the production of the article, and that it is only ancillary to that that there will pass from the artist to his client or customer some materials in addition to the skill involved in the production of the portrait, that does not make any difference to the result, because the substance of the contract is the skill and experience of the artist in producing the picture."

48. The Australian case of Deta Nominees v. Viscount Plastic Products [1979] V.R.167 and the Hong Kong case of Tin Tsun Lithographers v. United Battery Service and Oversea Battery Factory (1937), Vol.29, HKLR 16 contained a review of the authorities.

49. In the present case, the final products that were supplied by the plaintiff to the defendant, were the garments. The work they had been done had ended in something that obviously can be the subject of sale. The defendant's emphasis is on the material supplied by it to the plaintiff to make the garments. However, the ownership of the materials is not conclusive in determining the nature of the sale. I think Mr Yau was clearly right when he said that what the defendant was interested in this case was not the fabrics or processed fabrics but the finished garments. It was not interested in how or the sequence in which the sewing or cutting work was performed but in the final product and its finished quality. This is very different from the contract of painting a house or dry cleaning a suit. In my view, this is clearly a contract for sale of goods.

Conclusion

1. There shall be judgment for the plaintiff in the sum of $238,054.99 (i.e. $66,404 + $181,804 - $3,563.01 - $6,590)

2. There shall be interest at judgment rate on this sum from the date of service of writ until payment.

3. The counterclaim is dismissed.

4. The plaintiff is to have costs nisi of the claim and counterclaim. The plaintiff's own costs to be taxed in accordance with Legal Aid Regulations.

Representation:

Mr Albert Yau, instructed by Messrs Simon C.W. Yung & Co., for the Plaintiff

Ms Edith Lam, instructed by Messrs Hui & Lam, for the Defendant