K. Aloomall (HK) Ltd v. Houfield & Co (A Firm)

HCA001720/1974

IN THE SUPREME COURT OF HONG KONG

ORIGINAL JURISDICTION

ACTION NO. 1720 OF 1974

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Coram: Briggs, C.J.

Date of Judgment: 7th May, 1975.

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JUDGMENT

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1. The plaintiff, K. Aloomall (H.K.) Limited, is a company incorporated in Hong Kong in the import-export trade. The defendant, Houfield & Co. was at all material times, a firm dealing with textiles.

2. On the 26th February, 1974, the plaintiff agreed to supply the defendant with 2,220 yards of chiffonyl. This is a dress material which is embroidered and which comes from Switzerland. It was agreed between the parties that the shipment from Switzerland should be at the end of April, 1974. It was also agreed that upon the goods arriving in Hong Kong, delivery would be obtained by the defendant upon payment of 20% of the purchase price, the balance of 80% was to be paid by cheque post-dated for 60 days. It was also agreed that an interest of 13% per annum be paid by the buyers. This contract was varied by an oral agreement made between the parties. This provided that the material which, under the terms of the written contract, was to be in lengths of ten yards would be in lengths of fifteen yards. It was also agreed that instead of the goods being shipped to Hong Kong by sea they would be airfreighted. On the 15th May, 1974, the goods arrived by air. The defendant was notified that they had arrived. He could not pay the 20% of the purchase price to the plaintiff and delivery of the goods has never been effected to him.

3. On the 3rd July, 1974, the plaintiff, in order to mitigate his loss, sold the goods to a company called Days International Limited for $28 per yard. Later, since Days International Limited were unable to dispose of these goods, the plaintiff re-purchased them at the same price and sold them to a firm called Trinunion Trading Enterprises for $32 per yard.

4. It is agreed by the defendant that he has not paid anything towards the price of these goods to the plaintiff and he has not accepted delivery.

5. The plaintiff's claim is for the difference between the contract price and the price of the goods sold to Days International Limited together with the cost of the air freight.

6. The defence to this action is that the parties agreed verbally that the contract should be cancelled. Secondly, that the reason the defendant did not accept delivery was because the goods arrived late, that is to say, late under the terms of the contract.

7. A Mr. Hero A. Bharwani, who is a director of the plaintiff company, gave evidence for the plaintiff company and one HO Chung Chiu, who was at the material time a partner in the defendant firm, gave evidence for the defendant company. No other witnesses were called by either side. It was these two gentlemen who signed the written contract made on the 26th February, 1974. Mr. Ho, for the defendant company, was insistent that he and Mr. Bharwani had agreed that the contract should be cancelled. On the other hand, Mr. Bharwani said that this had never occurred. Where the stories of the two witnesses conflicted, I much prefer the evidence of the plaintiff to that of the defendant. Mr. Ho, for the defendant company, agreed that, in his own words, it was "negligent" of him not to have written a letter to the plaintiff company setting out the fact that the contract had been cancelled. He gave no less than three separate dates on which he said a conversation occurred between himself and Mr. Bharwani which resulted in the cancellation of the contract. His evidence was confused and unconvincing and, when tested by the various documents which were put in as exhibits in the case, did not hold water. I will say at once that I do not believe his evidence as to this aspect of the case.

8. The second ground for the defence was that the goods were delivered at too late a date. This cannot be so. By the original written agreement it was agreed that the goods would be shipped from Switzerland at the end of April 1974. The journey from Switzerland to Hong Kong takes approximately 35 days. As a result of the variation of the contract, the goods arrived on May 15th. I do not think that the defendant has anything to complain of on that head. In the schedule to the Statement of Claim, the plaintiff sets out various items showing the sums of money which he has credited the defendant in reducing his claim against the defendant. One of these sums is the resale value of the goods in question to Days International Ltd. of $28 per yard, which is stated to be in that schedule, $62,160.

9. There is no doubt in my mind that the plaintiff has made out his case that the defendant is in breach of the contract in not taking delivery of the goods in question. The figures given in the schedule have not really been challenged and there must therefore be judgment for the plaintiff for the sum therein mentioned, namely $36,635.29.

10. There is one other matter I must mention. I Was told by Mr. Ho that the defendant firm has ceased business and the registration of the business (Houfield & Company), under Chapter 310 of the Laws of Hong Kong has been vacated. He said this happened towards the end of last year. However, the defence was filed on the 20th September, 1974, and this matter was never pleaded therein. Further, as late as the 6th May, 1975, Mr. Ho filed a notice to act in person stating that he was a partner of Houfield and Company, the defendant.

11. In the event, there will be judgment for the plaintiff for $36,635.29 with costs. The judgment debt is to bear interest of 8% per annum until paid.

Representation: