Guangdong Springfield Logistics Services Ltd v. Yiu Wing Hong
Read the full judgment text of DCCJ 4863/2002 on BabelCite. This District Court judgment was delivered on 10 November 2003.
1. The plaintiff is an air-forwarding company providing air-freightage service to customers. The 1st and 2nd defendants used to operate a company called ABT Company ("ABT"). The defendant used to operate a factory in Huadu, Guangzhou City, the PRC. In September, 2000, the plaintiff airfreighted 420 carton boxes of LCD watches for the defendants from Guangzhou to Mexico. The plaintiff now claims for payment of fright charge from the defendants.
Cites 1 case
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DCCJ004863/2002 DCCJ4863/02 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CIVIL ACTION NO. 4863 OF 2002 _____________________________
___________________________________ Coram: His Honour Judge L. Chan Date of hearing: 21, 22, 23 October 2003 and 3 November 2003 Date of Handing down Judgment: 10 November 2003 ___________________________ J U D G M E N T ___________________________ The background 1.The plaintiff is an air-forwarding company providing air-freightage service to customers. The 1st and 2nd defendants used to operate a company called ABT Company ("ABT"). The defendant used to operate a factory in Huadu, Guangzhou City, the PRC. In September, 2000, the plaintiff airfreighted 420 carton boxes of LCD watches for the defendants from Guangzhou to Mexico. The plaintiff now claims for payment of fright charge from the defendants. The pleadings 2.By the Re-Amended Statement of Claim (amount of claim re-amended at the commencement of the trial), the plaintiff claims payment of balance of airfreight charges at HK$284,639.25 from the defendants. The 2nd defendant has not filed any Notice of Intention to Defend and default judgment in the sum of HK$289,715.23 as originally claimed has been entered on 3rd October, 2003. 3.The plaintiff pleads that the defendants in around August or September, 2000 had, in the name of ABT, instructed the plaintiff to airfreight 420 cartons of LCD watches from Hong Kong to Mexico. The rate for the delivery was US$1.60 for the trip from Hong Kong to Los Angeles and US$0.55 per lb from Los Angeles to Mexico making a total of US$2.15 per lb. 4.The plaintiff further pleads that it had air-freighted the goods per the instructions and then issued 2 invoices dated 7th September, 2000 to ABT for US$52,485.80 freight charge and HK$2,080 for storage charge. The plaintiff then pleads that the 1st defendant has issued 2 post-dated cheques for HK$136,000 and HK$272,000 dated 1st October, 2000 and 12th October, 2000 respectively in purported settlement of the airfreight charge. The two cheques were dishonored and eventually the defendants made part payments in the sums of HK$27,480 and HK$88,160 on 19th and 31st October, 2000 respectively leaving a balance of HK$284,639.25 unsettled. It is also the plaintiff's case that the 1st defendant has settled HK$2,080 storage charges on 3rd October, 2000 by depositing the same into the plaintiff's account with the Hang Seng Bank Ltd. 5.By his Defence and Counterclaim, the 1st defendant denies liability. The 1st defendant pleads that there was an oral agreement with the plaintiff whereby the plaintiff was instructed to arrange airfreight for 420 cartons of LCD watches at 24,076 lbs directly from China to Mexico at the freight rate of US$1.60 per lb. It was also an essential condition of the agreement that the goods had to reach Mexico on or before 12th September, 2000 as that was a term of the contract between the defendants and their buyer. 6.The 1st defendant then pleads the following story. The goods were collected by the plaintiff on 6th or 7th September, 2000. One Mr. Cheung Hiu Ming of the plaintiff together with some other people then went to the defendants' Guangzhou office and demanded full payment of the freight charges at a higher rate of US$2.15 per lb (which is about 34% higher than the agreed rate of US$1.60) and at a greater weight of 24,412 lbs. Cheung also demanded storage charges incurred in Hong Kong. The defendants objected to the Cheung's demand and pointed out to him that the agreed rate was US$1.60 per lb with a total weight of 24,076 lbs and that it was agreed that the goods should have been freighted directly from China to Mexico instead of going through Hong Kong and Los Angeles. However, Cheung threatened that if full payment or security thereof was not received by the plaintiff on that day, the goods would not be freighted. If the goods were not dispatched, the defendants would suffer a huge loss with value of the goods at HK$1.2 million. The subsequent contracts under negotiation with the buyer would be affected too. After much heated argument, the defendants finally gave in to the plaintiff's blackmail and upon the plaintiff's promise and assurance that the goods would arrive Mexico on 12th September, 2000 and acceptance of the weight at 24,076 lbs instead of 24,412 lbs, the defendants agreed to pay freight charge at the new rate of US$1.82 per lb. On this basis, the 1st defendant issued a personal cheque for HK$136,000 to the plaintiff as security for the payment by ABT of the freight charges. (This is the first cheque referred to in the Re-Amended Statement of claim.) It was agreed that after the plaintiff had performed the freight contract, ABT would make payment in exchange for the said cheque. 7.The 1st defendant further pleads that Cheung and these other people again turned up at the defendants' Guangzhou office on the next day. He said that his boss did not agree to the terms as settled on the previous day. He and his people required the defendants to pay the full amount of the freight charges as stated in the invoices (which had been rejected by the defendants). They also required the defendants to sign an agreement to pay the freight charge but the defendants refused to sign. The defendants considered the situation unacceptable. But Cheung and his people again threatened that the goods would not be delivered if the defendants did not cooperate. The defendants therefore bowed to the plaintiff's pressure and threats and the plaintiff's definite promise that the goods would reach Mexico on 12th September, 2000 and the 1st defendant reluctantly issued another personal cheque for HK$272,000 being the balance of the freight charges as stated in the rejected invoices. (This is the second cheque referred to in the Re-Amended Statement of claim.) However, the goods were not delivered on time but were only delivered on 19th September, 2000 with over 80 cartons damaged due to negligence of the plaintiff in handling them. As a result, many LCD watches were missing and damaged and the buyer refused to pay the contract price and cancelled all subsequent orders. As a result, the 1st defendant pleads that he is not obliged to pay for the airfreight service at all. 8.Regarding the plaintiff's pleading of the 3 payments by the defendant at HK$2,080, HK$27,480 and HK$88,160 on 3rd, 19th and 31st October, 2000 respectively, the 1st defendant did not admit the same. The 1st defendant in evidence denies of having paid the HK$2,080 and had no idea as to who had paid it. He further pleads that sometime after 12th October, 2000 (when the 2nd cheque for HK$272,000 was also dishonoured), the plaintiff's parent company AGI Logistics (HK) Ltd. ("AGI") sent some people along to demand payment of the cheques and threatened to harm the 1st defendant's family. The 1st defendant denied his liability and replied that he would report the matter to the police. There were then people going to the defendants Guangzhou factory and threatened the staff there and took two automatic bonding machines from the factory thereby putting the production to a halt. The 1st defendant then negotiated with the plaintiff for the return of the machines. The plaintiff however required the payment of RMB30,000 and the delivery of a van owned by the 1st defendant as security for payment in return for the two machines. The 1st defendant bowed to the pressure again as the factory could not operate without the two machines. The plaintiff then took away RMB30,000 from the defendants' staff and the van and returned the two machines. The 1st defendant therefore claims the return of the RMB30,000 and the van at a market value of RMB160,000. (The RMB30,000 is referred to as the second payment of HK$27,480 in the Re-Amended Statement of claim and the van has been given a value of HK$88,160 and is referred to as the third payment therein.) 9.The plaintiff in the Reply and Defence to Counterclaim denies any agreement to deliver the goods on or before 12th September, 2000 to Mexico because it is the airline that has ultimate control on when and where to fly to in the light of the prevailing circumstances. The plaintiff also denies any knowledge that, if the freight of the goods were delayed, the whole order would be cancelled and the contracts under negotiation would be affected. 10.The plaintiff also pleads that the goods had in fact been delivered to Los Angeles on 7th September and was destined to be flown to Mexico on 10th September. However, they were held up by the United States Customs Service for inspection as the watches had the mark "Energizer" on them but there was no document to certify that the mark was used with the licence of "Energizer". One So Kwong Lam Johnny ("Johnny So") of the plaintiff then asked the 1st defendant for the licence document but was asked to approach the 2nd defendant who in turn asked him to approach one Mr. Shanna Jones for the same. Mr. Jones eventually provided the document shortly before 12th September and the goods were delivered to Mexico on 12th September, 2000. 11.The plaintiff further pleads the 1st defendant had said that he could not pay the plaintiff because his partner had run away. Eventually the 2 cheques were obtained by Cheung from the 1st defendant on 12th September, 2000 in Tuen Mun. The plaintiff denies that it had threatened the plaintiff that if the cheques were not given, the goods would not be sent. The goods were then already on the way to Mexico. The plaintiff also pleads that the two bonding machines were offered by the 1st defendant as security for the payment of freight charges as the two cheques had already been dishonoured. The two machines were later exchanged for RMB30,000 and the van at the request of the 1st defendant. Issues 12.The first issue is the terms of the airfreight service. The plaintiff says that it was for airfreight from Hong Kong to Los Angeles at US$1.60 per lb and US$0.55 per lb from Los Angeles to Mexico. The delivery of the goods from Guangzhou to Hong Kong was a matter for the defendants. The 1st defendant says that the airfreight was to be carried out directly from the airport in Guangzhou to Mexico at the rate of US$1.60 per lb. 13.If I should find in favour of the 1st defendant on the first issue, the second issue would arise. At the end of the evidence but before submissions, Mr. Ho for the 1st defendant said that if I should accept the 1st defendant's case on the terms of freight, then I should find that he has no liability to pay any freight charge to the plaintiff despite the fact that the plaintiff had delivered the goods to Mexico. The reason being that the contract between the plaintiff and the defendants required delivery by air direct from Guangzhou to Mexico, but the plaintiff took the goods by truck through Hong Kong and by air through Los Angeles. That was not in accordance with the terms of the contract. The plaintiff had therefore failed to perform the contract and should not be entitled to any payment per the contract. When I raised quantum meruit with Mr. Ho, he said that there was no evidence for assessment of quantum meruit and I should therefore not order any payment. I should also point out that the 1st defendant in his defence merely denied liability but without pleading the grounds as then proffered by Mr. Ho, he has also not pleaded that the plaintiff should only be paid on a quantum meruit basis. 14.In his final submissions, Mr. Ho changed this stance slightly and clarified this point by saying that when the plaintiff refused to abide by the original terms of freight of US$1.60 per lb for direct airfreight from Guangzhou to Mexico and insisted on the higher rate of US$2.15 per lb, the plaintiff had thereby renounced the contract at the rate of US$1.60 per lb and was not entitled to enforce it. Therefore, if I should decide that the new terms of freight at US$2.15 per lb is unenforceable by reason of economic duress, the plaintiff would have no contract to enforce. 15.Since the Defence and Counterclaim has pleaded that the defendant had agreed to the plaintiff's new terms of freight because of the plaintiff's blackmail and upon the plaintiff's promise and assurance that the goods would arrive Mexico on 12th September, 2000, I also asked Mr. Ho the position of the 1st defendant if I should find that there was economic duress that vitiated the news terms but that the goods had indeed arrived at Mexico on 12th September. Mr. Ho confirmed that in that event, the 1st defendant should either pay the plaintiff freight charge at the original rate of US$1.60 per lb or on quantum meruit basis. The Evidence 16.The parties were desirous of letting the witnesses adopt their witness statements as evidence in chief and I so ordered. PW1 Cheung Hiu Ming 17.The plaintiff has called one witness Mr. Cheung. He adopted his witness statement. He said in the statement that he had been in the forwarding business for 14 years with 12 years in China. He was at the material time the general manager of the plaintiff. He is now the general manager of Aero World Transport Ltd. He said at the material time, there was no direct flight from Guangzhou to Mexico. All goods destined from Guangzhou to Mexico by air-flight had to be sent by air from Hong Kong to Los Angeles and then to Mexico. He thus had never said to the 1st defendant that he could arrange goods to be sent by air directly from Guangzhou to Mexico or that the price for such delivery was at the rate of US$1.60 per lb. He instead had told the 1st defendant that goods had to be trucked to Hong Kong and then sent by air from Hong Kong to Los Angeles and then to Mexico. He had also told the 1st defendant that the rate was US$1.60 per lb from Hong Kong to Los Angeles and US$0.55 per lb from Los Angels to Mexico. He also referred to a quotation prepared by one Tony Poon of the plaintiff and addressed to the 1st defendant setting out this route and the said rates. This fax was dated 6th September, 2000. He also said that he had provided the back of the shipper's instructions to the 1st defendant. The front of the shipper's instructions contained a declaration by the shipper above space for the shipper's signature to the effect that the shipper had read the terms and conditions of contract at the back. He also denied that he had forced the defendants to sign an agreement promising to pay the freight charge. He further said that the 1st defendant had voluntarily paid the plaintiff RMB30,000 and surrendered the van to the plaintiff at an agreed value of HK$118,080. 18.Mr. Cheung also gave oral evidence in chief to supplement his witness statement. He referred to a job sheet prepared by his colleague Tony Poon, approved by the accounts department and signed by him as the general manager. The job sheet set out the shipper's instructions, the description of the goods to be dispatched, the freight charge payable by the shipper and the cost to be incurred by the plaintiff for the transaction (except the plaintiff's daily running costs). The calculation in the job sheet showed that the net profit before daily expenses was about 2.5% of the freight charge payable by the defendants (or HK$10,201.33). He further said that the plaintiff had paid RMB210 to a courier to sending the certificate of original from Guangzhou to Mexico, but the cost for trucking the goods from Guangzhou to Hong Kong was paid by the defendants as the plaintiff was merely providing the air-freight service from the port of Hong Kong and Hong Kong was the port of origin. If the plaintiff should have paid the trucking charges, the charges would appear as an item of expenditure in the job sheet. He also assessed the trucking charges to be between HK$5,500 to HK$8,800 depending on whether two or three trucks were involved. 19.On the an agreement which the plaintiff asked the defendants to sign to signify their agreement to pay the freight charge, he said that it was prepared by the accounts office for signature by the parties. Since the defendants were a new customer and the deal was relatively big, the plaintiff therefore wanted an agreement to protect itself. It was given to him on 8th September, 2000. However, he was busy on that day and could not visit the defendants' office. He therefore signed 2 copies of the agreement and passed it to his subordinate Mr. Johnny So for him to deliver to the defendants for their signatures. 20.In cross-examination, he said that the storage charge for HK$2,080 was levied as some 2,080 kg or 4,586 lbs of the goods had arrived earlier and hence storage charge had to be paid. He was referred to the two invoices for freight and storage charge and their numbers differed by more than 100. He explained that the invoice for the freight charge was issued by one Emily and the one for storage was issued by one Steve Lam. Steve Lam issued the second invoice when it was discovered that Emily had not included the storage charge in the first invoice. It might be that Emily and Steve had kept different invoice books, hence the invoices issued by them had different numbers. He was also firm that the price quoted by him only covered the journey from Hong Kong to Los Angeles and from Los Angeles to Mexico, he did not include any costs for delivery from Guangzhou to Hong Kong. He also firmly denied that he had quoted a price of US$1.60 per lb from Guangzhou to Mexico as at that price, the plaintiff would suffer a loss of about 20%. 21.On the date of arrival of the goods at Mexico, he agreed that the 1st defendant had told him that the goods were for urgent delivery, but he denied of having agreed to 12th September, 2000 as the date of arrival. Since the airlines did not guarantee any date of arrival, he could not accept any business with such stipulation. He also agreed that if all things should have happened in the normal way, the goods would have arrived Mexico on 12th September, 2000. In fact his original booking was for the goods to be sent from Los Angeles to Mexico on 10th September, 2000. He also denied that the plaintiff had collected the goods from the defendants at Guangzhou and maintained that they were sent to the plaintiff's warehouse in Hong Kong. He further maintained that the plaintiff had typed up the shipper's instructions for the 1st defendant's signature and those instructions as delivered to the 1st defendant had both the front and the back pages. 22.He also said that the consignee should have signed a document confirming that the goods had been delivered in good conditions, otherwise goods would not be released. If there was any claim of damage, a surveyor would be engaged immediately to inspect the goods and the goods would be released after the inspection, the surveyor's report would be the basis of the claim. He also said that the airline would not release the document that was signed by the customer and therefore he could not produce the same. He was also firm that the goods had been detained by the US Customs. 23.On the 2 automatic bonding machines, Cheung said that the plaintiff had not taken any active step to seek the two machines as security. The plaintiff did not even know what asset the defendants had in the factory and had no idea that there were these machines. The machines were of no use to the plaintiff. It was the 1st defendant who offered these two of his three machines to the plaintiff as security as by 5th October, 2000, the first cheque dated 1st October, 2000 had been dishonoured (on 4th October). He denied of any made any threat to damage anything at the factory as there were only a few of them who were the plaintiff's employees and there were many workers of the defendants in the factory. In that situation, he worried about his own safety and it was stupid for him to have uttered any threat there. Upon taking the machines, he wrote a receipt dated 5th October, 2000 for the defendants' factory confirming that he had taken delivery of the two machines which were ex-factory of the manufacturer. 24.Regarding the payment of RMB30,000 and the van valued at RMB95,000, Cheung said that at that time the cheques had all been dishonoured (the 2nd cheque dishonoured on 13th October) and the plaintiff was entitled to forfeit the two machines which were security for payment. The 1st defendant therefore volunteered RMB30,000 and the van to exchange for the two machines. Furthermore, the registration of the van was changed by the defendants' representative with the government authority from the defendants to the plaintiff and the plaintiff had no right to ask for such change to be made by the government. The plaintiff's documents 25.In addition to calling Mr. Cheung, the plaintiff also produced a number of documents without calling their makers to show that the goods were sent by air from Hong Kong on 7th September to reach Los Angeles on the same day. They were destined to be flown to Mexico on 10th October, but were withheld by the US Customs Service for trade issue. They were released upon the production of evidence of licence from "Energizer", the trademark owner and were delivered to Mexico on 12th September. These documents are:
DW1 Yiu Wing Hong, the 1st defendant 26.The 1st defendant also adopted his witness statement as part of his evidence in chief. He said that he and the 2nd defendant Mark Tobor set up ABT Company for import, export and manufacturing business with a factory in Guangzhou to manufacture watches and electronic products. He said that he knew that Johnny So was working for one Sparkle Shipping Godown Wharf Transportation Co. Ltd. ("Sparkle"). He did not know that he also worked for the plaintiff. Johnny So in about July, 2000 offered to airfreight goods for him between Hong Kong and Mexico at US$1.82 per lb. He considered the charge too high and the route was not direct and not fast enough. Johnny So then introduced PW1 Cheung of the plaintiff to him because he could give a better price. He thought that Johnny So was doing him a favour as Johnny So was a long time friend of his elder brother John Yiu. Cheung had an office in the Guangzhou Airport and claimed that he all the facilities and link in the Guangzhou airport to do the job. 27.In late August, 2000, Cheung offered him the rate of US$1.60 per lb for the fast and direct airfreight from Guangzhou to Mexico. The low price was offered for the large quantity of goods and future business relationship. The goods were ready to be shipped in early September, 2000 and the deadline for them to reach Mexico was 12th September, 2000. The defendants then took up Cheung's offer, but they had emphasized to Cheung the importance and urgency of the shipment and that the goods had to reach Mexico by 12th September, 2000. Cheung said that the goods would be delivered directly by air from Guangzhou to Mexico and would reach there before 12th September, 2000. The plaintiff then came to their factory on 6th September, 2000 and collected the goods. Cheung had also faxed him the front page of a shipper's instructions but not the back page (though no point is being taken that he was not to be bound by the terms at the back). On 7th September, 2000 he received two faxes. One was dated 6th September, 2000 but was only faxed to their factory in the early morning of 7th September, 2000. This fax quoted an airfreight charge of US$2.15 per lb from Hong Kong to Mexico via Los Angeles. Both the rate and the route were different from had been agreed with Cheung. He thought that Cheung had trapped him in sending him this fax only after the plaintiff had taken the goods away. The second fax was the house airway bill dated 7th September, 2000 issued by AGI and numbered AGI994819. It was faxed to him at 15:17 hours on that day. This bill named ABT as the shipper and Promoland as the consignee. (It stated that the LCD watches would be freighted out of Hong Kong on 7th September.) The weight of the goods quoted in the bill was also larger than what he had agreed. The defendants did not accept the terms stated in the bill and he questioned the plaintiff, but the plaintiff denied that they had offered the rate of US$1.60 per lb. The plaintiff also told him that the goods had already been sent to Hong Kong and stored in the plaintiff's warehouse. The plaintiff demanded full payment of all charges including storage charge before delivery would be made. They objected and the 2nd defendant immediately invited Federal Express in Guangzhou to give a quotation for direct airfreight from Guangzhou to Mexico. Federal Express gave a quotation dated 7th September. Yiu also denied of having paid the storage charge of HK$2,080 and he questioned why storage charge was necessary as the goods were sent out immediately from Hong Kong upon their arrival. 28.In the evening of 7th September, Johnny So came to their office and offered to assist. Johnny So persuaded them to accept the rate of US$1.82 per lb and pay 40% of the total freight charge first. Johnny So also said that the plaintiff had promised to deliver the goods to Mexico by 12th September, 2000. Eventually, the 2nd defendant agreed and asked him to issue a post-dated cheque for HK$136,000 as a security for payment. He said it was agreed that if the plaintiff could perform the agreement, ABT would make payment in exchange for this cheque. In the morning of 8th September, the plaintiff sent him a new shipper's instructions form and caused it to be typed up in place of the previous handwritten one. The 2nd defendant also corrected the name of the consignee from Promoland to Stockland. However, the matters were still unresolved. He said in the evening of 8th September, 2000, Johnny So and Cheung went to the defendant's factory again saying that the plaintiff's boss did not accept the terms settled on the previous day. The plaintiff wanted the full amount of the airfreight charges at US$2.15 per lb. Cheung even forced the defendants to sign an agreement to pay the freight charge. They refused to sign the agreement. However, they yielded to the plaintiff's blackmail as the plaintiff had wasted their time to instruct any forwarder and they had no choice but to issue another post-dated cheque to the plaintiff for HK$272,000 as security upon Cheung's assurance that the goods would reach their customer in Mexico on 12th September, 2000. 29.On the actual delivery of the goods, he said the plaintiff had never shown them any acceptable proof and evidence of the delivery of the goods since 12th September, 2000 until he made the witness statement on 10th April, 2003. But he was told by the 2nd defendant that the goods were delivered on 19th September, 2000 with about 80 cartons damaged. A lot of LCD watches had gone missing and damaged. The total quantity was thus not in accordance with the packing list. The customer also refused to pay for the goods. By mid-September, 2000, he had complained to Cheung and tried to get an answer form the plaintiff but in vain. Instead, the plaintiff was chasing him for payment. The plaintiff also made a lot of disturbance to the factory and his family from time to time. People acting for the plaintiff's holding company AGI also telephoned him repeatedly for payment and threatened to disturb his family. Finally, he was fed up with these and threatened to report the matter to the police and these people stopped for a while. In early November, Johnny So then rang him and asked for payment. So suggested that he could ask his brother John Yiu for help or he could sell the factory to make payment. His brother also told him that Johnny So had gone to his brother's home and office with other people to demand payment. He then asked So for explanation and So told him that he had to make payment, otherwise the boss of the plaintiff Mr. Lam would use all possible means to get payment form him. In order to avoid further disturbance to his brother, he acceded to So's request for a payment plan and wrote a payment schedule to the plaintiff's holding company AGI and faxed it to AGI. He said that he wrote the schedule not to acknowledge the debt, but to protect his brother John Yiu. (The first installment of HK$50,000 under the acknowledgement was due and payable on 20th December, 2000). 30.He further said that the customer in Mexico eventually refused to pay for the said goods, which was delivered late and all future orders were cancelled. However, he did not produce any document to show any complaint by the customer or any document to prove that the customer had failed to pay anything for all the watches. 31.He also said that as a result of the loss of this business, the 2nd defendant sued him at the end of September, 2000 to prohibit him from leaving Hong Kong. He however did not produce the writ of summons and statement of claim to show what was the ground as used by the 2nd defendant in suing him, he only produced the first page of a prohibition order preventing him from leaving Hong Kong, the subsequent pages which would normally show the sum of money to be required for suspending the order was also not produced. 32.As a result of the prohibition, he could not return to the factory and the plaintiff on 5th October, 2000 (the date after the 2nd cheque was dishonoured) went and seized from the factory two automatic bonding machines each worth HK$150,000. He said he was told by the staff that 7 to 8 people of the plaintiff came to ask for payment and they threatened to damage the factory. They however misled the manager to think that they had his authority to take away the two machines. This caused him delay in production and serious loss and damage to the factory. He demanded for the return of the machines but the plaintiff asked him to replace the same with the company's new van of a worth of RMB160,000 and RMB30,000. He was also asked to sign a document confirming the value of the van at HK$118,080 for payment of the freight charge. He said because of the troubles caused by the plaintiff, the factory could not continue its operation and was forced to close down. He therefore could not recover all documents related to the case as they were stored in the factory. The factory eventually closed in January, 2001 and the defendant suffered immense loss. 33.In his oral evidence, he said he was introduced by Johnny so to Cheung of the plaintiff. Cheung had office at the Guangzhou airport and said he could export goods directly from the defendants' factory to the Guangzhou airport and to Mexico without going through Hong Kong. Cheung repeatedly said that there was no problem. He said Cheung sent people to collect the goods on 6th September. He could not remember if Cheung collected the goods once or twice, but there were only 11 tons of goods. The collection was in the afternoon at about 2:00 to 3:00 p.m. He said he was there and there should have been just one truck. When he received on 7th September the quotation dated 6th September, he immediately phoned Cheung and asked him why was the quotation different. Cheung said the quotation reflected what had been agreed. In answer to his query on where were the goods, Cheung said that they were in Hong Kong and asked him what was the problem. He said that if it was so expansive, he might not have been able to send them through the plaintiff. He asked Cheung to return the goods to him. Cheung said he would not do so as the goods were in Hong Kong. Cheung instead told him that he should pay quickly, otherwise, the goods would be placed in a warehouse. He then located the 2nd defendant at a hotel and discussed if they could get back the goods and send them by another forwarder. They then contacted Guangzhou Fedex and got a quotation a copy of which ash been produced at page 101 of the bundle. This quotation was at US$3.10 per lb for door-to-door service. It was more expansive than the plaintiff's rate and they could not use Fedex. When the Court observed that the quotation from Fedex as produced in page 101 of the bundle was for only 300 cartons and not 420 cartons, he explained that the quotation was not given by Fedex in response to their request on 7th September but was a response given to their enquiry made some days before the 7th when they only wanted to dispatch 300 cartons. He admitted that what he said about getting a quotation from Fedex in his witness statement was wrong. 34.He was asked why he agreed to issue the post-dated cheque, he said that the 2nd defendant was angry and demanded that the goods had to go by whatever means. They could not be late as they had deals to being discussed. Furthermore, time was pressing. If he did not make up his mind, the job could not be accomplished. If the goods could not reach Mexico on 12th September, he would lose a partner, his partner would lose a customer and the customer might sue them. 35.On the detention of the goods by the US Customs Service, he said he had not been told by the plaintiff about this. Johnny So had had not contacted him for licence document for release of the goods. He had no idea about this incident. However, he admitted that if the plaintiff should have encountered problems in delivery and had to contact the shipper, they should have contacted him. 36.He also referred to the incident of Cheung taking away two automatic bonding machines from the factory. He said Cheung had lied to the factory manager that Cheung had his authority to take the machines away. When he was asked by the Court on whether he had been told about this by anyone of the factory, he said nobody could have phoned him because the only IDD phone was inside his office and his was not told about this before or after the event until he phoned the factory on the 7th or 8th October. He then asked Johnny So for the return of the machines, but Johnny So wanted the new van and RMB30,000 in exchange. He had no choice but to agree as the two machines were more expansive than the van. When he was shown the authorization signed by a representative of the factory allowing the plaintiff to take away the van away, he agreed that the authorization was given with his consent, but he said that there was never any discussion on the price of the van and his representative had told him that there was no statement on the value of the van when it was signed by the representative. He thus suggested that the plaintiff had added to the authorization a statement on the value of the van afterwards without the consent of his representative. 37.He then dealt with the acknowledgement by him to AGI dated 20th November, 2000 whereby he promised to pay the balance of the freight charge by installments of HK$50,000 each on or before 20th December, 2000, 20th February, 20th March and 20th April, 2001 and the balance on or before 20th June, 2001. He said Johnny So at the beginning of November, 2000 suggested that his elder brother could pay for him. His elder brother was then in poor health and could not stand the pressure of disturbance by So. At So's suggestion, he wrote the acknowledgement in terms dictated by So. Regarding the invoices from the plaintiff for payment of the freight and storage charges, he said he had never received them though his Defence pleads that the invoices had been rejected. 38.He was asked whether he had enquired on the arrival of goods in Mexico. He said that he had asked Cheung who told him that the goods had arrived and there was no problem. Cheung also promised to give him documentary proof of this, but he did. 39.In cross-examination, he admitted that he had overlooked the need to set forth in writing to the plaintiff about the consequence to the defendants if the goods should fail to reach Mexico on 12th September. He also said that when the plaintiff went to the factory on 6th September to collect the goods, they sent along a truck with Mainland registration but not Hong Kong registration. Therefore they had to change the cartons to another truck with Mainland and Hong Kong registrations to bring them to Hong Kong and he thought that in moving the goods around, they damaged them. He agreed that he had been defrauded as the plaintiff had initially quoted him a rate of US$1.60 per lb for direct airfreight from Guangzhou to Mexico and took the goods with a truck with only Mainland registration, but then they changed the truck and sent the goods to Hong Kong and then demanded a higher rate of US$2.15 per lb the next morning. He also said that after seeing the goods on 6th September, he had no idea as to their whereabouts or what had happened to them. He denied that he had paid the storage charge of HK$2,080 by depositing cash into the plaintiff's bank account on 3rd October, 2000 as he did not have the plaintiff's bank account number. He agreed that this payment of storage charge in cash into the plaintiff's account was part of the fraud to make it appeared that he had admitted liability to the storage charges. On the closure of the factory, he admitted that most of the workers had left because of the dispute between him and the 2nd defendant and they had left before Cheung had come to get the bonding machines. Regarding the van, he said that he only promised with Johnny So that he would let the plaintiff use the van for a while and the plaintiff had to take good care of it. He did not know that the plaintiff was going to change the registration of the ownership of the van with the authorities. When he was asked by the Court on why the registration document was given to the plaintiff, he said that was not arranged by him and he believed his manager had banded together with the plaintiff and he therefore sacked the manager. The 1st defendant's submissions On Cheung's evidence 40.Mr. Ho for the 1st defendant submitted that I should not accept the evidence of Cheung. The first point was that Cheung said the cheques of HK$136,000 and HK$272,000 were collected by Johnny So from the 1st defendant on 7th and 8th September respectively whilst the witness statements of both So and Lam (the boss of AGI and the plaintiff) and the plaintiff's Reply all say that this cheques were collected on 12th September. The second point was that So's witness statement says that there was a meeting of So and Cheung with the 1st and 2nd defendants at ABT's office on or around 2nd September but Cheung said that there was no such meeting before 7th September. Bearing in mind that the events took place over 3 years ago, such minor discrepancies are to be expected. In any case, neither So nor Lam has given evidence and I do not think I should place much or any weight on the contents their witness statements. I also note that the numbers of the two cheques are 005095 and 005098 and there are two other cheques in between. This tends to suggest that these two cheques were issued on different occasions and thus supports Cheung's evidence. 41.Mr. Ho further says that Cheung was shifty and not reliable. Cheung's evidence was that he had received information that there was an order of carriage from Guangzhou to Mexico. Mr. Ho said that it was a slip of Cheung and such slip showed that in Cheung's mind, it was an order for goods from Guangzhou to Mexico. I do not think I can come to the same conclusion. The goods were indeed from Guangzhou and the destination was indeed Mexico. There was nothing surprising for Cheung to remember that the information he got was for goods to be delivered from Guangzhou to Mexico. However, Cheung maintained that he had only agreed to deal with the journey from Hong Kong to Mexico by air as there was no direct flight between Guangzhou and Mexico. Cheung's evidence is in fact supported by the terms of the agreement that the plaintiff had asked the defendants to sign but the defendants declined. That agreement stated that the defendants had engaged the plaintiff to handle an airfreight shipment from "Hong Kong to Mexico". 42.Mr. Ho further said that when Cheung was asked by the Court on why storage charge had to be paid, Cheung initially said that he could not recollect, but subsequently he seemed to be able to remember a lot about it. Mr. Ho raises the rhetorical question that if the 1st defendant had been asked to pay storage charge of HK$2,080, why did he pay this small sum separately and in cash into the plaintiff's bank account but instead issued two cheques of substantial amounts for the freight charge. It seems to be Mr. Ho's point that if the 1st defendant had indeed been asked to pay the storage charge, he would have included the same in the two cheques. Since he has not done so, the storage charge was not part of the demand made on him. In addition, Mr. Ho said that the 1st defendant had countermanded the two cheques around the end of September, he had no reason to pay the storage charge. Mr. Ho asked a further rhetorical question that if the 1st defendant was required to pay the storage charge, why was this charge not recorded as part of the sum payable in the agreement that the defendants were requested to sign. This agreement stated that the defendants had engaged the plaintiff to handle an airfreight shipment from "Hong Kong to Mexico". Mr. Ho in particular refers to the sum payable under the agreement was the full amount of air freightage including all charges from "Guangzhou to USA", but that sum did not include the storage charge. He asked the Court not to accept Cheung's explanation that the plaintiff at the time of preparing the agreement was focusing on the substantial freight charge and overlooked the storage charge. He also criticized Cheung's apparently inept explanation that "China" as used in the agreement meant "Hong Kong" as the drafter would have used the name "Hong Kong" if that was what he meant. That was what the drafter did when he referred to the journey as from "Hong Kong to Mexico". 43.This attack appears to have some force, however, it is again not made on good factual foundation. However, I must point out that it is not just the plaintiff's case, but also the 1st defendant's case that he had been asked on 7th September by the plaintiff to pay storage charge. This shows that the storage charge was indeed a matter that had featured at the latest by 7th September and not a subsequent fabrication by Cheung or the plaintiff. It is not surprising that after the lapse of a few years, Cheung's memory of this matter has become faded but was refreshed after he had read the documents about it. Furthermore, the storage charge was invoiced separately from the freight charge and was in a relatively small sum. It is entirely possible that the 1st defendant just paid and discharged the small sum invoice first as he had the means to do so. For the two cheques, they were not all countermanded at the end of September. The first one dated 1st October was countermanded on about 29th September and the second one dated 12th October was countermanded on 3rd October. It is entirely possible the 1st defendant countermanded the cheques individually as and when he knew that he did not have sufficient fund to meet them. The 1st defendant has not produced any bank statement to show that he had sufficient funds in the account to meet either of these cheques as and when they fell due. Though the plaintiff has not given a good explanation for the use of the phrase "including all charges from China to USA" in the agreement, in the light of the undisputed fact that storage charge had been demanded at the latest on 7th September, I do not think that this phrase can be used to infer that the plaintiff had not demanded such charge. 44.Mr. Ho further argues that there were 10,920 kg of goods but the plaintiff only charged the defendants HK$2,080 at HK$1.00 per lb for storage of the goods. This attack overlooks Cheung's evidence that the goods did not arrive in one lot and storage charge was only levied on those that came early but not those that came late which were sent out right away. 45.There is one minor issue on who prepared a typewritten shipper's instructions dated 8th September, 2000. These instructions were to replace a handwritten shipper's instructions dated 6th September, 2000. The instructions of 6th September had stated the dimensions of the cargo. Those dimensions were found to be incorrect on 7th September. But the typewritten instructions of 8th September still repeated the erroneous dimensions in the handwritten instructions of 6th September rather than the correct dimensions. For this reason, Mr. Ho says that the typewritten instructions were prepared by the defendants and not by the plaintiff. Cheung in his evidence said that he had the experience of misreading handwritten shipper's instructions. His practice was therefore to ask his staff to rewrite by typing all handwritten shipper's instructions and ask the customer to sign the typewritten version again. This was to avoid any misunderstanding. The incorrect dimensions in the handwritten instructions were thus repeated in the typing process. I find this explanation not unreasonable. 46.Mr. Ho's next point is that Cheung had at one time said that the freight charge included the trucking charges from Guangzhou to Hong Kong, but when he saw that there was no such charge recorded in the job sheet, he changed his evidence and said that the trucking to the plaintiff's warehouse in Hong Kong was the responsibility of ABT. This is indeed a discrepancy in Cheung's evidence. Mr. Ho also refers to Cheung's evidence on whether the bank account number of the plaintiff had been made known to the 1st defendant (which was relevant on whether the 1st defendant had deposited the storage charge in cash into the plaintiff's bank account). Cheung at first said that the number was printed on the plaintiff's invoice, but when he found that it was not there, he said that it had been given by the plaintiff's staff to the 1st defendant. This is also a discrepancy. However, in the light of the lapse of over 3 years, it is not surprising to have these minor discrepancies. On the plaintiff's documents 47.Regarding the plaintiff's documents referred to above, Mr. Ho questioned their authenticity though no such challenge had been made to the plaintiff before the first day of the trial. The 1st defendant has also not served any notice under Order 24 rule 4(2) of the Rules of this Court and his admissions in terms of Order 24 rule 4(1) are deemed. Mr. Ho is therefore not entitled to make the challenge. Furthermore, all these documents had the telephone numbers, fax numbers, addresses and sometimes e-mail addresses printed on them. If the 1st defendant should have harboured any doubt on the authenticity of any or all of them, he had all the means available to verify his doubt. Nevertheless, I would deal with Mr. Ho's criticisms one by one. 48.Mr. Ho refers to the letter dated 9th September which was supposed to have enclosed the authorization letter but the authorization was dated 11th September. The first letter of 9th September was printed on the letterhead of Grupo Cavasi. But Mr. Ho further points out that it was not signed and without any company chop. The second letter of 11th September was printed on the letter head of Eveready de Mexico, S. A. de C. V. with the "Energizer" logo and signed by one Monica Mena Brito of Marketing, but Mr. Ho notes the absence of the company chop. He relies on the discrepancy of the dates and these other matters to doubt the authenticity of the two letters. I however note the 1st defendant's case that the goods were for urgent delivery and had to reach Mexico by 12th September. As the goods were detained by the US Customs Services, the steps taken to ensure their release must have been taken urgently. These two letters were prepared against such background by different people at different places. The presence of the imperfections pointed out by Mr. Ho are not impossible and falsity is not the only possible explanation. The most important argument against falsity is that these letters contain all the sources for verification of authenticity. 49.On the fax letters dated 29th and 30th October, 2002, Mr. Ho has made a host of criticisms against them. He said that Cheung had not referred to these documents in his evidence, the maker of these two faxes one Alicia Belghley was not called by the plaintiff to give evidence, there is no witness from the plaintiff to tell who is this Belghley, there is no signature by this Belghley or any company chop, no time or other particulars printed by the fax machine can be seen on the faxes, the first fax dated 29th October, 2002 was disclosed by the plaintiff in its list of documents on 13th December, 2002 but the next fax dated 30th October, 2002 was only disclosed 24th September, 2003. Mr. Ho says that for these reasons, these two fax letters were fabrications. The plaintiff has issued hearsay notices for these documents. It was not necessary for Cheung to refer to them. In fact Cheung has already insisted that the goods had been detained by the US Customs though he was not involved in getting the authorization to secure their release. If the 1st defendant thought that it was necessary to ask Cheung on these documents, such could have been done in cross-examination. If there was anything unclear on the fax letters as produced, the 1st defendant could have asked for inspection of the original or the best copy available. The most important point is of course that there were avenues for verification particularly for the first fax which was disclosed on 13th December, 2002. 50.Mr. Ho said that in the light of the above four documents being questionable, the other documents produced by the plaintiff and referred to above should also be viewed with skepticism. He highlighted the fact that the makers were not called to produce them. He also referred to the Transportation Entry and Manifest of Goods Subject to Custom Inspection and Permit ("the Permit") apparently issued by the US Customs Service for 420 cartons of LCD watches which stated that the gross weight of the cargo was said to be 53819 lbs and said that this weight was obviously wrong and it could not be a typographical error. However, this document contains a host of other information which are all accurate. The presence of one error on the weight of the cargo is not enough to give the document a look of falsity. The error on the weight is obviously a typographical one though not created by the juggling of figures. 51.Regarding the In-bond Examination Hold also issued by the US Customs Service, Mr. Ho says that the name of the printed inspector has been deleted and replaced by another name in handwriting but not signed by any person. He also says that the "date" 7th September, 2000 and "time" 17:05 hours were the date and time when this document was made. He further says that the Permit should have come into existence before this document. He then makes the point that the name of the consignee in the earlier document has already been corrected from Promoland to Stockland. However, the correction was only made by the defendants and made known to the plaintiff on 8th September Hong Kong time which is 16 hours in advance of Los Angeles time. It was thus too early for the Permit to show the correct assignee. For the same reason, the In-bond Examination Hold could not have been issued at 17:05 hours which was at least 2 hours too early. Mr. Ho thus says that these two documents are fabricated. However, Mr. Ho again overlooks the fact that there was an invoice from the defendants' customer Image Group to Stockland and dated 7th September, 2000 for 420,000 pieces units of promotional digital watches imprinted with "Energizer" logo. That invoice and the Transportation Entry and Manifest of Goods Subject to Custom Inspection and Permit both bore a date of 11th September, 00 imprinted by the US Customs Service. The invoice was obviously processed by the US Customs together on 11th September. The consignee in the Permit should of course be the same as the purchaser in the invoice. Regarding the "date" and "time" shown on the In-bond Examination Hold, they could well be the date and time of the arrival of the goods in Los Angeles. 52.Mr. Ho also doubts the authenticity of the document said to be downloaded from the internet as he says that this document is not in the internet format. He also criticizes the late discovery of this document. But he could have log on to the relevant website and verify it for himself. Mr. Ho then argues that the air cargo manifest is a self-serving document. But this document by itself may not prove anything. It is merely a piece of corroborating evidence of the delivery of the goods. Regarding the hard copy of the e-mail, Mr. Ho criticizes that the maker was not called and no evidence has been given that the writer of the e-mail had any knowledge or capacity or authority from anyone to write about the matters in the mail. However, the e-mail addresses of the sender and receipt are clearly shown and available for the 1st defendant to verify the authenticity of the mail. Furthermore, the mail was created very recently on 3rd September, 2003. 53.In addition to the lack of any notice under Order 24 rule 4(2) of the Rules of this Court, I also find by reason of the above that Mr. Ho's attacks on the plaintiff's documents have no merit. The 1st defendant's case 54.The 1st defendant's case as revealed at final submissions is as follows. Before 6th September, 2000, Cheung offered the defendants the rate of US$1.60 per lb for direct airfreight of 420 cartons of LCD watches from Guangzhou airport to Mexico. The defendants accepted this offer. The plaintiff then used a truck of Mainland registration (which could not come to Hong Kong) and collected the goods from the defendants' factory in Guangzhou purportedly for dispatch to the Guangzhou airport for direct airfreight to Mexico. The plaintiff then removed the goods onto another truck that had a Hong Kong registration and drove the goods across the border to Hong Kong. The next morning at about 9:31 a.m., the plaintiff faxed a quotation purportedly dated 6th September to the defendants' factory. The quotation revealed that the true route and charge for the freight was from Hong Kong to Los Angeles at US$1.60 per lb and then from Los Angeles to Mexico at US$0.55 per lb or a total of US$2.15 per lb. At about 3:17 p.m. on the same day, the plaintiff faxed the defendants a house airway bill issued by AGI showing the goods to be delivered on that day. The 1st defendant did not agree to the rate of freight charge and the route to be taken. He therefore demanded the return of the goods. But the plaintiff denied that it had offered the rate of US$1.60 per lb from Guangzhou to Mexico and said that the goods were in their warehouse in Hong Kong. The plaintiff demanded full payment of all the charges including the storage charges otherwise they would not send out the goods. In that evening, the 1st defendant bowed to the plaintiff's blackmail and through Johnny So gave a cheque post-dated to 1st October for HK$136,000 as security for payment and suggested a rate of US$1.82 per lb on condition that the goods would arrive at Mexico on 12th September, 2000. On 8th September, the plaintiff refused and insisted on the rate of US$2.15 per lb. The defendants had no choice but bowed to the blackmail of the plaintiff and the 1st defendant gave another cheque post-dated to 12th October for HK$272,000 as the balance to the plaintiff on condition that the goods had to reach Mexico on 12th September. He had thus been defrauded and blackmailed by the plaintiff. 55.However, after the goods had been taken away on 6th September, 2000, he had no idea as to their whereabouts. The only thing he learnt was from the 2nd defendant that the goods only arrived Mexico on 19th September, 2000 with some 80 cartons damaged and a lot of LCD watches missing and damaged. The customer then refused to pay for all the goods and the defendants suffered a huge loss. Despite the fact it had defrauded the 1st defendant and breached the condition on date of arrival of the goods, the plaintiff still kept on chasing the 1st defendant for payment. When the 1st post-dated cheque was dishonoured on 4th October, 2000, the plaintiff sent a long 7 to 8 people to the factory and took away two expansive automatic bonding machines by lying to the factory manager that they did so with authority from the 1st defendant. When the 1st defendant pleaded for the return of the machines, the plaintiff demanded RMB30,000 and a new van for exchange. The 1st defendant then let the plaintiff take away RMB30,000 and also to have use of the new van for a while. But unbeknown to him, the plaintiff had, after taking away the van, inserted a statement to the written authorization and acknowledgement to the effect that the van was given to the plaintiff for a monetary value for payment of the freight charge. It appeared that the factory manager had also conspired with the plaintiff to change the ownership registration of the van to that of the plaintiff. 56.The plaintiff's deviousness was not limited to the above. It also sent people to make demand with disturbance and threats to the defendants' factory, the 1st defendant and his family. The 1st defendant threatened to report the matter to the police and these people stopped for a while. But then they repeated their demand in early November, 2000 and also caused trouble to his elder brother. In order to protect his elder brother, he at the suggestion of Johnny So made a written acknowledgement dated 20th November to the plaintiff's parent company AGI promising installments of HK$50,000 each starting 20th December, 2000 though he had not paid any. The plaintiff is thus devious and the 1st defendant weak-kneed. 57.Despite these most fraudulent and illegal acts, the 1st defendant had not made any report against the plaintiff to the police in Hong Kong or the Public Security Bureau in Guangzhou or any other authority in either place. He had also not made any written demand for the return of the RMB30,000 or the new van. There is also nothing in writing of his many complaints against the various misdeeds of the plaintiff either by himself or through lawyers. There is no documentary support to his complaints whether contemporaneous or otherwise. 58.In stark contrast to the 1st defendant's timidity, the plaintiff's deviousness is exceptional. After the plaintiff has taken the matter to Court, the 1st defendant then found out that the plaintiff had on 3rd October, 2000 paid HK$2,080 cash into its own bank account for the storage charge and as a bogus admission of liability by the 1st defendant. In order to boost its bogus claim at the trial, the plaintiff has also fabricated a number of documents purportedly obtained from various sources including the internet, the US Customs Service, the defendants' customer Image Group and other business concerns in North America though the 1st defendant had not taken any step to confirm that they or anyone of them was forged. On the 1st defendant's case, the plaintiff is devious to the extreme. Findings 59.I find that the plaintiff's case simple and straightforward. It is also supported by contemporaneous documents. Cheung was also forthright in his evidence. He appeared to be a reasonable person experienced in the airfreight business. He was vigorously cross-examined but remained firm. I accept his evidence that at the material time, there was no direct flight from Guangzhou to Mexico. I do not accept that he had lied to the 1st defendant that he could arrange direct airfreight of cargo from Guangzhou to Mexico. Such lie could have been exposed easily by a simple enquiry by the 1st defendant with the Guangzhou airport. I find that Cheung is clever enough not to tell such stupid lie. I also do not accept that Cheung had behaved in the way described by the 1st defendant. Cheung was in real business, not crime. I cannot imagine that he would have behaved in such a fraudulent and illegal manner. In the description of the 1st defendant, he was not merely dishonest, he was just a thug. However, I reject such contention as I cannot imagine that the 1st defendant would have just allowed himself to be trodden by the plaintiff and Cheung in the way as described and still did not make any report to any authority or send out any letter of complaint. The minor discrepancies of Cheung's evidence can be explained by the fading of memory by the lapse of years. I accept Cheung's evidence in total. 60.I also reject the story of the 1st defendant for the above reasons. He was also improvising in the course of evidence. This is particularly clear on the taking of the two bonding machines and the change of ownership of the van. He said that Cheung had taken the two machines away by lying to his factory manager that Cheung had his authority to do so. But when he was asked by the Court on whether the staff had told him about it. He said nobody had phoned him as the only IDD phone was inside his room. This is unbelievable. The two machines according to him had a total worth of HK$300,000. That was very substantial by the standard in Guangzhou. It is unthinkable that the manager and staff of the factory would have just taken the words of Cheung and allowed the machines to be taken away. It was not difficult to make an IDD call from Guangzhou to Hong Kong. If there was no IDD phone available in the factory, one could always be found outside. On the RMB30,000 and the new van, he merely referred in the witness statement to the plaintiff's demand for these in exchange for the two bonding machines. But when he was asked by the Court on how the ownership of the van was changed, he very handily put the blame on the factory manager and said that because of his suspicion that the manager had conspired with the plaintiff, he sacked the manager. If the ownership was really changed without his knowing but by the conspiracy of the plaintiff with his manager, such was an important matter and would have gone into his witness statement. On the whole, his description of the plaintiff was too devious to be believed and of he himself too timid to be true. 61.I also refer to the point of the 1st defendant that he had not signed the agreement provided by the plaintiff and that was an indication that he did not agree to the terms. However, I believe that he did not sign simply because the 2nd defendant also did not sign. His tendering of the two cheques is ample proof of his willingness to assume the liability to pay. In any case, the date for the second post-dated cheque as mentioned in the agreement was 7th October but the one given by him was dated 12th October. That could also be a reason why he did not sign the agreement. If this written agreement indeed represented something seriously different from the terms already struck between the parties, the defendants or one of them would have responded in writing. They never did. 62.The 1st defendant has also criticized the plaintiff for not calling Johnny So to give evidence. The evidence of So in my view is not important. There is no dispute that the contract was made between Cheung and the 1st defendant and that is the crucial matter that I have to adjudge. The events that So had taken part were only peripheral. In the light of the reasons of my finding, the calling or So would not have made any difference. 63.I must also mentioned that the 1st defendant has also not made any complaint to the plaintiff on the delay in the delivery of the goods and the damage and loss of a substantial quantity. This breach by the plaintiff, according to the 1st defendant, had resulted in a loss of over HK$1 million to the defendants. This would have been the perfect answer to any demand for freight charge or any charge. Even if there was no claim by the plaintiff for freight charge, the defendants or the 1st defendant would have written to or claimed against the plaintiff for such loss. 64.I therefore find that the plaintiff and the defendants had agreed that the 420 cartons of LCD watches were to be delivered by air from Hong Kong to Los Angeles at US$1.60 per pound and from Los Angeles to Mexico at US$).55 per pound and the trucking of the goods from Guangzhou to Hong Kong was a matter for the defendants. 65.If I should be wrong on this and that the original contract was at US$1.60 per pound for direct flight from Guangzhou to Mexico, I also find that that original contract had been varied to US$2.15 per pound from Hong Kong via Los Angeles to Mexico. The reason being that the 1st defendant has said clearly in his evidence that the main reason for him to issue the post-dated cheque to the plaintiff and to yield to the plaintiff's demand was because the 2nd defendant was very angry and demanded that the goods had to be sent and had to reach Mexico on 12th September, 2000. If point should be taken that the plaintiff had not supplied any fresh consideration for the variation and the variation was unenforceable, I would rely on Williams v. Raffey Bros. & Nicholls (Contractors) Ltd. [1990] 2 WLR 1153 at 1165 C to H and UBC (Construction) Limited v. Sung Foo Kee Limited [1993] 2 HKLR 207 to support this finding. 66.On the strength of Cheung's evidence and the documents produced by the plaintiff, I also find that the goods were delivered to Mexico on 12th September, 2000. I can come to this finding without referring to the documents produced by the plaintiff on 24th September, 2003. There are sufficient documents disclosed by the plaintiff in December, 2002 to afford such finding and the 1st defendant has produced nothing to contradict it. Those new documents of the plaintiff only confirmed my finding. If this date of delivery was a term of the agreement, the plaintiff had complied with it. But I accept Cheung's evidence that he had not accepted such condition as he was in no position to guarantee its compliance. 67.I therefore give judgment to the plaintiff for the sum of HK$284,639.25 with interest at the judgment rate from the issue of the writ on 5th August, 2002 to the date of payment and dismiss the Counterclaim. I also make an order nisi that the 1st defendant do pay the plaintiff costs of the action with certificate for counsel.
Representation: Present : Mr. Chik, Counsel instructed by Messrs Angus Tse, Yuen & To for Plaintiff Mr. Ho, Counsel instructed by Messrs Waller Ma Huang & Yeung for 1st Defendant. |
Cases cited in this judgment