Links Film (International) Co (A Firm) v. The Pearl City Films Ltd
Read the full judgment text of HCA 8906/1983 on BabelCite. This High Court CFI judgment was delivered on 14 February 1984.
1. The plaintiff's claim against the defendant is now limited to the return of deposits, nominal general damages and an indemnity. The plaintiff's action is founded on an alleged failure on the part of the defendant to deliver copies of a film "Bloody Money" for distribution overseas in breach of Clause 8 in two contracts. The indemnity prayed for is one from the defendant against the plaintiff's liability for loss and damage to his overseas sub-buyers. The plaintiff no longer seeks liquidated d
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HCA008906/1983
BETWEEN
________ Coram: Hon. Liu J. Dates of Hearing: 12 - 13, 16 - 20, 23 - 25 January 1984 and 1 and 6 February 1984 Date of Delivery of Judgment: 14 February 1984 __________ JUDGMENT __________ 1. The plaintiff's claim against the defendant is now limited to the return of deposits, nominal general damages and an indemnity. The plaintiff's action is founded on an alleged failure on the part of the defendant to deliver copies of a film "Bloody Money" for distribution overseas in breach of Clause 8 in two contracts. The indemnity prayed for is one from the defendant against the plaintiff's liability for loss and damage to his overseas sub-buyers. The plaintiff no longer seeks liquidated damages as compensation. 2. Arising out of the same two contracts, the defendant counterclaims on the plaintiff's alleged failure to take delivery under Clause 10 for a declaration that these two contracts had validly and effectually determined, a further declaration that the defendant was entitled to and did validly forfeit the deposits paid thereunder and a further declaration that the defendant is entitled to resell the exhibition rights of the said film. The defendant has abandoned its counterclaim for damages. Costs is also being claimed by each of the parties to these proceedings. 3. In the course of the production of a film "Bloody Money", the plaintiff secured its distribution rights under two separate contracts both dated the 11th May 1982, "P1" and "P2". The former was for distribution in America and Canada and the latter England and Holland. Under "P1", for US$23,000 the defendant was to supply the plaintiff with 2 new copies of the said film, 4 trailers, stills, posters, synopsis and dialogue. Under "P2”, for HK$25,000 the defendant was to supply the plaintiff with one new copy of the said film, 3 trailers, stills, posters, synopsis and dialogue. For our present purposes, the two contracts are in similar terms. A rider was added to Clause 8 of both contracts, but it was recorded only in "P1". However, it was not disputed that the same was applicable as well to "P2". Of the US$23,000 under "P1", the plaintiff was required to and did deposit US$15,000. Of the HK$25,000 under "P2", similarly the plaintiff paid a deposit but only in the sum of HK$8,000. The balance under "P1" was therefore US$8,000 and under "P2" HK$17,000. 4. The relevant clauses are Clause 8 and Clause 10. The plaintiff relies on Clause 8 whilst the defendant relies on Clause 10. These clauses read as follows:
5. As I have said, the rider does not appear at the end of Clause 8 of "P2", which leaves blank even the time limit within which the defendant was to perform the contract, but it is common ground that the provision in Clause 8 of "P1" was to apply to both contracts. Naturally the deposit to be forfeited and compensation to be paid under "P2" were only to the extent of HK$8,000. 6. Previous to these two contracts, the plaintiff had purchased distribution rights of another three films from the defendant. It was Miss Mabel Chan of the defendant who contacted the plaintiff, Mr. Lam for the address of delivery, and admittedly this practice was expected to be followed under these two contracts "P1" and "P2". 7. Returning to these two contracts: On the same day, the 11th May 1982, Mr. Lam sold the same American/Canadian distribution rights to North America Chinese Motion Pictures Organisation, Inc. and those for England and Holland to Sino-Cine (HK) Company Limited on similar terms. 8. According to Mrs. Leung and Miss Mabel Chan of the defendant, the said film together with Chinese and English synopsis, the English posters and stills were taken to Cannes on or about the 11th May 1982, the Chinese/English dialogue was ready by July and all was ready for delivery in mid-August of the same year. 9. In July 1982, for the first time Mr. Lam had a preview of "Bloody Money" in the premises of the Hong Kong Colour Movielab Ltd. Mr. Lam told the court that after the July preview, he complained to Mabel Chan of its poor quality and enquired if it could be improved. Miss Mabel Chan confirmed Mr. Lam's complaint but she maintained that she made no promise of having any part of it reshot. Miss Mabel Chan was arranging for the film to be delivered in September, but particularly in October, November she claimed to experience frequent difficulty in her attempts at contacting Mr. Lam. She also complained that Mr. Lam, when located from time to time, would give no definite date for the plaintiff taking delivery. Mr Lam denied these assertions of Miss Mabel Chan. 10. A solicitors' letter dated 8th November 1982 was caused to be sent to the plaintiff. The despatch and receipt of this letter was not disputed. Mrs. Leung and Miss Mabel Chan had this solicitors' letter sent in the hope of extracting some formal response from Mr. Lam, but according to Mr. Lam he was surprised at the receipt of this solicitors' letter as he had always been prepared to take delivery. 11. The versions from the plaintiff and the defendant drifted further apart after this solicitors' letter of the 8th November 1982. It would be more convenient to deal with them separately. I will begin by setting out the defendant's version first: The defendant's case is that some time after the despatch of this solicitors' letter of the 8th November, Miss Mabel Chan received a call from Mr. Lam, in which Mr. Lam allegedly told Mabel that he would come over to see Mrs. Leung with a view to seeking a favour of a postponement as to taking delivery. Mr. Lam also enquired into the reason for the letter. Upon receipt of Mr. Lam's reply dated the 10th December 1982 in effect agreeing to take delivery by the 17th December, Miss Mabel Chan realized Mr. Lam' s about-faced manoeuver in his informal approach. Mr. Lam's telephone message was said to have been conveyed to Mrs. Leung whom Mr. Lam approached on or about the 12th December. Mrs. Leung recounted how Mr. Lam pleaded with her to postpone delivery under the pretext that fund was not ready. The plea of Mr. Lam was allegedly acceded to and a postponement was granted until after the showing of "Bloody Money" in Hong Kong. Conversation on prints of the said film to be delivered was not very explicit, but it was clearly understood, so claimed Mrs. Leung, that used copies could be delivered by the defendant to the plaintiff after such Hong Kong showing of "Bloody Money". Thereafter, according to Miss Mabel Chan, she referred to the agreement reached between Mrs. Leung and Mr. Lam in a subsequent telephone conversation in which Mr. Lam also requested the defendant to send him a confirmatory letter. Thus, by a letter of the 16th December the defendant wrote to the plaintiff in these terms: "Dear Sir,
12. Mabel Chan told the court that on the 15th March 1983 she contacted Mr. Lam by telephone with the information that the Hong Kong showing of "Bloody Money" would finish several days before the end of March. She also requested Mr. Lam to have the cheque ready. Thereupon, Mr. Lam replied: "Absolutely no problem", and instructions to effect delivery to Mr. Lam's office were also given. What came next was the letter dated 18th March 1983, "D1", whereby the defendant confirmed the telephone conversation between Mr. Lam and Miss Mabel Chan on the 15th March. That letter reads:
13. Mabel Chan recalled that she instructed a clerk to send out this letter "D1" on the 18th March because that was the second time she was to sit for her driving test in the afternoon. Hence, in the morning of the 18th she had to finish her office chores before she took time off in the afternoon. A memo of the same date, 18th March 1983, "D2" was despatched to Hong Kong Colour Movielab Ltd. with instructions to deliver 2 prints and 4 trailers to the plaintiff after their collection from Gala Film Distribution Ltd. Under the two contracts a total of 3 copies and 7 trailers were to be delivered, and Miss Mabel Chan was extensively cross-examined as' to the number of prints and trailers to be collected and delivered as per this memo. Her attempted explanation as to an extra copy being kept in her office was less than satisfactory, but "Bloody Money" had been shown in Hong Kong from the 21st to 26th March in some 16 to 17 cinemas and Miss Mabel Chan maintained that more than sufficient prints and items required under contracts "P1" and "P2" were instantly available. Miss Mabel Chan further testified that on or about the 25th or 26th March 1983, Mr. Lam spoke to her over the telephone on, inter alia, the letter of the 18th March and the delivery date of the 31st March therein confirmed. According to Miss Mabel Chan, Mr. Lam raised the question that under Clause 10 of both contracts he should have 40 days after receipt of a written notice to take delivery of "Bloody Money", and she had no alternative but to abide by the period of 40 days from 18th March 1983 so insisted upon by Mr. Lam. After the telephone conversation, the defendant countermanded instructions for delivery previously given to Hong Kong Colour Movielab by another memo dated 26th March 1983, "D3". 40 days from 18th March 1983 fell on the 27th April. A week or so before the 27th April 1983 in a telephone conversation Miss Mabel Chan allegedly reminded Mr. Lam of the imminent expiration of the period and requested him to have the cheque ready for taking delivery. Thereupon, according to Mabel Chan, Mr. Lam asked for a meeting to discuss the matter in detail. That allegedly resulted in a meeting at the Tai Ping Restaurant in Austin Road, at which Mr. Lam told Mabel that he was in difficulty as the film distribution rights were purchased at too high a price. He implored Mabel to assist him by asking Mrs. Leung for a reduction in the price, if possible. He also put forward two other alternatives, namely, that he be permitted to take delivery of the film without paying for the balance but that if takings were to exceed the deposits then he would pay the excess towards the outstanding balance or part of it, or that the defendant should assist him in selling off the distribution rights as he had unsuccessfully attempted to sell the same to "Century". With these proposals, Miss Mabel Chan was allegedly to seek the indulgence of Mrs. Leung. According to Miss Mabel Chan, two or three days later and that must have been from about two days to about a week before the expiry date of the 27th April, she conveyed to Mr. Lam over the telephone that Mrs. Leung would only agree to try her best to sell the film rights at a higher price and that as the defendant was only interested in recovering the outstanding balance, Mr. Lam would be returned any surplus. It would appear from part of the evidence of Miss Mabel Chan that the plaintiff seemed to be suggesting a minimum price for the disposition of his film rights, but I think the intention of Mr. Lam was better reflected in what, according to Miss Mabel Chan, he said to her that if the plaintiff would only lose $5,000 he would be very happy. Mrs. Leung and Miss Mabel Chan disclosed that throughout this period, both before and after the 27th April, the defendant constantly consulted its solicitors. Miss Mabel Chan told the court that the defendant waited for Mr. Lam until the expiry date to "get money to pay" 'the defendant, that the defendant's rights "would still be valid" and that the defendant waited for the expiry date to pass so that the plaintiff's right "was confiscated automatically". 14. In mid-May 1983 Mrs. Leung approached Mr. Choi of Golden Harvest and two other prospective purchasers with a view to disposing of "Bloody Money". Some two days thereafter, on the 16th May, an agreement was reached and signed through Mr. Choi with Mr. Albert Wong for US$10,000, "D5". The very next day, the 17th May, Miss Mabel Chan requested Mr. Lam by telephone to collect the excess of US$2,000. Mr. Lam declined the offer and threatened to settle the matter in court. It was understood that Mrs. Leung required the return of the 3% commissions. 15. As far as the distribution right for England and Holland is concerned, Miss Mabel Chan indicated during her evidence that the defendant "did not look for another buyer". Miss Mabel Chan was not in control of the management. Mrs. Leung seemed to be more precise in her evidence that the defendant was unable to secure another purchaser. 16. Mr. Lam gave a different version: He denied the alleged contents of the telephone conversations and the discussion at the Tai Ping Restaurant as given by Miss Mabel Chan, but Mr. Lam was at pains to point out that there had been many telephone conversations between Mabel Chan and himself. He maintained that he was readily accessible after the preview in July 1982 and was throughout prepared to take delivery of "Bloody Money". Mr. Lam claimed that the delay was caused by the defendant as Mrs. Leung and Mabel often explained that something further would have to be done to the film. He told the count that he was surprised at the receipt of the defendant's solicitors' letter of the 8th November 1982, the 180th day after the signing of the contract. He specifically denied that he told Mabel shortly before or about the time of his letter dated the 10th December 1982 agreeing to taking delivery by the 17th December that he would come over to Mrs. Leung's office seeking a favour of a postponement. Mr. Lam recollected that he visited the office of the defendant some time between the 10th of December and 17th of December on other businesses, but he denied that he had ever requested Mrs. Leung for a postponement. Instead, so Mr. Lam claimed, on the 15th December 1982 Mabel contacted him by telephone with the suggestion that delivery of "Bloody Money" was to be made only after its showing in Hong Kong. It was also alleged that Mabel estimated the showing of "Bloody Money" in Hong Kong as likely to be in January. Mr. Lam was quite alive to the force of the rider to Clause 8 of both contracts, that is to say that the defendant was perfectly entitled not to deliver to the plaintiff before the expiration of a month after the last day of first showing of the said film in Hong Kong. At one time, Mr. Lam testified that he asked Mabel to write to the plaintiff so that he could consider the defendant's proposed delayed delivery. Mr. Lam did not explain precisely why the defendant would require his consent if it was, by the rider to Clause 8 of both contracts, entitled so to deliver within a month after the first showing of the film in Hong Kong. At another time Mr. Lam seemed to say that he had in fact agreed with Mabel Chan on the defendant's suggestion over the telephone. If that had been so, there would have been no necessity for any further consider-action. Mr. Lam explained that the defendant's letter of the 16th December 1982 (p.7 of the Agreed Bundle) was such written request for a postponement sent to him for his consideration, but that particular letter of the defendant dated the 16th December was couched in terms not quite consistent with the version Mr. Lam related to the court. Mr. Lam then gave us two alleged telephone conversations: One was from him to Mabel Chan seeking an explanation as to why the film was not shown locally in January. According to Mr. Lam, Mabel Chan's response was: "Very difficult. Let's discuss it later." He took that to mean difficulties in cinema dates in Hong Kong, and as a decent business associate with amicable relationship, so Mr. Lam explained, he did not wish to aggravate the situation. Delivery of "Bloody Money" was therefore left to an unknown date which Mr. Lam was said to have no alternative but to accept. The next alleged conversation was at the beginning of March 1983 from Mabel informing Mr. Lam that the showing of "Bloody Money in Hong Kong would be at the end of March. The gist of these two telephone conversations was, needless to say, denied by Miss Mabel Chan. Then came the alleged conversation on the 15th March 1983: Mr. Lam's version was that Mabel Chan categorically gave him the showing date of the film in Hong Kong as "20 something day" in March, but she sought, though unsuccessfully, advance payment of the outstanding balance under both contracts. To Mr. Lam's knowledge, the film was shown in Hong Kong from 21st to 26th March 1983. It is therefore the plaintiff's case that delivery of "Bloody Money was to be "within one month after the last day of the first showing of the film in Hong Kong" in accordance with the rider to Clause 8 of the contracts. In his letter to the defendant on the 10th December 1982, in counting (as he must have been) the 40 days from the defendant solicitors' letter of the 8th November 1982, he arrived correctly at the date of the 17th December 1982. Mr. Lam also adhered to the 27th April 1983 as the last day for performance under both contracts. However, one month after the last showing on the 26th March should be the 25th April or even the 26th April but never the 27th April. Mr. Lam also attempted to explain the erroneous computation by suggesting that he was counting 31 days. Even then, including the remaining 5 days in March up to the 31st March, that would only take him to the 26th of April. Finally Mr. Lam was driven to admit that he had made a mistake of one or two days. However, he never offered any explanation as to why he could have made this mistake in April 1983 whilst he had been accurate earlier in December 1982.Mr. Lam denied the receipt of the letter from the defendant dated 18th March 1983, "D1". Mr. Lam told the court of two further telephone conversations after the last showing of "Bloody Money" in Hong Kong, one was from him on the 6th April 1983 to Mabel Chan enquiring as to how the film would be delivered to the plaintiff. In that conversation, Miss Mabel Chan allegedly gave him a vague reply to the effect that she had yet to consult Mrs. Leung. Mr. Lam did not express any displeasure at such alleged laxity. On the 8th April 1983, Mr. Lam negotiated with "Continental Century" with a view to selling "Bloody Money" distribution rights in America and Canada. Mr. Wong Hoi who controlled one of the five lines of Chinese cinemas in America testified that the plaintiff's sub-buyer North America Chinese Motion Pictures Organisation, Inc. cancelled bookings in March 1983. The cancellation perhaps fell more smoothly into the general pattern of events in the defendant's version, but without more no weight should really be placed on the mere disengagement between "North America" and Mr. Wong's Chinese cinemas in America. The other telephone conversation, according to Mr. Lam, was on the 10th April. It was a call either from Miss Mabel Chan or Mr. Lam, in which Mabel allegedly informed Mr. Lam that Mrs. Leung was preoccupied and that Mabel could only give him a reply on the delivery date after a more few days. 17. According to Mr. Yu, on the 13th April, "Continental Century" returned the press book of "Bloody Money" and told Mr. Lam that "Continental Century" was not interested in buying the distribution rights in America and Canada. Mr. Lam denied that "Continental Century" had categorically rejected his offer of "Bloody Money" which formed part of an alleged package deal said to be still pending between the plaintiff company and "Continental Century". If in fact the negotiation had been or was still on foot, Mr. Yu would have been at least aware of it as a responsible member of his company. Mr. Yu could not categorically refute Mr. Lam's allegation as he had no personal knowledge of it. It is quite unnecessary for me to make a factual determination on this aspect which in my view has no real bearing on the issues between the plaintiff and the defendant. Whatever the truth was, Mr. Lam could still have represented to Mabel that his offer for sale was turned down. 18. In proper sequence of time, I will return to the alleged encounter between Mr. Lam and Miss Mabel Chan. Next came the meeting of the two at the Tai Ping Restaurant in Austin Road. Mr. Lam's version is again entirely different from that of Miss Mabel Chan's. According to Mr. Lam, without any explanation Mabel Chan simply broke the news to him that the film had been sold to Golden Harvest. Thereupon, Mr. Lam said he was surprised. I cannot read into the evidence of Mr. Lam that he was surprised in disbelief. On a fair reading of his evidence, he was surprised at the defendant's alleged conduct. Mr. Lam asked Mabel to communicate with him in writing. 19. On the 4th May 1983 the plaintiff's sub-buyer for American and Canadian distribution rights wrote to the plaintiff terminating the sub-contract on account of delay. 20. It is common ground that surprised as he was, requesting for a written communication as he did, and being pressed by his sub-buyer as he claimed to have been, Mr. Lam took no step or action until he was written to by the defendant through its solicitors on the 20th May 1983, and only in response to that did Mr. Lam reply through his solicitors on the 24th May 1983. 21. I have given every aspect of this case my overall consideration. I propose to highlight only the more substantial issues. 22. Mr. Lam produced a US$8,500 remittance notice, "P8" of 15th December 1982 with a view to corroborating his claim that after the defendant's solicitors' letter dated 8th November 1982 (p.1 of the Agreed Bundle), he was at all times ready, willing and financially able to take delivery. Mr. Lam claimed that this remittance was earmarked for "Bloody Money". It was therefore urged that the alleged plea of his to Mrs. Leung in December for postponing delivery on account of not having ready fund was improbable and untrue. Being kept in fund by this US$8,500 remittance from North America would not necessarily dampen all the temptations to rid himself of what was thought to be disastrous commitments. It was also possible, of course, that Mr. Lam's alleged financial difficulty as related to Mrs. Leung in fact bore no relation to the truth. 23. As for the date of 27th April 1983, Mr. Lam was wholly unconvincing in his endeavours to explain this date while seeking to shut out a more likely date for computation in "D1", the letter of the 18th March 1983. This letter of the 18th March goes hand in glove with a series of other related communications such as "D2", the memo of the same date to the Hong Kong Colour Movielab Ltd. and the subsequent cancellation of instructions "D3" on the 26th March. The receipt of these instructions by the Hong Kong Colour Movielab Ltd. was well established by the evidence of Mr. Ko Tin Chau. 24. Turning to Mabel's alleged surprise message of sale of the film at the Tai Ping Restaurant meeting: What better excuse for not taking delivery on the 27th April than an alleged outright disposition of the subject-matter, "Bloody Money"! Mr. Lam claimed that he was given this irreversible message of sale at the restaurant a few days to about a week before the deadline of the 27th April. Mrs. Leung testified that the sale of the film was discussed with Mr. Choi and two other prospective purchasers only a day or two before the 16th May 1983 and that the deal was in fact closed upon the signing of the sale agreement "D5" on that date. From the time sequence given of this transaction, if true, it was improbable that Miss Mabel Chan should have fabricated a false message of sale at an earlier date in the Tai Ping Restaurant. In the letter of North America "P6" dated the 4th May 1983, it would seem that they were unaware of the alleged sale of the film said to have been disclosed by Mabel Chan to Mr. Lam some time before the 27th April. It is difficult to understand why North America could have been left uninformed by the 4th May 1983 of this alleged disposition if Mabel had in fact made a clean breast of it before the 27th April. I was invited by Mrs. Kaplan, counsel for the plaintiff, to detect from Mr. Lam's evidence an element of surprised disbelief upon being so told by Mabel Chan of the alleged sale of "Bloody Money". In my view, a fair reading of the evidence reflects amazement and surprise of Mr. Lam at the alleged conduct of the defendant rather than his disbelief of the truthfulness of the information. Miss Mabel Chan and Mr. Lam were not on bad terms, and Mr. Lam had made no accusation that Mabel Chan was devious. If Mr. Lam's evidence could be understood to suggest some disbelief or suspicion of the disclosure made by Mabel Chan, he would have been all the more unforgivable for not having taken any step or action sooner. 25. It was suggested that the defendant deliberately broke the contract for an extra profit of US$2,000. The sale to Mr. Albert Wong through Mr. Choi of Golden Harvest was for US$10,000, US$2,000 more than the balance to come from Mr. Lam under "P1". The extra benefit of US$2,000 is more apparent than real. The true position was: instead of selling "Bloody Money" at US$23,000 as it was sold to Mr. Lam under "P1", it could only be disposed of for merely US$10,000, representing a diminution in actual value of some US$13,000. Moreover, such US$2,000 over and above the balance due from Mr. Lam under "P1" could hardly be described as a realistic inducement for the defendant not honouring its USA/Canada distribution rights contract. Any breach of such a contract would be visited with the risk of a substantial damages claim, spelt out in terrorem as limited damages in its very Clause 8. Besides, under the English and Dutch distribution rights contract "P2", only a HK$8,000 deposit was paid. There was HK$17,000 to come as outstanding balance. Even at the exchange rate in this day and age that would be slightly more than US$2,000. 26. Against the background of a number of unattractive commercial realities this case developed. "Bloody Money" was a poor quality product. Mr. Lam himself allegedly said to Miss Mabel Chan that its exhibition rights in Canada and America might not even fetch as much as the outstanding balance of US$8,000. Every possible manoeuvre seemed to have been adopted by Mr. Lam to wriggle out of these contracts. This court was told by Miss Mabel Chan as to how Mr. Lam agreed by a formal reply dated 10th December 1982 to take delivery but at the same time approached her and Mrs. Leung informally for a postponement by way of indulgence. Also from Mabel Chan we heard of the affirmative attitude of Mr. Lam in agreeing to take delivery at the end of March with an emphatic remark of "Absolutely no problem." only to be displaced some 10 days later by his subsequent insistence on the 40 days period. The whole manoeuvre culminated in Mr. Lam's declared intention of not taking delivery of the film at the Tai Ping Restaurant meeting. 27. According to Mr. Lam, he had been at least 4/5 times disappointed by the defendant: First, having agreed to deliver' by 17th December, 40 days after the solicitors' letter of the 8th November 1982, Mabel Chan allegedly came up with the suggestion of delayed delivery after the first showing in Hong Kong on the 15th December 1982, just two days before the deadline. Secondly, having allegedly informed Mr. Lam of a likely local showing date in January, upon being pressed for an explanation as to why the film was not so shown in Hong Kong, Mabel's only answer could not have been more vague: "Very difficult. Let us discuss it later." Thereupon, Mr. Lam was prepared or rather forced to accept an unknown delivery date. Thirdly, upon notifying Mr. Lam on the 15th March of a scheduled local showing at the end of March, Mabel allegedly demanded immediate payment of the balance without any conceivably good cause. Fourthly, on the 6th April 1983, Mabel allegedly gave another vague answer to his inquiry as to the delivery date that she had to consult Mrs. Leung. By the same token, on the 10th April 1983 another evasive answer was given allegedly by Mabel that Mrs. Leung was otherwise pre-occupied and a reply could only be given to Mr. Lam in a few days' time. Lastly, at the Tai Ping Restaurant meeting, without any warning or explanation for the wantonly irresponsible attitude, Miss Mabel Chan allegedly broke the news of the sale of "Bloody Money". It is incredible that Mr. Lam would have tolerated such irrational and atrocious behaviour on the part of the defendant as he said he did until the very end. 28. There was no step taken by Mr. Lam after all was allegedly said and done until the 25th May 1983 and only in response to the defendant solicitors letter of the 20th May 1983. The letter of the 20th May from the defendant's solicitors seems to leave much to be desired, but no one had any illusion of or was misled as to the defendant's real complaint as borne out by the evidence in this case. 29. In addition I have had the opportunity of observing the demeanour of the witnesses in the box. Despite trivial discrepancies I accept the version given to the court through Mrs. Leung and Miss Mabel Chan. Needless for me to say that I accept also the evidence of witnesses called by the defendant who all stood their ground well under cross-examination. I have little hesitation in preferring their evidence to that of Mr. Lam's. 30. It was argued on behalf of Mr. Lam that the defendant had served no notice on him for taking delivery under Clause 10 of these contracts. In the version of the defendant, which this court accepts, the consensus was for used prints and other items of "Bloody Money" to be forwith delivered to Mr. Lam' s office address after its Hong Kong release. Such agreed postponed delivery date from the 17th December 1982 at the request of Mr. Lam was confirmed by the defendant's letter dated 16th December 1982 (p.7 of the Agreed Bundle). This confirmatory letter categorically stated that the plaintiff would be notified in writing of "the exact date of the film delivery after its releasing". In addition to my other criticisms levelled at Mr. Lam's explanation of this letter, it is worthy of note that this letter was dispatch for confirming an accepted state of affair and not for allegedly placing a request for Mr. Lam's consideration. As the Hong Kong showing of the film was expected to come to an end several days before the 31st March, Miss Mabel Chan passed on this information to Mr. Lam in mid-March with a reminder that Mr. Lam should have the cheque for the balance ready for collection. Mr. Lam assured Miss Mabel Chan that there would be "absolutely no problem" and asked for delivery to be made to his office. As a result, a further confirmatory letter was sent to Mr. Lam, the letter dated the 18th March 1983, ."D1". This again was a confirmatory letter of an agreed delivery date on the 31st March and Mr. Lam's office as the given place of delivery. Obviously, "D1", as sent, was not and not intended to be a Clause 10 notice, but according to Miss Mabel Chan, on the 25th or 26th March 1983 over a telephone conversation on this letter "D1" and the delivery date of the 31st March, Mr. Lam asserted his right to take advantage of the contractual period of 40 days from 18th March 1983, being the date of "D1". Insistence on such period of 40 days was founded on Clause 10 of the contracts. Mr. Lam then clearly treated "D1" as a Clause 10 notice and that was acceded to by Miss Mabel Chan. Thereupon both parties proceeded on the basis that "D1" was such a Clause 10 notice. In my view, Clause 10 was thus converted to and did serve as such a notice. 31. The accepted practice between the parties to this action was for the defendant through Miss Mabel Chan to consult Mr. Lam near the date of performance as to the time and place of delivery. The defendant had through Miss Mabel Chan followed such practice by her telephone call to Mr. Lam in mid-March 1983, in which instructions were given by Mr. Lam for delivery to be made to his office. A letter of the 18th March 1983 "D1" confirmed this arrangement. I have explained how " D1" was ultimately accepted as Clause 10 notice giving rise to the agreed deadline of the 27th April 1983. Mr. Lam categorically declined to go on with the transactions for the excuses given to Mabel Chan at the Tai Ping Restaurant meeting, not long before a few days to about a week ahead of the 27th April. After the Tai Ping Restaurant meeting and even closer to the expiry date of the 27th April, Mr. Lam reiterated his stance over the telephone. It is, in my view, an irresistible inference that Mr. Lam persisted in his repudiation of this contract up to the very end and refused to carry out his part of the bargain. Mr. Lam could not have been unaware that he could, at any time after the last telephone conversation up to the 27th April 1983, decide to take delivery by notifying the defendant of his intention and the address for delivery as Mr. Lam had never been told by the defendant of any sale of the film before the 17th May. The sale on the 16th May was not effected on behalf of Mr. Lam. If, which was not the case, the defendant had secured a buyer for Mr. Lam before the 27th April on Mrs. Leung's previous promise to lend a helping hand, Mr. Lam would not have been deprived of a prior personal consultation before closing of the deal. In the circumstances, the defendant did continue to tender performance up to the 27th April in the sense that, as was well known to Mr. Lam, it remained then ready, able and willing to give performance. This is, therefore, a case of tender and refusal to take delivery up to the expiration of the time for performance. In another words, the defendant did continue to afford an opportunity of taking possession of the items contracted for until the very end. It was Mr. Lam who persistently refused to perform his part of the bargain and failed to take or instruct the defendant as to the place of delivery. There was no question of the defendant ever seeking to accept the plaintiff's anticipatory breach, though persisted to the end. I find and hold that the plaintiff Mr. Lam was in breach by not agreeing to take delivery and/or not giving instructions as to the place of delivery to the defendant up to the expiration of the deadline on the 27th April 1983. 32. I am inclined to the view that continuing and persistent anticipatory breach would remain open for acceptance as a repudiation at any time before the expiration of the contract period for performance, even though the breach had once been treated as inoperative and the contract affirmed. However, I need not decide on this aspect as there was no question of accepting any anticipatory breach. These contracts were taken as valid and subsisting up to the very end. Moreover, it was never suggested that there had been communication to Mr. Lam of any acceptance of his anticipatory breach as a repudiation. The defendant's case is that Mr. Lam was in breach of Clause 10 of these contracts by not taking delivery up to the 27th April. 33. After the showing in 16 to 7 Hong Kong cinemas, the defendant was, at the end of March 1983 and had, at all material times thereafter, been ready, able and willing to give performance by delivery. As a matter of fact, the defendant company had been, according to Miss Mabel Chan and Mrs. Leung, so ready, able and willing to perform since a much earlier date in July/August 1982. 34. The plaintiff's claim therefore fails. If the plaintiff's claim for indemnity were supportable, I would find that the defendant, through Miss Mabel Chan, became aware of the sub-sale by Mr. Lam of the distribution rights at the Tai Ping Restaurant meeting. In addition to some of the considerations to which my attention has been drawn by Mrs. Kaplan, the defendant had the previous experience of delivering on instructions 3 films to Sino-Cine at an office known not to be belonging to Mr. Lam. 35. The defendant's counterclaim therefore succeeds as it now stands. The resale of the distribution rights is no concern of Mr. Lam for a Clause 10 forfeiture, but I prefer and accept Mrs. Leung's evidence that the defendant has been unable to secure a buyer for the distribution rights under "P2" despite the assertion of Miss Mabel Chan that her company did not "look for someone else". 36. I grant the declarations sought in terms with costs of this action and of the counterclaim to the defendant against the plaintiff.
Representation: Mrs. B. Kaplan instructed by P.H. Sin & Co. for the Plaintiff. Mr. Sammy Lee instructed by M.K. Lam & Co. for the Defendant. |