Lep International ( Far East) Ltd v. Chiu Duen Ching and Another

HCA000830/1977

Coram: Mr. Commissioner Bewley.

Date of Judgment: 30 July 1979

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JUDGMENT

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1. In this action the plaintiff sues for unpaid freight and storage charges and for other expenses incurred in respect of a consignment of goods forwarded from Hong Kong to Los Angeles by air, pursuant to an agreement with the defendants. In the event of liability being owed, damages are agreed at $34,902.

2. The plaintiff is a well-known forwarding company with branches in Europe and the Far East. The defendants are manufacturers of children's dolls. One of their customers is a Los Angeles company named Peggy Ann Inc. This company is the only customer with which the defendants deal directly. In all other cases they sell through Hong Kong based exporters, who take care of the shipping details.

3. The defendants are accustomed to ship goods to Peggy Ann by sea, but on 10th December 1976 they received a telex from Mr. Tietler of Peggy Ann (1 in Agreed Bundle) urgently asking them to find out the cheapest way of airfreighting 2,000 dozen pieces. On 12th December there was a telephone conversation between David Chiu (1st defendant) and Mr. Tietler. This was followed later that day by a confirmatory telex from David Chiu (3 in Agreed Bundle) in which, inter alia, he said that 1,000 dozen pieces would be sent by airfreight on 15th December.

4. David Chiu was not familiar with airfreight procedure, but was introduced by a cousin to an employee of the plaintiff company. This man, a Mr. Lee, visited David Chiu at the factory on the morning of Monday, 13th December and they discussed the matter. Mr. Lee said he was on leave but would pass the instruction to a colleague, Mr. Yam, who would take care of things.

5. Later that day David Chiu received a telephone call from Mr. Yam. Mr. Chiu and Mr. Yam do not agree about what was said on the telephone, but it was agreed at any rate that the plaintiff should airfreight the goods to Los Angeles.

6. There is no dispute that the goods were delivered to the plaintiff on 16th December and that a Lep 'house airway bill' was given to Mr. Chiu on 17th December. In this document, which gives particulars of the consignment and in turn enables the shipper to negotiate his letter of credit, the flight date is given as 18th December. It is common ground that the goods did not leave Hong Kong on this flight, that a 'master airway bill' which is the contract between the forwarding agent and the air-line - was executed by the plaintiff on 20th December and that the goods left Hong Kong the following day. When they reached Los Angeles, Mr. Tietler refused to accept them, as they were too late for the pre-Christmas market.

7. According to the agreement between the defendants and Peggy Ann, the freight charges were to be paid by the consignee. However, on either 16th or 17th December, David Chiu signed and delivered to the plaintiff a document entitled "shipper's letters of instructions for contract of carriage" (4 in Agreed Bundle), which specifically provides:

"The undersigned hereby guarantee the payment of all charges due to the carriers involved on collect freight basis, whether the shipment is abandoned at destination or returned to shipper at his/her request, or for any reason it is impossible to make delivery of the shipment within a reasonable time and in such event, the consignee refuses or is unable to pay any or all charges due under the Airway bill mentioned above without limiting or qualifying in (sic) any of the provisions of the said Airway bill, and agrees to the conditions on reverse hereof."

8. The last sentence of para. 4 of the Standard Trading Conditions on the reverse side reads:

"Subject to express instructions in writing given by the Customer, the Company reserves to itself absolute discretion as to the means, route and procedure to be followed in the handling, storage, and transportation of goods."

It is on the strength of this document that the plaintiff makes its claim. The defendants say that, since the document was only signed on the strength of a prior oral warranty that the goods would be flown on 18th December, the guarantee is not legally enforceable.

9. The plaintiff's main witness was Mr. Yam, who was in charge of the consignment. He is no longer employed by the plaintiff. He did not know David Chiu and spoke to him for the first time on the telephone on 13th December. Mr. Chiu did not specify any date which the cargo should leave Hong Kong, but Mr. Yam told him that it would be before the weekend, or at least he would try to arrange it with the airlines, but it was difficult to obtain space at the peak Christmas season.

10. Mr. Yam then contacted several airlines and succeeded in booking space on Pan Am flight PA876 on 18th December. He again telephoned David Chiu, who confirmed that this was suitable. According to Mr. Yam, details of the consignment were not discussed during these telephone calls.

11. There was a further telephone call on either 14th or 15th December, when Mr. Yam gave David Chiu the numbers of the house and master airway bills. It is possible to do this before the bills are issued, as the numbers are reserved for a particular consignment as soon as it is booked. At some point during these two days, a pad of booking forms - the above-mentioned shipper's letters of instructions - was delivered to the defendants' factory. This was standard practice in the case of a new client.

12. On 16th December - Mr. Yam says it was in the afternoon - the goods were delivered to the plaintiff's warehouse. In cross-examination, however, Mr. Yam said that he gave this date because it was the date on the shipper's letters of instructions, which accompanied the goods and which later reached his desk. He himself did not physically receive the goods.

13. From the information contained in the shipper's letters of instructions, the plaintiff completed the house airway bill, which was delivered to the defendants on 17th December. On that day also the goods were sent to the airport. Mr. Yam does not remember if he had another telephone conversation with David Chiu before the weekend, but concedes that this is possible.

14. Mr. Yam was not in the office on Saturday 18th December. At some time on Monday 20th December - Mr. Yam cannot say whether it was morning or afternoon or indeed whether he was notified by the airline or by someone in his own office - he learned for the first time that the consignment had not left as planned on 18th. The goods had been "off-loaded", which simply means that the airline had found it inconvenient to put them on board that particular flight and had stood them by for another day. This, under its conditions of carriage, and in spite of the confirmed date already given to the plaintiff, it was entitled to do.

15. Mr. Yam rang David Chiu to tell him the bad news. At least this is what he first said. Later in his evidence he said it was possible that he had done so, but he was not sure.

16. He was shown a telex sent from New York by Mr. Tietler to the defendants on 18th December at 4.00 a.m. Hong Kong time (10 in Agreed Bundle), in which complaint is made that Airmark - the forwarding agent in Los Angeles - had advised that the cargo was not due to leave until 21st December. Mr. Yam said that if Airmark knew this at that time, then the plaintiff must also have known, but he did not know how Airmark could have known, unless they had checked the manifest with the airline on 17th December. The manifest was available on 17th and would have provided the relevant information.

17. At 4.00 p.m. on 20th December a telex was sent by the plaintiff, signed by Mr. Yam's subordinate, Franky Man, who was in charge of the documentation for this consignment, addressed to Airmark in Los Angeles (13 in Agreed Bundle). This telex includes the numbers of both airway bills, the flight number, the date 18th December and the message that the consignee urgently needed the cargo. Mr. Yam does not know why Franky sent this message. He concedes that by that time - 4.00 p.m. - it is most likely that Franky had already executed the master airway bill for the flight on 21st December. He thinks that Franky must have made a mistake. Unfortunately Franky no longer works for the plaintiff and cannot be located.

18. Mr. Yam does not know how a copy of this telex came into the defendants' possession. He denies that he told David Chiu to come to his office to see it in order to satisfy himself that the goods had really gone on 18th December.

19. At 6.25 p.m. the same day Franky sent another telex to Airmark (1 in Non-agreed Bundle). This also quotes the house airway bill number, the flight number and the date 18th December, but continues, "Do not let him know about the actual 'ETD' shipment, will consign to you by PA876 21st December master airway bill No. 026-765985535. Details will telex you later." I assume "ETD" stands for estimated time of departure. Mr. Yam says that, so far as he can remember, he did not instruct Franky to send this telex and he cannot remember why it was sent. He can think of no reason why the plaintiff should have wanted to hide the ETD, unless the defendants themselves desired it so.

20. On 28th December Mr. Yam himself sent a telex to Airmark (2 in Non-agreed Bundle). This enquires about the exact time of arrival of the cargo and the time the consignee was notified and concludes, "Has consignee found out that shipment actually left Hong Kong on 21st December?" Mr. Yam's explanation for this sentence is that it refers to the previous telex sent by Franky at 6.25 p.m. on 20th. But when he was asked in cross-examination to explain the connection, he replied, "I can't remember". Counsel put it to him that these telexes suggest that there was something hidden from the consignee and Mr. Yam agreed. He suggested, however, that it was possible that they were informed of the off-loading by the airline between the first telex to Airmark at 4.00 p.m. and the second at 6.25 p.m.

21. Counsel then put it to Mr. Yam that it was because he had given an oral warranty to David Chiu on 17th December, that he tried to hide the real date of departure. To this Mr. Yam replied, "Yes", but he qualified this in re-examination by explaining that, by the term "warranty", he meant a promise, but not one that must definitely be kept.

22. In answer to the court, Mr. Yam admitted that Franky must have known on 18th December that the goods had been off-loaded. This was why the master airway bill was executed on 20th not 18th. He should have told Mr. Yam on Monday morning, but failed to do so. Mr. Yam explained that it was normal practice to telephone the airline a few hours before departure and check that the goods were on board. If they were, the master airway bill was made out and delivered to the airport.

23. The joint managing director of the plaintiff company, Mr. Bird, then gave evidence. He himself has no knowledge of the events with which we are concerned and was thus only able to give evidence as to his firm's practice and procedure. Asked about the master airway bill, he said it would have been prepared some time before the flight, with the flight number left blank. Then, when they were certain that the cargo was on board - some hours before departure - this final detail would be filled in. If the cargo were off-loaded after the master airway bill had been sent to the airport, the airline would either amend the document or notify Lep and ask for a new one.

24. Mr. Bird confirmed Mr. Yam's evidence that a pad of blank shipper's letters of instructions forms was normally sent to a new customer and that this was done prior to delivery of the cargo to the plaintiff's warehouse. The completed form would accompany the cargo together with other relevant documents. Only when these documents had been received, was it possible for the plaintiff company to complete its own internal documentation. He considered it unlikely that the information contained in shipper's letters of instructions would be given over the telephone.

25. Mr. Bird explained that the house airway bill was issued as soon as the cargo was in the plaintiff's warehouse, in order that the shipper might take it to the bank and negotiate his letter of credit. The information in the airway bill was obtained from the shipper's letters of instructions.

26. Mr. Bird also confirmed that there is no way that an airline could be held to a definite date for a particular cargo. The calculation of space availability was a complicated matter and was entirely at the airline's discretion. I should mention here that the airline is completely protected in law by para. 5 of its conditions of contract on the reverse of the master airway bill.

27. The first defence witness was Mr. Albert Lo, cargo terminal service manager of Pan Am - the carrier in this case. He told the court in chief that, if goods were off-loaded, his office would not learn about it until after the departure of the flight. It was only then that the forwarder would be notified. Consequently, if an enquiry was received from Los Angeles, for example, his office would confirm that the goods were on that flight even though, in fact, they had already been off-loaded.

28. In cross-examination, however, Mr. Lo admitted that he sometimes knew before departure that a cargo had been off-loaded but, except in cases where the flight had been cancelled, there would be no time to notify the forwarding agent.

29. In this particular case, the records had already been destroyed and he could therefore give no details. He said, however, that, if the goods had been offloaded on 18th December, Lep would have been notified on Monday, 20th December.

30. Mr. Lo agreed that Christmas was a peak period for air cargo, but in his opinion 80% of the goods, for which firm bookings had been made, was shipped on schedule at this time.

31. He also said that his office required the master airway bill at least two hours before flight departure time.

32. Mr. David Chiu himself was the next witness. He knew on the 13th that 1,008 dozen pieces could be packed and ready to go by the evening of 15th December. He therefore asked Mr. Yam on the telephone if there was a flight to Los Angeles on 16th December. Mr. Yam said he would check. Mr. Chiu cannot remember if he did so there and then, or if he rang back later, but in any event Mr. Yam confirmed that there was a flight on the afternoon of 16th December. He warned Mr. Chiu that he must deliver the goods to the Lep's warehouse on the morning of the 16th, but Mr. Chiu said he would prefer the plaintiff to collect them from the factory. There was no other conversation. A little later in his evidence, however, Mr. Chiu said he told Mr. Yam on the 13th that there were 84 bundles and he gave him the weight and measurements and the address of the consignee. He was able to give the particulars of weight and measurements, since each consignment was made up in exactly the same way and each bundle contained the same number of dolls.

33. On the morning of 16th December Mr. Chiu rang Mr. Yam in order to ask him to collect the goods. He told Mr. Yam that the goods must go that afternoon. Mr. Yam said that time was short and it would be better for Mr. Chiu to deliver the goods to Lep. He confirmed however that the goods would arrive in Los Angeles that day. Mr. Chiu also asked him several times to give him the time of the flight and the airway bill number. Mr. Yam told him to ring again in the afternoon.

34. Mr. Chiu immediately instructed his cousin CHIU Chi-yan to find transport and to deliver the consignment to the plaintiff. He set off at 10.00 a.m. with some packing lists, customs invoices and other documents, but not the shipper's letters of instructions. He made two journeys by lorry and returned to the factory soon after midday with a small receipt. This receipt was thrown away when the house airway bill was delivered next day. The packing lists contained the consignee's name, the brand name of the goods and the cargo measurements.

35. Sometime between 2-3 p.m. that day Mr. Chiu again telephoned Mr. Yam and asked him for the flight departure time and the airway bill number for the information of his customer. Mr. Yam gave him these particulars, which he cabled to Peggy Ann forthwith (9 in Agreed Bundle) . This document gives the flight number and the airway bill number, but it does not state the date of the flight. It merely says that the goods. were delivered to Lep 'this morning'. Mr. Chiu believed that Mr. Tietler would conclude from this that the flight was also that day.

36. Next day - 17th December - Mr. Chiu again telephoned Mr. Yam and asked him for the airway bill. Mr. Yam said he could collect it that afternoon and so, later that day, CHIU Chi-yan duly fetched it from the plaintiff's office.

37. When David Chiu examined this document (Ex. D1), he noted with horror that the flight date was 18th December, whereupon he once more telephoned Mr. Yam. The latter told him that there was no flight on 16th December: he had booked a flight for 16th, but on the afternoon of 16th he had learnt that there was no such flight. Mr. Chiu remonstrated with him as to why he had told him on the morning of 16th that the flight was that very afternoon. Mr. Yam replied, "I waited all the afternoon and I learnt there was no such flight and that it was scheduled to go on the 18th."

38. Mr. Yam tried to pacify Mr. Chiu by saying that, even if the goods had gone on 16th, his customer could not have received them before Monday, 20th December. The flight on the 18th would arrive the same day and he guaranteed that his customer would receive the goods on the 20th. Mr. Chiu reasoned that it was too late in the day to retrieve the goods and take them to another forwarder. In the circumstances he reluctantly accepted 18th December as the alternative date.

39. Later on 17th December another employee of the plaintiff came to the defendants' factory and asked David Chiu to sign a blank form. This was the shipper's letter of instructions. Mr. Chiu said that was not necessary, since the airway bill had been delivered. The employee said this was the procedure and insisted that Mr. Chiu sign. He agreed to do so but told the Court that, if Mr. Yam had not promised him that Peggy Ann would receive the goods on the 20th, he would have taken the goods back and refused to sign.

40. He first read the Chinese characters and then some of the English terms. He found the form contained the usual information. He did not read the guarantee or the conditions on the reverse of the form. He told his cousin to type the particulars of the consignment on the form - he later denied that he had done so - and to ensure that the freight charges were to be paid by the consignee. He then signed the blank form and handed it to the plaintiff's employee with the words, "You two people fix it up for me". The two men then went to another room, where there was a typewriter, and Mr. Chiu did not see it again. It was his cousin's duty to do this kind of work; he was the person who did all the typing. Now, however, Mr. Chiu can tell from the typescript on the document that it was not typed on their typewriter. His cousin had told him he did not type it. Nevertheless, he has no reason to believe that the form was not completed in his office before it was taken away. He says that he does not know if the hand-written measurements etc. on the form were in his cousin's handwriting. But he agrees it is obvious from this writing that, when the goods arrived at the Lep warehouse, they were measured and the result recorded. He suggests, however, that it was only later that they were copied onto the shipper's letter of instructions.

41. The next development was a cable from Peggy Ann on the morning of 20th December informing him that the cargo was not due to leave Hong Kong until 21st December and requesting him to send it on an earlier flight (10 in Agreed Bundle). This cable had arrived in Hong Kong on the Sunday, but Mr. Chiu did not see it until Monday morning, as he has since noted in English at the bottom.

42. Mr. Chiu naturally telephoned Mr. Yam, who assured him that the goods had left on 18th December. He added that he intended to send a telex to the Los Angeles agents that afternoon and that, if he came to the Lep office, he could see a copy.

43. Mr. Chiu agreed, and that afternoon he sent his cousin to get the telex (13 in Agreed Bundle). His cousin returned shortly before the office closed - at 5.30 p.m. - and gave him the telex. Mr. Chiu was convinced and sent a telex to Peggy Ann confirming that the cargo had left on 18th December at 2.00 p.m. via Honolulu. This telex (14 in Agreed Bundle) is timed at 4.28 p.m.

44. In cross-examination, however, Mr. Chiu said that he spoke to Mr. Yam some time before 4.00 p.m. and the latter said the telex had already gone. It may be that he means that he rang Mr. Yam twice on 20th, because in re-examination he said he had got the information about Honolulu when he telephoned Mr. Yam on the morning of 20th. On the other hand, according to Mr. Chiu, this was said during the telephone conversation in which Mr. Yam said he could come to the office to inspect the telex to Airmark.

45. While his cousin was on the way to collect the plaintiff's telex, Mr. Chiu rang a friend in Central, who load a telex machine and used to send telexes on his behalf, and dictated the message to Peggy Ann. But he told him not to send it without further instructions. In cross-examination Mr. Chiu said he later rang his friend and told him to send the telex, but in re-examination he said he did not remember if his friend had by then already sent it.

46. Finally, in April he made enquiries at the Pan Am freight office and discovered that there were flights on 16th, 18th, 19th and 21st December and that his consignment had left on 21st. He made a note of this on a piece of paper (Exhibit D2). He also saw the master airway bill. Now, for the first time, he was sure that the goods had not been forwarded on 18th December.

47. All efforts to settle the matter between himself, Lep and Mr. Tietler had failed.

48. The final witness was Mr. CHIU Chi-yan. He is the defendants' production manager and David Chiu's cousin. He was responsible for introducing Joe Lee to David Chiu. He met Mr. Yam for the first time at the defendants' factory, but he cannot remember whether it was on 13th, 14th or 15th December, but it was before he delivered the goods to the plaintiff's warehouse on 16th December.

49. That morning, having hired a lorry and a coolie, he made two trips to the warehouse. He also delivered to the plaintiff a packing list, but he cannot remember if there were any other documents. He only looked casually at the packing list and he cannot say if it was a blank shipper's letters of instructions form.

50. After delivering the first load, Mr. Chiu remained in the warehouse and the coolie returned to the factory in the lorry. The bundles were piled together, but they were not weighed or measured. When the second load arrived, an employee of the plaintiff gave Mr. Chiu a provisional receipt, which stated only the number of bundles, and he returned to the factory in time for lunch.

51. Next day - Mr. Chiu does not remember if it was in the morning or the afternoon - he went to the plaintiff's office and obtained the house airway bill (Exhibit D1) from Mr. Yam. They did not discuss the business of the consignment.

52. Mr. Chiu was then shown Franky's first telex to Airmark (13 in Agreed Bundle). He remembers going to the plaintiff's office to collect this, but he cannot recall the date, the time of day or his means of transportation. There was no discussion between himself and Mr. Yam on this occasion. Mr. Chiu is able to recognize this telex, because he knew Mr. Yam had promised it to his cousin. He also identified his cousin's telex to Peggy Ann, which was sent the same afternoon (14 in Agreed Bundle), but he does not remember when he saw it.

53. Mr. Chiu said that in December 1976 he did not see the shipper's letters of instructions (4 in Agreed Bundle) or even a blank form of that nature.

54. It is the defendants' contention that they are not bound by the guarantee contained in the shipper's letters of instructions and that the plaintiff must look to the consignee for the payment of the freight and storage charges. This argument is based on the premise that three contracts were entered into by the plaintiff and defendants. The first was on 16th December, when the goods were delivered to the warehouse. This was a contract between the plaintiff and the defendants as agents for the consignee. The plaintiff was to ship the goods and the consignee was to pay the freight charges. The guarantee was not a term of this contract.

55. Then on 17th, when David Chiu discovered that the goods had not left on 16th, a collateral oral contract was entered into between the plaintiff and the defendants, whereby, provided the plaintiff warranted that the goods would leave on 18th December, the defendants agreed to execute the guarantee contained in the shipper's letters of instructions and further agreed that the consignee should be bound by the standard trading conditions.

56. The third contract was made when David Chiu signed the shipper's letters of instructions later that day. However, since the condition precedent in the collateral contract was not fulfilled, this final contract has no legal effect and is not binding on the defendants. That at least is my understanding of Mr. Poon's argument.

57. Mr. Poon concedes that, if the signed shipper's letters of instructions came into the plaintiff's hands before Mr. Yam gave the oral warranty on 17th December, the latter is irrelevant and the defendants are bound by the guarantee. Such a finding undermines his case and the whole edifice comes tumbling down. The credibility of the witnesses is therefore critical.

58. Dealing firstly with the evidence of Mr. Yam, it was notioeable that he relied to a large extent on the documents, not only to help him recall the events of thirty months ago, but also as a substitute for memory. This is understandable when one realizes that he must have been dealing daily with such shipments. It nevertheless reduces the weight to be attached to his testimony when he positively affirms that something was said or done.

59. So far as his credibility is concerned, I would divide his evidence into two segments. That which dealt with the events of 13th - 17th inclusive gave me the impression that he was honestly and genuinely striving to recall what took place between David Chiu and himself. I thought he was telling the truth.

60. When he was dealing with subsequent events, however, his evidence took a different turn. He either suffered from complete loss of memory - for example his telex to Airmark on 20th December - or he contradicted himself, or indeed admitted that on 20th December they were trying to cover up something.

61. Nevertheless, if Mr. Yam's earlier evidence is true, it makes no difference that he and Franky later tried to pretend that the goods left on 18th December. It is understandable that Mr. Yam should not be prepared to admit this in the witness box, despite the fact that he has now left the plaintiff's employment.

62. David Chiu, on the other hand, was shipping goods by air for the first time. Things went seriously wrong and it is natural that he should have a better recollection of events than Mr. Yam. In fact he purports to give more details of the various telephone conversations and meetings than I should have expected.

63. His evidence was otherwise given in a competent and rational manner. It contains some contradictions, however, and there are also a number of other matters which lead me to the conclusion that he is not telling the truth.

64. To start with, I do not believe that David Chiu gave such full particulars of the consignment over the telephone on 13th December. Mr. Yam did not need to have this information at this stage and would have pointed out that the letters of instructions would be sent to him in due course.

65. Secondly, Mr. Chiu did not properly explain why he telephoned Mr. Yam on the morning of 16th December. They had already discussed the question of the collection of the goods on 13th December. He did not say whether Mr. Yam had agreed on 13th that the plaintiff would collect the goods, but they must have come to some agreement on the question. If Mr. Yam had refused, it was rather late in the day to try to get him to change his mind, at 9.00 a.m. on 16th, when the flight was that very afternoon.

66. What is more, the flight on 16th was at 2.20 p.m. I do not believe that Mr. Yam, knowing this, would have told Mr. Chiu that it was sufficient to deliver the goods that morning. No time was even mentioned as a deadline. Yet they had to be measured and weighed, the documentation had to be completed and the cargo had to reach the airline in time for loading. If Mr. Yam had booked the flight on 16th, he must have known the time of the flight and the airway bill number. There was therefore no point in refusing to give the particulars to Mr. Chiu when he asked for them on the morning of 16th. If, on the other hand, he had not booked this flight, he would not have told Mr. Chiu on 13th that he had. If it was the flight on 18th that he had booked, there was no reason why he should not have told Mr. Chiu. This date was acceptable to Mr. Tietler and therefore to Mr. Chiu. There was no reason for Mr. Yam to deceive Mr. Chiu at that stage. It is clear from the house airway bill that the goods were booked on 18th and, if this was not acceptable to Mr. Chiu, he could have tried another firm. I am sure the plaintiff company is not so desperate for business that it deceives its customers in such a manner.

67. I am satisfied that Mr. Yam and Mr. Bird are telling the truth when they say it is normal practice to send blank pads of shipper's letters of instructions to new clients. It is common sense and sound commercial practice that written instructions should be given to the forwarding agent at the time he receives the goods.

68. There was no reason in this case why there should have been a departure from the normal practice. In this connection I do not accept Mr. CHIU Chi-yan's evidence that the goods were not weighed and measured on receipt. This would be the obvious time to do it. It is clear, from the scribbled figures and writing on the shipper's letters of instructions, that the weight and measurements, with some cost calculations, have been hurriedly written on this form. They do not look as though they have been copied from another document, as David Chiu suggests.

69. I am confirmed in my view by the obvious lies told by David Chiu in his version of how this document came to be completed. Apart from his contradictory evidence concerning the instructions that he gave his cousin, it is very unbusinesslike to sign such an important document in blank. Secondly, if the document was given to his cousin to type, it is quite extraordinary that CHIU Chi-yan should say he has never seen it before.

70. So far as the typescript is concerned, there is no other document in evidence which is said to be typed at the defendants' factory, but this document was certainly not typed on the typewriter used by Franky to type the airway bills. The '7' is quite different. It is of interest also that the date is written in the style that is uniformly used in America, whereas Franky uses the English style. For these reasons I conclude that Mr. Yam's evidence that the document was received on 16th - the date on the document - may be relied upon.

71. That really disposes of the matter but, for the sake of completeness, there are a few loose ends to be tied up.

72. I think that, if David Chiu really had been given 16th as the flight date, he would have mentioned this in his cable to Peggy Ann (9 in Agreed Bundle), instead of merely saying that he had delivered the goods that day.

73. David Chiu's account of his telephone conversation with Mr. Yam on 17th December is nonsensical. Mr. Chiu himself concedes that there was a flight on 16th December. Mr. Yam would not, therefore, have told him that he had discovered on the afternoon of 16th that there was no such flight. Even if he had had a motive for so doing, he would not have told a lie that could easily be checked. Furthermore, David Chiu had spoken to him on the afternoon of 16th.

74. I do not believe David Chiu's contradictory account of how the first telex to Peggy Ann came to be sent.

75. I do not believe that David Chiu ever contemplated taking the cargo back. Once he was in possession of the Lep airway bill, he could negotiate his letter of credit. He had done his best for Mr. Tietler and there could be no unpleasant repercussions for him.

76. It does not matter how Peggy Ann discovered that the cargo had not left on 18th, but they undoubtedly did. The fact is that Franky sent a cable to Airmark at 4.00 p.m. on Monday (13 in Agreed Bundle), which he must have known was a lie. If the cargo had gone on 18th, he himself would have executed the master airway bill on 18th and sent it to the airport. He must, therefore, in spite of Mr. Lo's evidence, have been notified by the airline by 18th that the cargo had been offloaded. He naturally then delayed execution until the Monday, as there was now no urgency.

77. The significance of Franky's telex to Airmark and the subsequent telexes from him and Mr. Yam in the non-agreed bundle is that the plaintiff was trying to cover up the fact that the cargo had not left on 18th December. Why should they have done this?

78. Even if it had been a term of the contract that the cargo was to go on 18th - which it was not - such a term would have been nullified by the guarantee in the shipper's letters of instructions. It may be, however, that Mr. Yam did not realize this and that, remembering that he had told David Chiu on 13th December that he would be able to fly his goods out before the weekend, thought that some liability, or at least some opprobrium, would attach to the plaintiff company if the truth came to light. This is unfortunate, because it has placed the plaintiff in a false position and infused the defendants with a sense of injured innocence. But for this, the matter might have been settled.

79. There will be judgment for the plaintiff on the claim in the agreed sum of $34,902 with interest at 8% from 21st December 1976. The counterclaim is dismissed. I will hear counsel on the question of costs.