Hui Cheung Wai t/a Sun Hing Plastic Advertising Manufactory Co v. General Merchants Ltd
Read the full judgment text of HCA 1444/1981 on BabelCite. This High Court CFI judgment.
1. This action was commenced by Writ issued on 5th March 1981. It was a simple claim. The Statement of Claim being endorsed on the Writ, it was for the price of goods sold and delivered under two contracts, 7138A & B and 7143 revised. It is now common case that there is no defence to that claim. On an unknown date in May 1981, the Defence and Counterclaim of the Defendant was served. Contrary to all the provisions of the Rules (as is customary in Hong Kong),there is no proper endorsement as to s
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HCA001444/1981
BETWEEN:-
____________ Coram: The Honourable Mr. Justice Jackson-Lipkin in Court Date: 27th May, 1983 at 9.50 a.m. Appearances: Eddis with Khuflaoo for the Plaintiff. Lee for the Defendant. ____________ JUDGMENT ____________ 1. This action was commenced by Writ issued on 5th March 1981. It was a simple claim. The Statement of Claim being endorsed on the Writ, it was for the price of goods sold and delivered under two contracts, 7138A & B and 7143 revised. It is now common case that there is no defence to that claim. On an unknown date in May 1981, the Defence and Counterclaim of the Defendant was served. Contrary to all the provisions of the Rules (as is customary in Hong Kong),there is no proper endorsement as to service on the Defence and Counterclaim, and there is a preposterous date, presumably the date when the document was drafted, over the names of the solicitors for the Defendant. Equally preposterously the solicitors for the Plaintiff purported to give their consent to the Defence and Counterclaim being "filed" out of the time. The number of times that Solicitors have been told that only a Judge can given consent to a pleading being filed out of time, is legion, but they still continue to use a chop using the word "file". Solicitors of the Supreme Court can not usurp the function of the Judges; they car only give consent to "service" out of time. Once consent to a service out of time is given, then any pleading requiring to be filed bay be filed without anyone's consent. The whole system of civil practice and civil litigation-depends on "service", and "filing" is almost totally irrelevant. That Defence included a plea of tender under circumstances where the facts could never amount to tender. It was very properly immediately abandoned by Mr. Sammy Lee, when his turn came to address me. It then recited a whole mass of matters, set out between paragraphs 3 and 11, concerning another purchase contract, which had nothing to do with the claim, but which the parties, apparently, had entered into some two years before the contracts the subject of the action. Paragraph 10 claimed a set-off. Paragraph 10 should, of course, have been paragraph 2 of, and all the matters I have referred to should have appeared in, the Counterclaim. Further and Setter Particulars were sought and given, and eventually an amended Defence and Counterclaim was served: When I know not, because, in the bundle of pleadings given to me, I do not even have the amended Defence and Counterclaim. I have a black one with some rather unpleasant underlining in red, contrary to the practice rules which say that I should have a red and black pleading. It is not, as it required by order 18, endorsed with the date of service. The bizarre date of its original filing is crossed out - I do not know why, because it must be true - and a new date of filing is put on. Equally bizarrely, Wilkinson and Grist have crossed out their own name, and then put it in again. It was quite clearly their names should never have been crossed out because they were the signatories to the first pleading. And again there is a ludicrous and unnecessary date, presumably the date when somebody settled it. It is put above their signature. Once again, I remind the officers of this Court that it is both unnecessary and improper. 2. A Reply to Defence and Counterclaim was originally served some time in June 1981, the copy I have given is wholly illegible but for the endorsement 4.30 p.m., so I do not know when that was served. That is little more than a joinder of issue and a denial of the matters put in the Defence, and the Defence to Counterclaim in the circumstances merely repeats the Defence. That was amended, and I have not been supplied with the copy of the amended Reply to Defence and Counterclaim:I have been supplied with a black photostat with its obscene underlining in red. Here again, the date of the original filing which I apprehend is genuine and true, has been crossed out. A new date of filing has been put in. There is no indication to be when it was served. All there is a chop of Messrs. Wilkinson and Grist and a wholly illegible scribble. Once again, above the signature Poon and Sum are some dates which ought never to appear in the pleading, the significance of which escapes me. 3. After all the evidence was completed, after all the submissions had been made to me, I had applications for leave to re-amend. Re-amendment of the amended Defence and Counterclaim was carried out by Mr. Sammy Lee for the Defendant, which he did properly by just writing his amendment in green and signing it at the bottom. He did not attempt any of the ridiculous entries to which I have just referred. Mr. Eddis applied to re-amend the Defence and Counterclaim and that was granted, and he did that by hand in the same way. Such is the state of the pleadings. 4. When the action was called on, Mr. Eddis opened very shortly on the Statement of Claim and then pointed to the Defence paragraph I of which reads as follows:-
I do not know why that was there in the first place. Upon hearing that, Mr. Lee made it perfectly clear to me that he considered that the claim must succeed, but pointed to me that there was a set-off. Counsel then agreed very properly indeed as follows:
Having got that far, I was then told that there was a summons under Order 38 relating to hearsay notices. That shamefully late state of affairs was explored by me, and I had, in the end, to formulate issues and to try them, thus delaying the trial by three-quarters of a day. It is perfectly clear from Order 38 rule 27 and the Notes thereunder, and common sense and the various textbooks, that issues such as that should be determined before the action is called on for hearing; as long before as it is reasonable. In this case there were the most astonishing delays. I will not go into them in detail. I dealt with the matter thoroughly on the Summons under Order 38, but I will point out that the first Summons for Directions was 4th July 1981. Nothing was sought in that summons in relation to witnesses beyond the seas or hearsay evidence, notwithstanding the very clear rules that all interlocutory matters ought to be dealt with on the Summons for Directions or by counter-notice thereunder: Anything sought thereafter is made by notice. The whole purpose of the, what is called "the new robust", Summons for Directions under order 25 is that everything should be dealt with on its hearing. It is made quite clear in rule 2 of Order 25, and the matters that I am referring to are in rule 3 of Order 25. Be that as it may, a "substitute" Summons for Directions was issued on 29th of January 1982; very little happened, and eventually an affidavit from David Nigel Robinson appeared before the Court, sworn on 23rd of February 1982. The only relevant paragraphs are these:-
That affidavit was lodged in support of the transfer of this action to the Fixture List. Mr. Robinson said this:
Nothing happened. The action was transferred to the Fixture List. On 8th of March of this year, the Defendant applied for leave to serve hearsay notices out of time and obtained such leave, and, on 9th of March, it served such hearsay notices. That application was supported by another affidavit of Mr. Robinson sworn on 4th of March. He says this:-
On the 14th of March, this case was set down for hearing on dates to be fixed. On the 16th of March a Counter-notice was served under Order 38. And on the 12th of April dates were fixed. Again, nothing happened. On the 21st of May 1983 Mr. Robinson swore a further affidavit, which he lodged on the same date, in support of the Summons to which I have just referred. That was a Summons returnable on the very morning of the trial, not in Chambers, but at the same time that the trial was due to call on. It later transpired in evidence that no serious attempt whatever had been made to get in touch with the surveyor. The principal witness for the Defendant was Mr. Mohan Gidumal who, in the early hours of the second day of his evidence, telephoned to California, found the new telephone number of the surveyor and spoke to the surveyor: A step which his Solicitors could so easily have taken back in 1982. These are not complaints of form, these are complaints of substance, and I will explain why. In an action which depended entirely upon the allegations of unmerchantability and unfitness for the purpose for which goods were sold, no effort whatever has been made by the "Counterclaimer" to find out who Mr. Ross is, or if he is in any way related to attached to, in business connection with the person or company to whom the goods were delivered in California. No effort whatever has been made to ascertain if Mr. Ross has any qualifications as a surveyor. None appeared in the so-called survey report. No effort has been made to ascertain what experience, if any, he has as a surveyor. No effort has been made to ascertain what experience, if any, he has as a surveyor of acrylic goods. This is not the first time that I or my brethren in this building have had to complain about the appalling lack of preparation of cases that come before us.We, the Judges, do not mind for ourselves. We will do the best we can on the evidence that is adduced before us. But, as I pointed out to Counsel yesterday, we are the father and mother of the people: The people ace the litigants - the members of the public who come before us for relief. We are a little concerned with Counsel We are slightly more concerned with Solicitors, who are our officers. But our principal concern lies with the litigants, between whom we must endeavour to do justice. And when a judgment contains serious complaints such as these. they are made in the hope, I trust not in vain, that improvement will come, and the litigants will get the service to which they are entitled. We are not a backward jungle community in an old African Colony. This is modern, thriving, commercial centre. But, without the combined efforts of Solicitors, Counsel and Judges to maintain the very high standard of British justice, this territory will become as meaningless to overseas investors and corporations and to our own business community, as many of our surrounding countries, where there is no confidence whatever in the Courts or recourse to the Courts. Having said that, I now pass to the merits of this action. 5. The issues on the Counterclaim were very succinctly and carefully analysed by Mr. Lee, and accepted by Mr. Eddis as being the true and correct ones. The first was this. Was the Plaintiff in breach of contract by supplying defective goods? And that is sub-divided that into four. (a) Were they defective? (b) Was the defectivenvess caused by faulty manufacturer and or by packing? (c) Is the seller responsible for the defects? and (d) What is the interpretation of the express clause in the contract between the Plaintiff and the Defendant? The contract in question is Exhibit 1. The second question he posed was this: "Does the extent of the defectiveness render the goods unmerchantable or unfit for the purpose for which they were bought?" The third question he posed was:"Was it in the contemplation of the parties that the goods were for re-sale to a foreign country?" The fourth was: "What is the true salvage value of the defective goods?" And the fifth was: "What is the correct measure of the damages?" He sub-divided that into two. (a) Whether the compensation to the sub-buyer was reasonable as a settlement and the true loss of the Defendant? and (b) Should the reasonableness be tested by asking if the Defendant can recover loss of profits? If one looks at page 1 of the Defendant's bundle, a document which was agreed, the answer to question 3 is clearly yes. It was an invoice from the Plaintiff to the Defendant; no.BO463 dated 2nd of February 1977 and it referred to the goods in question: Acrylic bed trays 20" by 30" by 10", 500 of each, the unit price of$49,50; and then it had shipping marks and other marks, the principal ones of which read as follows: -
The answer, therefore, is unequivocal: Yes to question 3, and Mr. Eddis did not seek to argue otherwise. 6. Mr. Gidumal then gave evidence. He had in fact already given evidence in the issues that I ordered to be tried on the Summons under Order 38 to which I referred earlier. And I will say at the outset that he was a model of frankness. Unlike many witnesses, he was quite prepared, without a moment's hesitation, to admit to matters damaging to himself; when he did not know something essential, when he could not remember, he said so; and he answered most truthfully regardless of the consequence of his answers. Examinations disclosed loose joints resulting in the destruction of the integrity of the trays. The master cartons, each containing two boxes, each box containing one tray, appeared to have no external damage and appeared to be perfectly sound. Mr. Ross's document says that no unusual stress having been placed on the joint was revealed, and reached the conclusion that the failure was due to inadequate bonding or that the procedure for bonding was not adequate to maintain the joints in question. He exhibited to his report certain photographs, which are Exhibit 6 in the action. The bottom right hand photograph demonstrates what is described a glue failure of a right angle joint. I say a right angle joint because of the evidence given by Mr. Gidumal. Three things are clear from that report. One is that the only complaint found by the alleged surveyor was a failure of gluing or bonding at right angle joints. Second is that the number of items examined is not revealed, and I do not know whether it is a minute number, a small number or a large number. Lastly, there is no mention whatever of cracking of the goods. Although I have gone at length through this document and referred to the photographs, I must say, at this stage, that, in all the circumstances of the case, the history that I have recited the failures that I have recited,it is a document to which I attach minimal weight: Save for the absence of any reference to cracking, to which absence I do attach some weight. Mr. Gidumal said that he had been to the factory of the Plaintiff, but then he went to all factories, and he did not in fact conduct inspections. He just went to look around and see things were being done: But that there was an inspection before these goods were despatched to the United States. 7. In 1977 complaints were received by Mr. Gidumal from Mr. Posen of The Akron of the state of the goods. And there followed considerable correspondence. Eventually, Mr. Gidumal went and examined the goods himself, and to his discoveries I will come later in this judgment. There were certain discussions, as I have said, with Mr. Posen, and it is clear from the correspondence, if I accept it, and I do accept it as being genuine but without attaching much weight to its contents, there was a conversation between Mr. Posen and Mr. Hui of the Plaintiff. one thing stands out quite clearly from the correspondence, and that is that Mr. Hui wished to go to America to look at the goods, and he wished to take steps to remedy the defects which were brought to his notice. And when I say "brought to his notice", I must emphases that, until half way through this trial, no allegation had ever been made to the Plaintiff that there was any cracking in the bed trays. All that the Plaintiff knew, until half way through this trial, was that some of the joints had become loose and, as Mr. Gidumal very frankly submitted when asked by me, the application of one of these "miracle "modern adhesives such as Araldite, would have cured that defect, and made the bed trays safe for use and sufficiently strong to take the weight of whatever the user wished to put on it - a tea tray or a large bottle of brandy - whatever Americans consume for breakfast. I am not going to go into great detail of all the events that happened because they appear very clearly from the correspondence. I will pass now to the two major items that have caused me concern. The first is the examination of the goods by Mr. Gidumal: As. I. have said I accept his evidence without hesitation. He went some very considerable time after the arrival of the goods. If matters not when, but it was a long time afterwards. He was shewn by a representative of The Akron one defective bed tray. He then opened four cartons. He said that the cartons were in good condition. Such a carton is to be seen in the top left hand photograph of Exhibit 6. Within that carton were two boxes. And the sample of such a box is to be shewn in the upper right hand photograph of Exhibit 6. He opened four cartons containing eight boxes and he opened the eight boxes. The bottom left hand photograph on page 6 reveals what he saw. At the near and far end are the leg parts of the tray wrapped in plastic. In the centre, and wedged diagonally into the box, is the centre part of the tray, and that is held in position not only by being wedged, but by shoulders around the centre of the cardboard or of the cardboard box. They appeared quite clearly in the bottom left hand photograph of Exhibit 6. He found that joints had become detached, as shewn in the bottom left right hand photograph, but he went further. He said: "But there were cracks in other parts of the trays, there were failures in other joints.", and he explained that not all the joints were right angle joints, such as revealed in Mr. Ross's photograph, but some were moulded joints; curved parts of the bed tray; that was never really explained to me, although I accepted what Mr. Gidumal said that there were some rounded joints: I found it a little difficult to follow because the illustration of the bed tray itself is to be seen on the label attached to the outside of the box in the upper right hand photograph of Exhibit 6. Be that as it may, Mr. Gidumal having seen the cracks and the failed joints, reached the conclusion that it would not be practicable to repair these. As far as I can gather from his evidence, the result of that examination was never made known to the Plaintiff. The Plaintiff to the end firmly believed that the complaints it had to meet were of joint failures, as appears from paragraph 5 of the amended Defence and Counterclaim. Cracking appeared in the pleading only at the end of Counsel's submissions to me last night. When I say "last night", I do not mean last afternoon. but at the astonishingly late hour to which we had to sit inorder to finish this case, which had originally been set down for two days - thee-quarters of a day, however, being lost by the unnecessary return date on the Order 38 Summons. 8. Right through this action and until the point in time that I have mentioned, the Plaintiff had to meet only an allegation of joint failure, a matter which could be simply, quickly, easily and cheaply rectified, so as to put the goods into a condition where they could be sold at what is common case, their price of $49.50 in Hong Kong currency, $29.99 in American currency, giving a nett profit on the deal for The Akron of $28.00 per bed tray. 9. The second matter that I have to deal with is the question of compromise. Mr. Gidumal impressed me as a very sensible and sound business man. He and Mr. Posen of The Akron fought long and hard about this, and reached a conclusion that everybody should pay one-third of the loss - the Plaintiff, the Defendant and The Akron, being the Defendant's sub-buyer. That commended itself to Mr. Posen. It commended itself to Mr. Gidumal. Mr. Gidumal said that he had explained this to Mr. Hui on a number of occasions thoroughly. Mr. Gidumal does not speak Cantonese. If he does, he certainly had little confidence in it, because he told me of a conversation when he had with Mr. Hui when he sent one of his staff to explain one of the contracts to Mr. Hui: He said his "Cantonese - speaking staff", but, as he said to me, not being confident that they had explained it adequately to him, he advised Mr. Hui most carefully to go off back to his office and to get somebody else fluent in Cantonese to explain it to him. I am sure from Mr. Gidumal's evidence that he did his best to explain to Mr. Hui that there was a proposal for one-third, one-third, one-third: But I am not satisfied that Mr. Hui really understood it for a number of reasons. The first I have already given,which is a language difficulty.The second is the very frank admission of Mr. Gidumal to Mr. Eddis in cross-examination that no figure was ever put to Mr. Hui, so Mr. Hui would never know, and never did now, what it was if he was being called upon to pay: All Mr. Hui knew was that two contracts made in February 1979 were not being paid for, and there was some conversation which may or may not have been clear to him about a contract in 1977 being set off against the monies undoubtedly due to him. It is equally clear that Mr. Hui was never told that Mr. Gidumal's sub-buyer was alleging a total loss of the shipment under the suit contract. I am quite sure that Mr. Gidumal tried to explain that there was a"100% total loss", as he described it, but I am not satisfied, having regard to the previous answers, that Mr. Hui really understood. 10. Another matter which I found quite bizarre is the questions of the dates, because on the face of the correspondence it appears that the one-third, one-third, one-third agreement had been reached between Mr. Gidumal and Mr. Posen without Mr. Hui being brought into it, at the very time that Mr. Hui was saying, "Please, let me go to America. Please, let me have these goods repaired. I am quite sure that they can be repaired easily and cheaply.". Mr. Hui did not go: The agreement was concluded, and it was concluded while Mr. Hui was still wishing to go to America - and, indeed, one of the letters between Mr. Gidumal and Mr. Posen actually complains of the obstinacy of Mr. Hui in wishing to go to the United States to try to repair these goods. That is to be found at pace 29 of the Defendant's bundle. 11. I must now pass to the contracts because they forma most material part of the matters that I have to decide. The contract between the Plaintiff and the Defendant carries on its face the following:-
With his signature on this order, the supplier confirmed all details of the order and his acceptance of the contract. That appears to have been signed by Mr. Hui by the Plaintiff, and no challenge is made by Mr. Eddis to Mr. Gidumal's assertion of the Chinese signature on the bottom left of Exhibit 1 is in fact the signature of Mr. Hui. By signing that contract, No. 6608, Mr. Hui must be taken to have accepted the term that I have just read. In other words, that the Plaintiff would be responsible for claims caused by faulty manufacture or for claims caused by packing. Nobody, save Counsel in his final submission, has ever suggested faulty manufacture. Certainly, Mr. Gidumal did not. He attributed everything that he found to inadequate packing, not faulty packing I hasten to add, but inadequate packing. It is not, he said, that what packing there was, was faulty, but there was not sufficient and it was not adequate to protect the tray. That was a mere expression of opinion and I found it rather difficult to accept, having regard to the pristine condition of the boxes and the cartons in which the boxes were contained and the method by which the bed tray was wedged tight within the box and supported by shoulders. But as I said, Mr. Gidumal was far too honest a witness to go further than an expression of his opinion. Clause 8 of the contract between the Plaintiff and the Defendant was heavily relied upon. The material parts read as follows: -
My difficulty is this. I do not know whether Mr. Ross is a competent surveyor. I do not even know that he is a surveyor: Nor does Mr. Gidumal, who very frankly admitted that. I do not know if he is an independent surveyor, nor does Mr. Gidumal, as he very frankly admitted. Mr. Gidumal's legal advisers have taken no steps whatever to find out. As I explained to Counsel under Order 38 I would admit a telex from Mr. Ross giving his qualifications, experience and independence, but nothing resembling that has been put before me. There is, therefore, no prima facie evidence as to the quality and description of the goods in support of a claim by the sub-buyer against the buyer resulting in a claim by the buyer, as the Defendant, against the seller, that is the Plaintiff. And I can not rely, in any way, upon the so-called report of Mr. Ross, substantiating any claim by The Akron against the Defendant. I must fall back on the oral evidence of Mr. Gidumal of what he found. Mr. Gidumal compromised with The Akron, and he sought in his amended Counterclaim to recover the compensation that he paid to The Akron from the Plaintiff. That involves my looking at the contract between the Defendant and The Akron. In the Defendant's bundle, at page 8, is a photostat copy of the front page of the contract between the Defendant and The Akron: There is a number of additional entries on it which are of no importance. But important words are as follows:-
and nobody has bothered to put before me the back of the contract. The original contract apparently has disappeared somewhere in the records of the Defendant company. However, Mr. Gidumal, and I have explained his business acumen, has a special system when a dispute arises, documents are copied and put into a disputes cabinet, which has a special number. And in this case, a photostat copy only of the front of the contract was put into the disputes cabinet under A for Akron, being No. 2 in the A series. I mention that because certain of the letters bear references 9300-82, 9300 is the disputes file. Mr. Gidumal, however, produced for me, as Exhibit 3A, another contract made about the same time, which does in fact disclose the terms and conditions which were applicable to the Defendant's contract with The Akron. The princiapl clause is as follows:-
I have omitted words which are not applicable in this case. The written claim was not lodged until 26th June 1979 and that is Exhibit 11B. Admittedly, there was correspondence earlier. There were telephone calls. There were attempts of the compromise. But no claim under the contract between The Akron on the Defendant was ever lodged within two months. The earliest reference appears on page 14 of the bundle; page 15 of the bundle refers to a problem and asks Mr. Gidumal to study the problem; page 16 refers to the poor condition and to "working out" an arrangement. But what is interesting is that it offers, in fact it says that a sample has been sent back by seamail to the Defendant. The first letter referring particularly to this contract, that is purchase order H32306, is page 9 of the bundle, which refers to the contract in question. Exhibit 3 reads as follows:-
That last is the letter, which it is agreed between both Counsel, I must not look at.
By no stretch of the imagination can that be described as a claim in writing under Clause 8. And, indeed, the subsequent correspondence shews that no claim was being made, and it was not until some time later that the suggestion was being made that the parties bear the loss three ways. A claim upon the Defendant was not made until the date I have just mentioned. It behoves me at this stage to go back to Mr. Lee's questions. Question l(a): Were they defective?
the goods unmerchantable or unfit for the purpose for which they were bought. In this repsect, Mr. Lee relied heavily on Jackson v. Rota Motor & Cycle Co. [1910] 2 K.B. 937. The case, which stands his good to this day,appears in both McGregor on Damages, 30th Edition, and Benjamin on Sale of Goods, 2nd Edition. That case however, was rather special. There were two distinct shipments because it was a shipment by instalment. The first shipment was wholly good and was paid for. The shipment was one of motor horns. The second shipment was one where 50% of the horns themselves were damaged and a large number of tubes was damaged. What do I have here? I have worthless evidence in the surveyor's report, worthless as the content and worthless as to quantum. I have only the evidence of Mr. Gidumal, who saw ten trays out of five hundred. seven of which were damaged, two of which, was in good condition. He opened four cartons containing eight boxes, found one good tray and seven bad. Somebody in The Akron had opened another carton containing two boxes and he shewed Mr. Gidumal one, and that was damaged. So that is eight out of ten. That is a very small sample to take out of five hundred, particularly when one considers the immense amount of time that was available, and the immense amount of opportunity that The Akron had to have a proper examination, and Mr. Ross had to have a proper examination. I am left with practically no evidence at all to decide whether the defects were such as to render the goods unmerchantable or unfit for the purpose for which they were bought. 12. So far as the failure of the joints is concerned, that could have been put right at a minimal cost and, as Mr. Gidumal admits, successfully: The extent of the cracking is totally unknown to me. In this state of the evidence, I can not really say that this shipment was unmerchantable or unfit for the purpose. I wish I could, for I have great sympathy for Mr. Gidumal. I am quite sure in my own mind that evidence could have been adduced that would have helped me either positively one way or positively the other, but he has taken upon himself the burden of proof, and the lack of evidence before me is such that it would be quite unsafe for me to say that the whole shipment was unmerchantable or unfit for the purpose for which it was sold. It is possible in any state of affairs that you might find one or two damaged goods among several hundred. There was every opportunity here to put before me convincing evidence, evidence of a qualified, competent, independent surveyor, evidence of a larger number, something that would assist me to help Mr. Gidumal, but try as I could, I was unable to get further assistance. The answer in my judgment on the totality of the evidence in this case,alas, must be no. 13. I now pass to question 4. What was the salvage value of the defective goods? Here again, I am left almost totally without help. I have letters from Mr. Posen, who has not being called: He has not even deposed to his letter on affidavit: He has now disappeared: Nobody knows where he is: All I know is that he has said that the best out of a number of bids that he could get, was two dollars for these trays: I am not surprised, if nobody examined the five hundred goods to see the proportion of defects. if there was a proper survey report by a proper surveyor, saying that a small proportion of the goods was damaged. (but as far as I can ascertain the major part is good), then two dollars would be a wholly inadequate sum. If, however, the report said practically all of them were damaged, and it would be very difficult to open all the boxes and repair the damaged goods, or alternatively the damaged goods could not be repaired, then, two dollars is a reasonable price. No enquiries have been made of Jerry Negrin & Co. referred to in Exhibit 9. Mr. Gidumal does not know who he is. Nothing has been followed up with The Akron. Attempts were made by Mr. Gidumal to get in touch with The Akron in the last two days. Of course, it being left so very, very late by everybody, all the people who knew about his contract have left the company, and nobody knows anything about it at all. All I know is that the salvage cost, or the salvage yield was two dollars per item, which is a thousand dollars. That I know and that I accept. I have admitted hearsay evidence on that document; a fact has been agreed on that - it is a thousand dollars American currency. But whether that is the true salvage value or not, I have no idea. And all I have to say is that, if I had to assess the salvage value, I would be obliged, on Mr. Gidumal's own evidence, to say that a thousand dollars was not a reasonable sum, or that it should be something like that. But in view of my findings, I need not go any further. 14. Lest I be wrong on all these findings, it behoves me to deal with question 5 on Mr. Lee's submission, which leads me to Biggin & Co. Ltd. v. The Permanite Ltd. and Others [1951] 2 K.B. 314, (incidentally, one of the earliest cases in which I appeared in the Court of Appeal as a pupil). It is a very well-known case: It has been cited very, very frequently, and the question is not whether, the Plaintiff in this case, the Counterclaimer, acted reasonably in settling the claim of the sub-buyer, but whether the settlement was a resonable one. Two questions arise there. First is this. Was he reasonable in settling?Answer: As a business man, yes, of course, he was. Mr Gidumal explained to me very clearly and concisely that he realised that, under his contract with The Akron, he was not obliged to settle at all. He settled only in order to preserve goodwill and for good business sense. And that leads to the question: Was the compromise reasonable? Reasonable it may have been in the eyes of the business man, Mr. Gidumal, but reasonable in the context of this case, it was not. Why should the Plaintiff be saddled with damages equal to the cost of a compromise which need never have been entered into. That is the first answer to the question. Mr. Gidumal realised that he was under no obligation to pay: He has told me so. Was it therefore a reasonable compromise? In my judgment, it was not a reasonable compromise for the purposes of a Counterclaim, because, if Mr. Gidumal could have said no, then whatever he paid was not reasonable as a foundation of a Counterclaim. Secondly, was it a reasonable sum? My opinion having regard to the facts that I had already found, it was an excessive sum. And being an excessive sum, it ought not to be counterclaimed. 15. That brings me to the next point, which was raised only on re-amendment. Why was it excessive? It was excessive because Mr. Gidumal failed in his duty to mitigate. He failed to mitigate his damage. He failed to attempt to mitigate his damage and failed by his failure to permit the seller, who actively wished to go and mitigate, to be allowed to mitigate. In other words, his failure to permit mitigation, when I say mitigation, I mean sending somebody to America to glue up these right angle joints and make the bed tables safe. Having regard to all that, if I had reached the conclusion that Counterclaim should succeed, I would have assessed the recoverable damage at only 10% of the claim, which ought to be one-third of the loss of profit. 16. Lastly, I have to ask myself whether the figures given to me this morning could be claimed under the re-amendment to the Counterclaim. That re-amendment alleged the cracking,and claimed damages for breach of contract under paragraph 8 of the Defence. That is so vague that is almost impossible for a judge to assess. All I have is what Mr.Gidumal told me,that. some of these were cracked. He did not even say that all the eight that he saw, were cracked. Some of them were cracked. If, therefore, I were to have found for the Defendant under the Counterclaim under Prayer 4, which was added in green at the conclusion of the submissions yesterday, I would have allowed one-eighth of the ascertainable loss, which was quantified for me this morning by Mr. Lee at $19,750.00. 17. I apologise to both Counsel that this judgment is not as felicitously phrased as I would have wished it to be: They know the handicap under which I am labouring this morning. 18. There will accordingly be judgment for the Plaintiff on the claim and counterclaim with interest from the relevant date at the relevant dates. 19. Before I deal with costs, I wish to add this. Mr. Lee has pointed out to me that he misunderstood me at an earlier stage in the action, saying that he thought I was stopping him from addressing me on the question of liability. In fact he has put forward the nine points that he wished to advance. I have pointed out to him now, in the last ten minutes, by analysing each of those nine points, that they were dealt with in detail by me in the course of argument both on the summons under the hearsay notice, and in the course of argument during the hearing of the action and in his final address. Each of them is a matter to which I have given careful consideration in coming to my decision.
..................................................................................................................................................... Decision 20. I have just heard a powerful and interesting submission on costs from Mr. Lee in which he has sought to attribute the loss of three-quarters of a day to the conduct of the case by the Plaintiffs. I have no wish to cast blame on any particular person, and, therefore, I will say no more on this point, save that I disagree with every single allegation made against the Plaintiffs in respect of their conduct on this case. Three-quarters of a day was wantonly thrown away for the simple reason that the Order 38 summons, which should have been dealt with by solicitors before a Master months ago, was dealt with by me yesterday morning and occupied the greater part of the morning, evidence in support of the summons was called in the afternoon: But it took a very short space of time. No doubt, the solicitors will have recorded the times. My Clerk keeps a record of the time at which the action began. The Defendant must pay the Plaintiff's costs of yesterday and of today, and they will pay the costs on a common fund basis of the three-quarters of a day thrown away, as an expression of the Court's displeasure of the summons under Order 38 being set down for 10 o'clock yesterday morning: The same time as the hearing. The remainder of the costs they will pay on a party-and-party basis.
Representation:
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