Uni Koeki Co Ltd v. Raju Traders (A Firm)

Case No.HCA 3267/1973

Court

High Court CFI

Date—

Judge—

Case Document

100%Judiciary

HCA003267/1973

IN THE SUPREME COURT OF HONG KONG

ORIGINAL JURISDICTION

ACTION NO. 3267 OF 1973

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BETWEEN
	UNI KOEKI CO., LTD.	Plaintiff
	and
	RAJU TRADERS (a firm)	Defendants

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Coram : Li, J.

Date of Judgment : 13th September, 1974

Mr. W. Wang (Hoosenally & Co.) for plaintiff

Mr. M. Asome (David Burgin & Co.) for defendants

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JUDGMENT

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1. This is an action brought by the Uni Koeki Company, Limited (hereinafter referred to as the plaintiff) for damages for breach of contract against Raju Traders (hereinafter referred to as the defendant).

2. On the 18th of November, 1971, the defendant signed a contract with Anderson & Livingston, an indent agent, whereby the defendant placed an order for 6,000 yards of material, 100% Polyester Double Knit Jersey, at US$1.70 per yard C.I.F. The terms of contract read:

"	The supplier is to be Marumitsu Company Limited in Japan.
	Quality is 5284.
	Article: 100% Polyester Double Knit Jersey.
	Dimensions: Approximately 58/60", 330 grammes.
	Quantity: Total 6,000 yards.
	Price: US$1.70 per yard C.I.F.
	Delivery from Mills, December 1971.
	Make up and Packing Despatch: As usual.

	Terms of Payment:	By Bankers Confirmed Lrrevocable
		Letter of Credit to be established for 60 days in favour of the supplier.

Kong he found work as a teacher teaching now in the Wellington College and now earns the sum of $1,320 per month. He said that he had never been back to the respondent in China for the last ten years. There is some attempt in his evidence to cast shadow on the fidelity of the respondent. But I find as a fact that this is completely groundless and a cowardly attack on the respondent. During his absence from China, he had only remitted money in support of his late mother. He had completely forgotten his family and has lost all affection for the respondent and the child. Then in 1973, the respondent arrived in Hong Kong with the child and started to bother him vouching revenge in order to harm him, his mistress and his new establishment. He admitted that there had been several meetings between him and the respondent, but each time it was never a re-union of husband and wife but that he was being scolded all the time by the respondent, sometimes throughout the night to the early hours of the morning, first in his cousin's home in Yuen Long and then in Happy Valley in another cousin's home. They had a family meeting with the relatives together with the brother of his mistress at Kingsberg Restaurant in which he was pressed to make a choice between the respondent and his mistress. In order to ease the situation for the time being and to give time for his mistress to keep herself out of harm's way from the respondent, he pretended that he chose the respondent. However, after that meeting he never went to the respondent's place of residence at all. That was some time in August last year. But that did not mean that they had not met because the respondent from time to time went to his school where he taught and made a lot of trouble, causing him great embarrassment and fear that if this continued and he might lose his job as a teacher in the Wellington College. He makes it quite clear that he has lost his affection for his family that he loves his mistress and his children by her and that he is not in a position to support the respondent and son. However, in his petition, he asks that he be given reasonable access to his son by the respondent.

3. The respondent's case is a slightly different story. Her evidence is that while they were training as a teacher in China, they met and fell in love. After their graduation from the Teachers Training College they started to live together in Canton. The respondent found a job as a teacher in a primary school earning some $37 RMP per month and subsidized the petitioner to go through a few years in college so that the latter could obtain a better qualification. When the petitioner and reads as follows:

"	Dear Sirs,
	Hurriedly, we are writing to you regarding the matter, in view of the urgent nature of the urgent matter. Instead of writing to Messrs. Anderson & Livingston, we are compelled to write to you directly, due to the fact that our supplier has been asking us repeatedly in the last few months when we are going to make shipment of the above merchandise.
	Up to this writing, we have not yet received any favourable reply from either of Messrs. Anderson & Livingston and you Raju Traders. In this connection, we have to mention that your non-cooperation put as in a disastrous position and we risk that our best supplier breaks away from us due to your unrealiability. It goes without saying that they would hold us responsible for your postponement of shipment calling quantity 5,550 yds at the price of US$1.70 per yard, c.i.f. Hong Kong. Apparently, they would take a legal action against us for their losses sustained due to your non-establishment of L/C, besides the fact that such supplier would break away from us, which will be detrimental for the future in your interest as well as in the interest of our company. We are sure that your company is big one of commanding high business reputation and it is believe that your sales system is close and complete and conse quently, every documents, especially as orders or such like that, must be well and double checked before issuing. In case, you really did not check the matter, but why you keep silent so long until shipment has already overdued. This is very very serious case concerning not only between Raju Traders and Uni Koeki, but also affecting the confidence of many other suppliers here in Japan. You really have to consider this very point seriously for us and think it over and over as you were we. It will be absolutely unworkable when we are doing our best on your behalf at our end and you cannot come up with our expectations.
	However, regardless of how it had gone wrong on your part, in order to maintain our mutual reputation and confidence and for the sake of our mutual business prospect, we ask and insist you to immediately establish L/C opening for the 5,550 yards as you originally contracted.
	Closing this letter, we dare to say that we are very very serious about Business Credit and Morality.
	Your utmost cooperation and understanding in this matter will be highly appreciated. This case should be overcome by our mutual hand-in-hand efforts. We both take up everything by duty, obligation and responsibility, under any circumstances."

4. There was no reply to this letter by the defendant. Eventually the plaintiff had to sell the material to the extent of 5,550 yards at a reduced price of US$1 per yard C.I.F. The plaintiff bring this action to recover the differences in price and incidental expenses for breach of contract on the part of the defendant.

5. The defence case is that, while admitting that there was such a contract it was a term of the contract that 6 yards of the material in each colour should be sent to the defendant as sample for approval, and it was only after the defendant approved the samples that defendant was obliged to open the Letter of Credit. So far no samples of such yardage were ever sent to the defendant. Early in 1972 some colour samples were sent to the defendant which were similar to exhibit D.2. When the defendant saw those colour samples they found that such samples were not the same as the quality samples shown to the defendant by a certain Mr. Kaku of Anderson & Livingston before the contract was signed. As a result, the defendant returned both the quality samples that were shown to the defendant before the contract was signed and the colour samples that were produced to the defendant in 1972 to enable Mr. Kaku to take up the matter with the plaintiff. The complaint of the quality was that the colour samples as supplied were of much wider weave than the quality samples that were shown to the defendant in 1971. Hence, no Letter of Credit was opened because such material would not be acceptable to the defendant or to the defendant's sub-purchaser.

6. The issue, therefore, is whether the defendant is obliged to open the Letter of Credit subject to receipt and approval of 6 yards of samples. On this point I must observe that when a contract has been reduced into writing as it is in exhibits 1 and 2, it should be normally construed to within the four corners of the written contract. The samples were, according to the contract, only to be sent prior to shipment. There was no reference whatever in the written contract that the samples were to be sent prior to payment or prior to the opening of the Letters of Credit. In the term of payment there is no reference as to sending samples. It is understood that shipment is only to be made 30 days after receipt of the Letters of Credit. There is authority in 'Benjamin on Sale' page 142 to 144, that when time is specified for the opening of the Letter of Credit it should be opened before the date of shipment.

7. The plaintiff's evidence is that they never agreed with the defendant that samples would have to be sent before the Letter of Credit was opened by the defendant. Mr. Kaku, an agent of the plaintiff, gave evidence to that effect. He said that no mention was made of any prior approval of the samples before Letters of Credit were opened. At a certain point I asked him searchingly upon the terms of the irrevocable Letters of Credit and he explained to me that despite that the defendant would have to open irrevocable Letters of Credit in favour of the plaintiff prior to shipment and prior to seeing the samples, if, samples were sent to the defendant for approval prior to shipment and defendant disapproved of such samples of the shipment, then it was still open to the defendant to cancel the Letters of Credit for breach of contract on the part of the plaintiff. There would be sufficient time for the defendant to do so. The term 'irrevocable' is not so irrevocable because the defendant could still rely on a breach of contract. I accept his explanation, and he is not shaken in any way on this point or, indeed, on the other points.

8. I do not propose to repeat the evidence in detail. The evidence of both parties are rather short, but having considered the evidence of all the parties I must observe that the defendant's evidence does not appear to be compatible with that of a prudent man experienced in business if the terms of the contract were, in fact, as he alleged. I come to this conclusion for several reasons. First of all, he never replied to the letter dated the 19th of May, 1972 written direct to him by the plaintiff. His only explanation was that he thought he took up the matter with Mr. Kaku. Secondly, on the 16th of June a letter was addressed to the defendant in these terms by the plaintiff's solicitor. It reads:

	"We act for Messrs. Uni Koeki Co. Ltd. of Japan on the instructions of Messrs. Anderson & Livingston Corporation.
	We are informed by our clients that you agreed to purchase and our clients agreed to sell a certain quantity clothing material on certain price.
	We are also informed that in spite of repeated requests by our clients you have failed to establish Letter of Credit for the aforesaid goods.
	Our instructions are to once again request you to establish Letter of Credit within the next seven days and unless we are advised of such establishment within the next seven days our clients will sell the goods in open market at best possible price and shall claim difference of contracting an selling price and other incidental expenses.
	Yours faithfully,"

There was no reply whatsoever from the defendant. His explanation was that he thought that this letter did not warrant a reply.

9. The third letter was even more serious. That is a letter written again by the plaintiff's solicitor to the defendant's solicitor and dated the 25th March, 1974. It reads:

	"We are instructed by our client to inform you that your client, Mr. Vashi C. Gurubuxani, visited our client's office on the 19th of March at about 11.45 a.m. in connection with the above matter.
	We are instructed by our client to inform you that your client informed our client that the goods, the subject matter of the contract, were purchased by your clients for sub-sale to a garment factory. Your client further informed our client that the garment factory did not open the letter of credit as agreed and therefore your client was unable to open the letter of credit. Mr. Kaku of Messrs. Anderson & Livingston Corp. informed Mr. Vashi that the goods were purchased by Messrs. Raju Traders and not by the garment factory and it was the responsibility of Raju Traders to abide by the terms of the contract. It would further appear that Mr. Vashi tried to persuade Mr. Kaku to withdraw the action and settle the claim through the intervention of a third party. Mr. Kaku rejected all these suggestions.
	As you are the solicitors of the defendants, would you please request your client not to contact our clients in future. If he wishes to propose any terms of settlement, then these terms of settlement should naturally come from your office.
	Yours faithfully,"

10. Mr. Vashi's, the sole proprietor of the defendants, explanation is this: that he did not see fit to instruct his solicitor to refute such allegations, although he objected to at least two sentences of the second paragraph of this letter viz the 2nd sentence and 4th sentence. He did not feel that a reply was necessary. Mr. Vashi's version of the conversation on that occasion was that he never told Mr. Kaku that because the garment factory suffering to all concerned. However, I am greatly disturbed by the conduct of the petitioner who has made no arrangement for the support of the respondent and the child. He asks that the custody of the child be given to the respondent but he should be given access. This amounts to asking for the best of both worlds. The respondent is 37 years old now, the child is young. Taking into consideration that life in China is such that there is practically complete equality between men and women, financially, economically and politically, it is expected that she can still find a job and do some work once the dust of this whole trouble has settled down. On the other hand, the mistress of the petitioner, although I had no evidence of her age, would, I gather, be at the working age as well. If the respondent must work to support herself, the respondent must have some form of assistance financially to support the son and herself by the petitioner.

11. For this reason, although I am inclined to grant a Decree, I will not do so at the moment. I will adjourn this case and will not pronounce a Decree Nisi unless and until such time that an agreement be reached as to make financial provisions for the support of the respondent and her child. The parties then can come back to me. Failing an agreement satisfactory to both parties, then application may well be made to come back either to me or to the Registrar.

12. I would like to see that the parties can come to a reasonable arrangement to be approved by me, failing which they will come back and I have to make an order for the provision of the respondent and the son. And for this reason, the cause stands adjourned to a date to be fixed by the Clerk of Court. It will be heard in Chambers in the first instance.

Representation: