Staccats Trading Ltd v. Best Wear Garment Factory

Read the full judgment text of HCA 2249/1980 on BabelCite. This High Court CFI judgment was delivered on 2 July 1982.

1. The plaintiffs are a trading company specialising in the manufacture and export of denim garments. The defendants' business is the making up of garments. The proprietor is Mrs. Pang Leung Chui-ping. The business is managed by her husband Mr. Pang Tak-chiu (Pang). As the defendant was acting in person and is not in good health, I allowed her husband, Pang, to conduct the defence on her behalf.

Case No.HCA 2249/1980
Court
High Court CFI
Date02 Jul 1982
Judge
Case Document
100%Judiciary

HCA002249/1980

No legal significance - attention only invited to pages 22 and 23.

IN THE HIGH COURT OF JUSTICE

1980, No. 2249

BETWEEN

STACCATS TRADING LIMITED Plaintiff

AND

BEST WEAR GARMENT FACTORY Defendants

(sued as a firm)

___________

Coram: Hon. Hunter, J.

Date: 2 July 1982

__________

JUDGMENT

__________

1. The plaintiffs are a trading company specialising in the manufacture and export of denim garments. The defendants' business is the making up of garments. The proprietor is Mrs. Pang Leung Chui-ping. The business is managed by her husband Mr. Pang Tak-chiu (Pang). As the defendant was acting in person and is not in good health, I allowed her husband, Pang, to conduct the defence on her behalf.

2. What I have heard is a very unfortunate piece of litigation. In my judgment it would never have developed as it did had it not been for the character and personality of Mr. Irving Fisher (Fisher) who in human terms is the plaintiff company.

3. The plaintiffs are closely associated with a Canadian Company Diamond and Co. Ltd., which occupies a very influential position there in the garment trade. From and through the plaintiffs, Diamond buys heavily in Hong Kong. In August 1979 for example Diamond opened in the plaintiff's favour a credit totalling nearly US$1 million for expenditure on a vast number of garments of different types and sizes. In relation to the garment manufacturing industry in Hong Kong therefore Fisher occupied a position of some influence and power, and one from which he could no doubt have traded with profit and success.

4. Unfortunately this case has demonstrated that he is not satisfied with honest trading and honest returns. He appears not to recognise honesty. He seems to live in a world of his own, the particular features of which are: that anything may be said or done which advances his interest: that he has always to be in a dominant controlling position preferably one of apparent strength on documentation that is in fact misleadingly incomplete: and those who fail, disappoint or offend him must not simply be made to pay their debts or reasonable compensation, but must be utterly crushed or destroyed. I have thus in this case had to consider claims which I am satisfied were falsely conceived and advanced: to listen to evidence from Fisher much of which was not simply unreliable but was positively untrue: to listen to evidence from his assistant/secretary Miss Esther Leung, who out of a misguided sense of loyalty was also prepared freely to lie in support of her boss: and to a tape recording of an interview in October 1981 between Fisher and Pang, in the course of which Fisher could be heard bullying, hectoring and threatening Pang with the loss of his job, his wife's job, prison, "I will put you in your grave", and "I will put you in the street", if the defendant resisted Fisher's demands any further and did not consent to judgment in the sum of $118,000. The latter was a particularly nasty experience.

5. By contrast Pang conducted his case with moderation, and indeed on occasions made concessions which might not have been forthcoming from counsel. At times he tried my patience and I had to rebuke him to the obvious delight of Fisher. Nor can I say that I accept his evidence in its entirety. But by comparison I greatly prefer his evidence to that of Fisher and Miss Leung wherever it conflicted. On several matters all the witnesses were uncertain or confused and in such cases I have had to look primarily to the documents.

6. The process of ascertaining and adjudicating upon the issues between the parties was not assisted by the fact that:-

(i) The lack of legal representation for the defendant inevitably meant that I became more involved with the conduct of the case that I would have wished.

(ii) Very inadequate discovery was -given by both parties, so that throughout the hearing I had to permit both to add considerably to the documentation.

(iii) Despite amendment and reamendment the pleadings never properly defined the real issues as they emerged in evidence, so that I had to try what emerged not what had been pleaded.

7. The material facts as I find them are these. The plaintiff company, as I have said, does an extensive trade with Diamond & Co. Ltd. in Canada. It is itself a $2 company. With its considerable requirements in the cheaper end of the denim market it is on the look out for manufacturers prepared to make up cloths to its requirements and-to enter into what are called CMT (Cut, Make and Trim) Contracts. The defendant worked principally in the fashion trade, but in late 1979 was anxious to enlarge the scope of her work. In late October 1979 Fang met Fisher and Miss Leung and within a few days two contracts in writing dated 2nd November 1979 were entered into. These contracts are to be found at pages 11 and 12 of the plaintiff's bundle of documents, which bundle I shall refer to by the prefix C. The contracts provided for:-

(i) The making up of material to be supplied by the plaintiffs under trust receipts.

(ii) The first contract, C11, was for 300 dozen infant crawler overalls style 013 at the price of $56 a dozen for delivery by the end of December, later amended to 31st January 1980.

(iii) The second contract, C12, was for 600 dozen infant crawler overalls style 7020 at $54.50 a dozen for delivery by 31st January 1980.

(iv) In both, payment was expressed to be "within 7 days of receiving dock receipt".

8. At the outset of the party's relationship certain things happened which set the pattern for the future. At their first meeting Fisher and-Miss Leung produced name cards. One described Fisher as ''Managing Director Far Eastern Operation'' of Diamond & Co. Ltd. with a Kowloon address. The other described Miss Leung as "Assistant Manager" of the same company at the same address. Both documents were quite false. Neither person held any position in Diamond: and that company carry on no business in Hong Kong. Both parties represented only the plaintiffs, a $2 company, not the wealthy Canadian company with which some persons dealing with the plaintiffs plainly thought they were dealing. Fisher's explanation of this was that the buying power of Staccats was nil whereas Diamond was something. Neither was remotely concerned by this deception.

9. The delivery requirements of the written contracts appear quite clear and simple. If no delivery under either took place before 30th January 1980, one's instinctive reaction would be to say - clear breach. The truth was rather different. When he first met Fisher and Miss Leung, Pang explained that his company did not have certain machinery necessary for the finishing of denim goods, e.g. machines for bartacking (or cross-stitching), for putting on shank buttons and for putting on a particular type of fastener called a scovil snap. He was at once told that he should not worry about that, that the plaintiffs owned such machines, and that if an order was placed the necessary machines would be lent to him free of charge. It transpired that the most significant of these machines was the scovil machine. The plaintiffs possess two such machines one automatic and one land operated. I was told that they were the only such machines in Hong Kong. The machines were designed and owned by the manufacturer, Scovil, and leased to the plaintiffs. Both of the contracted styles called for scovil snaps. Their fixing was one of the last operations to be done. By their control of these machines the plaintiffs controlled the timing and ability of the defendant to complete the contract. On this vital matter the written contracts were silent, rendering the provisions as to time for delivery misleadingly incomplete.

10. This omission was in my judgment deliberate. It enabled Fisher to assert in his pleading a simple case of breach by failing to deliver by 31st January 1980. It enabled Fisher in evidence to deny that he promised any machinery, and to assert that Pang himself promised to buy all the machines he required. This transparent lie he developed at some length to the point of asserting that his first loan to the defendant, with which I shall deal in a moment, was to enable him to buy machines. The omission thus enabled Fisher to exploit the apparent completeness of the documents, and to lie if he thought it was in his interest to do so.

11. A similar comment can be made about the term as payment. This was a CMT Contract: not a CMT and D contract. To impose an obligation on the defendant, as was suggested, to deliver at his expense to a shipper to be designated later by the plaintiff would require in my judgment very much plainer words than in fact appear. I am equally satisfied that Fisher did not explain to Pang that this term was intended to impose on him an obligation to deliver at his expense. I think that this term was. deliberately devious to leave Fisher in a good position to argue the cost of delivery later; and to argue it in the context of a price which Fisher himself described as "low". I took that to mean very low.

12. At the outset of the relationship Fisher promised to give the defendants financial support if she would work exclusively in denim for the plaintiffs. To this Pang agreed. This led to the first of three loan transactions. On 16th November 1979 Fisher handed pang a cheque for $12,000 payable by the plaintiffs to the defendant: and in return received from Pang an undated cheque drawn by the defendant in favour of the plaintiffs for the same amount and personally endorsed by Pang. Albeit strictly speaking a loan, commercially this $12,000 was an advance payment under the contracts. As Fisher himself eventually admitted after earlier different answers: "I was to hold the cheque until such time as he completed my order".

13. A second similar transaction followed on 8th December with an exchange of cheques for $10,000. On this occasion Fisher demanded and obtained a document drawn as a bill of sale, assigning all the defendant's machinery as security for all loans made by the plaintiffs to the defendant. This document contained an express provision requiring "four months prior notice (written)" to be given by Fisher. Fisher told me that he realised the importance the defendant obviously attached to such notice and that he agreed to it only because "this was theatre; ..... I knew the document was not worth the paper it was written on". This did not however prevent him from threatening to register and enforce the document in the course of the taped conversation above referred to.

14. A third transaction followed on 10th January with a cheque payment of $15,000 to the defendant against two undated exchange cheques totalling $13,000. The contemporary document evidencing this loan and signed by Pang and Miss Leung, referred to the anticipated delivery of style 013 in one week's time. The position then was that the sewing of these styles was complete or nearly complete; and the finishing processes were expected to take only a week.

15. These transactions again are in my judgment typical of Fisher. The cheques he received were of course again silent as to any restrictions agreed upon their completion, dating and presentation. He was thus free to deny any such restrictions, to complete and date the cheques, and sue the defendant and/or Pang on them with very real prospects of obtaining summary judgment. This is exactly what he tried. Immediately after the breakdown of his relationship with Pang, and without any prior notice-or warning, he completed and presented the cheques. They were dishonoured. This action was then started, claiming $35,000 on these cheques. In an attempt to obtain summary judgment Fisher then swore that these cheques were "entirely distinct from .. and nothing do with" the two written contracts, paragraph 5 of his affidavit of 3rd September 1980. This was deliberately untrue. Summary judgment not having been obtained, on the first day of the hearing before me a claim on the underlying loan of $37,000 was added which was of course never disputed.

16. I now return to performance under the written contracts. It seems to be common ground that on 10th January the 013 garments were in the state I have just described. It is equally common ground that on 21st February what became known as the Removal took place during which the whole of the unfinished goods in both styles that were then still at the defendant's premises were taken therefrom by the plaintiffs. As to the events between these dates the evidence was extremely confusing and unsatisfactory. The evidence from Fisher and Miss Leung was frequently unreliable and often directly contradictory: that from Pang largely negative from lack of recollection of dates. The documents ought to have been more reliable but they were very incomplete, and a number were challenged as inaccurate or given conflicting explanations by the plaintiff.

17. In relation to this period I have to ask myself two questions namely:-

    (i) Have the plaintiffs proved the simple case of breach by non-delivery of garments by 31st January, which was the only breach originally pleaded: or

    (ii) Have the plaintiffs proved the case of repudiation by bad workmanship first advanced in evidence on the first day of the hearing and pleaded on the second day.

    18. In relation to the first question what is in issue is the reason for the admitted non-delivery in fact. The dispute centred over the provision or non-provision of the machines, and specially of the scovil machine. The plaintiffs through Fisher and Miss Leung asserted that sufficient machines were provided on time: Pang that there were difficulties and delays especially over the delivery and manning of this scovil machine which led to Fisher saying that he would arrange for this and other finishing work to be done elsewhere. In relation to style 013 the documents plainly show Pang to be right. On 29th January 1980 he gave to Fisher a cheque for $1,200 which Fisher endorsed as follows: "This cheque for partial payment for following labour work done on style 013. Putting on bartacking: putting on button hole: putting on shank buttons: putting on scovil snaps", C33. This shows that on or before 29th January, i.e. before the due delivery date, the parties agreed for this work to be done elsewhere: that that was a variation of the written contract: and that such variation made it impossible for the plaintiff to sustain their simple breach by non-delivery case in respect of style 013.

    19. The question therefore is whether there are grounds for concluding that the parties intended to deal with style 7020 in a different manner to style 013. In my judgment nothing supports this conclusion. The finishing processes for both styles were identical and needed the same machinery. Although the precise course of events thereafter is very obscure, I am satisfied that at the same time as they obtained the cheque at C33, the plaintiffs were determined to treat the two styles identically, have them both finished elsewhere, and in all probability to have the scovilling done by the same contractor namely Yick Lee Garment Factory. Fisher told me that all work described on the back of the cheque at C33 was executed by a firm called Manta Garments and that the $1,200 was a part payment, corrected to the whole cost, then recorrected to part payment again. No documentation of any sort with Manta was produced. Miss Leung asserted that manta had done all this work except scovilling: that scovilling for both styles had been done by Yick Lee who on the documents was plainly approached very early in February: and that she thought, after one correction, that the trans-portation documents at C35 and 39 referred to style 013 going to Yick Lee for scovilling. The Yick Lee documentation in turn purports to confirm that he did all scovilling but also claims the cost of "Manta" work on 60 dozen of style 013. The evidence is totally confusing, but its overall effect indicated in my judgment a decision on the part of the plaintiffs to take the finishing processes out of the defendant's hands in relation to both styles which decision was taken before 31st January. No attempt was made to support this decision by a plea of anticipatory breach. I therefore think that a negative answer has to be given to my first question in respect of style 7020 also.

    20. The plaintiffs' pleadings originally made no complaint of bad workmanship at all. It was therefore some what surprising on the first day to hear Fisher saying in evidence that bad workmanship was not simply a reason, but the reason, for the removal, which he was then putting at about 7th February. But this evidence was quite a irrecon-cilible with his later evidence that he was first aware of serious bad workmanship as result of complaints from Yick Lee made after the removal. My answer to this question is again, no, for two reasons. The first is that the degree of faulty workmanship was much too slight to constitute any breach going to the root of the contract which the plaintiffs could treat as a repudiation. Secondly they plainly did not so treat it and so the most that the plaintiffs can recover in respect of bad workmanship is the proper cost of correcting the garments.

    21. It became quite clear during the hearing that after 1st February the plaintiffs continued to treat both contracts as subsisting. This meant the end of the alternative case of repudiation introduced by amendment on the second day of the hearing in paragraph 9 of the amended Statement of Claim, which although contradictory in form I agreed to treat as pleaded in the alternative. This only left the Claim based on removal by consent. At the conclusion of the plaintiffs case it was thus admitted by Mr. Lai that save for a point on defects with which I have just dealt, the whole case turned upon the terms, express or implied, of the agreed removal on 21st February. Upon these terms the pleadings on both sides were wholly silent.

    22. Before coming to that, it is necessary to pick up the story in relation to what became known as the piece goods. Sometime early in January, when the work on the written contracts was approaching completion, Pang asked Fisher for more work to maintain continuity on his exclusive denim line. As a result, two lots, comprising nearly 5,000 yards of denim, were delivered, together with samples of styles 012 and 008 which the plaintiffs were contemplating having made. These goods were the subject matter of a third trust receipt dated 1st February, and first produced by Fisher after he had been in the witness box for some days.

    23. At this point the parties accounts diverge. Fisher says that he was contemplating a further written contract for the production of these two styles which was never made. He says that he gave no permission for the piece goods to be cut, and still less the written permission required by condition 11 of the trust receipt. Further he said nothing was in fact done to these goods. They were removed in their original wrappings on 21st February. Miss Leung corroborated this account in detail. She described how these goods were still in their original rolls on 21st February: how they were then stacked; and how they were packed, up to four at a time, a garment bags. I was told that this material was later made up into these particular styles not by Yick Lee to whom they were taken on removal, but by one or other of two factories. No documentation was produced to show what was done, by whom and at what cost. Such documentation would have been of crucial relevance to this claim.

    24. Pang's evidence was very different. The object of this delivery he said was to maintain continuity and Fisher told him he was at liberty to cut as soon as the samples arrived. Both styles he said were cut and in relation to style 012 substantial sewing work was done as well. In support of this he produced:-

      (i) His cutting records showing that on 27th/28th January 334 dozen were cut of style 012: and 1st/2nd February 494 dozen of style 008.

      (ii) His records showing payments to the cutter for this work of $467.60 and $691.60 respectively.

      (iii) The records of his workforce during late January and February which lie said were made up daily showing the work done by various members of his staff on these styles, and payments in respect thereof totalling $3,586.

      25. The choice before me is clear and stark. Something was fabricated - either the defendant's records or the plaintiffs' evidence. In my judgment the documents are not fabrications and are conclusive. I was confirmed in this view by my general view of Fisher and Miss Leung: by the plaintiffs failure to produce any documentation: and by an early answer of Miss Leung, which she later corrected, to the effect that the defendant had done work on the piece goods. 1 am satisfied that Fisher asked for these styles to be cut and that on the 21st February he knew that this had happened and that other work also had been carried out.

      26. I now return to the Removal on 21st February. On this day, and with the assent of the defendant, the plaintiffs removed from the defendant's premises in circumstances of some hurry and confusion:-

      (i) The nearly completed garments produced to styles 013 and 7020 under the written contracts.

      (ii) The piece goods cut for styles 012 and 008 and to some extent sewn also.

      (iii) A quantity of threads, the defendant's property, bought specifically for this production.

      (iv) A quantity of accessories which had been delivered by the plaintiffs to the defendants for this production but were not yet fixed to the garments.

      Apart from the acceptance by both parties that this happened by consent, the evidence of express agreement was almost non-existent. Fisher in one answer asserted that Pang agreed to pay all his claims i.e. gave him a blank cheque. This was a typical piece of Fisher evidence which I reject. Pang said he could remember no express conversation, but that thereafter he was expecting to receive an account from Fisher in which he was credited with the contract price of styles 013 and 7020 and with the value of his other work and debited with the reasonable cost of completed the former style.

      27. In these unusual circumstances, and in the absence of any pleaded or proved express terms, I think I can only go by the terms which any honest reasonable man must have accepted at the time - by the "Oh, of course!" test of Mackinnon L.J. in Shirlaw v. Southern Foundries 1939 2 K.B. 206 at p. 227. On this basis the implied terms of this agreement in my judgment were:-

      (A) That the plaintiffs would cause the garments of styles 013 and 7020 to be completed, and would thereafter credit the defendant with the contract price therefor, but debit her, first with the reasonable cost of completing the goods and secondly with the advances already made in relation thereto.

      (B) That in relation to the piece goods and styles 012 and 008, that the plaintiffs would credit the defendant with the proper value of the work done by the defendant.

      (C) That the plaintiffs would credit the defendant with the reasonable price of the threads and any other items of property of the defendant removed.

      (D) That the taking and settlement of the accounts between the parties on the above basis should be in settlement and discharge of all claims between them.

      I did not think that having regard to the circumstances then existing between the parties that any other terms can properly be implied. In particular I think that if either party wished to reserve or preserve his rights (if any) to make claims by x-ray of damages beyond the taking of the accounts above referred to, that this could only have been done expressly. In particular I think that this applies to the purely damages claims in paragraph 10 of the amended Statement of Claim, which if they had existed at all, did not survive the making of this agreement. I shall now separately consider the effect of each of these terms.

      Term A

      28. The major question here was the proper cost of completion. On 21st February all the goods were removed to Yick Lee. In respect of the cost of completing styles 013 and 7020 the plaintiffs claimed to have paid Yick Lee a total sum of $43,661.30 which is only a little way short of the total contract prices of $49,500. Much of the trial was directed to investigating the truth of this claim: and the reasonableness of this or some other sum.

      29. The documents initially put forward and principally relied upon by the plaintiffs were:-

      (i) A receipt dated 29th February and signed by Yick Lee for the sum of $20,000 as part payment for work to be done on these styles, C42; and a paid cheque for this sum C41. C42 also records Yick Lee's promise to complete the work on 013 by the end of March and on 7020 by mid-April.

      (ii) Two documents C44 and 46 which were both detailed bills and receipts setting out the work allegedly done on both styles and the rates of charge therefore; together with an acknowledgment signed by Yick Lee of the receipt of $6,873.30 for. 013 and $16,788 for 7020: a total of $23,661.30.

      I regard these documents as wholly consistent with one another; with the demand for an initial deposit of $20,000 coupled with an acknowledg-ment of the total receipt for the whole job of $23,661.30 and no more.

      30. The plaintiffs however asserted that the documents had to be read cumulatively. Fisher at first told me that the plaintiffs had paid Yick Lee not $23,661 but $43,661: by the $20,000 cheque on 29th February, and as I then understood him by the two sums stated in C44 and C46 on 11th April. He described this charge as "daylight robbery" and said that at the outset of his negotiations with Yick Lee he knew he was being taken to the cleaners but that he had no choice. "He (Yick. Lee) had me: he held the Aces". There then being before the court no evidence of payment beyond the documents of 29th February and 11th April, he then said that he thought that some payments to Yick Lee had been made by cheque or cash whilst he was in hospital following his collapse in Yick Lee's factory. The date of his collapse was later fixed at 22nd April and his stay in hospital as from 22nd April to 5th May.

      31. The following day Fisher produced in evidence photostat copies of cheques drawn by the plaintiffs in favour of the proprietor of Yick Lee. These photostats were not of the paid cheques, but were taken before final delivery of the cheque to the payee. This singular practice was said to be normal in the plaintiffs' office. These cheques and their purpose as described by both Fisher and Miss Leung were:-

      (i) A cheque dated 21st March for $10,000. This cheque carries on its back an endorsement by Yick Lee in favour of his landlord together with a receipt by the landlord. Yick Lee, I was told, requested this cheque because he was two months in arrear with his rent.

      (ii) A cheque dated 22nd March for $4,500. This was requested by Yick Lee because he was "short on wages". Miss Leung explained that Yick Lee had a large factory of at least 6,000 square feet, and she confidently expressed the view that his wages bill for 15/20 sewing staff was a minimum of $20,000. She was then apparently unable to say whether she meant by this $20,000 a month or $20,000 a fortnight, which was surprising having regard to the confidence of the earlier answer, the usual fortnightly practice in this trade, and the date on this and the succeeding cheque.

      (iii) A cheque dated 8th April for $10,000. This was given because Yick Lee said he was again short on wages and had some bills to pay.

      32. The production of these cheques, and of the relevant bank pass sheets proved these payments. The question then was in respect of what did Yick Lee receive them. Both Fisher and Miss Leung were emphatic that the only work Yick Lee did for the plaintiff was this work on 013 and 7020 and that the firm did nothing else before or after. All payments therefore were referable only to this work. When the work was nearly complete Miss Leung said that she negotiated the figures in the documents of 11th April, C44 and 46 with Yick Lee and in "fairness" to the defendant whom she knew was going to have to pay the bill, negotiated some reduction. The different between the $44,500 already paid in. the four cheques, and the $43,661 due was then repaid by Yick Lee in cash. There was no document supporting this.

      33. The transport documentation produced by the plaintiffs appears to show:-

      (i) The delivery by the plaintiffs to Yick Lee of a total of 18 machines during February. Fisher confirmed this figure in evidence. 10 were removed from the defendant on 21st February. The relevant debit note is dated 25th February. This shows I was told the usual time lapse between deed and document. The earliest debit note is dated 4th February so that the first movement of machines to Yick Lee was very early in February.

      (ii) The delivery from the plaintiffs direct to Yick Lee of 18 bales and 6 cartoons of "jeans" under a debit note dated 8th February, C38. The accuracy of this was challenged for different reasons by both Fisher and Miss Leung.

      (iii) The collection from the defendant or 7th February, C35 and the delivery to Yick Lee C39 of 15 bags of denim children jeans. These Miss Leung said were style 013 going to Yick Lee for scovilling. This she said was the first dealing with Yick Lee. Before it he had quoted to her a price being the price appearing in the documents of 11th April with which she was quite happy.

      34. In re-examination, right at the end of her evidence, Miss Leung revealed that there was a further term of the plaintiffs agreement with Yick Lee which ought to have appeared in the document of 29th February C42. This she said was: "we told Yick Lee that he could not take any other orders when he was doing our work". This was her last answer of that day. Next morning she corrected "our work" to "the work on 013 and 7020". In part by way of confirmation and in part by way of correction of her earlier evidence she said:-

      (i) On 11th April the work on both styles was nearly finished and all the goods were out by 15th April.

      (ii) Between 29th February and 15th April (not the whole of April as she had earlier said) Yick Lee had no garments on his premises except styles 013 and 7020. This was the period of exclusivity.

      (iii) This was a very small job for Yick Lee compared with his usual output of 3,000 dozen garments a month.

      (iv) Having regard to the time he took Yick Lee lost money. $44,500 would not have covered his wages bill for six weeks.

      (v) It was pure chance that Fisher was at Yick Lee's premises on 22nd April. No work was then being done there for the plaintiffs: the visit was connected with machines.

      35. On this evidence and having seen and heard Fisher and Miss Leung I am convinced that this was a false claim, and not only is $43,601 an unreasonable sum but that it was not in fact paid to Yick Lee for this work. I say that principally because:-

      (i) The claim directly conflicts with Yick Lee's receipts relating to this work. Indeed the negotiation procedures which led to the making of the documents of 11th April would have been a complete farce if there was no truth in the total figures there appearing.

      (ii) By the end of the evidence nothing was left of Fisher's explanation of "daylight robbery". The decision to use Yick Lee was taken at least three weeks before-the Removal and at a time when he held no aces and was quoting reasonable prices.

      (iii) An exclusivity clause limited to this job coupled with a six weeks completion time is quite absurd. Having regard to the modest amount of work outstanding a completion time of six weeks is equally absurd from the exclusive use of a substantial workforce. If Yick Lee agreed to this he was robbing himself and guaranteeing himself a loss.

      (iv) I do not for one moment think he did. Like Mr. Pang before him I think he was offered exclusivity in the terms of Miss Leung's original answer in return for financial support and sufficient work. I am sure he got both. The cheques represented financial support of the same type as had been given to Pang. The work I think started with the jeans on the 8th February debit note if not before. This was the reason why he was lent 18 machines, many more than completion of the defendant's work required, and why he was allowed to keep them at least until 22nd April. This I believe is why the piece goods were sent to him and why no subsequent documentation was produced in relation to them. This I am sure is what full discovery of the plaintiffs' records would have revealed.

      36. In the light of this conclusion I have approached the figures in C44 and C46 with great circumspection and with the gravest doubts as to whether they were the product of any genuine arms length negotiating at all. The figures compare very unfavourably with the sum of $1,200 paid by cheque in respect of 013, which is the only other comparable evidence before me. Although at one time Fisher told me that this sum represented the price of the work, it became common ground that it was only as an approximate sum: a figure thought to be approximately correct. At Yick Lee's rates the same job would have cost $2,542.50. This is double the parties' expectation in January and I am minded to think double what is reasonable. The problem does not end there. The plaintiffs told me that Manta did everything but scovilling for 013, but produced no evidence as to what they received; and the Yick Lee documen-tation claims for 60 dozen of this style.

      37. I think here that the plaintiffs are fortunate in the reasonableness of Pang's approach and at the concession he made. These rates he told me varied from factory to factory, and subject to only 3 point's he accepted' the reasonableness of these figures. His 3 points were:-

      (i) A reduction of the figure in C44 to $5,039.04 by reducing two rates and the percentage uplift to 20%.

      (ii) The reduction of the figure in C46 to $12,491.40 on the same grounds.

      (iii) To his receipt of credit for the $1,200 cheque.

      The net figure produced is $16,330.44. This I will do because in my judgment it represents a reasonable, if not generous allowance, for completing the work required by the written contract and correcting any defects therein. As these documents show the defects were much less extensive than the plaintiffs maintained and this method of dealing with them is not only the only one available but is fair and reasonable.

      38. I turn now to the remaining claims in paragraph 10 of the amended Statement of Claim. They fall into two groups: those within the agreement of 21st February: and those which can only arise by way of damages under the original contract. Into the first group falls items 2 and 5.

      (2) Generally speaking accessories are to "factories account" under the contracts. Accessories in the quantities and to the values given in the debit notes at C28, 29 and 30 were delivered. Some were used and fixed: the balance were removed. With one exception the cost is properly deductable from the contract price. The exception is the first item on C29. This was an over provision for the written contracts and part would have been used on other contracts. The amount proper for the written contracts, in my judgment 700 dozen or $525, is an appropriate deduction: the balance of $266.25 is not because the defendant is not receiving the contract price for any future work. The proper deduction under this head is therefore $7,069.85 minus $266.25 i.e. $6,803.60.

      (5) The proper cost of completion must include the proper cost of transporting the goods to the place of completion. The cost of carrying styles 013 and 7020 to Yick Lee is therefore deductable. This was $448,the last 2 items on C40. After some hesitation I am also prepared to include the $150 on C39 on the basis that this also was the cost of transporting material to Yick Lee for scovilling. No other sums in the transport documentation are in my judgment recoverable. As far as machinery is concerned the original promise was to provide this free of charge. Until about February this is what happened. No delivery charges were raised at all. The breakdown of the relationship does not justify a removal charge however reasonable it may be said to be. The proper deduction under this head is therefore $598.

      39. The second group of claims all fail both because I am not satisfied as to the relevant breach of contract, and also because they fall outside the agreement of 21st February. For completeness I would however add that each would in my judgment have failed as a head of damage because:-

      (i) The goods were not measured or counted out of the defendant's works. There was ample opportunity for muddle, confusion and loss during the move and at Yick Lee's works. No claim can be proved on Yick Lee's output, which is what in fact was attempted.

      (iv) At the time the contracts were made nothing was made known to the defendant about the ultimate consignee of the garments, his name location or delivery requirements. Further the plaintiffs failed to prove any contractual obligation to their consignee to deliver by any particular date.

      (vi) Having regard to the plaintiffs control of the machines: their decision to take the goods elsewhere: and the problem of ascertaining the truth about Yick Lee: I would have felt unable to have found the defendant responsible for any measurable period of delay.

      40. On my findings therefore the figures on the first part of the account taken under terra A are as follows:-

      Contract Price

      013

      $16,800.00

      7020

      $32,700.00

      Total

      $49,500.00

      Less

      1 . Assessories

      $6,803.60
      2. Cost of completion - transport

      $598.00
      3. Cost of completion - work

      $16,330.44
      Total

      $23,732.04

      Defendant's entitlement under contract

      $25,767.96
      But defendant received in advance

      $37,000.00
      So net balance in plaintiff's favour $11,232.04

      Term B

      41. The plaintiffs having declined to put any material before me in relation to their subsequent dealings with these goods I have only the defendant's costings and estimates.

      42. In relation to style 012 the defendant's claim is for $15,403.60 made up as follows:-

      $

      1. Cutting fee 334 dozen C $1.40 a dozen

      467.60
      2. Sewing wages

      3,586.00
      3. Thread (estimated)

      460.00
      4. Rental (approximate)

      3,600.00
      5. Overheads

      3,500.00
      6. Wages of denim supervisory staff for 1 month

      Instructor

      $1,600
      Assistant Instructor

      1,300
      Clerk

      900

      3,800.00

      7. Profit Nil

      43. Items 1 and 2 are taken from the defendant's contemporary records above referred to and I accept the reasonableness of 3. I was told that the supervisory staff had about 10 days preparatory work to do before cutting started, as well as general supervision thereafter. This work had to be done for both styles, but this head of claim is made only under this style. In these circumstances it seems to me reasonable to allow it. The direct costs therefore total $8,313.60. Items 4 and 5 were scarcely probed and were simply left to me. I think my best guide here is the 50% on cost for profit and overheads originally raised by Yick Lee in his documentation and accepted by Pang as appropriate to a new contract. I therefore allow 50% i.e. $4,156.30 under items 4, 5 and 7, making a total of $12,470.40.

      44. In relation to style 008 the defendant's claim is for $1,990.10 made up as follows:-

      $

      1. Cutting 494 dozen $1.40 a dozen

      691.60

      2. Sewing

      313.50
      3. Thread

      85.00
      4. Overheads   900.00

      Again items 1 and 2 are taken from the contemporary records and 3 is reasonable. I apply the same 50% uplift which produces a total figure of $1,635.15.

      45. In my judgment therefore the reasonable values of the work done on style 012 and 008 were $12,471.30 and $1,635.15 respectively. Under this tread the defendant is therefore entitled to credit in the total sum of $14,105.55.

      Term C

      46. The plaintiffs never disputed their obligation to pay for the threads and other items removed on 21st February. This admission appeared in each version of the reply and finally in paragraph 8. It was repeated by Fisher in evidence. The only issue was quantum. On the documentation produced by the defendant this was clearly established in the figure of $3,811.66. Mr. Lai's concern, expressed to me by letter after the hearing, that he had made some inadvertent concession in respect of this item, is ill-founded.

      Miscellaneous

      47. There were three more small claims which the defendant made against the plaintiffs in his debit note dated 28th May 1980. There are:-

      $

      1. Bags 20 pcs. @ $10

      200.00
      I understood this to have been conceded.

      2. Sample fee 9 pcs. @ $55

      495.00
      It is not disputed that these samples were made, but I find that this work was done in circumstances in which neither party expected any money to pass. Nothing is now recoverable.

      3. Storage fee (bags on garments)

      1,000.00
      Sometime in January Fisher asked Fang to store for him 14 bags and 11 cases of cutting fabric which he did for about 10 days until 25th January 1980. Unlike the samples this was a service for which Fisher normally expected to have to pay but hoped in this case not to be asked to do so. Having regard to the quantity of goods involved I am not prepared to say that the sum claimed is unreasonable and I allow it.

      48. In respect of these miscellaneous items therefore the defendant is entitled to credit in the sum of $1,200.

      Term D

      49. On my findings therefore the final account between the parties reads, expressed from the defendant's view point, as follows:-

        

      $

      A. Debit

      11,232.04

      B. Credit

      14,105.55
      C. Credit

      3,811.66
      Miscellaneous credit

      1,200.00

      19,117.21

      Net balance in defendant's favour

      7,885.17

      50. There are two matters to which I must revert before leaving this case. The first is the taped conversation to which I referred at the start of this judgment. It was typical of Fisher that when this subject matter was first raised in cross-examination he gave a whole series of untruthful answers in relation to it. Then having listened to the tape he had to admit the accuracy both of the tape and of the transcript. No one hearing this tape or reading this transcript could in my judgment doubt that Fisher was bringing grossly improper pressure to bear on Pang to force the defendant to submit to judgment for $118,000. The matter was referred to the police. They have as yet taken no action. If this arose from their belief that Fisher bona fide thought he had a valid claim for $118,000 then I do not share it. Having regard to the fact that this claim included the $20,000 said to have paid to Yick Lee, and gave the defendant no credit at all either for work done or materials supplied I have the greatest difficulty in seeing how even Fisher could have conceived that he was owed the sum that he was demanding.

      51. Secondly during the course of the hearing the defendant put a notice in the South China Morning Post to the effect that the firm was ceasing business. This was brought to my attention by Mr. Lai during the course of Fisher's evidence. Mr. Lai told me that lie was contemplating an applicat on under Order 44A. Having considered that Order with counsel I express doubt about the validity of any such application which was in fact never made. Fisher of course heard this on the witness box. Thereafter Mr. Lai later told me that he advised Fisher that if he wanted to pursue the matter further he would have to seek an injunction from another judge and through another counsel.

      52. That evening Fisher resorted to direct action. Being in the vicinity of the defendant's factory and seeing materials and machinery being removed therefrom he complained to the police. Despite his denial, I am satisfied that the whole purpose of this was to try to get the police to stop the removal. He claimed to the police that Pang had acknowledged his indebtedness to him that same day, when he had in fact done no such thing. Naturally when the police learned of these proceedings they did nothing. The incident was no doubt disturbing and worrying to Pang who was already burdened and struggling with the conduct of the defendant's case.

      53. As I told Mr. Fisher at the time, in my judgment this behaviour was a clear contempt of court; a clear attempt to obtain relief outside the court which he had declined to seek in the court no doubt because he thought it would be refused. At the time of this incident Fisher had endured the strain of several days in the witness box. More significantly in my view, he is a man who simply does not seem to recognise or understand the accepted norms of human behaviour and the consequences of his own conduct. I think it is therefore sufficient for me to give him one clear warning. This is that the kind of strong arm tactics about which I have heard in this case are quite intolerable and will not be tolerated by this court. If repeated again under any circumstances they are likely to have serious and unpleasant personal consequences.

      54. I accordingly give judgment in the action for the defendant in the sum of $7,885.17.

      (D.S. Hunter)

      Judge of the High Court

      Representation:

      Mr. Thomas Lai, instructed by H.H. Lau & Co. for Plaintiff.

      Defendant in person.