Li and Fung (Trading) Ltd v. Wing Hing (Tangs) Fabrics Manufacturing Co Ltd

HCA003561/1985

1985, No. A3561

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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BETWEEN

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Coram: His Honour Judge Downey, sitting as Deputy Judge of the High Court

Date: 21 May 1986

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JUDGMENT

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1. These proceedings relate to numerous transactions between the plaintiff and the defendant between the summer of 1984 and March 1985. During that period, the defendant sold and delivered substantial quantities of cotton woven dyed fabric to the plaintiff in various colours and patterns. The precise quantity is now in dispute, but by any reckoning the value of these deliveries exceeded US$800,000. Unfortunately, the rest of the narrative is still in a state of confusion, and I feel unable to follow the King's advice to the White Rabbit:

"Begin at the beginning ...... and go on until you come to the end: then stop. "

Instead, I feel obliged to begin somewhere beyond the middle!

2. By a writ, issued on the 4th June 1985, the plaintiff sought to recover the sum of $152,265.49, being the balance due on a cheque, dated the 20th March 1985 and drawn by the defendant, which had been dishonoured. Oddly enough, the plaintiff's solicitors never applied for summary judgment. Instead, on the 9th July 1985, they consented to a Defence and Counterclaim being filed out of time. By this pleading the defendant admitted drawing the cheque, but alleged, inter alia, that it was given subject to a condition that the plaintiff would perform its part of an agreement to purchase 300,000 yards of the cotton fabric at a price of US$2.29 per yard. The details of that agreement were set out clearly in paragraph 4 of the Defence. The defendant went on to allege that the plaintiff had taken delivery of 267,369½ yards of the fabric, but had failed or neglected to take delivery of the remaining fabric. It counterclaimed damages in the form of its loss of profit on the remaining fabric, and interest on sums allegedly paid late by the plaintiff. This part of the counterclaim (para. 12) was abandoned at the outset of the trial. On the 23rd July 1985, the plaintiff filed a Reply and Defence to Counterclaim. It disputed the basis on which the amount of the cheque had been reached, but it expressly and unambiguously admitted paragraph 4 of the Defence, and went on to allege that it had taken delivery of and paid for a total of $340,796.85 yards of the cotton fabric. Full particulars of these deliveries, referring to invoices and delivery receipts, were then set out at considerable length.

3. Having regard to the time which had elapsed between the presentation of the dishonoured cheque and the filing of these pleadings, and the detailed particulars contained therein, it is reasonable to suppose that the legal advisers of both parties had by then obtained full instructions and sifted through all material documents, and analysed their contents with some care and precision. The Summons for Directions was heard on the 25th October 1985. Although automatic mutual discovery had not taken place, the parties' advisers were presumably satisfied that the issues were clearly drawn and that the case was more or less ready for trial, or, at least, suitable for setting down in the Running List. Although the defendant apparently did not comply with the order for discovery, the case was set down for trial on the 6th December 1985 upon the basis that nothing had happened to affect the estimated length or nature of the hearing.

4. Regrettably, many of these and other assumptions proved to be wrong on the first day of the trial and during the hearing. No agreed bundle of documents had been prepared. Instead, counsel arrived laden with separate bundles. That for the plaintiff contains 323 pages; the defendant's bundle runs to 124 pages. I have since discovered that some apparently material documents found in the defendant's bundle do not appear in the plaintiff's bundle; and vice versa. Although, it was clear on the pleadings that the defendant had the right to begin, Mr. Chung was placed in some difficulty and embarrassment from being instructed late on the eve of the trial. After an adjournment during which the plaintiff's bundle and part of the defendant's bundle were agreed, he briefly opened his case.

5. At an early stage, it became apparent that the evidence did not tally with the pleadings, both in matters of detail and substance. Towards the end of the first day, it emerged that the plaintiff was endeavouring to put forward a case on the alleged agreement which was radically different from that admitted in the pleadings. All in all, an undue amount of time and effort had to be devoted to ensuring that the parties kept to the courses charted for them by the pleadings, with the unfortunate consequences that the flow of evidence was fragmentary instead of smooth, and counsel, in their final submissions, were unable to give me the assistance which the documentary and oral evidence clearly called for. As a result, I have had to spend a grossly inordinate amount of time on examining and analysing the numerous documents much of which, in my respectful view, should have been done long before the trial began and certainly before I rose to consider my judgment.

6. I will now return to the beginning. It is common ground that the bulk of the deliveries of cotton fabric made by the defendant to the plaintiff stemmed from a telex dated the 25th July 1984 (p. 1 of the defendant's bundle ("D/B")). Although the telex makes no reference to the price, paragraph 4 of the Defence alleged that it was a firm order for 300,000 yards at US$2.29 per yard. As already indicated, that was expressly admitted by the plaintiff in its Reply and Defence to Counterclaim. Yet, at the hearing more than one attempt was made on behalf of the plaintiff to assert that there was never a definite and binding commitment to take delivery of 300,000 yards and, further or alternatively, that the defendant eventually agreed to reduce the price from US$2.29 to US$2.10. Invitations or suggestions to amend the pleadings at early and later stages of the hearing were declined. But, shortly before the completion of the evidence, the plaintiff applied to amend its Reply to withdraw the admission and to put forward its wholly different case. I refused that application because I considered that it was made far too late, would result in the defendant being confronted with an entirely new case, and the prejudice to the defendant could not be adequately avoided by an award of costs. In effect, my ruling on that application precluded the plaintiff from adducing evidence and contending that the telex was merely an acknowledgement of receipt of a standing offer by the defendant, which was accepted from time to time when the plaintiff sent in Sale or Purchase contracts similar to items 146 to 156 in the plaintiff's Bundle ("P/B").

7. I fully recognise that all the material facts may not have emerged from the evidence. But, I am satisfied, and so find, that the plaintiff did contract to take delivery of 300,000 yards of fabric at a price of US$2.29 per yard for delivery between December 1984 and march 1985. The terms of that contract were set out in a so-called "agreed" document (on page 7a of D/B) dated the 9th October 1984. Unfortunately, that is not signed by the plaintiff and, on the evidence before me, I consider that it may never have been sent to the plaintiff. I am satisfied, however, that the plaintiff assented to these terms, not only on the basis of the admission on the pleadings, but by reason of its conduct in complying with the defendant's invoice dated the 10th November (page 3 of P/3), which sets out the essential terms. This invoice was for 20 per cent of the total contract price of US$685,454.25, arrived at on the basis of a unit price of US$2.29 and a total quantity of 299,325 yards. The plaintiff paid the deposit of US$137,090.85 by a cheque for HK$1,072,324.68 (p.4 of P/B). In return, the defendant delivered a postdated cheque for the same amount (item 7b of D/B) as a guarantee of delivery" of the goods. It is, in my view, also significant that the invoice (and the unsigned Sales Contract) gave the buyer an option of accepting 5% more or less than the contract quantity.

8. Between December 1984 and February 1985 the defendant delivered substantial quantities the fabric to the plaintiff or its overseas buyer (or "principal"), Santa Cruz Imports Inc. As far as I can gather from the evidence of the parties and the documents in the two bundles, the fabric would be prepared by the defendant after receipt of instructions from the plaintiff as to quantities, colour assortment and patterns. The eventual deliveries would be evidenced by delivery receipts, invoices and, in some cases, credit notes, like those contained in the two bundles before me. During this period the plaintiff also transferred to the defendant its rights to draw on two letters of credit, apparently advised by Chase Manhattan Bank N.A. in Hong Kong (as correspondent bank) on the instruction of Manufacturer Hanover International Banking Corp. in San Francisco, which was presumably the issuing bank for Santa Cruz Inc., the importer and ultimate purchaser of the fabric. The first letter of credit was for US$503,733.29 and was made available to the defendant in December 1984 (pp 282 & 314 of P/B). The second was for US$154,402.50 and was made available in February 1985 (288 & 317 of D/B). It is, in my view, significant that the amount of the second letter of credit greatly exceeded the difference between the "contract price" for the 300,000 yards apparently ordered in 1984 on the one hand, and the total of the deposit and the first letter of credit on the other band. The difference is even greater if one assumes that the plaintiff would take advantage of the option and take 5% less than the apparent contract quantity.

9. I heard oral evidence from Mr. Thomas Tang Siu Sang, managing director of the defendant, and Miss Florence Wong Sun Ban, Assistant Manager of the plaintiff. At times their evidence was very confused, possibly because of the manner in which their respective cases had been pleaded and the issues thereby raised. I also think that they did not have direct or full personal knowledge of some of the facts on which they were questioned. It is obvious from their evidence and the numerous documents before me (especially telexes between the parties) that other persons should have been called to give evidence of certain material facts or to explain some of the documents. It may be that this particular case was not correctly listed. If it was, it may have been called for trial earlier than was reasonably expected by the parties or their legal advisers. I can understand the desire to avoid the costs and inconvenience of an adjournment. But, it is equally unfair to proceed on the basis that such witnesses as may be available should be expected to answer for the words or deeds of others.

10. As already indicates, the plaintiff alleged in its Reply and Defence to Counterclaim that it had taken delivery of over 340,000 yards. In order to meet this complete defence to the counterclaim, Mr. Tang explained that some of the invoices related to a different or second contract for the same fabric at an agreed price of US$2.10 per yard. Miss Wong, however, was adamant that these invoices also related to orders placed as a result of the "confirmed production booking" made in July 1984 (p. 1 of D/B). She added the explanation that Mr. Tang had agreed to reduce the price from US$2.29 to US$2.10, after she had explained that her "principals" wanted to reduce the quantities of cloth to be delivered. Miss Wong did not indicate when the defendant agreed to this reduction in price. In the course of her long answer to explain this alleged reduction, she suggested that it was "in early December 1984". According to my note of her evidence, her answer continued in the following terms:-

"........ Therefore, after negotiation between the 3 parties - defendant, I and principal - finally defendant agreed to reduce the price to 2.10 if we will take up the total quantity up to 300.000 yards.

I realise that it was her counsel who suggested that the reduced price was for "the balance"; but it was Miss Wong who volunteered the information that "the balance" was then "about 70,000 to 80,000". Frankly, I was puzzled by her evidence about this balance because, at that early stage of deliveries, the balance to be delivered under the original "commitment", as Miss Wong described the relationship between the plaintiff and the defendant, would have been substantially in excess of 80,000 yards.

11. If this discussion with the defendant took place in the following year, at or around the time when the defendant's dishonoured cheque was exchanged for the return of its "guarantee cheque" (p 7b of D/B), Miss Wong's reference to a re-adjustment of the price for the remaining deliveries might fit in with the defendant's pleaded case that the dishonoured cheque was given subject to the express condition that the plaintiff would perform its obligation to take delivery of the balance of the 300,000 yards of the fabric in question. But, on the evidence before me, that was never a "starter", as Mr. Chung eventually conceded. Furthermore, I do not think that Miss Wong ever suggested that it took place in 1985. I think that it may be the case that she was seeking to demonstrate that the plaintiff's "commitment" to take 300,000 yds was met by the seven Purchase Contracts, submitted to the defendant in October 1984 (pp 294-300 of P/B), and the two Purchase Contracts, submitted at the end of December 1984 (pp 301-2 of P/B). The former covered 239,703 yards of Fabric at US$2.29 per yard. The latter covered 73,525 yards at US$2.10 per yard. But, that possible interpretation of Miss Wong's evidence does not exactly explain the additional contracts for 5,800 yards at US$2.29 per yard (p 303 of P/B) and for 13,320 yards at US$2.10 per yard. (p. 304 of P/B). Nor, in my view, do they explain the fact that the second letter of credit was made available to the defendant in February 1985 in an amount which greatly exceeded the balance due under a firm contract to purchase 300,000 yards, whether at a price of US$2.29 per yard or US$2.10 per yard. I consider that it is more probable (and I so find) that the price of US$2.10 per yard was the rate agreed for fabric to be delivered under an entirely separate contract, viz. one for which no deposit had been paid in advance of deliveries.

12. Mr. Tang went on to explain that he could identify the fabric delivered under the July agreement ("the First Contract") by reference to the unit prices on the invoices. He testified that prices of US$2.29, US$l.84, US$1.54 and US$2.171 all related to the First Contract. It was not made clear how the last figure was arrived at, but I assume that it as an adjustment to reflect the fact that the defendant was being paid at rates which did not allow for the payment of the 20 per cent deposit, or at rates higher than an adjusted rate. In any event Miss Wong did not dispute these rates. She merely contended that US$2.10 was also included in the category of reduced or adjusted rates. For the reasons given earlier, I think that it belongs to a second category related to a separate contract made in December 1984.

13. As a final parting shot Mr. Lee recommended that I look at the telex at p. 61 of D/B for some assistance on the question of prices. He didn't indicate how it might assist me; nor was it referred to in the evidence of Mr. Tang or miss Wong. However, it seems to me to confirm my view that there were two separate contracts at different prices; but, in the case of one of them, the price was adjusted because of the payment of a deposit. Some additional support for the view that the first contract was a firm order for 300,000 yards, subject to the 5% margin, concluded in October 1984 may be found in the telex of the 14th November 1984 (p 31 of D/B). The defendant was then complaining of the plaintiff's failure to pay the deposit and open the letter of credit; yet the earliest reference to a price of US$2.10 I have been able to find is in the telex of the 28th November 1984 (p 36 of D/E). This telex together with the reference to "additional yardage" in item 2 of the telex of the 6th December 1984 (p. 39 of D/B) also suggests a separate contract at a price of US$ 2.10 per yard.

14. Another issue, which occupied an inordinate amount of time, and eventually turned out not to be an issue at all, was the basis for arriving at the amount of the dishonoured cheque. Comparison of paragraph 3 of the Defence and Counterclaim and paragraph 2 of the Reply indicates a clearly irreconcilable conflict between the parties. Neither version was supported by the evidence adduced before me; nor was the conflict resolved. What clearly did emerge was the fact that the dishonoured cheque was not given subject to the condition pleaded in the Defence or, indeed, subject to any condition to be performed by the plaintiff. It was, in my view, clearly given shortly before the parties contemplated their deliveries under the two contracts would be completed, and in order to arrive at an informal settlement or adjustment of accounts between the parties. On this aspect of the case, I entertain no hesitation in accepting Miss Wong's evidence in preference to that of Mr. Tang. The amount represented repayment to the plaintiff of the difference between the deposit paid and the amount actually received from the plaintiff's principals or this purpose, and an adjustment to the rate at which the deposit was converted into Hong Kong dollars. I find as a fact that the defendant stopped payment of the cheque simply because the plaintiff, in or about March 1985, failed to provide colour assortments. This information was essential in the sense that the defendant could not manufacture the alleged balance of the fabric without it. The cheque was not, in my view, stopped because the plaintiff had broken a condition imposed at the time of, and in consideration for, the issuing of the cheque. Accordingly, and subject to the Counterclaim, there must be judgment for the plaintiff on the dishonoured cheque.

15. I come now to the Counterclaim, or that part which remains to be considered. The defendant alleges that the plaintiff took delivery of 267,369½ yards of fabric at US$2.29, but failed or neglected to take delivery of the remaining fabric. On its behalf, Mr. Chung contended that damages should be awarded on the basis of the defendant's loss of profit in respect of the balance. Assuming that the defendant is entitled to damages calculated by reference to its loss of profit, on which I have some doubts and reservations, I find as a fact that its loss of profit was HK$7.00 per yard. But, on the principle that damages are, as a general rule, assessed on the assumption that the party in breach would have performed the contract in the manner which is least burdensome to him, I must take account of the 5 percent margin contained in the First Contract. See Re Thornett & Fehr and Yuills Ltd [1921] 1 KB 219. Accordingly, the alleged balance is 17,630½ yards, assuming that only 267,369½ had been delivered to, and accepted by, the plaintiff. Strictly speaking it is 16,989¼  yards because the total (100%) quantity was 299,325 (not 300,000) yards, and the plaintiff was not obliged to take delivery of more than 284,358 ¾ yards.

16. On either basis, the amount potentially recoverable on the Counterclaim is substantial. Despite the paucity of assistance already referred to, I have endeavoured to analyse the documents before me in considerable detail and From various angles in order to be fairly confident about my ultimate conclusions and findings of fact. The exercise has had to be repeated in order to eliminate obvious error. It has been extremely time-consuming, and largely explains the delay in delivering this reserved judgment. To his credit, however, Mr. Chung did direct my attention to significant features of the evidence on the principal issues. He also prepared a schedule setting out the deliveries which he contended had been made by the defendant at the unit price of US$2.29 per yard. I have found it to be useful in the sense that it has Guided me towards the more important documents. Unfortunately, I am unable to accept it as a comprehensive and reliable summary of the evidence of quantities delivered, because it tends to show that only 252,355.85 yards had been delivered to the plaintiff, whereas in paragraph 5 of the Defence and Counterclaim it is alleged that 267,369½ yards had been delivered and paid for. The difference of some 15,000 yards cannot be attributed to trivial mathematical miscalculations. It suggests some material error of omission or classification of the available documentary material. Furthermore, this obvious discrepancy has not been explained.

17. Because Mr. Tang and Miss Wong could not give precise evidence on the question of the amount of fabric delivered, I consider that this aspect of the case must largely, and for all practical purposes, rest upon the invoices issued by the defendant. I have already adverted to the discrepancies between the two bundles placed before me. The defendant's bundle includes documents which do not appear in the plaintiff's bundle. To the extent that they suggest that additional deliveries of the fabric covered by the First Contract were made by the defendant, I consider that I should accept them in the absence of some other explanation. None has been suggested in the case. My examination of the documentary evidence in this case has proceeded along the lines set out in the next paragraph.

18. Firstly, I have picked out the invoices which appear in both bundles before me. They can be regarded as agreed facts leading to the conclusion that 234,312.35 yards of fabric at US$2.29 were delivered to the plaintiff between December 1984 and the 26th February 1985. The relevant invoices are as follows:-

1377, 1378, 1380; 1382, 1383, 1384, 1386, 1389, 1393, 1397, 1398, 1401, 1402, 1404, 1408, 1409, 1410, 1413, 1417, 1427.

All are included in Mr. Chung's schedule.

19. Next, there are three invoices which, in my view, also relate to deliveries under the First Contract. They are 1418 (Rev), 1425 and 1426. Invoice 1418 (Rev) is the same as 1418 at p. 262 of P/B. It is included in Mr. Chung's schedule and covers 13,898 yards at US$1.54 per yard. Invoice 1425 is not mentioned in the Reply or P/B, but it appears at p. 113 of D/B. The relevant credit note for the proportion of pre-payment appears at p. 111 of D/B, which also covers invoice 1418/1418(Rev). It is not included in Mr. Chung's schedule. No explanation has been given for this omission, but I am satisfied that it represents a delivery of 18,938.5 yards under the First Contract. With one possible exception, invoice 1426 (P 114 of D/B) is in the same category as 1425. There is a credit note (P 115 of D/B) covering all the fabric amounting to 11,984 yards. However 295 yards are invoiced at US$1.99. That obviously adjusted rate was never referred to in the evidence of Mr. Tang or Miss Wong. Nevertheless, I find as a fact that it also relates to the First Contract, because neither Mr Tang nor Miss Wong ever suggested that there was a third contract at another rate. Accordingly, this small quantity must relate to the First Contract, or to the second one at the rate of US$2.10 without a pre-paid deposit. I conclude that it must relate to the First Contract because the credit rote shows clearly it was part of the goods covered by invoice 1370, dated 10th November 1984, In respect of which a 20% deposit had been paid. It is, furthermore, clear from the "Remarks" on the credit note that it related to an original sale price of US$2.30.

20. In the entire documentation of deliveries under the First Contract the parties appear to have agreed to, or acquiesced in, a "rounding-up" to the nearest cent. Strictly speaking, the initial adjustment, to reflect a 20% deposit should have resulted in an adjusted unit price of US$1.832. That, and the original contract price have been rounded up to US$1.84 and US$2.30 respectively, and this process has been carried through all subsequent deliveries of goods under that contract. I am not concerned with the question of who, if at all, as getting any advantage from these various adjustments of rates. Possibly, it was only towards the end of the delivery period that the parties realised that minuscule differences between two or three digits to the right of the decimal point of a price quoted in one currency could, with favourable rates of exchange or volume of deliveries result in a substantial gain in the other currency, resulting from an eventual total containing 6 digits to the left of the decimal point! I am only concerned to identify, if possible, the quantity of yards delivered by the defendant under the First Contract. For the purposes of the present case I consider that I am entitled to regard any document emanating from the defendant, which shows a gross unit price of US$2.29 or US$2.30 as a prima facie indication of a delivery under the First Contract.

21. It is odd that invoices 1425 and 1426 do not appear in the plaintiff's Reply or its bundle of documents. Because they are included in the defendant's bundle, and for the other reasons just stated, I am satisfied, on the balance of probabilities, that they do relate to deliveries under the First Contract and that they have been accidentally omitted from Mr. Chung's schedule. I now turn to three other categories of documents, which appear in the defendant's bundle, but not in the plaintiff's Reply or bundle of documents. All of these documents come from the defendant and appear to relate to the delivery of the same fabric at the basic and adjusted prices applicable to goods under the First Contract. Having regard to the fact that the basic or adjusted price is the only basis upon which Mr. Tang could identify which deliveries were attributable to the First Contract, it is not unreasonable to infer that these documents, emanating from that source and included in the defendant's bundle, are relevant to the issues in this action.

22. In this category, the first is invoice 1375 of the 15th December 1984 (p. 38 of D/B). This is for 12,198.5 yards at US$2.29 per yard, but shows a deduction based on a 20% deposit. Unlike other deliveries under the First Contract, there is no corresponding credit note and no reference to the relevant letter of credit. The reference is to an entirely different letter of credit. It also refers to an Order No. SC/84/614 and 71/84. It seems to me these various different features must be taken as indicating that the document has nothing to do with the issues before me. I have not been told why a supposedly irrelevant document was included in the defendant's bundle. Possibly it was done cause it bears virtually the same serial number (3218) as invoice 1377. In any event, I do not think that I should treat it as evidence of a delivery under the First Contract.

23. Then there are five invoices - 1387, 1387A, 1387B, 1388 and 1390A. These are not set out in Mr. Chung's schedule, although they clearly relate to deliveries under the First Contract. However, on invoice 1389 (at p 79 of D/B) there is a note to the effect that it covers these five invoices. Having compared the quantities, colours and pattern numbers, I am satisfied that 1389 does incorporate these five invoices. Since the quantity has already been included in Mr Chung's schedule, these 5 invoices are properly excluded. No explanation was given for this change in the method of documentation. Equally, it has not been the subject of any adverse comment on behalf of the plaintiff.

24. Finally, there are the five invoices - 1390B (Revised), 1390C, 1390D, 1390 (Revised) and 1390E - appearing at pp 76, 77, 80, 84 & 85 of D/B. Only one of these, viz. 1390(Rev), has been included in Mr Chung's schedule. This covers a delivery of 4142 yards of white pattern 708.  In many respects, these are the most baffling of the documents in the defendant's bundle. There is virtually nothing to indicate that they do not relate to deliveries under the First Contract. Indeed I am satisfied that three of them - 1390C, 1390D and 1390E - clearly refer to such deliveries. Although they contain no reference to any letter of credit, the unit prices are those for fabric to be supplied under the First Contract, and the relevant credit notes (pp. 78, 81 and 86 of D/B) refer to invoice 1370. Accordingly, the total quantity of these three invoices, viz. 14,859.50 yards should, in my view, be treated as having teen delivered to the plaintiff or its principals.

25. That leaves 1390B and 1890. I appreciate that the fact that both are described as Revised" may suggest that they are revised versions of 1390 or 1390A or some other invoice, in much the same way as 1389 incorporates other invoices. But, I do not think that these separate documents, differing as they do in their detailed contents, can be regarded as duplications or revised versions of 1390 or 1390A. In fact 1390 has not been produced at all and I have already found that 1390A was incorporated in 1389. Having carried out the same exercise of comparing the quantities, colours and pattern numbers, there is absolutely nothing to indicate or even hint that these two invoices have been incorporated into some other invoice which has already been accounted for. The fact that there are no credit notes in respect of these invoices suggests the inference that they are not relevant to the issues before me, as does the unit price of US$2.30.

26. As I have already indicated, the latter is by no means conclusive, because the parties seem to have used this figure indiscriminately to refer to deliveries under the First Contract. This indiscriminate method of identifying deliveries under the First Contract is partly borne out by 1390B (P. 76 of D/B). This document refers to Order No. GC/TI/84/874. This reference number appears on the Purchase Contract (P. 303 of P/B) which, on any view, was a clear order for 1700 yards of fabric at US$2.29 per yard. The extra 85 yards delivered under 1390B is 5 per cent - the precise margin stipulated in the First Contract. Balancing the various probabilities, I consider that the 1785 yards in 1390B should be regarded as deliveries under the First Contract.

27. Oddly enough the remaining invoice, viz. 1390 (Revised) is the only one which seems to be included in Mr. Chung's schedule. It is for 4142 yards of white pattern 708. But, since Mr. Chung gives it a unit price of US$1.84, his schedule was presumably prepared on the basis of a document which I have not seen! Invoice 1390 (Revised) at p. 84 of D/B quotes a unit price of US$2.30. Again there is no corresponding credit note; no reference to any letter of credit; and no reference to invoice 1370. Unlike 1390B, there is no reference to an order number which might identify the contractual source of the delivery in question. On the contrary, there are, in my view, slight but significant indications that this particular invoice is irrelevant to the issues before me. This invoice carries a handwritten note suggesting that it referred to a shipment to Canada. A telex, which appears at p. 82 of D/B, suggests that payment for a shipment to Canada was to be "C.O.D. ". I consider that I cannot ignore these differences or inconsistencies. But, I must confess that I find It difficult or somewhat unrealistic to do so in the absence of any explanation on the part of the defendant, especially as it clearly has the burden of proving that the plaintiff only took delivery of 267,389.5 yards. After all, the fact that Mr. Chung has included this particular invoice in his schedule is, or should be regarded as, an acknowledgement that the fabric mentioned in that invoice was delivered to the plaintiff under the First Contract. Yet, the meagre information or evidence placed before me leads me to court whether this particular invoice has anything to do with the First Contract, or any issue now before me.

28. The result of my unaided investigation of the documents and the other evidence before me leads me to find as a fact that the total amount of fabric delivered to the plaintiff under the First Contract was 295,777.35 yards. This total comprises:-

Although that is approximately 4000 yards less than the "contracted quantity" stated in invoice 1370, it is substantially more than the plaintiff was, in my view, legally obliged to accept under the First Contract. Upon these findings, the Counterclaim must be dismissed. In the circumstances, the defendant has no answer to the plaintiff's claim by way of set-off or otherwise; and, accordingly, judgment must be entered for the plaintiff in the sum of $152,265.49.

Representation:

Mr. William Lee, counsel instructed by Messrs Job Young & Co. for plaintiff

Mr. Tommy Chung, counsel instructed by Messrs. Edward C.T. Wong & Co. for Defendant