Betterfield (HK) Ltd v. Yuen Yui Hing t/a Yuen Hing Sewing Machine Co

HCA001031/1987

Case No. 1987, A1031

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

Between

Coram: Deputy High Court Judge Findlay, Q.C.

Dates of hearing: 15, 16, 17 and 20 November 1989

Date of handing down of judgment: 29 November 1989

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JUDGMENT

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The Plaintiff's Claim.

1. The Plaintiff claims repayment of money paid under a contract to supply sewing machines and accessories entered into in or about August 1986 and damages flowing from the Defendant's failure to deliver these goods.

The Defence.

2. The Defendant pleads that the contract provided that the Plaintiff would take delivery of the goods on or before 23 September 1986, that, if the Plaintiff failed to take delivery as required, the contract would be discharged and the deposit forfeited and that, before delivery, the Plaintiff would deliver a banker's cheque for the balance of price as a condition precedent to taking delivery.

3. Alternatively, the Defendant pleads that it was a custom of the trade or an implied term that failure of the Plaintiff to take delivery would discharge the Defendant from performance and entitle him to forfeit the deposit.

4. Time for performance and payment under the contract is said to be of the essence.

5. The Defendant pleads that the Plaintiff failed or refused to take delivery on or before 23 September 1986, or on or before an extended dead line of 22 November 1986, or on or before a further extended dead-line of 8 December 1986, or at anytime.

6. The Plaintiff also failed or refused to deliver a banker's cheque on or before 23 September, 22 November or 8 December 1986, and countermanded payment of two cheques issued to the Defendant and post-dated to 11 December and 13 December 1986.

7. The Defendant alleges that the Plaintiff evidenced an intention no longer to be bound by the agreement, repudiated it and that the Defendant accepted that repudiation on 8 December 1986. Alternatively, the Defendant says that he accepted the Plaintiff's repudiation upon dishonour of the two cheques.

8. The Defendant alleges that there was a further agreement on 28 October 1986 under which he agreed to modify the sewing machines and sell some sewing machines components. Pursuant to this agreement, the Plaintiff paid a deposit of $100,000 and the Defendant modified the machines.

9. It was agreed, the Defendant says, that the Plaintiff would take delivery of the components when it took delivery of the machines, that, if it failed to take delivery, the deposit would be forfeited and that, before taking delivery, the Plaintiff would pay the outstanding balance due under both agreements as a condition precedent to taking delivery. Alternatively, it alleged that the Defendant would take delivery of the machines after modification and the components within a reasonable time of seven days. The Defendant repeats the allegations made in respect of the first agreement that justify his discharge from his obligations under the contracts and the forfeiture of the deposits.

The Defendant's Counterclaim.

10. The Defendant says that he is entitled to forfeit the deposit of $120,000 and claims damages from the Plaintiff for breaches of contract. He also claims the sum of $14,100 being the price of other goods sold and delivered to the Defendant.

The Plaintiff's Reply and Defence to the Counterclaim.

11. Generally, the Plaintiff denies the Defendant version of the facts.

12. The Plaintiff admits countermanding payment of the two cheques mentioned, but says that it did so because the Defendant refused to confirm in writing part of an oral agreement regarding the provision of technical back-up following the supply of the sewing machines, and that, on or about 15 December 1986, the Plaintiff sought to take delivery and present a cashier order for the total of the two cheques, but the Defendant refused to make delivery or accept the order. Further, the Plaintiff says, on 16 December 1986 and 2 January 1987, the Plaintiff tendered the cashier's order against delivery of the goods.

13. The Plaintiff denies that it evidenced an intention not to be bound by the agreement for the sale. If time was of the essence, the Defendant waived or is estopped from relying on this because he extended the dead-line and presented the two cheques for payment. It is also alleged that the Defendant was not entitled to rely on the expiry of the time limit on 8 December 1986 because of that presentment. Further, the Defendant had failed to accept any repudiation by the Plaintiff, was himself in breach by refusing delivery and he repudiated, which repudiation the Plaintiff accepted by issue and service of the writ.

14. The Plaintiff admits an agreement to modify the machines and sell some components and that it paid the sum of $100,000. It says that the sum was not paid pursuant to that agreement, but because the Defendant said that he could not obtain the sewing machines unless the Plaintiff paid that sum:

15. The Plaintiff denies liability for the sum of $14,100 claimed, saying that those goods were, on their own, worthless to the Plaintiff. The Plaintiff denies the Defendant's claim for damages.

The Issues.

16. There are many factual issues between the parties as to the events surrounding the relationship between them, but resolution of most of them will not advance the cause of deciding liability, except to the extent that they may assist on deciding matters of credibility on the vital issues. The important issues concern the happenings towards the end of period of the dealings between the parties. Resolution of these will determine who was in breach, who repudiated and who is liable.

The Plaintiff's Evidence.

Mr Dennis Lee gave evidence for the Plaintiff. He is a director and shareholder of the Plaintiff and had charge of the dealings with the Defendant. He deposed that the sewing machines were ordered from the Defendant, with the necessary modifications for use to manufacture base-ball caps. He says that he pressed the Defendant for delivery of the goods in October and December 1986. He was shown a letter, purportedly by the Defendant to the Plaintiff, dated 14 November 1986 (page 41 in the bundle of documents) which complains of the Plaintiff's failure to take delivery and imposes a dead- line of 22 November for taking of delivery, failing which the deposit would be forfeit. Mr Lee said that he did not receive this. According to the Defendant it was despatched to the Plaintiff by ordinary post.

17. At the end of November, Mr Lee says that the Defendant told him that the machines were about to be completed and that the Plaintiff could book shipping space and arrange export permits. The Plaintiff did this.

18. Mr Lee says that, at the beginning of December, on about the fourth, he saw the Defendant and gave to him the document which is at page 51 in the bundle. It was dated 4 December and sought written confirmation of an earlier oral agreement that the Defendant would provide technical back-up after the machines were delivered. The Defendant took this document away with him.

19. Thereafter, Mr Lee says he received the letter from the Defendant dated 4 December 1986 (page 50 of the bundle), in which the Defendant complained that the Plaintiff had not taken delivery "despite a number of requests" and said - "Now written notice is hereby given that if you do not take this lot of goods before 8 December this year, the forwarded deposit will be forfeited. It is hoped that you will be co-operative and decide the date of taking delivery.".

20. To this letter the Plaintiff responded with the letter (page 53 of the bundle) dated 8 December 1986 in which Mr Lee said -"Due to the fact that the contract between Better Trading Ltd. and the Mainland China, we are still awaiting import and export permit and arrangements for transportation between Panyu factory and Hong Kong. Therefore delivery cannot be taken immediately. Nevertheless, we disagree to your letter of 4 December which suggests to forfeit our deposit. Therefore we take delivery within 14 days. Any inconvenience caused is much regretted.".

21. This exchange of letters does not, according to Mr Lee reflect the rights and wrongs of the matter. He explains his failure to state the true facts by saying - "To me, I was merely thinking on a point of doing business. I did not want to have a disagreement with him.".

22. After the letter of 8 December 1986, Mr Lee saw the Defendant who told him that there was no problem with delivery so he issued to the Defendant the two cheques I have mentioned. The Defendant received the cheques and made no complaint. After he had handed over the two cheques, he received backfrom the Defendant the agreement dated 4 December he had given to him. The agreement reflected deletions that Mr Lee found unacceptable so, after unsuccessful attempts to contact the Defendant, he told the bank not to pay the cheques. In the bundle of documents, there are (at, respectively, pages 56, 58, 60 and 63) copies of a letter dated 12 December to the bank counter-manding payment of the cheque due on 11 December, a note of the countermand by the bank dated 12 December, a letter dated 13 December countermanding payment of the cheque dated the same day and a countermand note by the bank dated 15 December. Almost immediately, Mr Lee says, he had second thoughts so he obtained a cashier's order from his bank for the total of the two cheques so that he could speak to the Defendant and obtain delivery. On 13 and 14 December, he failed to contact the Defendant, and on 15 December he sent his sister to the Defendant to show him the cashier's order and obtain delivery. This attempt was unsuccessful. On 16 December 1986 (page 65 of the bundle) the solicitors wrote to the Defendant. This said that, on 15 December, the Plaintiff had sought to take delivery, presented the cashier's order to the Defendant, but had been told the Defendant was not prepared to make delivery. The letter tendered the cashier's order against delivery of the goods.

23. Under cross-examination, Mr Lee denied that the Plaintiff had any financial difficulty in meeting the two cheques issued.

24. Mr Lee's letter of 8 December 1986, in reply to the Defendant's letter of 4 December, bears the endorsement "Enc: An agreement". There is no mention of this agreement in the body of the letter. Mr Lee explained that this was another copy of the agreement of 4 December, which he sent to the Defendant because the Defendant had not returned the other copy of the agreement that he had handed to him, duly signed.

25. Mr Lee says that he does not know why the amount to be paid to the Defendant was split as reflected in the two cheques issued by him; this was arranged by the accountant. He handed the cheques to the Defendant personally. He could not remember specifically when the bank was told orally to stop the cheques, nor could he remember specifically when the cheques were issued, save that it was after the letter of 8 December 1986 and he thinks it was done on 9 or 10 December.

26. Mr Lee says that he had the cashier's cheque drawn so that he could negotiate with the Defendant regarding the post-delivery technical back-up. He was not able to say what he would have done if the Defendant insisted on the deletions he had made in the agreement of 4 December 1986. He could not make a decision about that until he had spoken to the Defendant. Although he had said earlier that he had attempted to contact the Defendant on both Saturday, 13 December and Sunday, 14 December, he said in cross-examination that he could not remember if he had tried to get hold of the Defendant on the Sunday. He does not remember why he did not personally go to see the Defendant on Monday, 15 December, but sent his sister. He thinks he would have handled the matter personally if he had been able to do so, but thinks that he was prevented from doing so by a more important matter which he cannot identify. He denied that a Ms Suen of his company telephoned the Defendant on 15 December saying that a cashier's order would be delivered, and nothing else was done. He could not remember if there was a Ms Suen on the staff at that time. He also denied that, on 15 December, the Defendant telephoned one of his staff and said the deal was over. Ms Beatrice Lee, Mr Dennis Lee's sister, gave evidence. She is also a director and shareholder of the Plaintiff. She was the one who gave instructions to the Plaintiff's solicitors that resulted in the letter of 16 December. She gave these instructions of 16 December 1986, and did so because the Defendant refused to make delivery of the goods. The day Before, on 15 December 1986, she went to the Defendant's premises. She did not see the Defendant, but someone else whose identity she cannot remember. At the time, she ascertained the identity of this person and satisfied herself that he was the person to speak to; by which I took her to mean that he was a person in authority. On another occasion on the same day, she spoke to a woman at the Defendant's premises. The purpose of her visit was to tell the Defendant that they had a cashier's order and that they wanted him to make delivery of the goods, and she told this to the people she met there. They refused to make delivery, but did not give any reasons. At that time, there was no female member of staff named Suen.

The Defendant's Evidence.

27. Mr Yuen, the Defendant, gave evidence before me. He said that, by 23 September 1986, he was ready to deliver the goods, which had been ordered without modifications. Delivery by the Plaintiff was not taken, he pressed for this and the Plaintiff said that delivery would be taken as soon as possible. At the end of September, the Plaintiff sent a technician by the name of Lee to inspect the goods. After this, he telephoned Mr Dennis Lee, and Mr Lee told him that there was a problem between him and the China party. Mr Lee asked him to modify the machines so that they could be used exclusively to manufacture caps and ordered some additional parts. Mr Yuen agreed to do this but asked for another $100,000 as a deposit. He made this request because, after modification, the machines would be difficult to market and he would be incurring substantial labour costs. He was given this additional $100,000 deposit, by a cheque dated 4 October, on 3 October 1986. The parties agreed that the delivery date would be extended to the end of October.

28. Mr Yuen says that the modified machines were ready on 28 October so he telephoned Mr Lee and asked him to collect the goods. Mr Lee said he would collect them as soon as possible. However, nothing happened so, on 14 November 1986, he wrote the letter at page 41 of the bundle - the one Mr Lee says he did not receive. There was no response by the dead-line of 22 November so he went to the Plaintiff's premises to request it to take delivery. He was told that the Plaintiff would collect the goods as soon as possible and asked him to stretch a point. He did not speak to Mr Lee on this occasion.

29. On 4 December, Mr Yuen says, someone brought the agreement regarding the technical back-up to his office. When the agreement was handed to him, it was signed by Mr Lee, but the deletions were not there; he made the deletions himself. He says he made the deletions because he had not agreed to provide back-up service on the terms written, and would not have done on such uncertain terms. When he had done this, he gave it back to the messenger - Ms Suen, who had brought it - and asked for a copy to be sent to him. He received this copy with Mr Lee's letter of 8 December. Before receiving this, he sent his letter of 4 December by registered post.

30. When he received Mr Lee's letter of 8 December by the hand of Ms Suen, he immediately went to see Mr Lee. He went at about 2 pm, but did not see Mr Lee. He returned some time after 6 pm and spoke to Mr Lee. He told Mr Lee to collect the goods immediately and to make payment immediately, failing which he would forfeit the deposit. Mr Lee, he says, was off-hand and asked him to accept a post-dated cheque within a few days. By implication, Mr Yuen says he accepted the two cheques dated 11 December and 13 December.

31. He presented the first cheque on 11 December and was told by the bank on 12 December that the cheque had been stopped. Immediately, he telephoned Mr Lee and went to his office, but he could not find him. He presented the second cheque and was told on 15 December that payment of this cheque had also been stopped. Again he attempted to contact Mr Lee but failed to do so. He did however speak to the Plaintiff's staff, saying that "the game is over, it is enough, do not come to collect the goods in future." Having said this, he said he "hung up", so presumably this message was conveyed over the telephone. Soon after this, he says Ms Suen telephoned him and said that a cashier's order would be handed to him, but he did not receive it.

32. On 17 December 1986, he received the letter from the Plaintiff's solicitors dated 16 December. He took it to his own solicitors.

33. Under cross-examination, Mr Yuen said that he had told his solicitors and counsel about the new dead-line of the end of October.

34. He said that, on 8 December, he had already collected the two cheques and treated them as payment - presumably payment conditional on the cheques being met. He says that when he collected the cheques, he specifically told Mr Lee that if the cheques could not be cashed, he "would not be good" to Mr Lee, in the sense of calling the deal off. From this, he thought that, if the cheques were not met, the deal would "automatically go off" and that was his intention. Mr Lee, he says, specifically assured him that the cheques would not be "bounced". He says he did not say this before because he was not asked about it. He did, however, tell his legal advisers about this from the outset. When he was asked if, when the first and more substantial cheque was dishonoured, he thought the deal was off, he said - "I was hoping to locate Lee to get explanation, and hoping that the transaction would come to a good end, so I considered then that the deal would continue: Otherwise I would not have tried to locate him.". But, because he failed to contact Mr Lee, he thought the deal was at an end on 12 December and there was nothing more from him to do. It was pointed out to him, however, that he took the trouble to go to the Plaintiff's office on 15 December to tell them the deal was off. To this, he replied - "Because there was still an outstanding amount of $10,000 plus for spares already delivered. I went to Lee's office to clearly discuss the matter as well as hoping that he would take delivery of the goods.". He said that if he had been given the cashier's order immediately he would have accepted this, but he did not receive a concrete reply. He was feeling very angry and decided to call off the transaction. When asked when he decided to call off the transaction; before he went to the Plaintiff's office, when there, or after he left, he said that at the time of leaving the office, he had decided to call off the transaction. He was asked what he did about his decision to call off the deal, and said that he did not do anything because he had decided to call off the transaction.

35. Mr Yuen said that, when he received the letter from the Plaintiff's solicitors, he understood that the letter asked for delivery and said that the cashier's order was ready. The only reason why he thought the matter was at an end was because of the previous dead-lines and the dishonour of the cheques. He did not understand that he had done anything significant on 15 December.

36. In re-examination, Mr Hung made valiant efforts to get Mr Yuen's attention to his actions when he decided that the deal was off, but the witness was not co-operative. Despite Mr Hung's best efforts, Mr Yuen failed to repeat that, after he had decided that the transaction was at an end, he communicated this decision to the Plaintiff. In fact, he expressly said that, after he left the Plaintiff's office, he did not do anything, including making telephone calls. He said he was at his office the whole time on 15 December, waiting and hoping that Mr Lee would come down to give an explanation. It was pointed out to him that he had agreed that the only reason why he thought the transaction was over was because the cheques had bounced and the dead-lines had passed. He confirmed that this was so. He was then asked by Mr Hung if he had communicated his thought that the matter was over because the cheques had bounced and the dead-lines had passed. He said he had; to the staff of his company. When asked if he had communicated it to any others, he said he had not.

37. The letter by the Plaintiff's solicitor to the Defendant of 16 December says, after reciting the contract in outline -

"    We are instructed that on Monday, the 15th December 1986, a director of our client company called at your company for the purpose of taking delivery of the machine etc. A Cashier's Order in the sum of $365,204.00 being the balance of the purchase price was also presented to you. Mush to our client's surprise, they were told that you were not prepared to make delivery of the goods to them.

We are further instructed to give you notice, which we hereby do, that unless the goods in question are delivered to our client within ten days from the date hereof, legal proceedings will be instituted against you for damages for breach of contract without further notice.

We wish to add that our client has deposited with us a Cashier's Order in the sum of $365,204.00 which will be paid over to you upon delivery of the goods."

38. The reply to this letter by the Defendant's solicitor was dated 20 December 1986. This said that the Plaintiff had failed to take delivery in accordance with various dead-lines up to 8 December, and recited the facts about the dishonour of the two cheques. It concluded -

"    In the circumstances, our clients have no alternative as a result of your client's repudiation to fulfil his duty and duly forfeited his deposit.

Kindly advice you client accordingly."

39. There is no denial or mention in this letter of the alleged attempt by the Plaintiff to obtain delivery on 15 December, no mention of any earlier acceptance of a repudiation by the Plaintiff or any communication of this acceptance, nor is there any attempt to deal with the tender by the Plaintiff's solicitors of the cashier's order against delivery.

Credidility.

40. Generally, I was more impressed by the evidence of the Defendant that by that of Mr Lee, but it would be difficult to decide the issue of credibility without having regard to the probabilities and the documentary evidence. These, in my judgment, strongly favour the Defendant.

41. There is the letter of 14 November that the Defendant says that he wrote to the Plaintiff and that Mr Lee says he did not receive. It may be that Mr Lee did not receive it, but I have no doubt that the Defendant wrote it. It was not suggested to him that he had concocted it; and, having regard to the letter of 4 December, in similar terms, it is most improbable that he did so. This letter shows clearly the Defendant's state of mind. It is most improbable that he would have wrote this if he were the one delaying delivery of the goods, and most improbable that he would have wrote it to the wronged person the person who says that it was pressing for delivery - if it did not reflect the facts of the matter.

42. Equally, it is unlikely that the Defendant would have written the letter of 4 December, complaining of delays by the Plaintiff, if it were the Defendant himself who was neglecting to make delivery and the Plaintiff was ready and willing to accept the goods.

43. In my view, if the Defendant was not ready to make delivery as early as 14 November, it is very unlikely that he would have wrote these open letters to the Plaintiff saying what they did. If he was not ready, what could he have done if the Plaintiff had turned up on his doorstep, with transport and labour to take delivery and a banker's cheque with which to make payment?

44. But it is the Plaintiff's reply to the Defendant's letter of 4 December that really tells heavily against Mr Lee's credibility. The picture painted by Mr Lee is that the Plaintiff was in need of these sewing machines, delivery of which was over two months overdue by the fault of the Defendant, and had been pressing hard for them. And then the Plaintiff gets a letter from the Defendant out of the blue stating a completely false position and blaming the Plaintiff for the delays. So, for the sake of avoiding an argument, Mr Lee says, he does not deny vehemently, or even gently, that the Plaintiff is at fault, and that, in fact, he, Mr Lee, has been demanding delivery. Instead, he makes excuses, states falsely, on his own evidence, that he is awaiting, inter alia, an export permit and apologises to the Defendant for inconvenience caused to him. In any event, whatever the validity of the excuses for being unable to take delivery, there was nothing to prevent the Plaintiff from sending the bank cheque in terms of the agreement and asking the Defendant to hold the goods for a short while until arrangements to collect the goods could be made. After all, it must have been clear to the Plaintiff that it was the payment of the purchase price that was of immediate concern to the Defendant. Mr Lee's story on this point cannot be accepted as anywhere near credible.

45. And then there is the evidence about Mr Lee's document of 4 December in which he attempted to get the Defendant to acknowledge writing the effect of an earlier oral agreement. It was important for Mr Lee to show that he did not have the agreement with the deletions by the Defendant before he issued the cheques because, otherwise, he would have no reason for countermanding payment of them. The document of 4 December was very short, and, if as Mr Lee says, it simply reflected an earlier oral agreement, there would have been no need for the Defendant to take it away from the meeting at which it was presented to him. There is also the odd words "Enc: An Agreement" that Mr Lee endorsed on his letter of 8 December. Mr Lee says that this was an indication that he sent another copy of the agreement to the Defendant because the Defendant had not returned the earlier copy, duly signed. This is very strange. Mr Lee only adverted to these endorsed words when I drew his attention to them, and only then did he tell the story of sending another copy. If Mr Lee was awaiting the return of the signed agreement, as he says he was, I cannot understand why he did not mention this fact in the body of the letter of 8 December, and say that he was sending another copy in case the Defendant had lost the earlier copy. Again, I cannot accept Mr Lee's version of this event as credible. The simple endorsement on the letter is much more consistent with the Defendant's version; that this recorded the sending of a copy of the signed version of the agreement about which nothing more needed to be said.

46. Because of my impression of Mr Lee and Mr Yuen as witnesses, as backed-up by the probabilities I have mentioned, my finding is that the evidence of the Defendant is to be preferred to that of Mr Lee.

The Repudiation.

47. On the basis of the evidence of Mr Yuen, which I accept, the Defendant had been strung along intolerably. Time was clearly of the essence of the dealing between the parties; even if not originally, it was made so by the Defendant's reasonable demands. The Plaintiff neglected to meet each successive dead-line for payment and acceptance of delivery. Apart from the inference that would arise from the parties' conduct as to the effect of the dishonour of the cheques, I accept Mr Yuen's evidence that he made it perfectly clear to Mr Lee that, if the cheques were not met, the matter was at an end. Indeed, in view of the Plaintiff's conduct, I would have been very surprised if Mr Yuen had not said something to this effect to Mr Lee.

48. Accordingly, I am satisfied that the Plaintiff's failure to pay these cheques was a breach of the contract between the parties such as to entitle the Defendant to regard himself as discharged from his obligations. Even if I am wrong about the truth of the matter regarding the agreement under which the Plaintiff sought to bind the Defendant to provide future technical back-up, nothing the Defendant did entitled the Plaintiff to refuse to pay the purchase price of the goods. Even if, as the Plaintiff says, he already had a binding oral agreement with the Defendant to provide this back-up, the Defendant's refusal, if it were so, to reduce that agreement to writing does not justify the Plaintiff's conduct. He had no right to refuse to make the promised payments because the Defendant refused to do something he was not bound to do; that is, sign a writing of what had been agreed earlier.

Acceptance of the Repudiation

49. In this situation, the Defendant was entitled to elect whether to accept the Plaintiff's breach or repudiation, and treat the contract as at an end, or to ignore it, and keep the contract alive for his own benefit and that of the Plaintiff.

50. There is no doubt that even at this late hour, the Defendant hoped that the contract would go through. He shilly-shallied during part of the day of 15 December, but, in the end, he decided that he had had enough and decided to treat the contract as at an end.

51. The question much argued before me was, assuming the Defendant decided to bring things to an end, did he sufficiently, or at all, communicate this decision to the Plaintiff before the Plaintiff properly tendered performance. I assume that the law requires that the decision be communicated to the other party, except in special circumstances such as where that other party deliberately avoids the possibility of that communication, although I must admit to having some doubts about the logicality, history and justice of this rule. I am not sure that the exception is not the situation here. Mr Lee was suspiciously unavailable on 15 December and he cannot give any explanation for this. I feel it is likely, in view of the history of the matter and the fate of the cheques that he was keeping well out of Mr Yuen's way, but it is not necessary to make any positive finding in this regard.

52. The Defendant says that he could not find Mr Lee to talk to him about the matter. He says that after unsuccessfully trying to find him, he telephoned somebody at the Plaintiff's office and told this person, in no uncertain terms, that he would not be continuing with the contract. The Defendant did not repeat this evidence during cross-examination or re-examination, but I do not accept that this destroys his earlier clear evidence on the point. When he told me about this, he did so as part of his narrative of the events, and it emerged perfectly naturally. The fact that he did not consider that this communication was a matter of importance when he was answering questions in cross-examination and re-examination does not surprise me in the least. I do not believe that its importance would be apparent to a non-lawyer. The essential nature of communication of acceptance of repudiation is artificial and a concept invented by lawyers, and even they are not of the same mind as to the significance, logicality or necessity of communication of an acceptance of repudiation. (See the discussion in Dawson [1981] C.L.J. 83). I believe that it was not a matter than one would expect to be at the forefront of the Defendant's mind in his memory of the events of 15 December. I accept that he was telling me the truth when he said, as part of his story of the happenings on that day, that he made this communication, and that it was natural not to mention it again when he was being asked to recall matters of significance that occurred.

53. But even if one does not accept the Defendant's version of this happening, the evidence led on behalf of the Plaintiff equally establishes that the Defendant had decided that the matter was at an end and this was communicated to the Plaintiff. Mr Yuen had told his own staff that the contract was cancelled and they would, naturally, communicate this to anyone from the Plaintiff who asked about the matter. Ms Lee says that she went to the Defendant's premises to seek delivery of the goods and told the Defendant's staff that there was a cashier's order available, but she is quite clear that she did not have the order with her at that time. She made sure that she was speaking to someone who was the person with whom to communicate. This person unequivocally refused to deliver the goods. If this version of the facts is correct, it constitutes a sufficient intimation, in my view, of the Defendant's decision. There is no technical requirement as to what is sufficient to communicate the decision that the contract is at an end. Viscount Simon L.C. in Heyman v. Darwins Ltd. [1942] AC 356, at 361, said that"... the other party may rescind the contract, or... "accept the repudiation" by acting so as to make it plain that in view of the wrongful action of the party who has repudiated, he claims to treat the contract as at an end ... ". On Ms Lee's evidence, the Defendant's staff may not have told her the reason why delivery was refused, but, in my view, it is not necessary to state the obvious. In view of what had happened in the dealings between the parties, the Plaintiff could have had no doubt why the Defendant would not deliver; it was because he no longer regarded himself as bound to do so because, to top the Plaintiff's other breaches of the agreement, cheques that were promised as "good" were dishonoured.

54. It was argued that Ms Lee's conduct on the Plaintiff's behalf was a tender of performance by the Plaintiff before the contract had been brought to an end. I do not accept this. No proper payment was made to the Defendant against which the Defendant would be bound to release the goods. He was told merely that there was a cashier's order in existence. The cashier's order was not even exhibited to him, let alone handed over. No one could blame the Defendant, especially in view of the history of the matter, for not accepting this as an acceptable performance of the Plaintiff's side of the bargain. Promises, promises, promises, especially emanating from one who has broken promises before, are not, in the circumstances here, equivalent to performance.

The Result.

55. In the result, I accept that, by dishonouring the cheques, the Plaintiff committed a breach of the agreement such as to justify the Defendant treating the contract as at an end, that he decided to elect to treat it so, and made plain to the Plaintiff that this was his decision. Thus, any tender of performance after this, in particular, in the letter of the solicitors of the Plaintiff dated 16 December, assuming it was a sufficient tender, was too late. The Defendant was discharged from performing the contract and is entitled to his remedies against the Plaintiff.

The Defendant's Remedies.

Forfeiture of the Deposit.

56. The Defendant asks that I say that he is entitled to forfeit the deposit. Against this, the Plaintiff asks for relief against forfeiture. My understanding is that I should exercise equitable jurisdiction to grant relief against forfeiture only were it would be oppressive or unconscionable to do otherwise. I can see no basis for coming to that conclusion in this case. The deposits paid, amounting to $120,000, are not unreasonable having regard to the overall value of the contract. I do not think that there is anything about the conduct of the Defendant that should affect his conscience. On the other hand, the conduct of the Plaintiff that brought about the cancellation of the contract was not merely technical or petty. I find that there are no grounds on which I should grant relief and I declare that the Defendant is entitled to forfeit the payments made.

57. The Defendant also claims damages. The amounts paid by the Plaintiff must, of course, be taken into account in assessing the damages suffered by the Defendant.

The Contract Price.

58. The Defendant cannot, of course, maintain that the contract has been terminated and, at the same time, sue for the contract price due under the contract. This part of the Defendant's claim is dismissed.

Claim on the Cheques.

59. The cheques represented the contract price. If the Defendant recovers on these cheques, he will be recovering the contract price. I do not know any law on the point, but it seems common-sense to me that the Defendant cannot recover the contract price in this way in respect of a contract that he has terminated.

Damages.

60. This is the appropriate remedy for the Defendant and I find that he is entitled to damages suffered by him arising out of the Plaintiff's breach. I am told that, in the event of a finding that either patty is entitled to damages, I am to order that judgment be given for damages to be assessed. Accordingly, I grant judgment in favour of the Defendant against the Plaintiff for damages to be assessed.

Price of Other Goods Sold.

61. There remains the Defendant's claim for $14,100 in respect of other goods sold and delivered to the Plaintiff. There is no dispute about this claim, save to the extent that the Plaintiff says that it is not liable because the goods concerned are worthless to it. This in itself is not, of course, a good defence to the claim, but I will read into the defence the allegation that the goods are worthless because of the wrongful failure by the Defendant to deliver the sewing machines. I have already held that there was no such wrongful failure and, accordingly, the defence must fail. I grant judgment in favour of the Defendant against the Plaintiff in the sum of $14,100.

The Costs.

62. On the face of it, there is no reason why the casts should not follow the event and, accordingly, I make an order nisi that the Plaintiff pay the Defendant's costs.

Representation:

Mr K.B. Ng, instructed by Messrs. Hastings & Co., for the Plaintiff.

Mr Andy Hung, instructed by Messrs Wing-sum Lo & Co., for the Defendant.