Gibb, Livingston & Co Ltd v. Bogi (Hong Kong) Ltd
Read the full judgment text of HCA 886/1978 on BabelCite. This High Court CFI judgment was delivered on 6 February 1979.
1. In this action the plaintiff company claimed three sums of money namely, $65,449.34, $4,620 and $5,374.91 making a total of $75,444.25 from the defendant company in a form of reimbursement. It is common ground that on 5th November, 1976 an agency agreement was signed between the defendant and plaintiff whereby defendant appointed the plaintiff as its exclusive and sole agent for certain purchases. There is no dispute as to the letter of the terms of the agreement or the text of the agreement
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HCA000886/1978
----------------- Coram: Li, J. in Court Date of Judgment: 6 February 1979 ----------------- JUDGMENT ----------------- 1. In this action the plaintiff company claimed three sums of money namely, $65,449.34, $4,620 and $5,374.91 making a total of $75,444.25 from the defendant company in a form of reimbursement. It is common ground that on 5th November, 1976 an agency agreement was signed between the defendant and plaintiff whereby defendant appointed the plaintiff as its exclusive and sole agent for certain purchases. There is no dispute as to the letter of the terms of the agreement or the text of the agreement to which I shall refer at a later stage. 2. The defence is simply one of that the sums so incurred are not within the Indemnity Clause of that Agreement of Agency. Because the defendant failed to answer or serve counter notice to the plaintiff's Notice to Admit Documents, all the documents listed and included in a list in a Notice to Admit Documents are deemed to be admitted by virtue of Order 27 Rule 5(3). 3. In order to shorten the proceedings it is agreed between the parties that the only issue is whether the sum aforesaid so incurred by the plaintiff for purchases on behalf of one Kemba Nederland B V at various states without the defendant's knowledge are within the terms of the agreement or deemed to be authorised by the defendant and thereby within the terms of the Indemnity Clause of the Agency Agreement. In other words, this case is argued on the basis that all the aforesaid sums were incurred by the plaintiff in carrying out orders placed with them directly by Kemba Nederland B V without the defendant's knowledge. In this connection the interpretation of the documents and the terms of the document are therefore important. I shall refer to a few relevant clauses in this Agreement. 4. Clause 1 of the Agency Agreement provides as follows:-
5. Clause 3 of the agreement puts the agent's obligations.
6. I come now to Clause 8 which provides that
7. Lastly I come to Clause 13. That is the Indemnity Clause. It provides that
These, in my opinion, are the relevant clauses. 8. Learned counsel for the plaintiff argues that as the purchases were made in carrying out the orders placed by Kemba Nederland B V they were purchases in accordance with sub-para. (a) of Clause 1 of the Agreement. As such it is covered by Indemnity Clause 13 namely, that it was done pursuant to and in accordance with the terms and conditions of the Agreement. For this reason the defendant is liable to reimburse the plaintiff. 9. Learned counsel for the defence contends, if I understand him correctly, that whatever purchases that were made by the plaintiff for any company or associated company it must be directly authorised by the defendant or to the knowledge of the defendant. He prays in aid sub-clause (a) of Clause 3 in interpretation. He says that the agent's obligation is merely to carry out the orders and execute them promptly if for the purchase of goods is communicated to them, the plaintiff, from time to time, by the company. The two words "or otherwise" are too ambiguous and they are without any meaning. He also prays aid the particulars in Clause 1. He says that looking at the agreement, and in particular Clause1, as a whole it clearly indicates that the parties contemplate orders must be made through the defendant. It is argued that the Kemba Nederland B V is not a party to this agreement. The plaintiff has no obligation to carry out any orders placed by Kemba Nederland B V directly with the plaintiff. That would be outside the provisions of Clause 3(a) of the Agreement - that is, if I disregard the two words "or otherwise". Looking at Clause 8(1) as a whole all the particulars indicate that they are purchases to be made if directly communicated by Mr. Edward J. De Vries who is the Director of the defendant company. I have to consider the two propositions as to the terms and the intentions of the parties within the document itself. 10. Having considered them carefully I am of the opinion that the plaintiff must succeed. First of all the plain letter of Clause 1(a) indicates that the defendant appoints the plaintiff as sole and exclusive agent for the purchase of merchandise of all kinds and in particular specified all purchases made by Kemba Nederland B V. This clause shows no qualifying words that the purchases made by Kemba Nederland B V must be made through the defendant or with the knowledge of the defendant. In contradistinction to this, I observe that these sub-clauses (b), (c) and (d) of Clause 1 specify that all purchases should be those by or for customers introduced directly by Mr. Edward J. De Vries who is the Director of the Company or companies controlled by or associated with Mr. De Vries or of Bogi Design items. This envisages a situation that no other firms unless they are associated with Mr. De Vries or associated with Bogi (the defendant company) or the defendant company or design items or exclusive lines to those companies. Paragraph (d) makes it abundantly clear that any other business are to be further agreed from time to time as by writing between the parties thereto. Reading Clause 1 I cannot say that the word "otherwise" in sub-clause (a) of Clause 3 has no meaning. It envisages the duty of the plaintiff to carry out orders which are communicated to them from time to time by the Company or otherwise. In short by compaines who are associated that order Bogi Design items or other exclusive lines or the companies associated with or controlled by Mr. De Vries and/or any other items which are specially agreed to by the defendant. This must have envisaged that the purchases by Kemba Nederland B V or by companies associated and controlled by Mr. De Vries may be placed with the plaintiff or through the plaintiff without further authorisation by the defendant. 11. Furthermore Clause 8(a) in paragraph 7 even provide for overseas travel. The term "overseas travel" has qualifying words. It does not mean the plaintiff would have the privilege of being indemnified of any costs for overseas travelling if such costs are not incurred with the authorisation of the defendant. Then I come to Clause 3. The words are plain. Once I come to the conclusion that carrying out an order placed by Kemba Nederland B V directly through the plaintiff and without further authorisation by the defendant is within the authorisation that has been given in Clause 1(a) of the Agency Agreement then the Indemnity Clause must operate. For this reason I give judgment to the plaintiff in the total sum of $75,444.25.
Representation: Mr. R. Wong, Allman-Brown (J.S.M.) for Plaintiff Mr. Suffiad (Hoosenally & Co.,) for Defendant |