Dowty Seals Ltd v. King Tah Steel Ball & Bearing (Sued As a Firm)

HCA000726/1977

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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Coram: Mr. Commissioner Liu, Q.C. in Chambers.

Date of Judgment: 27th September 1977

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JUDGMENT

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1. This is a claim by the plaintiff for tooling charges i.e. cost for making tools for the manufacture of rings ordered by the defendant from the plaintiff. The defence is virtually a bare denial. It is averred in the defence that the defendant has never agreed to pay for any tooling charges, and the defendant relies heavily on certain remarks which appear at the end of the sheets of quotation dated the 19th of June 1974. Those remarks read as follows: "The above prices are subject to 10% oil emergency surcharge. In view of escalating cost of tool manufacture the above tool charges will be subject to confirmation or adjustment on receipt of the order."

2. There is little dispute on fact between the plaintiff and the defendant. As early as the 6th of June 1974, with a view to placing a first order for certain rings, the defendant wrote to the plaintiff by a letter of even date. In response to the defendant's enquiry, the plaintiff duly sent to the defendant sheets of quotation dated 19th June 1974. They included no less than 95 items of rings quoting the price per hundred, and for some 35 of those items quoted there was a explicit endorsement, which reads: "Part cost of tools £xxx", for tooling charges. The quotation as originally delivered by the plaintiff to the defendant contained, in addition to the tooling charges for some of the items, a 4.6% discount. Notice of a 10% oil surcharge was given in the said remarks at the end of the sheets of quotation. After negotiation, the plaintiff finally agreed to delete the 10% oil surcharge and replace it by a 10% increase on the price instead of allowing a 4.6% discount thereon. In the negotiation, no specific mention was made to the tooling charges, but it was understandably so as tooling charges were only applicable to a little over a third of the 95 items, and a general discussion on price would hardly involve tooling charges.

3. It was contended on behalf of the defendant that by virtue of the remarks at the end of those sheets of quotation it was a condition precedent to the plaintiff's entitlement to the tooling charges that they must either be confirmed or adjusted on receipt of the defendant's order. In my view, such suggested construction-flouts at common sense and business efficacy as we understand them. By those remarks on the last sheet of the quotation, the plaintiff did little more than impressed upon the defendant that they would charge at least that much for cost of the tools reserving their right to increase it in view of the worldwide escalating cost for tool manufacturing.

4. Counsel for the defendant made great play of the absence of any reference to tool charges in the parties' exchange of correspondence, I need hardly supplement my earlier observation on this matter. Obviously, silence on these charges cannot be construed as the party having excluded them from the final concluded agreement. There is, in my view, clearly no triable issue. The documents speak for themselves. When the quotation is looked at, it is evident that the Plaintiff's claim is supported by undoubted documentary evidence.

5. When the parties appeared before the Registrar on the 11th of August 1977, an order was made on submissions advanced. The defendant was given conditional leave to defend by a payment into Court of $20,000 within 14 days thereafter. I have not had the benefit of any written decision of the learned Registrar; nor have I been briefed fully as to what oral decision, if any, was given by him. Counsel for the plaintiff rightly submitted that the appeal before me is by way of a hearing de novo and that I am to adjudicate and determine afresh the issues on the Order 14 summons.

6. An objection was also raised to the reading of the last documentary exhibit to the affidavit of Mr. Cotteril filed in these proceedings on the 22nd of July. Counsel for the plaintiff was quite content to omit that document, and I have not, for the purpose of my decision, paid any regard to it. The question as to whether or not reference could be made to a document on appeal ruled inadmissible in proceedings before the learned Registrar is thus left open.

7. Therefore, judgment must be given for the plaintiff as claimed. The defendant has raised no issue against the claim which ought to be tried. Counsel for the defendant has now, on instructions, conceded to the rate of exchange as pleaded in the Statement of Claim. Consequently, the order of the Registrar dated the 11th of August 1977 be set aside, and plaintiff do have leave to sign judgment as claimed with costs, and a certificate for counsel. Before I leave this case, I ought to say that I have given consideration to the four points advanced by counsel for the defendant, and needless for me to say that I do not find favour with him on any of his submissions.

Representation:

Mr. Rodway instructed by Messrs. Hampton Winter & Glynn for Plaintiff.

Mr. Patrick Fung instructed by Messrs. Deacons for Defendant.