Rank Xerox Ltd v. Norbert H. Kern International Forwarders (HK) Ltd

DCCJ003207/1981

IN THE DISTRICT COURT OF HONG KONG

HOLDEN AT KOWLOON

CIVIL JURISDICTION

ACTION NO. 3207 OF 1981

________________________

Between

________________________

Coram: His Honour Judge Downey

Date: 18 February 1982

---------------------

JUDGMENT

---------------------

1. In this case, by a writ issued on 20th March 1981, the plaintiff company sought to recover the sum of $4,177.52 being charges, as they say, due from the Defendant Company under an agreement in writing which was made on the 16th October 1980. The plaintiff company is a well known supplier of copying machines, and this agree-ment was for the hire, over a period of 2 years, of a copying machine, model No. 3103, which attracted a monthly initial charge of $835; and then there were charges per copy over and above an initial quantity of 2,000 per month. The Defence, which was filed on the 26th March 1981, alleged briefly that the plaintiff's representative had represented to Mr. Leung, the director of the defendant company, that the machine to be supplied to him or to his company would be a new machine and that that was a term of the contract between them; that that term had been broken, leaving the defendant entitled to treat it as repudiation, which they did so by letter dated the 8th November 1980, alternatively by a letter dated the 30th January 1980, which appears to bs a typing mistake because it is common ground that the second repudiation, if there was a second repudiation, occurred on the 30th January 1981. The particulars of Claim were amended pursuant to an order of another Judge on the 28th of December 1981 whereby the plaintiff claimed the sum of x$6,472.50 "and continuing". On the 11th January an Amended Defence and Counterclaim was filed, whereby the defendant company added a Counterclaim claiming storage charges for the machine from the 16th of February 1981. On the 23rd January this year an Amended Reply and Defence to Counterclaim was filed, but on the first day of the hearing of this case(15th February 1982) Miss Kaplan, who appeared on the behalf of the Plaintiff, sought leave to further amend the writ and Particulars of Claim by, in effect, deleting the amendment made in December, thus restoring the claim to the amount as set out in the original Writ.

2. That application was, in my respectful view, properly made, but it did raise a query in my mind, at the beginning of the trial, as to whether the consequence of that would mean that I could not try this case or, indeed, the Counterclaim. This was because of a belief that, on the 1st of February this year, the Small Claims Tribunal's juris-diction had been increased from $3,000 to $5,000. However, on looking at the Administration of Justice (Miscellaneous Amendment) Ordinance (No. 79 of 1981) Section 2 thereof, which makes various amendments to various Ordinances dealing with financial limits on jurisdiction as set out in the first schedule, only, in fact, achieves an amendment of Section 9(1) and Section 10(3) of the Small Claims Tribunal Ordinance. Those relate to abandoning the excess over the $5,000 in respect of claims, and counterclaims. There is, due to an oversight, no amendment, as yet in force to give the Small Claims Tribunal jurisdiction to hear cases over $3,000 and under of $5,000. Accordingly, I am in the happy position of being able to say that I can try this case and that the time and the costs involved in the hearing have not been completely wasted.

3. The issues before me are principally : first of all, was there ever any representation made to Mr. Leung by a Mr. Ip, the salesman who handled this matter, that the copying machine would be a new machine? If there was such a representation, I then have to consider the nature or the effect of the representation, and if it be a term of the contract, whether the breach thereof entitled the defendant to treat the agreement as repudiated by the Plaintiffs and thereby to rescind and claim damages for any loss suffered. I should add that at the opening of the case Mr. Yam, who appears on behalf of the Defendant, also sought leave to further amend his Defence to plead that the re-presentation and warranty referred to in the Defence constituted, in the alternative, a collateral agreement, for breach of which the same remedy or relief would be available to Defendant.

4. In relation to the first principal issue I have heard evidence from Mr. Ip, the salesman employed by the Plaintiffs, and by Mr. Joe Wong, his superior who, I think, was the sales manager at the material time. I have also heard the evidence of Mr. Leung. One thing is clear - and I think this is fairly common ground; it is clear that Mr. Leung wanted a new machine. That is what he said in evidence in essence, and to some extent that is confirmed by some of the evidence of Mr. Ip. The general trend of Mr. Ip's evidence was "I told him that he couldn't have a new machine; that it would be a re-conditioned machine." Mr. Leung told me that before he signed the agreement on the 16th of October he was assured that the machine would be a new machine. I should perhaps add at this point that the agreement itself contains a provision in what is called paragraph 'A' of the agreement that the equipment always remains the property of Rank Xerox who may supply either a new or a re-conditioned machine at its sole option. And indeed it is also common ground that the same rate is charged by Rank Xerox whatever kind of machine is supplied, whether it is a new machine or whether it is a re-conditioned machine.

5. At the top of the written agreement, there are a number of boxes. On the left hand side, there is a rectangular box which is divided into four parts; one dealing with 'quantity'; next is one headed 'product', under which the code number of the machine is inserted; then there is a box tabled 'New', and next to that, one headed 'Conversion from'. I am told, and I accept, that this is really for the purposes of internal records of the Plaintiff Company and that the tick in the box 'New' is merely to indicate this is a new agreement, as distinct from an agreement entered into when the machine is replaced by another machine, in which case there would be a tick in the 'Conversion From' box at the top of tire agreement. I must confess that I think anyone reading this agreement and seeing the tick in the box 'New' could not, perhaps, be forgiven for assuming, if he also realised that the Plaintiff claimed an option to deliver a new or re-conditioned machine, that he would be getting a new machine, even though, as I say, I accept that that indication is there for a different purpose. But I don't have to decide whether that is an indication of what was agreed upon in this case, because Mr. Leung said, and I accept this part of his evidence, that he didn't read the agreement before he signed it. So, whatever it might mean to a reasonable man, it could not have had any effect upon his wind or the intention of the parties in this particular case.

6. The machine was delivered on the 28th October 1980 and almost immediately Mr. Leung discovered that the machine was not a new machine. It was a scratched, dirty and described at one stage as worn out, although he did later agree that it performed satisfactorily as a copy-ing machine. But it clearly wasn't a new machine, and there is no dispute that it was a re-conditioned machine. As a result of this discovery, Mr. Leung said he telephoned Mr. Ip and complained that he had not got what he had been promised, and eventually, two days later there was a meeting at Mr. Leung's premises at which Mr. Wong and Mr. Ip were present. Mr. Leung told me, and again this part I accept without any hesitation, that, when he signed the agreement Mr. Ip was in a hurry, and so, that's one of the reasons why he didn't read it. But he said, and although this has been criticized, and it is, perhaps, a little odd that someone in the position of a director of the Company, that he didn't read agreements before he signed them, I don't think that that is so unusual that I should treat it as, in any way, going to the credibility of Mr. Leung. Many businessmen do sign agreements, particularly printed agreements, without reading them, when they may have reason to be assured that they reflect their wishes, unless of course it involves very large sums, when, perhaps, one would expect them to read before signing. He also said that, quite apart from the earlier discussions with Mr. Ip, which began in September of 1980, all along he was assured that he would get a new machine; he had made it clear that he wanted the new machine; he wasn't interested in an old machine, because they already had a copying machine which they purchased some 4 years ago, in 1977, and which was still under guarantee and warranty for 5 years from Plaintiff Company. Mr. Ip, however, said that he explained to Mr. Leung that the Company could either supply a nevi machine or reconditioned machine, and with respect to this particular model, which he advised Mr. Leung would meet his requirements in a better way than the existing copying machine, that such a model was only available in its re-conditioned state, and that, in fact, they had no new models of that type in stock at that time. To some extent, his evidence differed slightly from Mr. Wong's on this aspect. Mr. Ip said that such models were not being marketed as new models in Hong Kong as far as he was aware, although he did hot know what the world-wide situation was. Mr. Wong, however, in his evidence - and this is to some extent borne out by passages in one of the letters-indicated that a shipment of that model was to be expected in December 1980. However, whatever the reasons may be for the fact that the Plaintiff Company didn't have hew models of that particular machine doesn't perhaps carry very much significance in this case, because the question I have really to, consider is whether the non-availability new machines of that type was made clear to Mr. Leung. He said he was never told that. He was told he would get a new machine; he thought he would get a hew machine; he wanted a new machine, but in fact he was supplied with a re-conditioned model.

7. Having heard the evidence of these 3 witnesses, I have also observed their demeanour in the witness box, in so far as that assists me in this case, bearing in mind that a witness, demeanour in the witness box may be capable of one or more explanations. Hesitation, which has occurred from time to time in this case, may be due to a desire to be careful and to assist. It may be an indication of an attempt to recollect details which had occurred some time in the past and which, perhaps, have faded in time. Or it may be an indication the witness is not being frank and is thinking of what answer would be more convenient than one which is accurate and true. I don't think that I can really derive a great deal of assistance from the demeanour of the witnesses. What I think does help me is to consider the overall manner in which they have conducted themselves throughout this unfortunate matter. Having considered these aspects, I am satisfied, oh the balance of the proba-bilities, that the account which has been given to me by Mr. Leung is the more reliable account. I prefer his evidence to that of Mr. Wong and Mr. Ip, and I am satisfied, on the balance of proba-bilities, that he was told that the machine would be a hew machine that he was never told that he would get a re-conditioned machine, or that such machines were not available at all, at any rate at the time he entered into the contract. I accept that he was told later on at the meeting on the 30th October that the reason why he had a re-conditioned machine was because no new models were available in Hong Kong. But that was after the machine had been delivered and after he had discovered that it wasn't what he had expected. As Mr. Leung said, what use would they have for a used or old machine as they already had an old machine? What they wanted was a new machine.

8. One matter which I think I should mention is that this allegation or contention by Mr. Leung, that he was assured he would receive a new machine, was mentioned by him, on the telephone, first of all to Mr. Ip on the 28th of October or on the following day, when he said "the machine you delivered is not a new one", whereupon Mr. Ip said: "I only said that I would give you a machine of a new model, didn't say that I would give you a new machine." To which Mr. Leung's reaction was; "you should not tell a lie, I want you to come right over now." He didn't do so, but he came with Mr. Wong 2 days' later on the 30th of October. That allegation, as I say, is also made in writing, when Mr. Leung wrote to the Plaintiffs a letter of the 8th November 1980, which is a page 20 of the agreed bundle, in which he said:

"I regret to request you to cancel the Rental and Service Agreement as your salesman Mr. H. Ip offered to me a new machine of 3103 but you delivered to us an aged and damaged machine."

9. That allegation was never answered. The letter in reply, which is at page 21 of the bundle, makes no reference to his allegation. That allegation was repeated in January, when the letter, which, so to speak, finally brought matters to a head, dated the 30th January 1981 at page 29 of the bundle, again made reference to the fact that he had been offered anew machine and, instead, a used machine had been delivered. That letter was written apparently after Mr. Leung had sought advice from his solicitors, who are presently the solicitors representing him in these proceedings. No reply has ever been received denying that allegation. The same allegation is repeated in March of 1981, when on the 3rd of March, Mr. Leung's company sent a telex, pointing out that they had not received any reply to the letter of the 30th January, presuming that they (the Plaintiffs) are not going to replace the machine with a new one as promised, and saying that the machine had been placed in their warehouse, they being forwarders in business on the 16th of February 1981, at storage charges of HK$100 per day. The Plaintiffs had been given notice in the letter of 30th January to come and collect the machine within 14 days. The Plaintiffs never did.

10. I find it strange that a company of the apparent stature of the Plaintiffs, when a customer makes complaint of such a nature, that it is not dealt with. I think the reason why it was not dealt with was because - and this is an unfortunate impression, but a very real one, which I derive from the evidence in this case - the Plaintiffs, I think, have dodged the issue or sought to evade it, because what clearly happened after Mr. Leung complained about the fact that he had received an old or used machine instead of a new one, whatever he was entitled to expect, was that, thereafter, instead of taking it back as Mr. Leung wanted, that Plaintiff Company, through its representatives Mr. Wong and Mr. Ip, prevailed upon Mr. Leung to await or take delivery of a different model, a 3107, which costs a couple of hundred dollars more per month to hire because it has an additional facility in that it is capable of reducing the size of the pages. It is clear that Mr. Leung was willing to go along with this suggestion, possibly as a way of arriving at a sensible compromise which would give sufficient face, and, perhaps avoid embarrassment, to Mr. Ip and Mr. Wong, and, indeed, perhaps to himself, for, as I say, he is a director of the Company and so, ha naturally would perhaps have to give some explanation to his fellow directors as to why they had entered into this commitment in respect of an old machine. But Mr. Leung, no doubt because of his previous experience in September and October, insisted that the new machine 3107, which it was eventually agreed he would take, although initially he had indicated he didn't want as he didn't need the reduction facilities, he would only take if he got a written assurance that it would be new. The agreement which was sent to him in respect of that proposed new hiring, so he said didn't specify it was new. I haven't seen that document although it is referred to in a letter in a bundle. He asked for the assurances. He couldn't get them. When he asked Mr. Wong over the phone whether it would be new, Mr. Wong's reply was "not definitely". He asked for an assurance from Mr. Kenneth Wong, who seems to be a person in a more important position in the Plaintiff Company, but didn't get any, and so, lie wrote on the 30th of January indicating that he was no longer interested with the copying machine and asking the in to take it back.

11. I must deal with subsequent history later on when I deal with the question of waiver. But before I deal with that point, being satisfied, as I am, that Mr. Leung was assured that the machine he was hiring would be a new machine, I have to consider whether that became a term of the contract or, as it is alternatively pleaded, whether in the circumstances a collateral agreement came into existence. I take the view that it did become a term of this contract. In so far as there may be an apparent objection based upon the parole evidence rule, I do not think that that rule would be offended by incorporating into this agreement the express assurance that the machine would be new. I do not think that that would contradict or vary or add to the other printed terms of the agreement, bearing in mind that, according to the Plaintiff's contract, they have an option to perform by supplying a new or a re-conditioned machine. But, if I am wrong on that, I think that in the circumstances of this case, Mr. Leung having made it abundantly clear, in my view, to Mr. Ip, before and at the time of signing the contract that he wasn't interested unless it was new, there was a collateral agreement, and that that assurance was given in consideration for Mr. Leung signing that agreement on the 16th October 1980.

12. The next question is, was that term or, in the alternative, the agreement of such importance that breach of that term would amount to a breach, going to the root of the contract, as it sometimes said, or amounting to repudiation on the part of the Plaintiffs of the agreement thus entitling the Defendant to accept that repudiation and put an end to the contract. Miss Kaplan, in a very able argument, has submitted that such an assurance that the machine would be new, cannot be regarded as such an important or fundamental term that a breach thereof leads to repudiation. She has pointed to the fact that the rate charged by the Plaintiffs would be the same whether the machine is new or re-conditioned. That may be so. She also relied on the fact that the machine actually delivered, although a re-conditioned one, was perfectly adequate to the needs of the Defendants in terms of the general overall performance of the machine. But, in the circumstances of this case, and I would think, generally speaking, if a person asks for a new machine or new article, whatever it may be, I think it is important, when it is a machine in particular of the kind in question here, that the machine should be new. Such machinery is less likely to go wrong or be out of order, at any rate in the early days of its life, and one must remember that this agreement was a hiring which was to last for 2 years. So, whether the machine is new or re-conditioned would be, in my view, view, important to someone who was hiring it for such a long period. I would concede that if it were a question of hiring it for a day for a motor car, whether it was new or used might not be terribly important, but I think its nature, new or used, would be important for a much longer period of hire. And in this particular case it is clear, as I have found on the evidence, that Mr. Leung would never have entered into this contract on the 16th October 1980 unless he was getting a new machine. It is never easy to characterise a term in a contract, whether it is called a condition or warranty, or what-ever. whether it is of such importance that a breach thereof leads to repudiation, or may lead to repudiation, must be decided in my view on the context of the particular contract and the circumstances in which it came into being. In this particular case, I think it was an important term and, upon the undoubted breach thereof, was such as to give the Defendant a right to treat it as repudiation, and to reject the machine, and put an end to the contract.

13. The question is did Mr. Leung on behalf of the Defendant exercise that right, which I find is available to him in this case, by rejecting it in unequivocal terms or did he, as the Plaintiffs allege, waive his rights and affirm the contract by his conduct subsequent to discovery of the breach? That conduct includes using the machine, a fact which Mr. Leung did not deny. The extent of the user is a matter which is not clear on the evidence. According to a document apparently kept by the Plaintiffs in their service department (page 57 of the bundle), when the machine was last inspected, apparently because it was noisy, on the 28th January 1981, the meter reading was 18,343 when the repair work was finished. In the, telex of the 3rd of March, to which I have already referred, there was an undertaking by the Defendant to pay copy charges at the rate of 13½ cents a copy for a meter reading of 23,650, subject to deductions for wasted copies. So there clearly was evidence of user, and I think it is right to infer, as Miss. Kaplan invited me to infer, that it was probably used after the 30th of January, although Mr. Leung said he gave instructions to his staff not to use it after that date. I think as  I say, it probably was used after that date, and probably used from then until some time before the 16th of February, when apparently it was placed in the warehouse, awaiting collection by the Plaintiffs. The first question is, has Mr. Leung indicated clearly an intention to reject or exercise its right to accept this repudiation? It is said that he never really did this until the 30th of January; that, after discovering the breach, he was content to go on with the contract, and merely because they were unable to conclude another agreement in respect of the other model, 3107, that he then wrote seeking to reject. In those circumstances, it is submitted that he has affirmed the contract, notwithstanding the breach, and, therefore, he cannot claim the remedy which he relies on in this case. I should, perhaps, say that if that in fact is the position, then there is no evidence that he then suffered any loss from breach of that term if he is bound by the contract. If so, it is purely for nominal damages either because the machine is working reasonably or because having been used sufficiently, there is nothing to indicate any diminution in value. However, that doesn't arise in this case. I merely have to consider whether he did waive this breach and affirm the contract.

14. I am satisfied that he did do this (i.e. reject), when he spoke to Mr. Ip on or, shortly after 28th October when he discovered the machine was not new. In any event, notwithstanding the discussions which took place at the meeting on the 30th, he clearly, in my view, indicated his intention to treat this contract as at an end because of this breach. I have already quoted the second paragraph of the letter of the 8th of November. He refers in that letter to the discussion with Mr. Wong, and it having been explained by Mr. Wong that there would be no new machine of model 3103 available and they could only give a re-conditioned machine, but Mr. Wong apologised for the machine which was delivered and he promised to change a damaged part, which he did in the form of a paper tray, and to change that machine for another machine, which would be in better condition, in the middle December. And, as I said, Mr. Wong did give evidence that another shipment of that model was expected in December. And he concluded that letter saying:

"In my opinion, you should either cancel the Rental and Service Agreement or to deliver new machine of 3103 to us. If we get still an old machine why should we change it from our present 2202."

15. In the circumstances existing at the time that letter was written, and bearing in mind that he had already on the telephone virtually accused Mr. Ip of lying to him, I think he did then indicate that he was accepting that breach as a repudiation. On that finding, for reasons I will mention in a moment, I do not think that there was any act of affirmation or waiver on the part of the Defendant.

16. Clearly, just as a purchaser of goods must have a reasonable time in which to decide whether the goods comply with the contract he has made, and to consider, in the event of discovering a breach, what he will do; what inquiries perhaps he should make as to the commercial possibilities and the alternatives open to him, failure to reject the the goods at once doesn't, in my view, prejudice the right to reject if it is exercised within a reasonable time. Even retaining the goods doesn't necessarily indicate an intention to accept and to keep the contract alive. The question of waiver really only arises if I am wrong in finding, as I do, that there was a repudiation in that letter on the 8th of November, in which case I must look at what happened between the 28th of October, when the machine was delivered, and the 30th of January when clearly an intention to reject the machine and to treat the contract as repudiated was evinced by Mr. Leung.

17. The first thing that I must say about this period, on the evidence of Mr. Leung, which I accept, is that throughout this period Mr. Leung's conduct and, indeed, the use of the machine between November and January, was all done under protest and pending negotiations for a different machine to be supplied, namely the 3107, negotiations which, I find, broke down because the Plaintiffs refused to give a written assurance or undertaking that the 3107 would be new, although, as I understand their evidence, they did have new models of that particular kind available - conduct which I find surprising on the part of a company of this nature, and particularly in the circumstances of this case. I don't think that, even after November when he wrote that letter, and the meeting with Mr. Wong, the Defendant elected to go on with this hiring despite knowledge that it was not a new machine. The fact is that after that meeting, when Mr. Wong apologised to the Defendant and, as I also find Mr. Ip indicated that he was sorry about that matter in the way which has been suggested of putting his hands up to his head and uttering words of apology, thereafter what happened was: Mr. Leung wanted them to take back this machine; they obviously didn't want to lose business and sought to mollify him by suggesting that, perhaps, he should now reconsider his earlier rejection of the proposal to take the 3107, which eventually he did, although, as I say, subject to a condition which was never met by the plaintiffs. Mr. Ip dropped out of the picture at this point, and I was told he was trans-ferred in accordance with the general posting which occurred in the Plaintiff Company at that time of the year. Instead, a Mr. Daniel Chan was brought into the picture and he is the one who discussed with the Defendant the possibility of replacing the 3103 with a 3107. That such discussion took place is apparent from the letter of the 24th November 1980, written by Mr. Wong to the Defendant in answer to the letter of the 8th of November. As I say, there is no reference any-where in that letter to the allegation that Mr. Leung had been told by Mr. Ip that he was going to get a new model. Indeed, in the circum-stances, it was perhaps a little offensive to conclude that letter with the words "Thank you again for your confidence in Rank Xerox."

18. The question, in what circumstances conduct after discovery of the breach might constitute waiver or affirmation, was considered in the similar but slightly different case of Gilman and Company Ltd. v Yau Shun Printing Press (1978) DCLR34. This is a decision of Judge Leathlean, in which he had to consider facts somewhat similar to those before me although, he found that he was dealing with a hire purchase agreement and not a hiring agreement, although it was expressed in terms of a hiring, and the defect or the breach complained of was entirely different. The copying machine in that case would not produce the number or quality of copies which the hirer had been led to believe. It is that part of the judgment, beginning at page 38, which I have found particularly useful, where the learned judge considers a number of authorities, including a decision of the Court of Appeal of Jamaica in Breckword v Hanna (1963) 5 WLR 356. Those cases involved contracts of sale of goods, but I think they illustrate a principle which is applicable in general to all contracts. Perhaps, they have a slightly more practical attraction to a case involving the hire of goods. With respect, I have found great assistance in that summary of the law, and I think those cases show that even using goods after discovering a breach is not necessarily conclusive of an intention to affirm the. contract. It is, after all, a question of fact whether there is an intention to affirm, or whether there is an intention to reject, in consequence of a breach.

19. Bearing in mind the circumstances in which Mr. Leung, so to speak, want along with the suggested solutions by the Plaintiffs, I do not think that the delay, if it were a delay, until January, or the fact of using the machine during that period is sufficient to lead me to conclude that the Defendant intended to keep the machine and to go on with this contract. If, as I have found, the repudiation was accepted by the letter of 8th of November, then for the reasons which Judge Leathlean so ably expressed in the decision referred to, sub-sequent user would not alter the fact. It would not have the effect of reviving the dead contract, because after acceptance of the repudiation, the person in possession of the goods would become an involuntary bailee, and his use of the goods could not operate to revive the contract which already come to an and, although it might give rise, to liability in conversion. Accordingly, I am satisfied that there was a breach of a serious express term of the agreement between the parties here, or of the collateral agreement, which ever way one looks at it. I am also satisfied that Mr. Leung never waived that breach nor did he affirm that, contract. He was in the position where although he had told the Plaintiffs to take the machine back, as it wasn't what he wanted or what he expected, they didn't do so. Instead they persuaded him to take another machine one which he had earlier rejected as it was not necessary or suitable to his needs. It was a situation where he really had very little option, and I think the Plaintiffs and Mr. Wong and Mr. Ip, to some extent, exploited the situation with a view to getting him to take the, more expensive machine.

20. The question, then, is what damages is the Defendant entitled to on the Counterclaim? It follows from my findings that claim of the Plaintiffs must be dismissed, as it is pleaded in these proceedings. I have to consider what damages are recoverable on the Counterclaim. As I have said, the goods were placed in the Defendant's warehouse on the 16th February 1981. The Defendant carries on business as forwarders and, accordingly, their warehouse is a place which would normally be used for commercial gain, in the way of storing customers' goods. Miss Kaplan said there was no evidence as to where precisely in the ware-house the machine is being stored, and, in any event, the charges which the Defendant claims are based upon commercial rates including a profit element. I think I can infer from all the circumstances, including the fact that it was removed from the Defendant's offices to the warehouse, that it was stored in its warehouse and was, thereby, taking up space which would otherwise be used for storing customers' goods for gain. I do not think it makes any difference that the rates which the Defendant claims for that storage would include a profit element. The fact is that one can say that, to that extent, the Defendant has lost the ability to charge at these rates some other customer for storing goods where the machine is now located. The difficulty I have is in assessing that consequential loss, which I think is recoverable, in a situation of this find, where the Plaintiffs have failed to take back their goods after they have been given reason-able notice, as they were given 14 days by the letter of the 30th January, because the only evidence before me is in the form of a list of charges, which is headed "HACTL Agent's Facility Department", which Mr. Leung said, and it wasn't really challenged, are the charges which his company adopts. The difficulty is that under the heading "Storage" there are two figures for storage : one of 50 cents per kilo, apart from certain free days and for export cargo, withdrawn from the terminal, it is 25 cents per kilo per day, or part thereof. No evidence has been given to explain these different rates. I do not know why there should be different rates but I am sure there is a very good reason. But, in the circumstances, I do not think that I can accept Mr. Yam's suggestion that I should assess storage charges on basis of a figure of $78 per day, which is 156 kilos at 50 cents per kilo. I think that, on the state of the evidence, I should take the lower figure of 25 cents per kilo, which I do, and I will assess the damages on the Counterclaim at the sum of $14,352. I think, in the circumstances, it would be right to add to that sum, or in effect to order the Plaintiffs to pay by way of damages for this breach such further sums, at the rate of $39 per day, until such time as the Plaintiffs re-take possession of the machine. Accordingly, the Plaintiff's claim must be dismissed, and there will be judgment for the Defendant on the Counterclaim in the terms I have just indicated.

Representation:

Miss Barbara Kaplan, counsel instructed by Messrs. Deacons for the Plaintiff.

Mr. David Yam, counsel instructed by Messrs. Johnson Stokes and Master for the Defendant.