Fook Woo Cars Co., Ltd. v. Companion Building Material (Holdings Limited)

HCA005896/1986

Coram: Hon. Barnett, J. in Court

Dates of hearing: 14th, 15th, 18th-21st May 1987

Date of delivery of Judgment: 29th May 1987

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JUDGMENT

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1. The plaintiff claims damages against the defendant for wrongful detention or conversion of a quantity of marble. The defendant counterclaims for storage charges.

2. Chan Park-chi (Mr Chan) and his .wife own all the shares in the plaintiff. Mr Chan is Managing Director. Mr Chan and his son own (or did at the material time) all the shares of Guangda Development Limited (Guangda). Again Mr Chan was Managing Director. Fook woo Building Material Company (Fook Woo) is or was a company of which the plaintiff was sole proprietor. Mr Chan was effectively the alter ego of these companies.

3. Because of the nature of the arguments advanced by counsel I think it is necessary to set out both the plaintiff's and defendant's cases in some detail. It is the plaintiff's case that in 1983, Fook Woo purchased a quantity of marble from Italy. As shown in the Letter of Credit (Second Bundle p. 3), the plaintiff ordered three types of marble, namely 900 x 600 x 20mm (Type C), 300 x 150 x 10mm (Type B) and one other which need not concern us. This order was based upon orders which had been received from customers in Hong Kong. When the shipment arrived in Hong Kong, it was discovered that the intended Type B marble was only 7mm thick (Type A). Subsequently, Type B marble to the proper specification was supplied to the plaintiff who disposed substantially of Types B and C but was left with Type A. The Type A together with the balance of Types Band C was placed in premises rented by Fook Woo in Tsuen Wan for the purpose of storage.

4. In early 1984, Fook Woo ceased business. The premises at Tsuen Wan together with a stock of tiles were transferred to Guangda, while the marble which was still stored there was transferred to the plaintiff in satisfaction of a debt.

5. In 1985, it was necessary for Guangda to surrender the Tsuen Wan premises. Indeed, Guangda was disposed of at about the same time although the precise date was never specified. Mr Chan therefore looked for buyers for the tiles and marble which he wished to dispose of in one lot.

6. On 19th August 1985, Mr Chan went to the office of a Mr Siu Yeuk-yuen whom Mr Chan understood to own the defendant. With Mr Chan was Miss Kwok Man-mei (Miss Kwok), an accounts officer in the plaintiff. Mr Chan offered to sell the tiles for $250,000 and the marble for $100,000. Mr Siu offered $120,000 for the tiles but said that he did not want the marble as it was too expensive. Mr Chan said he would not sell the tiles alone. Mr Siu. then offered $120,000 for the tiles payable over 3 months and said, he would let Mr Chan use his, Mr Siu's, warehouse to keep the marble free of charge. Mr Chan . accepted his offer.

7. The agreement was reduced into writing and signed the same day. It appears on page 1 of the Agreed Bundle.

8. Mr Chan said in his evidence that the tiles were worth over half a million dollars. He explained that he offered them for a lower price because of the circumstances surrounding the sale and accepted Mr Siu's offer because of the free storage.

9. Upon the defendant paying the first instalment of $40,000, it was giver a key and removed the tiles from the plaintiff's premises over a period of time. As the premises did not have to be surrendered until November/December, Mr Chan left moving the marble until the last moment. Mr Chan asked Wong Hon-lun (Ah Lun), an employee of a decorating company used by Mr Chan, to make arrangements for the move. On or about 26th November 1985, when Ah Lun reported that all was ready, Mr Chan drove his car to Tsuen Wan and led Ah Lun and the lorry which he had hired to the defendant's warehouse in Shatin. Ah Lun moved the marble in two loads on two consecutive days and on the third . day returned to Shatin to tidy up loose or damaged marble which was contained in eleven or twelve bamboo baskets.

10. The bamboo baskets, at least, were causing a nuisance and obstruction in the defendant's warehouse. Froth employees of the defendant and Ah Lun communicated this to the plaintiff. As a result, Mr Chan agreed with Mr Siu that Mr Siu would order 100 boxes in which to pack the loose marble. The boxes were ordered by the defendant and paid for by the plaintiff. Ah Lun returned to the warehouse in about December and packed all 100 boxes with loose marble. At the same time,  he carried out a count of the number of boxes of the various types of marble and gave the result of his count to Miss Kwok by telephone and subsequently by calling at her office.

11. In April 1986, the defendant sold 365 pieces of Type B marble on behalf of the plaintiff. Payment was duly made to the plaintiff by the defendant. Nothing was said about storage charges for the marble nor was any deduction made from the $2,110 which represented the proceeds of the sale.

12. On or about 14th July 1986, Hong Kai Decoration and Design Company Limited (Hong Kai) offered to buy the plaintiff's marble for $113,000. Mr Chan received a purchase order from Hong Kai already signed by Mrs Lo Chi-ming, a director (Agreed Bundle p. 3), and immediately tried to telephone bin Siu to arrange to get the marble. He was unable to reach Mr Siu. He repeatedly phoned Mr Siu but Mr Siu did not return his calls. Miss Kwok, who also telephoned the defendant, was told by someone not to bother going to collect the goods.

13. Eventually, on or about 26th July 1986, Mr Chan received an invoice from the defendant for storage charges for the marble with effect from 26th November 1985 at the rate of $2,000 per month. Mr Chan, had not received any such demand for storage charges previously. He consulted his solicitors who wrote the usual letter before action to Mr Siu which appears in the Agreed Bundle at p.7.

14. In the meantime because he had been unable to obtain the marble, Mr Chan did not sign the contract with Hong Kai.

15. Central to the plaintiff's case was the agreement negotiated by Mr Chan and Mr Siu on 19th August 1985. Mr Chan gave evidence for the plaintiff about this. His evidence was in general terms confirmed by the evidence of Miss Kwok. Evidence as to the quantity of marble stored in the defendant's warehouse was given by Miss Kwok and Ah Lun. Evidence as to the Fong Kai contract was given by Mr Chan and Mrs Lo, the director of Hong Kai.

16. The defendant's case relied essentially upon Mr Siu and Madam Siu Yuk-chee (Madam Siu), his sister. It was their evidence that, sometime before 19th August 1985, Mr Chan, followng a telephone call, came to the defendant's office and saw Madam Siu together with her husband, Mr Leung, the Managing Director of the defendant. Mr Chan wished to dispose of his stock of tiles but Madam Siu, who was responsible for purchasing, was not interested in the proposal. Madam Siu had not dealt with the plaintiff before, most of the defendant's tiles being imported.

17. Mr Siu, who had met Mr Chan once before in connection with the proposed sale of a car, then arrived at the office.Mr Siu had been Managing Director of the defendant until 1978 but while he remained a director, no longer took part in the day to day running of the business. He greeted Mr Chan who said that he had closed his company and was feeling miserable because of losses of several million dollars, and was offering to sell his remaining goods. Mr Siu was told that discussion was in a preliminary stage but that a stock list or catalogue was not available. In response to a request by Madam Siu, Mr Chan telephoned Miss Kwok who brought a stock list and, after staying about five minutes, left the defendant's office. Mr Siu told Madam Siu to do her beat to buy the goods. He then left.

18. After further discussion and in reliance upon the stock list, Madam Siu offered $150,000 for the tiles excluding small lots. Madam Siu said an inspection would be necessary.

19. During the next few days, Madam Siu asked for and received catalogues so that she could check up on such matters as quality and patterns. Mr Chan phoned two or three times to see when the deal might be concluded. He mentioned the possibility of selling marble and bathroom cabinets. As the defendant did not deal in marble, Madam Siu was not interested. In due course Madam Siu, together with a colleague, went to Mr Chan's office where inspection of the tiles was agreed upon and inspection of some of the cabinets carried out.

20. An inspection of the tiles was carried out on a Saturday by Madam Siu together with her husband and son and Mr Chan's son. During the course of the inspection, she marked discrepancies upon the stock list which had previously been supplied by Miss Kwok. She found that in some cases, there were fewer tiles than listed while others were not acceptable. Subsequently, she went to Mr Chan's office and offered $110,182, again excluding small quantities of tiles. Eventually she agreed to take all the' tiles except broken ones for $120,000 having regard to the terms of payment which were offered. The contract was then drawn up and signed.

21. In early October Mr Siu together with a Mr Chung went to the plaintiff's office to look at a car. Mr Chan said that the marble was going begging and his lease of the premises at which the marble was stored was expiring. Se asked if the marble could be stored in the defendant's warehouse. He said that he had potential buyers so lie would only need two or three weeks. If no one had bought the marble by then, he had other space and would put the goods there. Mr Leung, who was present, objected because the defendant had a substantial quantity of mosaic tiles due to arrive at the end of November and would need storage for these. Mr Chan promised that there would be no delay in the timing and repeated how miserable he was about his loss. Mr Siu therefore agreed to Mr Chan's proposal and understood that Mr Chan would put the marble in the defendant's warehouse when the premises were surrendered in November.

(In fact, the warehouse was owned by Companion Glory Ltd, a subsidiary of the defendant. Nothing turns on this).

22. Subsequently, Madam Siu scolded Mr Siu because the defendant would suffer a loss if the' defendant had to store any of its goods in a public godown. Mr Siu therefore telephoned Mr Chan and warned him to make sure that the goods were removed within two weeks or otherwise he would impose a storage charge. When the plaintiff's marble arrived at the warehouse, Mr Siu received complaints about the state of these goods. He therefore telephoned Mr Chan and told him to put the goods in order.

23. After two weeks, Madam Siu reminded Mr Siu that the period had expired. Mr Siu telephoned Mr Chan and asked him to remove the marble immediately. Mr Chan said he could not do so because there was a chance of more breakage if the marble was moved again, while a public godown would not accept goods in such a condition. Mr Siu then said that he would ask a storage fee of $2,000 per month. Mr Chan said this was too expensive. Mr Siu explained that because of the condition of Mr Chan's goods and because the defendant's goods would have to be stored in a public godown he had to ask that price. Mr Chan agreed to pay this storage fee from the moment that his goods had been deposited in the warehouse. He said it would only be for a further three or four months and he would pay the storage charges in one lump sum after selling the marble.

24. Mr Siu told Madam Siu about the arrangement. Thereafter, he rather forgot about it. However, in June 1986 Madam Siu reminded Mr Siu because more than six months had elapsed. Mr Siu told Madam Siu to speak to Mr Chan and tell him to remove the goods and pay the storage fee. Madam Siu reported that Mr Chan had said he would move the goods quickly and pay the fee.

25. About a month later, Madam Siu reported that Mr Chan had neither paid nor moved his goods. Madam Siu phoned Mr Chan again and then Mr Siu telephoned him. Mr Chan said that he would not have thought the value of the marble would be so little despite many efforts to sell it. He said that although he had promised to pay $2,000, he thought it would not have been necessary for him to store the marble for so long and asked Mr Siu to reduce the charge.

26. Mr Siu would not reduce the charge. Mr Chan then said he would not pay anything and that, as there was only an oral agreement made on the telephone, he could go back on his word. Mr Siu became angry and terminated the conversation. He asked Madam Siu to issue an invoice for storage charges. The invoice for $16,000 appears on page 4 of the Agreed Bundle.

27. The defendant's case therefore is that the sale of the tiles by Guangda to the defendant was a separate and self-contained agreement, all the terms of which are contained in the written contract. There was a subsequent and informal agreement between Mr Siu and Mr Chan for free storage by the defendant of the plaintiff's marble for a period of two or three weeks. Subsequently, that agreement was varied, or there was a new agreement, providing for storage of the plaintiff's marble at a charge of $2,000 per month to take effect from the date of first storage.

28. Mr Chan and Miss Kwok were carefully cross-examined by Mr Chan. The only material discrepancy which was exposed was that Miss Kwok agreed that madam Siu mainly conducted negotiations on behalf of the defendant. It was put to Mr Chan that Mr Siu did not negotiate but referred Mr Chan to his sister. In reply, Mr Chan said "I only knew Mr Siu". I accept that as a denial.

29. Mr and Madam Siu were equally carefully cross-examined by Mr Mumford. Two material discrepancies emerged. First, Mr Siu said that Mr Chan mentioned marble during the preliminary discussion. Madam Siu said that marble was not discussed on that occasion. Second, Madam Siu put the first meeting with Mr Chan in mid-July. Mr Siu said it was 8 or 10 days before 16th August.

30. To my mind, no material discrepancies arose within the evidence of each individual witness. It is necessary therefore to have regard to the inherent probabilities of the respective stories in the light of documents and undisputed facts and to have regard to the demeanour of the witnesses themselves.

31. Mr Mumford urged that I should start by considering what happened at the end rather than at the beginning of the story. He said that if the Fong Kai contract is genuine then there is a very strong probability that Mr Siu's story cannot be true. He pointed out that the defendant's case is that the plaintiff was desperate yet, in June 1986, Mr Chan apparently agreed with madam Siu that he would move the goods and pay the charges. If the contract was genuine, it would mean that the burden would be lifted, yet Mr Chan is alleged to have asked Mr Siu for a reduction of the charge and said that he would move the goods. According to Mr Siu, Mr Chan made no mention of the Hong Kai contract although the contract would mean that he would be able to pay the storage charges and if necessary, the supplier in Italy who had not yet been paid. Consequently there would be no reason for undertaking litigation or continuing to pay a very high storage fee.

32. If the contract was not genuine, it indicated that the plaintiff had little prospect of being able to sell the marble at all. The plaintiff might therefore just as well abandon the marble and leave it to the defendant to sue if thought worthwhile. There was little point, said Mr Mumford, in Mr Chan inventing the contract in advance of any trouble between the parties and then stirring it up.

33. Mr Chain did not go so far as to say that the Hong Kai contract is bogus, as was suggested by Mr Siu who said he had doubts about the sincerity behind it. However, Par Chain submitted that the plaintiff had not proved its authenticity as a true bargain. He said that the only witness called who could speak to the contract was Mrs. Lo and, on her own evidence, she had simply signed at the request of her husband upon his assurance that it was worthwhile for their company.

34. I note that this contract is not in fact a contract. It is entitled "Purchase Order" and constitutes a letter of intent on the part of Hong Kai and is expressly "subject to contract and availability". It also states "so that we can proceed with the contract and payment". I see no reason to doubt that it is a step on the :coy to what was intended to be a genuine contract for the sale of the marble to Hong Kai.

35. It is curious, howver, that this document was not signed by Mr Chan or anyone on behalf of the plaintiff. Mr Chan explained that he did not do so because he discovered that he could not arrange to have the marble released from the defendant's warehouse. I find this explanation difficult to accept. On or around 14th July 1986, which is the date of this document, Mr Chan had no reason, according to him, to suppose that there would be any difficulty in getting the marble.The defendant had already co-operated with him by selling off part of the marble on the plaintiff's behalf. No mention had so far been made about storage charges. I conclude therefore that Mr Chan was not being truthful about this and that them is some other explanation less helpful to the. Plaintiff In teaching this conclusion, I have had regard to his demeanour to which I shall refer later. Accordingly, I do not find that the existence of this document undermines the defendant's case.

36. Mr Mumford made a strong submission that the defendant changed its story to meet difficulties facing it on the basis of its original defence and the documents discovered. Before amendment, the defence. was that there was no agreement about storage in August 1985 but that in October or November, there was an oral agreement between Mr Siu and Mr Chan that the defendant would charge a storage fee of $2,000 per month from commencement of the storage. There was no mention of the agreement for temporary free storage. If that was the basis of the defendant's claim, then it is inconceivable, said Mr Mumford that there should be no document such as a receipt to acknowledge what goods had been stored. Equally, it was remarkable that no invoice for storage charges had been rendered until July 1986 and that no deduction for storage, charges had been made from the proceeds of sale of the 365 pieces of marble. It is clear, said Mr Mumford, that the defendant changed its story to meet these difficulties so that now, following amendment of the defence, the defendant pleads the initial agreement for two weeks' free storage, which would account for the lack of documents, followed by the agreement to pay $2,000 per month from the beginning of the storage period.

37. Mr Mumford said that although the. defendant might technically be right not to rely on the initial agreement for free storage it was impossible to leave this agreement out of the story because, without it, there is no explanation as to how the goods came to be in the defendant's warehouse, there having been no mention of the marble in the earlier contract for the sale of tiles. Mr Mumford said that it is impossible to believe that lawyers, having been told about this, should have left it out of the defence. Therefore, it must have been fabricated recently.

38. In any event, said Mr Mumford storage for a period of two weeks would be useless to the plaintiff unless he could be assured of a sale within that period. Without a sale, another move would be necessary resulting possibly in further damage to the marble. It would, therefore, be more sensible for the plaintiff to move immediately to a public godown, or to his own storage space if the defendant's story  about that is true. Further, although originally occupying some 300 or 400 square feet in the defendant's  warehouse, that space was reduced to 100 square feet which works out at a rate of $20 per square foot for which the plaintiff could obtain other premises without difficulty.

39. Mr Mumford then reminded me that no invoice was issued for storage charges by the defendant until July 1986. He pointed out that the plaintiff's marble was a nuisance to the defendant while Mr Chan had twice failed to remove the goods within periods stated. In those circumstances, it as extraordinary that no earlier invoice was issued. As for Mr Siu saying that there would be no charge until the goods were removed, Mr Mumford suggested that he was lying about this. He suggested that it is common knowledge that public godowns, while giving some credit, do not let charges mount up when the goods, over which a godown might have a lien night not be worth the accrued charges.

40. Finally, Mr Mumford said that the new story does not explain why 365 pieces of marble were released without the defendant first ensuring that the plaintiff was going to pay at a time when the plaintiff was being a nuisance and had already failed to comply with deadlines.

41. I do not find in the amendment to the defence, the sinister implication for which Mr Mumford contends. As Mr Chain said, the defence could have been better pleaded. To my mind, it amounts to no more than that.

42. In considering the broader issues raised by Mr Mumford, it is important, I think, to bear in mind, and it is not disputed, that the defendant and its subsidiaries are not in the business of a public godown. The only storage activities in which they indulge are storage of their own goods. Against this background, Mr Siu was simply doing Mr Chan a favour by way of a loose and informal arrangement for the storage of Mr Chan's goods. The defendant is in a substantial way of business with a turnover which last year reached $30,000,000. It is not surprising, therefore, that Mr Siu should have said that he regarded the arrangement and the charges as trivial and that he should have come to overlook or forget them.

43. Mr Siu was cross-examined about the defendant's accounting procedures. He said that the defendant's business is computerised. As the arrangement with Mr Chan was an unusual or irregular transaction, it was not provided for in the computer programme. Accordingly, it was not entered and regular accounting for it was not carried out. I find this explanation wholly unexceptionable. Equally unexceptionable I find to be Mr Siu's explanation that there were no formalities for checking in and out the plaintiff's marble. The arrangement was, as I said, informal and a favour to Mr Chan. Clearly, all that was required was that Mr Chan should be allowed access to the defendant's warehouse in order to place his goods there. There was no reason, at that stage, to suppose that any difficulties would arise between the parties.

44. As to the need for Mr Chan to move the marble again if he failed to dispose of it within 2 or 3 weeks, undoubtedly Mr Chan was simply being optimistic. He did agree with Mr Chain, however, that there was a ready market for his goods'.

45. A number of other matters was canvassed. Mr Mumford pointed out that Mr Siu said the meeting at which the sale of the tiles was discussed, was about 8 or 10 days before the date of the contract. On the other hand, Madam Siu said that it was about 4 weeks before the  contract in the middle of July. I see nothing in this other than a genuine mistake of memory on the part of one of them. Whichever timing is correct, it still allows for the subsequent inspection and negotiations before a price was agreed and the contract was signed.

46. Mr Mumford said that even on the plaintiff's case, the inspection of the tiles could have taken place after the contract was signed and that the markings made by Madam Siu on the stock list consequent upon her inspection are equally consistent with this. There was, however, no evidence led to suggest that this was the manner in which the parties conducted the affair. Indeed, having regard to the discrepancies which Madam Siu found in respect of some of the tiles, and which she marked upon the stock list, I would have expected a variation on the price in the contract and evidence to have been led about that. To my mind, the markings on the stock list are wholly and only consistent with Madam Siu's account of how the agreement was negotiated and concluded.

47. Mr Chain pointed out that Mr Chan regarded the provision for storage as an important element of the contract with the defendant yet no mention of this is made in the contract itself, even though the contract goes to the length of including an acknowledgement by the defendant of receipt of keys to the plaintiff's warehouse to facilitate collection of the tiles. As to this, Mr Chan explained that Guangda was a joint venture between him and a certain Mr Wong to sell a property called City Garden. He did not want what was essentially his personal affair mixed up in a contract of this nature. Further, as Mr Mumford said, the inclusion of the storage provision might suggest that the interests of Guangda were being sacrificed to Fook Woo. It is curious, however, that in chief Mr Chan said he and his son were the shareholders in Guangda. I find this difficult to reconcile with Mr Chan's explanation, as also do I the idea that a joint venture, if joint venture it was, of this nature should be involved in the relatively small-scale business of building material.

48. Various other points were made by Mr Chain on behalf of the defendant. Suffice it to say that I find them of no great value.

49. In all these circumstances, I do not find that the defendant's case is inherently unlikely or improbable. To my mind, the evidence given by Mr and Madam Siu was coherent and rational. If they fabricated their evidence, whether recently or at all, it is difficult to understand why they should have concocted such an elaborate story which would stand every chance of falling apart when tested in cross-examination. In the event, their story did not fall apart other than in respect of the inconsistencies to which I have already referred. I did not find Mr Siu to be evasive in his evidence. I did not consider him to be misleading or attempting to mislead the Court about charges levied in public godowns.   Mr Siu is not a public godown keeper. I consider his evidence on this point to be mistaken rather than dishonest. It was suggested that he was wrong about the necessity for an inspection of the tiles before the agreement could be concluded. Of course, an agreement could have been concluded subject to inspection, but as Mr Siu pointed out, the tiles in question were old stock and inspection would, in the circumstances, be prudent.

50. Madam Siu also gave her evidence in a straight-forward and convincing manner. There was no suggestion of evasion on her part. She was not shaken in her evidence.

51. Having regard to the manner in which these two witnesses gave evidence and the perfectly acceptable content of their story, I find them to be witnesses of truth.

52. Mr Chan on the other hand, was not an impressive witness. His account of the negotiations, I thought, to be thin and colourless. For reasons already given, I found unacceptable his explanation for not signing the purchase order with Hong Kai. Further, it was clear that a formal contract was still to be signed between the two parties thus allowing for inspection or even removal of the goods first. I also found to be significant but not decisive the discrepancy between his evidence and that of Miss Kwok concerning the identity of the person with whom he mainly conducted negotiations.

53. What emerges in undisputed form from the evidence is that Mr Chan had embarked upon an unhappy adventure in the building material trade through Fook Woo. He lacked experience in this field. As Mr Siu said, and his evidence on this was not challenged, Mr Chap's import prices were considerably higher than those of the defendant. Not surprisingly, Mr Chan's business failed and the business ceased in or about 1984. He had difficulty in disposing of his remaining stock of tiles and marbles at a reasonable price, or indeed, at all. Again, Mr Siu explained that there is a small group of persons in Hong Kong dealing in tiles of the nature that Mr Chan was seeking to sell and by combining, they can keep down the price of such goods. For this reason, the defendant had the upper hand in any negotiations with Mr Chan.

54. The defendant, and it is undisputed, did not deal in marble. Further, Mr Chan and Mr Siu had only met once before. During the negotiations which led to the sale of the tiles, therefore, there would be no reason for Mr Chan to expect help from the defendant over the storage of his marble. In any event, at that time the surrender of the plaintiff's premises was still two or three months away, thus still allowing time for Mr Chan to dispose of the marble elsewhere. While Mr Chan may have raised the possible sale of marble with the defendant during the tile negotiations, he would have no reason to take it further once the defendant showed no interest. No doubt the question of the sale of marble was raised as both Mr Chan and Mr Siu said in their evidence. It is true that Madam Siu did not say this but I attach no importance to this apparent discrepancy between her evidence and that of Mr Siu.

55. I reject therefore, the evidence of Mr Chan. The only matter which gave me pause before doing so was the evidence of Miss Kwok. Like Mr Mumford, I found her to be straight-forward. She was not caught out in cross-examination. Generally she gave her evidence clearly, coherently and without evasion. However, the greater part of her evidence was concerned with the quantity and value of the remaining marble. This required constant reference to the various relevant documents. Miss Kwok was very much at home with these, finding her way with ease and explaining the various transactions without difficulty. On the meeting at which the sale of the tiles and free storage for the marble was apparently negotiated, Miss Kwok was to my mind, less fluent and less detailed in her evidence. It is not without significance that Mr Chan did not mention in his evidence that Miss Kwok was with him at the meeting. To my mind, this lends support to Mr Siu's evidence that Miss Kwok's presence was short-lived and in a purely messengerial capacity.

56. Mr Siu's evidence of course was that the agreement for free storage was concluded at the plaintiff's office on a day subsequent to the signing of the contract for the sale of tiles. Miss Kwok, an employee off the plaintiff was no doubt present on the plaintiff's premises at that time. Putting the matter charitably, therefore, I have come to the conclusion that Miss Kwok is confused about when agreement was reached for storage of the marble.

57. I am comforted about this by the evidence of Mr Chung who was called on behalf of the defendant. He gave evidence of the meeting at the plaintiff's office in the course of which agreement was reached about free storage of the marble. He was subject to a difficult' cross-examination in the course of which he, at tides, became angry with Mr Mr Mumford. In my view, however, his story was not shaken although he was not entirely clear as to the exact reason for his visit. I was satisfied that he was no more than expressing exasperation at the protracted manner in which, to him, a perfectly straightforward matter was being questioned. I was satisfied that he was a witness of truth.

58. In my judgment, the plaintiff has failed to prove its case. I find that the contract for the sale of tiles to the defendant was wholly contained within that document and that there was no condition or collateral agreement for free storage of the plaintiff's marble.I find that in or about October 1985, Mr Siu on behalf of the defendant, agreed with Mr Chan on behalf of the plaintiff, for the free storage by the defendant of the plaintiff's marble for a period of two or three weeks. I further find that at the end of November or the beginning of December 1985, Mr Siu agreed with Mr Chan for the continued storage of the plaintiff's marble at a fee of $2,000 per month to be payable with effect from the first day of storage on 26th November 1985. I also find that the storage fee has not been paid and that the plaintiff's marble remains in the defendant's warehouse.

59. It is not necessary for me to consider, in the circumstances, the quantity and value of the marble. I would not, however, indulge in Mr Chain's mathematical calculations. I would have no hesitation in accepting the evidence of Miss Kwok and Ah Lun as to the counting and recording of the marble, the result of which is accurately reflected in the Hong Kai contract.

60. In the circumstances, the plaintiff's claim is dismissed. There will be judgment for the defendant on the counterclaim for $34,000 and for further storage charges at the rate of $2,000 per month for the period from 26th April 1987 until the plaintiff's goods are removed.

Representation:

Mr E.C. Mumford, Q.C. and Miss B. Cheng (inst'd. by Li, Ma & Wong) for Plaintiff

Mr B. Chain (inst'd. by Lau, Chan & Ko) for Defendant