Hop Fat Garments Factory Limited v. Siber Hegner and Company (HK) Limited Trading As Siber Export

HCA006197/1985

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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BETWEEN

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Coram: Hon. Liu J. in Court

Dates of hearing: 30th November, 1st-3rd, 7th-8th December 1987

Date of delivery of ruling: 1st December 1987

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RULING

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1. The case of the plaintiff against the defendant is on a contract for goods sold and delivered. The plaintiff claims the unpaid balance of the purchase price.

2. In the opening of the case for the plaintiff, Mr. Smith, counsel for the plaintiff stated categorically that the defence was wholly based on certain defects detected or discovered at the time of inspections. Counsel for the defendant did not seem to show any great interest and gave no indication that that was not the basis by which the defendant was to be bound.

3. Evidence was led on behalf of the plaintiff on the basis of the defence so openly assumed by counsel for the plaintiff. At no time during the plaintiff's entire case had counsel for the defendant ever intimated that his position was otherwise.

4. When the defence opened, counsel for the defendant sought to rely on defects by way of breaches of contract against the plaintiff other than those said to have been discovered at the time of the inspections. Thereupon, Mr. Chain, counsel for the defendant, was reminded by the Court of paragraph 9 of the Re-Amended Defence and the stance counsel for the plaintiff had taken.

5. Mr. Chain now agrees that paragraph 9 would not so enlarge the scope of the defendants case against the plaintiff. Mr. Chain concedes that paragraph 11 is susceptible of more meanings than one. It is the particulars sought on part of paragraph 11 of the Re-Amended Defence that Mr. Chain now seeks to take advantage of. I think Mr. Chain's approach can be shortly stated, thus : in paragraph 9 of the Re-Amended Defence, the defendant alleges certain breaches of contract between the plaintiff and the defendant, rendering the goods delivered unmerchantable and/or unfit for the purpose of re-sale, and particulars are given under that paragraph. These particulars under paragraph 9 refer exclusively to alleged defects found at the time of inspections. A slight twist has been introduced by paragraph 10. I do not use the word "twist" in any derogatory sense. What is being sought to be raised by paragraph 10 of the Re-Amended Defence is : whether or not the defects discovered at the time of the inspections are matters sufficient to found any cause of action, the plaintiff further agreed with the defendant that if any claim should arise on those defects, the plaintiff would hold itself responsible for claims lodged by the defendant's overseas buyers. On the other hand, paragraph 11 relates to matters vis-a-vis the defendant and their own overseas buyers. What is pleaded there is that the overseas buyers complained of divers defects in addition to those under paragraph 9. It is on the defects other than those specified in paragraph 9 that the plaintiff seemed to be interested and further particulars were sought from the defendant prior to this hearing. One of the questions asked of the defendant by way of clarification was : of the defects disputed by the overseas buyers other than those referred to paragraph 9 of the Re-Amended Defence and Counterclaim, state how the plaintiff was said to be in breach of contract with the defendant. And the answer given was: it is because "the defects have rendered the goods not reasonably fit for the purpose and/or not of merchantable quality." Hence, it was in effect alleged that defects outside those particularised in paragraph 9 had also brought about breaches of the contract between the plaintiff and the defendant.

6. Paragraph 9, in my view, exhaustively sets out all the alleged breaches of the contract on account of reasonable fitness and merchantability between the plaintiff and the defendant.   Mr. Smith is quite correct : what is, in essence, being sought by the defendant for the moment is to introduce particulars given under a subsequent paragraph, which were impliedly excluded by the comprehensive particulars of an earlier paragraph. Reading these above passages, it is difficult for any reasonable pleader to suspect that the exhaustive particulars for alleged breaches given under paragraph 9 are in fact being sought to be so extended. What the particulars given under paragraph 11 seem to say is that the defendant's overseas buyers complained of defects that would go to the merchantability and fitness of the goods for either the purpose of re-sale or the purpose under the contract between the plaintiff and the defendant. Although there may be adistinction between the two, it cannot be a matter of any real significance. Plainly, the particulars given under paragraph 11 are not easy to follow.

7. If, indeed as I see it, paragraph 9 of the Re-Amended Defence does contain an exhaustive list of alleged breaches of contract against the plaintiff, then it is difficult to see how the exhaustive list of alleged breaches of contract could compatibly be re-opened and added to by a subsequent paragraph without proper amendments.

8. Pleadings are intended to put an adversary on notice of a party's case so as to ensure that he would not be taken by surprise at the trial. The particulars in (4) given under paragraph 11 could be taken as seeking to enlarge the parameter of the particulars given under paragraph 9, but that would be, in my view, a tortuous course in pleading, which no party should be encouraged or granted any indulgence to follow.

9. In view of paragraph 9, the opening of Mr. Smith, the conduct of the proceedings of the defendant through their counsel, the belated attempt to enlarge the exhaustive list of alleged breaches of contract and the ambiguous and inconsistent nature of a later assertion, particulars given under paragraph 11 should not be admitted to quality the alleged breaches of paragraph 9. Indeed, it would not be reasonable or fair to allow the defendant to do so.

10. In my view, paragraph 9 contains an exhaustive list of alleged breaches of contract against the plaintiff by the defendant. If the defendant seeks to go beyond matters contained in or otherwise disturb that list, it would only be fair for the defendant to make an application to put their house in order. I hold that the defendant is bound by the alleged breaches of contract against the plaintiff given in the particulars of paragraph 9. I would not permit the ambit of that list extended by reference to particulars given under a later, ambiguous and inconsistent paragraph. And I so rule.

Representation:

Mr. C. Smith instructed by Messrs. Samuel Soo & Co. for the Plaintiff.

Mr. B. Chain instructed by Messrs. Kao, Lee & Yip for the Defendant.