Aldwick Textile Exports Ltd v. Leaguer Textiles Ltd

HCA 4789/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 4789 OF 2002

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BETWEEN

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Before: Hon A Cheung J in Court

Date of Hearing: 10 & 11 August 2004

Date of Judgment: 22 September 2004

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J U D G M E N T

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1.This is a sale of goods claim.

2.There were two contracts involving the same type of goods (cotton spandex yarn).  The Plaintiff was the buyer, and the Defendant the seller.  The 1^st contract was dated 24 April 1999 for 100 bales of yarn, to be delivered between April and June 1999.  The 2^nd contract was dated 4 days later, i.e. 28 April 1999.  It was for a further 200 bales of yarn, to be delivered between May and July 1999.

3.The unit price under both contracts was $6,400 per bale.  The payment term under the two contracts was “45 days after delivery by post-dated cheque”.  It is common ground that delivery under the two contracts was by instalments.

4.It is also common ground that the 1^st contract was completed by six instalment deliveries, which were all paid for – although not strictly in accordance with the payment term.  Performance of the 1^st contract may be summarised as follows:

5.The Plaintiff did not adhere strictly to the payment term provided under the 1^st contract in that firstly, no post-dated cheque was ever given to the Defendant upon or following delivery; secondly, all instalment payments were late.

6.As regards the 2^nd contract, there was only partial performance as follows:

7.In relation to the 2^nd contract, only three instalments, totalling 51 bales of yarn, were delivered.  The last delivery was made on 31 May 1999.  Thereafter no further delivery was made.  Like the 1^st contract, the Plaintiff did not adhere to the payment term provided in the 2^nd contract, in that the Plaintiff did not give the Defendant any post-dated cheques, it was late in relation to payment of the second instalment, and it did not pay for the first and third instalments.

8.In this action, the Plaintiff sues the Defendant for damages arising from the Defendant’s non-delivery of the balance 149 bales of yarn under the 2^nd contract.  It alleges that the yarn was purchased (to the knowledge of the Defendant) for the manufacture of fabric to be supplied to its customers.  The Defendant’s non-delivery of the balance yarn resulted in the Plaintiff’s failure to manufacture the requisite quantity of fabric due to the lack of raw material, and thus its inability to perform contracts of sale regarding the fabric with third parties.  The Plaintiff sues for damages and an indemnity.

9.On the other hand, the Defendant counterclaims for the outstanding price of the first and third instalments of yarn delivered under the 2^nd contract.  There was at one stage a claim for damages in terms of loss of profit.  At the beginning of the trial, Mr Wong, counsel appearing for the Defendant, confirmed with the Court that that relief was no longer pursued.

10.The amount of outstanding purchase price under the 2^nd contract is not in dispute.  The trial is only concerned with the Defendant’s liability, if any, in respect of the Plaintiff’s claim.  If the Plaintiff should be successful in establishing liability, then the questions of the quantum of the Plaintiff’s claim and the type of relief available would have to be dealt with subsequently, subject of course to the Defendant’s counterclaim for the outstanding purchase price which is not in dispute.

11.As mentioned above, it was the Defendant which decided to stop making further delivery of goods under the 2^nd contract after the last delivery on 31 May 1999.  At trial, the Defendant through counsel argued that the Defendant was justified to do so, even though there was a total of 149 bales of yarn yet to be delivered under the 2^nd contract, because firstly, the Plaintiff was in breach of the express payment term under the 2^nd contract, and secondly, the Plaintiff had through its director (Mr Chan) told the Defendant’s managing director (Mr Lui) in mid-June 1999 that it no longer wanted delivery of goods.

12.It is common ground that the express payment term under the 2^nd contract comprised two elements, namely a credit period of 45 days counting from delivery, and the provision of a post-dated cheque as security and for payment (upon its maturity).  Despite some disagreements at the pleading stage, Mr Lui of the Defendant accepted in evidence that a post-dated cheque need not be given by the Plaintiff at the time of delivery, but it should be provided upon receipt of the Defendant’s invoice for the instalment delivery, which would be within 10 days of the delivery in question.

13.The 2^nd contract (like the 1^st contract) did not say whether the express payment term was a condition of the contract.  Of course, if the express payment term constituted a condition, then the Plaintiff’s undenied departure from the express payment term would entitle the Defendant to terminate the contract, and thus justify the Defendant’s refusal to make further delivery under the same, subject to the Plaintiff’s argument on waiver/estoppel and subject to the consideration that the contract was one for delivery by instalments.  On the other hand, if the express payment term was merely a warranty under the contract, then the Plaintiff’s failure to strictly adhere to the express payment term would not entitle the Defendant to terminate the contract and refuse making further delivery of goods.  A third possibility is that the term was an innominate term.  For all this, see generally Chitty on Contracts (29 ed.), Vol.1, para. 12-019 et seq.

14.Having considered the terms of the contract as a whole, the nature and purpose of the express payment term, and the general evidence given by Mr Chan and Mr Lui insofar as it constituted admissible factual matrix of the contract, I am of the view that the express payment term was a condition of the contract (subject to further consideration, if necessary, that this was an instalment contract).  In particular, I am of the view that provision of the post-dated cheque was a matter of importance to the parties in that it served the dual purpose of a security to the Defendant during the credit period and the means of payment upon the expiry of the credit period and the maturity of the cheque.  (Incidentally, I note that in the contracts the Plaintiff has apparently entered into with third parties, a similar requirement for post-dated cheques can be found.)

15.However, that is not the end of the matter.  A term amounting to a condition of a contract can be waived.  It can be waived in total so that there will not be any breach at all.  It can be waived to such an extent that the innocent party loses his right to terminate the contract by reason of the breach of condition, but retains the right to sue for damages for the breach.  In the latter situation, the breach of condition is to be treated as if it were a breach of warranty only.  This brings me to the main contention raised by the Plaintiff in the present case.  It is the Plaintiff’s case that the Defendant has waived the express payment term in relation to the provision of post-dated cheques, or is otherwise estopped from asserting it.  The Plaintiff relied on the undeniable fact that for the nine instalments that had been delivered under the 1^st contract and the 2^nd contract, the Plaintiff never provided any post-dated cheque, yet that notwithstanding, the Defendant made delivery by instalments of all the goods sold under the 1^st contract and made three further instalment deliveries under the 2^nd contract before it abruptly stopped further delivery after May 1999.  Furthermore, the Plaintiff argued (and the Plaintiff’s witnesses gave evidence to that effect) that the Defendant never orally or in writing asked it for the provision of the post-dated cheques.

16.So far as documents are concerned, besides the express provisions in the two contracts, in the invoices issued by the Defendant, the Defendant invariably required the Plaintiff to provide post-dated cheques in respect of the deliveries in question as a matter of standard wording.  Indeed in the invoices, the dates of the post-dated cheques required were set out.  But it is quite true that apart from the contracts and the invoices, there was nothing in writing evidencing the Defendant’s request for the provision of post-dated cheques, whether before or after disputes between the parties arose.

17.Mr Lui of the Defendant gave evidence at trial that he and his accounts staff did orally (over the telephone) ask the Plaintiff repeatedly for the provision of the post-dated cheques.  He said that on or about 20 May 1999, he personally spoke to Mr Chan of the Plaintiff over the telephone and told him that the Plaintiff must provide the post-dated cheques, for otherwise further delivery would be affected.  Apart from a Miss Tong who did not give evidence on this aspect of the case, no other witness was called by the Defendant to back Mr Lui’s claim that he and his staff had repeatedly chased the Plaintiff for the post-dated cheques.  (At the beginning of the trial, there was an attempt by the Defendant to call one further witness, an accounting clerk, to give evidence – the application for leave to do so was opposed and counsel of his own motion withdrew the application.)

18.Both Mr Chan and Miss Leung (a clerk of the Plaintiff responsible for liaising with the Defendant for the taking of the instalment deliveries) said in evidence that there was no such oral request for post-dated cheques at all.  Contrary to Mr Lui’s allegation in evidence, Mr Chan said in evidence that in fact the Defendant never used the absence of post-dated cheques as a reason for its failure to make further delivery after May 1999.  He referred the Court to the contemporaneous correspondence between the parties regarding the non-delivery of goods (and non-payment of the outstanding purchase prices for the first and third instalments), which made no mention whatsoever of the post-dated cheques.  From his evidence, it is quite plain that he regarded the contractual provisions on post-dated cheques as a matter of mere formality and standard wording.  He said that he never gave the post-dated cheques to the Defendant, and he and his staff never received any complaints or demands from the Defendant regarding them.  

19.I have carefully borne in mind the content of the witnesses’ evidence, as well as their demeanour in Court.  I have taken into account the contemporaneous documents and considered the inherent probabilities and improbabilities of the competing versions of fact.  I prefer the respective evidence of Mr Chan and Miss Leung in this regard.  In other words, I do not accept Mr Lui’s assertion that he and his staff had chased the Plaintiff for the post-dated cheques.  His version was not supported by the contemporaneous correspondence.  He said that the failure of the Plaintiff to provide the post-dated cheques, despite his and his staff members’ repeated requests, was his reason for stopping delivery after May.  But quite surprisingly the contemporaneous correspondence between the parties made no mention of that at all.  Rather other reasons were given.

20.The Defendant’s letter dated 16 August 1999 only referred to the Plaintiff’s late payment as one of the reasons for refusing to make further delivery of goods.  It did not mention the question of post-dated cheques at all.  On late payment, it must be remembered that at the time when the Defendant started refusing to make further delivery, no payment under either the 1^st contract or the 2^nd contract had yet become due, given the 45 days’ credit period.  In final submission, Mr Wong did not rely on late payment (or non-payment in respect of the first and third instalments made under the 2^nd contract) as a ground to justify or explain the Defendant’s refusal or failure to make further delivery of goods after end of May.  No evidence to such effect was led from the Defendant’s witnesses either.

21.Mr Lui’s assertion in evidence that he had personally called Mr Chan on or about 20 May 1999 regarding the post-dated cheques was not mentioned at all in his witness statement, despite the fact that the question of waiver/estoppel had been expressly and specifically raised by the Plaintiff in its reply and defence to counterclaim.

22.Furthermore, as described above, although no post-dated cheque was given, payments in respect of the instalment deliveries under the 1^st contract were in fact made, starting from mid June.  Although all payments were made late, the fact remains that all instalments under the 1^st contract were indeed paid for between mid June and early August.  All this should have alleviated at least to some extent the Defendant’s alleged concern regarding the Plaintiff’s ability and sincerity to pay for the goods already delivered (that was the whole point of requiring the post-dated cheques).  That being the case, the Defendant’s persistent refusal to make further delivery notwithstanding the payments received between mid June and early August, on the ground that no post-dated cheques had been given, does seem to me to be rather commercially unreal – particularly when according to the evidence, the two sides and the individuals concerned had known each other for a long time and the past relationship had been good.  Rather all this suggests that the Defendant failed or refused to make further delivery for some other reasons.

23.Of course, as a matter of law, either the Defendant was entitled to treat the contract as at an end and therefore refuse making further delivery, or it was not in which case it had no right whatsoever to stop making further delivery; for laymen, the distinction should not have been so clear cut.  That was why I said that if the Defendant had concern at the time (i.e. May) in relation to the Plaintiff’s failure to provide the post-dated cheques, from mid June onward after the Plaintiff had started making payments in respect of the instalments delivered under the 1^st contract, that concern should have been alleviated at least to some extent, and there should be less reason for the Defendant to adopt such a hardened attitude of refusing to make any further delivery, leaving aside the Defendant’s allegation that Mr Chan told Mr Lui in mid-June that the Plaintiff no longer wanted further delivery of goods for the time being.

24.As I said, for these reasons and based on the totality of the evidence, I prefer the respective evidence of Mr Chan and Miss Leung to that of Mr Lui regarding the Defendant’s alleged chasing of the post-dated cheques.  As I said, I find, on a balance of probabilities, that the Defendant never chased the Plaintiff for the cheques.

25.This does not, by itself, necessarily mean that the Plaintiff’s case on waiver/estoppel can be established.  For, as mentioned above, the invoices did contain the standard wordings requiring post-dated cheques (with the dates of the post-dated cheques required clearly set out).  Moreover, one must not forget that strictly speaking one has two different and separate contracts here.  The Defendant’s failure to insist on the provision of post-dated cheques related more to the 1^st contract than to the 2^nd contract, as to which the Defendant had only made three instalment deliveries – out of which, by early June, the time for providing a post-dated cheque had only expired in respect of the first instalment.

26.However, in my judgment, the Defendant’s failure – subsequent to the issue of the invoices containing the standard wordings – to insist on the Plaintiff’s provision of the post-dated cheques, and its conduct of making further deliveries notwithstanding the Plaintiff’s persistent failure to provide the post-dated cheques, are most significant in determining whether there has been a waiver or an estoppel has arisen in the circumstances of the case.

27.Furthermore, having considered the evidence as a whole, in my judgment, it is really unrealistic to separate the two contracts in the present context.  Commercially speaking and on the evidence, the parties simply treated the 2^nd contract as a continuation of the first one.  The terms were basically identical, and the mode of performance by the two parties of the two contracts was essentially the same.  Mr Wong, in his written opening, in fact said that the two agreements were “inextricably woven” (paragraph 21).  In those circumstances, in my view, it is unrealistic to say that there has only been a waiver of the post-dated cheque requirement under the 1^st contract, and when the 2^nd contract came to be performed (after all goods under the 1^st contract had been delivered), everything should start afresh.  What happened in the 1^st contract formed, at the lowest, part of the past dealings and background circumstances against which the parties’ conduct must be judged in order to determine whether there has been a waiver of the payment term under the 2^nd contract, or whether an estoppel arose out of such circumstances.

28.In my judgment, put at the lowest, in the absence of a specific warning or notice by the Defendant that it would insist on its strict legal right regarding the provision of post-dated cheques in respect of future deliveries, the Defendant could not unilaterally revert to the contractual provisions and insist on strict compliance.  On the facts, the Defendant’s conduct, when viewed as a whole, constituted the representation that no post-dated cheques would be insisted upon; in reliance on it, the Plaintiff never bothered with providing to the Defendant the post-dated cheques. As I found above, no prior notice or warning about the Defendant’s insistence on its strict legal right was ever given, and in fact as I am going to find below, the Defendant stopped delivery as from June for some other reasons that were quite unconnected with the question of post-dated cheques.  In those circumstances, the Defendant was estopped from asserting its strict legal right regarding the provision of post-dated cheques under the 2^nd contract, at least in the absence of prior warning or notice.  In fact, if necessary, I would be prepared to go further and find that there was a waiver of the payment term regarding the provision of post-dated cheques under the 2^nd contract.

29.The second reason that the Defendant relied on at trial to justify its failure to make further delivery as from June 1999 was that Mr Chan of the Plaintiff told Mr Lui in June 1999 that the Plaintiff wanted no further delivery of goods.  Mr Lui gave evidence to that effect at trial.  Apart from his evidence, Miss Tong, a shipping clerk of the Defendant, who was responsible for liaising with the Plaintiff’s staff (Miss Leung) for arranging delivery, also gave evidence that after the 31 May 1999 delivery, the Plaintiff no longer contacted her to arrange for further delivery, and from her angle, that was why no further delivery was made.  She specifically denied Miss Leung’s evidence that the Plaintiff had made repeated requests for further delivery in June.

30.Having borne in mind the entire evidence, including the contemporaneous documents and the demeanour of the witnesses, I have no hesitation in rejecting Mr Lui’s and Miss Tong’s evidence in this regard, and prefer Mr Chan’s and Miss Leung’s evidence.

31.Mr Chan has explained at trial that the Plaintiff had entered into contracts with buyers for the fabric to be manufactured from the yarn purchased from the Defendant, and there was no reason for the Plaintiff not to ask for further deliveries from the Defendant under the 2^nd contract.  Although this trial does not concern the quantum of the Plaintiff’s claim, I have no doubt on the existing material and documentary evidence before me (coupled with Mr Chan’s evidence) that the Plaintiff has indeed entered into some contracts with buyers for the fabric, which was to be manufactured from yarn to be obtained from the Defendant pursuant to the 2^nd contract.  What, if any, loss was caused to the Plaintiff as a result of the Defendant’s failure to make further delivery as from June 1999 is a matter that does not concern me at this stage, and I do not want to make any finding on it.  But based on the limited finding that I have just made, I agree with Mr Chan that there was no reason whatsoever for the Plaintiff not wanting further delivery of goods in June 1999.

32.As for the contemporaneous correspondence, I accept that the letter dated 10 August 1999 and 18 August 1999 written by the Plaintiff would seem to support the Plaintiff’s present allegation, whereas the letter written by the Defendant (i.e. the one dated 16 August 1999) would seem to support Mr Lui’s allegation that Mr Chan had told him that the Plaintiff no longer wanted further delivery of goods.

33.Mr Lui’s evidence that in mid-June Mr Chan told him that the Plaintiff no longer wanted any further delivery of goods and Miss Tong’s evidence that after the 31 May delivery the Plaintiff no longer called her to ask for further delivery did not really match each other, because between 31 May and mid-June, even according to Mr Lui’s case, the Plaintiff was still wanting some further delivery, and that being so, there was no reason why Miss Tong would have stopped receiving telephone calls from Miss Leung regarding arrangements for further deliveries.  Moreover, the Defendant’s letter dated 15 August 1999 referred to Mr Chan’s wanting initially to delay taking delivery and subsequently to stop taking delivery anymore (after taking some further deliveries).  All this does not square exactly with Mr Lui’s evidence, nor does it fit well with Miss Tong’s evidence (that the Plaintiff never approached her again for further delivery after 31 May 1999).

34.I wish to make clear that I have also borne in mind Mr Lui’s evidence in Court that according to the stock record kept by his company, the Defendant had sufficient stock to meet the demand under the 2^nd contract.  However, the stock record is of little value here because without knowing what the Defendant’s contractual commitments to all its customers at the material time were (on which there is nearly no evidence), it is difficult to tell whether the warehouse stock was sufficient to meet the demand under the 2^nd contract.

35.As regards the competing versions of fact given by Miss Leung and Miss Tong, I must say that I am much more impressed by the demeanour of Miss Leung than that of Miss Tong in Court.  Furthermore as I said, Miss Leung’s evidence that she had repeatedly chased Miss Tong for further delivery was evidenced by one of the contemporaneous letters, i.e. the Plaintiff’s letter dated 18 August 1999, to which there was no written reply from the Defendant.

36.I have not forgotten that the Defendant further wrote to the Plaintiff on 11 November 1999 alleging that Mr Chan had promised Mr Lui in September that the Plaintiff would settle the outstanding purchase prices for the first and third instalments of goods delivered under the 2^nd contract within another two weeks’ time, which was not done.  Mr Chan said in evidence that there was no such agreement but accepted that there was no reply to the Defendant’s letter.

37.I have also borne in mind that since then, at least according to the documentary evidence, there was a period of silence of three years until the Defendant instructed solicitors to write to the Plaintiff demanding payment of the outstanding purchase price, and a letter dated 9 December 2002 was thus sent (– there was some suggestion that Mr Chan had been imprisoned in the Mainland for a period of time).  In response to the solicitors’ letter, the Plaintiff commenced the present action on 23 December 2002.

38.None of all this is really conclusive either way, but I have borne everything including what I have just outlined in mind, in reaching my findings of fact.

39.As I said, on the totality of the evidence before me, I have no difficulty in preferring the evidence of Mr Chan and Mr Leung, to that of Mr Lui and Miss Tong.

40.Pausing here to summarise: I find that the Defendant never chased the Plaintiff for the provision of post-dated cheques, and the Plaintiff never told the Defendant in June (or thereafter) that it no longer wanted further delivery of goods.  Furthermore, I conclude that the Defendant is estoppel from asserting (in the absence of prior warning or notice), or has waived, the requirement of post-dated cheques in the 2^nd contract.  In the latter case, whether that was a complete waiver or a limited one reserving to the Defendant a right to claim damages as if there had been a breach of warranty is academic because Mr Wong accepted in final submission that no such damages are being counterclaimed.  For reasons of its own – probably due to a shortage of supply (but I need not make any specific finding here), the Defendant stopped making delivery after May 1999.

41.In those circumstances, I further conclude that the Defendant was not entitled to stop delivery after May 1999.  Its refusal or failure to make further delivery under the 2^nd contract as from June 1999 constituted a wrongful breach of the 2^nd contract.

42.Mr Wong for the Defendant ran, in those circumstances, a fallback argument to the effect that: despite the Defendant’s wrongful breach of the 2^nd contract the Plaintiff kept on requiring further delivery, the 2^nd contract was thus kept alive, and both parties had to perform their respective obligations thereunder.  The respective credit periods for the first and third instalments expired in July, yet the Plaintiff refused to make payment.  The Plaintiff was therefore in repudiatory breach of the 2^nd contract, and the Defendant was entitled to accept the repudiation.  In that way, the Defendant was justified in not making further delivery, as least as from July.

43.I do not accept the argument.  It must not be forgotten that the 2^nd contract was an instalment contract.  The failure to make payment related only to two instalments, comprising in total 42.5 bales of goods, out of a total of 200 bales.  In those circumstances, in my judgment, the ultimate question to ask is whether in all the circumstances of the case, viewed objectively, the Plaintiff had evinced an intention, by its failure or refusal to pay for the two instalments in question, no longer to be bound by the 2^nd contract, or not to perform its part of the contract anymore.  See generally Benjamin’s Sale of Goods (6^th ed.) para. 8-063 et seq.; Sale of Goods Ordinance (Cap. 26) s. 33(2).

44.In my judgment, the answer is “no”.  First, by then (July), the Defendant had been in wrongful breach of the 2^nd contract for over a month by its wrongful refusal or failure to make further delivery.  The Plaintiff’s refusal to make payment was plainly in response to the Defendant’s refusal to make further delivery.  Moreover, the Defendant’s refusal to make further delivery must have started causing the Plaintiff some loss (the quantum of which will have to be assessed), and understandably – viewed objectively and commercially, the Plaintiff was withholding further payments by way of a set-off.

45.In those circumstances, I would conclude that although the Plaintiff refused to make payment in respect of the two instalments, that did not represent an intention on the Plaintiff’s part no longer to be bound by the 2^nd contract.  The fact that the Plaintiff nonetheless made payments under the 1^st contract (following the expiry of the respective credit periods for the various instalment deliveries under the 1^st contract) is, in my judgment, neither here nor there.  It does not affect any of the above considerations.

46.Another way of looking at the matter is this: the Plaintiff’s refusal to make payment of the two instalments upon the expiry of the respective credit periods could simply be viewed as the Plaintiff’s acceptance by conduct of the Defendant’s continuing wrongful repudiation of the 2^nd contract (in refusing or failing to make further delivery as from June 1999).

47.Both as a matter of law and as a matter of common sense, I do not find it just or right that the Plaintiff’s refusal to make payment of the two instalments, against the background of the Defendant’s wrongful and persistent refusal or failure to make further delivery of goods for over one month, could somehow be turned around into a justification for the Defendant’s wrongful refusal or failure to make further delivery of goods.

48.As I said, I reject Mr Wong’s fallback position.

49.In those circumstances, I conclude in favour of the Plaintiff on liability.  In other words, I hold and find that the Defendant was in wrongful breach of the 2^nd contract in refusing or failing to make further delivery of goods under the 2^nd contract as from June 1999.

50.As I said, this trial is only a trial on liability (of the Plaintiff’s claim).  Furthermore, there is an undisputed defence of set off and counterclaim regarding the outstanding prices in the total sum of $272,000.  The Plaintiff’s claim for damages and the Defendant’s counterclaim for the outstanding prices arose out of one single contract, i.e. the 2^nd contract.  There should be a set off between the damages and the outstanding prices, and depending on the figures, a net judgment should be entered for either the Plaintiff or the Defendant against the other.  A complication might arise because of the Plaintiff’s claim for an indemnity.  At this stage it is difficult to tell whether that complication would really arise or not.

51.In those circumstances, subject to the parties’ consent to the course proposed (see Order 36, Rules of the High Court, Cap. 4A), I would simply adjourn the question of relief both under the action and the counterclaim for trial before a master.  After the assessment of damages and the determination of the Plaintiff’s claim for an indemnity (by way of a declaration), if the parties cannot agree on what judgment or judgments should be entered in respect of the claim and counterclaim, the parties shall be at liberty to apply to this Court for directions and determination.  The proposed course has been indicated to the parties at trial, who have raised no objection to it.  Unless either party should indicate its disagreement in writing with supporting reasons to the Court within 7 days after this judgment is handed down, the necessary consent shall be deemed to have been given, and the court order shall be drawn up accordingly.

52.As regards costs, given that the amount of damages arising from the Defendant’s breach of contract is at this stage unknown, I would reserve the question of costs to the master.  If the master should feel able to deal with the question of costs upon the completion of assessment of damages and determination of the Plaintiff’s claim for an indemnity, the reserved costs (as well as the costs of the hearing before the master) may be dealt with by the master.  But if there should be any difficulty in dealing with the reserved costs, the master may refer the question of the reserved costs to this Court for determination, failing any agreement by the parties on the same.

53.I thank counsel for their patient assistance.

Miss Joan MC Auyang, instructed by Messrs Ho & Ip, for the Plaintiff

Mr Jonathan Wong, instructed by Messrs King & Co., for the Defendant