Gourmet Coffee Roasters Cc v. Regent Way International Ltd
Read the full judgment text of DCCJ 6478/2003 on BabelCite. This District Court judgment was delivered on 1 December 2004.
1. Interlocutory judgment in this action was entered on 9 December 2003 as the defendant failed to file an intention to defend the plaintiff’s claim against it. Today’s hearing is an assessment of damages hearing.
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DCCJ6478/2003 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CIVIL ACTION NO. 6478 OF 2003 ______________________ BETWEEN
______________________ Coram: H H Judge H C Wong in Court Date of Hearing: 1 December 2004 Date of Delivery of Judgment: 1 December 2004 ASSESSMENT OF DAMAGES 1.Interlocutory judgment in this action was entered on 9 December 2003 as the defendant failed to file an intention to defend the plaintiff’s claim against it. Today’s hearing is an assessment of damages hearing. 2.The defendant failed to appear on any of the pre-trial hearings and further failed to appear today for the assessment of damages. Therefore, it was heard in the absence of the defendant. Background 3.The plaintiff is a South African corporation. It purchased from the defendant, a Hong Kong company, 7,416 units of model number Y4024, coffee plungers, and 672 units of spare glasses for the said model of coffee plunger, in the sum of US$13,357.61 under an agreement evidenced in a proforma invoice dated 3 July 2002 and a commercial invoice dated 22 August 2002. 4.The plaintiff found upon delivery in South Africa on 21 September 2002 that 78 per cent of the coffee plungers delivered failed to meet the quality of the sample supplied by the defendant. This 78 per cent is 78 per cent of the total order which included other models than model Y4024. 78 per cent represent the number of model Y4024. The plaintiff therefore claims against the defendant for damages and loss suffered. The plaintiff’s evidence on the quantum of damages 5.The plaintiff’s evidence was given by way of an affidavit from its sales manager, Mr Michael Edward Bayer, of 22 November 2004 and the exhibits to the affidavit. Mr Bayer did not come to Hong Kong to give evidence nor were there any other witnesses called at this hearing. 6.Under my earlier order of 5 October 2004 leave had been granted to the plaintiff to read out the plaintiff’s witness statement or affidavit at the assessment of damages and the plaintiff was granted leave that its witness shall not be cross-examined or be required to attend court. Leave had been further granted to permit the plaintiff to rely on the inspector’s report from SGS South Africa PTL Limited dated 6 August 2003 without calling the maker of the report. 7.The invoices produced confirmed that the parties had contracted that the transaction would be paid in US dollars. The evidence also showed that the defendant was paid by letters of credit in US dollars the sum of US$16,988.91. According to Mr Bayer’s affidavit evidence, not all models of the coffee plungers were found to be defective, only model Y4024 were. Mr Bayer further produced a purchase order placed by Rieses Food Imports for 6,000 units of coffee plungers. This purchase order is dated 27 June 2002 and these 6,000 units were to be delivered on or before 15 September 2002. 8.It is also stated in the purchase order that the coffee plungers were to be used by Rieses to promote a brand of coffee in the supermarkets. The packaging will consist of a coffee plunger with a pack of coffee to be packed by Rieses. No mention was made of the price charged by the plaintiff or the price offered by Rieses for these 6,000 units of coffee plungers in this purchase order. The plaintiff claimed that the agreed purchase price for the coffee plunger model Y4024 was 35 Rand each which at the time was equivalent to US$3.68. This constitutes the plaintiff’s claim against the defendant over and above the purchase price of US$13,357.61. 9According to Mr Bayer’s evidence, out of the 7,416 units of model Y4024 Rieses order was for 6,000 units. The 298 cartons of model Y4024 constituted 78 per cent of the total consignment of goods ordered and paid for and the remaining 22 per cent were not defective. As a result of the defects in the model Y4024 the plaintiff claims it is not able to sell to Rieses Foods. Subsequently a total of 278 cartons of Y4024 was sent to SGS inspector for an inspection report. The report stated that SGS inspected 200 units for appearances and tested 20 samples. The defects found by them were below the acceptable quality level. It was SGS’s conclusion that “the commodity found to be non-conforming to our client’s requirement in both physical appearance and to the test done. We therefore find the consignment submitted for inspection to be of no commercial use.” 10.Mr Bayer’s evidence was that the plaintiff tried to negotiate with the defendant and find a solution for it. The effort failed. On 31 January 2003 the plaintiff purchased through a third party 1,560 replacement sieves and springs at a total cost of US$302.32, close to 2,116.3 Rand, together with courier cost of US$97. Unfortunately, these failed to solve the problem for the plaintiff. Mr Bayer claimed that the plaintiff sent him to Guangzhou on 12 October 2002 to 13 October 2002 to resolve the problems with the defendant. However, the matter remained unresolved. He claimed the expenses incurred for the 10-day trip to Guangzhou and Hong Kong. 11.The plaintiff further claims courier costs for returning some of the defective sieves in the sum of US$959.70. The plaintiff claims further the loss of profits of US$15,708 from the sale to Rieses and the remaining 1,516 units it could have sold in the open market at a profit of US$3. Conclusions 12.The evidence of the plaintiff is based solely on the affidavit evidence of Mr Bayer. Mr Firmin, the plaintiff’s solicitor, admitted that Mr Bayer’s affidavit is far from perfect and free of errors and since no further evidence has been adduced and Mr Bayer not being present in court to clarify the uncertainties and ambiguities arising in his affidavit I should accept only those evidence that I find are reasonable and satisfactory on a balance of probability and to be acceptable as proof. On the quantum of damages 13.First, for the price paid. I accept the evidence of SGS inspection report that out of the 278 cartons only 200 samples were examined and 20 tested. They represented, however, the general quality and condition and they are sufficient samples of the 278 cartons of model Y4024 coffee plunger. I further accept Mr Firmin’s calculations that this represented a total of US$13,357.61 which was the price paid for the model Y4024. I shall allow the assessment of this item at US$13,357.61. 14.Second item, freight and duty charge. As to the freight charge of 64,334.43 Rand, which is 78 per cent of the charge for the total of goods ordered and shipped, it is 78 per cent of the freight and duty paid of 82,480.04 Rand. 15.Item 3 and 4, replacement of sieves and springs. The plaintiff claimed it had through a third party purchased replacement sieves and springs which did not solve the problem. The cost incurred was 2,116.30 Rand and a freight charge of US$97 courier charge. 16.The fifth item, cost of the SGS report. I shall allow in full this claim of 3,552.24 Rand. 17.As to the trip to Hong Kong and Guangzhou, I am not convinced that Mr Bayer travelled to Guangzhou solely for the purpose of resolving this dispute when it was quite clear by then through correspondences and emails that the defendant had apparently refused to resolve the dispute. From Mr Bayer’s itinerary to China he spent day three to day six at the Canton Fair which had nothing to do with the goods purchased from the defendant. Neither would visiting the factory on day seven help the situation for the plaintiff’s contract was with the defendant not with the factory, the manufacturer. It is therefore clear to me that Mr Bayer’s main purpose of visit was to the Canton Fair and he had stopped over in Hong Kong before going to the fair in Guangzhou in order to talk to the defendant’s representative in Hong Kong. He did mention in his itinerary that he had looked at other goods at the defendant’s office so the visit clearly is not just for the purpose of resolving the dispute, as far as this contract is concerned. I will therefore allow only the part relevant to resolution of this contract according to his itinerary a charge of US$170 for his stay in Hong Kong on day two. 18.Item 7, return of defective goods of 959,070 Rand. I will allow this in full. This is equivalent of US$137.10. 19.Loss of profit. I will allow the loss of profit to Rieses of the 6,000 units ordered at the average price of US$1.91. Therefore the loss was US$11,460. 20.I am not, however, satisfied the remaining 1,426 units could have been sold at a profit of US$3. I will allow the sum of $1 each for each of the 1,416 units. I accept Mr Firmin’s submission that the plaintiff has lost in the currency exchange due to the devaluation of the US dollar against the South African Rand and this amount comes to US$9,844.73 representing a $60,643.55 Rand difference in the currency exchange. 21.In summary:
22.Interest on the judgment from date of writ at half judgment rate up to date of judgment and full judgment rate until full payment. Costs to the plaintiff to be taxed if not agreed.
Present: Mr Paul Firmin, of Messrs Oldham, Li & Nie, for the Plaintiff
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