Bbc Cable Engineering Co Ltd v. Hydrotech Professional Ltd

DCCJ838/2005

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 838 OF 2005

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BETWEEN

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Coram: Deputy District Judge W. K. Kwok in Chambers.

Date of Hearing: 25^th July 2005 and 30^th September 2005.

Date of Handing Judgment: 15^th November 2005.

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JUDGMENT

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1.This is an application for summary judgment by the Plaintiff against the Defendant for the sum of $487,420.80, being the unpaid purchase price of certain cables sold and delivered by the Plaintiff to the Defendant in or about December 2004.

The Plaintiff’s Case

2.The Plaintiff’s case was outlined in the Writ of Summons and Statement of Claim, its Reply and Defence to Counterclaim, as well as the two affirmations filed by Mr. Ng Wing Chiu Raymond (“Mr. Ng”) on 11^th May 2005 and 10^th June 2005 respectively.

3.The Plaintiff’s case was that it was at the material times the Hong Kong sole agent for the supply of “Pirelli” cables.  Such cables were manufactured by “Pirelli”, a company based in Britain, and the Plaintiff had no involvement in the production of the “Pirelli” cables.

4.On 14^th May 2004, the Defendant entered a contract with the Drainage Services Department for supply and installation of electrical and mechanical equipment for Sludge Digestion Tanks No. 13 & 14 at Sha Tin Sewage treatment works stage III extension (“the Project”).

5.On or about 27 July 2004, pursuant to the Defendant’s request, the Plaintiff sent to the Defendant a quotation (“the Quotation”) for the supply of certain “Pirelli” cables for the Project. 

6.On or about 28 July 2004, the Defendant sent to the Plaintiff a purchaser order (“the Purchaser Order”) for the purchase of (a) 1,254 metres of 1,000 mm² 600/1000 volt I/C XLPE/AWA/PVC Copper Conductor To BS5467 at the total price of $583,110 (“the 1,000 mm² cables”); and (b) 98 metres of 150 mm² 600/1000 volt 4/C XLPE/SWA/PVC Copper Conductor To BS5467 at the total price of $26,166 (“the 150 mm² cables”).

7.The Purchase Order stipulated inter alia that “all cables shall deliver to our store at Yuen Long on or before October 30^th , 2004”.  The delivery date was underlined in the Purchase Order.

8.The Plaintiff signed and returned the Purchase Order to the Defendant, and for the present purpose, Mr. Lawrence Lam, Solicitor for the Plaintiff, was prepared to accept that the Plaintiff did so on 28^th July 2004.

9.It was the Plaintiff’s case that despite the signing of this Purchase Order, the Purchase Order had to be read together with the Quotation where it was stated that the particulars therein including the expected delivery date were “subject to manufacturer final confirmation”.  The Plaintiff further said that since the Plaintiff was only the sole agent and not the manufacturer of “Pirelli” cables, the Defendant was or ought to be well aware that the actual delivery date of the cables had to be subject to the confirmation of the manufacturer.

10.On 4^th August 2004, the Plaintiff by a letter dated 4^th August 2004 informed the Defendant that the Plaintiff was unable to accept the Defendant’s order because the manufacturer had advised them that the minimum manufacturing quantity for the 150 mm² cables was 2,000 metres per order.  Meanwhile, the Plaintiff and the Defendant were waiting for the manufacturer’s confirmation on the expected delivery date for the 1,000 mm² cables.

11.On 4^th November 2004, the Plaintiff informed the Defendant by letter that 946 metres of the 1,000 mm² cables were expected to arrive at Hong Kong on or about 24^th November 2004, and the remaining 308 metres on or about 29^th November 2004.  It was the Plaintiff’s case that Mr. W. S. Man (“Mr. Man”) of the Defendant then confirmed with Mr. Ng over the phone the Defendant’s agreement to those expected delivery dates.

12.In respect of the 98 metres of the 150 mm² cables stated in the Purchase Order, the Defendant by a fax dated 6^th November 2004 asked the Plaintiff whether it could supply to the Defendant a few pieces of shorter cables to make up the aforesaid order.  After checking its stock, the Plaintiff agreed to sell to the Defendant 98 metres of the 150 mm² cables at the unit rate of $267 per metre.

13.According to the Plaintiff, on or about 25^th November 2004, its shipping clerk Miss Wong (“Miss Wong”) informed Mr. Man that the 946 metres of the 1,000 mm² cables were ready for delivery.  Mr. Man however stated that there was insufficient space in the site to store the goods for the time being, and asked Miss Wong to withhold delivery until early December 2004 when the parties should fix another date for delivery of the goods.

14.In early December 2004, Miss Wong and Mr. Man agreed over the phone that the 946 metres of the 1,000 mm² cables were to be delivered on 16^th December 2004.  Meanwhile, another 305 meters of the 1,000 mm² cables had arrived, and Mr. Man directed the Plaintiff to deliver them to the Defendant also on 16^th December 2004 together with the 946 metres.

15.On 16^th December 2004, the Plaintiff duly delivered the respective lots of 946 metres and of 305 metres of the 1,000 mm² cables to the Defendant who duly acknowledged receipt of the same.

16.As far as the 98 metres of the 150 mm² cables were concerned, the Plaintiff delivered them to the Defendant on 16^th and 20^th December 2004.  The Defendant had also duly acknowledged receipt.

17.By a cargo receipt dated 16^th December 2004, the Defendant confirmed that it had received the goods in good order and condition. 

18.The Plaintiff therefore claimed that the Defendant was liable to pay for the goods sold and delivered.  After deducting the deposit paid by the Defendant, it claimed that the Defendant was liable to pay $487,420.80.

The Defendant’s Case

19.The Defence and Counterclaim as well as the affirmation of Tang Chun Tung filed on 27^th May 2004 outlined the Defence case.

20.There was no dispute that the Defendant did purchase and receive the said quantity of the 1,000 mm² cables and the 150 mm² cables from the Plaintiff. 

21.It was the Defendant’s case that the cables so ordered were to be used in the Project with the Drainage Service Department.  According to the Defendant, it was bound by its contract with the Drainage Service Department that it had to complete the Project on or before 25^th July 2005, failing which it was liable to pay liquidated damages in the sum of $8,045 for each day of delay.

22.The Defendant’s defence was that the Purchase Order represented the contract made between the parties, and that it was a fundamental term and condition of the contract that the Plaintiff should deliver all the cables on or before 30^th October 2004.  The Defendant expressly denied the Plaintiff’s contention that the terms of the contract, including the delivery date of the cables, were subject to the manufacturer’s confirmation.  To support its contention that the Purchase Order represented a binding contract regarding all the particulars stated therein, the Defendant pointed out that it had paid 20% of the purchase price upon signing of the Purchase Order and had caused the issuance of an irrevocable letter of credit in the sum of $487,420.80 in favour of the Plaintiff by the Bank of East Asia on or about 8^th October 2004. This letter of credit stated explicitly that the deliveries had to be effected on or before 31^st October 2004.

23.The Defendant also denied specifically that it had received from the Plaintiff the letter dated 4^th August 2004 referred to in paragraph 10 above in which the Plaintiff allegedly said that it was unable to accept the Defendant’s order.

24.The Defendant further contended that the Plaintiff had failed to deliver the goods on or before 30^th October 2004 as stipulated in the Purchase Order despite its repeated requests and demands.  It stated that the Plaintiff delivered the cables to its Yuen Long store on 25^th November 2004, 9^th December 2004, 14^th December 2004 and 20^th December 2005, and that it was forced to accept these late deliveries because it had to carry out its duties and responsibilities with the government and had no time to obtain the cables from other suppliers.

25.In particular, the Defendant pleaded in paragraph 14 of its Defence that because of the Plaintiff’s failure to deliver the cables on or before 30^th October 2004, “the Defendant was unable to organize the major equipment for testing until 25^th January 2005 which was originally scheduled on 4^th January 2005”.

26.In paragraph 15 of the Defence, the Defendant referred to a letter dated 25^th February 2005 issued to it by the Drainage Service Department which voiced its complaint against the Defendant for the slow progress of the Project and requested for its completion without further delay.  In its Counterclaim, the Defendant alleged that as a result of the late delivery of the cables, the Defendant had suffered loss and damages in that it faced a potential claim from the Drainage Services Department and that it had to incur additional costs caused by a delay in the completion of the Project.

27.In paragraph 19 of the affirmation of Mr. Tang Chun Tung which was affirmed on 27^th May 2005, he quantified the Defendant’s loss at not less than $989,760.00.

Discussion

28.Since the Defendant admitted that the Plaintiff had sold and delivered to it the cables particularized in the Plaintiff’s claim, and since it had never raised any complaint about the quantity and quality of the cables so delivered, the Defendant was liable to pay for the price of the goods, and its liability to pay could only be excused if it established a valid defence.

29.The Defendant sought to rely upon the defence of set off by virtue of its counterclaim that it had quantified at not less than $989,760.00.

30.Mr. Lam, Solicitor for the Plaintiff, argued that, by reference to the various documents, including the Quotation and the correspondences between the parties subsequent to the Purchase Order, the Plaintiff had never agreed to deliver the cables on or before 30^th October 2004.  Mr. Lam stressed that the Defendant had never made any contemporaneous complaint that the Plaintiff had not delivered the cables on or before 30^th October 2004 according to the alleged contract.  He also pointed out that there was no complaint made by the Defendant in the cargo receipt.

31.Mr. Lawrence Hui, Counsel for the Defendant, argued otherwise.  He pointed out that the Quotation from the Plaintiff, which contained the remark “subject to manufacturer final confirmation”, was an offer from the Plaintiff, which was rejected and replaced by the Defendant’s counter-offer, i.e. the Purchase Order, which contained no term or remark that the delivery date was subject to the manufacturer’s confirmation.  He stressed that both parties had signed the Purchase Order which was therefore the contract made between the parties.

32.It is not necessary to recite further the arguments put forward by Mr. Lam and Mr. Hui.  It is sufficient for me to say that if this application turns solely on the issue whether the Defendant had put forward a triable issue that the Plaintiff had been guilty of late delivery of the cables in breach of the contract, the Defendant would have been entitled to leave to defend.  However, this is not the position here.

33.Assuming that the Defendant can prove that the Plaintiff has been late in delivering the cables in breach of the contract, the Defendant still has to establish that it has suffered loss and damage as a result of the Plaintiff’s breach which entitles it to claim a set-off (and counterclaim) against the Plaintiff’s claim. 

34.On the Defendant’s own allegation, all the cables were delivered by the Defendant on 20^th December 2004.  The Defendant alleged, in its Defence, that as a result of these belated deliveries, it was unable to organize major equipment for testing until 25^th January 2005 which was originally scheduled on 4^th January 2005.  A number of questions naturally arise for consideration.  If the cables were already available by 20^th December 2004, why was it that the test referred to by the Defendant could not be carried out on 4^th January 2005?  If the testing of the major equipment had been deferred to 25^th January 2005, there was therefore at most a delay of 22 days in the testing, but the Defendant was allowed to complete the Project on or before 25^th July 2005, i.e. 6 months after the date when the testing was carried out on 25^th January 2005, why was it that the lost time of 22 days could not be absorbed by the remaining construction period of 6 months by adopting measures like increasing manpower or extending working hours to make up the lost time?  How was it that the delay of 22 days in testing the major equipment had caused the Defendant to suffer a loss of no less than $989,760.00 as alleged?  How did the Defendant arrive at this quantum of damages?  In short, did the Plaintiff’s breach cause the Defendant to suffer the loss as alleged or at all?  The answers cannot be found in the Defence and Counterclaim or in the affirmation of Mr. Tang.

35.Mr. Hui submitted that it was not possible for the Defendant to quantity its loss with accuracy on the first day of hearing of this summons, i.e. 25^th July 2005 which was the very same day when the Project should have been completed.  However, in order to rely upon this defence, the Defendant had to condescend upon particulars.  Having obtained instructions from the Defendant, Mr. Hui eventually asked for an adjournment to file a supplemental affirmation so as to adduce evidence on the loss and damage caused by the Plaintiff.  His application was granted and the Defendant was given more than a month to prepare and file this supplemental affirmation.

36.The hearing resumed on 30^th September 2005 when neither Mr. Hui nor his instructing solicitors appeared.  The Defendant’s solicitors had in fact obtained an Order on 21^st September 2005 that allowed them to cease acting for the Defendant. 

37.Due notice of the hearing on 30^th September 2005 had been given to the Defendant, but nobody appeared for it on that day. 

38.In addition, the Defendant had not filed any further or supplemental affirmation to substantiate how the Plaintiff’s delay in delivering the cables had caused it to suffer the alleged loss and damage.  No evidence had been filed to substantiate the alleged quantum of loss.  There was simply no evidence in these regards, even though the Defendant was given an adjournment specifically for these purposes.

39.Furthermore, while the Defendant referred to a letter dated 25^th February 2005 from the Drainage Services Department in its Defence to substantiate its claim that the Plaintiff’s late delivery had caused it to suffer loss and damage, the three complaints raised by Drainage Services Department there, namely, delay in delivery of major equipment, insufficient labour and late progress of work, could not be attributed to the alleged late deliveries of the cables by the Plaintiff.

40.In an application for summary judgment, the burden fell upon a defendant to satisfy the Court that there was an issue or question in dispute that ought to be tried or that there ought for some other reason to be a trial: Order 14 rule 3 of the Rules of the District Court.  It was also trite law that a mere assertion in an affidavit of a given situation did not, ipso facto, provide leave to defend, since the defendant must satisfy the court that he has a fair or reasonable probability of showing a real or bona fide defence: Hong Kong Civil Procedure 204, paragraph 14/4/9.

41.In the present case, the Defendant’s only defence to the Plaintiff’s claim for the price of the cables is the alleged set off.  It had to show by credible evidence that there is a real or bona fide claim that the late deliveries of the cables on the part of the Plaintiff has caused it to suffer the alleged loss and damage.  No such evidence has been stated in the affirmation of Mr. Tang Chun Tung, and the Defendant does not file further or any evidence to fill up the lacuna despite having an adjournment for doing so.  It did not even appear in the resumed hearing and its counsel and solicitors had all withdrawn from the case.  Under these circumstances, I am not satisfied that the Defendant has raised a real or bona fide defence.

42.For these reasons, I rule that the Plaintiff succeeds in this application for summary judgment.

Order

(1)   Judgment be entered for the Plaintiff upon the Plaintiff’s claim against the Defendant in the sum of $487,420.80 with interest thereon at the rate of 8.069% from the date of Writ to the date of judgment and thereafter at the judgment rate until the date of payment.

(2)   Costs of this Action, together with the costs of and occasioned by this application, to be paid by the Defendant to the Plaintiff, to be taxed if not agreed.

Mr. Lawrence Lam of Messrs. Vincent T. K. Cheng, Yap & Co., for the Plaintiff.

Mr. Lawrence Hui, instructed by Messrs. Huen & Partners, for the Defendant on 25^th July 2005.

Defendant, acting in person, absent on 30^th September 2005.