Grand Connection Ltd v. Jundle Holdings Ltd
Read the full judgment text of DCCJ 3611/2004 on BabelCite. This District Court judgment.
1. The Plaintiff, a garment manufacturer, sold a batch of ladies’ 100% wool woven skirts (the “ Goods ”) to the Defendant, which in turn re-sold the Goods to Ventilo in France. The Plaintiff claimed for the outstanding price of the Goods (the “ Price ”) as follows :
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DCCJ3611/2004 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CIVIL ACTION NO. 3611 OF 2004 ____________ BETWEEN
____________ Before: Her Honour District Judge Marlene Ng in Court Dates of Hearing: 20th, 21st and 22nd June, 2005 Date of Handing Down Judgment: 25th November, 2005 ______________ J U D G M E N T _______________ I. Introduction 1.The Plaintiff, a garment manufacturer, sold a batch of ladies’ 100% wool woven skirts (the “Goods”) to the Defendant, which in turn re-sold the Goods to Ventilo in France. The Plaintiff claimed for the outstanding price of the Goods (the “Price”) as follows :
Subject to the counterclaim below and its assertion that a finance charge (the “Finance Charge”) should be deducted from the Price, the Defendant accepted it had not paid the Price. 2.The Defendant claimed that the parties had a mutual understanding at the time of contract that if it supplied the fabric for the Goods (the “Fabric”), it would charge a Finance Charge of 5% (the “5% Rate”) on the cost of the Fabric (the “Fabric Cost”) against the Plaintiff. Hence, the Price according to the Defendant should be :
On the first day of the hearing, I granted the application by Mr Cheung, solicitor for the Defendant, to amend the Defence and Counterclaim to plead the amended figures marked by the asterik sign above. However, it appears that as a matter of arithmetical calculation the figures marked by superscript 1, 2 and 3 should in fact be the original pleaded figures of US$6,724.09, HK$52,313.42 and HK$28,386.52 respectively. 3.The Plaintiff denied any Finance Charge was chargeable by the Defendant or deductible from the price of the Goods. 4.The Defendant counterclaimed for loss of profit in the sum of HK$174,877.00 due to reduction in custom from Ventilo as a result of the defective quality of the Goods, namely, that the Goods were not reasonably fit for purpose or of merchantable quality and they failed to comply with description. 5.The issues in this case are as follows :
6.The Plaintiff commenced its claim in the Small Claims Tribunal. On 6th July 2004, the learned adjudicator transferred such claim and the Defendant’s counterclaim to the District Court. The Plaintiff acts in person and is represented by its director and witness, Mr Lau Koon Chung Hermes (“Lau”). The Defendant’s director, Mr Jean-Luc Yves Cabirol (“Cabirol”), gave evidence. Both of them are experienced in the garment trade. II. Background relationship 7.Since 2000, the parties have worked together to supply garments to Ventilo. The Plaintiff sub-contracted the manufacturing process to factories in Mainland China, including Hang Hing Fashion Company (“Hang Hing”). Hang Hing manufactured the Goods. III. The contract between the parties and the purchase of the Fabric 8.French Genuine Creations Limited (“Genuine Creations”) was the supplier of the Fabric. By a shipment advice dated 30th April 2002 to the Defendant, it advised that 1,924m of fabrics (including 962.3m of the Fabric) were estimated to arrive in Hong Kong on 5th May 2002 and requested the Defendant to send a bank draft for US$14,430.00 on/before 3rd May 2002. Genuine Creations issued an invoice dated 14th May 2002 (the “Fabric Invoice”) to the Defendant for the sale of 1,793m of fabrics for US$13,447.50 (of which the Fabric Cost was US$7,217.25). The Fabric Invoice asked inter alia for payment by bank draft in exchange of bill of lading. The Defendant paid the Fabric Invoice by cheque dated 14th July 2002 (the “Cheque”). 9.The Defendant gave Ventilo’s sketch and sample garment to the Plaintiff for quoting a price for the Goods. At the end of June or the beginning of July 2002, Ventilo confirmed with the Defendant its order for the Goods. About 1-2 weeks before 20th July 2002, the Plaintiff quoted a price for the Goods. After some negotiations, the parties agreed to the price stated on the Contract (see below). The Defendant finalised the purchase order dated 20th July 2002 for the Goods at US$24.20/piece “FOB HK IQ” (the “Contract”). The Contract specified that the Plaintiff should ship/air the Goods by 5th September 2002. (a) Defendant’s case 10.The Defendant always purchased finished garments from the Plaintiff on an FOB basis, which meant the Plaintiff would organise and, if required, sub-contract printing, embroidery and beading works to specialised mills/factories. The Defendant would not pay for the fabrics, embroideries or accessories for garment manufacturing. (b) Plaintiff’s case 11.Although the Contract was stated to be on FOB basis, the parties knew at the time of signing the Contract that the Fabric Cost paid for by the Defendant would be deducted from the price of the Goods. Since the Defendant paid the Fabric Cost and the embroidery charges, the Contract was essentially a CMT or “false FOB” contract. Cabirol, an experienced garment trader, should be familiar with “false FOB” contracts, which were common in the garment trade. Under a “false FOB” contract, the buyer and the factory would agree on the cost of the fabric, which the buyer would pay for if the factory were unable to do so. The factory’s cost for manufacturing the garments calculated on a unit cost basis together with the cost of the fabric would become the “false FOB” price. A “false FOB” contract was effective in controlling fabric wastage and minimising cost to the advantage of the buyer. If fewer garments were produced due to excessive fabric wastage, the total “false FOB” price would become reduced since the cost of the fabric remained unchanged. (c) Analysis 12.In my view, during the negotiations for and at the time of signing the Contract, the parties knew the Defendant would be responsible for paying the Fabric Cost. They further knew that the Contract (despite an express provision to the contrary) was not a genuine FOB contract and the Fabric Cost would be deducted from the “false FOB” price. 13.Cabirol at first said he expected the Plaintiff to immediately pay the Fabric Cost and commence production of the Goods since the order was very rushed. He claimed that during negotiations the Plaintiff never mentioned any difficulty with paying the Fabric Cost. But a few days before the date of the Cheque (14th July 2002), the Plaintiff/Hang Hing revealed they were financially unable to open a letter of credit or otherwise pay the Fabric Cost. The Defendant helped by issuing the Cheque to pay the Fabric Cost. Although there was as yet no formalised Contract between the parties, there was mutual trust from past dealings and an understanding that the Fabric Cost would be deducted from the price of the Goods. 14.Such evidence suggested it was all along the Plaintiff’s responsibility to pay the Fabric Cost and it was only a few days before 14th July 2002 when the Plaintiff’s poor financial situation was revealed that the Defendant paid the Cheque. But such evidence did not sit well with Genuine Creations’ shipment advice and the Fabric Invoice both of which were addressed to the Defendant and dated 14th May 2002 (ie 2 months before the date of the Cheque). There was no or no reasonable explanation, so I have no hesitation in rejecting Cabirol’s evidence referred to above. 15.Cabirol’s evidence evolved when he was confronted during cross-examination with the courier slip dated 14th May 2002 (ie the date of the Cheque) from Genuine Creations to the Defendant with the remark “Re: Invoice IO22083(A)” (similar to the reference number of the Fabric Invoice). He conceded he was unsure whether the Cheque was post-dated or not and/or whether such slip was for courier collection of the Cheque by Genuine Creations. Such concession did not sit well with his above suggestion that until a few days before 14th July 2002 it was still contemplated that the Plaintiff should pay the Fabric Cost. Cabirol was constrained to explain that in fact the Plaintiff was unable to reimburse the Defendant for the Fabric Cost, not that it was unable to arrange for the issuance of a letter of credit to pay Genuine Creations. 16.Cabirol clarified and expanded on the subject in re-examination. He said the Fabric was originally intended for another order of Ventilo garments, which order was placed by the Defendant with the Plaintiff (the “Other Order”) together with other orders from Ventilo for the winter 2002 season. The Fabric turned out to be too sheer, so Ventilo cancelled the Other Order but promised to use up the Fabric by a future order. The other fabrics for the Ventilo garments for the winter 2002 season were paid by a letter of credit dated 8th May 2002 arranged by Hang Hing. The Plaintiff refused to pay for the Fabric because it was not responsible for the cancellation of the Other Order. The Defendant (to the Plaintiff’s knowledge) paid for the Fabric Cost by the Cheque. It did so because of its steady business relationship with Genuine Creations and because it was expected that Ventilo would take up responsibility for the cancelled stock. The Defendant pressed Ventilo to use up the Fabric. In/about the end of June or the beginning of July 2002, Ventilo placed the order for the Goods with the Defendant, which in turn entered into the Contract with the Plaintiff, so the Plaintiff knew the Fabric would be used for the Goods. Cabirol said that since the price of the Goods was on FOB basis, the Defendant asked the Plaintiff for reimbursement of the Fabric Cost. The Plaintiff was financially unable to do so and asked the Defendant to deduct the Fabric Cost from the price of the Goods after shipment. 17.The above explanation was quite different from Cabirol’s earlier evidence on the subject and it cannot be found in his witness statement or in the Defendant’s pleadings. I find on balance that I cannot safely rely on Cabirol’s assertions in relation to the purchase of the Fabric. Even if his explanation in the above paragraph were correct, it is not unreasonable for the Plaintiff to refuse payment of the Fabric Cost in May 2002 when the Other Order was cancelled through no fault of the Plaintiff. Further, even on such explanation, it is plain that by the time the Contract was signed the parties knew that the Defendant had paid the Fabric Cost by the Cheque (whether post-dated or not). 18.I find on balance that the parties entered into the Contract on the premise that the Defendant had paid the Fabric Cost to Genuine Creations and such cost would eventually be deducted from the price of the Goods. Thus, to the parties’ knowledge the Contract was not a genuine or full FOB contract. I reject Cabirol’s attempt to rebut this by saying that the Defendant asked the Plaintiff to reimburse its payment of the Fabric Cost to Genuine Creations. It came at a very late stage in his evidence and, in my view, was a mere afterthought. It also contradicted Cabirol’s earlier explanation. In any event, other than Cabirol’s bare assertion, there is no evidence of impecuniosity on the part of the Plaintiff or its partner Hang Hing. In fact about 2 months ago in May 2002, Hang Hing was able to arrange for issuance of a letter of credit in the sum of US$33,814.00 to pay Genuine Creations for the cost of fabrics. IV. Finance Charge 19.There is no express provision for any Finance Charge in the Contract. The Defendant claimed that it (and not the Plaintiff) was entitled to charge a Finance Charge at the 5% Rate because it paid for the Fabric Cost. However, there was no counterclaim for such Finance Charge. Instead, the Defendant sought a deduction of such Finance Charge imposed by the Plaintiff from the price of the Goods. 20.The Plaintiff did not dispute that when it purchased fabrics under a genuine FOB contract, it would impose a Finance Charge, ie a mark-up over the cost of the fabrics, to cover inter alia interest for a period of about 3 months from its payment for the fabrics up to the shipment of the finished garments or to the receipt of payment for such garments (the “Interest Cost”). (a) Defendant’s practice of charging the Finance Charge 21.Cabirol claimed (a) it was common practice for the Defendant to charge a Finance Charge at the 5% Rate based on the cost of the fabric it purchased, (b) the Plaintiff was well aware of such practice given its history of doing business with the Defendant and (c) the Plaintiff had no objection to such practice. In my view, these assertions did not sit well with Cabirol’s claim that the parties previously dealt with each other on FOB basis and that the Defendant was never involved in the purchase of fabrics or in the production of the garments. In the circumstances, it is doubtful even on the Defendant’s case whether there was any common practice as alleged by the Defendant. I accept on balance Lau’s evidence that there was no such practice and the only occasion the Defendant purchased fabrics was the purchase of the Fabric under the Contract. (b) Whether the Finance Charge was included in the price of the Goods 22.Cabirol claimed that the price of the Goods stated in the Contract was inclusive of a Finance Charge at the 5% Rate because at the time of the Contract it was expected the Plaintiff would arrange for the issuance of a letter of credit in favour of Genuine Creations to pay the Fabric Cost. Eventually it was the Defendant that paid the Fabric Cost, so the Finance Charge should be deducted from the price of the Goods. 23.I reject such assertion. At best, Cabirol’s evidence upon his own clarification (which I do not consider reliable) showed that the Defendant expected reimbursement from the Plaintiff of the Fabric Cost that it had paid by way of the Cheque and it did not expect the Plaintiff to open a letter of credit in favour of Genuine Creations. I prefer Lau’s evidence that the price of the Goods was exclusive of any Finance Charge. The parties knew at the time of the Contract that it was not a genuine FOB contract and that the Defendant would pay the Fabric Cost. 24.In my view, there is no commercial reason for the Plaintiff to include any Finance Charge in calculating the price of the Goods. As Lau explained (which I accept), it would be pointless to include the Finance Charge in the price of the Goods only to have it deducted when ascertaining the Price payable by the Defendant. I agree with Lau that had the Defendant expressly requested for a deduction of the Finance Charge from the price of the Goods, the Plaintiff would have factored such Finance Charge in an increased quotation of the price of the Goods. But neither party expressly raised such issue in the negotiations for the Contract. I therefore accept the Plaintiff did not include any Finance Charge in the price of the Goods, so the outstanding Price should be HK$31,194.81. (c) Finance Charge rate 25.Given my findings above, it is unnecessary to deal with this issue. However, the implausibility of Cabirol’s evidence in this respect serves to confirm my views, so I will discuss this matter briefly. 26.Cabirol claimed the Finance Charge was chargeable at a flat 5% Rate. He claimed whenever the Plaintiff and its associated company Legend Apparel Limited purchased fabrics they would so charge the Defendant. He said Lau told him the Plaintiff’s normal practice was to adopt such flat 5% Rate for the Finance Charge it imposed on the Defendant when calculating the price of the Goods because the Plaintiff all along paid the cost of the fabrics by letter of credit. 27.Apart from Cabirol’s bare assertion (not stated in his witness statement), there is no evidence that the Plaintiff invariably paid for the cost of the fabrics by letter of credit. I find on balance there is insufficient evidence for me to safely make a finding to such effect. I prefer Lau’s evidence, which I find to be commercial and sensible, that the Finance Charge was chargeable at either 2% or 5% mark-up over the cost of the fabric paid by the Plaintiff depending on whether the payment was by letter of credit or not. Lau said and I accept a 2% mark-up would be sufficient to cover the Interest Cost of about 1% pa calculated on the basis of the approximate prime rate of 3% pa in 2002. If the payment was by letter of credit, the Plaintiff would incur additional letter of credit opening charges and banker’s commission, so the 5% Rate would be necessary in order to provide a safe margin. 28.I find it unlikely that the Defendant, an experienced garment trader, would have agreed to pay the Finance Charge at a flat 5% Rate if a letter of credit was not required. There was no reason why, if the Plaintiff chose to pay for the cost of fabrics by a less secure method (eg US dollar cheque) instead of by letter of credit, it would be able to gain a windfall profit by charging a flat 5% Rate instead of 2% mark-up over the cost of the fabrics. In my view, this cannot be right. V. Other information provided to the Plaintiff 29.Apart from the Contract, the Defendant supplied the Plaintiff with (a) technical worksheets setting out the size specifications and other particulars of the Goods and the techniques for making them (the “Worksheets”) and (b) paper patterns for the Goods (the “Paper Patterns”). There is no dispute the Plaintiff should follow and comply with the specifications in the Worksheets and the Paper Patterns. Indeed, Lau conceded the Plaintiff relied on these documents to manufacture the Goods. VI. Jumping size set samples and bulk production of the Goods 30.After the Contract was signed, the Plaintiff arranged for Hang Hing to make jumping size set samples for the Goods (the “Samples”). At/about the end of August 2002, the Defendant sent the Samples to Ventilo for approval/comments prior to bulk production. 31.On/about 27th August 2002, Ventilo informed the Defendant by fax (the “Ventilo Comments Fax”) that the Samples failed to correspond with the size specifications, namely, (a) the waist was over 3cm wide, (b) the back length was 4cm short and (c) the bottom was not rolled or stitched at 0.5cm (the “Hem Problem”). Ventilo also commented that the label must be stitched with thread tone on tone and not with white thread that could be seen through the Fabric. The Defendant showed the Ventilo Comments Fax to Lau. 32.Ventilo returned the Samples to the Defendant. By a fax dated 29th August 2002 to the Plaintiff (the “Defendant Comments Fax”), the Defendant referred to Ventilo’s above comments and to further comments written on the returned Sample. The Defendant also mentioned the following : “missing hook and eye on top of zipper” and “[the] edge of slit must be better made : straight and not wavy …” and requested the Plaintiff to follow instructions and make good the defects. 33.Cabirol claimed the Plaintiff failed to follow the Worksheets and Paper Patterns in making the Samples. On the other hand, Lau explained that the Samples were to elicit comments from the buyer and were not intended to be perfect. 34.The Plaintiff informed Hang Hing about Ventilo’s and the Defendant’s above comments and Hang Hing’s factory technicians (eg the pattern maker and sewing supervisor) would ascertain whether the buyer’s requirements could be met. I accept Lau’s evidence that the factory would commence bulk production if there were no problem. For example, Hang Hing resolved Ventilo’s complaint that the back length of the Goods was too short by technically adjusting the Paper Patterns, so such problem disappeared by the time of the final inspections of the Goods. Lau claimed that if the factory encountered difficulty, the Plaintiff would request the buyer to alter the relevant requirement and it would wait for the buyer’s approval before commencing bulk production. As an example, Lau cited Ventilo’s complaint in respect of the Hem Problem, which will be analysed in detail below. VII. Final inspections of the Goods 35.Production of the Goods started in/about July 2002. Cabirol claimed that normally the Defendant would conduct 1 in-line inspection during production and 1 final inspection. Here, shipment of the Goods was late and the Defendant’s quality inspectors (the “Inspectors”) conducted 4 final inspections on 16th, 19th, 20th and 24th September 2002 respectively (the “Inspections”). I accept the Defendant conducted 4 final Inspections because of its concerns over the quality of the Goods in light of the defects observed. The first final inspection on 16th September 2002 (the “1st Inspection”) was a full inspection and the remaining 3 Inspections were on workmanship only. 100 random samples of the Goods were checked during each Inspection. 36.The Inspectors identified major defects in 16, 12, 14 and 5 random samples of the Goods and minor defects in 17, 4, 8 and 8 pieces respectively during the 4 Inspections. Lau confirmed that the Defendant accepted the contents of the 4 Inspection reports. 37.On the 1st Inspection, the Inspectors noted that the factory had “just finished packing in cartons about 95%”. The major defects identified included holes, missing hook and eye, poor waistband shape, skipped/loose/missing embroidery stitches and uncut embroidery threads exposed outside body. Other defects noted included iron/dirty/chalk marks and upside down main labels. The Goods were rejected. 38.On the second Inspection on 19th September 2002 (the “2nd Inspection”), the major defects identified included dirty marks/oil stains, holes/broken yarns, puckering at seams, poor waistband shape, loose and puckering embroidery stitches and pattern puckering. It was also noted there was poor bottom hem shape. Shipment of the Goods was held pending reply from the Defendant’s Hong Kong office. 39.On the third Inspection on 20th September 2002 (the “3rd Inspection”), the major defects identified included dirty marks/oil stains, iron marks, holes (broken yarns), poor waistband shape and loose embroidery stitches. Other defects noted included loose yarn and chalk marks. The Goods were rejected. 40.On the fourth Inspection on 24th September 2002 (the “4th Inspection”), the major defects identified included open seams, holes, puckering at embroidery, loose embroidery stitches and chalk marks. Other defects noted included poor bottom hem shape and fabric defect at back body. The Inspectors noted that the packing and repairing of the Goods were not yet finished and they did not have the packing list during the 4th Inspection. Shipment of the Goods was held pending reply from the Defendant’s Hong Kong office. 41.In all 4 reports for the Inspections, the Inspectors made the following comments : (a) “all bulk of skirt, the [bottom] hem (shaped) is not rolled and over 0.5cm” (ie the Hem Problem) and (b) “the rouge colour of embroidery, the stitches of red is little lighter than standard”. In addition, the report for the 1st Inspection noted that : “of rouge colour have 10-15% puckering embroidery of stitches” and the report for the 2nd Inspection noted that : “5-10% have chalk marks defect on the garments, factory must be cleaned clear before release of this shipment”. VIII. The quality of the Goods 42.Although Lau doubted whether the above defects would ultimately affect sale of the Goods to consumers, I find on balance that the Goods were defective and in breach of the implied warranties of the Contract by failing to correspond to the contractual description for size and other specifications in the Worksheets and Paper Patterns and not of merchantable quality. The Defendant’s pleadings averred that the purpose of the Goods was for resale to Ventilo. However, although the Defendant claimed that the Goods were not reasonably fit for purpose, they were actually aired to and accepted by Ventilo. (a) The Fabric 43.Lau suggested during his cross-examination of Cabirol that the iron/chalk marks, dirty marks/oil stains, holes and broken yarns were associated with the quality of the Fabric. I prefer Cabirol’s explanation that these were manufacturing and handling problems and probably not associated with the quality of the Fabric. Given the sheerness of the Fabric, sewing with the wrong needles could easily cause holes and broken yarns. Further, marks/stains were hallmark defects associated with poor handling of garments by manufacturers. In my view, other than the defects discussed in detail below, the majority of the defects identified in the 4 Inspection reports were manufacturing defects (eg poor waistband, poor waistband/hem shape, puckering). 44.Further, I accept on balance that it was standard practice for garment factories to inspect fabrics on receipt, so that if problems with the fabrics were noted, the factories would resolve the problems with the fabric supplier. In this case, the Plaintiff could have liaised with the Defendant as well because the Defendant paid the Fabric Cost. But neither Genuine Creations nor the Defendant received any such complaint from the Plaintiff. (b) Embroidery problems 45.The Goods had an embroidery pattern. The Defendant supplied Ventilo’s embroidery artwork to the Plaintiff. After Hang Hing cut the Fabric into panels, those panels that required embroidery work would be sent to the embroidery mill (the “Mill”). After the embroidery was done, Hang Hing would collect the embroidered panels for sewing into garments. It was therefore logical and sensible that the Plaintiff and not the Defendant would be responsible for designating the Mill and controlling the embroidery work as part of the production process. Although the Defendant knew quite a number of embroidery, printing and beading factories (including the Mill that embroidered the Goods), they only helped to develop samples for the Defendant’s buyers and did not directly manufacture garments for the Defendant. In the circumstances, the Plaintiff would be responsible for overseeing and ensuring the quality of the embroidery work. Given such finding and further given that the Plaintiff also accepted the contents of the 4 Inspection reports, it is, in my view, immaterial whether the defects of the Goods identified by the Inspectors were the result of the embroidery or other manufacturing processes. 46.There is no dispute the Defendant paid the embroidery charges for the Goods (the “Embroidery Charges”), which I find to be consistent with my conclusion that the Contract was a “false FOB” contract. Cabirol claimed the Defendant had no choice but to pay the Embroidery Charges because the Plaintiff failed to do so and it wanted to maintain its business relationship with the Mill. But the Defendant only paid the Mill by cheque in about December 2002 or January 2003, long after the Plaintiff issued its invoice for the Goods dated 26th September 2002 to the Defendant (the “Invoice”). 47.I am not persuaded by this aspect of Cabirol’s evidence. The Invoice was issued a day before air shipment of the Goods to Ventilo. It stated on its face that the Embroidery Charges would be deducted from the price of the Goods, which suggested that at the very least it was contemplated as early as 26th September 2002 that the Defendant would pay the Embroidery Charges. There is no evidence that the Defendant protested against such provision in the Invoice. Cabirol’s witness statement also did not refer to the Plaintiff’s failure to pay the Embroidery Charges for financial or other reasons. 48.I am also not convinced that the Mill showed a copy of its invoice addressed to the Plaintiff when it approached the Defendant for payment of the Embroidery Charges. Such alleged invoice was not discovered and indeed Cabirol confessed he did not know whether the Defendant still had it. Cabirol’s assertions that the Defendant paid the Embroidery Charges for the Plaintiff without knowing or finding out what were the agreed charges between the Plaintiff and the Mill and that it was prepared to accept on the Mill’s word that the sum offered by the Mill was already discounted appear commercially unconvincing. I find on balance that under the “false FOB” Contract the parties knew and understood the Defendant would pay (and it did later pay) the Embroidery Charges. (c) Size measurement problems 49.The Inspectors checked the size measurements of the random samples during the 1st Inspection, but only checked the workmanship during the 2nd to 4th Inspections. The size measurement record of the 1st Inspection showed the samples for sizes 36, 38, 40 and 44 deviated from Ventilo’s size specifications for hip and waist measurements. For example, waist measurement for size 38 samples varied from –1.5cm to +2cm, so there was almost 4cm difference between these samples. According to Cabirol (which evidence I accept), Ventilo normally only allowed 1cm difference and a 4cm difference would amount to a different size (eg Ventilo’s size specification of 66cm waist measurement for size 36 and 69cm for size 38). In my view, the deviations in size measurements of the inspected samples shown in the results of the 1st Inspection illustrated the inconsistent quality of the Goods. Indeed, Lau conceded that the construction and nature of the Fabric were very loose, so it was difficult to control the dimensional stability (ie the length and width) of the Goods and problems with size measurements were found during the Inspections. 50.Further, I find on balance that the Plaintiff was not able to correct the above size measurement problems prior to air shipment of the Goods. The report of the 1st Inspection noted (and Lau agreed) 95% of the Goods were packed, so effective remedial work during the few days between the 1st Inspection on 16th September 2002 and the air shipment of the Goods on 27th September 2002 was unlikely. (d) Hem Problem 51.The Ventilo Comments Fax and the reports of the Inspections all complained of the Hem Problem because the inspected samples had the usual clean finished hem of about 0.7cm (the “Clean Hem”). Cabriol explained that elegant garments of sheer fabric (such as the Goods which were made of sheer wool Fabric) should have rolled hem, which was specified in the Worksheets for the Goods. I agree with Cabirol that the Plaintiff failed to follow such specification in the Worksheets and/or the comments by Ventilo and the Defendant in respect of the Samples. 52.On the other hand, Lau said after the Fabric was cut, Hang Hing would make up a production sample to check whether the buyer’s requirements could be met. If there was a problem and the factory/the Plaintiff could not resolve it (which would be rare), the Plaintiff would discuss with the Defendant to work out a solution. Lau claimed that due to the style of the Goods and the sheerness of the Fabric which broke easily, it was difficult to make a rolled hem of 0.5cm (the “Rolled Hem”). He told the Defendant the Plaintiff could only make a Clean Hem and asked the Defendant to consider and request Ventilo to adopt the Clean Hem. Lau believed the Defendant spoke with Ventilo on the subject because in practical reality the Plaintiff could not achieve a Rolled Hem and there was time pressure for shipment. The Defendant replied to Lau by asking the Plaintiff to try its best to achieve a Rolled Hem. Lau at first conceded such reply meant the Defendant/Ventilo did not abandon the requirement for a Rolled Hem, but under further cross-examination he claimed that bulk production of the Goods only started after the Defendant had compromised by verbally agreeing to the Plaintiff’s request. He further claimed the Defendant never indicated it/Ventilo would not accept the Goods if the Plaintiff could not achieve a Rolled Hem. 53.On the other hand, Cabirol denied Lau had explained to him the Fabric was too sheer for making a Rolled Hem. Cabirol claimed the Plaintiff had previously made the Rolled Hem when working with similar fabrics. The Plaintiff’s merchandiser responsible for following up Ventilo’s orders told Cabirol the Plaintiff made a mistake with the Clean Hem, but such mistake could not be remedied because it was difficult to unstitch the Clean Hem and it might damage the Goods. Cabirol further asserted that the Plaintiff’s merchandiser said the Goods had to be aired as they were because shipment of the Goods was already late. 54.On balance I reject Lau’s evidence in this respect and prefer Cabirol’s evidence. There is no dispute that the Worksheets/Paper Patterns (although not discovered) required a Rolled Hem for the Goods. I also accept that Ventilo and the Defendant all along required a Rolled Hem and it was part of the contractual description of the Goods (see the comments in the Ventilo and Defendant Comments Faxes that the Samples failed to comply with such requirement). Lau also admitted the Goods failed to satisfy such requirement or description. 55.Further, I reject Lau’s attempts to excuse the Plaintiff’s breach on the basis that the Defendant had waived the requirement for a Rolled Hem. Such waiver has not been pleaded. Not only was such assertion unsupported by any document, it did not sit well with the comments in the Ventilo and the Defendant Comments Faxes and the reports of the Inspections which consistently complained of non-compliance with such requirement. In any event, even on Lau’s evidence (which I do not accept), the Defendant’s response was merely that the Plaintiff should try its best to achieve a Rolled Hem, which could hardly be regarded as an unequivocal waiver of the requirement for a Rolled Hem or an unambiguous acceptance of a Clean Hem. Indeed, Lau conceded so under cross-examination. I find Lau’s subsequent insistence that the Defendant had compromised by accepting a Clean Hem an unreliable afterthought. 56.I find on balance that the Defendant/Ventilo never abandoned the requirement of a Rolled Hem, but with the shipment already being late, the Plaintiff could not remedy the defective Clean Hem and was constrained to air the Goods as they were. Indeed, Lau admitted as much when he agreed that the Goods were already completed and substantially packed by the time of the 1st Inspection. He said it was unrealistic for the Defendant to hope for any change during the 2nd to 4th Inspections. 57.Lau next argued that a Clean Hem was not a true defect because it would not have affected the style of the Goods or their ultimate sale to consumers. He described such defect as a quality control defect, ie discoverable by professional quality inspectors during production but unnoticeable by ordinary consumers or irrelevant to consumer sale of the garments. Lau claimed that garments with quality control defects could be shipped under a letter of guarantee from the manufacturer (as in the case of the Goods), so that the manufacturer would be responsible if the overseas buyer made a claim for the quality control defects. 58.I reject such argument. I have found that by having a Clean Hem the Goods failed inter alia to conform to contract description and amounted to a breach of an implied warranty of the Contract. Such breach did not turn on whether the Clean Hem had an adverse effect on consumer sale of the Goods or not. Further, although Lau claimed he could speak from his personal experience as a consumer buyer of clothing, there is no evidence that he had any qualification or experience to comment on the effect of a Clean Hem on consumer sale of the Goods in the European and American markets. (e) Summary 59.Bearing in mind the above analysis as well as considering the totality of other defects set out in the reports of the Inspections (countersigned by the manufacturer and not disputed by the Plaintiff), I am satisfied that the Goods were in breach of implied warranties of the Contract in that they failed to (a) correspond with the contract description and (c) be of merchantable quality. I am further of the view that there was insufficient time between the 4th Inspection on 24th September 2002 and the air shipment of the Goods on 27th September 2002 to remedy the identified defects. 60.Lau pointed out and I agree that an acceptable quality did not mean nil defects. He tried to argue that the identified defects satisfied AQL 4 as applicable to the garment trade. According to Lau, AQL meant “acceptable quality level”, namely, the permissible level of defects that might be found within a specified proportion of random inspection samples selected from bulk. A pass under AQL 4 allowed 2 defective garments out of 32 inspection samples otherwise the bulk would be rejected. But AQL or AQL 4 was not mentioned in either the Plaintiff’s pleadings or in Lau’s witness statement. It was also not an express term of the Contract. Even if it were applicable, there is no evidence the Goods satisfied AQL 4. I do not accept Lau’s evidence in this respect. IX. Shipment of the Goods and the Plaintiff’s letter of guarantee 61.The Goods were aired out of Hong Kong on 27th September 2002 to Lille, France. The Plaintiff issued the Invoice to the Defendant. The Invoice requested payment by cheque 30 days after the shipment date. 62.Lau accepted that the Goods still had major defects when it was aired to France. To protect itself against claims by Ventilo, the Defendant only allowed the Goods to be aired against the Plaintiff’s execution of a letter of guarantee dated 27th September 2002 in its favour (the “Guarantee”). By the Guarantee, the Plaintiff agreed to be responsible for any claim raised by Ventilo after receipt of the Goods “concerning all discrepancies & problem found in the report and the black underlining used on the red skirt which is not colour matching and look ugly”. Cabirol said it was unacceptable for Ventilo, a top-level brand, to cancel shipment of the Goods because it needed the Goods for its own retail stores. 63.Lau argued that the Guarantee suggested it was worthwhile for both parties to air the Goods and take the risk that Ventilo might or might not accept them. He claimed that the Plaintiff would not have shipped the Goods or signed the Guarantee if the defects were plain and obvious (eg large holes on the front side of the Goods). However, I prefer Lau’s evidence under further cross-examination that since the delivery was late, the Plaintiff had no choice but to sign the Guarantee and air the Goods even though they still had defects. Lau admitted the parties would have suffered more severe loss if the Plaintiff did not sign the Guarantee and/or air the Goods. 64.There is dispute as to whether the Plaintiff previously signed any letter of guarantee in favour of the Defendant. Cabirol claimed that the Guarantee was not the first one the Defendant asked the Plaintiff to sign for the winter 2002 season. In the Small Claims Tribunal Proceedings Cabirol claimed that the Plaintiff had produced other defective garments for Ventilo in/around June and July 2002 and the Plaintiff had signed 2 letters of guarantee dated 28th June and 2nd July 2002 respectively to acknowledge the poor quality of such garments (not discovered in the present proceedings). On the other hand, Lau could not remember whether the Plaintiff signed any other letter of guarantee for Ventilo’s orders for the winter 2001, spring/summer 2002 and winter 2002 seasons. His impression was that there was none. 65.I find there is insufficient evidence for me to conclude whether the Plaintiff previously signed letters of guarantee in favour of the Defendant. In any event, this issue is not particularly relevant as the Defendant did not plead any reliance on any earlier letter of guarantee. But it is clear from the Ventilo Fax (see below) dated 2nd October 2002 that Ventilo did complain about the mediocre quality of the garments for the spring/summer 2002 season and Lau admitted that the Plaintiff did manufacture garments for Ventilo for such season. I therefore accept there had been some problems in respect of the quality of the garments the Plaintiff manufactured for the Defendant/Ventilo for the spring/summer 2002 season. X. Ventilo’s reactionand the Defendant’s counterclaim (a) Background 66.Ventilo did not formally claim against the Defendant for compensation in respect of the poor quality of the Goods. Eventually Ventilo paid the price of the Goods to the Defendant, the amount of which Cabirol could not remember. Ventilo’s purchase order with the Defendant as well as the Defendant’s invoice were not discovered. 67.On 2nd October 2002, Ms Isabelle Herbelin, who was in charge of Ventilo’s Far East purchasing and administrative operations, sent a fax to Cabirol marked “urgent” (the “Ventilo Fax”) as follows :
68.Cabirol understood from the Ventilo Fax (which he received shortly after it was issued) that Ventilo expected the Defendant to find better factories in order to normalise the situation, failing which Ventilo would drop its business with the Defendant. The Ventilo Fax also asked for Cabirol’s personal involvement to ensure that quality garments would be delivered to Ventilo in a timely fashion. Lau said he did not see the Ventilo Fax until after litigation commenced. 69.I accept on balance Ventilo did complain against the poor quality of the Goods although it did not do so in writing. Ventilo’s boss, Mr Ventilo, telephoned Cabirol to berate him for the poor quality of the Goods, including their poor visual look and workmanship. 70.The Defendant claimed there was a substantial drop in turnover for woven (not leather) business from Ventilo (the “Ventilo Business”) for the spring/summer 2003 season as follows :
The Defendant counterclaimed for loss of profits in the sum of HK$174,877.00 (being the Hong Kong dollar equivalent of US$22,420.00 at the exchange rate of US$1.00 : HK$7.70) as a result of reduction of the Ventilo Business caused by the aforesaid defective quality of the Goods, ie (US$362,101.00 – US$250,000.00) x 20% (net profit). The Defendant first raised such counterclaim in answer to the Plaintiff’s claim in the Small Claims Tribunal. (b) The law 71.Loss of custom or repeat orders was as much a matter of claim as any other loss if shown to be within the contemplation of the contracting parties. “Where, at the time they made their contract, it was within the reasonable contemplation of the parties that defects in the goods supplied by the seller (in breach of his undertaking as to their quality) might lead to sub-buyers (customers of the buyer) withdrawing their custom from the buyer, damages may be awarded for loss of profits on “repeat orders” from the sub-buyers ……” (Benjamin’s Sale of Goods 6th ed (2002) para.17-068 at p.932, McGregor on Damages 17th ed (2003) para.20-098 at p.741 and GKN Centrax Gears Ltd v Matbro Ltd [1976] 2 Lloyd’s Rep 555). 72.In Britvic Soft Drinks Ltd & ors v Messer UK Ltd & anor [2002] 2 1 Lloyd’s Rep 20 (QBD) and 2 Lloyd’s Rep 368 (CA), some alcoholic beverages and soft drinks were contaminated by benzene. Britvic, a soft drink company, claimed inter alia for loss of future business profits on the basis that the publicity engendered by the benzene incident caused sales of its carbonated soft drinks in later trading periods to be substantially less than they would otherwise have been. Tomlinson J in his first instance judgment (there being no material discussion on the subject in the Court of Appeal judgments) accepted it was possible that a downturn in demand caused by a defective product could ground a claim for loss of future profits, but he dismissed Britvic’s claim on the matter of proof. The learned judge found that Britvic had not come close to demonstrating that the publicity had any measurable impact upon the demand for its products. (c) Defendant’s case 73.Cabirol claimed that a traditional company like Ventilo would not claim for compensation despite the poor quality of the Goods. However, it would and did reduce future Ventilo Business for the Defendant. The Plaintiff/Lau, well experienced in the garment business, must have known the Defendant worked according to the seasons. Normally for each season the Defendant would receive several batches of orders from Ventilo. But after the Goods were aired, the Defendant did not receive additional orders for the spring/summer 2003 season from Ventilo. Cabirol said Ventilo would have no difficulty in shifting its orders to its 2 other Hong Kong suppliers (apart from the Defendant) that handled similar types of garments. 74.The above turnover figures showed a reduction of 3% between the winter 2001 and spring/summer 2002 seasons, 26% between the spring/summer 2002 and winter 2002 seasons and 31% between the winter 2002 and spring/summer 2003 seasons as well as a loss of almost half of the Ventilo Business between the spring/summer 2002 and spring/summer 2003 seasons. The alleged 20% net profit was the difference between the price that Ventilo paid to the Defendant and the price the Defendant paid to the Plaintiff. Although Cabirol claimed there was no problem for the Defendant to disclose the relevant supporting documents, he had not thought of doing so and none was discovered. (d) Causation of the loss of future profits 75.On balance I do not accept that any reduction in the Ventilo Business was caused by the defective quality of the Goods. 76.Turnover for the spring/summer 2003 The Defendant was inter alia put to proof of its Ventilo Business turnover for the spring/summer 2003 season. Cabirol admitted such turnover would have been easily ascertainable from the Defendant’s accounting documents or from the purchase orders placed by Ventilo with the Defendant, but such documents were not discovered. The alleged turnover of HK$250,000.00 was merely Cabirol’s bare assertion. Lau noted that the Ventilo Business turnover for the winter 2001, spring/summer 2002 and winter 2002 seasons were quite precise sums, but the turnover for the spring/summer 2003 season was in a round figure of HK$250,000.00. The Defendant did not offer any explanation, which cast doubt on the accuracy of such sum. 77.Proper comparison of the seasons Cabirol conceded it was inappropriate to compare the turnover of a spring/summer season with that of a winter season as the seasons were quite different. Lau also accepted there would be some differences between the seasons, particularly as the cost of winter fabrics would be higher. Cabirol accepted that the turnover of the spring/summer 2003 season should be compared with that of the spring/summer 2002 season and the turnover for the winter 2002 season should be compared with that of the winter 2003 season. Since the Goods were for the winter 2002 season, the turnover for the winter 2003 season should be considered to see if there was a real drop in the Ventilo Business. But there is no pleaded or evidential reliance on the Ventilo Business turnover for the winter 2003 season. There is also no pleaded reliance on the defective or poor quality of the Ventilo garments for the spring/summer 2002 to justify the alleged drop in Ventilo Business for the spring/summer 2003 season. Likewise, there are no pleadings or evidence of the alleged “actual loss” because the Ventilo Business turnover for the winter 2003 season was not referred to at all. 78.I reject Cabirol’s suggestion that the Defendant was in fact minimising its counterclaim by adopting the 26% drop in Ventilo Business turnover between the winter 2002 and spring/summer 2003 seasons instead of relying on the loss of almost half of the turnover between the spring/summer 2002 and 2003 seasons. The latter comparison was irrelevant because the Plaintiff did not plead any reliance on any defective or poor quality of the Ventilo garments manufactured by the Plaintiff for the Defendant for the spring/summer 2002 season. 79.In the circumstances, I find on balance it is unsafe to conclude that the basis of the presently formulated counterclaim is appropriate or that it truly reflected the Defendant’s “actual loss”. 80.Ventilo’s decision to reduce the Ventilo Business In my view, it is doubtful whether the poor or defective quality of the Goods led to Ventilo’s decision to reduce the Ventilo Business with the Defendant for the spring/summer 2003 season. I find it unlikely that the Ventilo Fax referred to the Goods at all despite its allusion to the mediocre quality of the delivered garments for the spring/summer and winter 2002 seasons as well as multiple delays of delivery. 81.The Goods were aired to Lille, France on 27th September 2002 (Friday) and the earliest possible date for clearing customs was 30th September 2002 (Monday). It would normally take a day for land haulage of the Goods to Ventilo’s warehouse in Paris, so Ventilo would only have received the Goods at the earliest on 1st October 2002. Since it was the low season (because the garments for the winter season were already delivered), Cabirol believed (but did not know for certain) Ventilo would have attended to the Goods immediately on arrival. 82.On balance I am not convinced Ventilo had the opportunity to conduct appropriate inspection of the Goods before issuing the Ventilo Fax on 2nd October 2002. Cabirol’s evidence in this regard was quite vague. He said his denial of there being no immediate opportunity for Ventilo to inspect the Goods was only because he did not know or cannot prove the dates of Ventilo’s receipt/inspection of the Goods. Cabirol tried to say his receipt of the Ventilo Fax coincided in time with his telephone conversation with Mr Ventilo who complained about the Goods, but later confessed he could not remember whether he received Mr Ventilo’s telephone call or the Ventilo Fax first. There is no or no reliable evidence that Ventilo inspected the Goods immediately on arrival and discovered their poor or defective quality on 1st or 2nd October 2002. 83.Cabirol said he requested for additional orders for the spring/summer 2003 season during his telephone conversation with Ms Herbelin on 26th September 2002 (ie before the shipment of the Goods), which conversation was referred to in the Ventilo Fax. Since only Mr Ventilo could make such decision, Ms Herbelin did not give any substantive response. Subsequently, Ventilo confirmed by the Ventilo Fax that it would not increase orders for the spring/summer 2003 season. In my view, Cabirol’s request to Ms Herbelin and the reference in the Ventilo Fax to “[the] heavy drop [Cabirol] had recorded (noticed) in [Ventilo’s] commitments is a direct consequence of the mediocre quality of your products for Summer 2002 and Winter 2002 ……” (my emphasis) plainly suggested there was already a noticeable reduction in the Ventilo Business for the spring/summer 2003 season even before shipment of the Goods on 27th September 2002. It was such noticeable reduction that prompted Cabirol’s enquiry and Ventilo’s reply by the Ventilo Fax. Since such fax only “[confirmed] that [Ventilo’s] orders for the Summer Season 2003 could not be revised upwards”, Ventilo had plainly made its decision to reduce the Ventilo Business for the spring/summer 2003 season before shipment of the Goods. 84.Indeed, Cabirol at one stage said in his evidence that he felt the drop in the Ventilo Business turnover for the spring/summer 2003 season was due to Ventilo’s total loss confidence during “fit approval” of the Goods (ie the procedure whereby the Samples were made and re-made for approval in order to commence bulk production). This was not pleaded and was not directly related to the quality of the bulk production of the Goods relied by the Defendant. I am not satisfied on balance that the Defendant has shown the necessary causative connection between the Plaintiff’s breach of the Contract and the loss and damages claimed. 85.Poor quality of the earlier deliveries It was agreed that the poor quality of the Goods (being part of the winter 2002 season) could not have affected the Ventilo Business turnover for the winter 2002 season. Cabirol suggested that the poor quality of the Plaintiff’s deliveries to the Defendant/Ventilo for the spring/summer 2002 season led to the reduced turnover for the winter 2002 and spring/summer 2003 seasons. The Ventilo Fax also said the the reduction in the Ventilo Buisness for the spring/summer 2003 season was due to the poor quality and late shipment of garments delivered for the spring/summer 2002 and winter 2002 seasons. 86.So even on the Defendant’s case taken to its highest, the reduction in the Ventilo Business for the spring/summer season 2003 was caused by a combination of (a) the poor or defective quality of the Goods, (b) the poor or defective deliveries for the spring/summer 2002 season and (c) the poor or defective deliveries for the winter 2002 season other than the Goods. The Defendant never pleaded reliance or led evidence on the nature of the poor quality of garments other than the Goods. More importantly, there is no evidence as to how the alleged reduction in the Ventilo Business turnover for the spring/summer 2003 was attributable to the defective or poor quality of the Goods (ie the Plaintiff’s breach of contract as pleaded) amongst other alleged contributing causes. The onus was on the Defendant, but in the absence of evidence the court would be unable to make any sensible or just apportionment. Lau reminded that, according to the Defendant, its total Ventilo Business turnover for the spring/summer 2002 and winter 2002 seasons was US$850,007.00, but the price of the Goods at US$14,302.20 only amounted to only 1.7% of such total turnover. The Ventilo Fax also referred to wider complaints of the mediocre quality of the Ventilo Business for the spring/summer 2002 and winter 2002 seasons as well as multiple delays in delivery and not just the poor or defective quality of the Goods. 87.In my view, even if Cabirol’s above evidence were accepted (which I do not agree), at best the Defendant would only be entitled to nominal damages. According to McGregor on Damages 17th ed (2003) para.10-004 at p.360, “[nominal] damages may also be awarded where the fact of a loss is shown but the necessary evidence as to its amount is not given …… In the present case the problem is simply one of proof, one not of the absence of loss but of the absence of evidence of the amount of loss”. 88.Other reasons Cabirol claimed there was no reason for Ventilo to reduce the Ventilo Business for the spring/summer 2003 season except to punish the Defendant for the Plaintiff’s bad production. At that time, the economy in Europe was good and Ventilo’s business was booming. It was opening up stores in the United States and expanding in Europe. 89.On the other hand, Lau said although the Plaintiff knew Ventilo was the Defendant’s sub-buyer, it knew nothing about Ventilo’s operations or that it was a garment retailer. Lau further said the merchandisers told him that the Defendant only placed about 70% of its Ventilo Business with the Plaintiff and the rest of such business was given to other factories. 90.Whilst accepting that the quality of the garments manufactured by the Plaintiff might be one of the factors that might affect the volume of the Ventilo Business, Lau claimed it did not necessarily follow that Ventilo would place substantial orders with the Defendant even if the quality of the garments met Ventilo’s requirements. He suggested that many other factors might affect the volume of the Ventilo Business. First, apart from the Defendant, Ventilo placed purchase orders for garments with other suppliers, so the Defendant had competition for the Ventilo Business from such other suppliers. Secondly, Ventilo placed orders from selections of fabric swatches and style samples provided by its suppliers. The Defendant had a sample section that specialised in making up samples for its sub-buyers and the Plaintiff only made a few initial samples for the Defendant. The quality of the Defendant’s swatches/samples would affect Ventilo’s decision whether to place purchase orders. Thirdly, Ventilo’s retail business depended on its competitiveness in France and Europe. During the material time, Lau noticed a 20-30% drop in business from the Plaintiff’s other customers that were stationed in France, Belgium and the United Kingdom but which sold garments across Europe. Such decrease was consistent with the 26% drop in the Ventilo Business turnover from the spring/summer 2002 to the winter 2002 season. Lau claimed the Defendant never gave any explanation to the Plaintiff about such drop in business nor made any complaint in respect of the garments for the 3 seasons the Plaintiff supplied garments for Ventilo. 91.I have found that the relevant bad production (if any) would be other than the Goods. But if I were wrong, I note the above matters referred to by Cabirol in this respect were not canvassed in his witness statement and only came about in cross-examination. Apart from the Ventilo Fax, there is no document or other evidence from Ventilo in respect of its unwillingness to increase orders for the spring/summer 2002 season. The Ventilo Fax did not discuss these other matters. In the circumstances, given the conflicting evidence between Lau and Cabirol, I find I cannot on balance safely form any conclusion on the veracity of the assertions by either of them. I do not consider that the above matters assist the Defendant. 92.Net profit Although the matter of net profit is strictly within the Defendant’s and not the Plaintiff’s knowledge, there is simply no evidence to support Cabirol’s bare assertion that its net profit was 20%. He claimed the Defendant had the relevant supporting financial documents or purchase orders, but not a single such document was discovered. Since the Defendant carried the burden of proof and in light of the totality of the evidence, I am not persuaded I can safely rely on such bare assertion. (e) Summary 93.On the above analysis and in light of the relevant evidence, I am not satisfied on balance that the Defendant has proved it suffered loss and damages being the loss of future profits in the sum of HK$174,877.00 or at all. XI. Conclusion 94.In the circumstances, the Defendant’s counterclaim is dismissed. I grant judgment in favour of the Plaintiff for the sum of HK$31,194.81 with interest thereon from 11th November 2003 (ie the date the Plaintiff lodged its Form of Claim with the Small Claims Tribunal) at the rate of 9.234% pa to the date of judgment and thereafter at judgment rate until the date of payment. 95.There is no reason why costs should not follow event. I therefore grant a costs order nisi that the Defendant do pay the Plaintiff costs of the action (including the costs of the counterclaim and all costs reserved, if any) to be taxed if not agreed.
The Plaintiff acting in person and represented by its director Mr Lau Koon Chung Hermes. Mr Eric Cheung of Messrs Chong & Yen for the Defendant. |
Further hearings and rulings under DCCJ 3611/2004