Tmi Ltd v. South China Ltd and Another
Read the full judgment text of DCCJ 2406/2004 on BabelCite. This District Court judgment.
1. This is the Plaintiff’s claim for payment due for goods sold and delivered in relation to four invoices, namely, 42735, 42785, 42965 and 42978 in the total sum of $194,461.20. The Defendants’ defence is that they never received the goods as represented by the said invoices.
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DCCJ 2406/2004 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CIVIL ACTION NO. 2406 OF 2004 -------------------- BETWEEN
-------------------- Coram: H.H. Judge Chow Dates of Hearing: 31st October, 1st and 2nd November, 2005 Date of last written submissions: 29th November, 2005 Date of handing down Judgment: 15th February, 2005 ______________________ J U D G M E N T ______________________ 1.This is the Plaintiff’s claim for payment due for goods sold and delivered in relation to four invoices, namely, 42735, 42785, 42965 and 42978 in the total sum of $194,461.20. The Defendants’ defence is that they never received the goods as represented by the said invoices. The evidence of the Plaintiff 2.Mr. Chan Ming Tung, a general manager of one of the Plaintiff’s divisions, testified that the Plaintiff has established a trading relationship with the 1st Defendant since 2000. The Plaintiff did business with the 1st Defendant by letters of credit. The method of payment is that the 1st Defendant opened a letter of credit with a bank upon which the Plaintiff could draw money due when the bank received delivery notes from the 1st Defendant, which authorized payment. 3.The Plaintiff would hand over the goods to a transportation company called Ming Ho which would deliver the goods for them to the address as stated on the delivery notes. When the staff of Ming Ho came to collect the goods from the Plaintiff, there were 2 copies of delivery notes, they would be signed and acknowledged by the people who received the goods. 4.The two Defendants told him that they worked in partnership and did business together. In November, 2003, he was told by Mr. Ken Chan of the 1st Defendant that they had some financial problems, and he asked him whether the Plaintiff could wait for payment for the goods in respect of invoice Nos. 42735 and 42785, to the effect that the Plaintiff should deliver the goods and be paid subsequently, rather than pursuant to the terms of the letter of credit. In view of the past business relationship, he agreed to the request. 5.In or about December, 2003, Mr. Ken Chan and Mr. Elvis Lam of the 2nd Defendant requested him to deliver more goods when there was an outstanding payment due to the Plaintiff from the 1st Defendant. He was unhappy about the situation, but he considered that the good business relationship between the parties would prevail, and they would pay, so he agreed to deliver the goods the subject of Invoice Nos. 42965 and 42978. 6.One day in December 2003, when he was driving to collect the original cargo receipts from the 1st Defendant, he received a mobile phone call from Mr. Ken Chan, who told him that he had to leave the office because of some emergency and that he could not attend him nor give him the cargo receipts. He has not heard from him or Mr. Elvis Lam since that time and has not received cargo receipts for any of the invoices, the subject of the claim, and therefore could not obtain payment under the terms of the Letter of Credit. 7.He wrote to the 1st Defendant on 25th February, 2004, marked for the attention of Mr. Arthur Ling and Mr. Ken Chan, and copied to Elvis Lam, David Xie of the 2nd Defendant, demanding for the outstanding payment. But he did not receive any response for it. The letter reads as follows:-
8.He called up these people at least 10 times, and pressed them to make payments by giving him the cargo receipts. During those telephone conversations the Defendants did not say that they had not received the goods in question. 9.For the 4 invoices, before deliveries were made, either Mr. Ling of the 1st Defendant or Mr. Elvis Lam of the 2nd Defendant would tell the Plaintiff the name of the person to whom the goods were to be sent. Nothing would be made without the consent from the other party. In respect of Invoice 42965, he said that before delivery of the goods was made, they specially phoned up the 1st Defendant for their confirmation. After delivery was made they pressed them for the cargo receipts in order to get payment from the 1st Defendant. 10.He confirmed that the signature on Invoice No. 42785 was that of the 2nd Defendant. When it was put to him that the 2nd Defendant was not an agent of the 1st Defendant, he disagreed, because he were told by the 1st Defendant that they could have direct dealing with Mr. Elvis Lam. 11.Mr. Yeung Tze Shan testified for the Plaintiff. He is one of the partners of the Ming Ho Company. This company has been doing business with the Plaintiff since 2000. He delivered the goods and invoices Nos. 01-42735, 01-42785, 01-42965, and 01-42978 as follows:-
12.In respect of 42735, he said after he had received the invoice, the Plaintiff asked him to contact Mr. Elvis Lam and ask him to direct where the goods were to be delivered to. When he arrived at the Sheung Shui KCRC Station, Mr. Elvis Lam introduced Ah Wah to him, and he was told to hand over the goods to Ah Wah. 13.In respect of 42965, he went to the Plaintiff to collect the invoice and the goods. Mr. Elvis Lam asked him to hand over the goods to Ah Wah in Sheung Shui. Then he called back the Plaintiff, saying that the goods had to be delivered to Sheung Shui. Then the Plaintiff said that there was no problem and he was to act according to Mr. Elvis Lam’s instruction. In Sheung Shui, Ah Wah signed the document to indicate that he received the goods. Then they left. 14.In respect of 42978, the same thing happened as on the previous occasions. Mr. Elvis Lam said that the goods should be delivered to Sheung Shui, to Ah Wah. The evidence of the 1st Defendant 15.Mr. Chan Ken testified for the 1st Defendant. He said that the 1st Defendant never purchased the goods relating to the invoices, the subject matter of the claim. The 1st Defendant never knew of these transactions. When he received the letter 25th February, 2004, he handed it to his secretary to deal with it. He did not care about the document. 16.When the 2nd Defendant ordered goods, the 1st Defendant would buy goods from the Plaintiff, and would mark the price of the goods by 3% and sell them to the 2nd Defendant. So the 1st Defendant would make a profit of 3%. The evidence of the 2nd Defendant 17.Mr. Lam Kam Hung testified for the 2nd Defendant. He denied signing Invoice 42785 in the presence of Ah Wah. He said that he was informed that the document in respect of Invoice 42785 was signed by him. But after reading that document he found that it was not signed by him. He just ignored it because it was not his signature. He did not make enquiry as to who signed that document. 18.I accept the evidence of the Plaintiff’s witnesses. They impressed me to be truthful witnesses. In particular, I accept the evidence of Mr. Yeung Tze shan. There is no reason for him to make any lie as to whom the goods and invoices were to be delivered to. 19.Upon receiving the letter dated 25th February, 2004, Mr. Chan Ken simply referred it to his secretary. There is no evidence that he followed up the letter. It is his version that he never received the goods as represented by the 4 invoices. That being the case, it would be very natural for him to follow up the matter in order to find out the truth, because the alleged outstanding payment was quite substantial, i.e. $180,532, and if payment was not made within 7 days, the Plaintiff would take legal action to recover the same. But the matter is simply left ignored. It would be very simple for him to ring up the Plaintiff to find out the truth of the matter by using the telephone number printed on the letter. The evidence of Mr. Ken Chan is incredible. I reject it. 20.Mr. Elvis Lam for the 2nd Defendant did not make any enquiry when he came to realize that his signature had been forged on invoice 42785. This is incredible. In any event Mr. Yeung Tze Shan testified that it was he who signed on that document. I reject his evidence. 21.I find that the Defendants did receive the goods in question as stated in the 4 invoices. They acted together and therefore they are jointly and severally liable for the value of the goods as represented by invoices in dispute. But the Plaintiff only claims against the 2nd Defendant for $94,400, and no application was made to amend the claim. I make an order that judgment be entered against the 1st Defendant in the sum of $194,461.20, and the 2nd Defendant in the sum of $94,400. The Defendants are to pay, within 14 days from today, the respective sums and the interests thereon at judgment rate commencing on 10th May, 2004, until satisfaction of the respective debts. Costs 22.I make an order nisi, to be made absolute within 14 days, that the Defendants do pay the Plaintiff costs of this action, to be taxed, if not agreed with, Certificate for Counsel.
The Plaintiff: represented by Mr. Paul Stephenson instructed by M/S Boase, Cohen & Collins, Solicitors. The 1st Defendant: represented by Mr. Jonathan Kwan, instructed by M/S Pansy Leung Tang & Chau, Solicitors. The 2nd Defendant: represented by Mr. Lam Kam Hung, unrepresented. |