Sun Tung on Co Ltd v. The Personal Representative of Li Kwong Ming, Deceased

DCCJ 4921/2004

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 4921 OF 2004

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BETWEEN

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AND BETWEEN

(by order to carry on dated 17^th December 2004 given by Master J. Ko)

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Coram : Deputy District Judge Wesley Wong in Court

Date of Hearing : 9^th – 12^th May 2006 & 17^th May 2006

Date of Handing Down Judgment : 7^th June 2006

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JUDGMENT

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1.The Plaintiff’s claim against the Personal Representative of Li Kwong Ming deceased is for diesel oil supplied by the Plaintiff to the deceased on 27/2/2003, 17/4/03 with a shortfall of $1,000 and 10/5/04 for a total of $179,000.00 but under an agreement made between the Plaintiff and the deceased, the deceased was entitled to a discount of $27,200 for the purchase between 27/2/03 and 30/12/03.

2.The Plaintiff’s case is that by an agreement partly oral and partly in writing in the form of a letter dated 12/2/03 the Plaintiff agreed to open an account for the sale of marine diesel oil to the deceased by granting to the deceased a credit limit of 300 barrels.  In excess of the 300 barrels the Plaintiff would change interests at 2% per month should the deceased failed to settle the overdue amount within 14 days.  Further a discount of $20 per barrel would be given to the deceased by the end of Lunar Year if the purchase was more than 1,500 barrels during that period if the deceased only purchase diesel oil from the Plaintiff.

3.The deceased purchased a total of 1,660 barrels from the Plaintiff during the period between 27/2/03 and 30/12/03.  Hence the deceased is entitled to a discount of $27,200.00 i.e. 1,600 – 300 x $20.

4.The Defendant now do not dispute the amount of $151,800.00 claimed by the Plaintiff but by way of counterclaim says that the deceased was entitled to a return of deposit at $30 per barrel for the period from 5/2/03 to 10/7/04 amounting to $68,220 and a $20 discount per barrel during the same period amounting to $45,480.00 and that there was no credit limit nor interest charges because the deceased had during that period purchased a total of 2,464 barrels.

5.The issues are:-

(1) Were the terms of agreement the same as alleged by the Plaintiff

(2) whether there was a deposit of $30 per barrel

(3) when and how was the $20 per barrel discount calculated and refunded

6.There is no dispute that there was an agreement between the Plaintiff and the deceased.

7.Ms. Kwok Man Wing Doris, a director of the Plaintiff said that the deceased was introduced to the Plaintiff by Fung Yuet Hei (an old customer of the Plaintiff) to apply for a credit line with the Plaintiff.  Fung went with the deceased to the Plaintiff office on 10/2/03 where she and 2 other staffs discussed the terms with the deceased.  Eventually they agreed to the terms as set out in para 2 above.  A letter dated 12/2/03 concerning the credit line and interests was sent to the deceased.

8.Mr. Fung another fisherman could remember clearly he was with the deceased at the Plaintiff’s office on 10/2/03.

9.Although the Defendant produced a record from Immigration Department to show the deceased was out of Hong Kong from 8/2/03 to 11/2/03, it is not important because both the Plaintiff and the Defendant agreed that there was an agreement.  I have to consider which version is more probable.

10.The deceased’s brother Li Yau Kwai Danis gave evidence and said that the deceased informed him the terms of the agreement

(i) there would be a deposit of $30 per barrel.

(ii) a refund of $20 per barrel provided the deceased did not purchase diesel oil from other suppliers and the refund would be made on the 5^th month of the lunar calendar.

(iii) there was no credit limit nor time for repayment but final repayment would be on the 5^th month of the lunar calendar taking into account of the deposit and discount.

(iv) no interests would be charged.

11.The Defendant’s case is handicapped in that the deceased passed away and what Li Yau Kwai said was purely hearsay.  He did not participate in the negotiation.

12.What he said is highly improbable as the deceased had not reached any agreement with the Plaintiff by 5/2/03.  Further I see no reason why the 5^th month of the lunar calendar had been chosen as the cut-off date.  To calculate the discount at the end of the Lunar Year is a more logical date as the fishermen in Aberdeen would be back for the Chinese New Year and they need money for the Chinese New Year.

13.I do not see the logic of taking $30 deposit for one barrel of diesel oil by the Plaintiff.  The Plaintiff did not sell the diesel oil by containers.  There is nothing which necessitates a deposit.  The Defendant tried to make out a case that the Plaintiff charged customers who pay cash $30 per barrel less than customers who have credit line from the sales records.  But then the record also showed that the Plaintiff sometimes charge less than $30 per barrel for customers who pay cash.  This is an empty or bare assertion.  There is no substance in such allegation.

14.Having considered all the evidence, in my judgment what the Plaintiff said was more probable.  I accept that the terms of the agreement were as stated by the Plaintiff.

15.In the premises I find that the Defendant has not made out the claim of $68,220.00 being refund for deposits nor $45,480.00 for refund of the discount.

16.Since the Plaintiff had not charged interests for the credit line of the deceased I see no reason why the Plaintiff should now charge interests at $99.81 daily from date of writ to judgment.  In any event the Plaintiff has agreed to abandon this claim.

17.In the premises there be judgment for the Plaintiff in the sum of $151,800.00 with interests at 1% above prime rate per annum from 25/8/04 to judgment and thereafter at judgment rate.

18.Counterclaim dismissed.

19.Order nisi:  Costs to the Plaintiff in respect of the Plaintiff’s claim and the Defendant’s counterclaim.  Certificate for Counsel.

Miss Julia Lau instructed by Messrs. Gallant Y.T. Ho & Co. for Plaintiff.

Mr. Hylas Chung instructed by Messrs. Joseph C.T. Lee & Co. for Defendant.