Janzen Garment Co v. Angel Garment Ltd

DCCJ3347/2005

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 3347 OF 2005

BETWEEN

Coram: H H Judge Lok in Chambers

Date of Hearing: 9 November 2005

Date of Judgment: 9 November 2005

J U D G M E N T

1.The Plaintiff’s claim in the present case is for the price of the salesman’s samples sold and delivered by the Plaintiff to the Defendant in the sum of US$10,216.

2.The Plaintiff is a firm engaged in the business of manufacturing and supplying garment products, whereas the Defendant carries on the business of a trading company.  For the transaction in issue, the Defendant was acting as a buying agent for an overseas buyer, namely Buffalo Inc. (“Buffalo”), with a view to find an appropriate manufacturer to supply garments for the Buffalo’s 2005 Fall Production (“the Fall Production”).  In the course of the negotiation, the Plaintiff supplied the salesman’s samples to the Defendant.  Unfortunately, the negotiation was not successful, and the Plaintiff therefore sues for the price of the samples supplied.

3.In this application for summary judgment, the Defendant does not dispute its liability to pay for the salesman’s samples.  However, the Defendant claims that the Plaintiff was in breach of a binding agreement made on 11 March 2005 for the supply of garments for the Fall Production, and as a result, the Defendant had to pay higher price to obtain supply from other manufacturers, and to incur additional freight charges in supplying the garments to Buffalo on time.  The Defendant calculates its loss in the sums of US$15,759.70 and HK$58,580.70, and it seeks to set-off such loss from the Plaintiff’s claim.

4.As I see it, the main issue is whether there was a binding agreement made between the parties for the supply of garments for the Fall Production.  For the purpose of this Order 14 application, I am prepared to accept that in the meeting on 11 March 2005, the Plaintiff’s and the Defendant’s representatives had a preliminary agreement on the price of the garments to be supplied to Buffalo based on a target quantity.  However, it is common ground that the parties had not agreed on the other essential terms of the purported agreement, such as the quantities of each type of garments to be supplied, the date and mode of delivery and the payment term.  Without such details, it would not have been possible for the Plaintiff to agree to a definite price or to confirm its ability to supply the goods required at a specific time.

5.In my judgment, it is clear from the objective evidence that the parties were still in the negotiation stage.  Whatever agreement they might have was not a binding agreement, and the terms of which were simply too uncertain to be legally enforceable. 

6.As there was no binding agreement between the parties, the counterclaim is bound to fail.  The Defendant has not managed to establish an arguable defence in the present case, and summary judgment should therefore be granted in favour of the Plaintiff.

7.The Defendant also has a counterclaim in the sum of $3,626.10 for the fabric supplied by the Defendant.  The Plaintiff agrees to give credit to such sum, and so the same should be deducted from the final judgment sum.

8.I now listen to the parties’ submissions on the final wording of the order and on the issue of costs.

Miss Sara Tong, instructed by Messrs C W Yuen & Co., for the Plaintiff

Mr Eugene W T Yim, instructed by Messrs Philip K H Wong, Kennedy Y H Wong & Co., for the Defendant