Lite on Electronics H.K. Ltd v. Vantage Technologies Ltd and Others

DCCJ 3238/2004

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 3238 OF 2004

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BETWEEN

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Coram: Deputy District Judge M. Chow

Date of Hearing: 19^th  & 20^th June 2006

Date of Handing Down Judgment: 12^th July 2006

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JUDGMENT

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1.This is an action brought by the Plaintiff pursuant to a sale and purchase of a computer software called Opera II.

2.The 3 Defendants were originally represented by Burke, Fung and Li Solicitors, the Solicitors ceased to act on behalf of the 3 Defendants since 21.4.2006.

3.It was originally fixed for hearing on 1.3.2006.  However, on the 15 February 2006, the Defendants applied for an adjournment to refix the hearing date.  This case was subsequently set down for hearing on 19.6.2006.  The Plaintiff’s Solicitor had also served the trial bundles on all Defendants 3 days before this trial.  However, there was no response from the Defendants and they were absent on the trial dates.

4.The Plaintiff called Miss Cheng Kam Yiu, Marine as witness.  She adopted the content of the witness statements as her evidence.  She said that Defendants represented to the Plaintiff that Opera II was fit for and capable of replacing the three existing programs which were used by the Plaintiff at the material time for business accounting and stock record purposes.  Miss Cheng said that the Plaintiff was induced by those representations made by the Defendants, entered into the three agreements with the Defendants.

(1)    1^st Agreement.  Evidenced by quotation dated 15.1.2002 and an invoiced dated 28.1.2002, the price was $137,730.

(2)    The 2^nd Agreement dated 14.2.2003 for the Defendants to provide the Plaintiff with in addition to the first Agreement, some further customizations of the Opera II software.  The price was $15,000.

(3)    The 3rd Agreement.  This is a software support contract for Opera II entered on about 22.4.2003.  A cheque for $36,369.10 was issued to the 2nd Defendants. 

The total sum claim by the Plaintiff was:  $189,099.

5.The Plaintiff in her evidence said that written and oral instructions have been given to the Defendants as to what expectations and requirements it had from Opera II.  The Plaintiff also supplied samples of previous computer programs to the Defendants.  PW1 said that the Defendants were fully aware of what was expected and required from the implementation of Opera II.

6.However, after some 20 months of programmings and calibrations, the Opera II still failed to perform and/ or function properly.    The failure to perform and/or function properly amounts to a breach by the Defendants of the agreements.   When a test was conducted on Opera II, there were new defects.  On the other hand, old defects remained uncured, defects that had been cured previously re-appeared.

7.These defects, in a summary, were:  errors in displaying currency, customer codes, payment overdue, profit percentages, unit prices for stock, stock balance, etc.  These defects affected the daily running of the Plaintiff’s business.

8.The Plaintiff found that Opera II still failed to perform what it was represented to be capable of performing despite various programmings and calibrations.

9.In accordance to S.3 of the Misrepresentation Ordinance, Cap. 284, the burden of proof is on the Defendants to show that they have had a reasoning ground for believing the representation.

10.After hearing the evidence from PW1, I found the Plaintiff have proved its case.  I entered judgment for the Plaintiff.  The three Defendants are jointly and severally liable for the claims by the Plaintiff.  The Defendants’ counterclaim be dismissed.  Costs to the Plaintiff with Counsel’s certificate.  Costs order nisi, to be made absolute in 14 days, to be taxed if not agreed.

Mr. Jason WONG instructed by M/s Tang, Lai & Leung, for the Plaintiff

The 1^st, 2^nd and 3^rd Defendant absent