Jin Hai Development (HK) Ltd v. Wai Hung Industrial (Hong Kong) Co. Ltd
Read the full judgment text of DCCJ 3600/2005 on BabelCite. This District Court judgment.
1. This is the Plaintiff’s application by summons dated 10 th July 2006 pursuant to Order 14 rule 1 of the Rules of the District Court, Cap.336 for summary judgment in favour of the Plaintiff against the Defendant for HK$229,390.56 being the deficit of price for resale of the goods as a result of non-acceptance of goods by the Defendant.
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DCCJ 3600/2005 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CIVIL ACTION NO. 3600 OF 2005 ____________ BETWEEN
____________ Coram: Deputy District Judge M. Chow Date of Hearing: 12th October, 2006 Date of Handing Down Judgment: 9th November, 2006 __________________ JUDGMENT __________________
1.This is the Plaintiff’s application by summons dated 10th July 2006 pursuant to Order 14 rule 1 of the Rules of the District Court, Cap.336 for summary judgment in favour of the Plaintiff against the Defendant for HK$229,390.56 being the deficit of price for resale of the goods as a result of non-acceptance of goods by the Defendant. Order 14 principles 2.It is well-settled law in an Order 14 application that the defendant must satisfy the court that he has a fair or reasonable probability of showing a real or bona fide defence i.e. that his defence is reasonably capable of belief. Hong Kong Civil Procedure 2006 Vol.1 14/4/9. 3.The underlying policy of summary judgment procedure is to prevent the Defendant from delaying the Plaintiff from obtaining judgment in a case in which the Defendant clearly had no defence to the Plaintiff’s claim. It is for the Defendant to show that there is a triable issue. Manciple Ltd v Char On Man (1995) 3 HKC 459. 4.While in Order 14 proceedings, it is not a mini-trial on affidavits, it is, however, necessary to set out the factual background of the case before deciding whether that evidence is capable of belief. Ng Shou Chun v Hung Chun San (1994 ) 1 HKC 155. Background 5.The Plaintiff and the Defendant entered into a contract dated 8th April, 2005 that the Defendant agreed to purchase and take delivery from the Plaintiff 360 tons of plastic material ASB-AG15A1m between 3rd May 2005 and 3rd June, 2005 at the price of $4,174,630.00 6.On 22nd April, 2005 the Defendant faxed a copy of the Purchase Order with a chopped word “ CANCELLED” in an attempt to cancel the contract. In response to this fax, the Plaintiff replied on 23rd April, 2005 to inform the Defendant that according to the terms of the contract that cancellation of the contract had to be agreed by both parties, also unilateral cancellation of the contract would in effect amount to a breach of the terms of the contract. In the event that the Defendant failed to take delivery of the goods, the Plaintiff would resell the goods in the open market at the current market price. The Plaintiff would demand the difference of the prices from the Defendant. 7.The Plaintiff ‘s replied letter to the Defendant dated 23rd April, 2005: -
8.On 3rd June2005, the Plaintiff informed the Defendant that the goods were available for delivery. 9.The Defendant in response to this letter told the Plaintiff that the Defendant’s company would not use this material ( the goods in question ) and further the Defendant’s company had not received any orders from its own customers. The Defendant requested a replacement of others goods. 10.By 9th June, 2005, the Plaintiff informed the Defendant another lot of goods had already arrived and demanded the Plaintiff to pay by cashier order with 3 days before taking delivery. The Defendant made no response to this letter. 11.The Plaintiff sold the goods to various customers and suffered a loss of HK$288,977.22. 12.On 11th July, 2005, the Plaintiff through its Solicitor sent a demand letter to the Defendant and asked for payment of HK$229,390.56 being the loss suffered by the Plaintiff. The Defendant disagreed. Inconsistence of the amount 13.The Plaintiff is aware of the fact that in the statement of claim the amount claimed is HK$229,390.56, while the actual loss should be HK$288,977.22. 14.The Plaintiff is contented to claim against the Defendant for the amount of HK$229,390.56 for the purpose of the summary judgment as the Plaintiff has not yet sought to amend the particular in the statement of claim. The Argument 15.Mr. Chu for the defence argued that the letters by the Plaintiff to the Defendant had varied the terms of the contract, namely,
Validity of the Contract 16.At p.36 of the bundle, the defence disputed that the hand written words “ 交貨期：請於3/5/2005 至 30/6/2005期間交貨。”on the contract was not the terms of the contract at the time of signing by the Defendant. 17.The Defendant failed to locate its original copy, but allegedly said that this term was not part of the contract. This is indeed a very serious allegation which has an implication of “ making a false instrument” by the Plaintiff. 18.The Plaintiff’s affirmation was made in July 2006 and the copy of the contract was exhibited in her affirmation. The Defendant filed his affirmation in August, 2006. Had this term not been parted of the contract, the Plaintiff was in a very daring and defiance position to file a false instrument as an exhibit as the Defendant in his affirmation could always exhibit his copy of the contract. 19.To conclude, I refuse to accept the Defence’s allegation that the written part of contract was subsequently added to it for the purpose of this claim. 20.The purpose of this allegation all goes to the issue that the Defendant had to take delivery of the goods between 3/5/2005 and 30/6/2005. 21.The Defendant’s position was that there was an oral agreement that the Defendant could complete the taking of delivery of the goods in September, 2006. That was not incorporated into the contract. 22.If that was the concern of the Defendant, the question is: - why the Defendant did not raise in the letter dated 3-6-2005? 23.The Defence now also raised the issues that there was an unilateral variation of the contract as stipulated in two letters dated 3rd June, 2005 and 9th June, 2005: -
24.The content of these letters varied the terms of the contract in that the D should have 7 days ( letter : 3 days ) to made payment by cheque ( letter : advance payment by cashier order ) and to inspect the goods. 25.In response to the Plaintiff’s letter dated 3rd June, 2005, the Defendant promptly replied on the same date: -
26.The Defendant’s affirmation dated 3rd August, 2006 at paragraph 6 said that “ subsequently I learned from the technical department that there was a quality problem of this particular ABS ( model numbered 15A1 ) …… in manufacturing products with curved surface. In addition, the Defendant had not obtained sufficient orders from its customers to order new supply of ABS. For these reasons, I did try to cancel the sales contract …….. however, the Plaintiff ……………… refused to accept the cancellation..” 27.In fact, on 3rd June, 2005, Miss So and Miss Wan of the Plaintiff went to the Defendant’s office to deal with this matter, however, the Defendant, Miss Choy Yin Nie did not meet them to discuss the matter. 28.Miss Choy in her affirmation stated that she was too busy to engage in other matter, therefore, she did not have time to see them. However, when she found out that they had left the Defendant’s office, Miss Choy did not call or communicate with the Plaintiff. 29.With this background in mind, the Defendant claimed that it had not received the fax letter dated 9th June, 2005 from the Plaintiff was purely a mere assertion and not capable of belief. 30.In effect, this contemporaneous document from the Defendant dated 3rd June, 2005 clearly showed the intention of the Defendant, it could not be any clearer, that the materials/ goods which the Defendant had ordered from the Plaintiff was of no used to them. They would not take delivery of the goods from the Plaintiff whether it was 3 days or 7 days, by cashier orders or by cheque. 31.Again, had this been the concerns of the Defendant, the Defendant should have raised these in its letter to the Plaintiff. 32.The two letters by the Plaintiff to the Defendant on 3rd and 9th June, 2005 were in fact no more than notices to the Defendant to take delivery. 33.In the signed contract, there was no agreement that the goods should be delivered in one single lot. In the past, the Defendant accepted delivery by installments. The resell price 34.When the Defendant replied to the Plaintiff on 3rd June, 2005 to the effect that the goods was basically of no good use to them and the Defendant refused to meet the Plaintiff ‘s staff in its office, what possible inference could the Plaintiff infer from the conduct of the Defendant? 35.I therefore conclude that the Plaintiff had taken a reasonable course of action by reselling the goods in open market. In fact, the Defendant was well aware that this would be the course of action to be taken by the Plaintiff. 36.I do not consider that the Plaintiff was not ready, willing and able to deliver the gods to the Defendant as alleged. Rather, it should be said that it was the Defendant was not ready, willing and able to take delivery of the goods. 37.When the Defendant refused to take delivery of the goods on 3rd June, 2005, the Plaintiff had to dispose the goods in the open market. The goods in question was subject to the fluctuations of the market price. 38.The Plaintiff sold the goods to various customers and suffered a loss. The Defendant took the view that the Plaintiff should have sold the goods at a higher market price and made profit with it. ( paragraph of 9 of the Defendant’s affirmation ). 39.In fact, this argument goes both ways, the Defendant could have taken the goods and resell them to its customers and made a profit out of it. 40.As the Plaintiff’s Counsel rightly pointed out, the Plaintiff had to sell the goods to its available customers to mitigate its loss. 41.To conclude, I am not persuaded that the Defence had a real bona fide defence. The defence is simply not reasonably capable of belief. I am satisfied that the assertions now made by the Defendant are entirely inconsistent with the contemporary document and the Defence pleaded by the Defendant. 42.Accordingly, I enter judgment for the Plaintiff. Order
Mr. Victor C.F. CHEUNG instructed by M/s Chong, Fu & Co., for the Plaintiff. Mr. George CHU instructed by M/s Pang, Kung & Co., for the Defendant. |