Uni-art Precise Products Ltd v. Super Times (HK) Ltd
|
DCCJ 6073/2005 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CIVIL ACTION NO. 6073 OF 2005 ------------------------ BETWEEN
------------------------ Coram : Deputy District Judge R. Cheung in Court Date of Hearing : 14th December 2006 Date of Handing down Reasons for Assessment of Damages : 20th December 2006 --------------------------------------- ASSESSMENT OF DAMAGES --------------------------------------- 1.The trial is for assessment of damages only. 2.Interlocutory Judgment was entered against the Defendant on 1 April 2006 for damages to be assessed. The Defendant did not appear at the trial. 3.In gist, the case is that the Defendant had sold integrated circuit units ("IC") to the Plaintiff who assembled the IC as component parts of wireless headphones and wireless speaker systems ("the Plaintiff's goods") and delivered them to overseas buyers. A percentage of the IC turned out to be faulty, causing a portion the Plaintiff's goods to malfunction. The Plaintiff has compromised with its buyers and now claims damages against the Defendant in relation to its own sales. 4.There are technical hurdles before the Plaintiff. The Amended Statement of Claim pleads minimal facts in relation to the Plaintiff's sales and compromise. The witness statement of the only witness PW1, one Mr. Chan Chi Kan, presents only sketchy information on the same. Admissibility of some of the Plaintiff's evidence is in issue. These matters were raised with Counsel for the Plaintiff before and during the trial. Counsel for the Plaintiff had elected to proceed on an "as is" basis. 5.Paragraph 9 of the Amended Statement of Claim is in the following terms:
Particulars
6.Apart from supplying brief descriptions of what the losses are made up of, paragraph 10 of the Amended Statement of Claim adds very little to the above. That is about everything the Plaintiff says about the circumstances of its losses. 7.The starting point here must be whether the Plaintiff's pleading has disclosed a cause of action against the Defendant. 8."The words 'cause of action' comprise every fact (though not every piece of evidence) which it would be necessary for the plaintiff to prove, if traversed, to support his right to the judgment of the court ……… The phrase comprises every fact which is material to be proved to enable the plaintiff to succeed ……… The words have been defined as meaning 'simply a factual situation the existence of which entitles one person to obtain from the Court a remedy against another person ………" per Hong Kong Civil Procedure 2006, para 15/1/2. 9.It is trite law that no evidence may be led on facts that are not pleaded: "Every party must plead all the material facts on which he means to rely at the trial; otherwise he is not entitled to give any evidence of them at the trial. No averment must be omitted which is essential to success. Those facts must be alleged which must, not may, amount to a cause of action ………" per Hong Kong Civil Procedure 2006, para 18/7/7. The law requires the Plaintiff's pleading to supply averments which must, and not just may, amount to a cause of action. I take it to mean that if the Plaintiff's pleading permit several inferences to be drawn, some of which amount to a cause of action, and some not, then the pleading is bad. 10.I am precluded from finding any fact as proved unless it has been pleaded: "Moreover, if the plaintiff succeeds on findings of fact not pleaded by him, the judgment will not be allowed to stand………" per Hong Kong Civil Procedure 2006, supra. 11.Further, the Plaintiff's evidence is confined by the substance of its witness statement: "that party may not without the consent of the other parties or the leave of the Court adduce evidence from that witness the substance of which is not included in the statement served………" perRDC Order 38 Rule 2A(7)(b). 12.With that in mind, the Plaintiff 's claims will be examined. The special damages claimed are in relation to losses suffered in relation to the Plaintiff's 4 sales with (1) Philips; (2) Starmoon; (3) Fleggaard Indob A/S; and (4) Sharper Image. The Philips claim will be examined first. 13.What must be pleaded to entitle the Plaintiff to succeed on this? 14.I consider that the Plaintiff must plead inter alia the following:
15.What was in fact pleaded? 16.The Amended Statement of Claim sets out alleged admissions made by the Defendant which amount to evidence (Hong Kong Civil Procedure 2006, para 18/7/5 refers). This irregularity is however only peripheral and not fatal. But there are fatal omissions that I would turn to. 17.Averments (1) and (2) were clearly pleaded. Averment (3) was not expressly pleaded but I consider that on a fair reading, I should accept that Averment (3) was indeed supplied by the Plaintiff's pleading, albeit in an implicit manner. 18.I am not prepared to find that Averment (4) was supplied by the pleading. The pleading does show that the manufacture of the Plaintiff's goods preceded the Plaintiff 's knowledge of the IC's defect but it does not necessarily show that the sale preceded such knowledge. 19.I consider Averment (4) to be a material averment: "Where the buyer, before reselling the goods, discovered the defect in their description or condition, he cannot pass on to his seller any liability which he thereafter incurred towards his sub-buyer in respect of that defect. Where the buyer acquired knowledge of the defect after making the contract of sub-sale but he could, by passing on the knowledge to his sub-buyer, reduce his liability towards the sub-buyer, the buyer cannot recover any damages from his seller in respect of the loss incurred by the sub-buyer which could have been avoided by communicating the knowledge to him………" per Benjamin's Sale of Goods, 7th edition, para 17-079. 20.Not surprisingly, PW1 did not give evidence pertaining to Averment (4). Had PW1 given such evidence, I cannot rely on it. Also, I am precluded from finding that the sale preceded the discovery of the IC's defect. 21.Averment (5) was not expressly pleaded but I am prepared to accept that it was supplied by necessary implication. The same applies for Averment (6). 22.Averment (7) was not pleaded at all. I am not prepared to find that the averment of "reasonableness" was supplied by necessary implication in the pleading. I think in the circumstances of this case, the reasonableness of the compromise with Philips is a material fact that must be pleaded (Benjamin's Sale of Goods, 7th edition, para 17-078 refers). I am precluded from making any finding that the compromise is reasonable in the absence of such an averment. Unless the compromise is reasonable, the Plaintiff is not entitled to damages. 23.In the circumstances, the Plaintiff's claim against Philips must fail. 24.There is no need in the circumstances to refer to the Plaintiff's claims in relation to the three other buyers in detail. It suffices to say that these claims all fail on the same grounds as the Philips claim. 25.The Plaintiff's claim against the Defendant is therefore dismissed. Since the Defendant was absent, the appropriate order is that there be no order as to costs.
Representation: Mr. Paul Lee, instructed by Messrs W.I. Cheung & Co., for the Plaintiff The Defendant: unrepresented, absent |