Toneast Footwear Ltd v. Wai Cheong Holdings Ltd
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DCCJ 784/2002 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CIVIL ACTION NO. 784 OF 2002 -------------------- BETWEEN
-------------------- Coram : H.H. Judge Chow Dates of Hearing : 16th to 18th March, and 20th April, 2009 Date of handing down Judgment : 22nd May, 2009
-------------------- JUDGMENT --------------------
1.This is the Plaintiff’s claim for goods sold and delivered to the Defendant in the sum of US$43,448.40. The Defendant counterclaims against the Plaintiff for damages in the sum of US$6,415.20 by reason of its loss of commission. 2.On 1 September 2000, the Plaintiff issued a proforma invoice ML/PO/20/203 (“PI 203”) to Regent Universal Ltd. (“Regent”) (nominated by the Defendant to follow up the order in question) as the buyer of 9720 pairs of men’s shoes in the total sum of US$43,448.40. The delivery date of the shoes was “ASAP”, which means “as soon as possible”. 3.On 13 October 2000 by way of email the Defendant issued shipping instructions for PI 203. On 1 November 2000 the Defendant by way of email asked the Plaintiff to hold the orders for PI 203. The email reads:-
4.On 8 December 2000, by way of the following email the Defendant notified the Plaintiff to cancel the order under PI 203:-
On 10 December 2000, the goods under PI was laden on board of a vessel. Between 18 and 20 December 2000, the Plaintiff delivered to the Defendant the bill of lading for PI 203 (Invoice No. 232/2000 dated 30th November, 2000), on which it was stamped by the Defendant with the words “bill of lading received and accepted by” the Defendant and the company chop of the Defendant was also stamped thereon. On this invoice it was expressly stated “For account and risk of” the Defendant. 5.By way of a letter dated 19 November 2001, the Plaintiff’s solicitors asked the Defendant to settle the payment of US$43,448.40 under PI 203. This letter reads: -
6.On 19 November 2001, the Defendant replied to the Plaintiff’s letter, saying that it did not owe the Plaintiff any money. On 27 November 2001, the Plaintiff’s solicitors asked the Defendant to settle the sum under Invoice No. 232/2000. On 28 November 2001, the Defendant by letter referred the Plaintiff to Mr. Uri Dahan (“Mr. Dahan”) of International Ciers (“IC”). On 1 February 2002, the Plaintiff commenced the present action against the Defendant. 7.The Defendant raised two defences: (1) the agency defence and (2) the delay defence. The agency defence 8.Under paragraph 6 of the re-re-amended defence, the Defendant pleaded that in or about June 2000, when Mr. Haim Samucha (“Mr. Samucha”) of the Defendant was first introduced by Mr. Dahan of IC to Mr. Bruce Lee of the Plaintiff at the Plaintiff’s office in Hong Kong, Mr. Dahan made it clear to Mr. Bruce Lee that the Defendant was to be the agent of IC responsible for and on their behalf following the orders placed by IC with the Plaintiff and inspecting the goods before shipping. 9.Under cross-examination, Mr. Samucha and Mr. Dahan informed this Court that there was a written agency agreement between the Defendant and IC. But this agreement was not produced as evidence. No explanation was offered in this respect. In his witness statement, Mr. Dahan did not refer to this agreement. He said:-
The particulars of “A” are reproduced hereinbelow:-
The appointment agreement does not refer to any written agency agreement between the Defendant and IC. 10.In his witness statement dated 26 June 2005, Mr. Samucha did not mention any written agency agreement. He merely referred to the appointment agreement. He said,
11.On 21 March 2003, in answer to the Plaintiff’s request of any written contracts or agreements between the Defendant and IC concerning the allegation that the Defendant was the agent of IC, the Defendant simply asked the Plaintiff to refer to the Supplemental List of Documents of the Defendant filed in Court (on 21st March, 2003) and copy documents attached thereto. But no written agency agreement between IC and the Defendant was filed in Court. 12.The issue of agency is the defence of the Defendant, and the written agency agreement proves the existence of the agency relationship between the Defendant and IC. The Defendant was a party to this agency agreement. It must have got hold of a copy of it. If there was really a written agency agreement between IC and the Defendant, there is no reason not to produce it. On the other hand, it would be natural for Mr. Samucha and Mr. Dahan to have mentioned the existence of the written agency agreement in their witness statements. They mentioned the appointment agreement in their witness statements in order to prove the agency relationship. Then there is no reason why they should not have mentioned the written agency agreement in these statements, so as to prove such relationship. Since the written agency agreement was not produced as evidence, when it could have been produced, and they could have mentioned the written agency agreement in their witness statements, but they had failed to do so this Court is entitled to draw and do draw an inference that such a written agency agreement was not in existence at all. Hence there was no basis to form the agency relation between IC and the Defendant, the basis of such a relationship being the existence of the written agency agreement. 13.The Defendant relies on the appointment agreement to show that the Plaintiff had knowledge of the agency relationship between IC and the Defendant. Under paragraph 6 of the re-re-amended defence and courterclaim, the Defendant pleaded that the Plaintiff well knew that the Defendant was acting as agent for IC in the transaction under PI 203 because in or about June 2000 in the Plaintiff’s office in Hong Kong, Mr. Dahan made clear to Mr. Bruce Lee that the Defendant was to be the agent of IC. According to the evidence of Samucha, the appointment agreement was shown to the Plaintiff during his visit to the Plaintiff’s office in March 2000. This was not pleaded in the re-re-amended defence. The particular of knowledge pleaded is merely related to what happened in June 2000, and not March 2000. The defence was amended a number of times. But this point was not included in the defence. 14.According to paragraph 6 of the re-re-amended defence, Mr. Samucha was only first introduced to Mr. Bruce Lee at the Plaintiff’s office in June 2000. So it is not possible that during his visit to the Plaintiff’s office in March 2000 (3 months prior to June 2000) the appointment agreement was shown to Mr. Bruce Lee. The oral evidence of Mr. Samucha simply contradicts paragraph 6 of the re-re-amended defence. In light of such conflict, I cannot attach any weight to the oral evidence of Mr. Samucha in this respect, and I cannot attach any weight to the appointment agreement. 15.In conclusion I rule that this agency relationship between the Defendant and IC under PI 203 did not exist and this defence cannot succeed. The defence of delay 16.Mr. Bruce Lee told the Court that production started in October 2000, and the goods were completed around mid November 2000; the Defendant cross-examined him on the issue of delay by making comparison with previous orders. Such approach cannot assist this Court, because the facts of each case are different. There is no evidence that the factual circumstances of the other orders and the order under PI 302/2000, namely, the quality and the quantity of the goods, the time in the year for manufacturing the goods and the method/process of manufacturing the goods are similar. Such an approach cannot constitute a meaningful or appropriate comparison. 17.The Defendant bears the burden of proving the defence of delay. It contends that the goods were intended for Christmas sale. If that was regarded as a very important element affecting the date of delivery, this factor should have been reflected and embodied as the date of delivery in the proforma invoice. For example, a deadline could have been set for the date of delivery, so that the goods could be delivery on time for Christmas sale. But this has not been done in the present case. 18.The Defendant queries why the Plaintiff did not make reservation for shipments. The contractual term for delivery is “as soon as possible”. It should not be construed in such a way that the Plaintiff was under a legal obligation to make any special arrangement of delivery for the Defendant. 19.The order was postponed by the email dated 1 November 2000. The Defendant cancelled the order on 8 December 2000 because of “very late shipment of goods”. The Defendant has not shown at which point of time delay should begin to run, for this Court to adjudge by this yardstick whether there was really a very late shipment of goods, so that the cancellation of the order is justified. As a result it failed to discharge the onus of proof, and this defence must fail. Variation of agreement 20.In or about November of 2000, through telephone conversation, Mr. Bruce Lee and Mr. Samucha on behalf of the Defendant reached an oral agreement that the Defendant would accept the goods on condition that there was to be a 5% discount on the purchase price of the goods despite any delay on the delivery of the goods on the past of the Plaintiff. Mr. Bruce Lee did this in order to avoid disputes between the parties and to maintain business relationship between them, although he considered that there was no delay in the shipment of the goods. 21.According to Mr. Chu Wai Kung (the former shipping clerk) of the Plaintiff, in or around November of 2000, Mr. Bruce Lee told him that the Defendant had complained of the late shipment of the goods. However, the Plaintiff had agreed with the Defendant that the Defendant would accept the goods on condition that there would be a 5% discount on the purchase price of the goods despite any complaints from the Defendant about late delivery of the goods. For accounting purposes and for the purpose of collecting the correct amount of the purchase price from the Defendant, he needed to record it down in the Commercial Invoice as it would be presented to the Defendant for payment. So he put down “扣5% 貨遲Shipt” on the Commercial invoice before all copies of the Commercial Invoice were sent to the Defendant. 22.Mr. Samucha could not give any proper explanation to the “less 5%” remarks in a duplicate copy of CI 232/2000 produced by the Defendant. It must be true that the Defendant did receive this duplicate of CI 232/2000. This supports Mr. Chu’s evidence that he did write this “less 5%” remarks on the duplicate. It must be true that an agreement had been reached between the parties, as claimed by Mr. Bruce Lee. Mr. Chu left the Plaintiff for many years. He has no interest in the outcome of the litigation. There is no threat to him if he speaks the truth because he is no longer employed by the Plaintiff. I accept that he is an independent witness. I accept his evidence. Acceptance of goods 23.It is the Plaintiff’s case that between 18 and 20 December 2000, the Bill of Lading was received and accepted by the Defendant by applying the company chop of the Defendant on the CI 232/2000 dated November 2000. The Defendant argues that the bill of lading was accepted under the instruction of IC to find alternative buyer for the goods for the Plaintiff. Hence the goods were never accepted by the Defendant or IC. 24.On 30 November 2001, Mr. Bruce Lee sent the following email to Uri Dahan:-
25.Mr. Bruce Lee’s explanation for sending this email is that he had chased after Mr. Samucha for payment for a long time, but did not succeed. Eventually Mr. Samucha told him that the end buyer of the goods was IC and that IC did not pay the Defendant money and so the Defendant did not have money to pay the Plaintiff. He had a talk with Mr. Dahan and both of them agreed that he was to send the goods to him. So the email was sent to IC. That is why he stated in the email “we shipped the container to Curacao as per your instruction”. This has nothing to do with any agency agreement between CI and the Defendant. He also explained that he offered to give IC a discount of 15%, so that IC would make payment to him. But the Defence Counsel submits that by reason of this email “it is unreasonable for the Plaintiff to now deny that the Defendant was acting as agent for IC under CI 232/2000, and that it did not have knowledge of the same.” I do not accept this submission because the Defendant has failed to prove that it was acting as the agent of IC at the material time. I accept the Plaintiff evidence in this regard. 26.The Defendant accepted the goods and the Bill of Lading, even though in its view the Plaintiff was late in delivering the goods. Upon acceptance of the goods, the property in the goods passed to the Defendant, and it was legally bound to make payment for the goods. But it has not made any payment at all. I therefore enter judgment in favour of the Plaintiff, in the sum of US$41,275.98 (US$43,448.40 x 95%). I dismiss the Defendant’s counterclaim. I order that the Defendant do pay, within 14 days from today the sum of US$41,275.98 with interests thereon, at judgment rate, commencing from 27th November, 2001 until satisfaction. Costs 27.I make an order nisi for costs, to be made absolute in 14 days’ time, that the Defendant do pay costs of these proceedings to the Plaintiff, to be taxed, if not agreed, with Certificate for Counsel.
The Plaintiff: represented by Mr. Chu Ming Tung, instructed by M/S Thomas Li & Yu, Solicitors. The Defendant: represented by Mr. David Chan, instructed by M/S Pansy Leung Tang & Chua, Solicitors. |