Jotron As (Formerly t/a Jotron Electronics As) v. Stanley Chang t/a Hong Kong Instech Trading Co

DCCJ 3369/2009

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 3369 OF 2009

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BETWEEN

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Coram: His Honour Judge Chow

Date of hearing: 12^th August and 10^th September, 2009

Date of handing down Decision : 16^th November, 2009

DECISION

1.This is the Plaintiff’s application for judgment, pursuant to O.27 r.3 of the Rules of the District Court (RDC), upon the admissions of facts by the Defendant in his defence.  The Plaintiff seeks judgment in the total sums of NOK 292,932 (NOK 253,432 + NOK 29,500 + NOK 10,000), and will waive its claim for any balance beyond the amount entered by way of judgment.

2.In the Statement of Claim, the Plaintiff claims against the Defendant for the sum of 302,877.35 NOK pursuant to a series of orders under which the Defendant purchased from the Plaintiff specialist marine radars and other equipment particularized in the Amended Statement of Claim.

3.Under Para. 21 of the Defence, the Defendant declares that the amount of the Plaintiff’s payment for goods detained by the Defendant is only NOK 253,432.28, and not NOK 302,877.35 as referred to in the Statement of Claim.  Under Para. 22, the Defendant disclosed the reasons for detaining the Plaintiff’s money of NOK 253,432.28.  In order to protect the Defendant’s business from being unlawfully violated and to protect the reputation and image of the Defendant in the Mainland market, the Defendant made requests to the Plaintiff to prevent Zhang Shun to supply Jotron VHF radio sets to Shi Yong Lin’s company (the Zhuhai Comverst Technology Ltd.) and Michael Zhang’s company (the Shenzhen Hudson Company Ltd.).  But there were no responses to such reasonable requests.  The Defendant has no intention to take the amount of NOK 253,432.28 as its own money.  Under paragraph 24, the Defendant agrees that if the Plaintiff adopts effective means to prohibit Zhang Shun of Beijing CAS Aviation Technology Development Ltd. from supplying Jotron VHF radio sets to Shi Yong Lin’s company (the Zhuhai Comverst Technology Ltd.) and Michael Zhang’s company (the Shenzhen Hudson Company Ltd.) the Defendant will return the amount of NOK 253,432.28 and restore the former good business relationship between the parties and continue to promote and sell Jotron VHF radio sets in the Mainland.

4.The conditions imposed by the Defendant for the return of the amount NOK 253,432.28 are that he wants the Plaintiff to take steps to overcome the Defendant’s two competitors in the Mainland China and to continue to do business with the Defendant.  These conditions were not incorporated as conditions for payment of the invoices relating to goods purchased by the Defendant from the Plaintiff, as particularized in the Statement.  They are not pre-conditions to be satisfied by the Plaintiff in order to obtain payment of the goods it sold to the Defendant.  Therefore there are no valid reason for the Defendant to withhold the amount of NOK 253,432.28.

5.The Plaintiff also claimed against the Defendant for the sums of NOK 29,500 and NOK 10,000.  Accordingly to Mr. Collins, the Plaintiff’s solicitor, the 2 units, of APM (remote receivers used in connection with VHF transmitters) have the value of NOK 29,500).  Mr. Collins, in his affidavit states,

“5.  In paragraph 22, the Defendant admits that NOK 253,432.28 of the Plaintiff’s total claim of NOK 302,877.35 is payable.  The Plaintiff accepts that Mr. Berdal spoke with the Defendant and confirmed to the Defendant that NOK 253,432.28 ‘the reduced amount’ was payable provided the Defendant returned 2 units namely APM (remote receivers used in connection with VHF transmitters which have value of NOK 29,500) and included a discount of NOK 10,000 by way of compensation.  However, the Defendant who agreed to these conditions to pay the reduced amount and return the APM units (2) has not returned those 2 units and as such the agreement to pay the reduced amount was repudiated as the condition for reduction of the amount was not performed; so that the full amount of the Plaintiff’s undisputed claim in the sum of NOK 292,932.28 (NOK 253,432.28 + NOK 29,500 + NOK 10,000) remains due and outstanding……..  The agreement referred to in the paragraph above is evidenced by the exchange of correspondence between the parties particularly Mr. Berdal’s email dated 29^th November 2008 in which he says inter alia that subject to receiving the APM modes in new condition the amount payable by the Defendant is NOK 263,377.  That figure also includes the NOK 10,000.

6.   The Plaintiff only applies for Judgment in respect of the admitted amounts which is for NOK 253,432.28 rising by another NOK 29,500 (the APM units) and the NOK 10,000 (the compensation).”

6.The Plaintiff is alleging a breach of agreement by the Defendant. The Plaintiff has to show, by way of affidavit / affirmation, the existence of the alleged agreement, because this is within its personal knowledge.  This cannot be done by the Plaintiff’s solicitor on its behalf  who merely spoke to Mr. Berdal of the Plaintiff. 

7.There is no admission made by the Defendant on the value of the APM modes.  There is no admission made by the Defendant in respect of the amount of NOK 29,500 and NOK 10,000.  There is no admission of the compensation of NOK 10,000, as evidenced by what the Defendant states in his defence.  In Defence 2 and Defence 3, the Defendant says,

“Although Mr. Arne Berdal has written to me asking our company to pay Jotron A.S. NOK 10,000 as compensation, I have never agreed to this unreasonable and ungrounded request.”

8.There is no claim for return of the APM modes in the Statement of Claim, and there is no claim for compensation.  Paragraphs 22-24 the Defence dated 12.8.2009 contains nothing relating to these 2 sums of money.  Therefore the requirements of O.27 r.3 of the RDC have not been complied with, and I dismiss the application in relation to these 2 sums of money.

9.The gross sum assessment for costs is inappropriate as the breakdown of costs set out in the statement relating to the costs prepared by the Plaintiff’s solicitors requires examination in detail.  This cannot be done before this Decision is made.  When this Decision is made, there is no opportunity to put questions to the Plaintiff.  The matter of costs should be dealt with by way of taxation.

10.The Plaintiff asks for costs of the action including costs reserved, to be awarded to the Plaintiff. This case has not been completely adjudged, because under Defence 3, there is a counter-claim.  So it is inappropriate to make an order of costs in relation to the entire action.  By reason of the matters above-said, I enter judgment in favour of the Plaintiff in the sum of NOK 253,432 with interest, at thereon at judgment rate, commencing from 22.7.2009 to satisfaction, to be paid by the Defendant within 14 days from today.

Costs

11.I make an order nisi for costs, to be made absolute in 14 days’ time, that the Defendant do pay costs of this application, to be taxed, if not agreed.

The Plaintiff  : represented by Mr. Collins of M/S. Boase, Cohen & Collins, Solicitors

The Defendant  : legally unrepresented

Please refer to HCA378/2010 for the relevant appeal(s) to the Court of First Instance.