Yee Fat Development Limited v. Winline Knitting Factory Limited

DCCJ 447/2007

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 447 OF 2007

________________________

Before: Deputy District Judge Robert Pang in Chambers (Open to Public)

Date of Hearing: 1 September 2010

Date of Delivery of Ruling: 1 September 2010

________________________

RULING

________________________

1.This is an application for leave to appeal from the judgment where I dismissed the plaintiff’s claim for goods sold and delivered. My judgment where I dismissed the plaintiff’s claim was on the basis that there was a settled account, in other words a binding agreement between the parties that the running account between them was fixed at a certain amount, some $146,000, in the plaintiff’s favour, which was subsequently paid.

2.In my judgment, I also expressed my opinion as to what the position would be as to whether the Transfer of Businesses (Protection of Creditors) Ordinance applied, thereby entitling the plaintiff to set-off certain sums paid in respect of  Yee Fat Trading.

3.The plaintiff’s draft amended notice of appeal - I should say it should be amended draft notice of appeal because no notice has yet been filed so it is still a draft - that notice has caused me to look at the pleadings again and I find  the defence pleaded is that the plaintiff is not entitled to the sums claimed because the defendant is entitled to set-off the freight charge liability pursuant to an oral agreement (see paragraphs 5(i) and (j) of the re-amended defence).

4.However, I gave judgment in favour of the defendant on the basis that there was a settled account, an issue that had, as I have been reminded by Mr Campbell, been raised at the stage of opening submissions which was dealt with in the evidence and in final submissions as well.  Nevertheless, it has not been pleaded and an agreement between the parties, binding on the parties to agree on a sum certain instead of an agreement that certain sums can be set-off, is something that needs to be specifically pleaded.

5.Whilst I do not resile from my findings of fact that there was a settled account, I cannot but acknowledge that the judgment I gave in this case was beyond the defendant’s pleaded case.  Accordingly, I find that the plaintiff has passed the threshold of an appeal with a reasonable prospect of success and I give leave to appeal to the Court of Appeal.

6.Costs of  this application to be costs in the cause of the appeal with certificate for counsel.

Mr Kwan Tong-lee, instructed by Messrs K B Chau & Co., for the Plaintiff

Mr James Campbell, instructed by Messrs Charles Yeung Clement Lam   Liu & Yip, for the Defendant