Forehap Investments Ltd. v. Dalian International Co. Ltd.
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CACV000126/1992
------------------ Coram: Sir Derek Cons, V.-P., Godfrey & Bokhary, JJ in Court Date of hearing: 19 November 1992 Date of delivery of judgment: 19 November 1992 ------------------------ J U D G M E N T ------------------------ Godfrey, J. 1. This is an appeal from an order made in the District Court by H.H. Judge Downey on 16th April 1992 dismissing the plaintiff's action. In the action the plaintiff had claimed $15,000 under an agreement made by the defendant with the plaintiff; the agreement was for the plaintiff to procure for the defendant a Chinese export licence relating to a quantity of ladies' cotton T-shirts which were to be shipped from China to New York, United States of America via Hong Kong by sea in December 1990. 2. The facts found by the judge may be summarised as follows. 3. On 14th December 1990, a Miss Lily Hon, the plaintiff's secretary, received a telephone call from Mr Cui Yuan Sheng of the defendant. Mr Cui wanted an export licence for 3,000 dozen of these T-shirts before 24th December 1990 There was a conflict of evidence, _ which the judge did not resolve, as to whether Mr Cui then said that he wanted the licence for a customer. (But even if he did say that, there appears to have been no evidence that he said anything to the effect that the transaction was to be subject to the customer's approval of the licence; so the point is of no importance.) 4. Miss Hon made some enquiries, and then telephoned Mr Cui to tell him that she could obtain the export licence from the authorities in China. There was some negotiation over what the judge called "the price", but which I would prefer to call "the consideration". The two of them eventually agreed on this. 5. Later that day, Mr Cui faxed to Miss Hon his instructions as to the details to be entered on the export licence. He did so by endorsing them on a document in the form used by the Chinese authorities for such a licence, which he used as a draft. (I shall return to this later.) 6. On 20th December 1990, Miss Hon received the export licence from the authorities in China. She notified Mr Cui, who asked her to fax a copy to him. She did so; but later Mr Cui indicated that his customer would not accept it. 7. The plaintiff was not in a position to tender an export licence which strictly corresponded with the defendant's requirements as communicated on 14th December 1990 if the standard of strictness was such as to require (to borrow the phrase used by my Lord the Vice-President in argument) a carbon copy. The reason is that the licence obtained contained the words "FOB CHINA" in Box 12. These words had not appeared in Box 12 in the draft, although Box 8 in the draft had specified "FOB Chineseport value $91,500'', and this had been repeated on licence obtained. 8. The instructions given by Mr Cui to Miss Hon, in Chinese writing endorsed on the draft, were in the following terms (as translated):-
9. The point which concerned the judge was this. The words "FOB CHINA" did not appear in the draft licence. All that had appeared in Box 12 of the draft licence was a reference to the amount of the total price of the goods, US$91,500. When the actual licence was tendered, it included what had been specified for Box 8, that is to say, "value of FOB Chinese port US$91,500", with the addition of the words FOB CHINA" in Box 12. It is on this alleged discrepancy that the argument has turned. 10. The contention of the plaintiff before the judge was that the addition of the words FOB CHINA" in Box 12 was an immaterial addition because it merely repeated what was found in Box 8 of the licence. But the judge took a different view. 11. The judge accepted that as between the immediate parties to a contract, the court will usually attempt to construe documents containing or evidencing their agreement in a broad and liberal manner, so as to give full effect to their common intention. But he went on to say this:-
He went on to speculate as follows:-
"Unfortunately," said the judge "I do not have any reliable evidence on these matters"; and that was the fact. There was no evidence before the judge whether this licence was or was not required for some special purpose. The judge went on to say this:-
I regard the judge's approach to the matter as entirely reasonable; but the fact remains that there was no evidence before him on which he was entitled to come to a conclusion - upon- any- of- these matters. 12. In the end, the matter which the judge had to decide was whether the licence tendered was, or was not, in accordance with the contract for its procurement. The only matter urged before us to prove that it was not in conformity with the contract for its procurement was the insertion of these surplus words "FOB CHINA" in Box 12. 13. In this connection, it does not, in my judgment, matter whether or not one treats this export licence as a document to which the "strict compliance" rule appropriate to documents drawn under documentary credits applies. I am prepared to assume without deciding that this is a document to which the "strict compliance" rule does apply. Even on that basis, in my judgment no reasonable banker or other person concerned would be entitled to form the view that this document ought to be rejected for the reason that the words "FOB CHINA" had been added in Box 12, by way of repetition of what had appeared in Box 8. There is no conflict or discrepancy between Box 8 and Box 12, even if the matter is tested under the "strict compliance" rule. 14. Accordingly, I would accede to this appeal and allow the plaintiff to enter judgment in the amount claimed. Sir Derek Cons, V.-P., 15. I agree with my Lord and the order that he proposes. I find myself unable to accept that, on the true construction of the instructions given by the defendant, which are translated at page 43 of the appeal bundle, they require the licence to be a "carbon copy" of the draft submitted. It was a question of the information to be contained in the document to be procured, not what one might call the artistic way in which that information should be set out. In my view, the document tendered was certainly not vitiated by the repetiton of the fact the underlying contract was for a price FOB China. Bokhary, J., I agree. However, as we are differing from the learned judge in a view which he reflected in a reserved judgment over which he took some care, I would add a few words of my own. 16. In my view, what the learned judge regarded as a sample was not a sample at all. In the words chosen by the defendant itself, it constituted a "set of information". such information included the undoubted fact that the sale in question was to be FOB China. That fact is reflected - and, everybody accepts, correctly reflected - in box 8 of. the export licence. The repetition of that fact in box 12 of the export licence does not constitute any defect in performance even under the general rule that the performance of contractual obligations must be exact. In any event, the rule is modified by a number of exceptions, one of which is the rule that the law does not concern itself with trifles. If necessary, I would regard any discrepancy, if discrepancy there be, as de minimis. 17. I arrive at this conclusion without having said anything on the question of whether the export licence ought to be treated as a document which would be presented under a documentary credit. Even if the export licence were such a document. I would still be of the view that this appeal must be allowed. The doctrine which would apply is then one of strict compliance. But there is a world of difference between strict compliance and robotic compliance. which is what the defendant would have to establish is needed in order to succeed. I. too, would allow the appeal. Sir Derek Cons. V.-P., 18. So the appeal is allowed. the judgment below set aside. and judgment entered for the plaintiff in the sum of US$15.000.
Representation: Mr Asok K. Sakhrani (M/s T.C. Foo & Co.) for Appellant/Plaintiff. Mr Paul K.N. Wu (M/s Kenneth C.C. Man & Co.) for Respondent/Defendant. |