Or Sheli Marketing and Trade Ltd v. Ting Li Li t/a Trans World Enterprise Co
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DCCJ 2161/2011 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CIVIL ACTION NO. 2161 OF 2011 -------------------- BETWEEN
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-------------------- JUDGMENT -------------------- Background 1.This is an action by the plaintiff against the defendant for the sum of :-
Issues in dispute 2.According to the Agreed List of Issues dated 20 November 2012, the issues are:-
3.In the trial, the defendant narrowed down the issues to:-
In other words, the defendant admitted that even if it is proved that the plaintiff as the defendant’s agent did make the payments to Mehadrin and Shoham, the suppliers of the fruits, the defendant has to reimburse the plaintiff. Common ground 4.It is common ground that:-
The plaintiff’s case 5.The plaintiff called David Doron, also known as Dudi (“Dudi”), to give evidence. He is the General Manager, Director and shareholder of the plaintiff. The case of the plaintiff can be summarized as follows:-
6.Pursuant to the said agreement, the defendant had placed 3 shipments of fruits with the plaintiff by e-mails respectively dated 11 October 2010, 13 October 2010, and 27 October 2010. 7.From 9 November 2010 to 16 November 2010, Charles wrote in the e-mails that he wished to refuse the shipments due to the delays of the expected arrival dates of the shipments, and the quality of the fruits. 8.The 2nd Shipment arrived on 21 November 2010. 9.In an e-mail dated 26 November 2010, Charles wrote, inter alia, that:-
The plaintiff submitted that the defendant changed his mind, accepted the fruits and proposed a payment schedule to pay for the 2nd and 3rd Shipments. 10.The 3rd shipment arrived on 1 December 2010. 11.On 5 December 2010, Charles informed by e-mail that due to the purported delay, the defendant would not take the Shipments. 12.Thedefendant only paid for part of the 2nd Shipment. As for the remaining balance thereof and the 3rd Shipment, the defendant refused to pay on the ground of late delivery and poor quality of the fruits. The plaintiff submitted that the real reasons for rejecting the fruits were Charles’s mismanagement for ordering schedule and the overestimation of the demand for fruits. 13.Payments were made to Mehadrin and Shoham for the 2nd and 3rd Shipments, particulars of which are as follows:-
Defendant’s case 14.The defendant called Chen Chih Lin, Charles to give evidence. He was the General Manager of the defendant. He is also the husband of Ting Li Li, the defendant herein. The case of the defendant can be summarized as follows:-
15.The defendant rejected part of the 2nd Shipment and the whole of 3rd Shipment due to the delay of the plaintiff in ordering the fruits. The defendant alleged that the date for ordering the fruits for the 2nd Shipment was 9 October 2010, but Dudi delayed in ordering the fruits and as a result the purported on board date was delayed from 17 October 2010 to 27 October 2010 (10 days’ delay). 16.For the 3rd Shipment, the defendant placed order on 18 October 2010 but Dudi only ordered on 27 October 2010 (9 days’ late), the actual on board date was about 5 November 2010. 17.Upon the breach of fiduciary duties under the Agency Agreement and the refusal/failure of Mardix and Dudi to return the remaining 2 containers of the 2nd Shipment, the defendant forwarded the said remaining 2 containers to Mainland China, and suffered loss in the total sum of RMB154,000. 18.As for the evidence of payments, the defendant alleged that the save and except the payment of US$46,994.30, the records only showed requests or instructions for payments. There was no payment records evidencing that the amounts had been actually debited or transferred. Discussion and analysis of the evidence Issue no 1: Whether the agreement between the plaintiff and the defendant is an Agency Agreement or Seller and Buyer Agreement. 19.I find the Agreement between the parties is an Agency Agreement for the following reasons:-
Issue no 2: Are there delays in ordering the fruits? If there are such delays, whether the defendant is entitled to refuse accepting the Shipments. 20.I find that there are no delays in ordering the fruits. It is true that the defendant wished to order fruits on a weekly basis so as to maintain a steady supply of fruits as evidenced by the Buy plan and the New Buy Plan. But those plans are not legally binding documents. They are only the intentions of the defendant. 2nd Shipment 21.For the 2nd Shipment, the defendant alleged that the time of placing order was 9 October 2010, but no written evidence was produced. According to the plaintiff, the ordering date was 13 October 2010. 22.According to the e-mail dated 13 October 2010 from Charles of the defendant to Dudi of the plaintiff, Charles wrote:-
23.According to the paragraphs 31 and 32 of Dudi’s statement dated 2 October 2012, “Charles placed a second order by an e-mail dated 13 October 2012.” “After this order was placed, it could not be confirmed as quickly as possible because Charles kept on negotiating with me on the price of the fruits and changing the precise quantity of the fruits ordered. On the other hand, I also needed time to confirm the grapefruits could be shipped with pomegranate in the same container.” 24.It can be seen from the e-mail dated 13 October 2010 that the defendant was still giving the instructions as to the purchase and the addition of another container. Therefore the reply from the supplier was required. I do not accept 9 October 2010 as the date of the 2nd shipment and I also do not accept that there was delay on the part of the plaintiff in carrying out the order. 25.The aforesaid date of 9 October 2012 even does not match the opening submission of the defendant. As in paragraph 6 of the defendant’s opening submission, it is stated that “On 9 October 2010, Charles Chen informed Mardix and Dudi to place order for the 2nd Shipment, and on 13 October 2010, details of the order for the 2nd Shipment was confirmed to Dudi by e-mail.” Only on 13 October 2010, the order was to some extent confirmed. 26.Given the questions posed and the additional container requested, it is likely that the order could not be confirmed by the supplier on the same day. 27.According to the e-mail dated 18 November 2010, it seems that the order was confirmed on 17 October 2010. Ship was scheduled to sail on 24 October 2010, and subsequently because of a delay, sailed on 28 October 2010. 3rd Shipment 28.Charles alleged that he had placed the order for the 3rd Shipment on 18 October 2010. The plaintiff alleged Charles only placed the order on 27 October 2010. 29.The defendant relied on the e-mail dated 18 October 2010 in which Charles wrote:-
30.The plaintiff relied on the e-mail dated 27 October 2010 sent by Charles in which he wrote:-
31.Also in the e-mail dated 11 November 2010, Charles wrote, inter alia, that:
32.In the above e-mails, it is crystal clear that Charles ordered the 3rd Shipment on 27 October 2010; it is also in his own words in the e-mail dated 11 November 2010 that he ordered on that day. The alleged order dated 18 October 2010 can only be regarded as an instruction to Dudi. Follow up work is needed and the final outcome is different from the instructions, in particular only 3 containers were ordered. There is also no evidence of delay in carrying out any order as alleged by the defendant. 33.Furthermore, no allegations of delay on the part of the plaintiff were made in the e-mails. The alleged delays were only directed to Mehedrin and the shipping company. I find that the defendant’s witness is not honest in insisting that the order for the 3rd Shipment was placed on 18 October 2010. The evidence clearly indicated that the order was placed on 27 October 2010. 34.In addition, I find that alleged delay is not the real reason of the defendant in rejecting the fruits. In the e-mail dated 25 November 2010, Charles wrote:-
35.In the e-mail dated 1 December 2010, Charles wrote:-
36.In the e-mail dated 3 December 2010, Charles compared the prices, quality and wrote, “It conclude to Mehadrin is 10% - 15% higher than other packing house.” “The Mehadrin’s quality is the worse. ” Payment: 02 containers: I will pay the Mehadrin invoice first to you next Monday……”. 37.In the e-mail dated 6 December 2010, Charles wrote to Mehadrin stating that “as the delay & market changes, we can’t no longer take them……”. “By the way, our Israel colleague did pay you the money, please also advise when you can return back our payment, thanks”. There was also the complaint of the price of the goods. 38.It can be seen that the real reasons for rejecting the fruits are that the defendant ordered too much fruits as he also ordered from other supplier; the time table for the arrivals of the fruits did not match his plan; and the price of the fruits, from Mehadrin according to Charles, was expensive. 39.It can be seen from the e-mail that Charles did not mention the refusal of payment in the e-mail dated 3 December 2012. He just said that he would pay the 2 containers first; it is also noted that, in the e-mail dated 26 November 2010, he confirmed the order and promised to pay. Then on 6 December 2012, he rejected the fruits. Therefore, even if there were delays in ordering the fruits, Charles should be responsible as he was the one who handled the ordering schedule and confirmed the orders. 40.It can also be seen from the e-mails that Charles is not an honest businessman. He used different pretexts to reject the fruits; for example, the quality of the fruits as stated in the e-mail dated 1 December 2010, the discrepancy of the packing lists arrival dates as stated in the e-mail dated 11 November 2010. I do not accept his evidence. Issue no 3: Whether the plaintiff can establish its claim by proving actual payments made to the fruit suppliers? 41.I find that the purchase price had been paid to Mehardin and Shoham, and the defendant has to repay it to the plaintiff. 42.I accepted the evidence of Dudi, the plaintiff’s witness, who alleged all the payments had been made. His evidence is clear and supported by documents. He impressed me as an honest witness and I preferred his evidence to Charles’s if there is any discrepancy. Save an except that he might try to get more money in the transaction of Shoham, alleging that there was some transportation cost , the difference is around US$1,148.71 (7,453.30 – (6,181.32 x 1.02)) (US$6,181.21 was the sum the plaintiff transferred to Shoham), he also made a mistake as to the price for Grapefruit Sunrise of size 45. The price should be US$16.32 instead of US$16.83, the difference is only US$0.51. The total price difference is only US$722.67 (1,417xUS$0.51). I do not regard these as secret profit as all the subject price lists were sent to the defendant as requested, the mistake could be easily found out by comparing the documents. After all, the documents sent to the defendant were only a proforma invoices and there may be room for variation in the invoices (if any). But such sum of US$1,870.98 (722.67+1,148.71) should be deducted from the amount claimed by the plaintiff. 43.The payments were supported by the documents issued by the bank. I do not accept the defendant’s submission that the documents were only requests or instructions. It seems to me the documents were printouts from the bank. It is true that in the 3rd payment record for the sum of US$46,994.30, there was another debit note which cleared any doubt as to whether the transaction had gone through. Even without this in other printouts, I am satisfied that they were records of payments. 44.Another evidence to support that the purchase price had been paid is that up to the date hereof, Mehedrin or Shoham have not asked the defendant to pay the purchase price. It is clear that the defendant did directly approach Mehedrin and rejected the goods, he even asked for the refund of money. There is another e-mail also dated 6 December 2012 in which Charles wrote to Mehadrin and stated that “it is impossible for us to pay you the invoice”. If the purchase price had not been paid, it would not be surprising for Mehedrin to write back to deny that such payments had been made and demand for it. 45.The defendant submitted that in the last paragraph of the e-mail dated 7 December from Mehadrin to the defendant, Sandra of Mehadrin wrote that “from my side, I will turn to the management and try to get some credit/reduction on price in order to help you”, which implied that the purchase price had not been paid. I did not accept that. It only showed the intention of Sandra, and even if the price had been paid, some credit or reduction could be given. 46.As for the counterclaim, the defendant failed to produce any documentary evidence to prove the Import tax and the cooling storage charges. In view of the above, the defendant is not entitled to them even if they are paid. I dismiss the counterclaim. 47.For the quantum, it seems both parties used the figures paid by the plaintiff to the suppliers for calculation, and as a result, no deduction mentioned in paragraph 42 above is necessary. It is agreed to be US$79,361.23. In the circumstances, I order the defendant to pay the sum of US$79,361.23 together with interest at judgment rate from the date of issuance of the writ to the date of judgment, and thereafter at judgment rate until payment. 48.I also make an order nisi that the defendant shall pay the costs of this action, including any reserved costs, together with certificate for counsel, to be taxed if not agreed. Unless varied, such order shall be made absolute within 14 days. 49.I thank counsel for their assistance.
Mr Bosco Cheng, instructed by Chin and Associates, for the plaintiff Mr Leung Yiu Kwong Sillie, instructed by Cheung & Liu, for the defendant | |||||||||||||||||||||||||||||||