EVER HARVEST TOBACCO AND LIQUOR BONDED WAREHOUSE LTD v. FORCE 8 CELLARS LTD

HCMP 743/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO. 743 OF 2009

(ON AN INTENDED APPEAL FROM DCCJ NO. 1945 OF 2007)

----------------------

----------------------

----------------------

DECISION

----------------------

1.  The plaintiff was in the:

“… warehouse/inventory and transportation services in Hong Kong”. 

2.  The defendant was engaged in the business of:

“… imports, distributes and retails fine wines and spirits in Hong Kong …”.

3.  By a Warehousing and Delivery Agreement signed on 7 October 2005 and dated as of 5 October 2005 (“the Agreement”), the plaintiff agreed to provide various services to the defendant, including, duty paid and duty free warehouse facilities, warehouse and inventory management, delivery services, and incoming shipments and transfers from bonded and other warehouses, on terms stated in the Agreement.

4.  In its claim, the plaintiff sued the defendant for the sum of HK$52,808.41 as:

“… outstanding payment to the Plaintiff for services provided by the Plaintiff to the Defendant”.

5.  The claim was disputed and in the Defense & Counterclaim, the defendant counterclaimed, inter alia, 

(1)  for the sum of HK$622,691.93.  The details of which was set out in the letter dated 20 June 2006 from Minter Ellison, solicitors then acting for the defendant to Ford, Kwan & Co., solicitors then acting for the plaintiff;

(2)  for the sum of HK$26,040.00 as:

“… additional charges from Wealth Zone Bonded Management Limited (the management company in charge of Ever Harvest’s bonded warehouse since March 1, 2006. …”.

6.  In para. 5 of the Reply and Defence to Counterclaim, the plaintiff relied on an oral agreement (“the Oral Agreement”) as follows:

“5. In view of the above problem, on or about 30^th October 2005, Mr. Liang of the Plaintiff talked to Ms. Budlong of the Defendant at the Plaintiff's warehouse. Mr. Liang expressed his difficulties with the Defendant's uncooperative and irresponsible attitude but Ms. Budlong insisted on having wines picked up delivered from the Plaintiff's warehouse without waiting for a proper stock count to be performed. With Ms. Budlong’s uncooperative attitude, Mr. Liang told her that it would be impossible for the Plaintiff to provide its professional service to the Defendant as per the Agreement. Accordingly, Ms. Budlong and Mr. Liang orally agreed (‘the Oral Agreement’), for the duty paid wines, that:

5.1 Beginning in November 2005, the Plaintiff, instead of providing the warehousing service to the Defendant as per the Agreement, would only rent out the warehouse to the Defendant to store its wines at HK$8,000 a month, and other than delivery of the wines, the Plaintiff would not provide other services to the Defendant (i.e. stock counting, packing, unpacking, placing, sorting of the wines etc., would be handled by the Defendant). As for delivery of the wines, the Plaintiff would follow instructions of the Defendant to pick up and deliver the wines and would charge the Defendant accordingly.”

7.  The Oral Agreement was denied, and it was the main contention between the parties at trial.

8.  After a trial which had lasted several days, District Judge Chow gave judgment in favour of the plaintiff in the sum of HK$52,808.41 and dismissed the defendant’s counterclaim.  The judgment was 21 pages long.  The plaintiff was represented by counsel at trial.  The defendant was represented by Miss Laura Budlong, a director.

9.  The defendant then applied for leave to appeal.  In a 14-page decision dated 3 April 2009, the learned judge refused leave to appeal essentially because the appeal has no merit.

10.  The defendant now applies for leave to appeal.  In the defendant’s skeleton submission prepared by Mr Wilson Leung, counsel for the defendant, it is said that the learned judge’s finding that at the end of October 2005, the Agreement was replaced by the Oral Agreement was contrary to the weight of evidence. 

11.  But the learned judge has found:

“14.   … The defence evidence [regarding the oral agreement] is wholly incredible.  I do not accept for one second that the defence raised on this issue is truthful.  I accept without any hesitation the evidence given by Liang.  The invoices concerning the rate of warehousing the wines are in line of what Liang told this Court in respect of the  circumstances leading to the formation of the Oral Agreement.  That is the true scenario.  I reject the evidence given by Laura Budlong that the Oral Agreement did not exist.  I find that she was not telling me any truth in this regard.”

12.  That is a primary finding of fact made after the learned judge has heard oral evidence from both Mr Liang, a witness for the plaintiff, as well as evidence from Miss Budlong, a witness for the defendant.

13.  The finding is supported by the fact that the plaintiff had invoiced the defendant for the period from 8 October 2005 to 8 January 2006 at the sum of HK$8,000 per month.  That is consistent with the Oral Agreement, and that the sum of HK$24,000 was paid without protest.

14.  In the circumstances, I do not believe that the proposed appeal against the learned judge’s finding on this important issue can succeed.  This is not a case where the defendant could show that the learned judge was plainly wrong.  See Ting Kwok Keung v Tam Dick Yuen and Ors [2002] 5 HKCFAR 336.

15.  Mr Leung also questioned the accuracy of the plaintiff’s invoices.  Mr Wilson Wong for the plaintiff submitted, as the learned judge has pointed out in para. 15 of the decision, no questions were ever put to the plaintiff’s witnesses on the calculation of the invoices.  Moreover, the learned judge has carefully dealt with the matter in paras. 15 - 21 of the judgment, and then paras. 17 - 18 of the decision.

16.  Mr Leung also complained about the dismissal of the counterclaim.

17.  The learned judge dealt with the counterclaim in paras. 22 – 42 of his judgment. 

18.  Only two items of the counterclaim from the letter of 20 June 2006 need to be mentioned specifically.  They are:

15.	Storage charges paid to Wealthzone Bonded Management Limited for the period 15 to 28 February 2006 as a result of Ever Harvest’s failure to release our client’s inventory.(Attachment 14-1 page)	8,877.19
16.	Storage charges paid to Wealthzone Bonded Management Limited for the period 1 to 31 Mach 2006 as a result of Ever Harvest’s failure to release our client’s inventory.(Attachment 15-3 pages)	21,892.70

19.  The other item is that stated in para. 5(2) above.

20.  But as the learned judge has correctly pointed out, there is no evidence that the defendant had paid these storage charges.  Indeed, from a judgement from the Small Claims Tribunal between Wealth Zone Bonded Management Limited and the defendant, it appears that Wealth Zone’s claim for storage charges against the defendant has been dismissed by the Small Claims Tribunal.

21.  Mr Leung also mentioned a claim for damages for wrongful detention of wines after 7 February 2006.  But as the learned judge has pointed out in para. 24 of the decision, the defendant had not made a claim for such loss.

22.  With respect, I agree with the learned judge that the proposed appeal has no merit.  I would therefore refuse leave. 

23.  This is such a clear case that I would also make an order under O. 59 r. 2A(8), that the defendant may not:

“… request the determination to be reconsidered at an oral hearing inter partes.”

24.  The application for leave is dismissed with costs to be taxed if not agreed.