THE MONTAGE ACCESSORIES CO LTD v. SUN PING WEAVING & DYEING FACTORY LTD

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JUDGMENT

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Liu JA:

1. This case is one of sale of goods. The plaintiff sold fabrics to the defendant under three agreements. It is the allegation of the plaintiff that the sale was by description and on implied conditions. On the other hand, the defendant's case is that the sale was by sample. Be that as it may, defects, so the plaintiff says, were discovered after delivery and in fact they came to light after the fabrics had been processed by the plaintiff's sub-buyers. So, it is a case in which claims were made by the plaintiff on the basis of complaints of its sub-buyers.

2. A summons dated 19 April 1996 was taken out by the defendant seeking Further and Better Particulars with reference to the plaintiff's sub-buyers under all three agreements pleaded in the Statement of Claim. The defendant's summons was dismissed by Master O'Donnell.

3. The defendant took the matter on appeal to Sears, J who, on 18 April 1996 granted, in essence, the defendant's application but in a reformulated version. The Further and Better Particulars sought by the defendant related to paragraphs 12 (a), (b) & (e) of the Statement of Claim. Sears, J ordered the plaintiff to supply particulars in the following terms:

4. Under the 3rd of the three agreements between the plaintiff and the defendant in the sale of fabrics, particulars in relation to the sub-buyer, Tarrant Company Limited ("Tarrant"), had been furnished by the plaintiff to the defendant. The arguments before the judge revolved around particulars sought with respect to the other pleaded sub-buyers. The plaintiff feels aggrieved by the determination of and the order made by Sears, J, hence, the instant appeal.

5. It would be convenient here to make references to the Statement of Claim. The material parts are paragraphs 12 (a), (b) & (e), 15, 16 and 19, including the prayer. To all of which I shall, in the latter part of this judgment, return.

6. Suffice to say, under the 3rd of the three Agreements between the parties to this action, the plaintiff claims loss of profits arising from the complaints of its sub-buyers. Under this head, the plaintiff claims against the defendant on the claims forwarded and to be made by Tarrant. That comprises (1) loss of profits and the payment of compensation to Tarrant of over $1.7m and (2) the plaintiff's claims on the returned $46,008 yards by Tarrant, including monthly storage charges. That is in toto the plaintiff's claims under the 3rd Agreement. Under all three Agreements, the 1st, 2nd and the 3rd, the plaintiff claims an indemnity against the defendant with respect to future claims from sub-buyers other than Tarrant. In substance, counsel for the plaintiff now maintains that the indemnity claim is based on "immaterial allegations".

7. It is submitted before us that particulars sought by the defendant under the 3rd Agreement have all been supplied and that under the 1st and the 2nd Agreement, as the allegations contained in the Statement of Claim are virtually immaterial allegations, the defendant would not be entitled to any particulars.

8. As to the submission that particulars have all been furnished under the 3rd Agreement, one merely needs to go to paragraph 15 of the Statement of Claim. The defendant sought particulars under that paragraph as follows:

"Of the allegation that ".... the plaintiff only had notice of the said breaches and/or defects after delivered fabrics were (sic) made into garments by the sub-buyers:-

This is the answer provided by the plaintiff:

"The buyers include but not restricted to Tarrant Company Limited and Golder Ram Fabrics Limited as the plaintiff is now in the process of stock-taking the number of finished garments which were made from the said defective fabrics."

9. It is reasonably clear that under the 3rd Agreement, apart from Tarrant, there was at least one more sub-buyer, the Golder Ram Fabrics Limited. There might be more when stock-taking of the plaintiff had been completed.

10. For the alleged indemnity, paragraph 17 of the Statement of Claim refers to sub-buyers under all three Agreements, including the 3rd. The allegation of the plaintiff is:

"that the defendant is liable for the claim by Tarrant or any other claims by its sub-buyers against the plaintiff and to indemnify the plaintiff for all the damages, interest and costs occasioned in such claims." (Emphasis added).

11. There are or are to be "other claims" of sub-buyers under the 3rd Agreement other than those of Tarrant. As will be seen from paragraph 19 of the Statement of Claim, they will definitely claim. It is inaccurate, therefore, for counsel for the plaintiff to submit that particulars for sub-buyers under the 3rd Agreement have all been furnished by the plaintiff to the defendant.

12. I turn to counsel's submission for the 1st and the 2nd Agreements that the allegations with reference to the other sub-buyers are virtually immaterial allegations and that therefore the defendant will not be entitled to particulars and none should have been ordered by Sears, J.

13. Paragraph 17 of the Statement of Claim relates also to the 1st and the 2nd Agreements. I do not propose to repeat what I have quoted of that paragraph. I should remind myself here that the sub-buyers pleaded in that paragraph include sub-buyers not only for the 1st and 2nd Agreements but also for the 3rd Agreement. An indemnity is claimed admittedly under all three Agreements. What is sought to be taken advantage of is the absence of an express prayer for a declaration of a right to indemnity. It is perfectly clear from the averments in the Statement of Claim that apart from Tarrant, firm claims from the other sub-buyers are yet to come. When the prayer of the Statement of Claim seeks in its paragraph 3 an indemnity, it is implicit that the plaintiff in fact claims a declaration as to the plaintiff's right to an indemnity against complaints from the other sub-buyers under all three Agreements. Indemnity itself has been conceded as directed against claims from all sub-buyers including those claims under the 3rd Agreement from sub-buyers other than Tarrant, and these claims must be, in the circumstances, future claims. On such a claimed indemnity against future complaints, it cannot be denied that particulars as ordered by the judge were justified. As a matter of fact, under the 1st and 2nd Agreements, the plaintiff's claims have gone beyond an indemnity against future claims. Paragraph 19 of the Statement of Claim alleges: These other sub-buyers "will definitely claim against the plaintiff for fabrics sold to them by the plaintiff at a later stage. The plaintiff will seek an indemnity against the defendant for any claim arising from and/or caused by the defendant's breach of the 1st, 2nd and 3rd Agreements." (Emphasis added). Therefore, the foreseeable claims from the other sub-buyers are, as alleged, definite. Not only has the plaintiff maintained that their claims from these other sub-buyers will definitely come, but in its response to a request for Further and Better Particulars seeking information as to "all facts and matters relied upon by the plaintiff to support the allegation that the plaintiff's sub-buyers would definitely claim against the plaintiff of fabrics sold to them at a later stage", the plaintiff provided the following answer:

"In support of the plaintiff's claim, the plaintiff avers that defects as set out in the Amended Statement of Claim were not apparent until the fabrics were (sic) made into garments under the 1st, 2nd and 3rd Agreements".

Therefore, not only had the plaintiff asserted in paragraph 19 of the amended Statement of Claim that the other sub-buyers would definitely make claims at a later stage, the plaintiff further affirmed these claims as definite and gave reasons in its answer to a request made for particulars of an allegation contained in paragraph 19 of the Amended Statement of Claim.

14. In conclusion, the allegations under the 1st and the 2nd Agreements and similar allegations under the 3rd Agreement just simply cannot be regarded as immaterial allegations. They are allegations on which the plaintiff claims an indemnity against as well future claims as claims that would definitely be made at a future stage.

15. In the circumstances, the order in re-formulated form made by the judge cannot be faulted. None of the submissions made by counsel for the appellant has any substance, and it is quite unnecessary to deal specifically with the grounds in the Amended Notice of Appeal. For all these reasons, I would dismiss this appeal.

Rogers J:

16. I agree and I have only one short point to add. It was submitted on behalf of the plaintiffs that the Statement of Claim was defective by reason of the presence of immaterial averments. The reason it is said that particulars should not have been ordered is that they would have been particulars of those immaterial averments. As has just been pointed out the averments in the Statement of Claim are not immaterial. However, if those averments were immaterial, the plaintiffs' correct course was to have amended the Statement of Claim and not left an embarrassing the pleading on the file.

17. I concur with the judgment which has just been given.

Nazareth VP:

18. I also agree. The appeal is accordingly dismissed.