KITH MUTUAL BENEFITS INTERNATIONAL LTD. v. STACK ELECTRONICS FAR EAST LTD.

HCA21508/1998

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.21508 OF 1998

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

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

J U D G M E N T

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

1. In this action, the plaintiff claims payment for goods sold and delivered, while the defendant counterclaims for damages for breach of contract under a breach of conditions based on allegations that the goods were defective. The defendant does not appear at the trial. Its solicitors ceased to act for it a few days ago. I have heard the evidence of one witness for the plaintiff, i.e. Mr Yau Chau Min.

2. It is clear that the plaintiff agreed to sell and the defendant agreed to purchase 5,880 pieces of 2MHz 32 DRAM Module and 4,000 pieces of 1MHz 32 DRAM Module at the agreed unit price in respect of the 2MHz Modules at US$10.30 each, and of the 1MHz Modules at US$5.40 each.

3. The defendant specified that the goods must be in the original packing and it appears from the invoice that all the goods were in fact of reseal boxes except for 400 pieces of the 1MHz Module. The agreed price for the goods was US$82,164. The goods were delivered on 24 April 1998 and on the same day, the plaintiff issued a commercial invoice for the goods. On 30 April 1998, the defendant paid US$21,600 to the plaintiff for the 4,000 pieces of 1MHz Module.

4. On 18 May 1998, the defendant returned 540 pieces of the 2MHz Module to the plaintiff and on 5 June 1998, the defendant returned a further 120 pieces of the 2MHz Module to the plaintiff. It appears that there was a complaint in respect of 200 pieces of the 1MHz Modules. Mr Yau says that the plaintiff supplied replacement modules for these. Accordingly, the defendant retained 520 pieces of 2MHz Module and all of the 1MHz Modules, including the ones which they claimed were defective and for which the plaintiff had supplied replacements.

5. The plaintiff demanded payment in the total sum of US$53,766 for the 5,220 pieces of 2MHz Module which is the original agreed amount less those which were returned. I have been shown a number of pieces of correspondence emanating from the plaintiff to the defendant, asking them to, in effect, either send back what they claimed was defective - if they were claiming that something was defective - or else pay up. This went on from about August 1998 until November 1998 and included requests to the defendant's holding company in the USA to get the Hong Kong defendant, i.e. their Hong Kong subsidiary, to sort out the matter. But it was all to no avail. The defendant neither paid the US$53,766 which was claimed for the goods, nor did it return any goods which it claimed to be defective, nor did it provide any specification whether by an expert report or otherwise of the alleged defects in the goods. I am accordingly satisfied that the plaintiff has proved its claim against the defendant for US$53,766.

6. The defendant has not come to court and has not proved its counterclaim, indeed it does not seem ever to have taken any steps to substantiate its counterclaim. Accordingly, there will be judgment for the plaintiff in the sum of US$53,766 or its equivalent in Hong Kong dollars, with interests thereon from the date of the writ until the date of judgment at the Hong Kong Association of Bankers' best lending rate plus 1% until the date of judgment, i.e. today, and thereafter at judgment rate. The defendant's counterclaim is dismissed. The costs of the claim and the counterclaim are awarded to the plaintiff, to be taxed if not agreed.