YAU TAI WAI t/a WAI MING PRINTING & GRAPHIC ARTS CO. v. CHU HON LEUNG t/a WING FUNG HONG

DCCJ22701/2001

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 22701 OF 2001

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Judgment

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The Plaintiff's claim is for $165,820.00 being the sum advanced by the Plaintiff to the Defendant as deposit for purchase of goods by the Plaintiff from the Defendant.

2. The Defendant counter-claimed for:-

(i) $10,000 being the sum under a dishonoured cheque.

(ii) $93,319.70 being the unpaid balance of goods supplied by the Defendant to the Plaintiff under a partnership agreement after deducting the amount of the dishonoured cheque stated above.

(iii) $47,352.80 being the Defendant's share of profit under the partnership.

The Plaintiff's Case

3. The Plaintiff was the customer of the Defendant who carried on business as supplier of printing materials.

4. On divers dates between 1997 and September 2001 the Plaintiff had advanced money to the Defendant as deposits for goods to be supplied by the Defendant.

5. The amount claimed is the balance of the deposit after the Defendant ceased supplying goods to the Plaintiff.

The Defendant's Case

6. The Defendant admits that he had supplied printing materials to the Plaintiff for gain since May 1997.

7. Pursuant to an agreement made between the Plaintiff and the Plaintiff in or about August 1997 the parties agreed that apart from supplying goods to the Plaintiff for gain the Defendant would also supply goods to the Plaintiff at cost for the Plaintiff to sell to his own clients at higher prices and that they would share the profit.

8. They commenced trading under the partnership in September 1997. Due to the Plaintiff's persistent failure to settle the invoices and profits, the Defendant terminated the partnership in August 2000.

9. The Plaintiff has since August 2000 made periodic payments leaving a sum of $150,672.50 unpaid.

10. The Plaintiff on 8 October 2001 drew a cheque in the sum of $10,000 on Nanyang Commercial Bank Ltd. in favour of the Defendant. The said cheque was dishonoured when the Defendant presented for payment on 14 November 2001.

The Issue

11. The only issue is whether there was such a partnership agreement. Both parties agreed that should this Court find in favour of the Plaintiff then the Plaintiff is entitled to his claim and counter-claimed should be dismissed. Whereas if this Court finds there was a partnership then the Plaintiff's claim should be dismissed and judgment be given for the Defendant as counter-claimed.

The Evidence

12. The alleged partnership commenced on 24th September 1997. The Defendant has produced invoices to the Plaintiff with unit price and invoices from the supplier to the Defendant for the period from May 1997 to 9th September 1997 (i.e. before the partnership). They showed that the Defendant sold goods to the Plaintiff at prices higher than the cost price.

13. From the Plaintiff's own documents p. 1 to p. 50 which were invoices from the Defendant to the Plaintiff there were no unit price. However there were calculations which the Plaintiff agreed were done by his sister-in-law. The Defendant has demonstrated that the column with lower figure was the price at cost by producing his own invoice from the original supplier. Together with the payment of cheques by the Plaintiff with words at the back to indicate part payment for which month and the receipts from the Defendant, he has demonstrated that a partnership agreement as alleged existed.

14. For October 1998 there were 19 invoices for goods delivered by the Defendant at cost totalling $77,027.80. The Plaintiff paid a total of $85,841.60 by 4 cheques in February and March 1999. The receipt issued by the Defendant in respect of the first 3 cheques were for partial payment of October 1998 and the last one for the balance of October 1998. This again goes to show that there was a partnership agreement.

15. The Plaintiff gave evidence and denied that there was any agreement. He said there was a discussion but he felt the calculation was too complicated so he did not agree to the partnership. I do not agree that the calculation was complicated. It was simple, the calculation was just the difference between the price at cost and the price he sold to his customer less his expenses and then share the profit.

16. Although he said the figures on the invoices with no unit price were calculated by his sister-in-law and he knew nothing about it, they were his own documents. If he did not know at least he should have asked his sister-in-law about it. In any event he said only he, the Defendant and Mr. Law were present during the discussion, one wonders how his sister-in-law could have made such calculation without his instructions.

17. It is also not probable that he had advanced more than he had paid for as he alleged because in March 1999 he was only paying for invoices of October 1998.

18. The Plaintiff called Mr. Law Chun Kay. Law said that he was a partner of the Defendant and was present at the time when they discussed about the partnership. Law said that there was no such agreement. I do not find Law an honest witness. The Plaintiff agreed that he is now trading with Law and yet Law denied this fact. He alleged he was a partner of the Defendant's firm but from the tax return he was only the sales supervisor. I do not agree with the Plaintiff's lawyer that he was an independent witness.

Conclusion

19. Having considered all the evidence, for reasons above stated on balance I find that there was a partnership between the Plaintiff and the Defendant as pleaded.

20. In the premises the Plaintiff's claim is dismissed. Judgment for the Defendant in the sums of $10,000, $93,319.70 and $47,352.80 respectively with interests at 1% above prime p.a. from 28th January 2002 until judgment and thereafter at judgment rate.

21. Order nisi:

Costs to the Defendant in respect of both the Plaintiff's claim and counterclaim. Certificate for counsel.