HA WAI t/a WAI YIP IMPORT AND EXPORT TRADING (H.K.) CO v. SANYEI CORPORATION HONG KONG LTD

IN THE COURT OF APPEAL

1987, No. 16
(Civil)

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JUDGMENT

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Cons, V.-P.:

1. This is an appeal from the judgment of Nazareth, J. who rejected a claim by the Plaintiff for damages for non delivery of 300,000 electronic calculators which the Defendant had agreed to provide pursuant to a contract dated the 21st January 1985.

2. Under that contract delivery dates were to be fixed according to the date of the issue of the Plaintiff's Letter of Credit. If the appropriate clause in the contract had continued to operate, the delivery dates would have become the 20th March as to the first 100,000 calculators and the 4th April as to the balance.

3. However the Statement of Claim went on to allege that a variation of the original contract had been reached in discussions between the Plaintiff and the Defendant prior to the issue of the Letter of Credit. The variations which were claimed to have been agreed were firstly that the entire amount contracted for should be delivered by the 25th March; secondly, that the goods, instead of being complete calculators, should be delivered in a semi knocked down form; and thirdly that there should be a slight reduction in price.

4. In the alternative it was alleged that the agreement to vary had been given in a letter dated the 6th March.

5. A still further alternative claimed a completely new contract made partly by the same letter of the 6th March and partly by word of mouth. This contract related to only 150,000 calculators.

6. The Plaintiff trades as an importer/exporter, in particular having customers in China. The Order in the present instance was to meet a contract he had already made with a government department in Shenzhen. In the end he was forced to pay damages for non delivery to that department and part of his claim was for 300,000.Reminbi so paid out. In addition he claimed damages for loss of profit in the sum of US$60,000.

7. The Defendant Company did not deny the original contract but pleaded, in its written defence, that the contract had been mutually terminated on the 12th February, and that negotiations for a new contract had been unsuccessful. It is not in dispute that no goods have ever been delivered.

8. The relevant witnesses before the judge below were a Miss Cheung, who had dealt with the transaction on behalf of the Plaintiff, and a Mr. Murakami, the appropriate sales manager of the Defendant Company. On their evidence, taken together with documents which were before him, the judge was not satisfied that the plaintiff had proved the alleged variation of contract, and counsel conceding that in that circumstance the claim must fail, the judge dismissed the claim.

9. The first and second grounds of appeal before us ask us to reverse the judge’s assessment of Miss Cheung’s evidence. Mr. Kwong, who appears for the Plaintiff today, I hasten to add that he has taken no part in any of the proceedings until today - has argued his case very fully all over again. He has taken us through all the documents and referred us to some passages in the evidence. These, he suggests, clearly indicate that Miss Cheung was a reliable witness and that the Defendant, through Mr. Murakami, did in fact agree to the variation as pleaded. He has made other comments on the evidence and the documents as he went through, and there were similar comments in those parts of his written skeleton to which he has referred us. I have doubt that similar comments were made to the judge below, for most of them find mention in his judgment. There are only two to which the judge does not refer. The first is the suggestion that Mr. Murakami would naturally have been influenced towards dishonesty in order to protect his company; and the second, that the quibbles which he raised as to the port of destination in Hainan were inconsistent with the Letter of Credit.

10. The judge gave a very careful judgment. He explained in detail why he rejected the variations alleged on the one hand by the Plaintiff, both in the Statement of Claim and in the evidence of Miss Cheung, and on the other by Mr. Murakami in his evidence. The judge had the additional advantage, which we do not, that he was able to observe the witnesses giving evidence. That is something to which he specifically referred in his judgment. For my part I see no reason whatsoever to interfere with his conclusions.

11. The third ground of appeal is in substance that, the judge having rejected the variations suggested by both parties, the original contract remained standing and judgment ought to have been given accordingly. As a commentary in law that ground of appeal seems undoubtedly correct. But it is based on a situation that just did not exist. Each of us on this Bench has observed during the course of argument this morning that the Plaintiff's claim was based, and based solely, upon the contract as varied. There was no alternative claim for judgment on the original contract.

12. At the conclusion of his judgment the judge below observed that there had been no application to amend the Statement of Claim. He continued with the suggestion that it would be difficult for the Plaintiff so to amend as to overcome the difficulties in which the Plaintiff found himself. With every respect to the judge I find that comment not easy to understand, but there may well be implications in his judgment which are not readily apparent.

13. Likewise no application has been made to this Court for leave to amend. There is however, in the Notice of Appeal, an application for a retrial, and if that were granted, then liberty to amend to rely upon the original contract. It is an aspect of the appeal that has not been pursued with any vigour by Mr. Kwong. For my part I would not support any such order. A retrial could be embarrassing. Moreover, I see no reason for it. The judge's conduct can in no way be faulted. He gave judgment on all the issues that they were put before him and there is nothing which requires retrial.

14. A further ground of appeal, concerned solely with the order of costs made by the judge below, has been expressly abandoned.

15. For these reasons I would for my part dismiss the appeal.

Clough, J.A.:

16. I agree and have nothing to add.

Power, J. A.:

17. I also agree and have nothing to add.