EUROPSONIC S.A. v. UNI-ART PRECISE PRODUCTS LTD.

HCA 19340/98

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 19340 OF 1998

____________________

J U D G M E N T

____________________

Background

1. The Plaintiff is a company incorporated in France and carries on business there as an importer and exporter of electronic equipment. The Defendant is a company incorporated in Hong Kong and carries on business as a manufacturer and exporter of electronic equipment. The Defendant's goods are manufactured at its factory in the Mainland.

2. It is common ground between the parties that in 1992 the Plaintiff first began purchasing and importing goods from the Defendant and resold the same to its distributors in France. The Plaintiff's distributors would then sell them down the chain to wholesalers, retailers and ultimately to the consumers. The goods in question in this action are low frequency infrared headphones and emitters or receivers. This is a set consisting of the headphones and the emitters or receivers. The Plaintiff's reference is CIS 29 whilst the Defendant's reference is IR 700 for the set ("the goods").

3. There is no dispute that in late 1992 the Plaintiff purchased 1000 sets of the goods. There were two further orders of 1000 sets each. There was no problem with the first 3000 sets ordered and delivered to the Plaintiff by the Defendant.

The contract

4. By a contract evidenced by a pro forma invoice dated 21 April 1993, the Plaintiff purchased 4000 more sets of the goods at the unit price of US$33.00 f.o.b. Hong Kong. This was the fourth order and it included 1% more, i.e. 40 more sets, as spare parts. The goods were manufactured by the Defendant with the Plaintiff's brand name "Europsonic" marked on the goods. The goods arrived in France in late July 1993 when the Plaintiff began to sell the same to its distributors.

5. It is the Plaintiff's case that the order of 4000 sets contained defective goods which were not of merchantable quality and were not reasonably fit for their intended use as headphones in breach of the implied conditions contained in S. 16 of the Sale of Goods Ordinance (Cap. 26). The goods that were sold by the Plaintiff to its distributors were returned by them to the Plaintiff. The complaint was that there was static interference in the headphones when in use or that the headphones did not work in one ear or the other. The Defendant denies that the goods were defective. There was also a subsequent order placed in October 1993 for a further 3000 sets of the goods. There is no complaint about the quality of this particular shipment. The only complaint related to the delivery of the 4000 sets delivered in July 1993 to the Plaintiff.

The returns

6. It is also common ground between the parties that a total of 1592 sets of the goods were returned to the Defendant for repairs, the Plaintiff complaining that these were defective. This was done in three lots. The first lot consisted of 470 sets. This lot was shipped back to Hong Kong on or about 26 January 1994 and was returned by the Defendant to the Plaintiff on or about July 1994. The second lot consisted of 660 sets. This lot was shipped back to the Defendant on or about 27 December 1994 and was returned to the Plaintiff in February 1996, over a year later. The third lot consisted of 462 sets. This lot was shipped by the Plaintiff to the Defendant in November 1995 and was returned to the Plaintiff on 12 June 1996.

7. The Defendant disputes that all of the goods in these three lots were defective as alleged. Its case is that it repaired the sets that it found to be defective and returned these and the rest to the Plaintiff in the three lots as set out above. The Plaintiff, however, maintains that of the returned sets, 1024 sets of the goods and 10 units of receivers (CS 29 being the Plaintiff's reference and IR 702 being the Defendant's reference) comprising a total of 1034 units ("the 1034 units") were still defective. These were returned to the Plaintiff by its distributors as they were rejected by dissatisfied customers.

The claim

8. The Plaintiff maintains that it was entitled to reject the 1034 units and claims damages for breach of contract. Alternatively, the Plaintiff claims damages for breach for contract if it is held that it has lost its right to reject the goods.

The evidence

9. I heard evidence from Mr Emile Sebban ("Sebban"), the chairman and managing director of the Plaintiff. There was also the hearsay evidence from the Plaintiff's experts namely, Bernadette Geay-Lollier, who is the hussier or bailiff of the French Court ("the hussier"), Claude Marcel Rene Gravier ("Gravier"), the manager of the Plaintiff's after-sales service who is also a technician employed by the Plaintiff and Philippe Merle ("Merle"), also a technician employed by the Plaintiff.

10. I also heard evidence from Simon Chan Chi Kan ("Simon Chan"), the marketing manager of the Defendant, Chu Man To ("Chu"), the assistant quality control manager of the Defendant and Ho Ka Ming ("Ho"), the assistant plant manager of the Defendant in its factory in Shenzhen.

11. I find that Sebban was basically an honest and truthful witness. I have no hesitation in accepting his evidence save for certain parts thereof which I do not accept and which I shall mention later.

12. On the evidence of Sebban, which I accept, the fourth order of 4000 sets of the goods were selling well after delivery in France in July 1993. The Plaintiff's selling price was FFr. 300 for each set. When they were sold to the distributors, returns kept coming back to the Plaintiff. By October 1993, I accept that there was already a problem with that shipment as the Plaintiff has received some returns. By October 1993, Sebban was, however, expecting that only about 300 to 400 sets would be returned. It was only later that he learnt that the problem was more serious.

13. I also accept Sebban's evidence that in 1993 at a trade fair in Hong Kong he spoke to someone from the Defendant informing him that there was a problem with that particular shipment. He believed that he spoke to Simon Chan but could not be sure. Simon Chan said that he did not speak to Sebban on that occasion. I believe him. Even though this conversation in October 1993 with a representative of the Defendant was not mentioned in his witness statement, I am satisfied that Sebban was telling me the truth. I find that he did speak to a representative of the Defendant in October 1993, informing him of the problem. He probably did not realize at that time that the problem was a serious one as he placed an extra order for 3000 sets of the goods. I accept, as Sebban said, that this was due partly to satisfy customers who had returned the goods as well as to sell more of the same to his distributors. I also accept and find that Sebban was informed by the Defendant's representative that he spoke to that there would be no problem in returning the defective goods to the Defendant for repair but was told to wait until he collected about 400 to 500 sets before returning the same for repairs. This he did and the 1592 sets of the goods were returned for repairs in three lots as mentioned above.

14. The Plaintiff had an after-sales service provided to its customers. I also accept Sebban's evidence that when the goods were first returned by the customers, he did ask his staff to check to see if there were anything wrong with the sets. They sometimes found that the sets were functioning and they were sent back to the customers. It was only later on that the Plaintiff realised why the customers had sent them back. This was because after the sets had been used for one or two hours it started having some noise or interference in the headsets. So, from about the end of 1996 or the beginning of 1997, the Plaintiff tested all the returned sets of the goods for longer periods.

15. Sebban also gave evidence, which I accept, that the schedule of the record of returns and repairs carried out by the Plaintiff from 1993 to 1998 showed that a large number of goods were returned by customers and subjected to repairs by the Plaintiff before being returned to its customers. I was informed that the schedule shows that about 1797 sets were returned by customers. That there was such a large quantity of goods returned to the Plaintiff for repairs is cogent evidence that there were serious problems with the shipment of the fourth order of the 4000 sets delivered to the Plaintiff in late July 1993.

The Defendant's tests

16. In relation to the 1592 sets of the goods that were returned to the Defendant for repairs, these were tested by the Defendant. The results of the tests are contained in the reports dated 25 April 1994, 8 March 1995 and 5 January 1996 respectively, in respect of each of three lots returned.

17. Ho was the assistant plant manager of the Defendant and the person responsible for quality control in its factory in Shenzhen. It is plain that the testing of the goods that were returned by the Plaintiff did not involve listening to the headphones for a prolonged period of time. Ho gave evidence of the testing conducted by the staff as set out in the reports produced. He explained that the procedure involved in testing the goods was that the sets were put on a conveyer belt with workers checking on them. The workers at the end of the production line would listen to the headphones for about a minute for each set but they would not listen to all of them. It was his view that it was not necessary to listen to the sets for very long. He also agreed that Exh. P2, which was produced in evidence and described by Sebban as being of unacceptable quality, was unacceptable. It was also his evidence that if the goods has been kept in storage for a long period of time that might account for the fact that they were not functioning properly. He explained that because of the change in frequency resulting in distortion, the user may hear the distortions in the reception.

18. I was not impressed with Ho's evidence. It is evident that the Defendant's tests did not involve listening to the headphones for any significant period of time. Ho felt that this was unnecessary but I do not accept this. As Mr Sebban said, and as I accept, it was only when his staff listened to the sets for 1 or 2 hours that they realised why the customers had returned the goods. That was why his staff tested the returned goods for longer periods and were satisfied that they were defective. Also, Ho himself never examined the 1034 units still kept with the Plaintiff in France. As he has not examined any of the 1034 units, I am of the view that any suggestion by him that prolonged storage of those units might have been the cause for the poor reception in the headphones is purely speculative and of no value.

19. Chu, the assistant quantity control manager of the Defendant, also gave evidence. He explained that the three lots inspected by the Defendant were checked and repaired and that the goods went through the AQL, i.e. acceptable quality level standard for quality control before being shipped back to the Plaintiff. He also referred to the said test reports as well as the results of the inspection reports dated 5 July 1994, 27 November 1995 and 3 May 1996 respectively. He explained that a portion of the total quantity as set out in those reports were subjected to various quality control tests including a 'drop test', where the packed goods were dropped from a height, and a 'burn in' test, which was a test in high and low temperatures. It was his evidence that the goods passed the standard adopted before being shipped back to the Plaintiff.

20. His evidence was to the effect that inevitably the Defendant's quality control system would prevent defective goods from leaving the factory. However, he eventually reluctantly agreed that it was possible that defective goods could have been shipped to the Plaintiff notwithstanding the quality control system employed by the Defendant.

21. I did not find Chu's evidence to be of much assistance. It is clear to me that some defective goods did find its way from the Defendant to the Plaintiff. Even on the Defendant's own case, functional damage was found on the returned units. Of the first lot, 44 out of 470 units were found to be functionally damaged. This was about 9.36% of the returned units. For the second lot, 62 out of 660 units were found to be functionally damaged. This was about 9.39% of the returned units. And for the third lot, 50 out of 462 units were found to be functionally damaged. This was about 10.82% of the returned units. That was, in my view, in any event an unacceptably high level of defective goods. This was certainly much more than the 1% acceptable level, bearing in mind that 1% spare parts (40 sets) were sent with the order for the 4000 sets of the goods. This also, in my view, supports the Plaintiff's case that the goods shipped by the Defendant to the Plaintiff were not of merchantable quality.

The October 1997 discussions

22. There is a dispute between the parties as to what happened during discussions in October 1997 at the trade fair in Hong Kong between Sebban and Simon Chan.

23. Notwithstanding the return of the goods by the Defendant to the Plaintiff in the three lots, the Plaintiff still received complaints and returns from its customers. Prior to the meeting in October 1997, the Plaintiff, by fax dated 6 October 1997, pointed out to the Defendant that, inter alia, since they received the sets they had a lot of problems and customers were sending them back after they were sold. The Plaintiff asked for replacement items of another product or for their money back and suggested that the Defendant meet Sebban on his visit to Hong Kong in October 1997.

24. Mr Sebban's evidence was that he met Simon Chan at the trade fair in Hong Kong in October 1997 where the Defendant had a booth. His evidence was that Simon Chan admitted that the goods were defective and agreed to compensate the Plaintiff half the value with units of a newer model 430A to be calculated at US$29 per set. It was not entirely clear from his evidence as to what he says was the agreement that he reached with Simon Chan. However, the fax dated November 17, 1997 from the Plaintiff to the Defendant shows that it was his understanding at that time that in return for the defective goods which would be shipped back to the Defendant, the Defendant would send 1100 pieces of the newer model 430A unit, being the replacement items. The 1100 pieces were arrived at by dividing the sum of US$31,894 with the unit price of US$29. This fax shows his understanding of the agreement reached.

25. Simon Chan, however, said that at the meeting in October 1997 he did not agree to accept the return of the goods as they were becoming obsolete. He proposed to Sebban a solution to the problem by each of them bearing half of the cost of the goods. For the Defendant's half, he proposed that he would sell the newer model 430A units at US$29 and said the Plaintiff would have to purchase 3200 units of the same. He would then give the Plaintiff a discount of US$5 per set so that in respect of the 3200 units to be ordered, the total amount of the discount would be US$16,000 which was about half of the value of the remaining items with the Plaintiff which it claimed were defective. Simon Chan said that the Plaintiff did not agree to his proposal.

26. On this issue of fact, I prefer the evidence of Simon Chan. I find that there was no agreement reached between Sebban and him that the Defendant would accept the return of the remaining defective units and replace them with the newer 430A units. I find that no concluded agreement was reached with Sebban in October 1997. It is probable, in my view, that Sebban misunderstood the position and mistakenly thought that he had arrived at a settlement of the problem with Simon Chan. As the Plaintiff is not suing on a concluded settlement agreement reached in October 1997, this does not really matter.

The January 1998 discussions

27. Sebban also said in evidence that the agreement that he had reached in October was repeated when he met Simon Chan in Las Vegas in January 1998. Simon Chan denied this. In my view, Sebban was probably mistaken about the discussions. On this dispute of fact, I also prefer the evidence of Simon Chan.

28. The contemporaneous communications by fax from the Defendant to the Plaintiff after the October 197 discussions confirms, in my view, that there was never an agreement reached either in October 1997 or in January 1998 in Las Vegas to resolve the problem. However, the communications between the parties after October 1997 does go to show that the Plaintiff was still maintaining its position that the goods were defective.

The Plaintiff's expert evidence

29. The evidence of the hussier relates to testing done by her on 20 May 1998 and on 11 June 1998 of a number of sets taken at random from their original packing. She is put forward as an expert witness but there is no evidence at all of her expertise. Mr Graham, Counsel for the Plaintiff, submitted that in so far as her evidence is of fact and not an opinion, such evidence was admissible. Her reports show that some of the sets she examined had crackling sound in one or both ears of the headphones or no sound at all. This was, in my view, her opinion on the matter and I do not think that her evidence is admissible. Even if it is admissible, I would not place much weight on her evidence.

30. The evidence of Gravier and Merle is, however, different. Sebban said that Gravier mistakenly said in his statement that the problem arose from the third delivery, whereas it was from the fourth delivery. He said that the mistake was made because Gravier works at the workshop and not at the delivery point. I accept Sebban's evidence. I accept that the problem arose from the fourth delivery namely, the delivery of the 4000 sets of the goods.

31. Both Gravier and Merle have worked for the Plaintiff for many years and were trusted employees. They are both experienced technicians. Gravier was the head of the after-sales service department and Merle was working under him. I have no hesitation in accepting their evidence. Gravier's evidence was that the goods were returned on numerous occasions by clients. There was always the same problem namely, one side having a lot of interference in reception or there was no sound at all. He also explained that his department had to test the headphones systematically in their warehouse before sending out the replaced items because some of them had the same problem as before.

32. Merle in his certificate dated 3 September 1999 stated categorically that he had tested all the goods in the possession of the Plaintiff and noted that they were all defective.

33. Mr Sebban gave evidence, which I accept, that by 17 September 1997 the Plaintiff had received by then the 1034 units which were defective and which were returned to the Plaintiff by its clients. He did, however, say that he could not confirm that the 1034 units were all part of the goods which were sent back to Hong Kong to be repaired. However, his evidence was that the 1034 units were defective. I also accept Sebban's evidence that Merle confirmed to him that all the units were defective and that he had tested all of them. Sebban himself saw Merle doing the testing once or twice. Sebban's office was above the workshop where the testing took place. On one occasion, he said that he saw Merle trying out the headphones. Merle tested 10 of them at once in a series. It took months to test them all. I accept that there has been a long and prolonged testing of the 1034 units. The evidence that all of them were defective is cogent evidence.

34. On the evidence, I find that the 1034 units were defective. They were not of merchantable quality or fit for their purpose for use as headphones in breach of the implied conditions.

Right to reject

35. The Plaintiff claims that it is entitled to reject the 1034 units as they were defective. However, the evidence is that once the goods were delivered to the Plaintiff in July 1993 it sub-sold them to its distributors.

36. S. 37(1)(b) of the Sales of Goods Ordinance (Cap. 26) provides that the buyer is deemed to have accepted the goods when the goods have been delivered to him and he does any act in relation to them which is inconsistent with the ownership of the seller. In Hardy and Co v Hillerns and Fowler [1923] 2 KB 490, it was held that the transfer of possession to the sub-purchasers put an end to the buyers' right of rejection notwithstanding that it took place before a reasonable time for examining the goods had expired. I am satisfied that by the sub-sale of the goods to its distributors, the Plaintiff, as the buyer, has done acts in relation to them which is inconsistent with the ownership of the Defendant as seller. In such circumstances, the Plaintiff is deemed to have accepted the goods and has lost its rights of rejection. The Plaintiff must be taken to have waived the right to reject but it is nevertheless entitled to claim damages.

Quantum

37. There are seven heads of claims.

1. Cost of the goods.

38. The purchase price for the 1034 units is agreed at US$33,942. The Plaintiff claims that it is entitled to the whole of the sum as he has lost the value of those goods. I accept Sebban's evidence that these goods have no commercial value. They are not only defective but are also obsolete. Simon Chan also said that the goods were obsolete. He said that the Defendant did not agree to the return of the same as they were worthless to the Defendant.

39. I am satisfied that the 1034 units have no commercial value. I also bear in mind that the units all had the Plaintiff's brand name 'Europsonic' marked on them. It is unreasonable to expect the Plaintiff to sell these defective goods with their brand name. The reality of the situation is that the 1034 units simply have no commercial value. I award the Plaintiff the full cost of the goods at US$33,942 under this head.

2. Cost of the storage.

40. The sum claimed is FFr. 217,269.25. This represents the storage cost as particularised in the supplemental statement of Sebban. The claim originally was for the total period of storage cost from September 1994 to July 1998. However, as the three lots were returned to the Defendant for repairs, this claim was subsequently revised to make adjustments for the periods of time that the three lots of goods were not with the Plaintiff but were with the Defendant for repairs. The claim was further revised to include storage after July 1998 right up to trial in November 2000 making an additional claim of FFr. 126,154.88.

41. The figure finally claimed is as follows :

Original claim	FFr.	217,269.25
Adjustment for the periods the 3 lots were under repair	- FFr.	47,096.62
	FFr.	170,229.00
Adjustment for additional storage	+ FFr.	126,154.88
Total claim	FFr.	296,383.86

42. It only became clear from the re-examination of Sebban that this was not a claim for reimbursement of expenses actually incurred in storing the goods in a public godown or warehouse. The goods had never been stored in any public godown or warehouse but were kept in the Plaintiff's premises. There is no evidence whatsoever to show either that the goods had occupied space which the Plaintiff had to use for the storage of other goods at the relevant times or that the Plaintiff had to incur expenses to store other goods elsewhere because the space was being occupied by the defective units. I am not satisfied that the Plaintiff is entitled to claim any part of the loss under this head of claim. The Plaintiff has not proved that he has suffered any loss under this head. I make no award under this head.

3. Freight and shipping costs between France and Hong Kong.

43. The amount claimed this FFr. 77,687.69. This is particularized in para. 18 of Sebban's supplement statement. All the items particularized are agreed save for the sum of FFr. 11,904.46, being import charge back to France, and FFr. 50,844, being import customs charge for importing the goods back to France. These two items relate to expenses incurred by the Plaintiff in shipping the goods back to Hong Kong in February 1998. This shipment was not accepted by the Defendant and it had to be shipped back to France. The evidence shows that the Defendant refused to accept the return of these goods as was made clear to the Plaintiff in the fax dated 10 February 1998 which was received by the Plaintiff on the same day. I have already found that there was no agreement reached in October 1997 for the return of the 1034 units in October 1997. Mr Sebban said that he could have stopped that shipment after receipt of the fax from the Defendant but he did not do so. The goods had not yet been shipped out of France although they had been picked up for shipment. But the Defendant never agreed to accept the return of the 1034 units and the Plaintiff should not have shipped them to Hong Kong in February 1998. I am of the view that it was not reasonable for the Plaintiff to have shipped the 1034 units back to Hong Kong and the expenses incurred in doing so are not recoverable from the Defendant. The only amount recoverable under this head of claim are in respect of the items particularized in para. 18 a to c of Sebban's supplemental statement. This amounts to a total of FFr. 10,209 under this head.

4. Repair costs.

44. This is for the costs incurred by the Plaintiff in repairing goods which were returned by its customers and which were then sent back. The total claim is FFr. 260,385.30 for the repair costs for the years 1993 to 1998. The particulars are as follows :

Year	Hours		Cost
1993	261	FFr.	37,818.9
1994	733	FFr.	106,211.7
1995	479	FFr.	69,407.1
1996	214	FFr.	31,008.6
1997	89	FFr.	12,896.1
1998	21	FFr.	3,042.9
Total	1797	FFr.	260,385.3

45. The evidence of Sebban, which I accept, was that it took each headphone about one hour to repair by the in-house repairmen. The figures are taken from the schedule of repairs. I accept that the schedule is an accurate record of the repairs carried out by the Plaintiff in respect of the returned goods. The unit rate of FFr. 144.9 per hour is the French Government statistical average hourly rate of workers which is an admitted figure. Instead of producing the payroll records of the workers to work out the unit rate, Sebban relied on the Government statistical figure of FFr. 144.9 to arrive at the sum of FFr. 260,385.3 (1797 hours x 144.9). Sebban, however, explained that the figure of FFr. 144.9 per hour would have taken into account paid holidays and leave and payment of bonus. These should have been included in the figure of FFr. 144.9 I accept this.

46. Mr Sebban did, however, frankly concede that he did not know if the hourly rate paid to his staff was more or less than FFr. 144.9 per hour as he did not make a calculation. He accepted that he could have made some mistakes in the calculations either for his advantage or for the Defendant's advantage.

47. I am satisfied that the Plaintiff is entitled to claim for repair costs based on 1797 hours. However, as the unit rate of FFr. 144.9 might be more advantageous to the Plaintiff than the actual wages paid to its employees, I think that some deduction ought to be made for this head of claim. Doing the best I can on the evidence, I allow 80% of this claim to make some allowance for mistakes made in the Plaintiff's favour. Under this head, I allow the sum of FFr. 208,308.2 being 80% of the FFr. 260,385.3 claimed.

5. Cost of returning repaired goods to customers and reimbursement of freight and carriage costs paid by customers.

48. This is claimed in the total sum of FFr. 62,280. The delivery rate of FFr. 30 per delivery is agreed. On the evidence of Sebban, this was a special rate given by one forwarder. I see no reason to think that the other forwarders would have charged less than FFr. 30 for each delivery. This head of claim has been particularised as follows :

Year	No. of Units Returned		Cost
1993	129	FFr.	7,740
1994	398	FFr.	23,880
1995	274	FFr.	16,440
1996	146	FFr.	8,760
1997	76	FFr.	4,560
1998	15	FFr.	900
Total	1038	FFr.	62,280

49. These are taken from the schedule of repairs produced. I allow this head of claim in full in the sum of FFr. 62,280.

6. Loss of Profit.

50. The claim in respect of this item is for loss of profit on the remaining 2976 sets, i.e. 4000 sets from the July 1993 shipment less the 1034 defective units. Sebban's evidence was that these 2976 sets were sold at FFr. 168 instead of FFr. 300 resulting in a loss of FFr. 392,832 to the Plaintiff. (300 - 168 x 2976). This head of claim is on the basis that the Plaintiff could have sold the 2976 units at FFr. 300 but because of the defects in the goods, the Plaintiff was forced to reduce its price to sell all of the 2976 sets at FFr. 168. However, the evidence on this is not at all satisfactory. No records have been produced to show when these goods were sold or that they were in fact sold at FFr. 168. I am unable to accept Sebban's evidence on this.

51. The evidence of Sebban was that in respect of some other items for instance ECM 2003, and the MS 2000 the Plaintiff reduced its selling price from 1993 to 1996 to between 46% to 50%. As for the goods in question which were shipped in 1993, the list price of the Plaintiff in 1996 was FFr. 168. That is about a 56% reduction from the FFr. 300. It is probable that there was a price reduction because the goods in 1996 had become obsolete with newer models in the market.

52. It is for the Plaintiff to prove its loss with satisfactory and cogent evidence. I am not satisfied that the Plaintiff has been forced to sell the 2976 units at a reduced price because of the defective 1034 units. I do not make any award under this head.

7. Loss of Reputation.

53. It is clear that a claim for loss of reputation as such is not maintainable in an action for breach of contract save for limited exceptions which do not apply in this case. (Aerial Advertising Co. v. Batchelors Peas Ltd. (Manchester) [1938]2 All ER 788; Foaminol Laboratories Ltd. v. British Artid Plastics Ltd. [1941]2 All ER 393).

54. In reality, the claim which the Plaintiff seeks under this head is, in effect, for the loss of repeat orders. Sebban's evidence was that this claim related to the loss of profit for future sales that the Plaintiff could have made if the Defendant had not supplied him defective goods. If it were not for the defective goods, he would have ordered more goods from the Defendant in 1996 and 1997 and would have sold goods to the value of US$200,000 for each of those two years. He estimated the loss of further profit for those two years at a total of US$120,000, being US$60,000 for each of those years.

55. I do not accept Sebban's evidence on this head of claim. It is highly speculative and unsatisfactory. It is for the Plaintiff to prove that it has suffered pecuniary loss as a result of the Defendant's breach of contract. It must do so by satisfactory and cogent evidence. In respect of this head of claim, the Plaintiff has failed to prove its loss.

56. Furthermore, in my view, this loss is too remote and is not recoverable in any event. In my judgment, it was not within the reasonable contemplation of the parties at the time the contract was made in April 1993. I make no award under this head.

Conclusion

57. The total damages awarded to the Plaintiff are in respect of the following heads of claim :

(a) under 1,	US$	33,942
(b) under 3,	FFr.	10,209
(c) under 4,	FFr.	208,308.2
(d) under 5,	FFr.	62,280

58. I give judgment to the Plaintiff in the sum of (1) US$33,942; and (2) FFr. 280,797.2 (being the total of (b), (c) and (d) above). There will be interest on the said sums at 1% above prime rate from issue of writ until judgment and thereafter at judgment rate until payment.

59. I make an order nisi that the Defendant should pay the Plaintiff its costs of the action.