CO-HABB FASHIONS LTD. t/a CO-HABB FASHION v. DJAUW DJIN

HCA 13641/1998

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 13641 OF 1998

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J U D G M E N T

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The Background:

1. The plaintiffs are associated companies dealing in garments and operated by Mrs Iu. Mrs Iu first came to know the defendant in about July 1992 when she visited the plaintiffs' office. The defendant identified herself as Mrs Tsang and claimed to be a major garment wholesaler in Indonesia. She started placing orders for garments with the plaintiffs. When the garments were ready, they would be collected by the defendant's forwarding agent, Same Way Cargo Services Limited (hereinafter called "Same Way Cargo") and exported to Indonesia. Usually, the defendant would attend the plaintiffs' office to settle payment by post dated cheques. She signed the cheques in the presence of Mrs Iu and her staff. The account holder as printed on the cheques was "Jauw Kian Kian". On one occasion, Mrs Iu asked why her name differed from that as printed on the cheques, the defendant said that the spelling of her name was indeed as shown on the cheques but she did not want to explain any further as the English spelling of Indonesian-Chinese name was not familiar to Hong Kong people.

2. From about the end of 1996 or early 1997, the defendant's sister, Ah Kuen, accompanied the defendant to the plaintiffs' office to place orders. The defendant introduced Ah Kuen as her sister and assistant. She also told Mrs Iu that Ah Kuen and her elder sister in Indonesia would place orders on her behalf if the defendant was not in Hong Kong. Ah Kuen never issued any cheques to settle payment for the garments. In March 1997, the plaintiff received a fax from Ah Har claiming herself to be the elder sister of the defendant and placed orders for garments. The garments were delivered and then duly paid by the defendant.

3. The defendant was given a credit period of two months. Between March and December 1997, various quantities of garments were ordered by the defendant and supplied by the two plaintiffs. However, the defendant failed to settle the price of the garments ordered. The outstanding balances due to Co-Habb Fashions Limited and Widecover Company Limited are $2,253,469.00 and $488,681.00 respectively.

4. The first defence against the claim of both plaintiffs is that the garments were sold to Jauw Kian Kian (Ah Kuen) and Jauw Pak Ha (Ah Har) trading in partnership under the name or style of Lai Lai Fashion with its principal place of business in Indonesia and the defendant was not a party to those contracts of sale. In view of Mrs Iu's evidence, in particular about the course of dealing in the past, the defendant's representation as the account holder of the cheques, the defendant's representation that Ah Kuen was her assistant, I am satisfied that this defence is incredible.

5. In addition, in relation to the claim by Co-Habb Fashions Limited, the defendant alleged that the plaintiff had reached a settlement agreement with Lai Lai Fashion to discharge the outstanding debt due by installments. The settlement negotiation was initiated on 22 August 1998 by the defendant's sister, Ah Har, writing from Indonesia, using the letter head of Lai Lai Fashion, making certain proposals for discount and settlement of the outstanding debt. According to Mrs Iu, this was the first time when the plaintiffs were approached by Lai Lai Fashion. On 24 August, she responded to Lai Lai Fashion for the attention of the defendant and her two sisters making a counter offer on the payment terms. A month later, the two sisters wrote back in purported acceptance of the payment terms but sought a release of liability against the defendant. This has not been accepted by the plaintiff nor have the two sisters made payment of any of the installments. I consider this letter a counter offer which has not been accepted. As such, there is no concluded settlement agreement which could extinguish the cause of action against the defendant. Accordingly, this defence is also rejected.

Conclusion:

6. In conclusion, I am satisfied that the plaintiffs have proved their respective claims and negatived any possible defences. I therefore enter judgment in favour of Co-Habb Fashions Limited and Widecover Company Limited in the respective sums of $2,253,469.00 and $488,681.00 with interest at judgment rate with effect from 13 August 1998 and with costs to be taxed if not agreed.