REAL INTERNATIONAL CO. LTD. v. UNISON ENTERPRISE COMPANY (a firm)

BETWEEN: -

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JUDGMENT

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1. This is an appeal by the plaintiff company which is in liquidation, from a decision of Master Hansen given on the 11th February 1985, when he granted the defendant unconditional leave to defend with regard to contract 3 which forms part of the statement of claim.

2. On the 7th October 1982 the parties entered into a written contract whereby the defendant agreed to supply to the plaintiff 10,000 dozen U.S. quota for 1983 under categories 347 and 348 for Type B transfer at a unit premium of $145.00 per dozen. The defendant was aware that the quota was intended for re sale by the plaintiff to Wing Cheong Trading Company at a unit premium of $238.00 per dozen. A sum of $725,000.00 was paid on account by the plaintiff to the defendant upon the signing of the contract.

3. Despite repeated requests made by the plaintiff the defendant has failed to effect the transfer of the quota nor repaid the sum of $725,000.00. The plaintiff therefore claims in respect of this contract the sum of $1,655,000.00 made up as follows:-

The defendant does not dispute the terms of the contract, admits receipt of the sum of $725,000.00, and does not challenge the plaintiff's loss of profit. However, the defendant contends that the agreement is illegal or void on the grounds that the plaintiff was trafficking in quotas.

4. Mr. Leong agreed that the practice of transferring quotas for profit in Hong Kong, is well known, but he submitted that the court should express the view that such a practice is objectionable and against public policy. I informed Mr. Leong that matters of policy are determined by the legislature and not by the courts. Transfers of quotas for profit are not illegal. The defendant is in clear breach of a valid contract and has raised no arguable defence to be tried.

5. Accordingly I allowed the appeal and gave judgment for the plaintiff for the sum of $1,655,000.00 with costs.