XCHRX ZUST AMBROSETTI FAR EAST LTD. v. RETKIE CO. LTD.

1996 No. A459

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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J U D G M E N T

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1. The Plaintiff carries on business as freight forwarders. It was engaged by the Defendant on a number of occasions to arrange for the carriage of the Defendant's cargoes by air and sea. It submitted invoices to the Defendant for its services. Five of the invoices dated August 1995 were not paid by the Defendant, and the Plaintiff issued these proceedings against the Defendant claiming the sums to which those five unpaid invoices related.

2. Summary judgment under Ord. 14 for the aggregate amount of those sums was given by Mr. Registrar Betts on 25th March, and there is no appeal from that part of his judgment.

3. However, the Plaintiff claimed an additional sum from the Defendant in these proceedings. That sum related to interest on the sums to which a large number of other unpaid invoices related. Its claim was for contractual interest on those sums at the rate of 1% per month. Summary judgment under Ord. 14 for contractual interest at the rate claimed was also given by Mr. Registrar Betts on 25th March, and it is that part of the judgment against which the Defendant now appeals.

4. It is not disputed that the Defendant was contractually obliged to pay the sums to which the Plaintiff's invoices related within 90 days of the date of the invoices, nor is it disputed that the Defendant ultimately paid a number of the sums to which the Plaintiff's invoices related well after the expiration of this credit period. What the Defendant contends is that (i) there was no agreement relating to the payment of interest, let alone an agreement to pay interest at a specified rate, and (ii) even if there was such an agreement, the Plaintiff has waived its right to claim that interest.

5. The evidence before Mr. Registrar Betts as to whether there was such an agreement could not have been more sparse. It amounted to no more than an assertion of the existence of such an agreement by Monroe Tse, the Plaintiff's Deputy Director, and a denial of its existence by Michael Foong, the Defendant's Administration General Manager. Mr. Registrar Betts knew nothing more than that. It is true that the Further and Better Particulars of the Statement of Claim dated 22nd February showed that the Plaintiff's case was that the agreement had been made orally on 8th July 1994, and had been reduced to writing on 9th July 1994, but those Particulars were not placed before Mr. Registrar Betts. Mr. Registrar Betts therefore knew nothing about that letter. If he had, he would no doubt have asked to see the letter himself, to see whether it bore out the Plaintiff's case or not.

6. On the material before Mr. Registrar Betts, therefore, he could not fairly be criticised for ruling as he did. It was, after all, for the Defendant to satisfy the Court that there was an issue or question in dispute which ought to be tried. I appreciate that it is difficult to prove a negative, i.e. it was difficult for the Defendant to prove that it did not agree to contractual interest. But the matters on which the Defendant now relies in support of its contention that there had been no agreement as to contractual interest or that the Plaintiff's right to claim such interest had been waived were not placed before Mr. Registrar Betts at all. Those matters are set out in paras. 5-7 of the affidavit of Claudio Rondinelli, the Defendant's Marketing Manager and one of its directors, which has been sworn and filed since the hearing before Mr. Registrar Betts.

7. On the material before me today, however, it is even plainer that there is no triable issue as to whether contractual interest was agreed. The letter of 9th July 1994 has now been exhibited. It purports to confirm the agreement reached the previous day, and expressly refers to the fact that the Plaintiff would be charging interest at the rate of 1% per month on invoices not paid within the 90 day credit period. Mr. Albert Yau for the Defendant has told me from the Bar Table that the reason why the Defendant did not seek to correct this error in the letter of 9th July 1994 was because the Defendant did not think that the Plaintiff would charge interest, since the Plaintiff had never charged interest in the past, despite the fact that the Plaintiff's invoices referred to the 90 day credit period. However, Mr. Yau's instructions have not been verified on affidavit or affirmation.

8. Moreover, there is evidence before me which wholly negatives at least one of the allegations made in Mr. Rondinelli's affidavit. Mr. Rondinelli's assertion that prior to the issue of these proceedings no demand for interest had been made has been blown sky-high by three invoices for interest which have now been exhibited, and which were dated 6 months or so before the date of the issue of the writ. I appreciate that in previous actions brought by the Plaintiff against the Defendant for freight charges, there was no claim for interest at the contractual rate, but those actions were all commenced after the three invoices claiming contractual interest had already been sent.

9. Nor in my judgment is there a triable issue as to whether the Plaintiff waived its right to contractual interest. The Plaintiff's conduct in not pressing immediately for the payment of interest once the 90 day credit period had passed, and its practice of not pressing for the payment of interest once the freight charges had in fact been paid, were light years away from amounting to a representation to the Defendant that interest would not have to be paid. In addition, I do not discern anything which suggests that the Defendant acted to its detriment in reliance upon such a representation, which is one of the ingredients of the defence of waiver. Mr. Yau has told me from the Bar Table that his instructions are that if the Plaintiff had made it clear that it was going to charge interest, the Defendant would seriously have considered placing its business with other freight forwarders. Again, that has not been verified on affidavit or affirmation either.

10. For these reasons, the Defendant has not satisfied me that there are issues or questions in dispute which ought to be tried, and it follows that this appeal must be dismissed.

(Brian Keith)

Judge of the High Court