HUIZHOU FOOK WOO PAPER CO LTD v. GREAT CONTINENTAL LTD

HCA 842/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 842 of 2013

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J U D G M E N T
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Introduction

1.  In this action the plaintiff, Huizhou Fook Woo Paper Company Limited, claims against the defendant, Great Continental Limited, the outstanding purchase price together with interest thereon, for goods sold and delivered by the plaintiff to the defendant.

2.  The defendant has filed a defence and a witness statement.  However on 6 November 2015 the defendant’s solicitors ceased to act, and on the 1^st day of this trial the defendant did not appear.  Having heard the submissions of Mr Peter K C Wong, counsel for the plaintiff, I decided, in exercising my discretion, to proceed with the trial despite the absence of the defendant.  I note however that in determining whether or not the plaintiff proves its case in this matter, I have kept a close eye upon the defence filed by the defendant, and upon any matters which may have prevented the plaintiff from proving its case.

The plaintiff’s case

3.  The plaintiff’s case is a simple one.  By 127 written contracts (“the contracts”) made between the plaintiff and the defendant between the period 20 April 2010 and 8 September 2011, and evidenced by the plaintiff’s 127 delivery notes, the plaintiff agreed to sell to the defendant, who agreed to purchase, various paper products at an aggregate price of RMB5,207,154.76.

4.  The goods were duly shipped on board various maritime vessels to the defendant and upon the defendant’s instructions.  On each occasion the plaintiff forwarded to the defendant a delivery note for the quantities of the goods delivered to the defendant, and a bill of lading for the shipment of the goods covered.

5.  The goods sold and delivered to the defendant were accepted by the defendant but despite demands made by the plaintiff, the defendant has not settled the aforesaid amount of RMB5,207,154.76 or any part thereof.

6.  The plaintiff called one witness, Mr Wong Chung Mau (“Mr Wong”), who was a director of the plaintiff and in charge of the financial operations of the plaintiff. I note that Mr Wong joined the plaintiff on 10 April 2013 after the contracts, the subject matter of this action had been performed, and that he has now left the company.  Mr Wong produced, inter alia, the relevant shipping documents and statements of the plaintiff, and confirmed that all of the goods in question had been delivered and accepted.

7.  Mr Wong confirmed that he had checked all the bank accounts of the plaintiff and no payment for the goods in question had been made into any of the plaintiff’s accounts, nor anything resembling the figure in question.

8.  Mr Wong also said that he was part of a new management team which had taken over the management of the plaintiff in 2013.  The new management, according to Mr Wong, discovered that many of the plaintiff’s documents had been destroyed or lost including most of the invoices relating to the goods now in question.  Mr Wong was of the view that these invoices had been deliberately destroyed, and indeed a report has been made to the police relating to the conduct of the earlier management.

The defendant’s position

9.  Although the defendant has not produced any evidence in this trial, I have as noted had close regard to the matters pleaded in its defence dated 9 July 2013.

10.  In §4 of its defence, the defendant admits ordering paper products from the plaintiff between April 2010 and April 2011 for a total price of “about RMB4,639,520.16”.  The defendant does not appear to deny that it received the goods that it had ordered from the plaintiff.  It says however in §§7(a) and (b) of its defence that the plaintiff had requested that payment for all of the goods be made into the personal account of a certain Madam Liang Hui Zhen (“Madam Liang”); and that consequently, the defendant’s purchaser of the goods that the defendant had ordered from the plaintiff, one Quanta Paper Corporation in the Philippines, effected payments to the personal account of Madam Liang in the sum of RMB5,147,253.60 between 26 May 2010 and 12 July 2011.

11.  The defendant says, in its defence, therefore that the plaintiff has been paid for the goods delivered, and therefore the defendant owes the plaintiff nothing.

Analysis

12.  I found the plaintiff’s witness Mr Wong to be a careful and reliable witness.  Although he was not employed by the plaintiff during the currency of the 127 contracts, I have no doubt that he has carefully and thoroughly checked the plaintiff’s documents and various bank accounts, and that no payment has been made into those accounts by the defendant.

13.  I also accept Mr Wong’s evidence that many of the plaintiff’s documents relating to these contracts have been destroyed.  I am not in a position to determine whether any of these documents were deliberately destroyed, which is Mr Wong’s view, but nevertheless I am satisfied that where any documents which would otherwise have been produced by the defendant in respect of these 127 contracts has not been produced, it is because they were destroyed before the new management of the plaintiff took over.

14.  Mr Wong has stated, and I accept, that there is no connection and no payment by the said Madam Liang with or into any of the plaintiff’s bank accounts.

15.  The plaintiff issued a notice of non‑admission in relation to documents originally sought to be produced by the defendant.  The defendant has failed to produce any of these documents during the trial and indeed has simply declined to participate in the trial proceedings at all.  As such, I am unable to place any weight upon the documents now objected to by the plaintiff.

16.  In short, the plaintiff has failed to produce any evidence in support of the matters pleaded in its defence dated 9 July 2013.

Conclusion

17.  I find that the plaintiff has proven that it sold and delivered the goods, the subject matter of this action, to the defendant.  I further find that the defendant has failed to pay the plaintiff in respect of these goods.  The defendant has failed to produce any evidence which would cast any doubt upon the plaintiff’s claim or the proof of its case.

18.  I find that the plaintiff has proven its case in this action.

19.  There will be an order as follows:

(i) Judgment be entered for the plaintiff and against the defendant in the sum of RMB5,207,154.76.  There will be interest at the rate of 6% per annum from 9 September 2011, to the date of judgment, and thereafter at the judgment rate.

(ii) There will be an order that the defendant do forthwith pay to the plaintiff the costs of an occasioned by this action, to be taxed if not agreed.