DAH SING BANK, LTD v. THOMSON PRINTING CO LTD AND OTHERS

DCCJ3556/2004

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 3556 OF 2004

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J U D G M E N T

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1.  The plaintiff is a licensed bank registered under the Banking Ordinance.  The plaintiff claims against the three defendants for loss and damage suffered under five lease agreements dated 1 June 2000, 4 June 2001, 21 September 2001, 21 September 2001 and finally 30 October 2001.  All five lease agreements were for the leasing of machines for the 1st defendant’s printing business.  The five agreements were guaranteed by the 2nd and 3rd defendants under a guarantee signed by them on 31 October 2001.

2.  In pursuance to the five agreements, the plaintiff purchased the five machines and leased them to the 1st defendant.  Under the said five agreements the total amount payable by the 1st defendant under the first agreement was $269,100 at $7,475 per month for a period of 36 months.  Under the second agreement the total amount payable was $2,300,004.  The monthly sum payable was $63,889 for 36 months.  Under the third agreement, the total amount payable was $207,000 at $5,750 per month for 36 months.  Under the fourth agreement the rental payable was $476,100 at $13,225 per month.  Under the fifth agreement $1,014,300.  The monthly sum payable was $28,175 per month as rental.

3.  The 1st defendant paid a total of $239,200 under the first agreement for a period of 32 months.  Under the second agreement the 1st defendant paid 31 monthly rentals totalling $1,980,559.  Under the third agreement the 1st defendant paid a total of 29 monthly rentals totalling $166,750.  Under the fourth agreement the 1st defendant paid a total of 29 monthly rentals at $383,525.  Under the fifth agreement the 1st defendant paid 27 monthly rental instalments totalling $760,725.

4.  Thereafter, the 1st defendant defaulted payments of rental under the five agreements.  As a result, the plaintiff served on the 1st defendant a written notice under clauses 8.01(a)  and (k) of the five lease agreements. 

5.  The plaintiff further instructed the firm, Contact Services Company, to inspect and retrieve the five machines at the 1st defendant’s factory premises in the PRC in Dongguan thereby incurring $1,500 costs recoverable under clauses 7.02 and 18 of the agreement. 

6.  On 11 September 2004, interlocutory judgment was entered in default of the defendant’s failure to give notice of intention to defend.  There was an order on that day for the assessment of damages.  At today’s assessment of damages hearing, the defendants are again absent.  The plaintiff called its collection manager, Miss Kitty Chan Kit-ying, to give evidence on behalf of the plaintiff. 

7.  Miss Chan further confirmed the contents of her amended witness statement dated 7 January 2005.  In Miss Chan’s evidence she set out the manner and the calculations of the damages suffered by the plaintiff.  It is Miss Chan’s evidence that three of the five machines, i.e machine numbers 1, 4 and 5, have been retrieved and subsequently sold for a total of $360,000.  After deducting the sale costs, the balance was applied in the reduction of the outstanding amount owed by the 1st defendant.

8.  The balance of the amount outstanding owed by the 1st defendant are as follows:

(a)	Under the second agreement $324,467.67 with interest at 3 per cent per month from 17 February 2004 on the sum of $316,742.26.
(b)	Under the third agreement $42,222.62 with interest at 3 per cent per month from 17 February 2004 on the sum of $39,114.87.
(c)	Under the fifth agreement $16,025.90 with interest of 3 per cent per month on the said sum from 17 February 2004.
(d)	The sum of $1,500 inspection and retrieval fee paid to Contact Services Company.

9.  The plaintiff further asks for costs on an indemnity basis.

10.  As two of the five machines’ rental costs and machine costs had been paid, the only outstanding amounts of three out of the five machines are pursued by the plaintiff today, particularly since the sale proceeds of three of the five machines have reduced the outstanding amounts.  I am satisfied with the calculations set out in Miss Chan’s amended witness statement and I assess the aforesaid sums to be recoverable by the plaintiff from the 2nd and 3rd defendants under the guarantee, the 1st defendant under the five lease agreements.  The aforesaid sums under paragraph 8 above are my assessments.

11.  Interests on the aforesaid sums shall be at 3 per cent per month from 17 February 2004 up to the date of judgment and thereafter at judgment rate until full payment.  Costs to the plaintiff to be borne by the defendants on an indemnity basis.

12.  Leave to the plaintiff to retrieve the original documents Exhibits P1 to P3.

13.  Leave to the plaintiff to file the Supplemental List of Documents, Supplemental Notice under section 47 of the Evidence Ordinance and Order 38 of the Rules of the District Court and the amended witness statement of Chan Kit-ying, Kitty.