MING FAI INTERNATIONAL AIR EXPRESS LTD v. QUANTUM MECA CO LTD

DCCJ  1864  /2005

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL JURISDICTION ACTION NO. 1864 OF 2005

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JUDGMENT

The Plaintiff’s Claim

1.  The pleaded case of the Plaintiff: -

“the Plaintiff claims for HK$162,954.00 being the amount of dishonoured cheques and HK$100,619.70 being the balance of freight charges”.

2.  The total sum being claimed by the Plaintiff was $263,573.70 which included the shortfall of each transaction ( total $53,722.20 ) and the last 8 transactions which amount to $209,851.50.

3.  The Defendant Case was overcharging by the Plaintiff. Although the Defendant in his claims and affirmations said that he came to realize that the Plaintiff had overcharged him when he started to use the other forwarders, the Defendant did not provide information as to how much he had been overcharged.

4.  The Defendant did not dispute the facts that he has not yet paid the services of the last 8 transactions to the Plaintiff.  Mr. Surana said that the amount should be $209,659.00.  The Defendant in fact had issued cheques for the payment of the last 8 transactions but due to the dispute of overcharging by the Plaintiff, Mr. Surana asked the bank to stop payment.

The Plaintiff’s Case

5.  The Plaintiff provides freight forwarding services to customers at agreed charges according to weight and unit rates per each kilogram.

6.  The Defendant was a customer of the Plaintiff between 4/2004 to 12/2004. 

7.  Both the Plaintiff and the Defendant agreed that it was trade practice that there are two chargeable weights, the gross weight and the volume weight.  The Plaintiff would charge the Defendant whichever weight was higher.  To quote an example, when the gross weight is 123 Kg and the volume weight is 456 Kg, the Plaintiff would charge the volume weight.

8.  However, the volume weight is calculated as: -

Length (cm ) x width (cm ) x Height (cm ) x number of cargoes

6000

9.  The Plaintiff and the Defendant also agreed on the unit price per Kg for freight services each time when the Defendant requested the fright services from the Plaintiff.

10.  According to the evidence of the Plaintiff, when a customer required the services of the Plaintiff, the customer was required to supply details of the numbers, the weight and the measurement of the cargoes, destination, name of the customer and the consignee etc in the shipper instruction.

11.  Both the weight and the measurements of the cargoes in the shipper’s instructions are for references only.

12.  When the customers delivered the cargoes to the Plaintiff’s warehouse with “either a delivery note or their own commercial packing lists.” (paragraph 8 of Alien Wong’s witness statement ), all the cargoes would be weighted and measured again in the present of the customers’ agents or delivery men.  These information would be recorded in the cargo receipts.

13.  Mr. Alien Wong said that after weighting and measuring the cargoes, the staff in the Operation Department would then use these information to calculate the volume weight according to the formula.

14.  According to Alien Wong’s evidence there were three copies of cargo receipts: -

1)	One copy to the customer,
2)	One copy to Maggie Wong who was in the Customer Services Department, for filing.
3)	One Copy attached to the cargoes which would subsequently send to the airline.  This copy of cargo receipt would keep in the Operation Department for a week and would be destroyed.

15.  Information from the cargo receipts would then be used to issue the airway bills. A copy of the airway bills would be issued to the Defendant and the airline next day.

16.  After the fright services was completed by the Plaintiff, invoices would be issued to the Defendant for payment.  At the beginning of trade with the Defendant, the Plaintiff allowed 90 days credit, subsequently changed to 60 days and 30 days as the Defendant company had a bad record of late payment and unilaterally deducted the actual payment amount.

17.  If the Defendant had any dispute as to calculation of the volume or any kind of dispute, the cargoes would be put on hold until the dispute was resolved.

18.  According to the back of the airway bills paragraph 12 stated that the Defendant should raise the complaint in writing within 14 days.

The Defendant’s evidence

19.  The Defence’s only witness was Mr. Surana.

20.  The Defendant said that the Plaintiff was a big forwarder company in Hong Kong, during this period of time, the Defendant had provided $1.2 million of business to the Plaintiff.

21.  The Defendant found out the Plaintiff overcharged its company when they used another freight forwarder company as they paid less for the same amount of cargoes.

22.  The Defendant then started to make enquiries from the Plaintiff as to the basis of charging the Defendant.  The Plaintiff wrote to the Defendant on 18/2/2005 that Jonathan Tsang was on leave and he would handle the Defendant’s enquiries upon his return. (p.425)

23.  However, up until the time that Jonathan Tsang left the Plaintiff in 4/2005, he still had not handled the Defendant’s complaint.

24.  Maggie Wong who handled the filing of cargo receipts had left the Plaintiff company and she was not called as a witness.

25.  As to the dispute of the correct amount of outstanding payment, the Defendant said at p.55: -

“Once the above documents are submitted proving that the weight charge by them is accurate, we are ready to pay the outstanding amount.  The same conveyed to the Plaintiff in February itself.”

26.  These supporting documents are the cargo receipts and the master airway bills from the airline.

27.  The Plaintiff could not provide any document as requested by the Defendant.

28.  The Defendant disputed the chargeable weight as the gross weight and chargeable weight on the invoices were the same.  There was no information as to the number of cargoes, their actual dimensions and weights.  The Defendant has no information to calculate the volume weight.

29.  The Defendant company keeps a number of packing lists and booking forms.  He said that these documents showed that the Plaintiff had overcharged him.

30.  Mr. Surana in his evidence said that when his company required the services of the Plaintiff, they would send BOOKING FORMs which contained information as to the numbers of cargoes, sizes and weight to the Plaintiff.  With these information, the Plaintiff could then book the space with the airlines.

31.  The Plaintiff called the BOOKING FORM as the SHIPPER’S INSTRUCTION. (p.521A)

32.  Once the airlines confirmed the available space, the Defendant would then send the cargoes from China to the Plaintiff together with a packing list and the booking form.  These documents provided details information as to the weight, size and numbers of cargoes.

33.  The drivers’ telephone numbers also appeared on the booking forms for purposes of communication.  The Defendant would never engage the drivers for unloading the goods as the trucker company would charge additional cost for such services.  As most of time the drivers would have a consolidated truck which carried different companies’ consignments to deliver to various places in Hong Kong, the drivers would not be interested to wait around for the cargo receipts from the Plaintiff.

34.  The Defendant has never received any cargo receipts from the Plaintiff.

35.  However, the Defendant did receive the airway bills from the Plaintiff. Again, in the airway bills there was no information as to weight, height and sizes of the cargoes.

36.  In both of the airway bills and invoices, the gross weight and the chargeable weight were the same.  The Defendant has no way to find out how did the Plaintiff calculate the chargeable weight.

37.   The letter (p.425) dated 18^th February, 2007 from the Plaintiff confirmed the Defendant still owed the Plaintiff an outstanding amount of $209,659.00.  The letter was signed by Paul Cheng who also has left the Plaintiff company and was not called as a witness.

The Dispute

38.  Michael Liu and Alien Wong’s evidence suggested that if Mr. Surana had any dispute as to the chargeable weight, he should raise it within 14 days in writing as stated in paragraph 12 at the back of the airway bills.

39.  Paragraph 12 of the airway bills in fact only concerns the complaint of delay, damages and non-delivery of goods.

40.  It is misconceive and misleading for them to say that paragraph 12 of the airway bills has any bearing on the issues before me.

The cargo receipts and the airway bills

41.  The Plaintiff said that the information from the cargo receipts would be copied into the airway bills.

42.  It was true that the Plaintiff could not locate the cargo receipts.  They were all lost.  The Defence alleged that the airline’s master airway bills certainly had the same information.  The Plaintiff should have obtained those master airway bills from the airline to prove its case, but the Plaintiff chose not to obtain any airway bills from the airline.  The Plaintiff’s excuse was that there was other information contained in the master airway bills which was commercially confidential.

43.  Having said that the Plaintiff simply made no attempt to collect the master airway bills from the airline.

44.  Evidence from Michael Liu said that the Plaintiff charged its customers including the Defendant according to the weight of the shipment, that was the gross weight or the volume weight, whichever was higher.

45.  In the airway bills, the Plaintiff should have put down the correct information in respect of the gross weight, the chargeable weight, the dimensions and the measurement of the cargoes.  But for unknown reason, the Plaintiff did not do so.

46.  When I assess all the evidence before me, I bear in mind that Michael Liu in his evidence said that without the supporting documents, i.e. the cargo receipts, he could not be sure that the information contained in the airway bills and in the invoices was correct or not.

Maggie Wong, Jonathan Tsang and Paul Cheng

47.  Maggie Wong, Jonathan Tsang and Paul Cheng, they all left the Plaintiff’s Company long before the trial started.  They were not called as witnesses.  The Plaintiff relied on witnesses who did not have first hand information of this case.

48.  Jonathan Tsang was the General Manager of the Plaintiff Company until 4/2004.  When he left his post, he did not inform Michael Liu about the Defendant’s complaint.  Michael Liu ‘s evidence said that he only came to know this case was when he was told to assist the Plaintiff in this trial.  His evidence was very much a general standard operation of the Plaintiff company after he joined this company.  He could not assist as to why all the documents were lost and why the gross weight and the chargeable weight appeared on the various airway bills and invoices were the same.

49.  Susanna So and Alien Wong said that they did not prepare all the invoices, but a lot of the invoices said that they prepared those invoices.  Alien Wong said that it might be a typo mistake.  It might be one, but how do the Plaintiff explains a consistence mistake in all these invoices?  How much weight can I attach to these invoices bearing in mind that Susanna So and Alien Wong were not “invoices makers” and there was no documents to support the Plaintiff’s claim of the chargeable weight in the invoices.

50.  Maggie Wong was the one done the filing and she signed the invoices.  She might issue these invoices, or she might not.  Whoever issued these invoices must base on the information from the airway bills, I have heard evidence that information from the cargo receipts would be copied onto the airway bills.  Question remains unanswer that why the gross weight and the chargeable weight were the same.

51.  On 24/1/2005, the Defendant Company send a letter (p.406) to the Plaintiff Company that the outstanding amount should be $258,003.00.  However, after deducting payment of $1,520, $18,408 and $28,416, the amount arrived at $209,659.00.

52.  On 18/2/2005, Paul Cheng of the Plaintiff send a letter ( p.425 ) to the Defendant Company that the Plaintiff would deposit the cheques amounting to $138,061.00 and expected 3 further cheques from the Defendant amounting to $71,598.00.

53.  The total amount was: - $209,659.00 ($138,061 + $71,598).

54.  In this letter ( p.425 ), Paul Cheng seemed to accept that the outstanding amount was $209,659.00 without disputing the content of the Defendant’s letter ( p.406).

55.  From the content of this letter, it seemed that the only person could handle the Defendant’s complaint was Jonathan Tsang.

56.  It is obvious to me that there was a lacuna in the Plaintiff’s case as to why Paul Cheng would accept that $209,659.00 was the outstanding amount.  In fact no one in the Plaintiff’s case could explain the content of this letter (p.425).  In fact, the letter dated 18.22005 (p.425) from the Plaintiff was a reply to the Defendant’s letter (p.406) faxed to the Plaintiff on 24.1.2005.

The balance of the $53,722.20 ( $263,573.70 - $209,851.50 )

57.      $53,722.20 was the shortfall of all past payments. The Plaintiff said that the Defendant Company had unilaterally deducted some payments in previous transaction.

58.      In both Michael Liu and Susanna So’s witnesses statements which were adopted as part of their evidence, they stated that  “to maintain the relationship with client, the Plaintiff did not sue for the shortfall that the Defendant failed to pay for those invoices. Instead, the outstanding amounts were accumulated and kept in record”.

59.      The previous discussion in relation with the invoices also have the same bearing in this part of the claim as the gross weight was the same as the chargeable weight. Equally, there was no supporting documents such as the cargoes receipts to verify the chargeable weight.

60.      Mr. Surana in his evidence said that he had personally discussed with  Jonathan Tsang about the  “unit price” per kilogram  and was agreed by Jonathan Tsang.  In the statement (p.411) faxed by the Plaintiff  to the Defendant on 29/11/2004: -

The agreed new unit price was:	$11
The new total amount: -	$66,902.

61.  While the invoice at p.142 dated 14/8/2004: -

The original unit price was	$11.5
The total amount was	$69,943.
The shortfall :- $69,943 - $66,902 =	$3,041.

62.  The Defendant Company paid 50% of the $66,902 which was $33,451.00 on 30/11/2004 ( p.222 ). 

63.  In the Plaintiff’s record, ( p.199 ), it showed that the Defendant Company also paid the balance of  $33,451.00 on 6/12/2004.

64.  From the above information, I do believe Mr. Surana that he did has a discussion with Jonathan Tsang and they reached an agreement as to the new unit price as stated in the statement prepared by the Plaintiff. ( p.411 ).

65.  This agreed new unit price produced a new total amount which was different from the amount in the invoices.

66.  I therefore rule out the possibility of the Plaintiff’s claim that it was a typo mistake as to the new unit price.

67.  As to the other invoices without the new unit prices, (p.411) there were a few lines written by the Plaintiff before it was faxed to the Defendant that

“agreed by Mr. Surana to pay the diff [difference] pls issue cheques”.

68.  Mr. Surana said that Jonathan Tsang agreed that the difference should be $16,370.00.   At p.405 the first part of the statement which consists of 14 invoices corresponded with the first part of the statements on p.411.

69.  I also noted that at the bottom of the first part of statement of p.405, it said: -

“promise to pay the rate difference, but we still not received your cheque.”

70.  From all these statements before me, I accepted Mr. Surana’s evidence that there was no issue as to the claim of $53,722.20. 

71.  The dispute has already been settled between Jonathan Tsang and Mr. Surana as evidenced in the Plaintiff’s statements. p.411 and p.405.

72.  The Plaintiff claim for the sum of $53,722.20 must fail.

The Final Submission by the Defendant’s Solicitor

73.   Mr. Tse represented the Defendant attempted to amend the Defence by saying that one of the Defences was “fraud” or “ misrepresentation” on the ground that the Defendant has been acting in person and does not know about the procedure.

74.  Mr. Tse acknowledged that the Defence did not expressly plead the defence of “ fraud ” or “ misrepresentation”.

75.  Mr. Tse’s application to amend the Defence only with a bare assertion that “ it was a case of fraud or misrepresentation” without any particulars.

76.  It was unpredictable as to the Defence case what was its perimeter.  In every pleaded case, it was the duty of the parties to frame their cases with particulars in accordance with their cases.  Order 18 rule 12 and page 46 in Jacob Goldrein on Pleadings Principles and Practice refer.

77.  No Court would entertain such kind of application.

The counterclaim on argument

78.  The Defendant submitted a document on 4/10/2006 titled as “Counterclaim on Argument”, in this passage, the content was very much the same repeating the defence of “overcharging” by the Plaintiff together with an exhibit of an airway bill.

79.  In essence, there was no counterclaim in substance as such.  It was a bare assertion without any particulars.

80.  Mr. Surana certainly did not mention or refer to any document in respect of his claim for counterclaim.

81.  By reading all the pleadings summonses, affirmations and Court orders, I note that the Plaintiff took out an Order 14 summons on 15.6.2005.  On 21.9.2005, the Court after hearing the Order 14 submission from the parties granted the defence conditional leave to defend its case.  On 4.10.2005, the Defendant filed “counterclaim on argument” which begins with the lines: -

“to Master, District Court of HKSAR, in the last hearing we have explained to the Master regarding overcharging …… so we request the Court to return back our deposit money ……  .”

82.  Although the Plaintiff filed Defence on counterclaim which was a bare denial, in my view the “counterclaim on argument” was to readdress the argument put forward by the Defendant before the Master for the Order 14 submission.

83.  This explains the fact that why Mr. Tse did not address on this topic in his closing submission.  

Conclusion

84.  In conclusion, I find that the Defendant should pay $209,659.00 to the Plaintiff with interest from 18.2.2005 when the Plaintiff demands the payment from the Defendant.

Costs: -

85.  I will hear from the parties on the issue of costs.

Order :-

1.	The Defendant do pay the Plaintiff $209,659.00 together with interest at a rate of 5% from 18.2.2005 until judgment, thereafter at judgment rate until payment.
2.	I will hear from the parties on the issue of costs.