MATTEL ASIA LIMITED v. LO SAU CHEUNG, ALAN AND ANOTHER

1987 No.A4187

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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ASSESSMENT OF DAMAGES

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1. In handing down judgment I explained my conclusion that the calculations in schedule III to the statement of claim were mathematically incorrect. See page 5 of the judgment down to the start of the paragraph numbered 2.

2. The figures given in the bottom line of schedule III did not disclose the method of their calculation, other than by reference to a percentage figure. In this absence of information, I assumed that the percentage represented an add on factor for profit; this assumption made the figures incorrect.

3. In view of the discrepancy between my calculations and the figures in the schedule, I gave leave to plaintiff's solicitors to re-open the issue for the purpose of clarification. This they now seek to do, and have filed a further affidavit of Mr. Cheung Sheung Kan.

4. According to Mr. Cheung, the calculation of profit in the toy industry relies on a complex formula which is set out in an annexure to his latest affidavit. The effect of this is that a profit margin described as, say, 45% in terms of the formula amounts to some 180%, as a percentage mark up.

5. The purpose of this obscure method of calculation I can only assume to be to conceal from a curious public the vast profits made in the toy industry. Nonetheless I have accepted Mr. Cheung as an authoritative source in his field and am satisfied that he is describing a normal trade practice. I also accept the figures he supplies as representing a 40% profit in terms of the formula used.

6. I accordingly find that the figure for loss of profit in the first head of claim should be $3,241,011.17 and that figure is substituted as the first of the four awards 'on page 7 of the judgment.

7. The total award is therefore adjusted to $4,962,776.17, on which interest will run as ordered.