HCA 902/2012
IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF FIRST INSTANCE
ACTION NO 902 OF 2012
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BETWEEN
CRYSTAL GEMS (HK) LIMITED
Plaintiff
and
WAH NGAI HONG JEWELRY COMPAMY LIMITED
Defendant
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Before: Mr Recorder Patrick Fung SC in Court
Date of Hearing: 21 July 2014
Date of Judgment: 29 July 2014
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J U D G M E N T
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Introduction
1. This is a claim by the plaintiff against the defendant for the price of diamonds sold by the former to the latter together with interest and costs.
2. At the commencement of the trial, a Mr Li Chi Hung (“Mr Li”), a director of the defendant, made an application before me for leave for him to represent the defendant. There was originally on record a solicitors’ firm acting for the defendant. That firm no longer acts for the defendant.
3. It transpired that Mr Li on behalf of the defendant had already made an ex parte application before Master Ho on 15 July 2014 for a similar order. That application was made under Order 5, rule 6(3)(a) of the Rules of the High Court which provides as follows:
“(3)(a) An application by a body corporate for leave to be represented by one of its directors shall be made ex parte to a Registrar and supported by an affidavit, made by the director and filed with the application, stating and verifying the reasons why leave should be given for the body corporate to be represented by the director.”
It was rejected by Master Ho. Order 5, rule 6(4) goes on to provide as follows:
“(4) No appeal shall lie from an order of the Registrar under paragraph (3) giving or refusing leave.”
The application by Mr Li before me was not even an appeal against Master Ho. I was firmly of the view that I had no jurisdiction to disturb Master Ho’s Order refusing leave. I therefore dismissed Mr Li’s application and proceeded to deal with the case on the basis that the defendant was absent and unrepresented.
The facts
4. Two witnesses were called to give evidence for the plaintiff, namely, a Mr Shah Tushar Arvindkumar (“STA”) and Mr Shah Prasannkumar Kantilal (“SPK”).
5. On 10 March 2011, STA took five lots of diamonds to the defendant. The defendant decided to purchase two of those lots, namely, Lot D11223 and Lot D11222. Lot D11223 consisted of 380.87 carats and Lot D11222 consisted of 369.92 carats. It was agreed between STA and the representatives of the defendant that the latter would be entitled to reject about 10% of each lot.
6. In the abovementioned circumstances, STA made out the following documents which he handed to the defendant on the spot:
(i) Sales Invoice No 30192 dated 10 March 2011 in relation to Lot D11223 with a weight of 342.76 carats and for the amount of US$129,563.28. The same was confirmed and counter‑signed by a Mr So So of the defendant.
(ii) Consignment Note No 13717 also dated 10 March 2011 and in relation to Lot D11223 with a weight of 38.08 carats as being diamonds to be rejected and returned.
(iii) Sales Invoice No 30193 dated 10 March 2011 in relation to Lot D11222 with a weight of 332.71 carats and for the amount of US$134,162.73. The same was likewise confirmed and counter‑signed by Mr So So.
(iv) Consignment Note No 13716 also dated 10 March 2011 and in relation to Lot D11222 with a weight of 36.99 carats as being diamonds to be rejected and returned.
STA explained that documents (i) and (ii) would make up roughly the total weight of the original Lot D11223 and documents (iii) and (iv) would make up roughly the total weight of the original Lot D11222.
7. The return of the diamonds by the defendant to the plaintiff under the two Consignment Notes did not take place immediately but in May 2011.
8. The delivery of the two lots of diamonds and the return of the rejected portions, inter alia, were all recorded by STA in his log book.
9. On 16 May 2011, STA took eight lots of diamonds to the defendant. The defendant decided to buy only one lot, namely, Lot D11219 weighing about 418 carats. The defendant asked for a 15% rejection rate and STA agreed.
10. In similar fashion as before, STA issued to the defendant the following two documents:
(i) Sales Invoice No 30428 in relation to Lot D11219 with a weight of 355 carats and for the amount of US$173,950. The same was confirmed and counter‑signed by a representative of the defendant. It was dated 30 May 2011 at the request of the defendant because it wanted a longer period to pay.
(ii) Consignment Note No 13738 dated 16 May 2011 in relation to Lot D11219 with a weight of 63.24 carats as being diamonds to be rejected and returned.
11. Again the delivery and the return were recorded by STA in his log book.
12. Eventually, the price under Sales Invoice No 30193 was paid by the defendant by way of four cheques in July, September and October 2011.
13. In relation to Sales Invoices Nos 30192 and 30428, however, despite repeated demands by the plaintiff, the defendant only settled a small part of the price for the diamonds under Sales Invoice No 30192 when, according to SPK, a sum of US$20,000 was paid in cash by the defendant to him for the plaintiff as partial payment.
My findings
14. I accept the evidence of both STA and SPK.
15. I find that the defendant is liable to pay to the plaintiff the prices for the diamonds under the two Sales Invoices Nos 30192 and 30428 subject to the deduction therefrom of the sum of US$20,000.
16. The two Sales Invoices in question also set out on their back the terms and conditions of the sale. Clause 9 thereof reads as follows:
“9. The Seller is entitled to receive interest @2% per month or part thereof in case the payment has not been received on or before the due date.”
17. I find that the defendant is liable to pay such contractual interest to the plaintiff in accordance with the said Clause 9.
18. Mr Ngai in paragraphs 18 and 19 of his Written Closing Submission for the plaintiff has helpfully worked out the calculations for the contractual interest as follows:
“18. Contractual interest at 2% per month, or 24% per annum, on the outstanding purchase price for Sales Invoice No. 30192 is calculated as follows:-
(a) Purchase price is US$129,563.28. Due date for payment was 10th July 2011. Part payment of US$20,000 was made on 2nd May 2012;
(b) Hence, interest on the purchase price of US$129,563.28 from 11th July 2011 to 2nd May 2012 is US$129,563.28 x 24% x 297 days / 365 = US$25,302.11;
(c) interest from 3rd May 2012 to 28th May 2012 on balance of purchase price is US$109,563.28 x 24% x 26 days / 365 = US$1,873.08;
(d) interest from 29th May 2012 to 21st July 2014 on balance of purchase price is US$109,563.28 x 24% x 784 days / 365 = US$56,480.62;
(e) in the circumstances, the total amount of interest up to 21st July 2014 is US$83,655.81 ; and
(f) interest for each day after 21st July 2014 until judgment is given is US$109,563.28 x 24% x 1 day / 365 = US$72.04.
19. Similarly, contractual interest on the outstanding purchase price for Sales Invoice No. 30428 is calculated as follows:-
(a) Purchase price is US$173,950. Half of this amount was due on 30th August 2011 and the remaining half was due on 30th September 2011.
(b) Hence, interest on half of the purchase price from 31st August 2011 to 30th September 2011 is US$173,950 x 24% x 31 days / 365 = US$1,772.86;
(c) interest on the whole of the purchase price from 1st October 2011 to 28th May 2012 is US$173,950 x 24% x 241 days / 365 = US$27,565.12;
(d) interest on the whole of the purchase price from 29th May 2012 to 21st July 2014 is US$173,950 x 24% x 784 days / 365 = US$89,672.41;
(e) in the circumstances, the total amount of interest up to 21st July 2014 is US$119,010.39 ; and
(f) interest for each day after 21st July 2014 until judgment is given is US$173,950 x 24% x 1 day / 365 = US$114.38.”
19. I gratefully adopt those figures.
Conclusion
20. I give judgment to the plaintiff against the defendant in the sum of US$486,179.48 (US$129,563.28 – US$20,000 + US$173,950 + US$83,655.81 + US$119,010.39).
21. The defendant is also liable to pay further interest to the plaintiff at the rate of US$186.42 (US$72.04 + US$114.38) per day from 22 July 2014 until judgment.
22. The defendant is also to pay costs to the plaintiff to be taxed on a party‑and‑party basis, if not agreed.
(Patrick Fung SC)
Mr Lawrence L K Ngai, instructed by C T Chan & Co, for the plaintiff
The defendant was not represented and did not appear