DELTA PRINTING CO. v. HAPPY YOUTH CO. LTD.

DCCJ 895/2001

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO.895 OF 2001

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JUDGMENT

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Background:

[1] The Plaintiff is a printer and brought this claim to recover the price of printing services rendered to the Defendant in the sum of HK$70,185.00. Prior to the commencement of this hearing, Mr. Wong, solicitor for the Plaintiff, agreed that a sum of HK$5,000.00 had been paid by the Defendant after the writ was issued and the outstanding amount is now HK$65,185.00.

[2] One of the Defendant's defence was that the Plaintiff had filed a similar claim at the Small Claims Tribunal, however, Mr. Pang, solicitor for the Defendant, agreed that the Plaintiff's action in the Small Claims Tribunal had been withdrawn prior to the commencement of this action and the Defendant would abandon this part of its defence.

[3] Mr. Wong also applied to amend a typographical error in the Plaintiff's Reply, Mr. Pang, did not object and the application was allowed.

[4] Most of the facts were agreed by the parties. The Plaintiff sold printed materials to the Defendant. The Defendant instructed the Plaintiff to deliver these materials to King's Ball International Trading Company Limited ("King's Ball"), the Defendant's subcontractor in Dong Guan, on the Mainland. On or about May 1999, the Defendant told the Plaintiff that the Defendant had decided to change its subcontractors and all further deliveries would be made to Yaofeng Wan Chu Chih P'in Factory, Hong Kong ("Yaofeng") in Shek Ngam, Shenzhen.

[5] On or about May 1999, the Defendant requested the Plaintiff to pick up certain printed materials in King's Ball's possession. The Plaintiff alleged that the Defendant did not have any storage facility in the Mainland to store these materials, therefore the Plaintiff was requested to store the same on behalf of the Defendant. In accordance with the Defendant's instructions, the materials were to be delivered to Yaofeng.

[6] The Plaintiff also alleged that in a letter dated 22/2/1999, the Defendant had offered and the Plaintiff had accepted terms of settlement by various monthly instalment payments commencing from February 2001. The Defendant's HK$5,000.00 part payment was the first payment pursuant to the terms of the settlement agreement.

[7] The Defendant's allegation was that the materials picked up at Kings Ball were materials returned to the Plaintiff due to printing mistakes and other materials not ordered by the Defendant (the "Returned Materials"). As a result, a sum of HK$36,185.00 should be deducted from the outstanding sums owed to the Plaintiff.

[8] The Defendant's director, Ms. Sung, testified that the there were some materials that the Defendants had only required 2000 pieces, but the Plaintiff stated that the minimum order was 5000 pieces. The Defendant had agreed to order 5000 pieces, so long as the Plaintiff would accept return of the extras.

[9] The parties agreed that on 5/5/1999, the Plaintiff had picked up other materials from King's Ball, in addition to the Returned Materials.

Issue:

[10] The sole issue to be determined was whether the materials the Plaintiff picked up from King's Ball were returned materials accepted by the Plaintiff as mistaken printings and over supplies or due to the Defendant's request to keep these materials until required by the Defendant?

Findings:

[11] Ms. Sung alleged that the Returned Materials were stated on an undated list (exhibited as page 85 of the bundle). When the Plaintiff picked up the Returned Materials from King's Ball. King's Ball gave the Plaintiff other materials as well as those on the list (the "Non-Returned Materials"). The Non-Returned Materials were listed in the Plaintiff's list of materials picked-up from King's Ball (page 82 of the bundle), below the last horizontal line. The Plaintiff had agreed to keep the Non-Returned Materials and deliver them to Yaofeng on the Defendant's instruction.

[12] Under Mr. Wong's cross-examination, Ms. Sung agreed that all deliveries by the Plaintiff to Yaofeng were made pursuant to the Defendant's instructions. If Ms. Sung's testimonies were correct, one would expect that none of the Returned Materials would be delivered to Yaofeng. Yet, on 24/11/1999, the Plaintiff delivered 3,900 pieces of "SM1201" instruction booklets and 3,650 pieces of "SM3101" instruction booklets to Yaofeng. "SM1201" and "SM3101" instruction booklets were listed as numbers 4 and 5 respectively, on the Returned Material list.

[13] In the schedule to paragraph 2 of the Statement of Defence, the Defendant stated a list of the materials returned to the Plaintiff. Numbers 4 and 5 on the schedule were numbers "1201" and "3101" (Although the prefix "SM" was omitted, it was reasonable to infer that these were the same instruction booklets marked as "SM1201" and SM3101"). Irrespective of the fact that these booklets were clearly stated as having been returned to the Plaintiff on the Returned Material list, the schedule to the Statement of Defence, stated that no "1201" or "3101" instruction booklets were returned to the Plaintiff.

[14] I am unable to accept Ms. Sung's explanation that she had simply forgotten to put the relevant booklets on the schedule to the Statement of Defence. Ms. Sung had a simple defence: The materials had been returned to the Plaintiff. The Defendant's later instruction to the Plaintiff to deliver part of the allegedly returned materials to Yaofeng for further work, made the later instructions contradictory to its defence.

[15] In the facsimile transmission from the Defendant to the Plaintiff dated 22/2/2001, the Defendant had clearly admitted that there was a debt due to the Plaintiff in the sum of HK$70,185.00. Ms. Sung testified that this offer-to-settle was made by the Defendant's accounting clerk without her knowledge. I found her story incredible. It was difficult to accept that an accounting clerk would have issued a settlement offer to the Plaintiff, when the parties were in litigation, without receiving any instructions from the Defendant. The fact that the 22/2/2001 settlement offer contained the Defendant's company chop clearly indicated that the Defendant's management authorized the settlement offer.

[16] My acceptance of the 22/2/2001 facsimile transmission as an admission by the Defendant however, did not mean that I have also accepted that the parties had reached a settlement agreement. Although I found that the Defendant had offered to settle the debt, there was no evidence that the Plaintiff had ever accepted the settlement offer. The fact the Defendant's HK$5,000.00 payment occurred in April 2001, two months after the first payment due day pursuant to the terms the settlement offered by the Defendant and the fact that in June 2001, the Plaintiff wrote the Defendant and proposed another repayment schedule, indicated to me that the Plaintiff did not accept the Defendant's 22/2/2001 settlement offer. This finding, however, will not impede the Plaintiff from recovering the debt from the Defendant. It only meant that there was no settlement agreement to enforce.

[17] I have also carefully considered the fact that the 22/2/2001 facsimile transmission was part of the parties' settlement negotiation and was privileged communication. However, the document was included in the agreed bundle by the Plaintiff and the Defendant did not object. I am of the view that both parties had waived the privilege.

[18] After careful consideration of the evidence, I am of the view that the Plaintiff's version of event was more credible. The Plaintiff was only keeping the materials temporarily for the Defendant. Judgment is therefore for the Plaintiff.

Order:

(1) Judgment is for the Plaintiff in the sum of HK$65,185.00, together with interest, calculated at the judgment rate, commencing from the date of writ until payment.

(2) Costs of this action together with all costs reserved, if any, are to the Plaintiff, to be taxed on party/party basis unless agreed.