SKIVA PRINTING & BINDING CO LTD v. COLORPRINT OFFSET LTD t/a COLORPRINT OFFSET

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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JUDGMENT

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1. In this Action the Plaintiff sues for the non-payment of 7 Invoices totally just under $300,000 owing by the Defendant. The Plaintiff is a company which carried on business as binder and the Defendant is a company which carried on business as printer. In 1993 the Defendant requested the Plaintiff to carry out the binding of various publications and these were done. At the trial of this Action, the issue was eventually reduced to whether, in relation to one Invoice for the binding of Bully books, the Plaintiff had delivered defective books to the Defendant which defects were alleged to be caused by the binding of the Plaintiff.

2. It is not in dispute that the Defendant by its written order to the Plaintiff in late February 1993 contracted that the Plaintiff should bind some 13,500 Bully books for the Defendant. The Defendant itself as printer did the printing of the printed sheets and the Defendant supplied to the Plaintiff these large printed sheets which were delivered to the Plaintiff on the 1st March in something like 13 pallets with each pallet consisting of 3,000 printed sheets. The work of the Plaintiff was to fold, sew, cut, case and casemake from the printed sheets of the Defendant and turn them into bound books. This was done and on the 8th March these bound Bully books were delivered to the Defendant. The dispute is as to what then happened. Did the Plaintiff deliver good bound Bully books to the Defendant or did the Defendant receive from the Plaintiff bound Bully books which the Defendant says were defective by reason of the ink-infiltration in the pages of the bound books.

3. This whole case really turns on the credibility of the two witnesses who gave evidence before me. For the Defendant which had the burden of proof, its evidence was given by Mr. Peter Lau, the big boss of the Defendant. For the Plaintiff, the evidence was given by Lau Wai Kiu. Mr. Peter Lau is a businessman in his early forties who is no doubt clever and shrewd. He was articulate and he did not hesitate to expand and amplify whatever he wanted to say. He is obviously a man of the world and knows more English than he admits to. Having observed him over several days in Court, I have formed a clear and most unfavourable impression of him as a witness. I do not believe that he is a truthful witness and I found him to be arrogant, without scruple and a man who is willing to say anything to advance the cause of the Defendant. He presents the ugly face of ruthless and sharp practice of Hong Kong commercial life. On the other hand, Mr. Lau of the Plaintiff is a very different sort of person. He is somewhat older in age and ponderous and slow both in speech and in reaction. But he struck me as the old fashioned Chinese who does not say much but whatever he says can be accepted as being truthful and reliable, namely a man of principle rather than a man of expediency. I accept him without reservation as a good and truthful witness and whenever there is a conflict between his evidence and that of Peter Lau of the Defendant, I prefer Mr. Lau of the Plaintiff to that of Peter Lau for the Defendant.

4. The only serious question to be decided at this trial is whether on the 8th of March 1993 when the Defendant took delivery of the bound Bully books from the Plaintiff, the defects alleged in the Defence and Counterclaim were there. The burden is on the Defendant to satisfy me by credible evidence that there were such defects in the delivered books. I have no hesitation in finding as a fact that the Defendant had failed to satisfy me that the bound books delivered to the Defendant were defective. The evidence on such books being delivered defective on 8th March is really very thin, as it all depends on the evidence of Peter Lau. There is no contemporaneous written evidence that there were such defects in the books delivered by the Plaintiff to the Defendants. There was no written contemporaneous document made by the Plaintiff or by the Defendant evidencing such books being delivered defective. There was no contemporaneous written complaint by the Defendant to the Plaintiff that such delivered books were defective. No defective books were given on the 8th of March or shortly thereafter on the 10th or 11th March by the Defendant to the Plaintiff to substantiate this allegation. At the trial, Peter Lau presented to the court a Bully book which was admitted in evidence as Exhibit D1 and he said this is a defectively book bound by the Plaintiff which he inspected on the 10th or 11th March, 2 or 3 days after delivery. The Plaintiff does not admit that such book was in fact a Bully book delivered by the Plaintiff to the Defendant on the 8th of March 1993 and I reject the evidence of Peter Lau on this. I do not accept what he said and what he produced could well be a book bound by the Defendant itself or someone else. For my part it is enough for me to reject Exhibit D1 as evidence of a defective book produced by the Plaintiff. It is worth pointing out that this particular book was never previously shown to the Plaintiff and its existence was never known to the Plaintiff prior to the production in court. Nowhere in the Defendant's list of documents was such a book mentioned and I find as a fact that this book was not the Bully book delivered to the Defendant on the 8th March 1993. This being the case, the only evidence left for the proof of the allegation that the books delivered on the 8th March were defective rested solely on the oral testimony of Peter Lau and I have already indicated earlier that I found him not to be a truthful or reliable witness. Peter Lau told the Court that he had a telephone conversation with Mr. Lau of the Plaintiff on or about the 10th or 11th March, immediately after he inspected the defective books and in that telephone conversation he complained about the ink-infiltration defects to Mr. Lau. I reject that evidence and I find as a fact that there was no complaint by the Defendant to the Plaintiff either in March or even in April until after Mr. Lau started chasing for payment when in response the Defendant caused the solicitors' letter to be sent. In respect of the alleged inspection of the defective books by Mr. Lau at the Defendant's office, I reject the evidence of Peter Lau and I find as a fact that there was no such inspection. There was no inspection because there were no defective books delivered which required any inspection. The primary case of the Defendant therefore falls to the ground.

5. This effectively decides the Action. In the course of the trial, much was said by Counsel and the witnesses as to many other aspects, such as 5 various alleged defects in Exhibit Dl, the conversations between the two Laus. the visit made by Mr. Lau of the Plaintiff to the Defendant office, the chasing of the payment by Mr. Lau, the significance of the Walker Fax and the order placed by the Defendant with the Plaintiff late in the afternoon of the 16th March for the binding of 3 Cayote titles, the responsibility of the printer Defendant to supply good printed sheets to the Plaintiff (made of proper paper and good ink). On each and every of these matters, I prefer the case of the Plaintiff to that of the Defendant. What seemed to me clear is that the Plaintiff binder had done what one would expect any reasonable binder to do. namely to bind the 13,500 books very quickly as required by the Defendant and this was done on the basis that the printed sheets supplied to the Plaintiff were such that ink infiltration would not and could not occur. The alleged responsibility on the binder to ensure that ink infiltration did not occur in the course of the binding had neither been pleaded nor proved to my satisfaction nor accords with what I regard as being reasonable commercial behaviour.

6. What happened in this case is simply that the Defendant did not want to pay and tried to find as many excuses as possible to avoid payment. The audacity of the Defendant's case is matched by the arrogance of its boss, Peter Lau. I reject the Defendant's case and evidence of its witness. Having found that Exhibit Dl is not the book delivered by the Plaintiff to the Defendant it is not necessary for me to go into various defects alleged to be found in that book. Suffice it to say that even if I should find it necessary to go into the intricacies of that book, I would still have rejected the evidence of Peter Lau that these alleged defects were caused by the Plaintiff in the course of the binding process. It seems to me in the circumstances, it is more likely that these were caused by the bad printing of the Defendant than by the defective binding of the Plaintiff. In the circumstances, the Counterclaim must be dismissed and judgment is hereby given to the Plaintiff in the whole of the amount claimed together with interests thereon at prime rate plus 2% from the date of the writ. The Plaintiff is to have the costs of the Action and of the Counterclaim.