XCHRX LIBERAL INDUSTRIAL LTD. v. KESSEL ELECTRONICS (HONG KONG) LTD.

HCA2531/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.2531 OF 2001

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J U D G M E N T

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1. There are two actions before me commenced by the same plaintiff against the same defendant for goods sold and delivered. In respect of the HCA2531/2001, there were all together 16 invoices totalling more than $1 million. In respect of HCA2555/2001, 34 invoices were involved and the total price exceeded $3.5 million.

2. The defence raised by the defendants in the two actions is similar. For some invoices, the goods were rejected; for some other invoices, the goods were delivered late. Further, for the first action, there was partial delivery of goods under certain invoices. The defendant also queried the existence of a particular invoice for a sum of $150,000.

3. If my arithmetic is correct, the goods for the first and second actions rejected amounted to $54,901.00 and $131,667.01 respectively.

4. The master gave unconditional leave to defend, for the first action, the claim concerning the rejected goods and the queried invoice, totalling $204,901, and for the second action, the claim concerning the rejected goods. She then transferred those parts of the claims to the District Court. She proceeded to enter judgment on the balance of the claims for both actions.

5. The defendants now appeal and urge upon me that unconditional leave should be given to defend the entire claims. In brief, their arguments run like this. The plaintiff was in breach of the contracts in that part of the goods was rejected, part of the goods were delivered late, and there was shortage of delivery. As a result of the breach, their business was disrupted. There are issues, they say, which should entitle them to go to trial, such as whether goods were rejected, whether there was late delivery or partial delivery.

6. Putting the defendants' case at its highest, the plaintiff was arguably in breach of the contracts, but the defendants had failed to condescend upon particulars on the loss and damage they had thereby suffered. Disruption of business was alleged. But the defendants had stopped short of giving any further particulars on how the business was disrupted, how serious was the disruption, and what loss and damage, if any, they had suffered as a result of the disruption.

7. There is no evidence before me to suggest that the defendants had not accepted the goods delivered late, or goods where there was short delivery. In those circumstances a defendant had to pay the agreed price. If he did not do so, he could claim his damages by way of counterclaim. That is a trite proposition of the law: see, for example, paragraph 17-038, Benjamin's Sales of Goods, (5th ed.). For partial delivery, if a defendant had accepted the goods so delivered, he had to pay the agreed price, and if he had not done so, like the case where there was late delivery, I think he is entitled to claim his damages by way of counterclaim.

8. However, both scenarios beg the question if the defendants had suffered loss and damage as a result of the plaintiff's breach. As noted, no particulars of damage had been given. Indeed, the defendants had not even alleged that they had suffered any loss and damage as a result of the plaintiff's breach or disruption of business.

9. In the circumstances, I am not satisfied that the defendants are able to raise a defence on the price by way of set-off or counterclaim for damages for the late delivery or the partial delivery. The master was therefore correct in entering judgment as she did.

10. Since Mr Lee for the plaintiff did not insist on having judgment on those invoices, the claim for which the master had given unconditional leave, I would not propose to deal with them here. In my view, the order of the master must stand. The appeal is therefore dismissed for both actions.