WING TAT HABERDASHERY CO LTD v. ELEGANCE DEVELOPMENT & INDUSTRIAL CO LTD

DCCJ 775/2007

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 775 OF 2007

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D E C I S I O N

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1.  The defendant applied for leave to appeal against my judgment of 16 November 2010 in this action. Should leave be refused, the defendant asked for the cost orders be varied.

2.  From the draft grounds of appeal lodged by the defendant, the defendant submitted there was an inconsistency in my findings that it was the defendant who persuaded the plaintiff to re-dye the colour tapes to meet the requirements of the defendant’s customers at paragraph 31 of my judgment and my earlier findings at paragraphs 25 and 27 that the plaintiff’s readiness in agreeing to re-dye the tapes showed Wing Tat had accepted there was something wrong with the goods. 

3.  Mr Wong, counsel for the defendant, has failed to take notice of paragraph 34 of my judgment that the majority of the tapes could be used and were used in the garments by Leading Garments, the defendant’s customer.  It was only 16.01% of the tapes in total that had to be replaced.  Due to the low percentage of defective tapes, it was probably the reason why they had escaped the notice of the defendant in the first place and probably also that of the plaintiff.

4.  I had found that the defendant, Elegance, knew and was warned of the possible side effects of repeated re-dyeing in paragraph 34 of my judgment.  And paragraph 28 is not inconsistent as the paragraph referred to Jacky Chan’s evidence that it was common knowledge the colours of the colour tapes could become unstable the more times the tapes were dyed.  As the majority of over 83% of the tapes were accepted and used, I gave judgment to the plaintiff. 

5.  Mr Wong submitted that the plaintiff had failed to plead mitigation in the defence to counterclaim, yet, I had found the defendant was equally to blame for failing to avoid its loss by taking precautionary steps.  According to Benjamin’s Sale of Goods, Chapter 17, paragraphs 59 to 60, this duty to take precautionary steps is a duty imposed on the buyer when he had actual knowledge of the defect.  The duty is incumbent on the buyer claiming damages.

6.  On the finding of 50% to blame, Mr Wong is correct to say that it was not specified in Benjamin’s Sale of Goods, but Benjamin’s Sale of Goods, Chapter 17, paragraphs 59 to 60, does provide that the buyer has a duty to take precautionary steps and the consequence of failing to take precautionary steps. 

7.  The failing to take precautionary steps is a factor that should be taken into consideration in the quantification of loss that could have been avoided.  The issue is whether the plaintiff anticipated the defendant’s loss including the overtime labour costs incurred, the purchase of quotas and extra labour costs for sewing new labels onto the garments, these were part of the precautionary steps that could have been avoided for the extent of the loss could have been reduced. 

8.  The defendant produced a debit note from Leading Garments, a Hong Kong based company, but no evidence was adduced from this company to prove how this head of loss was incurred, it is the same with the other invoices.  The Court was required to assess the avoidable loss against the unavoidable loss.  Due to the scarcity of evidence and based on the evidence available, an assessment has to be made.  In my judgment, 50% for equal blame is a fair assessment.  There was no evidence to contradict this assessment.

9.  Based on the defendant’s draft grounds of appeal, I cannot find any realistic prospect of success in the appeal, leave is refused. 

10.  As to the costs application, the defendant’s defence on the plaintiff’s claim is that the plaintiff had supplied defective goods and the defence pleaded setoff and counterclaim.  There has never been any dispute as to the goods delivered was purchased by the defendant, therefore, evidence concentrated on the nature of the defective goods for the setting off and counterclaim.

11.  Costs usually are based on the result of the trial, not based on a mathematical table on which party had taken so many days at the trial to prove his/her case. Thus, on the application of costs to follow the event, I have based my orders on the result reached in my judgment.  It is facetious to say that the plaintiff’s successful claim amounted to only 23% of his original claim and therefore he should get only 23% of the costs.  There are cases where the winning party win much less than the original claim but upon succeeding in his case, he won the costs.

12.  On the open offer on the first day of trial issue, if there had been a payment into court, it may be a different case.  It is not the case here.  There are rules of court that would support such incidents.  After careful consideration of this application on costs, I found there are no valid grounds to vary the cost orders, I therefore made an order absolute of the cost orders.

13.  Costs of the present applications for leave to appeal and for the variation of costs order nisi be to the plaintiff, to be taxed, if not agreed with certificate for counsel.