LEE KA MAN t/a PIONEER EMBROIDERY FACTORY v. SUNNY WAYER (HK) ENTERPRISES CO LTD

1989, No. A373

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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J U D G M E N T

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1. In this case, the plaintiff claims against the defendant for embroidery charges in the sum of $158,262. It is not a matter in dispute that invoices for the total sum claimed have been duly delivered by the plaint if to the defendant. What is being allleged in the Defence and Counterclaim is that there was an agreement struck between the plaintiff and the defendant as to how matters were to be ironed out after a delay and that there was a loss of profits flowing from the alleged delay. In the Counterclaim, the defendant sets out the cost of zippers which the defendant had supplied to the maker of garments, Chase Glory, at $22,620 and which Counsel now concedes has little to do with the claim by the plaintiff against the defendant or the defendant' s Counterclaim against the plaintiff.

2. In the Counterclaim, the defendant further sets out $14,059.50 being the portion of air freight incurred as a result of the plaintiff's alleged delay. What is so significant is that the Counterclaim merely asserts loss of profit (to be assessed)".

3. In the affirmation of Mr Chui, a director of the defendant company filed on the 25th February 1989 in opposition to the plaintiff's 0.14 application, he verifies the allegations set out in the Defence and Counterclaim and states that he has been advised and verily believes that the defendant has a good defence on the merits and that the defendant has a bona fide set off and counterclaim against the plaintiff which is greater than the plaintiff's claim in the action

4. First, the defendant's Counterclaim has not been quantified. Secondly, there is no precise information given as to how the claim of the defendant for loss for profit, in fact, arose. It has yet to be suggested that the overseas buyers have filed any complaint or lodged any claim against the defendant for late shipment. If it be merely a loss of profit, it wold be difficult to understand why the defendant could not have it particularised. What is this loss the defendant is said to have suffered? We have no more than a bald assertion from Mr. Chui, a director of the defendant company, that in whatever circumstances the defendant's Counterclaim arose, such Counterclaim would be in excess of the claim of the plaintiff against the defendant.

5. Faced with this situation, it is understandable that the master had little alternative but to order payment into the Court as a condition to granting leave to the defendant to come in to defend. In fact, what would appear to be the case is that the master took away not only the air freight alleged to have been incurred but also the cost of the defendant's zippers. $159,262 less $22,620, being cost of the zippers and $14,059.50, being the alleged air freight would yield a net balance of $121,552.50. That was the sum ordered by the master to be paid by the defendant into Court.

6. The calculation would seem to be erroneous. The error lies in favour of the defendant. The erroneous deduction of zippers cost would not detract from the fact that the master's decision is sound in principle and was virtually dictated by the circumstances that he faced.

7. In the circumstances, I need not call upon Mr Mok to reply. For all the reasons I have given, the appeal of the defendant against the decision of the master in the instant appeal cannot be acceded to and the same must be dismissed with costs. I so order.