NEW CONTINENT ENTERPRISES PTE. LTD. v. CHEUNG CHI PING T/A JET AN TRANING CO.

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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JUDGMENT

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1. The plaintiff seeks damages as the seller in a contract on which the defendant purchaser has been adjudged in default. Interlocutory judgment to this effect was entered on 20th November 1989.

2. The transaction involved latex as specified in the contract of 7th November 1988, produced as Exhibit P1A by the plaintiff's manager, Mr. Roger Han. The contract price was at US$1,440 per metric tonne, and the plaintiff seeks to establish its damages on the basis of a market price of US$980 per metric tonne during the period for shipment. Mr. Han was the only witness.

3. In addition to the contract in question, Mr. Han produced several other contracts dated during and around the period for shipment in the present contract. The stipulated period was "end December 1988/early January 1989" and Mr. Han testified that this would cover the last week of December 1988 and the first week of January 1989. I accept this.

4. The other contracts, produced as Exhibits P1B, D, E, G, H, I and J, were argued to show a generally downward trend in the latex market, resulting in the plaintiff's damages. Only two of those contracts (marked B and D) fell within the precise period for shipment of the goods in question.

5. These other contracts were all for varying quantities of the same quality of latex goods, but the terms and destinations varied, distorting the purchase price per metric tonne. Through Mr. Han's evidence, and unchallenged by Miss Woodcock for the defence, Mr. Fok extrapolated prices per metric tonne in these comparable contracts as equivalent prices C and F Shantou, which were the terms of the contract in issue.

6. On this basis, and with adjustments for freight differences and insurance, the various contracts gave equivalent prices respectively of US$1,010, US$955, US$1,015, US$1,025, US$990, US$1,000, and US$990. I accept these conversions, which involve a simple mathematical exercise on known factors.

7. In addition to this documentary evidence, we have Mr. Han's opinion based on 16 years experience in the trade, that the price per metric tonne in early January 1989 was approximately U$980.

8. Mr. Fok pointed out that the two contracts dated during the shipment period of the contract in issue (marked B and D) give an average purchase price of US$982 per metric tonne. He invited the court to accept that figure if Mr. Han's opinion alone were found insufficient for damages based on a lower market figure of US$980 per metric tonne.

9. Miss Woodcock accepted the principle as to calculation of damages on comparable contracts, but argued that the comparability should extend beyond the period for shipment. She pointed out that the inclusion of the next contract (marked E) would increase the average of that and the earlier two comparable contracts to US$993 per metric tonne. This contract was dated 12th January 1989 and gave an adjusted C & F Shantou price of US$1,015.

10. The court is of course concerned with the probabilities as to market price obtaining at the time the goods were due for shipment. I feel unable to look outside that period unless the evidence directly pertinent to that period is unsatisfactory.

11. Mr. Han's opinion of US$980 must be given the weight of his 16 years experience, and the lack of challenge to his credibility. He seemed an honest and sincere witness and I have no reason to doubt his figure. The two C & F Shantou equivalent figures given in the contracts dated within the shipment period produce an average of US$982 per metric tonne. Although the upper and lower figures differ rather sharply, their average supports Mr. Han's evidence. I note also that Mr. Han's opinion mentioned "approximately US$980" per metric tonne as the market price for the relevant period. He did not give a precise figure.

12. I am therefore satisfied that the plaintiff has established a probable market price in the region of $980 per metric tonne. Bearing in mind the average of the two contracts relevant in point of time I place the precise figure at US$982 per metric tonne.

13. Multiplying the contracted quantity of 100.040 metric tonnes by the discrepancy between contract price and market price gives a figure of US$45,818.32, which is awarded as damages.

14. Interest is awarded on that amount at the judgment rate from date of writ to payment. Costs are to the plaintiff with a certificate for counsel, save any costs consequential on the plaintiff's vacating the earlier date for hearing, which are to the defendant.