VINTECH CO. LTD. v. RADIO-HOLLAND HONG KONG CO. LTD.

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 5706 OF 2001

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J U D G M E N T

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1. This is an application for summary judgment.

2. The Plaintiff placed an order for the supply of 61 sets of radar systems with the Defendant. It was a term of such contract that the Defendant had to deliver 31 sets of radar systems before 12 January 2001 and the remaining 30 sets of radar systems before the end of February 2001. The Defendant delivered the first lot of radar systems on time. However, for the remaining lots of 30 sets of radar systems, the Defendant wrote to the Plaintiff on 27 February 2001 saying that it was only in a position to deliver 15 sets of radar systems to the Plaintiff. The Plaintiff refused to accept the delivery of such lot of radar systems and claimed damages against the Defendant for breach of contract.

3. The central issue in the present case is whether it was a term of the contract that time was of the essence relating to the delivery of the radar systems.

4. It is the Defendant's case that all the transactions between the Plaintiff and the Defendant were subject to the Defendant's Standard Terms and Conditions of Sale ("the Standard Terms") which provide, inter alia, as follows:

"Delivery Time

The delivery time of the equipment offered, as mentioned in the quotation, will only start to take effect after acceptance of the order, and after receipt by RH-HK (i.e. the Defendant) of all details enabling us to carry out the order. However, RH-HK will do its utmost to meet the delivery time required by the purchaser.

Penalties and Claims

RH-HK will not accept any penalties or consequential damages as a result of a delayed delivery of equipment ordered ...unless these claims and/or damages are accepted by our principal supplier(s) before the order acceptance by RH-HK."

5. In paragraph 3 of the Affirmation of To Wai-shung, Wilson, filed on behalf of the Defendant, Mr To claimed that in all the quotations previously supplied to the Plaintiff, it was stated that the sale of any equipment would be subject to the Standard Terms. However, according to the evidence filed on behalf of the Plaintiff, it was clearly not the case. The documents exhibited as "LML-11" in the Second Affirmation of Liu Mei-ling, Betty, show that at least four quotations supplied to the Plaintiff prior to the subject transaction did not contain any reference to the Defendant's Standard Terms. Hence, in the absence of any express discussion on this subject and any consistent practice relating to the incorporation of the Standard Terms, the Defendant has simply failed to establish that the subject contract was made subject to the Defendant's Standard Terms.

6. Mr Wong for the Defendant submits that there is a reference in the Defendant invoice to the General Condition of Sales relating to the payment of overdue interest. However, this provision does not expressly state that the Defendant's Standard Terms would be incorporated as part of the contract. Indeed, there is no reference to the payment of overdue interest in the Standard Terms and so the meaning of that provision in the invoice is unclear.

7. Without the incorporation of the Standard Terms, the court still has to decide whether time was of the essence relating to the delivery of goods. In paragraph 8-025 of the Benjamin's Sale of Goods, 5th Edition, the learned author states as follows:

"There is no presumption or rule of law that stipulations as to time of delivery are of the essence of a contract of sale of goods. But, in commercial contracts, they are frequently so construed, even though this is not expressly stated in the words of the contract. In such a case, if the seller fails to deliver the goods within the time limited for delivery, there is a breach of condition and the buyer is entitled to reject the goods and treat the contract as repudiated."

8. Although the Defendant claims the Plaintiff knew that the Defendant purchased the radar systems from its Japanese suppliers, there is no indication to show that they did not regard time was of the essence relating to the delivery of the goods. Indeed, the sub-sale contract signed between the Plaintiff and his supplier tends to suggest that time is of the essence for such kind of commercial contract. Without any evidence to the contrary provided by the Defendant, I accept that it was a term of the contract that time was of the essence relating to the delivery of the radar systems, and there is no triable issue relating to such matter.

9. It is trite law that it is a duty on the part of the seller to deliver to the buyer the exact quantity of the goods stipulated in the contract of sale (see paragraph 8-041 of Benjamin's Sale of Goods). As the Defendant was unable to deliver the whole 30 sets of radar systems before the end of February 2001, the Plaintiff was therefore entitled to reject the delivery of the goods and claimed damages against the Defendant for breach of contract.

10. Based on the aforesaid, I allow the Plaintiff's application and grant interlocutory judgment against the Defendant.