CHAU KWUN LAI v. WONG LAI YIN AND ANOTHER

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REASONS FOR JUDGMENT

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Sir Alan Huggins, V,-P.:

1. We gave leave to appeal in this case because we thought it was arguable that the judge had failed adequately to consider the relevant issues. After hearing both sides we came to the conclusion that that tentative view had been justified.

2. The Plaintiff sued for the price of goods alleged to have been sold and delivered. At the beginning of the trial the judge said "Formal pleadings not needed in view of Plaintiff not being represented". There were in fact formal pleadings, and we assumed that what the judge meant was that he would not hold her strictly to her formal pleading. The Statement of Claim alleged that the contract was with both Defendants, but it immediately transpired that the Plaintiff case was based on a sale by her to the 1st Defendant, with an immaterial allegation of a re-sale by the 1st Defendant to the 2nd Defendant. The 2nd Defendant did not appear at the trial and the judge made no order against it. Even on the application for leave to appeal the Plaintiff repeatedly spoke of an agreement to "lend" the goods to the 1st Defendant, which further indicated the confusion in her own mind.

3. However, what really lifted the case out of the ordinary run of claims for goods sold and delivered was that the person alleged to have contracted on behalf of the 1st Defendant (both on the sale and the re-sale) was also the husband of the Plaintiff, and the principal issue which had to be decided was whether the husband had authority so to contract and to receive goods on behalf of the 1st Defendant's factory.

4. Before we turn to the main issue, we must observe that the judge appears to have thought that another issue arose, namely whether the Plaintiff was the owner of the goods which were apparently delivered to the 1st Defendant and warehoused in her name, although, having implicitly raised that issue, he never decided it. His doubt as to the plaintiff's ownership stemmed from the fact that the husband was in financial difficulties, and the judge suspected (although he was not prepared to find) that the whole transaction from beginning to end was designed to salvage (sic) some goods for [the husband] from his impending bankruptcy". It was implicit that he thought the goods might in truth be the goods of the husband and not those of the Plaintiffs. The Plaintiff's explanation of how they came into her possession was certainly unconvincing, but we thought we had to assume that the judge proceeded on the basis that the Plaintiff was the owner.

5. The husband gave evidence that he was the export manager of the 1st Defendant's factory and, further, that he was expressly authorized to enter into this particular contract. His position in the factory was irrelevant if he was given such specific authority. The 1st Defendant denied that he was the export manager and said that he was only a clerk. Neither side testified directly to the extent of his authority as distinct from his position, and the judge concluded that the 1st Defendant was telling the truth. Indeed, that was all he decided. With the greatest respect, he completely failed to direct his mind to the particular issue or issues, and to some of the evidence called by the Plaintiff. It was not clear whether he considered the extent of the husband's general authority, but, if he did, he presumably assumed (as did the Plaintiff) that if the husband were the export manager he must have had authority to contract and to receive goods on behalf of the firm. Be that as it might, he seemed not to have appreciated that there was evidence tending to support the husband's assertion as to his position. The Plaintiff - no doubt through her husband - was able to produce correspondence between the 1st Defendant's factory and overseas customers which showed that the husband was openly claiming to be, and being taken to be, the export manager. Even more important, she produced statutory returns made by the firm and signed by the husband as "Manager". The 1st Defendant was never asked for an explanation of these documents. It was not enough that they were in English and that she could not read English. The judge made no mention of this evidence in his judgment.

6. Equally the judge made no reference to some very contradictory evidence recorded as having been given by the 1st Defendant concerning a cheque which initially she said was "drawn on my factory ...... in favour of [the 2nd Defendant]" and subsequently suggested it was "for account of [her own factory] and had been issued to her company by the 2nd Defendant. It might be that the cheque was of no direct relevance, since it was apparently never paid into the 1st Defendants account, but the contradiction cast some doubt on the credibility of the witness.

7. It might well have been that there was evidence upon which the judge could find for the 1st Defendant, but we were by no means satisfied that the Plaintiff had had a fair trial of her claim. Even if that claim were ill-founded, we though she would have a legitimate sense of grievance were the judgment allowed to stand.

8. We allowed the appeal and ordered a re-trial.

12th February 1985