COCOA MERCHANTS LTD. v. FERRYVIEW HOLDINGS INC. AND ANOTHER

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

BETWEEN

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ASSESSMENT OF DAMAGES

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1. This assessment is limited to the damages due from the 2nd defendant to the plaintiff and is made pursuant to an interlocutory judgment given by the Honourable Mr Justice Hunter on 18th September 1984.

2. Subsequently an Order was made by Master Hansen permitting the plaintiff to adduce evidence by affidavit.

3. Accordingly the only evidence before me is that contained in and exhibited to an affidavit of James Nelson Brown Jnr filed by the plaintiff on 15th March 1985.

4. I am satisfied all necessary notices, Orders and the evidence have been properly served in accordance with an Order made by Master Crawshaw on 28th March 1985.

5. The claim against the 2nd defendant is for breach of what are called guarantees but appear to be indemnities in relation to contracts between the plaintiff and the 1st defendant. In essence the contracts provided for loans to be made by the plaintiff to the 1st defendant. Those loans were to be repaid in kind by certain quantities of cocoa butter to be shipped at agreed times. The 2nd defendant indemnified the plaintiff from loss arising from any failure in performance by the 1st defendant.

6. The loans were duly made and shipments commenced. The 1st defendant then defaulted in the last three shipments due. As a result the plaintiff had to buy elsewhere to make up what was required to fulfill its own obligations.

7. The terms between the parties are contained in documents dated May 10th 1982, September 16th 1982 and a letter of amendment dated 3rd November 1982. Those documents are full and comprehensively anticipate the circumstances which subsequently arose with only one exception and in that respect I must consider the method of calculation adopted by Mr Brown Jnr in his affidavit.

8. At the time of default the price of cocoa butter had risen. Furthermore, according to Mr Brown, the amount required to make up the plaintiff's overall shortfall was not immediately available on the world market. The shortfall was made up over a period and actually cost more than the notional market price on the date of default. Nevertheless the plaintiff has adopted that notional price for the purpose of its calculations. I cannot fault that and adopt it for this assessment.

9. Mr Brown's affidavit exhibits all relevant documents, schedules showing his calculations, explanations and even copy extracts from the 1st Defendant's own books of accounts.

10. I have had the advantage of being guided meticulously through all this by Mr Ribeiro who has also prepared a succinct summary bringing interest calculations up to date.

11. There is nothing before me to suggest the calcultions do other than reflect accurately the damages suffered by the plaintiff as a result of the breach of contract by the 1st defendant and for which it is entitled to be indemnified by the 2nd defendant.

12. In summary, therefore, I accept the figures put forward by the plaintiff, without alteration, and assess damages in the sums of £2,822,518.05 and US$707,469.57.

13. There will be costs to the plaintiff with a certificate for counsel.