XCHRX BRUNO GATJENS & CO v.SAM C.S. SZE

1994, No. A11137

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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JUDGMENT

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1. On 5 November 1994, the plaintiff issued a writ against the defendant claiming damages and other relief arising out a breach of a contract entered into by the parties in November 1993. On 17 January 1995, the defendant filed a defence. On 6 July 1995, the plaintiff issued a summons claiming summary judgment. This summons was returnable on 7 August 1995. The summons invited the defendant to send to the plaintiff a copy of any affidavit he intended to use. In fact, the defendant filed no evidence at all. Not surprisingly, in these circumstances, the Master granted judgment for the sum claimed. On 11 August 1995, the defendant filed a notice of appeal. This notice, amongst other things, asked for leave to file an amended defence "as per the copy exhibited to the affirmation of the defendant filed herein". No affirmation of the defendant has been filed, and no amended defence has been exhibited to any affirmation.

2. At the commencement of the hearing of the appeal before me, the defendant applied for leave to use an affirmation of Mr Simon Siu, his solicitor, affirmed on 21 August 1995. After argument, I allowed the application on the simple basis that, at what was a re-hearing of the matter, I could hardly do justice without permitting the defendant to put forward his defence.

3. The first point argued by Mr Ng was that the contract was not with the defendant, but with a limited liability company by the name of Interocean Fisheries Packing Limited ("Interocean Fisheries"). The only evidence of this is in Mr Siu's affirmation, where he says: "Even though the initial correspondence was between the plaintiff and Interocean Seafood Trading Company, when the transaction was finalised, the Company advised the plaintiff that the transaction would be handled by Interocean Fisheries Packing Ltd." I do not know what this means. It does not suggest that the contract was with Interocean Seafood Trading Company ("Interocean Seafood"), or suggest that Interocean Seafood was a legal entity separate from the defendant, and Mr Ng did not seek to argue this. This statement does not make it clear whether this advice was given before or after the contract was made. It is not said when, by whom and by what means this advice was given. Mr Siu does not explain what he means by the transaction being "handled" by Interocean Fisheries, and the effect of this. No factual basis is given for the defendant's allegation that the plaintiff contracted with Interocean Fisheries; not even a statement that it was the defendant's belief that this was so. The defence filed on 17 January 1995 does not carry the matter much further; if anything, it is against the defendant's present contention. The defendant agrees with the plaintiff's allegation that, in November 1993, it received some prawns from him. The defendant denies the plaintiff's allegations regarding the making of the contract, but goes on to give details of the agreement, if there was one. Having given some details of the agreement, the defendant says that one of the express terms was that payment should be effected by the plaintiff opening a letter of credit at sight in favour of Interocean Fisheries. The defendant says that Interocean Fisheries obtained payment under this letter of credit. There is not the slightest hint in this defence that the defendant's case is that the contract was with Interocean Fisheries. And, indeed, there is no documentary evidence that Interocean Fisheries was a party to the contract. The evidence of the contract is contained in an exchange of letters. The first is by the plaintiff to "Interocean Seafood Trading Co" for the attention of Mr Sam C Sze and is dated 15 November 1993. This letter refers to the prawns sent to the plaintiff, says that they were tested for quality and that the quality was "OK". The letter then places an order for "Ocean King Brand" prawns. The response is contained in letter dated 16 November 1993 and signed with the unqualified signature of the defendant. This letter is written on notepaper bearing the name "Interocean Seafood Trading Company" and the pictures and names of various seafood products, including the picture of a prawn and the name "OCEAN KING Brand". The letter says it is from "Sam C S Sze". The letter confirms the order by the plaintiff. The only mention in this letter of Interocean Fisheries is "Payment: Sight L/C in favor of our export dept. : Interocean Fisheries Packing Ltd.", followed by the same address as that on the notepaper. There was another exchange of letters on 16 and 18 November 1993, but nothing significant emerges from them. So, by this means, a contract is made, and part of the contract is that the plaintiff should make payment by letter of credit to the defendant's export department, Interocean Fisheries. This provision regarding the method of payment does not make Interocean Fisheries a party to the contract in place of the defendant. Accordingly, I reject the contention that the contract was between the plaintiff and Interocean Fisheries; all the evidence points to the fact that the contract was with the defendant trading as Interocean Seafood.

4. The next point argued by Mr Ng was that the plaintiff had not shown that there was any breach of the contract. On 10 February 1994, the plaintiff complained to the defendant that the prawns sent were not in accordance with the contract. On 22 February, the defendant, writing under the letterhead of Interocean Fisheries, admitted this, sought to make excuses, and offered to take back the shipment and return the money. In my view, this is the clearest evidence of a breach by the defendant. Mr Siu, in his affirmation on behalf of the defendant, does not attempt to say that the prawns supplied were not in accordance with the contract. He seems to suggest, without actually saying so, that the defendant was excused because he had to pay more on the market to obtain prawns that the plaintiff had not ordered.

5. The last point taken by Mr Ng was that the plaintiff is not entitled to judgment for damages at this stage. Mr Sakhrani does not challenge this; he says that the issue was not raised before the Master, but now there is a triable issue on damages. He concedes that judgment should be for damages to be assessed. Mr Ng sought to argue that I could not make such an order. He cited Associated Bulk Carriers Ltd v Koch Shipping Inc [1978] 2 All ER 254, but this case has no bearing on the situation before me. Nothing could be clearer that Order 14, rule 1(1), which speaks of the defendant having "no defence to a claim included in the writ, or to a particular part of such claim, or has no defence to such a claim or part except as to the amount of any damages claimed".

6. Accordingly, I find that the plaintiff is entitled to judgment for damages to be assessed.

7. As to costs, the defendant has substantially failed in this appeal, he rightly failed before the Master, and he raised the issue of damages only by the affirmation of Mr Siu filed a few days before the hearing of the appeal. In these circumstances, my preliminary view is that the defendant should pay the plaintiff's costs of appeal, and I make an order nisi accordingly.