LONGSMART CORPORTION LTD v. SEATOMAN HOLDINGS LTD

DCCJ270/2011

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 270 OF 2011

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BETWEEN

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DECISION

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1.  The defendant applies for leave to appeal my Judgment of 23 April 2013 in the present action. The defendant’s ground of appeal is I have erred in my finding of facts that the plaintiff did not receive and accept the seven revised purchase orders dated 22 June 2010.

2.  The basis of Miss Ho’s, counsel for the defendant, argument is:-

(1)  I failed to consider the plaintiff had issued invoices which matched the revised purchase orders, but the content of one of these was different from the e-mail exchanged between the staff of the plaintiff and the staff of the defendant on 2 June 2010, namely the prices set out there were in fact reversed between the two colours of the same style.

(2)  That I have placed importance in my Judgment on the signing of the purchase orders while the defendant’s purchase orders requiring the signing, stamping and returning of the purchase orders by the plaintiff under the “Remarks” column no longer appear in the defendant’s purchase orders after 2008.

(3)  That I was wrong in finding the defendant was not in the habit of issuing revised purchase orders to the plaintiff, that there was evidence of revised purchase orders issued in 2009 from the defendant to the plaintiff. 

3.  The defendant’s ground of appeal is in fact centred on Miss Ho’s first issue of dispute raised at the trial, that is whether all the terms in the purchase orders issued on 13 April 2010 as revised on 22 June 2010 formed part of the agreement between the plaintiff and the defendant.

4.  I have made a finding in my Judgment that the revised purchase orders were not sent to the plaintiff and they were not even signed by the defendant at paragraph 32 of my Judgment.  I further found that even if they were sent to the plaintiff, they were not signed by either party which the plaintiff insisted was the practice between the two parties all along.  She gave reasons for her refusal to sign the original purchase orders and any purchase orders that were different from their oral agreements with the defendant.  I accepted her explanation and I concluded that purchase orders have to be signed to be binding on both parties, in particular as the penalty clauses on the purchase orders had specified they would only be binding if the purchase orders were signed as in a written agreement.

5.  I further found that even if they were sent to the plaintiff, they were not signed by either party, which the plaintiff insisted was the practice between the parties all along.  I have dealt with the practice of signing by both parties at paragraphs 33 to 37 of my Judgment.  I concluded that the signing of the purchase orders or revised purchase orders was an important step where there were penalty clauses set out in the contract.

6.  I have also found the parties have reached a new agreement when the shipping terms changed from “false FOB Hong Kong” to “CMT” at paragraph 40 of my Judgment.  At paragraph 41, I emphasised the revised purchase orders were not signed by either party, even if they were delivered to the plaintiff.  Even though there were a few incidents of revised purchase orders issued by the defendant to the plaintiff in 2009 that Miss Ho pointed out and referred to, these were all signed by both parties to indicate acceptance of the terms therein.  The issue of a few revised purchase orders in the parties’ many years of business dealings cannot be described as a habit or a practice but the stamping and the signatures in an agreement must be essential to the binding effect of the terms set out therein.  This I have explained in my Judgment fully.

7.  On the aforesaid basis, I do not think the defendant’s appeal has an real prospect of success.  The application is dismissed.

8.  The costs of the application today to the plaintiff with certificate for counsel.

Discussion re costs

9.  I agree with Miss Ho that “Attending and receiving skeleton submissions of the defendant’s authorities 1.05 hours” is on the high side and “Attending conference with representative of the plaintiff explaining the skeleton submission of the defendant” of 1½ hours too long, when the parties understand English, translation would normally not be required.  As for item 9, I agree this seems to be rather long, the work would have been done by counsel.  I further find item 2, that having a 2 hour conference with the plaintiff explaining the summons which consisted of only two or three pages with the grounds set out on one page long only, is rather too long.

10.  On the gross sum taxation, I have assessed at $45,000.