HONG KONG MING WAH OAHAN SMART CARDS SERIES CO., LTD. v. LE SALON ORIENT MANAGEMENT LTD.

HCA 21167/98

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. A21167 OF 1998

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JUDGMENT ON ASSESSMENT OF DAMAGES

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1. The Plaintiff's claim herein is for damages for breach of a contract. By a Purchase Order Confirmation dated 24.7.1997 ("the Contract"), the Defendant contracted to buy and the Plaintiff agreed to supply, inter alia, 50,000 pieces of AT1604 Smart Cards ("Smart Cards") at the unit price of $18. The Defendant had by 21.10.1997 taken delivery of 4,200 pieces of the Smart Cards and had paid $75,000 for the same. The Defendant had however failed to take delivery of the remaining 45,800 pieces when they were ready for collection.

2. The action herein was commenced on 10.12.1998. Interlocutory judgment in default of defence for damages to be assessed together with interest and costs of the action was entered on 26.1.1999.

3. At the assessment hearing, the Plaintiff claimed loss of profit in the amount of $824,400, being the contract price of the 45,800 pieces of Smart Cards which the Defendant did not take delivery. The Plaintiff also claimed the sum of $600, being the balance of the 4,200 pieces of Smart Cards delivered and accepted.

4. The Plaintiff called only one witness, Mr. Wong Wing Nin, the director of the Plaintiff. It is Mr. Wong's evidence, which I accept, that the Defendant had failed to take delivery of the remaining 45,800 pieces of Smart Cards contracted for under the Contract. The Smart Cards were specially designed and manufactured for the Defendant's business and bore the Defendant's logo. As such, they could not be sold to other customers. I accept that, in the circumstances, there is nothing which the Plaintiff can do to mitigate its loss. Accordingly, the Plaintiff is entitled to recover from the Defendant the full contract price of these Smart Cards by way of damages for the Defendant's breach.

5. I also accept on Mr. Wong's evidence that there was a short payment of $600 for the 4,200 pieces of Smart Cards delivered and accepted (i.e. $18 x 4,200 less $75,000). The short payment arose out of a mistake in the calculation of the price payable when the Plaintiff sent the relevant invoice on 7.10.1997. The Plaintiff is also entitled to recover the amount from the Defendant.

6. In the premises, the award to the Plaintiff is assessed at $830,000 together with interest thereon at judgment rate from the date of Writ until full payment. I also make an order that the Defendant pays the Plaintiff the costs of the assessment to be taxed.