TAI TUNG AIR-CONDITIONING (HONG KONG) LTD v. WING SING LABELS & ACCESSORIES CO LTD

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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JUDGMENT

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1. The plaintiff pursues three claims against the defendant. I will deal with each of these in turn.

The First Claim

2. The first claim is based on an agreement made in or about July 1992 under which, the plaintiff says, air-conditioning equipment was sold and delivered to the defendant. The plaintiff pleads that this agreement is evidenced by a quotation, a written contract and some invoices, all dated 31 July 1992. The plaintiff alleges that the defendant has paid only $309,078.73 in respect of this agreement, leaving a balance due of $194,767.27.

The Defence to the First Claim

3. In relation to this claim, the defendant says, on or about 20 June 1992, "the defendant, in its representative capacity as the agent of Wuhan Sun Garment Company Limited, a company incorporated in the People's Republic of China, entered into a written contract ... numbered MC0157/92 with the plaintiff for the supply and installation of certain air-conditioning systems by the plaintiff to and for Wuhan Sun garment Company Limited".

4. The defendant alleges that the written contract "was addressed to the defendant 'for Wuhan Sun Garment Company Limited'", and that the relevant invoices "expressly stated ... that the relevant works and materials were 'sold to Wuhan Sun Garment Company Limited'".

5. The defence goes to admit that $309,078.73 has been paid, but says this payment was made by Shenzhen Wing Sing Printing Company Limited (Shenzhen Wing Sing) for and on behalf of Wuhan Sun Garment Company Limited (Wuhan).

The Reply

6. In its reply, the plaintiff says that, if the defendant entered into this agreement as agent for Wuhan, the defendant is, nevertheless, personally liable.

The Contemporaneous Documents

7. The "contract form" dated 30 June 1992 is written on four pages of a standard form. At the top of each page, there is the plaintiff's name, address and other information. Each page is addressed "To: Messrs Wing Sing Printing Co. Ltd.".

8. Each page of the form bears the printed words "We are pleased to list below our quotation of ... for ...". After the word "for" the characters representing the name "Wuhan Sun Garment Company Limited" have been inserted.

9. At the foot of each page are printed the words "Hoping to be favoured with your valued orders". Each page is signed by the plaintiff. It is not signed by the defendant or Wuhan. At the end of the fourth page, there is written the requirement that there be an initial deposit of 40%, another payment of 30% on delivery and the balance of 30% upon completion. Also at the foot, an additional order for further air-conditioners is written.

10. The quotation that preceded this contract form is dated 13 June 1992. Save that it is headed "Quotation" instead of "Contract Form", it is similar in all material respects to the contract form.

11. In relation to the goods supplied, there is a document dated 15 July 1992 addressed to the defendant and headed "Packing List". At the foot of this form appear the words "Acknowledge receipt of all above goods: Customer's signature". This acknowledgement, and the preceding page, is chopped by the defendant and there is a signature written over the chop. Attached to this, there is a document dated 20 July 1992 from the defendant addressed to the plaintiff and it says it is from Miss Kitty Wong, who is an employee of the defendant.

12. The invoice dated 31 July 1992 is written on three pages. Each page bears the heading "Sold to: Wuhan Sun Garments Company Limited". Each page is chopped by the defendant, with a signature over the chop.

13. There is bank transfer document dated 20 August 1992 relating to the transfer of ¥20,000 to Tang Chun Man, who is the brother of Mr Tang Kwan, a director of the plaintiff, from "Wing Sing", and one bearing the same date relating to the sum of ¥90,000 transferred to Tang Chun Man by "Shenzhen Wing Sing Printing". There is a further similar document dated 21 August 1992 recording the transfer of ¥90,000 to Tang Chun Man by "Wing Sing Printing".

14. On 15 September 1992, Miss Yip Wai Fong, a clerk in the plaintiff's accounts department, faxed the defendant, for the attention of Mr Szeto of the defendant's accounts department, a message that read, in translation. "Your esteem Co. has on 19-8-92 transferred by telegraphic transmittance Reminbi ¥200,00. equivalent to Hong Kong Dollars HKD215, 053.76 under the exchange rate of 0.93. This is for settlement of the following invoices." There follows details of various invoices in respect of money due by defendant to plaintiff, including the ones concerned in this claim, to which the sum of $160,734.11 was allocated as part-payment, leaving a balance of $343,111.89.

15. Another bank transfer, dated 18 January 1993, remitted the sum of Reminbi ¥100,000 to Tang Chun Man, the "drawer" being said to be "Shenzhen Wing Sing Printing Co. Ltd.".

16. Following this, Miss Yip faxed Mr Szeto again, on 6 February 1993, saying that "Your esteem firm has on 18-1-93 transferred by telegraphic transmittance Reminbi ¥100,000 equivalent to Hong Kong dollars HKD94,339.62 under the exchange rate of 1.06. This is for settlement of the following invoices." Again, certain invoices are shown to be settled, leaving a balance of $48,344.62 to be devoted to the invoice concerned in this claim.

17. On 27 July 1993, Mr Lau Hon Wing, a director of the defendant, gave to the plaintiff a cheque in the sum of $50,000 drawn by a company controlled by Mr Lau called Janfull Industrial Limited in favour of the plaintiff.

18. On 28 July 1993, Miss Yip faxed a message to Mr Szeto saying "We received from your esteem company a cheque in the sum of $50,000.00 on 27-7-93 for payment of [the invoices concerned in this claim]. The outstanding balance is $244,767.27.

19. On 4 February 1994, another ¥57,500 was remitted by Shenzhen Wing Sing Printing Co. Ltd, this time to "Mr Tang of Tai Tung".

20. On the same day, Miss Yip wrote to Mr Szeto saying "Your esteem factory transferred by telegraphic transmittance Dollars 57,500 Reminbi, equivalent to Hong Kong Dollars $50,000 is for payment of [the invoices concerned in this claim]. The outstanding balance for the Invoice is $194,767.27."

21. On 20 September 1994, the plaintiff's solicitors wrote to the defendant demanding payment under the various claims. The defendant did not respond to this before the writ was issued on 1 November 1994.

The Second Claim

22. The second claim is made on the basis of an agreement made in or about January 1993 under which the plaintiff, at the request of the defendant, carried out some air-conditioner maintenance work, and in respect of which a sum of $18,250 is due.

The Defence to the Second Claim

23. This claim is denied. The defendant says that the relevant invoice "was intended to be addressed to Shenzhen Wing Sing Printing Company Limited.". Alternatively, it is said, the work was supplied to Shenzhen Wing Sing.

The Contemporaneous Documents

24. The contract is written on three pages of a standard form. These are dated 3 December 1992. The opening printed words on the form say "An Agreement is made by and between the Owner ... and" the plaintiff. In the space after "Owner" is written the name of the defendant. Each page bears the chop of the defendant in the space for the signature of the "Owner", and is signed over the chop. This chop and signature are dated 16 December 1992.

25. The invoice in respect of this transaction is dated 6 January 1993. After the printed words "Sold to:" is written the name of the defendant, with an address, which is the address of Shenzhen Wing Sing.

26. The maintenance card used whilst the services were being performed bears upon it the name "Wing Sing Label Factory".

The Third Claim

27. The third claim rests on another agreement between the parties in or about September 1993 under which the plaintiff supplied some equipment to the defendant, the price of which was $1,200.

The Defence of the Third Claim

28. In this respect, the defendant says that the relevant invoice "expressly stated that the works and materials stated therein were 'sold to Shenzhen Wing Sing Printing Company Limited'".

The Contemporaneous Document

29. The invoice in respect of this matter has written upon it "Shenzhen Wing Sing Printing Co. Ltd." after the printed words "Sold to:".

The Plaintiff's Evidence

30. The witnesses who gave evidence for the plaintiff were Mr Tang Kwan, a director of the plaintiff. Miss Tam Wai Ha, a clerk employed by the plaintiff, Miss Yip Wai Fong, another clerk employed by the plaintiff, and Mr Ng Kwai Wing, another director of the plaintiff.

Tang Kwan

31. Mr Tang, in a statement confirmed by him in evidence, said that he had known Mr Lau Hon Wing of the defendant for some sixteen years. He knew that Mr Lau had many businesses, including joint ventures. He said that the plaintiff only did business with the defendant, not any other business of Mr Lau.

32. Mr Tang said that, after he had completed a deal with Mr Lau, Mr Lau would instruct his secretary, Miss Kitty Wong, to make the appropriate arrangements with Miss Tam of the plaintiff for delivery and completion.

33. The agreements concerned in this claim were negotiated by him on behalf of the plaintiff with Mr Lau on behalf of the defendant. Mr Tang said "On various occasions in or about May, 1992, Mr Lau told me that he would required various air-conditioners together with accessories and installation works to be carried out at a garment factory in Wuhan in China. Afterwards, on different occasions I talked to Mr Lau on the telephone and met him to negotiate on this matter. On or about 13 June, 1992, I instructed Miss Tam Wai Ha of the plaintiff's staff to send a quotation to the defendant. Subsequently, Mr Lau informed me that the quotation was in order. On every of these occasions, Mr Lau did not mentioned to me he is negotiating the agreements on behalf of any party other than the defendant."

34. When payment was not made, Mr Tang asked Mr Lau for payment. Mr Lau said that payment would be made later. On about 19 August 1992, when Mr Tang telephoned Mr Lau again, Mr Lau said that ¥200,000 "can be paid to the plaintiff. I instructed him to transfer the sum into the bank account of my elder brother Tang Chun Man."

35. In about July 1993, when he spoke to Mr Lau again, Mr Lau told him that $50,000 would be paid. Mr Tang went to the office of Mr Lau, and Mr Lau gave him the cheque drawn by Janfull Industries Limited in the sum of $50,000.

36. Mr Tang says that on no occasion did Mr Lau say that the defendant was not liable for payment, or that the defendant was just an agent. The only "excuse" given my Mr Lau was that payment would be made later.

37. In his oral evidence, Mr Tang said that Mr Lau said to him that Wing Sing had a factory in Wuhan and asked him if he could send people up there to install air-conditioners. He agreed to do so. Mr Lau never told him that the defendant would not be responsible for payment. As far as he, Mr Tang, was concerned, the defendant was the other party to the agreement.

38. Miss Tam was not involved in the negotiations. She got her information from him. He got the name of Wuhan from Mr Lau.

39. He was never told by anyone that the defendant was not responsible for payment. Mr Lau did not tell him that the money paid came from Wuhan.

40. He did not ask the defendant for deposits in their business dealings. This requirement in the contract was the usual condition.

41. Mr Lau did identify to him the factory where the work was to take place, but the plaintiff sold the items directly to the defendant. He was asked if he knew that the factory was operated by Wuhan. He said "At that time, he said Wing Sing had invested in a factory in China."

42. Generally, Mr Tang's oral evidence was internally consistent, and consistent with his earlier written statement. His evidence contained no inherent improbabilities. Naturally, his evidence was not perfect, but it was not shaken in cross-examination. Mr Pang tried to make much what he said in paragraph 6 of his statement, where he referred to Mr Lau telling him that "he" required various air-conditioners, but immediately prior to this, Mr Tang said that the agreements were negotiated with "Mr Lau on behalf of the defendant." One might make other minor criticisms of his evidence, but it appeared to me that he was telling the truth.

Tam Wai Ha

43. Miss Tam Wai Ha, in her confirmed statement, said that, in early June 1992, Mr Tang told her that the defendant wished to order certain air-conditioning equipment. She contacted Miss Kitty Wong of the defendant, and they worked out the exact order that the defendant wished to make. She prepared the quotation. She inserted the name of Wuhan "so as to identify the order and the destination for the delivery".

44. Some days later, Mr Tang told her that the quotation was in order, so she prepared the contract. "Similarly, the name of Wuhan Sun Garment Company Limited was written down on the appropriate place in the Contract to identify the order and the destination for the delivery." The defendant did not sign the contract.

45. In early July 1992, Miss Wong told her that the goods were to be delivered to a place near the Hung Hum railway station.

46. In mid July 1992, Miss Wong ordered some additional air-conditioners and work.

47. On 15 July 1992, the goods were delivered as instructed by the defendant. Miss Wong was there to receive the goods. She checked them, and then signed and chopped the packing list.

48. On about 19 July 1992, she arranged for workers to go to the factory of Wuhan Sun Garment Company Limited to install the equipment.

49. On about 15 July 1992, Miss Wong told her that "in order to facilities the defendant obtaining licence on the importation of the said goods, the invoices should be addressed to Wuhan Sun Garment Company Limited." Miss Tam made out the invoices as requested. A copy of the invoices was signed and chopped by the defendant, and returned to the plaintiff.

50. In her oral evidence, Miss Tam said that, during the course of dealing with the defendant, invoices were normally addressed to the defendant, but occasionally to Shenzhen Wing Sing. They were all sent to the defendant, and the defendant always paid them.

51. She repeated that the name of Wuhan on the documents was for the purpose of delivery.

52. In cross-examination, she agreed that Wuhan was the name of a company and not an address. She said that it was her duty to write down the normal payments terms, but these were not enforced in the case of regular customers. She denied that these terms were written because the contract was with Wuhan.

53. It was put to this witness by Mr Pang that Miss Kitty Wong did not tell her to write out the invoices that the goods were sold to Wuhan for facilitating the obtaining of permits. She denied this. I do not know how Mr Pang was able to put this to the witness. Miss Wong was not called as a witness by the defendant, and I was told that the defendant could not trace her.

54. The witness said that she knew that previous payments were by the defendant because she saw the cheques and wrote out the receipts.

55. Miss Tam was a credible witness. There is no reason at all to believe that she was not telling me the truth.

Yip Wai Fong

56. Miss Yip Wai Fong, in her statement confirmed on oath, said that in about August 1992 she noticed that the relevant invoices were outstanding. She telephoned Miss Wong several times about payment.

57. She received the various sums transmitted in Reminbi, and faxed Mr Szeto as appears from the documents concerned.

58. On no occasion when she spoke to Miss Kitty Wong did Miss Wong say that the defendant was not liable for the debt.

59. In her oral evidence, Miss Yip said that she spoke to Mr Szeto of the defendant's accounts department about the conversion of Reminbi to Hong Kong dollars. In her statement, she did not say that she spoke to Mr Szeto, but I do not think this is a point of any significance.

60. No one, on behalf of the defendant, made any protest to her about allocating the payments received to debts due by the defendant.

61. I allowed Miss Yip to be recalled for further cross-examination by Mr Pang. Mr Pang put to the witness a document; a copy of a return to the Inland Revenue Department by the defendant in which it was recorded that Mr Szeto had left the defendant's employment on 15 October 1993. If it was so that Mr Szeto was no longer employed by the defendant after this date, Miss Yip could not have spoken to him, as she said she did, in 1994. Miss Yip told me that, in spite of this information, it was her recollection that she had spoken to Mr Szeto in 1994. Assuming that what this document records is correct, it may be that Miss Yip is mistaken about contacting Mr Szeto in 1994, but the point is of little significance. The important point is that, in spite of clear written statements by the plaintiff to the defendant that the plaintiff was assuming that the money received was that of the defendant, no one, on behalf of the defendant, made any attempt to deny that this was so.

Ng Kwai Wing

62. Mr Ng confirmed his statement on oath. In that statement, he said the plaintiff had provided maintenance services to the air-conditioning system "of the defendant's factory in Shenzhen in China for years." On about 3 December 1992, Miss Kitty Wong telephoned him to tell him that the defendant required maintenance services at the defendant's factory in Shenzhen for the period 1 January to 31 December 1993. A standard contract was prepared, and the defendant signed and returned this. An invoice was sent to the defendant for the fees.

63. In about late August 1993, Miss Wong telephoned him and said that the defendant's factory in Shenzhen required a piece of equipment. This was supplied and installed. An invoice was sent to the defendant.

64. In his oral evidence, when asked why the invoice in respect of the order in August 1993 was written as "Sold to Shenzhen Wing Sing Company Limited", he said, in effect, that the reason was that the cap was used at Shenzhen Wing Sing. In the past, when plaintiff supplied services to Shenzhen Wing Sing, the plaintiff supplied parts, and the defendant paid for these.

The Defendant's Evidence

65. The only witness for the defendant was Mr Lau Hon Wing.

66. Mr Lau confirmed his statement on oath. In that, he said he was a director of the defendant. He was also a director of Wuhan and Shenzhen Wing Sing, companies incorporated in China.

67. He said that he had known Mr Tang for over ten years. He had dealings with the plaintiff in a number of transactions. The plaintiff installed and maintained the defendant's air-conditioning system from 1983 to 1994, and the air-conditioning system in Shenzhen Wing Sing from 1990 to 1994.

68. In 1992, he was instructed by Wuhan to acquire a suitable air-conditioning system from Hong Kong. He approached Mr Tang to make enquiries. He telephoned Mr Tang and "informed him of the intention of Wuhan Sun Garment to acquire an air-conditioning system. I told Mr Tang that I was a director of Wuhan Sun Garment. I also told him about the size and location of the factory and asked Mr Tang to provide me with a quotation." He then asked Miss Wong to liaise with the plaintiff. He said that Miss Wong has left the defendant "and could not be located".

69. He received the written quotation. He read it. He discussed the matter with Mr Tang. He asked Mr Tang to prepare a "proper contract ... so that I could show it to Wuhan Sun Garment".

70. He saw the contract. He took it to Wuhan. He told Miss Wong to tell plaintiff it was acceptable.

71. He said that he received the invoices issued to Wuhan. He said "As Wuhan Sun Garment does not have any office in Hong Kong, I acknowledged on behalf of Wuhan Sun Garment receipt of the invoices by signing on them. I believe that the company chop of the defendant was inadvertently placed on the signed invoices by some staff of the defendant." In his oral evidence, Mr Lau that his statement about signing the invoices was a mistake. He did not sign the invoices, but Miss Kitty Wong signed them.

72. Due to foreign exchange restrictions, Wuhan was unable to pay plaintiff directly, so he was instructed by Wuhan to arrange payment. He told Mr Tang that Wuhan would provide Reminbi. Mr Tang asked that payments be made in Shenzhen, and said that his brother would collect the payments on behalf of the plaintiff. Mr Lau arranged for funds to be transferred to Shenzhen Wing Sing so that Shenzhen Wing Sing could pay Mr Tang's brother. Subsequently, the three payments were made through Shenzhen Wing Sing to Mr Tang's brother.

73. The money was insufficient to pay the full debt. In July 1993, Mr Tang requested payment. Mr Lau said "At that time, I had not received any money from Wuhan Sun Garment but since the plaintiff was pressing for payment, I arranged for a sum of $50,000 to be paid to the plaintiff by my other company, Janfull Industrial Limited. This was the only payment made from my own source in Hong Kong for the invoices, for I see it my obligation to assist both Wuhan Sun Garment and the plaintiff in the difficult situation."

74. Mr Lau said that "throughout this transaction, the plaintiff was clear that the air-conditioning system was acquired by Wuhan Sun Garment, that the system would be installed in the Wuhan Sun garment's factory in the PRC, and that payment for material and works provided by the plaintiff would be settled by Wuhan Sun Garment.

75. Regarding the second claim, Mr Lau said, "[Although] The plaintiff in respect of these contracts were made in the name of the defendant, the plaintiff was aware that the work and materials to be supplied were required by Shenzhen Wing Sing."

76. He was in court when Mr Pang put to Mr Tang that, by the end of 1993 or early 1994, he told Mr Tang that he had no more dealings with Wuhan. He agreed that this detail did not appear in his statement. The defendant was a shareholder in Wuhan.

77. Miss Kitty Wong left the defendant in early 1994. He tried to contact her by telephone.

78. Mr Szeto left the defendant in October 1993. Mr Lau never tried to contact him.

79. Wuhan made the payments through Shenzhen Wing Sing instead of directly, in spite of additional bank charges, because he knew Mr Tang, but those at Wuhan did not. He said that "probably" because of the way people in China deal with these matters, the money was sent to him because they knew him.

80. Mr Lau said that he did not know the name of the payee under the bank transfers, but it was pointed out to him that, in written statement, he said that Mr Tang suggested that his brother, who lived in Shenzhen, could collect the payments. Later, in his oral evidence, he said that he did not know the name of the transferee until the money was remitted to that person. He told Wuhan to remit the money directly, but they did not do so. He was a director, but "more or less" he had no say. The defendant did not discover any documents relating to these transfers of money from Wuhan to Shenzhen Wing Sing because "all the documents were in Chinese I did not go to collect them".

81. When he asked Wuhan to pay the balance of the money due, they said "later". He did not think they were unwilling to pay.

82. His company Janfull Industrial Limited paid the $50,000 because he introduced the transaction and had shares in Wuhan so he strongly believed he could get the money back so he paid in advance. He had not been able to recover this money from Wuhan, for over three and a half years, although he still had business dealings with Wuhan.

83. When it was put to him that the agreement related to the maintenance contract was between the plaintiff and the defendant, he agreed, but said that he had informed Mr Tang to rectify the name on the invoices.

84. The defendant had not paid this claim because he, Mr Lau, was angry because Mr Tang refused to make out the invoices in the name of Shenzhen Wing Sing. Shenzhen Wing Sing had not paid because the invoices were not made out to it. When asked why Shenzhen Wing Sing had not paid for the equipment ordered in August 1993, where the invoice was made out in the name of Shenzhen Wing Sing, Mr Lau said that was because the invoice was made out by a Hong Kong company. Although the plaintiff had supplied the goods, he expected the invoice to be made out by a company in Shenzhen.

85. Mr Lau was an unsatisfactory witness. He did not answer all questions directly. I got the impression he was being evasive. I do not think he was being honest and truthful. His own counsel accepted that he "was not particularly impressive". I have no hesitation in preferring the evidence of the plaintiff's witnesses over that of Mr Lau.

The Issue and Decision as to the First Claim

86. The defendant admits that it entered into the relevant contract with the plaintiff, but says that it did so as an agent of Wuhan. It is for the defendant to show, on a balance of probabilities, that, although it entered into the contract, it is not liable on it because, to the knowledge of the plaintiff, it did so as an agent.

87. The defendant, and Mr Pang on its behalf, make much of the fact that, they say, the contract says that the defendant entered into the contract "for Wuhan Sun Garment Company Limited.", in the sense that this means that the defendant entered into the contract "for and on behalf of" Wuhan. It does nothing of the sort. It seems clear to me that the blanks in the form where the printed words "We are pleased to list below our quotation of ... for ..." appear are for the purpose of inserting, after "of", the amount of the quotation, and, after "for", the nature of the work in respect of which the quotation is given.

88. It is clear, of course, that the plaintiff knew that the ultimate beneficiary of the goods and services being provided would be Wuhan, but that does not mean that the plaintiff is to be taken to have known that the defendant was acting as Wuhan's agent in making the contract. It is not for the supplier of goods to guess at the relationship between a person who orders goods and the person to whom they are to be delivered. It is common, of course, for a main contractor to order goods from a supplier for delivery to the main contractor's customer. This does make the contractor the agent of the customer in ordering the goods so that the supplier must look to the customer for payment. It is for the person who says that he was acting as mere agent to make it clear to the supplier that that is the capacity in which he contracts. On my findings on the facts, the defendant did not do this.

89. There is the fact that the invoices are addressed to Wuhan, but the plaintiff has given an acceptable explanation for this that is not contradicted. This cannot affect the contract, of course, because this had already been concluded, but, as far as it might go to the probabilities, it is entirely consistent with the plaintiff's knowledge that the goods were destined for Wuhan, and, in any event, is far out weighed by other factors indicating the state of mind of the plaintiff and the defendant. These are that the packing list was chopped and signed by the defendant as the customer, the invoices themselves were sent to the defendant and chopped and signed by the defendant, the plaintiff received payments that it devoted partly to the defendant's debts without correction, the defendant never denied that it was liable when pressed by the plaintiff, Mr Lau paid the large sum of $50,000 apparently on behalf of the defendant, and the defendant did not reply to the letter of demand denying that it was liable.

90. Even if the onus had been on the plaintiff, I would have been satisfied that it had established that the defendant was liable. Certainly, the defendant has come nowhere near establishing on the probabilities that it contracted with the plaintiff as a mere agent so that it is not liable on the contract.

91. Accordingly, I find for the plaintiff on the first claim.

The Issue and Decision as to the Second Claim

92. There is simply no defence to this claim, and, to his credit, Mr Pang did not pretend that there was. He addressed barely a word to it.

93. Accordingly, I find for the plaintiff on the second claim.

The Issue and Decision as to the Third Claim

94. Here, the plaintiff has a much more difficult case. The invoice was written in the name of Shenzhen Wing Sing, which is a separate company to that of the defendant, although Mr Ng seems to have thought it was the defendant's factory for which the equipment was required. The plaintiff can succeed only on the basis of past course of dealing and the fact that the defendant was acting for a foreign principal.

95. I am not satisfied that I would be justified in inferring from the skimpy evidence I have before me relating to this contract that, on the basis of a course of dealing, that it was clear to both parties that the defendant would be entitled to sue, and be liable, upon it.

96. In relation to acting for a foreign principal, in Teheran-Europe Co Ltd v ST Belton (Tractors) Ltd [1968] 2 QB 545, Diplock, LJ said at page at 558

"... the fact that the principal is a foreigner is one of the circumstances to be taken into account in determining whether or not the other party to the contract was willing, or led the agent to believe that he was willing, to treat as a party to the contract the agent's principal, and, if he was so willing, whether the mutual intention of the other party and the agent was that the agent was that the agent should be personally ... liable to be sued on the contract as well as the principal."

97. Lord Diplock pointed out that the weight may be minimal where no credit is given, but considerably more weight when credit has been extended.

98. There is no evidence at all before me that the plaintiff applied its mind to where or not it was dealing with a foreign principal. Mr Ng seems to have thought that Shenzhen Wing Sing was the defendant's factory. Accordingly, it does not seem to me that, the contract having been made with the Shenzhen company, it can be said that the parties had the mutual intention that the defendant should be liable.

99. The plaintiff's claim here fails.

The Result

100. For the reasons I have given, there will be judgment in favour of the plaintiff on the first claim in the sum of $194,767.27, with costs of suit, and on the second claim in the sum of $18,250, with costs of suit.

101. From the date of this judgment, there will be interest at the judgment rate. If the parties cannot agree on the rate of interest prior to the judgment date, they will have to come back before me.

102. The plaintiff's third claim is dismissed with costs of suit to the defendant.