CANBORN COMPANY LIMITED v. CHENG SHUI NGON t/a SHUN TAK FUNG GARMENTS FTY.

1986, No. A4661

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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ASSESSMENT OF DAMAGES

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1. The hearing proceeded in the absence of the defendant who had been properly served with notice.

2. The plaintiff sued the defendant for breach of several contracts which fall into two categories as pleaded in the statement of claim. In default of notice to defend, interlocutory judgment was entered on 25th October 1986 for damages to be assessed.

3. The first contract is that numbered 098/C5/M9, in terms of which the plaintiff ordered garments from the defendant and at the same time entered into a resale contract for those garments with its Canadian customer. The plaintiff claims for loss of profit on the contract and for damages necessarily paid to its customer when 98% of the contract items were found unsaleable.

4. The plaintiff's witness, Miss Lau, said she was a director and dealt personally with defendant in all matters in issue between the parties. She produced the sales contract between the parties and the resale contract with plaintiff's customer in Canada. She also produced a surveyor's report (Exhibit P3) in relation to the goods shipped to Canada stating that 98% were unsaleable as defective.

5. Miss Lau went on to say that plaintiff had been obliged to pay damages to its Canadian customer covering the cost of customs duties and airline way bills when the defective goods were imported. These damages solely related to re-imbursement and were calculated after the Canadian customer had mitigated its losses by selling the goods as defective.

6. Miss Lau calculated the loss of profit as the difference between the purchase contract and the resale contract, amounting to $18,388.50. To this figure she sought to add the damages paid to the Canadian customer in the sum of $29,323.95.

7. I accept Miss Lau's evidence in support of these figures and I accept that the loss should have been contemplated by the defendant. I therefore assess damages at $47,712.45 in respect of contract No. 098/C5/M9.

8. The second head of claim relates to a group of contracts in terms of which fabric purchased by the plaintiff was delivered to the defendant to be made into garments. There is some discrepancy between Miss Lau's evidence and paragraph 15 of the statement of claim. I am however satisfied that the nature of the arrangement emerges clearly from the evidence and the discrepancy does not prejudice the defendant. I accordingly find the error in pleading to be inconsequential. The dates of some of the contracts are also incorrectly pleaded in paragraph 15, however I am again satisfied from the evidence and from the contracts produced by Miss Lau that the pleading adequately identifies them.

9. The contracts concerned are firstly that marked 113/C1,. in respect of which there was a resale contract for the completed garments to a Swiss company, and secondly a group of five contracts marked 124-128/C5/M9, in respect of which there were resale contracts to a Canadian company. The contracts between the parties and the respective resale contracts are produced in a bundle as exhibit P.4.

10. According to Miss Lau's evidence, the fabric delivered to the defendant to be made into garments has not been re-delivered to the plaintiff as contracted. The plaintiff claims loss of profit from the various contracts with its foreign customers and I accept that the defendant knew or ought to have known that such contracts existed from the nature of its own contract with the plaintiff and from the course of dealing between them.

11. Miss Lau testified that the lost profit totalled $65,352.87, quoting individual figures mentioned in subparagraphs (1) and (2) of paragraph 20 of the statement of claim. She also gave evidence of the retention by defendant without authority of certain other fabrics delivered to defendant pursuant to contracts 113/C1 and 124-8/C5/M9. This evidence supported paragraph 24 of the statement of claim and she valued the retained fabric at $72,375.20.

12. I therefore assess the plaintiff's damages in respect of the lost profit on contracts 113/C1 and 124-8/C5/M9 at a total of $65,352.87. I assess the damages for detention of the fabric at $72,575.20.

There will therefore be the following order:

 

13. The plaintiff shall have liberty to uplift original exhibits against the deposit of photocopies not earlier than 14 days from the delivery of this judgment.