CHIN LUNG HOLDINGS LTD. v. CHOY KIN SANG

HCA No. 16282 OF 1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 16282 OF 1999

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J U D G M E N T

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1. This is an assessment of damages pursuant to the plaintiff's claim in paragraph 8 of the Statement of Claim. Interlocutory Judgment for Damages to be Assessed had been obtained on the 6th December 2000.

2. Although the Assessment of Damages was conducted in the Punti dialect, the plaintiff's solicitors were happy for the judgment to be written in English.

The Evidence

3. Mr. Tsai Huo Yen a Director of the plaintiff gave evidence. He stated that the plaintiff and the defendant were partners in a joint venture on an equal footing each owning a 50% share and participation. The sole purpose of the joint-venture was to do business with one Beijing TV Equipment Factory ("BTEF") in the PRC by selling video recorders to BTEF. In November 1998, an account was taken between the partners of the joint venture and finalized on 23rd November 1998. The Account taken between the parties is at pages 22 to 24 of the Bundle. The part of the account with which this assessment is concerned relates to a debt in the sum of RMB1,318,200.00 due by BTEF to the joint venture. This is referred to in the last line of page 23 of the Account. Subsequent to the preparation of the account as BTEF was unable to pay the sum owed by them, it was agreed between BTEF, the defendant and the plaintiff that BTEF would return 1,000 sets of video recorders to the plaintiff at the value of RMB1,080 each to offset their debt to the joint venture. This agreement as between the plaintiff and the defendant is recorded in a letter dated 19 May 1999 from the defendant to the plaintiff at page 25 of the Bundle of Documents. BTEF did return the 1,000 sets of video recorders to the defendant for the joint venture. After deducting the value of such at RMB1,080,000.00 being the value of the 1000 sets of video recorders, from the total outstanding from BTEF, a sum of RMB238,200 was due from BTEF to the joint venture. As recorded in the letter from the defendant at page 25 of the Bundle of Documents, it was agreed that the plaintiff would collect such sum of RMB238,200.00 from BTEF.

4. In evidence Mr. Tsai stated that BTEF repaid the plaintiff the sum of RMB200,000.00 towards repayment of the balance of their debt to the joint venture. There was still a sum of RMB38,200.00 due from BTEF. Mr. Tsai stated that the defendant had all along agreed with him that for the purpose of the accounting between the defendant and the plaintiff the value of each video recorder sets returned by BTEF to the defendant was to be accounted for by the defendant at RMB1,080 each. The defendant now owed the plaintiff half of the value of the 1,000 sets returned by BTEF to the joint venture but retained by the defendant. Mr. Tsai stated that the sale price of each of the video recorder sold to BTEF was originally fixed at over RMB1,600. Mr. Tsai was of the view that the agreed return price at RMB1,080 was less than the market price of each video recorder at the time of its return. However, this was not relevant as there was the agreement between himself and the defendant as to value to be taken in respect of each video recorder for accounting purposes between the plaintiff and the defendant at RMB1,080. The value of 1,000 sets total RMB1,080,000.00. Half of which is RMB540,000. Mr. Tsai stated that as the plaintiff had received RMB200,000.00 on behalf of the joint venture from BTEF in respect of the balance owed by BTEF, he was willing to account to the defendant half of such receipt i.e. the sum of RMB100,000. He now claims on behalf of the plaintiff damages pursuant to paragraph 8 of the Statement of Claim related to the video recorders returned to the defendant by BTEF to the joint venture less half the sum of RMB200,000 the plaintiff received from BTEF in repayment to the joint venture.

Damages Assessed

5. Having heard the evidence from the plaintiff's Director Mr. Tsai, I am satisfied with his evidence that indeed the defendant owes the plaintiff as the other joint venture partner the value of the plaintiff's share of the 1000 video recorders returned by BTEF less RMB100,000.00. I am satisfied that the defendant should give credit for the agreed value of each of such video recorder at date of its return at RMB1,080 each and this is the proper unit basis for assessing the loss of the plaintiff in respect of such. I am satisfied that the value of the 500,000 units of video recorders due from the defendant to the plaintiff as the other partner of the joint venture is RMB540,000. After setting off RMB100,000 due by the plaintiff to the defendant in respect of the repayment of RMB200,000 to the plaintiff by BTEF for the joint venture, the defendant still owes the sum of RMB440,000 to the plaintiff. Hence I give judgment for the plaintiff in this sum.

6. Final Judgment to the plaintiff against the defendant in the sum of RMB440,000 or its equivalent in Hong Kong dollars together with interest thereon from date of Writ to date of handing down of this Judgment at judgment rate and costs of the assessment to be taxed if not agreed.