XCHRX C. MAHENDRA EXPORTS (H.K.) (a firm) v. SOUTH SEAS JEWELLERY CO. LTD.

1998 HCA No. 16240

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

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J U D G M E N T

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Introduction

1. This is an appeal by the Defendant from the order made by Master Cannon on 23rd March on the Plaintiff's summons for summary judgment under Ord. 14. The master gave the Defendant leave to defend the action, but conditional on the Defendant paying the sum of $133,399.00 into court within 21 days. The Defendant contends that it should be granted unconditional leave to defend the action.

The respective contentions

2. When these proceedings were commenced, the Plaintiff was claiming the sum of $333,399.00 from the Defendant, being the price of diamonds sold and delivered to the Defendant. The Defendant admits receiving various diamonds from the Plaintiff, but it claims that at the time it disputed their quantity, quality and price with the Plaintiff. The Defendant contends that that dispute was compromised by the Plaintiff agreeing to accept a number of diamond rings from the Defendant in full and final settlement of its claim.

3. For its part, the Plaintiff denies that there was ever a dispute over the quantity, quality or price of the diamonds supplied to the Defendant. It accepts that it received the rings, but it contends that it received them in part payment of the Defendant's debt. Those rings were invoiced to the Plaintiff at a price of $200,000.00. The Plaintiff accepts, therefore, that the Defendant should have been given credit for $200,000.00, and today it has applied successfully for leave to amend its Statement of Claim to reduce its claim by $200,000.00 to $133,399.00. To the extent, therefore, that the Plaintiff's summons sought summary judgment for a sum which the Plaintiff accepts that it could not have obtained judgment for, such a defect has now been remedied.

The Defendant's defences

"The defendant's affidavit must 'condescend upon particulars', and should, as far as possible, ... state clearly and concisely ... what facts are relied on to support [the defendant's defence]": The Supreme Court Practice 1999, Vol. 1, para. 14/4/5.

The affirmation of Lau Lap Shing filed on behalf of the Defendant does not do that. So far as the defence that the Plaintiff's claim has been compromised is concerned, the affirmation simply says:

"In about June 1998, the plaintiff agreed to accept and the defendant agreed to deliver to the plaintiff one lot of diamond rings worth about $200,000.00 from the defendant in full settlement of the price of the said goods."

The affirmation does not even say whether the agreement was made orally or in writing. In any event, the Plaintiff has filed evidence in reply which exhibits the invoice from the Defendant to the Plaintiff for 110 diamond rings at a price of $200,000.00. In my view, the submission of an invoice is more consistent with the Plaintiff's version of events than the Defendant's. I appreciate that someone has written on the invoice in Chinese the words "This lot of goods is for repayment of debt" and the words "List price 60%". But if anything, those words are more consistent with the rings having been sold to the Plaintiff at a discount in part payment of the debt than with the rings having been supplied to the Plaintiff in full and final settlement of the Plaintiff's claim.

4. If the defence of compromise fails, the Defendant defends the Plaintiff's claim on the basis of the quantity, quality and price of the diamonds originally sold to the Defendant. So far as that defence is concerned, Mr. Lau's affirmation simply says:

"... the quantity, quality and prices of the goods actually sold and delivered to the defendant by the plaintiff were disputed between the parties at the material time."

No details whatsoever of his complaints are given. I appreciate, of course, that expert evidence may be needed to explain why the diamonds which were supplied were not up to the contractual quality, and I would not require the Defendant to go to the expense of obtaining an expert's report for the purpose of resisting an Ord. 14 summons for a claim of this size. But the least that the Defendant should have done was to identify the nature of its case, even if it did not place before the court the evidence which it would have relied upon at trial.

5. Mrs. Dora Chan for the Defendant has frankly recognised that the Defendant has not given anything like the particulars of its defences which are required. She has asked me to adjourn the hearing of this appeal to enable the Defendant to file evidence giving the details of its case. I refused that application. No satisfactory explanation was given to me as to why that information could not have been included in Mr. Lau's affirmation.

Conclusion

6. In my view, Master Cannon was quite right to regard these defences, in the light of the paucity of the evidence before her (which is the same as the evidence before me), as so shadowy as to justify making the Defendant's leave to defend conditional upon the sum in dispute being paid into court. This appeal must therefore be dismissed.