NG KING t/a HUNTER GARMENT COMPANY v. SY CHEUNG SHUN t/a MAN KEUNG PIECE GOODS AND FASHION COMPANY

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JUDGMENT

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1. This action was commenced by the Plaintiff in May of last year, and it was for the cost of services rendered to the Defendant at his request in relation to pleating cloth or materials. The Plaintiff claimed a sum of money, the particulars of which, the statement of claim said, were contained in 4 invoices, which were identified. The total sum was HK$102,540,000.

2. A Defence was served, in which the Defendant admitted that the Plaintiff had rendered services to it in pleating cloth and denied paragraph 3, but contained this phrase "the Defendant avers that he is indebted to the Plaintiff in the sum of $65,625.60 only." In other words, the Defendant was saying "Yes, you did do work for me, but you didn't do the amount you claimed; you did a lesser amount.". No reason whatever was given, and, in due course judgment was entered for the admitted sum. The action came before me for the balance, and on a counterclaim alleging an oral agreement by way of commission in respect of materials given to the Plaintiff to pleat by customers introduced by the Defendant. In his closing speech to me, Counsel for the Defendant conceded in these words: "The counterclaim is dead.". I could not agree with him more. There was no evidence to support the counterclaim in its pleaded form at all.

3. When the case began, it was made clear to me by Counsel for the Defendant that I was in truth dealing with the 4 invoices referred to in paragraph 3 of the Statement of Claim; and that the Defendant had received and signed those invoices. The true defence, however was that, notwithstanding that the work was done by the Plaintiff for the Defendant at the Defendant's request, and invoiced, there had been an oral agreement between the Defendant Mr Sy and Mr Li Wai-yuen, an employee of the Plaintiff, to charge 80 cents per yard on the quantity of clothing sent to be pleated, despite the insertion in each invoice of $1.25 by the Plaintiff. The invoices are Exhibit 3, and it is to be observed-that three of them contain, not only the name of the Defendant, but also the name of the Defendant's customer; the fourth does not. The first copies of the invoices, that is the pink copies, have been produced, and they are Exhibit 2, and on two of the invoices the name of the Defendant's customer appears in carbon, and that obviously has come through from the top: On the second and third of those, the name appears in ball-point, one where the name does appear on Exhibit 3 and one where no name appears on Exhibit 3. I am told that the reason for that was that in relation to the one where the name appears on both white and pink, the white and pink had been torn out of the invoice book before the name was given and that is why it was written on in ball-point. In the other case, the writing was not that of anyone known to the Plaintiff and no explanation had been given to me of why there is a name on the pink and no name on the white. I have digressed slightly just to clarify the differences between the pinks and the whites of the agreed invoices.

4. Having reached that stage, it was put to Mr Chow, Counsel for the Defendant, that, in view of what the defence was to be, the burden of proof fell on the Defendant. Without hesitation, Counsel for the Defendant accepted that that was the position and that he was content to open; and accept the burden of proof: And that is how this case has been conducted with the Defendant assuming the burden of proof and commencing.

5. In due course, the true defence appeared in an amended pleading, which was handed to me this morning. The Defendant's version of the facts is not credible. It is not credible for a plethora of reasons, upon a few of which I shall touch. The Defendant's servant, Mr Tam, signed the invoices at $1.25 and accepted them. Some time later, when payment was demanded, there was an averment of this agreement for an 80 cents charge. But there had been a previous consignment pleated by the Plaintiff for the Defendant, charged at $1.25 and paid for by two cheques. When that was put to Mr Sy, Mr Sy changed tack immediately and said "Ah, yes, but then there was a total consignment of 100,000 yards and the idea was going to be 80 cents for a whole 100,000 yards; they put in a bill for $1.25. They said I should pay; and I agreed to pay, but on the basis that eventually a calculation would be made at 80 cents on the whole 100,000 and there would be appropriate deduction.". Then he was asked that why he had admitted the sum contained in the original Defence; and he said, on his affirmation here, 'Oh, well, that's a mistake of my girl bookkeeper, I didn't spot it until now.'. Then he was shewn an affirmation which he lodged in interlocutory proceedings earlier in this action, and in that he affirmed to the truth of the statement that he was indebted in that sum. He was asked how he could affirm to the truth of that: how could he say that that was the sum due if the true case was that less was due; he again tried to blame the girl bookkeeper, but, when challenged on that with his own affirmation, he sought to convince me that he had not been told what was in the affirmation. When faced with the affirmation of the solicitors' clerk, contained below the jurat, affirming that everything had been clearly, distinctly and audibly translated to him in Punti, he put up a most unconvincing performance. He also says that there was a meeting some time in March with Mr Li of the Plaintiff, whereby the agreement of 80 cents was reached for this reason: His clients were going to go and collect the goods themselves, and they would then see a unit price of 80 whereas he was charging them $1.25, and, to avoid that, he said he asked Mr Li to put $1. 25 on the invoices, but in fact they only to charge him 80¢. When his deputy, Mr Tam, came to give evidence, Mr Tam gave a totally different story. He said that there was a meeting when he went to deliver the cheques for the first consignment, (one not the subject to this action), and he asked if the price could be reduced because, he said, other people were charging only 90 cents. And he said that Mr Li could not decide then; he have to go away and discuss it, and would let him know; and then, averred Mr Tam, there was another meeting. At that other meeting, there was Mr Lee who just came into their offices and there was some discussion; and all Mr Li said was: 'It is agreed.'.

6. Mr Sy said that, at the single and the only meeting, where agreement was reached, he shewed a bundle of invoices to Mr Li, to demonstrate that other people charged 90¢. When Mr Tam was asked about that, he said that no invoices were shewn to Mr Li at the meeting. After his re-examination was concluded, I told him what his employer had said, namely that there were some invoices handed over, and asked how did he explain that; and he said to me 'Oh, well, all I meant was I didn't hand any over. '.

7. Mr Sy took me through all his costings, and he told me that, with 7% of the selling price for overheads, he aimed something in the region of a 10% profit on his transaction on the selling price. But the difference of 45 cents over $1.25 is a profit margin of 36%.

8. Then it transpired that there had been 10 dealings between these parties in relation to pleating in the previous year and the unit price had been $1.20, that is in 1984 before prices started to rise. Apparently there was never any challenge to the $1.20, never suggesting it should be 80 or 90 cents. There was, I am told, some form of kick-back of 5 cents, so that the true price would be $1.15: $1.15 in 1984 is quite remote from 80 cents in 1985. I am not going to go through every single one of these points: I have picked out one or two. In order to reach my decision I have had to consider the apparent credibility of the witnesses: I have tested their evidence against the documentary evidence: I have tested their evidence against each other: I have tested their evidence against those of the opposing party; And of course I have looked at it for internal self-contradiction. At the end of the day, as a matter of fact, and on the impression that I have of the witnesses, and on the totality of the evidence I reach the conclusion that I prefer the evidence of the Plaintiff. Indeed I do not think that I could do anything else, but that is neither here nor there. I do prefer the evidence of the Plaintiff, and all points where there is a conflict of fact between the Plaintiff and the Defendant, I accept the evidence of the Plaintiff. It follows therefore there will be judgment for the Plaintiff of the outstanding balance. The counterclaim, of course, stands dismissed. There will be interest on the judgment sum from the agreed date of the 1st of April 1985 to the 30th of July at, I am told that the judgment was given at a prevailing rate of 11% when it was entered on the 30th of July 1985, pursuant to the Order of the 1st of July, and I feel it, therefore, incumbent upon me to grant 11% from the 1st of April to the 30th of July. However, having regard to what happened to interest since then, there will be judgment at 8% from that date till to-day, and there will be judgment of the prevailing judgment rate from to-day until payment.

9. Mr Chain asked for costs on the counterclaim to be on a higher scale than on the claim, and he asked for costs on the claim to be on the High Court's scale. The latter is not opposed, and in the somewhat peculiar circumstances of this case and its history, I think it is a proper claim, and I order that the Plaintiff's costs on the claim be on High Court scale. So far as the counterclaim is concerned, Mr Chain urges upon me that I should award a higher scale of costs. The counterclaim has occupied the total of about half a day. At a half way stage in the Plaintiff's evidence, it was clear beyond peradventure that what he was complaining about bore no resemblance to the counterclaim: I, therefore, gave an opportunity to the Defendant's solicitor to interview the Defendant, albeit in the middle of his evidence, to take instructions to see if an amendment of the counterclaim was to be sought to reflect the evidence. I was told later that there would be no such application, and that the counterclaim would remain unchanged. At the end of the day, I have found that there was not a shred of evidence to support the counterclaim, and, even if there had been, it would have been incredible due to the astonishing number of self-contradictions and inconsistencies within it. But I was never trouble with the counterclaim because Mr Chow, with the greatest propriety, abandoned it, and asked me not even to consider it: He himself could see what it was like. But there is a world of difference between counsel abandoning a counterclaim when he sees that it is gone against him, and putting it in the class of frivolous and vexatious claims or, putting it in terms of Order 63, the undue waste of the court's time. I have great sympathy with Mr Chain's application, but, on the fact of this case, it is not one to which I will accede.

10. There will be costs to the Plaintiff on the claim and counterclaim, both on the High Court scale, to be taxed on the party and party basis if not agreed.