FRIGIDAIRE CONSOLIDATED LTD v. KAEAST (FAR EAST) LTD

-----------

-----------------

JUDGMENT

-----------------

Sir Derek Cons, V.P., delivered the judgment of the court :

1. This appeal arises ultimately from a writ issued, in April last year, by the plaintiff, which is a well known dealer in and distributor of electrical appliances in the United Kingdom, against the defendant, a manufacturer of such appliances incorporated in Hong Kong. By a statement of claim indorsed on the writ there are alleged an indefinite number of contracts by which the defendant, its servants or agents, are said to have agreed to supply and the plaintiff agreed to purchase an unspecified quantity of domestic appliances between August 1988 and July 1989. It is further alleged that of the appliances thereunder supplied some 10,656 toasters, 78 knives, 72 mixers and 186 can openers were "neither fit for their purpose nor of merchantable quality (within the meaning of s16 of the Sale of Goods Ordinance Cap. 26)"; and that the defendant had "failed to provide any or adequate spare parts components or cartons to enable normal repairs to be conducted in the United Kingdom" as was required by a term in the contracts. The statement of claim then sets out an unsuccessful attempt to compromise, in the course of which some of the items mentioned above were returned by the plaintiff to Hong Kong, where the defendant continues to retain them. In the final paragraph are claimed damages for breach of contract, and further and in the alternative, trespass to goods, conversion and detinue. Particulars of the loss and damage are liquidated to a total sum of ?6, 122.15. The prayer claims damages in that amount, damages generally, interest and costs.

2. A defence was filed in June. Although denying in general that the appliances supplied were defective, save as to those already returned, which it blamed a customer abuse rather than manufacturing fault, the main issue raised was that no transaction had taken place between the plaintiff and defendant prior to a date probably a little before 8th March 1989. It is suggested in argument, as it was apparently at all stages below:

3. Order 14 proceedings in general form were initiated in October last year, supported by affidavits from the general manager of the plaintiff, which did little more than repeat the statement of claim, and from the solicitor for the plaintiff, who exhibited various letters and faxes. An affirmation from Mr. W.L. Wan, the managing director of the defendant, merely confirmed the formal defence filed earlier. The master after hearing counsel for both sides, gave leave to defend the claim in tort, with directions in the event the claim were pursued, but ordered that "interlocutory judgment be entered in favour of the Plaintiff for damages to be assessed pursuant to paragraph 5 of the Statement of Claim". His reasons, recorded in a note taken by the solicitor for the plaintiff, can be shortly put as "bad pleading; good case". In particular he was satisfied "that contractual liability made out. Was an agreement between parties". By that we understand him to mean that he was satisfied, as it were on a preliminary point of law, that the defendant was party to all the contracts alleged.

4. The note as to quantum of damages is too obscure to be helpful. But the fact that the master ordered damages to be assessed would indicate that he was not satisfied that they were indisputably due as claimed. That is by no means surprising. Even after further affidavits were filed for the purpose of an appeal to Hooper, J., the evidence remained entirely inadequate. As to the appliances other than the toasters, there was no evidence at all; and that in relation to the toaster themselves was vague and unspecific. It is to be observed that at no time was a surveyor's report put forward, either with regard to those appliances admittedly returned to Hong Kong or to those said still to be stored in England.

5. But what the master appears to have overlooked is that his approach sits uncomfortably, indeed impossibly, with the reference in his order to paragraph 5 of the statement of claim, which pre-supposes that all the appliances in question were defective by reason of manufacturing faults and that judgment for the liquidated sum claimed ought therefore to have been awarded. Hooper, J, dismissed the appeal of the plaintiff, highlighting the difficulty we have mentioned by express findings of fact.

6. With respect to those who earlier advised the plaintiff, in our view the Order 14 application was misconceived. By that order a plaintiff may obtain summary judgment on the ground that the defendant has no defence to a claim included in the writ. He may obtain similar judgment with respect to "any particular part of such claim", but the notes to the Rules of the Supreme Court at paragraph 14/1/7 indicate that this can only be where the parts in question can be clearly identified, and must be so identified in the summons. It is immaterial that the defendant admits liability in general: see Associated Bulk Carriers Ltd v. Koch Snipping Inc [1978] 2 All E R at 254, an authority to which Mr. Oderberg, who now appears for the plaintiff, very properly draws our attention. Thus in the present instance, once it is accepted, as Mr. Oderberg felt bound to concede, that the plaintiff cannot establish that each and every appliance in question was defective due to a manufacturing fault, it is apparent that Order 14 proceedings were inappropriate.

7. That they were so can be illustrated by the hypothesis that the master who eventually entertains the assessment of damages comes to the conclusion, perhaps unlikely in the circumstances but not necessarily so, that no recoverable damage has been proved. That conclusion in a normal trial would mean dismissal of the claim. But here judgment has already been entered in the plaintiff's favour.

8. For these reasons we allow the appeal and set aside the order of the judge below. We make an order nisi that the defendant have its costs here, below and before the master.