Professional Documents
Culture Documents
DCCJ 1397/2009
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BETWEEN
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Plaintiff
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CYCLO TRANSPORTATION
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1st Defendant
COMPANY LIMITED
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JUDGMENT
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Introduction
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Background
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and the Defendant (which is a local courier) for onward delivery to the
Plaintiff.
It is not clear as to whether Shiyu passed the Goods to Tian Ying first
or COE first.
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On 1 December 2008, the Goods were lost at Kwun Tong, Hong Kong
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Mr. Ng Shun Kwok (Mr. Ng) is the only witness for the Plaintiff.
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8.
Mr. Ng told the Court that the Goods were part of the goods sold by
the Plaintiff but were rejected by the purchaser, Express Luck Industrial Ltd,
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9.
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collect the Goods for this purpose is dated 26 November 2008 (Bundle p63).
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and informed him that the Goods were lost on the way of delivery at Kwun
Tong. The matter was reported to the Hong Kong Police.
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Mr. Ng learned, only after this incident, that Shiyu sub-contracted the
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13.
The Defendant called one witness, Ms. Sui Ching (Ms. Sui), who is
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2008 with Tian Ying (the Agreement). Under the Agreement, the parties
agreed to deliver goods for the other party at an agreed fee as per Annexure
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(Bundle p103-104).
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15.
In other words, the Defendant will deliver goods for Tian Ying in
Hong Kong. These goods are shipped by the customers of Tian Ying in
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Mainland and to be delivered to Hong Kong. On the other hand, Tian Ying
will also deliver goods for the Defendant in Mainland.
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godown of the Defendant. Tian Ying instructed the Defendant to deliver the
Goods to the Plaintiff and to collect transportation fee at HK$180 from the
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Plaintiff. The Defendant only charged Tian Ying RMB 58 for this delivery.
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17.
The Defendant denies owing any duty of care to the Plaintiff. Further,
the Defendant relies on Clause 3.4 of the Agreement to limit their liability to
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Discussion
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The issues are: (1) whether the Defendant owes any duty of care to the
Plaintiff in respect of the Goods; (2) whether there is any breach of duty on
the part of the Defendant; (3) quantum of damages.
(1)
Duty of Care
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(a)
Negligence
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While the Defendant denied owing any duty of care under negligence
to the Plaintiff in the pleading, Mr. To, Counsel for the Defendant, rightly
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The Defendant is a bailee for reward. The Plaintiff is the owner of the
Goods. There can be no dispute that the Plaintiff will be affected by the
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under negligence.
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(b)
Bailment
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the pleading and that the solicitors for Plaintiff stressed that the cause of
action was negligence in their letter dated 17 June 2009 (the Letter), the
Plaintiff is not entitled to run its case under the law of bailment.
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23.
I do not accept Mr. Tos submission. Firstly, the Plaintiff had already
pleaded the factual matrix to support a claim against the Defendant under the
law of bailment. While it is always good practice to spell out clearly the
cause of action by making express reference to the area of law concerned,
the omission to mention bailment is not against the pleading rules as it is not
necessary for a party to plea law. Further, the omission is not material here.
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There is virtually no dispute as to the facts leading to this claim and thus the
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Defendant cannot really deny owing a duty of care to the Plaintiff under the
law of bailment.
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Secondly, the Letter is not written for the purpose of stating the nature
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introduced under the law of bailment. I am of the view that the Defendant is
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not entitled to run a defence under the law of bailment on the one hand and
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argue that the Plaintiff cannot make a claim under bailment on the other
hand.
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It is my ruling that the Plaintiff is entitled to run its case under the law
of bailment.
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27.
At all material times, the Plaintiff is the owner of the Goods. It is thus
obvious, while not admitted by the Defendant, that the Plaintiff is entitled to
immediate possession of the same. The Plaintiff is thus entitled to claim
against a sub-bailee or sub-sub-bailee who owes all the duties of a bailee for
reward (Morris v C. W. Martin & Sons Ltd [1966] 1 QB 716, p728-729). A
bailee for reward must exercise reasonable care for the safety of the goods
entrusted to him. (Halsburys Laws of England, 5th edition, Vol. 4, p94,
paragraph 146). It is my finding that the Defendant owes a duty of care to
the Plaintiff under bailment.
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(2)
Breach of Duty
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the Court finds that the Defendant owes such a duty of care.
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Indeed, under the law of bailment, it is trite law that the bailee has to
establish that he has exercised all due care for the Goods and that he is not
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147; Samsung Electronics Ltd and Others v J & C Cargo Services Co Ltd
and Another [2008] 2 HKLRD 243, paragraph 51).
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The Goods are left unattended in the street for 35 minutes. It is a clear
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(3)
Quantum of Damages
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RMB 1,200 with reference to the weight of the Goods which is around 50
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kg.
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: 5 300 , 20 /,
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under the Limitation Clause. Mr. Lai, Counsel for the Plaintiff, submitted
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arises.
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there are different provisions within the Limitation Clause governing the
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compensation (i) as between Tian Ying and the Defendant; and (ii) as
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: 5 300 , 20 /
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basis: RMB300 for the first 5 kg and then RMB20 for each additional kg;
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As between the transporting party and any other party, the effective
phrase is ...
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It should also be noted that the Defendant only seeks to rely on the
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38.
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There are 2 main sub-issues here: (a) whether the Defendant is entitled
to rely on the Limitation Clause? (b) If so, is the scope of this clause wide
enough to cover the present scenario?
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Is there any consent by the Plaintiff here? The Defendant can only rely
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42.
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which in essence means Mr. Ng did not know any sub-bailment
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(whether involving Tian Ying or the Defendant) and that the Plaintiff will not
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oppose to sub-bailment and will not care if Shiyu delivers the goods
themselves or sub-contract the delivery to other company provided that the
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43.
I am of the view that the Plaintiff leaves the entire delivery work to
Shiyu which is free to decide whether they will complete the whole delivery
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carriers.
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44.
That is however not the end of the story. In Marine Blast Ltd v Targe
Towing Ltd and Scheldt Towage Co NY [2004] EWCA Civ 346, Mance LJ
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said:-
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The issues here are whether the wordings of the Limitation Clause
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47.
Mr. Lai referred the Court to the limitation clause of COE (Bundle
p105-106). Before I move on, I should say that it is not entirely clear as to
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the role played by COE. The Plaintiff says that COE is the sub-bailee and
Tian Ying is the sub-sub bailee. The Defendant says Tian Ying should be the
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sub-bailee and COE is the sub-sub-bailee. This however does not affect the
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present case.
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48.
Mr. Lai relied on the evidence of Ms. Sui and submitted that the
limitation clause of COE governs the compensation between COE and its
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clients, namely Tian Ying and the Defendant, by reference to the weight of
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49.
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In my view, Mr. Lai has misunderstood the evidence of Ms. Sui who
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transporting party (it may be Tian Ying or the Defendant) and any other
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party. The Limitation Provision applies, in the present case, against Tian
Ying only. As to any other parties, the Exemption Provision applies. The
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fact that the Defendant is not relying on the Exemption Provision does not
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transporting and any other parties, it is my ruling that the Defendant cannot
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damages. However, for completeness sake, I shall examine the case further
assuming that the Limitation Clause covers the Plaintiff.
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Ltd [1983] 1 WLR 964 and George Mitchell (Chesterhall) Ltd v Finney Lock
Seeds Ltd [1983] 2 AC 803.
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52.
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follows:U
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If, pursuant to the provisions set out herein, any liability on the
part of the Company shall arise (whether under the express or
implied terms of this Contract, or at Common Law, or in any other
way) to the customer for any loss or damage of whatever nature
arising out of or connected with the provision of, or purported
provision of, or failure in provision of, the services covered by this
Contract, such liability shall be limited to the payment by the
Company by way of damages of a sum ...
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56.
Lord Fraser of Tullybelton at p972C said:Having considered these particular criticisms of paragraph (f)
the question remains whether in its context it is sufficiently clear
and unambiguous to receive effect in limiting the liability of
Securicor for its own negligence or that of its employees. In my
opinion it is. It applies to any liability whether under the express
or implied terms of this contract, or at common law, or in any
other way. Liability at common law is undoubtedly wide enough
to cover liability including the negligence of the proferens itself, so
that even without relying on the final words any other way, I am
clearly of opinion that the negligence of Securicor is covered.
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was), 28 March 1995). The relevant exemption clause is as follows:The Company (i.e. the Defendant) shall not be responsible for
any loss and/or damage to the Customer's vehicle or any articles
attached to or left inside the vehicle whilst on the Company's
premises or under the Company's control from whatsoever cause
arising.
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Mr. Lai relied on Always Win Ltd v Autofit Ltd and Citybase Property
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also note the submission of Mr. To that the Court should ascertain he natural
and plain meaning of the Limitation Provision in the light of the surrounding
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suggested by Mr. Lai. Secondly, the general principles about bailment for
reward is that if the goods are lost, whilst in the possession of the bailee, the
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bailee is liable unless he can show, and the burden is on him to show, that the
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Wilful Neglect
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If I am wrong and that I should have held that the Limitation Clause
covered negligence, the next issue is whether the conduct of the Defendant
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87, HH Judge Ng referred to Thomas Cook Group Ltd v Air Malta Co Ltd
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(t/a Air Malta) [1997] 2 Lloyd's Rep. 399 where Cresswell J who set out the
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Anvika Ltd v TNT Express Worldwide (Euro Hub) NV [2006] EWHC 230
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(Comm).
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68.
Ms. Sui said that each employee is responsible for his own district
alone. Mr. Wu is the only person responsible to deliver the Goods (5 boxes
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December 2008.
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arrived at No. 61 Shing Yip Street, Kwun Tong. He unloaded all the goods
(including the Goods) to be delivered from the van/lorry to the pavement
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outside No. 61 Shing Yip Street. He then picked out 22 items and delivered
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the same to Shing Yip Industrial Building at No. 19-21 Shing Yip Street. The
Goods and other items were left at the street unattended. He returned to No.
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61 Shing Yip Street at around 1030 hrs (35 mins later) and found the Goods
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were missing.
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If I am wrong and that I should have held that the Limitation Clause
covered the loss of the Goods (i.e. it covers negligence and there is no
willful neglect), the next issue would be whether it should be struck down by
reason of the CECO.
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73. The issues here are (i) whether the CECO applies? (ii) If so, whether
the Limitation Clause satisfies the reasonableness test?
Mr. To submitted that the CECO does not apply by reason of s16
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(ii) the acts constituting the offer and acceptance have been done
in different countries or territories or in and outside Hong Kong;
or
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(iv) the acts constituting the offer and acceptance were done in
Hong Kong and the contract provides for the goods to be delivered
outside Hong Kong; or
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(v) the acts constituting the offer and acceptance were done
outside Hong Kong and the contract provides for the goods to be
delivered to Hong Kong.
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(i) the goods in question are, at the time of the conclusion of the
contract, in the course of carriage, or will be carried, from one
country or territory to another country or territory, or to or from
Hong Kong from or to a place outside Hong Kong; or
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Kong company.
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I am of the view that the Agreement is not entered specifically for the
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nothing to deliver until goods are sent from Tian Ying. Therefore the true
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concludes, at the earliest, when Tian Ying informs the Defendant of the
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delivery. For the Goods, it is not clear when Tian Ying informed the
Defendant about the delivery. There is no evidence as to when and how the
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CECO.
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conclusion of the Agreement for the purpose of s16(3)(c), then I would hold
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constituting the offer and acceptance took place. The acts could have taken
place in Mainland and/or Hong Kong or somewhere else. In means that the
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Tian Ying or in Hong Kong by the Defendant. Once again, since there is no
evidence as to where the acts constituting the offer and acceptance took
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Goods and the written authorization is dated 26 Nov 2008. Shiyu collected
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the Goods on 28 November 2008. The Agreement is dated 27 Nov 2008 and
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on that day, the Goods will be carried from Mainland to Hong Kong.
With that, s16(3)(c)(i) is satisfied.
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83.
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Mr. Lai contends that even if s16 applies, the effect is that the
Limitation Clause is not subject to ss8 and 9 of the CECO. The Limitation
Clause is nevertheless still subject to s7(2) of the CECO which deals with
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85.
The first question that has to be resolved is: who are the parties in
question? Mr. Lai submitted that they are the Plaintiff and the Defendant.
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Mr. To submitted that they should be Tian Ying and the Defendant. He
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non-contractual party had dealt with terms which he had never seen. It is my
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ruling that the parties concerned are Tian Ying and the Defendant.
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Quantum
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(US$0.38 x 28,130 pieces). The sum claimed by the Plaintiff is the selling
price of the Goods to Express Luck Industrial Ltd.
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92.
While the Goods are of inferior quality in the eyes of Express Luck,
Mr. Ng said that the Plaintiff is entitled to return the Goods to the supplier
for replacement.
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Mr. Ng also said that the price of the Goods as on 1 Dec 2008 is more
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Mr. Ng. There is also no suggestion as to what is the value of the Goods on 1
Dec 2008.
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Conclusion
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and bailment. The Defendant has breached the duties. The Plaintiff is bound
by or subject to the Limitation Clause. However, the Limitation Provision, as
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relied on by the Defendant, only covers Tian Ying but not the Plaintiff.
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Further, the Limitation Clause does not cover negligence. In any event,
there is wilful neglect on the part of the Defendant. The Defendant cannot
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98.
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99.
I also make an order nisi that the Defendant to pay the Plaintiffs costs
of this action together with all costs reserved to be taxed if not agreed with
certificate to Counsel. This order shall become absolute unless there is
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Judgment.
( K. H. Hui)
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Mr Ken To, instructed by M/s. Chiu, Szeto & Cheng, for Defendant