The court held that defective goods supplied by the defendant breached both express and implied terms of the sale agreements, rendering the defendant liable for damages.

[1] This is my JUDGMENT in respect of the plaintiffs claim for loss and damage against the defendant for goods purchased which were defective subject to Hong Kong Sale of Goods Ordinance and the terms of purchase. The prayer in the statement of claim inter alia reads as follows:

"(a) The sum of USD122,091.45;

(b) General damages;

(c) Interest at such rate and from such period as this Honourable Court deems just and expedient, pursuant to Section 11 of the Civilian Act 1956;

(d) Interest at the rate of 8% per annum from the date of judgment to the date of full and final settlement and costs etc."

[2] It is essential to note there were various correspondences on the plaintiffs side to the defendant on the issue of liability and quantum of claim. There was no material objection orally or in writing at the material time to the claim as advocated by the defendant's witness in evidence and in fact there is admission to liability as well as quantum, subject to terms which have not been materialised.

[3] The parties have relied on the following cases: Kuwait Airways Corp v. Iraqi Airways [2002] 2 AC 883; Government of India v. Cairn Energy India Pty Ltd [Rayuan Sivil No.02(f)-7-2010(W) ]; Pacific Recreation Pte Ltd v. SY Technology Inc [2008] 2 SLR 491; Recaliva Design Steel (M) Sdn Bhd v. Vista Access Sdn Bhd [2008] 1 MLRH 304 , [2008] 6 MLJ 604 ; Atico International (HK) Ltd v. Sparko (Far East) Ltd [2006 HKECJ 2118; Oriental Fiannce Bhd v. Emas Kejuruteraan Sdn Bhd [2002] 7 CLJ449; Guan Soon Tin Mining Co v. Wong Fook Kum [1969] MLJ 99; PP v. Datuk Haji Harun Bin Haji Idris and Others ; Bowskill v. Dawson And Anor [1953] QBD 1393; Mohd Nazri Ab Majit v. Tan Keo Hock & Anor [1998] 3 MLRH 428 ; [1999] 1 CLJ 601 ; [1998] 4 AMR 3936

Brief Facts

[4] The plaintiff is a trading company inclusive of furniture located in Hong Kong. The Malaysian representative of the plaintiff was its sister company incorporated under the name of New Atico Trading Sdn Bhd (NAT) whose manager gave evidence on behalf of the plaintiff. The plaintiffs case has been set out in enclosure 14 and it can be summarised as follows:

"(a) The defendant entered into two agreements with the plaintiff, namely Purchase Order No. 51019001-1 dated 21.10.2005 and Purchase Order No. 51019002-1 dated 9.1.2006 (the sale and purchase agreements), to sell 4,277 pieces of side by side garden seats and 4,224 sets of garden tiles (the said goods) for USD 115,479.00 andUSD30,412.80 respectively.

(b) It was agreed that the said goods were to be delivered to an end purchaser in England, Wilkinson Hardware Stores Ltd (Wilkinson). The plaintiff paid for the said goods and defendant delivered the said goods to Wilkinson in batches.

(c) It was subsequently discovered that the said goods were defective and of unmerchantable quality in that they were:

(i) tainted with mould;

(ii) of inconsistent timber quality;

(iii) of inconsistent product colour finishing; and

(iv) of unacceptable levels of use of timber with splits in it.

(d) It is the plaintiffs case that the defendant is in breach of the express and/or implied terms of the sale and purchase agreements in that the said goods were not;

(i) free of defects;

(ii) of merchantable quality; and/or

(iii) fit for purpose

(the said breaches).

(e) It is the plaintiffs case that as a result of the aforesaid breaches, Wilkinson was forced to recall all the said goods. This resulted in the plaintiff having to pay compensation to Wilkinson to the sum of USD 111,600.94. In addition the plaintiff incurred additional costs of USD 10,490.51 to dispose of the defective goods on behalf of the defendant.

(f) By way of a letter of demand dated 15.6.2007, the plaintiff through its solici