CHINACHEM INVESTMENT CO LTD AND ANOTHER v. HENRY CHUE

CHINACHEM INVESTMENT CO LTD AND ANOTHER v. HENRY CHUE

Defendants failed to prove a production rate faster than the contractual two years and reliance on incomplete ledgers required the court to adopt conservative, ledger-supported monthly costs, leading to assessed production cost of HKD 8.22 per cubic metre, permitted deductions of HKD 620,000 for set-up/dismantling/depreciation, rejection of plaintiffs' discount and non-sale arguments, and rejection of mitigation by the Coffee Bay contract because defendants had capacity; total damages awarded to defendants HKD 2,801,265.

Citation
CHINACHEM INVESTMENT CO LTD AND ANOTHER v. HENRY CHUE
Parties
1st Plaintiff: Chinachem Investment Company Limited; 2nd Plaintiff: Chinachem Realty Limited; 1st Defendant: Henry Chue alias Kwok Keung Chue; 2nd Defendant: Chu Hung Kun; 1st Counterclaimant: Henry Chue alias Kwok Keung Chue; 2nd Counterclaimant: Chu Hung Kun; 1st Counter Defendant: Chinachem Investment Company Limited; 2nd Counter Defendant: Chinachem Group (a firm); 3rd Counter Defendant: Chinachem Realty Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
19 July 1983
Case Number
HCA2497/1980
Procedural Posture
Contract Dispute Assessment of Damages and Counterclaim / Assessment of Damages After Judgment on Liability
Outcome
Judgment for the defendants on assessment of damages; damages awarded to defendants in the sum of HKD 2,801,265.
Legal Topics
Assessment of Damages, Loss of Profits, Mitigation of Loss, Quantum of Damages, Evidence and Accounting Records
Source Language
EN
Contract Law Commercial Law Damages Law Assessment of Damages Loss of Profits Mitigation of Loss Quantum of Damages Evidence and Accounting Records

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Parties

Chinachem Investment Company Limited

1st Plaintiff

Chinachem Realty Limited

2nd Plaintiff

Henry Chue alias Kwok Keung Chue

1st Defendant

Chu Hung Kun

2nd Defendant

Henry Chue alias Kwok Keung Chue

1st Counterclaimant

Chu Hung Kun

2nd Counterclaimant

Chinachem Investment Company Limited

1st Counter Defendant

Chinachem Group (a firm)

2nd Counter Defendant

Chinachem Realty Limited

3rd Counter Defendant

Procedural Posture

Contract Dispute Assessment of Damages and Counterclaim / Assessment of Damages After Judgment on Liability

Legal Issues

  1. 1 What profit would defendants have made from a $15 crushing fee on contract quantity of 250,000 cubic metres?
  2. 2 What would defendants' half share of profit have been on external sales of up to 150,000 cubic metres?
  3. 3 Whether the Coffee Bay contract mitigates defendants' loss (capacity/mitigation)?

Ratio Decidendi

Defendants failed to prove a production rate faster than the contractual two years and reliance on incomplete ledgers required the court to adopt conservative, ledger-supported monthly costs, leading to assessed production cost of HKD 8.22 per cubic metre, permitted deductions of HKD 620,000 for set-up/dismantling/depreciation, rejection of plaintiffs' discount and non-sale arguments, and rejection of mitigation by the Coffee Bay contract because defendants had capacity; total damages awarded to defendants HKD 2,801,265.

Court Disposition

Judgment for the defendants on assessment of damages; damages awarded to defendants in the sum of HKD 2,801,265.

Orders

  • Plaintiffs Chinachem Investment Company Limited and Chinachem Realty Limited to pay HKD 2,801,265 to defendants Henry Chue and Chu Hung Kun