ICI SWIRE PAINTS LTD v. TECHI MOTOR ENGINEERING & TRADING CO

ICI SWIRE PAINTS LTD v. TECHI MOTOR ENGINEERING & TRADING CO

The court found that, applying the established test for implying terms, an implied term existed that ICI would supply goods to the Defendant for the duration of calendar year 1994 subject to stock availability; ICI (through Mr C.C. Cheung) unilaterally terminated supply in late May/1994 without mutual agreement or adequate contractual justification and therefore breached both the 1994 Sales Agreement and the 1994 Authorised Dealer Appointment; the Defendant is entitled to judgment on the counterclaim with damages to be assessed.

Citation
ICI SWIRE PAINTS LTD v. TECHI MOTOR ENGINEERING & TRADING CO
Parties
Plaintiff (original Action) and Defendant (counterclaim): ICI Swire Paints Limited; Defendant (original Action): Techi Motor Engineering & Trading Company; Counterclaimant: Cheung Kin Man trading as Techi Motor Engineering & Trading Company and Techi Paints and Accessories Specialities; Counterclaim Defendant: ICI Swire Paints Limited (counterclaim Defendant)
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
16 November 1998
Case Number
HCA7251/1995
Procedural Posture
Commercial Contract Dispute (dealer/distribution Agreements) / Judgment (trial Decision; Damages to Be Assessed)
Outcome
Judgment for the Defendant on the counterclaim; plaintiff found in breach of the 1994 Sales Agreement and Authorised Dealer Appointment; assessment of damages to follow; costs reserved.
Legal Topics
Implied Terms, Termination, Breach of Contract, Dealer Agreements, Trade Credit, Assessment of Damages
Source Language
EN
Contract Law Commercial Law Remedies Implied Terms Termination Breach of Contract Dealer Agreements Trade Credit +1 more

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Parties

ICI Swire Paints Limited

Plaintiff (original Action) and Defendant (counterclaim)

Techi Motor Engineering & Trading Company

Defendant (original Action)

Cheung Kin Man trading as Techi Motor Engineering & Trading Company and Techi Paints and Accessories Specialities

Counterclaimant

ICI Swire Paints Limited (counterclaim Defendant)

Counterclaim Defendant

Procedural Posture

Commercial Contract Dispute (dealer/distribution Agreements) / Judgment (trial Decision; Damages to Be Assessed)

Legal Issues

  1. 1 Whether the 1994 Authorised Dealer Appointment and Sales Agreement contained an implied term that the supplier would supply for the whole calendar year 1994 upon orders by the dealer
  2. 2 If such an implied term exists, whether the supplier unlawfully and unilaterally terminated supply in May/June 1994 or whether termination was by mutual agreement or justified by the dealer's conduct/credit position

Ratio Decidendi

The court found that, applying the established test for implying terms, an implied term existed that ICI would supply goods to the Defendant for the duration of calendar year 1994 subject to stock availability; ICI (through Mr C.C. Cheung) unilaterally terminated supply in late May/1994 without mutual agreement or adequate contractual justification and therefore breached both the 1994 Sales Agreement and the 1994 Authorised Dealer Appointment; the Defendant is entitled to judgment on the counterclaim with damages to be assessed.

Court Disposition

Judgment for the Defendant on the counterclaim; plaintiff found in breach of the 1994 Sales Agreement and Authorised Dealer Appointment; assessment of damages to follow; costs reserved.

Orders

  • Judgment entered for the Defendant on the Counterclaim (breach found)
  • Assessment of damages to be conducted on a date to be fixed (preferably before the same judge)