SHUM YIP - UTC (HONG KONG) CO. LTD. v. MASTER CO. (a firm)

SHUM YIP - UTC (HONG KONG) CO. LTD. v. MASTER CO. (a firm)

Where a seller, who has been wrongfully deprived of the contract price by the buyer's breach, reasonably resells to a third party and the resale fails because the third party is impecunious, the seller may nevertheless recover the original loss (contract price less recoveries and savings) from the original buyer; reasonable costs incurred in pursuing the third party are recoverable as mitigation. Buyer not entitled to alleged set-off for accessories where seller did not use them and no payment was received from the third party.

Citation
SHUM YIP - UTC (HONG KONG) CO. LTD. v. MASTER CO. (a firm)
Parties
Plaintiff (buyer): SHUM YIP - UTC (HONG KONG) CO. LTD; Defendant (seller and Counterclaimant): MASTER COMPANY (a firm)
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
15 May 2000
Case Number
HCA7560/1990
Procedural Posture
Breach of Contract for Sale of Goods; Assessment of Damages on Counterclaim After Successful Appeal / Remitted by Court of Appeal for Assessment of Damages; Assessment Hearing and Decision
Outcome
Assessment allowed in favour of Seller (defendant on counterclaim); damages assessed and interest awarded; costs follow the event (order nisi)
Legal Topics
Remoteness of Damage, Mitigation of Loss, Set Off, Assessment of Damages, Enforcement of Judgment, Recovery of Litigation Costs
Source Language
EN
Contract Law Sale of Goods Commercial Law Civil Procedure Damages Law Remoteness of Damage Mitigation of Loss Set Off +3 more

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Parties

SHUM YIP - UTC (HONG KONG) CO. LTD

Plaintiff (buyer)

MASTER COMPANY (a firm)

Defendant (seller and Counterclaimant)

Procedural Posture

Breach of Contract for Sale of Goods; Assessment of Damages on Counterclaim After Successful Appeal / Remitted by Court of Appeal for Assessment of Damages; Assessment Hearing and Decision

Legal Issues

  1. 1 Whether seller can recover original loss notwithstanding resale to third party which failed to pay
  2. 2 Whether buyer entitled to set-off claimed value of accessories supplied
  3. 3 Quantum: quantity delivered to third party and whether seller received payment from third party

Ratio Decidendi

Where a seller, who has been wrongfully deprived of the contract price by the buyer's breach, reasonably resells to a third party and the resale fails because the third party is impecunious, the seller may nevertheless recover the original loss (contract price less recoveries and savings) from the original buyer; reasonable costs incurred in pursuing the third party are recoverable as mitigation. Buyer not entitled to alleged set-off for accessories where seller did not use them and no payment was received from the third party.

Court Disposition

Assessment allowed in favour of Seller (defendant on counterclaim); damages assessed and interest awarded; costs follow the event (order nisi)

Orders

  • Damages assessed at HK$1,055,541 in favour of the Defendant on his counterclaim
  • Interest on the damages at commercial rate (prime + 1%)