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You are here: BAILII >> Databases >> England and Wales High Court (Commercial Court) Decisions >> Toprise Fashions Ltd v Nik Nak Clothing Co Ltd & Ors [2009] EWHC 1333 (Comm) (17 June 2009) URL: http://www.bailii.org/ew/cases/EWHC/Comm/2009/1333.html Cite as: [2009] EWHC 1333 (Comm) |
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QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Strand, London, WC2A 2LL |
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B e f o r e :
____________________
TOPRISE FASHIONS LTD |
Claimant |
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- and - |
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(1) NIK NAK CLOTHING CO LTD (2) NIK NAK (1) LTD (3) ANJUM AHMED |
Defendants |
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MR A. LATIMER (instructed by Billy Hughes & Co) for the Defendants
Hearing date: 3 June 2009
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Crown Copyright ©
Mr Justice Beatson:
Introduction
The claim
Defendant | Invoice Number |
Original Amount (USD) |
Amount Outstanding (USD) |
Date of Acceptance | Date Payment Due |
Second | TR-0104/07 | $262,960 | $110,035.34 | 31 Jan 07 | 2 Mar 07 |
Second | TR-1206/06 | $235,984.08 | $235,984.08 | 17 Jan 07 | 16 Feb 07 |
Second | TR-0103/07 | $56,225.20 | $56,225.20 | 25 Jan 07 | 24 Feb 07 |
Second | TR-0105/07 | $117,658.40 | $117,658.40 | 31 Jan 07 | 2 Mar 07 |
Second | TR-0108/07 | $197,820 | $197,820 | 12 Feb 07 | 14 Mar 07 |
Second | TR-0109/07 | $17,496 | $17,496 | 14 Feb 07 | 16 Mar 07 |
Second | TR-0201/07 | $25,374 | $25,374 | 28 Feb 07 | 30 Mar 07 |
First | TR-01011/07 | $4,326.90 | $4,326.90 | 25 Jan 07 | |
First | TR-07011/07 | $465.60 | $465.60 | 10 Jul 07 |
The defence
"in breach of the implied term set out above, the claimants supplied the goods which are the subject matter of the three invoices mentioned above in mixed orders. For the avoidance of doubt supply of a mixed order is a breach of the term that the goods including their packaging would correspond with the description and the packaging was not of satisfactory quality or fit for purpose in that it was misleading and wrong in a material respect".
"the representation made by Ivan Tse at the initial meeting with the third defendant [in or about February 2006] was wrong in that goods were manufactured in China and shipped via Singapore with changes having been made to invoices, bills of lading and GSP certificates. This practice is known as transhipment or submarining. In these circumstances the claimant is put to strict proof, including all necessary documentary proof that goods supplied in relation to each invoice sued upon were delivered lawfully; insofar as the claimant is not able to prove the same then the relevant defendant is entitled to rely upon the defence of illegality or alternatively to rescind the contract and lawfully avoid payment of the price."
Summary Judgment: the test
"i) The court must consider whether the defendant has a "realistic" as opposed to a "fanciful" prospect of success: Swain v Hillman [2001] 2 All ER 91;
ii) A "realistic" defence is one that carries some degree of conviction. This means a defence that is more than merely arguable: ED & F Man Liquid Products v Patel [2003] EWCA Civ 472 at [8];
iii) In reaching its conclusion the court must not conduct a "mini-trial": Swain v Hillman;
iv) This does not mean that the court must take at face value and without analysis everything that a defendant says in his statements before the court. In some cases it may be clear that there is no real substance in factual assertions made, particularly if contradicted by contemporaneous documents: ED & F Man Liquid Products v Patel at [10];
v) However, in reaching its conclusion the court must take into account not only the evidence actually placed before it on the application for summary judgment, but also the evidence that can reasonably be expected to be available at trial: Royal Brompton Hospital NHS Trust v Hammond (No 5) [2001] EWCA Civ 550;
vi) Although a case may turn out at trial not to be really complicated, it does not follow that it should be decided without the fuller investigation into the facts at trial than is possible or permissible on summary judgment. Thus the court should hesitate about making a final decision without a trial, even where there is no obvious conflict of fact at the time of the application, where reasonable grounds exist for believing that a fuller investigation into the facts of the case would add to or alter the evidence available to a trial judge and so affect the outcome of the case: Doncaster Pharmaceuticals Group Ltd v Bolton Pharmaceutical Co 100 Ltd [2007] FSR 63;
vii) Although there is no longer an absolute bar on obtaining summary judgment when fraud is alleged, the fact that a claim is based on fraud is a relevant factor. The risk of a finding of dishonesty may itself provide a compelling reason for allowing a case to proceed to trial, even where the case looks strong on the papers: Wrexham Association Football Club Ltd v Crucialmove Ltd [2006] EWCA Civ 237 at [57]."
The evidence
"10. Ya Ya were a customer of both Nik Nak and Nik Nak (1). On the basis of the samples shown by Toprise to Ya Ya, orders were placed with Toprise by Nik Nak on behalf of Ya Ya who would negotiate the price for the goods themselves. They would then add on to the order price, an agreed sum to be paid to Nik Nak/Nik Nak (1) which was usually between 30% and 40% of the cost, to cover clearance, freight and any duties involved in delivering the goods. The orders would be handwritten on behalf of Ya Ya by Ruud Tilroe and copies would be given to us and to Toprise. Ya Ya did not have the funds or liquidity to place large orders with Toprise. Toprise therefore used Nik Nak and Nik Nak (1) to open letters of credit on behalf of Ya Ya, with Nik Nak acting as Ya Ya's agent, with Ya Ya being the principal purchaser of the garments from Toprise. In turn, Nik Nak and Nik Nak (1) would invoice Ya Ya for the goods on arrival, providing Ya Ya with approximately 60-90 days credit for payment. Nik Nak and Nik Nak (1) dealt with the merchandising for all orders… and would liaise with both Ya Ya and Toprise as part of the process. Nik Nak and Nik Nak (1) never saw or inspected the consignment of goods manufactured for Ya Ya as these were sent directly to them by their shipping agent."
"11. The value of the transactions involving Nik Nak, Nik Nak (1), Ya Ya and Toprise were in the region of 2.5 million pounds. There were a large number of orders which were placed during approximately four visits by me and Ya Ya to Toprise. Initially, the arrangement worked satisfactorily."
"24. Weiner ordered these goods from ourselves which were meant to be delivered in good time in readiness for sale in January. However, they failed to arrive on time and were not delivered until February 2007 which meant that we had missed the season."
"25. We eventually persuaded Wiener to take delivery of the goods… however, on delivery Wiener contacted us to indicate that they were returning the goods as they were not able to sell them. The goods also comprised mixed orders that did not accord with the orders placed. Wiener wrote to us on 3 July 2007 setting out what the problems were, having returned them in or about the 1st or 2nd week of July. They also raised debit notes against us for €250,000 in respect of problems that they had encountered with their customers."
"Submarineing"
Agency
Breach of implied term in respect of goods delivered to Ya Ya
Sample Invoices
The Wiener invoices
Conclusion