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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> G & A Ltd. v HN Jewelry (Asia) Ltd. [2004] EWCA Civ 674 (27 May 2004) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2004/674.html Cite as: [2004] EWCA Civ 674 |
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COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM QUEEN'S BENCH DIVISION
Mr Justice Crane
Strand, London, WC2A 2LL |
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B e f o r e :
and
LORD JUSTICE JONATHAN PARKER
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G & A Ltd |
Appellant |
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- and - |
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HN Jewelry (Asia) Ltd |
Respondent |
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Smith Bernal Wordwave Limited, 190 Fleet Street
London EC4A 2AG
Tel No: 020 7421 4040, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
for the Second, Third and Fifth Appellants
Mr L Kuschke and Mr S Horan for the First and Fourth Appellants
Mr B Doctor QC (instructed by Eversheds) for the Respondents
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Crown Copyright ©
Lord Justice Waller :
Introduction
The Rolling Contract Issue
"1) Definition of Terms
Through this document the following definitions will apply:
"G&A" - G&A Limited
"Heng Ngai" - HN Jewellery (Asia) Ltd and Associate Companies
2) Timing
This contract is made between G&A and Heng Ngai. The contract is for three years rolling, commencing on 1 January 2001. There will then be a meeting once a year by the 15th of November to plan capacities and work on supply chain planning for the following year.
3) Exclusivity
All gold and sterling silver products produced by Heng Ngai and sister companies will be supplied to the UK, Irish and Gibraltar markets exclusively through G&A as sole distributor. These products will not be supplied to any other company (except QVC), in either finished or semi-finished form, for onward sale into the UK market.
QVC
The only exception to Exclusivity for the territory will be QVC. Heng Ngai will pay G&A 5% of the nett invoiced turnover to QVC for the UK market. Such payments to be made with full accounting support with independent audit ½ yearly on 1st September and 1st March. These will cover the 6 month period ending 30th June and 31st December, respectively.
In reciprocation G&A will give Heng Ngai preferred supplier status, i.e. products within Heng Ngai's technical capability will be sourced from Heng Ngai provided they are at commercial weights and prices and can be delivered within the agreed lead times.
4) Quantity/Total Manufacture
G&A will endeavour to generate as much business on the products sourced with Heng Ngai as is possible.
G&A will endeavour to buy a maximum of US$300,000 of 9ct gemset merchandise from its other small suppliers in Hong Kong, excluding its subsidiary Dynamic Creations Limited.
G&A guarantees a minimum purchase of US$9M for the year ending 31st December 2001. We will then meet annually to discuss targets for the following year.
5) Payment
Payment will be made on the 15th of the month following the month of delivery for all invoices dated within the relevant month. Heng Ngai will confirm which bank this payment should be made to each month.
6) Deliveries
a) Delivery Timings
Heng Ngai guarantees delivery of products as follows:
25 working days from the date of order. This should particularly be adhered to in the months July, August, September, October when it is absolutely vital that stock is delivered within the lead times.
There will also be a fast track for urgent orders of 15 working days from the date of order for an agreed quantity of merchandise. This agreed quantity will be negotiated each year.
Heng Ngai will provide details of all holidays and factory closures each year so that an accurate expected delivery date can be calculated for the purpose of monitoring this contract.
b) Ordering/Quantities
G&A will accept 95-105% of ordered quantities. Heng Ngai will indicate whether a particular shipment is a "partial" or the order is complete on the packaging documents occupying the shipment.
7) Quality
a) Stock Rejected by our QC Department
G&A will rigorously inspect all items on each Heng Ngai invoice for any quality defect. G&A's decision will be final as to what constitutes acceptable quality. Products considered not to be of acceptable quality will be rejected and a sample sent to Heng Ngai by the next available courier movement.
Any stock rejected on quality grounds will be debited from succeeding payments until replaced or final credit is agreed.
b) Stock Below 0.375 Standard
We will provide to you evidence of failure from the Assay Office. This stock will either be returned to you and the debit deducted from the succeeding labour payment or melted in the UK with the following associated charges:
i) Melting costs
ii) Labour costs plus loss
iii) Assay charges
8) Gold Quality
Colour – 9 carat merchandise should be the pale yellow colour preferred by the UK market.
9) Prices
The prices at gold base $362.50 for each item will be agreed and form the accepted price list for each year.
10) Retrospective Discount
If we cannot conclude the Project Rio discussions satisfactorily we reserve the right to open the discussions on volume discounts.
11) This Agreement shall be terminated without notice if either party has been wound up or has a winding up issued against him or such circumstance has arisen which reasonably prevents the party to comply with the terms of this Agreement."
"On behalf of Heng Ngai, we hereby give notice and confirm that the Agreement will expire at the end of 31 December 2003. Heng Ngai will not renew the agreement after its expiry and the agreement will not roll into a second three year period.
We would like to review with you opportunities to further develop our trading relationship on a non-exclusive basis and on new terms. We will contact you shortly to exchange ideas and thoughts."
The notice was signed by Wai-Kit Lau, a director of the first defendant (Mr Lau).
Interim Relief
"If in the exercise of its discretion the court decides that it is a proper case to grant a mandatory injunction, then the court must be careful to see that the defendant knows exactly in fact what he has to do and this means not as a matter of law but as a matter of fact, so that in carrying out an order he can give his contractors the proper instructions."
"I would concur with this passage as providing detailed guidance to the approach of the court when considering an application to grant a mandatory interlocutory injunction. A more concise summary, which I would commend as being all the citation that should in future be necessary, is the following passage in the judgment of Chadwick J in Nottingham Building Society v Eurodynamics Systems [1993] F.S.R. 468 at 474:
In my view the principles to be applied are these. First, this being an interlocutory matter, the overriding consideration is which course is likely to involve the least risk of injustice if it turns out to be 'wrong' in the sense described by Hoffmann J.
Secondly, in considering whether to grant a mandatory injunction, the court must keep in mind that an order which requires a party to take some positive step at an interlocutory stage, may well carry a greater risk of injustice if it turns out to have been wrongly made than an order which merely prohibits action, thereby preserving the status quo.
Thirdly, it is legitimate, where a mandatory injunction is sought, to consider whether the court does feel a high degree of assurance that the plaintiff will be able to establish this right at a trial. That is because the greater the degree of assurance the plaintiff will ultimately establish his right, the less will be the risk of injustice if the injunction is granted.
But, finally, even where the court is unable to feel any high degree of assurance that the plaintiff will establish his right, there may still be circumstances in which it is appropriate to grant a mandatory injunction at an interlocutory state. Those circumstances will exist where the risk of injustice if this injunction is refused sufficiently outweigh the risk of injustice if it is granted."
" "Where does the balance of convenience lie?" or, to my mind the preferable formulation of this issue: "which course carries the lower risk of injustice?" ".
Lord Justice Jonathan Parker: I agree