CDR Prep - Mohinder
CDR Prep - Mohinder
CDR Prep - Mohinder
- involved in the day-to-day running of the Business’s customer accounts for about two
years before its sale to Linderman (HK) Ltd.
In August 2009, you met with Peter and Nathan Petrelli several times to work out the details of
the business relationship.
- Was agreed that the Business would manufacture shoeboxes to Petrelli’s designs, and ship
them to shoe manufacturers at addresses supplied by Petrelli. The shoe manufacturers
would then package Petrelli’s shoes and ship them to retailers.
In about August 2009, before the Business began supplying Petrelli with shoeboxes, you
provided the Petrellis with samples of the shoeboxes made to their designs, with which they were
happy. The shoeboxes have perspex display windows and PVC closure tabs.
When discussing delivery arrangements in August 2009, you recall one of the Petrellis telling
you that delivery times were important, so Petrelli could meet delivery schedules under its
retail contracts. You remember responding that the Business would do its best to deliver by the
date specified by Petrelli in the order form. You do not think you gave any more concrete
assurance than that. You certainly did not agree that Petrelli could deduct any
expenses arising from any late delivery from the Business’s invoices.
- vague reassurance that any additional costs could be “sorted out between you”.
You do not think you agreed at the outset that the Business would obtain customs documentation
for every order supplied to Petrelli. However, you did organize customs documentation on an
order-by-order basis, whenever Petrelli specifically requested it. Petrelli usually did ask you to
organize customs documentation, and you did so for almost every order for them.
You do not think you recorded in writing or signed any record of these pre-contractual
discussions. The Petrellis took notes of all your meetings, but you didn’t check them. You don’t
speak or read Italian.
When entering its individual orders, Petrelli would enter the order details on the Business’s
website, and would have to tick a box to state that it agreed to Primacore’s standard terms. You
believe that the description of how the Packaging Contracts were made in paragraphs 10 - 12 of
the Statement of Claim is accurate.
Between mid-2009 and March 2010, there were no real problems with the Petrelli relationship.
There had been no complaints from Petrelli, and Petrelli had always paid their invoices on time.
However, you and Chandra agree that Peter and Nathan Petrelli have fierce tempers, and do
require sensitive handling.
You are not in a position to confirm the exact terms of the Packaging Contracts (quantities; price;
description; delivery dates and destinations) set out in the Schedule to the Statement of Claim,
because you do not have any of the relevant documents. All documents relating to the Business
were passed to Linderman at completion of the BPA. You did not keep any copies.
The only records you now have relating to the Business are emails from your personal account
(which you sometimes used when corresponding with Chandra on matters relating to the
Business). You do not think you have anything about the Packaging Contracts specifically. Do
you need to search your personal emails to make sure? Can your personal emails be disclosed to
the other side? Most of them would be marked “Private and Confidential”.
Remind Counsel that Linderman have all the relevant documentation relating to the Packaging
Contracts, but you will do your best to remember.
- The closure tabs were made of PVC, and you had warned Petrelli back in August 2009
that there might be problems adhering them to the boxes.
- Petrelli had insisted on this “vital design feature”.
- Your production team was supposed to take samples from each carton of shoeboxes
before dispatching, to check for quality problems.
- It is possible that there might have been problems with the closure tabs on some of the
shoeboxes in this batch.
- However, 21 days for the Shoebox Manufacturers to inspect and repair the Shoeboxes
seems excessive. Your plant could have done it in a week.
Petrelli did not tell you about the problem: if they had, you would simply have replaced the
defective boxes at the Business’s cost, which would have been far quicker and cheaper.
- if Petrelli had specifically asked you to organize the customs documentation then you
would have done it. You assume that on this occasion they did not ask. Perhaps in
retrospect (since you had organized the customs documentation for most – if not all – of
the other Petrelli contracts) you ought to have called Petrelli to check. However, you
regard a period of 16 days to arrange customs documentation as excessive.
(3) Third Contract: You acknowledge that the Business delivered the Shoeboxes to the
wrong Shoebox Manufacturers. However (if your recollection is correct) Selangor and
Singapore are only 300 miles apart by road, and the mistake could have been corrected
quickly and inexpensively by either Petrelli or the Business.
(4) Fourth Contract: Delivery took place after the Completion Date, by which time you had
left the Business (as had all your former colleagues). You did inspect samples of the
Business’s stock of shoeboxes immediately prior to the Completion Date, and found no
damp or other quality issues. Did the 5-day delay in delivering acceptable goods really
justify the Shoe Manufacturer shipping by air rather than sea?
(5) Amounts claimed: you question whether it was necessary for Petrelli to ship the goods
by air at all. If they did need to do so, the shipping costs seem excessive. You would
very much like to get hold of the air waybills completed by Petrelli/ the Shoe
Manufacturers as soon as possible. How can you do this?
(6) Loss of profit: You are worried about this aspect of the claim because of the amounts
involved. Can Petrelli really claim for this? It seems very unfair that Primacore should
be blamed for Petrelli’s poor business performance.
The Petrelli debts built up quickly between mid-March and May 2010, such that there was
US$120,000 outstanding by the completion of the Business sale on 31 May 2010. In early May
2010, you telephoned Peter Petrelli to request payment. Mr Petrelli complained about the
delivery-mix up under the Third Contract, for which you apologized. Peter Petrelli had not
suggested that Petrelli would be refusing to pay the outstanding amounts. He had asked you to
send a formal demand for payment to his brother Nathan, as he (Peter) only had payment
authorization up to US$100,000. You asked your father to send Nathan Petrelli a written demand
for payment, which he did. You do not have a copy.
You did not receive a written reply to your demand for payment. However, you and your father
did meet Nathan Petrelli at Fat Angelo’s restaurant in Wanchai, when he was in Hong Kong on
business in late May 2010.
Mr Petrelli did briefly mention the problem of recent late deliveries to you at the meeting. You
apologized for any inconvenience, but had the impression that Mr Petrelli was generally happy
with the service Petrelli SpA were getting. You remember Petrelli telling your father that he
would pay the outstanding invoices, but asking for a discount to cover his costs of the late
deliveries. You remember Petrelli and your father discussing the possibility of a discount, but do
not remember what (if anything) they agreed upon. You had drunk a lot of red wine by this
point, and were preoccupied chatting with the very attractive waitress. Again you are concerned
about this coming out in Court, as your fiancée does not drink and believes that you are also
teetotal. Can Counsel reassure you?
You had no involvement in the negotiation of the BPA, or the sale of the Business to Linderman,
save that:
(1) You discussed with your father, Chandra, the customer accounts which were outstanding
at the start of March 2010, when the BPA was signed. Petrelli did not owe any money to
the Business at this stage, all previous invoices having been paid on time. There were no
other significant customer debts either.
(2) You updated your father about the customer accounts when the Business sale completed
at the end of May 2010. Chandra was aware of the debt of US$120,000 then owing from
Petrelli. He told you that he would “follow it up”. You don’t know what he did about
this.
(3) Just before the May 2010 completion of the Business sale, your father asked you to
inspect the Business’s stock to ensure there were no defects. You supervised a team of 4
which inspected the stock at the Kwai Chung warehouse on 29 and 30 May 2010. This
included the stock of shoeboxes which would be supplied to Petrelli under the final
contract. There wasn’t time to check every single shoebox, so you sampled a few of the
shoeboxes on the top layer of every carton of 500. The shoeboxes did not seem damp,
and there were no other quality problems. The warehouse itself could be damp, and the
Business’s warehouse staff would therefore leave the air-conditioning system running 24
hours a day, to guard against damage to stock.
You do not know anything about the meaning or significance of the warranties in the BPA. You
would be interested in getting Counsel to explain them all: this might delay Counsel asking you
uncomfortable questions about what went wrong with the Petrelli contracts.
After completion
You resigned from the Business with effect from the Completion Date of 31 May 2010. You
have heard from your former friends and colleagues that Linderman laid-off all of the Business’s
employees within a fortnight of the Completion Date. You understand this was because
Linderman intended a change of direction for the Business, focusing on environmentally friendly
products and packaging. As recyclable packaging was something you did not think Petrelli (and
many other existing customers) would be interested in, you assume Linderman let the Petrelli
business relationship slide.
You knew nothing about any possible claim from Linderman, and/ or Petrelli, until last week
when your father showed you Linderman’s Statement of Claim and Petrelli’s Defence &
Counterclaim.