NG LAM v. STANDARD CHARTERED FINANCE LTD.

1991, No A1294

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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JUDGMENT

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1. This action was brought by the Plaintiff in both detinue and conversion.

2. The facts are simple. On or about the 13th of May 1989 the Plaintiff purchased a taxi bearing the number DW 8716. In June 1989 the Plaintiff borrowed from a man named Tong who ran a company called Dragon Motors the sum of $ 100,000 and deposited with Tong the licence book containing the registration of the taxi and the current licence. There is no evidence that he also deposited with Tong a signed but blank transfer form in respect of the vehicle. The Plaintiff repaid this loan in August 1989 and again borrowed from Tong in November of that year this time a sum of $ 90,000. He repaid that loan in February 1990. The papers relating to the ownership of the taxi remained with Tong as did the insurance policy.

3. On the 3rd of November 1990 the Defendant caused the taxi to be seized and delivered to Yet Cheung Company Limited who had arrange Hire Purchase in respect of the vehicle with the Defendant and who had guaranteed the loan. The taxi was eventually sold about the middle of November 1990 for about $ 920,000 including both the vehicle and the taxi licence.

4. In November 1989 Tong had approached Yet Cheung to obtain a loan in respect of the taxi by way of Hire Purchase and at that time Mr. Li Chiu-fan of Yet Cheung spoke to a person he believed to be the Plaintiff by telephone. That was denied by the Plaintiff. The address and telephone number in the agreement are believed to be those used by Tong. The Plaintiff denied borrowing the money or signing the Hire Purchase Agreement. The Plaintiff also denied any knowledge of a Hire Purchase Agreement with the Dao Heng Bank which preceded that with the Defendant. It is interesting to note at this point that when the Dao Heng agreement was paid out with the monies borrowed from the Defendant there was a surplus due to the borrower and this was paid by cheque by Yuet Chueng Ltd. to Tong of Dragon Motors. I do not suggest any impropriety by Yet Cheung in this matter who believed wrongly that in dealing with Tong they were dealing with the representative of the Plaintiff.

5. After four days of hearing evidence in this matter the counsel for the Defendant asked for an adjournment to have the signature of the Plaintiff on the Hire Purchase Agreement examined by a forensic expert and I adjourned on the 14th of February for that purpose to a date to be fired in consultation with counsel at the earliest opportunity and made appropriate orders for receipt, discovery and inspection of the report of the expert. The matter was finally brought on again on the 1st of December 1994 and a report produced by consent setting out that the signature of the Plaintiff to the Hire Purchase Agreement was a forgery.

6. Having considered all the evidence including the circumstances of the issue by the insurers of an endorsement to the policy over the vehicle showing the interest of the Defendant, which the evidence does not show was sent to the Plaintiff or his son, and the circumstances of the Government vehicle examination of the taxi in respect of which the evidence was that the son of the Plaintiff presented the car and Tong of Dragon Motors presented the paperwork I am satisfied on the balance that the Plaintiff never borrowed from the Defendant and never entered into any agreement with the Defendant pledging the taxi as security.

7. Mr. Wong for the Defendant argues that the Plaintiff is estopped from denying his signature and therefore the existence of the agreement and the loan due to his negligence in depositing the licence book for the taxi and the insurance policy with Tong. This argument is not sustainable as I accept that the Plaintiff borrowed from Tong and lodged those documents with Tong as good faith if not security for the loan. The Plaintiff might have been somewhat dilatory in seeking to recover those documents but he should not suffer for that. I note that not long after the taxi was seized Tong disappeared and neither party has been able to locate him. There is no issue as to the fact that he existed and that he ran Dragon Motors. He further argued on the evidence that the Plaintiff must have had notice of the existence of the loan either from the insurance company who held the policy over the taxi or at the time of the mechanical inspection of the taxi. I have already held on a consideration of all the evidence that the Plaintiff had no knowledge of the agreement or the loan.

8. On the basis of these findings the Defendant had no interest in the vehicle and without authority took possession of the vehicle and dealt with it in a manner inconsistent with the rights of the true owner intending to assert that right.

9. There will be judgment for the Plaintiff.

10. The Defendant having sold the taxi and the licence the only remedy available to the Plaintiff is in damages.

11. Issue has been taken between the parties as to the date upon which the value of the taxi and its licence should be assessed. It is clear that where the action is brought for conversion alone the value of the goods is assessed as at the date of conversion, in this case the 3rd of November 1990. Mr. Wu argues that where the action is brought both in detinue and conversion then the damages should be assessed at the highest value the goods achieved between seizure and judgment. On the facts of this case the seizure of the taxi was known forthwith and the demand made on the 21st of February 1991 by the issue of the writ herein. That in my view fixed the value of the taxi and licence. The only evidence which I have in respect of that value at about that time was the amount realized by the sale of the taxi in mid November 1990. Mr. Li of Yet Cheung Limited put the sale price at about $ 920,000 and that is the figure which I take as the appropriate measure of damages.

12. Mr. Wong argues that the loss of use claim has not been sufficiently pleaded as special damages. I do not agree and I award damages for loss of use at the rate of $ 4000 per month, being the evidence given by the Plaintiff as his loss of income from the taxi driven by his son, from the 3rd of November 1990 until the date hereof being the sum of $ 197,677.

13. Judgment is entered for the Plaintiff in the sum of $ 1,117,677 together with interest thereon from the 21st of February 1991 to the date hereof at 8%. Costs for the Plaintiff.