OWYANG LOONG SHUI IVAN v. WINCO PAPER PRODUCTS CO LTD

DCCJ 4867/2014

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 4867 OF 2014

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JUDGMENT

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Background

1.  The plaintiff is a former employee of the defendant.  After the termination of the plaintiff’s employment on 30 September 2014, he demanded return of a number of items (the “Properties”) that he stored at the defendant’s premises, but the defendant refused. 

2.  Protracted correspondence exchanged among the parties and/or their legal advisors prior to the commencement of the present claim, which form part of the documentary evidence in this case.

The Claim

3.  The plaintiff only proceeds with his alternative claim, ie damages to be assessed, and abandon his other claims pleaded, ie return the Properties and a sum of HK$955,716.53. 

4.  The Properties are set out in the paragraph 3 of the Amended Statement of Claim, which is reproduced in the Schedule of this judgment.

5.  The plaintiff’s claim is on detinue and conversion.  The plaintiff is either the owner or the bailee of the Properties, and is entitled to immediate possession of the Properties, thus he is entitled to damages for the defendant’s refusal to return the Properties to the plaintiff.

6.  The defendant does not assert ownership over the Properties, but claims that it does not know who the true owner is and the plaintiff failed to provide satisfactory proof of the alleged ownership or bailment.

Detinue and Conversion

7.  Mr Kwok, counsel for the defendant, spent a considerable amount of time trying to distinguish the differences between detinue and conversion, while Mr Tang, counsel for the plaintiff, submits that the plaintiff’s claim is on both detinue and conversion. 

8.  The following paragraphs are cited by Mr Kwok in explaining the difference between detinue and conversion.

Tort Law and Practice in Hong Kong at §7.021:-

“The tort of detinue is an old form of common law action for wrongful interference with goods and still exists in Hong Kong. In most cases where there is unlawful detention of a chattel a claimant can constitute an action in detinue along with the tort of conversion. Detinue is actionable as a form of wrongful interference with goods in Hong Kong, although it has ceased to be a specific tort in the UK as a result of the passing of the Tort (Interference with Goods) Act 1977. Detinue was originally used against bailees who did not return the goods upon demand by the bailors. Thus it was first an action ex contractu but then it came to be recognized as a tort.

An action for detinue lies where the defendant who has received a chattel from the claimant has wrongfully detained the chattel or where the defendant does not return it or withholds it against demand by the claimant.  This tort protects a person’s right to possession.  A claim in detinue lies where a person has a right to immediate possession and where the plaintiff makes a demand for return of her chattel and the defendant refused to deliver up the detained chattel.  So an action in detinue does not lie where the plaintiff does not have a right to immediate possession to the goods.”

Tort Law and Practice in Hong Kong at §7.033:-

“The tort of conversion is committed when the defendant interferes with the possessory title of the claimant and also causes harm or injury to the claimant’s right or title.”

9.  Mr Kwok further relies on §17-88 on Clerk & Lindsell on Tort (21^st Ed):-

“Conversion lay only for damages (normally the value of the goods plus consequential loss). Detinue, by contrast, could yield a judgment either for specific restitution or for delivery up of the chattel or payment of its value as assessed at the date of judgment, together with damages for its detention.”

10.  As the plaintiff concedes on his claim for delivery up of the Properties, and only seeks damages, he is entitled to the same if he can successfully prove that he had immediate right of possession to the Properties at the material time.  If he succeeds on that, he succeeds on both detinue and conversion claims, and would entitle to damages in either of his claims. 

The Plaintiff’s possession to the Properties

11.  Mr Kwok submits that the plaintiff failed to establish ownership for those items in the Properties which belong to him, i.e. items 23-29 and 33-38. Even if he could, most of the items are trifling in nature.  Concerning the rest of the items, there are evidence for items 2, 4, 6, 10, 12, 13 and 14 from the plaintiff on the ownership of Ting Co, such evidence is highly unsatisfactory in proving ownership on the part of Ting Co.

12.  In particular, in the plaintiff’s own evidence, item 10 belongs to MacMillan Publishers Ltd, item 13 to Joyous, and item 14 to the defendant itself.  Ting Co has no proprietary right over these items.

13.  Mr Kwok further submits that the plaintiff has not made out a case that he is Ting Co’s bailee, and the plaintiff has no locus to sue for any Properties which belong to Ting Co. 

14.  Mr Tang relies on §17-44 of Clerk & Lindsell on Tort (21^st Ed),which I agree :-

“A person has title to sue for conversion if any one if he had, at the time of conversion, either actual possession or the immediate right to possess the Properties concerned. It is not necessary to prove ownership…”

15.  The plaintiff relies on the following documentary evidence to prove his possession of those Ting Co’s properties:-

(a) Verification dated 12 December 2010;

(b) Authorization letter signed by Dr Philip Wong, a director of the defendant dated 5 January 2011; and

(c) The Appointment of First Director of Ting Co dated 6 September 2010.

16.  The plaintiff also relies on the plaintiff’s own testimony, and the testimony of the plaintiff’s witness, i.e. Cheung Wai Shing, given at the trial to show that the defendant had all along been aware of the relationship between the plaintiff and Ting Co, and its consent to allow the plaintiff to use the defendant’s premises to store the Properties.

17.  For those items which belong to the plaintiff, there is no dispute that the plaintiff was in possession of those items at the material time.  For those items which belong to Ting Co, Mr Kwok further submits that no bailment was ever created between Ting Co and plaintiff, because voluntary possession of Ting Co’s goods was with the defendant and therefore the bailee is the defendant, not the plaintiff. 

18.  After reading the documents mentioned in paragraph 15 above, and the testimonies of the plaintiff’s witnesses, I am satisfied that, irrespective of the ownership of the Properties, they were in the plaintiff’s possession and they were placed in the defendant’s premises. 

19.  I am also satisfied, with the documentary evidence produced by the plaintiff, in particular the correspondence abovementioned, that demands were made by the plaintiff and such were not met by the defendant.  In fact, I find the defendant and its solicitors most difficult in dealing with the plaintiff’s demand, which is not justified. 

20.  The defendant is thus liable for detinue and conversion.

Quantum

Items 1, 2, 4 and 12 – Ting Pens

21.  At the beginning of the trial, Mr Tang for the plaintiff directed my attention to the following items of the Properties which are more valuable:-

No.	Description	Quantity
1.	OID4 pen – TNG001 (Haylab)	839
2.	OID4 pen (microSD-8GB) – TG015	235
4.	OID4 pen (microSD-2GB-Padprint)	580
12.	OID4 pen (microSD-2GB) & pen case	5,478

22.  According to the plaintiff’s testimony, the above items are all “Ting Pen”, an electronic audio pen device that could scan and read out the words printed on a book.

23.  One of the plaintiff’s witnesses, Yip Pui Cheong (“Yip”), testified in court. He was employed by the defendant as the plaintiff’s driver at the material time.  It is his testimony that he visited the storage room of the defendant approximately one week after the termination of the plaintiff’s employment with the defendant and counted the number of boxes of goods belonging to Ting Co with Fanny Ng (“Fanny”), a subordinate of the plaintiff.  Fanny then provided the plaintiff with an accurate record of the number of products belonging to Ting Co. which remained in the storage room of the defendant. 

24.  During cross-examination, Yip confirmed that he opened every box and counted each and every item in the box, and produced a list of items.  The accuracy of that list is not challenged by the defendant.

25.  According to the documentary evidence produced by the plaintiff, which consists of a number of purchase orders, invoices and shipping notes, the values of the following items are as follows:-

No.	Description	Quantity	Unit Price (US$)
2.	OID4 pen (microSD-8GB) – TG015	235	21.4605
4.	OID4 pen (microSD-2GB-Padprint)	580	17.4237
12.	OID4 pen (microSD-2GB) & pen case	5,478	17.1537

26.  Whilst Mr Kwok complained the reliability of these documentary evidence by examining all purchase orders, invoices and shipping notes produced by the plaintiff microscopically and highlighting all the inconsistencies among them, the respective unit prices of those items are not challenged.  Accordingly, I accept that the above unit price shall be adopted in calculating the values of items 2, 4 and 12. 

27.  For item 1, the plaintiff concedes that he could not furnish any documentary evidence as to their costs due to his inability to return to the defendant’s premises to retrieve documents, and Mr Tang invited me to adopt the unit price of item 12, ie US$17.1537, being the lowest unit price among all other Ting Pens.  Whilst Mr Kwok complains that interlocutory application should be taken out to compel the defendant’s production of the same, I am satisfied that the plaintiff has shown that item 1 is in the defendant’s possession, and I am prepared to adopt the unit price of item 12 in calculating the value of item 1.

28.  The total value of Ting Pens, ie items 1, 2, 4 and 12, is accordingly as follows:-

No.	Quantity	Unit Price (US$)	Sub-total (US$)
1.	839	17.1537	14,391.95
2.	235	21.4605	5,043.22
4.	580	17.4237	10,105.75
12.	5,478	17.1537	93,967.97
		Total	123,508.89

29.  Mr Kwok argues that damages in conversion are not appropriate in this case because there is no irreversible conversion, hence no “value thus lost”. Instead, for a reversible deprivation of Properties, the proper relief is in detinue for delivery up (or else damages for the value of the Properties at the time of judgment), along with special damages representing the difference in value of the goods from the date of delivery up or judgment with when the plaintiff had demanded the goods or when he was prevented from reselling them.  With respect, I disagree.  When both detinue and conversion are available to the plaintiff to claim in this case, he succeeds in both claims, and he chooses damages to be assessed, damages should be calculated for the value of the above properties as at 30 September 2014, ie the date of conversion. 

30.  Mr Kwok further submits that the plaintiff suffered no real loss with respect to item 2, because those pen were, according to the plaintiff’s own testimony, not for the purpose of resale.  However, I am satisfied that the documentary evidence produced by the plaintiff, ie invoice dated 30 September 2011, represents the value of item 2 as at the date of conversion, especially when it is not argued that the value of item 2, or any item in the Properties, had depreciated between the date of conversion and the date of purchase.  Whether item 2 is intended for resale purpose is not an issue. 

Item 6: Cable – TC1305

31.  Same as the Ting Pens, I find that the plaintiff has proven on balance of probability that there are 3,600 pieces of USB Cable left at the defendant’s premises, and the value of each of them was at the time of conversion RMB2.7. The total amount of damages caused by the defendant’s conversion on this item is accordingly RMB9,720.00.

Items 13 & 14: Phonics books and Reading Tree & Rosaryhill books

32.  I find that the plaintiff has succeeded in proving on balance of probability, based on the documentary evidence and the testimony of the plaintiff’s witnesses, that these items are also at the defendant’s premises, and the damages to the plaintiff for these items are assessed, based on the invoice and purchase order produced by the plaintiff, as HK$225,561.00 & HK$46,632.35.

Conclusion

33.  The total amount of damages assessed to the above items exceeds US$125,000.00, the amount pleaded as estimated damages in paragraph 7 of the Amended Statement of Claim dated 21 May 2015.  The plaintiff accepts to be held to the said amount pleaded and accordingly I award the same to him as assessed damages.

34.  For the above reason, it is no longer necessary for me to deal with those other items in the Properties. 

Admission of Witness Statement of Leung Fung Yee, Maria

35.  The only witness of the defendant, ie Leung Fung Yee Maria (“Leung”), cannot attend the trial to testify for the defendant due to family reason, and the defendant seeks leave to admit her witness statement as her evidence-in-chief, on the basis that her evidence is not controversial and excluding her statement would not be in the interest of justice.  It is further submitted that her statement can assist the court by giving background information and the reasons for the defendant’s position in this case, and even if leave is granted, her statement would still be subject to the question of weight in accordance with s49 Evidence Ordinance. 

36.  The plaintiff objects to the admissibility of Leung’s statement on the grounds, inter alia, that the exclusion of her statement would not prejudice the interests of justice and the plaintiff would be deprived of an opportunity to test Leung’s evidence by means of cross-examination.  In any event, her statement is based substantially on the correspondence exchanged between the parties which already form part of the documentary evidence and her statement does not improve upon what is already contained in the relevant correspondence. 

37.  Having considered the submissions from both sides, the contents of Leung’s statement, and the reason for Leung not testifying in court, I exclude Leung’s statement.  The documentary evidence of this case, namely the correspondence, would bear more weight than her statement even if it is admitted.  Whilst I sympathise her reason for not testifying in court, it is not fair to deprive the plaintiff’s right to cross examine her on the contents of her statement.  The exclusion of her statement would not cause any prejudice to the interests of justice as the admission of the same would have no effect on the outcome of this case in any event.

Conclusion

38.  The plaintiff is entitled to damages for conversion of the Properties assessed and awarded at US$125,000.00. 

39.  I also make an order nisi that the costs of this action be to the plaintiff to be taxed if not agreed.

40.  Finally, I thank both counsels for their assistance.

SCHEDULE

List of the Properties