MEIKO TRANS CO LTD AND ANOTHER v. CHAN KWAN YIU t/a CHIN FUNG INTERNATIONAL TRADING CO AND ANOTHER

HCA 1024/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1024 OF 2011

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D E C I S I O N

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1. I will be brief in my Decision and Reasons.

2. I am satisfied that the plaintiffs, as bailees of Kee’s Corporation (“Kee’s”) which is the holder of the original bill of lading under which the Vehicle was delivered to the plaintiffs for shipment, have the immediate right to possession of the Vehicle and are hence entitled to sue in detinue (The Albazero [1977] AC 774 at 846).

3. I am not satisfied that the defendants are entitled to claim that the plaintiffs’ right to immediate possession has been extinguished by the plaintiffs’ alleged misdelivery of the Vehicle to the 1st defendant, when the plaintiffs failed to require production of the original bill of lading before releasing the Vehicle to the 1st defendant. This may be a right and entitlement open to Kee’s, the owner and bailor which had delivered the Vehicle to the plaintiffs, but distinctly, Kee’s has not chosen to allege that the plaintiffs had acted in a manner which is inconsistent with the terms of the bailment between the plaintiffs and Kee’s, or had repudiated their contract of bailment so as to bring it to an end. Far from it, Kee’s has in this action affirmed the plaintiffs’ rights as its bailee and the continued existence of the bailment, by lending support to the plaintiffs’ claims against the defendants.

4. Any agreement between the 2^nd defendant and Baizhi as to their sharing of the interests in the Vehicle and as to payment of the price for the Vehicle only affects and binds Baizhi, and not the plaintiffs or Kee’s. I do not regard such agreement as relevant to any question of the retention or passing of Kees’ title in the Vehicle, or to be binding in any way on Kee’s, so far as the passing of its title in the Vehicle to Baizhi is concerned.

5. I am not satisfied by the defendants’ argument that the plaintiffs had somehow waived their rights or title by agreeing to release the Vehicle to the defendants without insisting on the production of the original bill of lading issued by the plaintiffs, and without complaining about the defendants’ possession of the Vehicle for 11 months. Mr. Chung of Kee’s has given his explanation for agreeing to the delivery of the Vehicle to the defendants. In any event, the plaintiffs’ agreement to release the Vehicle to the 1st defendant without production of the original bill of lading may evidence their agreement to let the 1st defendant have possession of the Vehicle in June 2010, but it cannot by itself be waiver or abandonment of the title in the Vehicle. Nor have the plaintiffs or Kee’s thereby lost the right to terminate their consent to the defendants’ possession and to demand the return and delivery up of the Vehicle later in June 2011.

6. Since Kee’s has retained and remains now in possession of the original bill of lading, I am satisfied on the available evidence that Kee’s retains the title and is the owner of the Vehicle. I agree with counsel for the plaintiffs that the defendants’ claim of being an alleged bona fide purchaser of the Vehicle does not assist them in defence of the claim made by the plaintiffs under Kee’s title. They may have paid value to Baizhi, but Baizhi has not been shown to have any legal title to convey to the defendants (MCC Proceeds v Lehman Brothers International (Europe)[1998] 4 All ER 675at 688).

7. Any duties which the defendants may owe to Baizhi provide no defence to the plaintiffs’ claim, now that title to and right to possession of the Vehicle have been shown.

8. The 2^nd defendant has not condescended to particulars as to Baizhi’s alleged business as a mercantile agent, nor shown that Baizhi was in possession of the Vehicle at the relevant time. I am not satisfied that there are sufficient credible facts to show an arguable defence under section 3 of the Factors Ordinance.

9. I fail to see that the 2^nd defendant has any other valid ground to withhold delivery up of the Vehicle to the plaintiffs after their demand was made.  As there are no triable issues to raise any arguable defence, summary judgment should be entered against the 2^nd defendant, as claimed, with costs including certificate for 2 counsel.