YAN YAN MOTORS LTD. v. JOHNSTON SZETO & CO., LTD. AND ANOTHER

DCCJ 19047/2001

IN THE DISTRICT COURT OF THE

HONG KONG SPEICAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 19047 OF 2001

---------

-------

_________________

JUDGMENT

_________________

1. The Plaintiff claims against the Defendants the sum of $62,193 being the costs of repair of the Plaintiff's vehicle and survey fees. The Plaintiff's vehicle, a Toyota Public Light Bus, was damaged in a collision involving the 1st Defendant's vehicle on 9th February 1999. The 2nd Defendant was behind the wheels of the 1st Defendant's vehicle when the collision occurred. By consent, judgment on liability was entered against the Defendants on 17th October 2002 with damages to be assessed. The hearing before me was for assessment of damages.

2. Before the commencement of the hearing, the Defendants by way of two Summonses applied for specific discovery and for an adjournment of this hearing pending such discovery. I have dismissed both applications with costs to the Plaintiff. The documents sought by the Defendants were quotations, invoices and receipts of spare parts used in the repair of the Plaintiff's vehicle. The Defendants suspect the Plaintiff and its insurer had been charged for original brand new spare parts when in fact second hand spare parts were used to repair the Plaintiff's vehicle. Therefore they wanted proof of the purchase of these spare parts. The difficulty faced by the Defendants in this application was that they are unable to justify their suspicion which was at best a wild guess. Unless the Defendants have evidence that the Plaintiff and its insurer had been taken for a ride, this application for specific discovery is no more than a fishing expedition. Accordingly the application for specific discovery was dismissed and it follows the application for adjournment will also necessarily be dismissed.

3. The hearing for assessment of damages proceeded with only the evidence from the Plaintiff's witnesses.

4. After the accident the Plaintiff approached a garage Chu Kong Vehicle Works Factory Limited ("the garage") and obtained a quotation for the requisite repairs. A copy of the quotation is at p29 to 30 of the bundle. Having received the quotation the Plaintiff's insurer, Anglo Starlite Insurance Co, engaged a firm of adjusters, Toplis and Harding (Hong Kong) Ltd ("Toplis"), to assess the quotation. Toplis's assessment of the garage's quotation is contained in their Motor Survey Report dated 24th February 1999 (p27-31 of the bundle). As a result of the adjustments made by Toplis, the garage's labour costs was reduced from $63,100 to $30,100 whilst the charges for spare parts were reduced from $76,438 to $46,189.40 giving a total repair cost of $76,289.40. There were further deductions for betterment and excess totalling $14,765.80 from the spare part charges so that the final spare parts charges were $31,423.60. Of the final total repair costs of $61,523.60 the Plaintiff is seeking to recover $61,523 from the Defendants.

5. At the commencement of the hearing Mr. Cheng for the Defendants indicated that the labour costs of $30,100 and the survey fees of $670 were not challenged. Therefore, this hearing concerns only the Plaintiff's claim for spare parts charges in the sum of $31,423.

6. The Plaintiff called the director of Toplis, Sammy Wing Ho Lee, author of the Motor Survey Report. Mr. Lee gave evidence that the prices for the spare parts quoted in the Motor Survey Report were those of original spare parts sold by Crown Motors Ltd, agent for Toyota.

7. The Plaintiff also called Chan Kit Sing, proprietor of the garage, who confirmed that his garage accepted the repair costs as adjusted by Toplis and has received $61,523.60 from the Plaintiff's insurer. A copy of the receipt for $61,523.60 issued by the garage can be found at p41 of the bundle. It was suggested to Mr. Chan in cross-examination that the garage had used second hand spare parts for the repair but had charged the Plaintiff and its insurer for original brand new spare parts. Not surprisingly this allegation was vigorously denied. Mr. Chan was adamant that original Toyota spare parts were used even though the garage did not purchase them directly from Crown Motors Ltd. The spare parts used for the Plaintiff's vehicle were either purchased from the suppliers of Toyota spare parts or were from the garage's existing stock. Mr. Chan admits there were differences in price between spare parts purchased from Crown Motors Ltd and those from third party suppliers however he thought the garage was able to get a better price from the suppliers because the latter buy in bulk from Crown Motors Ltd and were able to get a discount which was in turn passed on to their customers. Mr. Chan says the garage is unable to produce invoices or receipts evidencing the purchase of such spare parts because the documents are with the garage's accountants.

8. Bearing in mind the Defendants' allegation, one would have expected them to either engage an adjuster to comment on the Motor Survey Report prepared by Toplis or to inspect the Plaintiff's vehicle after it has been repaired. However, the Defendants did neither. There was therefore no evidence to substantiate the Defendants' claim that the garage had overcharged the Plaintiff and its insurer for the spare parts.

9. The Defendants invited the Court to make an allowance for the spare parts charges in the absence of proof of purchase from the garage and in light of Mr. Chan's concession that there was a difference in price between spare parts supplied by Crown Motors Ltd and those by third parties. I do not see how I can make arbitrary allowance in the absence of evidence of overcharging by the garage and of the price differences between spare parts purchased from Crown Motors Ltd and those from third party suppliers.

10. Even assuming the Defendants' suspicion is well founded, the fact remains that the Plaintiff has, through its insurer, paid $61,523.60 to the garage for the repair of its vehicle. It was not challenged that such payment, which included $31,423.60 for spare parts, was made. The fact that the garage might have made a profit in the spare parts charges does not mean that the Defendants do not have to reimburse the Plaintiff.

11. For the reasons given above, I find that the Defendants are liable to reimburse the Plaintiff the sum of $31,423 being the charges for spare parts. The Defendants have conceded $30,100 for labour costs and $670 for survey fees. There will therefore be judgment for the Plaintiff in the sum of $62,193. This judgment sum will attract interest at the rate of 1% over Hong Kong dollar prime rate from the date of writ, that is, 2nd November 2001, until judgment date, that is, 7th November 2002 and thereafter at judgment rate from time to time prevailing until payment. The Plaintiff is to have the costs of this action.