LAW CHOC WAH t/a SUN WAH CO (a firm) AND OTHERS v. KWOK LAI CHEONG

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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ASSESSMENT OF DAMAGES

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1. On the 8th October, 1982 the Defendant's lorry forcibly propelled the 1st Plaintiff's coach into a house in the Clear Water Bay Road. The damage to this house does not concern me, nor does the bus driver's claim since that was settled by consent on the date of hearing. All I am concerned with is the amount of the claims of the first and second Plaintiffs, claims which have been contested by Mr Kwok of counsel for the Defendant.

2. The principle is that the Defendant has to make restitution to the Plaintiffs, not indemnify them.

3. The 1st Plaintiff Mr Law Choc Wah trades as Sun Wah Co. a firm, and he is the owner of the coach in question. He is also a director and major shareholder of the 2nd Plaintiff which "rents" his fleet of 8 coachos from his firm. The defendant has asked me to view this agreement between the two plaintiffs with circumspection but, on the evidence it seems clear that it was the advice of accountants which led to the agreement being made, and so far from being a sham, it is a real, and no doubt advantageous, arrangement for both the Flaintiffs

4. The damage to the coach was so extensive that it was written off by the surveyors as a total loss. Mr Law therefore went into the market to obtain a replacement. He encountered several difficulties. The first being that even if he could obtain spares so as to have the coach re-built, the evidence was that the necessary spares would have been difficult, and have taken long, to obtain. That apart, the policy of the Transport Department required him, as a condition, to replace the coach by a new one. There was some evidence from an officer of that Department to this effect, and also that he would have had to make out a quite exceptional case to be allowed to replace it by a second-hand one. He therefore bought anew one and now seeks to recover its entire cost from the Defendant. This the defendant resists citing Pomphrey v. James A. Cuthbertson, (a Scottish case reported in 1957 S.C. page 147, in which I many well-known English cases were referred to), as authority for the proposition that the measure of damages is the market value at the date of the accident, plus the cost of hiring a substitute until a new vehicle could be procured ready for use, less the scrap value.

5. I accept that proposition as correct. On the evidence before me the median estimated market value on the relevant day was $67,500, less its scrap value $500, that is to say $67,000. There will be judgment for the first Plaintiff for that amount, plus the two concessions made by the Defendant, for employees compensation paid to the 3rd Plaintiff $3,789, and for surveyor's fees of $350.

6. It is the 2nd Plaintiff however which claims the cost of hiring a substitute vehicle because of its agreement with the 1st Plaintiff. Quite simply the 2nd Plaintiff says it had a beneficial agreement with the first Plaintiff whereby for $216,000 a year it could hire all 8 of his coaches. The accident necessitated the outside hire of replacement coaches et $85,624.74, and that is the measure of its damage. See e.g. Birmingham Corporation v. Sowersbury 1970 PTR 1984.

7. The Defendant resists this claim (a) because it says the period in respect of which the claim is made is unreasonably long, and also because the cost of driver and fuel included in such charges were ordinarily borne by the 1st Plaintiff and not by the 2nd Plaintiff.

8. This is not a case where I should lift the corporate veil. I regard both Plaintiffs as separate entities, but there is merit in the Defendant's objection to the length of time under consideration. What I have to decide is what is a reasonable time in the circumstances.

9. From the evidence of PW1 and PW2 I find that the bus might reasonably have been expected to be off the road for 23 weeks after the date of the accident.

10. The 2nd Plaintiff's hiring claim is for a total of $83,124.73 for a period of nearly 34 weeks. The calculation therefore is 21/34 x 83,124.73 = $51,341.75.

11. The Plaintiffs' other claims are disallowed.

12. To summaris:-

13. There will be interest on $67,000.00 at 8% from doat of serice of writ until judgment and thereafter at the judgment rate until payment. Interest on hire charges Employee Compensation Ordinance Payment and Surveyor's Fees at 8% from the respective date payment until judgment and thereafter at judgment rate until payment. Costs to Plaintiff.