CHING KIN SANG v. GALLUCK INTERNATIONAL LTD. and Others

1994, No.A8225

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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J U D G M E N T

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1. This is a claim by the plaintiff for loss and damages arising out of a traffic accident occurring on 28^th February 1994.

2. The plaintiff was the owner of the vehicle Registration No. EZ918, and at the time of the accident, he was also the driver of the vehicle. The 1^st defendant was the owner of the vehicle Registration No. DR5281 and the 2^nd defendant was the driver at the time of the accident. The 3^rd defendant was, according to the business registration particulars submitted by him, the sole proprietor of the business of Keung Kee Vehicle Services Company. The exact relationship between him and the 2^nd defendant was one of the main issues in these proceedings.

3. The accident took place at about 10.10 p.m. on 28^th February 1994 at Route Twisk. At that time, the plaintiff was travelling in the direction from Shek Kong to Tsuen Wan. He had passed the highest point of the road and was going downhill approaching Chuen Lung. From the government survey map (D-1) the gradient of that stretch of the road was about 7.3 to 100 and as such was not particularly steep. That stretch of road had one lane of traffic going in each direction. From the map as well as from the agreed sketch plan drawn up by the police after the accident, the width of each lane was about 4 meters. It was common ground that at the time, the weather was foggy and it was also drizzling and the visibility was about 40 to 50 feet. The road surface was slippery.

4. According to the plaintiff, at that time, he was travelling at a speed of just above 30 km per hour and would definitely be below 40 km per hour. He had his dipped head lights on. There was no vehicle immediately before or behind him going in the same direction. However he noticed that there was traffic going from the opposite direction. The plaintiff's evidence was that as he was travelling along that straight stretch of road, he saw a vehicle travelling in the opposite direction suddenly cutting into his lane at a distance of about 2 car spaces in front of him. He at once applied his brake but could not avoid the collision. The front offside of the plaintiff's vehicle collided with the front of the on-coming vehicle which turned out to be the vehicle driven by the 2^nd defendant.

5. The 2^nd defendant said in his evidence that at the time of the accident, he was travelling uphill. He saw a left bend before him. However as he came to the bend, he then saw a white van being stationary at the bend. By then he was too close to the van to be able to stop without colliding with that van. So he steered to his right across to the opposite traffic lane to avoid the collision. However as he did so, he collided with the plaintiff's vehicle.

6. I have no hesitation in finding that the collision took place not at the bend of the road but on a straight stretch of the road. After the accident and both vehicles had come to a halt, the police was called. According to the sketch plan drawn by the police after the accident, the position of the rear near side of the plaintiff's vehicle was about 2.2 meters away from the lamp post No. FA5617. Also from the 2^nd defendant's own drawing when he went back to the scene of the accident later in the year with the government map, that lamp post was at least some 25 meters away from the bend. Thus there was at least some 23 meters of straight road ahead of the plaintiff before he would reach the bend. It would also follow that the collision took place some 23 meters after the left hand bend spoken of by the 2^nd defendant. Given the visibility at the time, I could not attribute any negligence on the part of the plaintiff for failing to see if there was any white van parked at the bend and in any event, I am far from being convinced that there was indeed such white van at the bend. In any case, I find that even if there was such a white van at the bend as alleged by the 2^nd defendant, given the distance between the bend and the place of the accident, I am of the view that there should be enough time for the defendant to come back to his own carriage lane after he passed the van. His not doing so is thus clear evidence that he had been negligent in travelling in the lane for the opposite traffic or that he was going too fast when negotiating the bend so that he could not get his vehicle back to his own lane before colliding with the plaintiff's vehicle.

7. At any rate, I accept the evidence of the plaintiff and find that at the time of the accident, the 2^nd defendant had suddenly come out of his own lane and went across to the plaintiff's lane. Although the road condition was far from being ideal, I do not agree that the accident was inevitable had the 2^nd defendant driven with care and attention which the circumstances would demand.

8. Accordingly I hold that the accident was caused by the negligence of the 2^nd defendant and I dismiss any suggestion that the plaintiff had also contributed to the accident. I do not consider that the plaintiff was driving too fast in the circumstances. I would consider it as totally unrealistic and fanciful to suggest that the plaintiff should try to avoid colliding with the 2^nd defendant's vehicle by steering sharply into the opposite traffic lane or by steering left and ran against the hill slope on his left. To do either of these acts was absolutely stupid and in any event given the closeness of the distances between his vehicle and the 2^nd defendant's vehicle, the visibility and the road conditions at the time, I am by no means convinced that the collision with the 2^nd defendant could be avoided even if the plaintiff was to be stupid enough to try to do what defence counsel had suggested that he should do.

9. As a result of the accident, the plaintiff's vehicle was severely damaged. The main damage occurred at the off side front part of the vehicle but I would also accept the evidence from the Zung Fu Garage and the plaintiff's surveyor that there were other parts of the vehicle which suffered from less visible damage such as the chassis and the rear lamp getting loose. The total cost of the repair to the vehicle was $700,000 and I hold that it was reasonable for the plaintiff to incur such cost for repairing his vehicle. It was suggested by the defendants that if instead of asking the Zung Fu Garage to repair the vehicle, the plaintiff had gone to some other small car repairers, the cost might well be cheaper and could well be cheaper by about one-third of the cost. However given the fact that the plaintiff's vehicle was only made in 1992 and given the extent of the damage to the vehicle, I am of the view that it was wholly reasonable that the plaintiff should entrust the repair of the vehicle to Zung Fu, the sole agent for that made of cars. At any rate I also accept the evidence from the plaintiff's surveyor that the workmanship of Zung Fu was far more superior and reliable than those small garages who charged at a cheaper rate.

10. Apart from the repair carried out, the plaintiff told me that the car alarm system of his car was also damaged during the accident. This was a system which had cost him $5,400 to install. However after the accident, he did not install the same system but instead he installed another security system costing him $14,000. In the circumstances I assessed that the plaintiff's claim for the loss to his alarm system should be $5,400 as claimed in the statement of claim. I would also allow the claim for the cost of the surveyor in the sum of $650. Indeed, it would appear that as a result of the effort of the surveyor, the cost of repair charged by Zung Fu had been substantially reduced to the lump sum of $700,000. The plaintiff had abandoned the claim for loss of use to his vehicle. Accordingly I would assess the damages at $706,050.

11. The plaintiff claims against the 1^st defendant on the basis that the 1st defendant was vicariously liable for the negligence of the 2^nd defendant. To succeed the plaintiff would have to show that the 2^nd defendant was the servant or agent of the 1^st defendant and that the accident occurred in the course of the execution of the work or mission.

12. There was no evidence on the nature of the business of the 1^st defendant. It is however apparent from the evidence before me that at least so far as this vehicle was concerned, the vehicle was under the charge of Mr Ma. Mr Ma had given evidence before me, and his witness statements had been ordered to stand as his evidence in chief. He told me that he first came to know Mr Chan, the 2^nd defendant, in 1992. At that time, he wanted someone to repair the vehicle which was acquired by the 1^st defendant earlier in the same year as a 2^nd hand vehicle. A friend introduced the 2^nd defendant to him and he spoke to the 2^nd defendant over the phone on the repair of the vehicle. He asked the 2^nd defendant how to deliver the car to him and was told by the 2^nd defendant that his place was quite far away. Eventually the two agreed that the 2^nd defendant would pick up his car somewhere in Tai Po. I am satisfied that the 1st defendant had been told that the 2^nd defendant's garage was at Shek Kong. However I would also find that the 1^st defendant had not been told whether the said garage was one owned by the 2^nd defendant or one which the 2^nd defendant was merely an employee. Indeed I see no particular reason for the 1st defendant to make any further detailed enquiry on the ownership of the garage which effected the repair. Plainly he entrusted the repair of his vehicle to the 2^nd defendant and had not enquired into the capacity in which the 2^nd defendant acted in receiving the vehicle from him. Whether the actual repair work was done by the 2^nd defendant himself, or by the 2^nd defendant's employee or by other employees of the garage employing the 2^nd defendant would not be of any great concern to him. At least I find that this question of who owned the establishment which actually carried out the repair had not crossed the mind of the 1^st defendant. His evidence was that some days after he had delivered the car to the 2^nd defendant, the 2^nd defendant telephoned him to quote to him the repair cost. He agreed to the quotation and asked the 2^nd defendant to proceed with the work. The work was duly carried out and he paid the 2^nd defendant in cash and the 2^nd defendant delivered back the vehicle to him.

13. The second dealing between the 1^st and 2^nd defendants was in February 1993. There was a conflict of evidence between Mr Ma of the 1^st defendant and the 2^nd defendant as to what exactly had been done on that occasion. According to Mr Ma, on this occasion, he asked the 2^nd defendant to inspect his car to find out if any repair work was required, and to obtain the certificate of inspection which was necessary for the renewal of the licence of the vehicle and also to renew the licence of the vehicle for the 1^st defendant. According to him, on this occasion only very minor servicing was required and he paid the 2^nd defendant again in cash and the 2^nd defendant had also obtained the inspection certificate for him as well as obtaining the renewal of the vehicle licence. The 2^nd defendant on the other hand maintained that the work done on this occasion had nothing to do with the renewal of the vehicle licence although he would agree that on this occasion, the work done was very minor and he was only paid a few hundred dollars. I accept the evidence of Mr Ma of the 1^st defendant. In view of the proximity to the anniversary date for the expiration of the vehicle licence I find that on this occasion, the 2^nd defendant was told to inspect the car, to carry out such repair which would be required in order to pass the inspection to obtain the certificate of inspection for the renewal of the licence, and also to obtain the certificate of inspection and also the renewed licence. It was obvious that the few hundred dollars paid on this occasion must only relate to the cost of the services rendered by the 2^nd defendant and would not include the disbursements required for the inspection certificate and the annual licence fee.

14. The third occasion when the 1^st defendant had dealing with the 2^nd defendant was sometime about August 1993. On this occasion, the 1^st defendant's vehicle was damaged in an accident. Again Mr Ma contacted the 2^nd defendant to collect the vehicle. Later the 2^nd defendant called to tell Mr Ma that the cost of repair would be a few thousand dollars without being more precise. He was told to proceed with the work. When the work was completed, the 2^nd defendant delivered the vehicle back to Mr Ma at Tsuen Wan. When the car was delivered back to Mr Ma, the 2^nd defendant handed to Mr Ma an invoice No. 984 of the 3^rd defendant showing the cost of repair to be $5,500. This invoice was signed by the 2^nd defendant. Mr Ma paid this amount by cheque and was asked by the 2^nd defendant to leave the name of the payee in blank. None of the parties to this action had seen fit to ask for discovery of this cheque and no copy of this cheque had been produced in evidence. Consequently, it was not clear as to whether or how the name of the payee was eventually filled up.

15. Both the 2^nd and 3^rd defendants gave evidence on the use of this invoice. According to them, the 2^nd defendant had made use of this printed invoice of the 3^rd defendant without his authority, knowledge and consent. However if this was so, I would find it surprising that in answer to interrogatories served on him, the 2^nd defendant admitted that the said invoice was issued by the 3^rd defendant to the 1^st defendant. The 3^rd defendant went further and alleged that he never discovered the unauthorised use of his invoice until about the beginning of 1996. Although his invoices would appear to be numbered in sequence and were in sets of 3 copies, he maintained that he did not know of the use of this invoice until 1996 when his solicitors drew his attention to this invoice discovered from the 1^st defendant. He explained that it was not surprising that he would not know of the fact that an invoice was missing or that an invoice had been used by the 2^nd defendant because he had many books of such invoices. He maintained that the 2^nd defendant was not his employee and had no authority to use his invoices. When he was asked if he still had any copies of the used invoices for 1993 or 1994, he told me that he no longer kept the copies of the invoices. I reject the evidence of both the 2^nd and 3^rd defendants that the 2^nd defendant's use of this invoice was unauthorised by the 3^rd defendant. I am unable to accept the evidence of the 3^rd defendant that he did not know that the 2^nd defendant had issued this invoice until 1996. I do not accept the 3^rd defendant's evidence that he no longer kept the copy invoices for the year 1993 and 1994. I am of the view that the reason for the 2^nd and 3^rd defendants' assertion that the use of this invoice was unauthorised was that for some reason, both the 2^nd and 3^rd defendants wanted to paint a picture that the 2^nd defendant's work had nothing to do with the 3^rd defendant and that the alleged loss of the copy invoices for the years 1993 and 1994 was to prevent any further investigation as to whether apart from this invoice No. 984 issued to Mr Ma of the 1^st defendant there was any other invoices issued by the 2^nd defendant at or about the same time.

16. The fourth occasion of any dealing between the 1^st and the 2^nd defendants was the occasion giving rise to this accident. About one week before 28^th February 1994, Mr Ma had spoken to the 2^nd defendant on the phone. He told the 2^nd defendant that his vehicle licence was about to expire and he wanted the vehicle to be checked and if any repair was required, the repair should be carried out. He also told the 2^nd defendant that he wanted the 2^nd defendant to obtain the inspection certificate for him and to renew the vehicle licence for him. The 2^nd defendant agreed to provide the service but said that he was not free for the time being and the two agreed that the 2^nd defendant would make arrangement with the 1^st defendant later to take delivery of the vehicle for such purpose.

17. After Mr Ma of the 1^st defendant had spoken to the 2^nd defendant, the 2^nd defendant made arrangement with Mrs Ma to collect the vehicle at about 7 p.m. on 28^th February 1994. Mrs Ma instructed one Mr Lee, an employee, to deliver the car to the 2^nd defendant outside Triumph Cinema at Tsuen Wan and the vehicle was so handed over to the 2nd defendant at the appointed time.

18. Although there was no express agreed amount for which the 2^nd defendant was to charge the 1^st defendant, to the 1st defendant, if the car would require repair, then he would have to pay for the cost of the repair and the cost of the repair would have included the cost of the inspection. He would also expect the 2^nd defendant to inform him of the cost of repair for his approval before the work was carried out. Even if the car would require no repair, to Mr Ma, if the 2^nd defendant had in fact carried out the inspection work, he would also expect to be liable for a reasonable amount for such work. He would not expect the 2^nd defendant to charge him separately for taking the car to the authorised garage for inspection in order to obtain the inspection certificate to obtain renewal of the licence and he would not expect the 2^nd defendant to charge him separately for the service of arranging for the renewal of the vehicle licence for him. All these he would expect the 2^nd defendant to include in the charges for the repair or for the 2^nd defendant's inspection of the vehicle. Certainly as he had not arranged for the vehicle registration document to be delivered to the 2^nd defendant, he would expect the 2^nd defendant to contact him later for such document in order to obtain the inspection certificate and for the renewal of the licence and of course he would have to reimburse the 2^nd defendant for the cost of obtaining the inspection certificate and the renewal of the licence. However he would expect the vehicle to remain with the 2^nd defendant until such time as the whole task was performed.

19. The 2^nd defendant in his evidence also agreed with much of what Mr Ma of the 1^st defendant had said in relation to the arrangement between them. However the 2^nd defendant would maintain that he was not told to obtain the renewal of the licence and that his task would end upon the obtaining of the inspection certificate. After that he would deliver the vehicle back to the 1^st defendant with the certificate of inspection for the 1^st defendant to arrange for the renewal of the licence with the government. On this point had it been necessary for me to decide whether the evidence of the 2^nd defendant or that of Mr Ma was correct, I would prefer the evidence of Mr Ma. The 2^nd defendant however also told me that in any event he did not think he would charge for the services he rendered for the inspection of the vehicle prior to any repair work. The reason for this was that, according to him, there would definitely be some defects in the car which he could find to require repair and he would not expect the 1^st defendant not to agree to the reasonable charges which he would quote for such work.

20. It was notable that after the 2^nd defendant took delivery of the vehicle, he drove and parked the car at a private hourly car park. He then had dinner with his wife and daughter. After dinner, he then drove the car via Route Twisk back to Shek Kong. As he lived very close to his garage in Sheung Tsuen, Shek Kong, his place of destination would be both his home and his garage. It was during this journey that the accident occurred.

21. The question that I have to decide was whether the arrangement between the 1^st and the 2^nd defendants was such that at the time of the accident the 2^nd defendant was driving the vehicle as the servant or agent of the 1^st defendant or whether the 1^st defendant had delivered its vehicle to an independent contractor so that at the time of the accident, the vehicle was being under the charge of the independent contractor for whom the 1^st defendant was not vicariously liable. I am of the view that it was the latter. I am of the view that although there was not yet any express agreement on the amount to be paid to the 2^nd defendant (or his garage employer), plainly the 2^nd defendant whether for himself or for his employer, had agreed to render certain services for the 1^st defendant. The 1^st defendant had no means of controlling how the services was to be rendered. The arrangement was such that the 2^nd defendant would use his own skill and equipment to inspect the car at a place to be decided at his sole discretion. The 2^nd defendant could choose which authorised garage to go to for the inspection certificate. Furthermore, the 2^nd defendant can choose which route he was going to take when driving the vehicle back to his house or garage. Although it was suggested that if the cost of the repair could not be agreed between the 1^st and 2^nd defendants then, there would be "no deal" yet it was obvious that the parties never contemplate that such event would happen and in any case, I accept the evidence of Mr Ma of the 1^st defendant that he would expect that the 1^st defendant would be liable for the reasonable cost of the inspection of the vehicle carried out in order to determine what repair was needed. Certainly I do not consider that the arrangement between the parties was such that the vehicle was being handed over to the 2^nd defendant for him to shop around for various quotations to be approved by the 1^st defendant and I do not consider that the 1^st defendant had intended to appoint the 2^nd defendant to be its agent to find a suitable car repairer to carry out repair or inspection of the vehicle.

22. My attention had been drawn to the decision of Li, J. (as he then was) in Chan Hung Wing and another v. Lam Kam Ching and others [1977] HKLR 505. In that case the 1^st defendant was the owner of a vehicle which was sent to the garage of the 2^nd defendant for repair. After the vehicle was repaired, the 2^nd defendant told the 1^st defendant that the vehicle was ready for collection and that the 2^nd defendant was about to move his garage to somewhere else. The owner of the vehicle then told the 2^nd defendant that he was not ready to collect the vehicle and requested the 2^nd defendant to move the vehicle to the new premises of the garage and that he would collect the vehicle if and when he required the vehicle. An accident occurred when the 2^nd defendant was driving the vehicle from the old garage premises to the new garage premises with a certain quantity of garage equipments on board. The accident occurred owing to the negligence of the 2^nd defendant. On these facts, Li, J. said (at page 507)

"On the question of liability I have no doubt at all that the deceased died as a result of the accident which was caused by the negligence of the 2^nd defendant for which the 1^st defendant must be held vicariously liable".

In so far as it was said that the decision of Li, J. would support the contention that when a vehicle was left with a car repairer for repair and was being driven by the repairer after he had taken delivery of the car, the owner would still be liable vicariously for the negligent driving of the repairer, I would respectfully disagree. In any case, I do not consider that Li, J.'s decision would support such wide proposition. I would consider that the decision was distinguishable from the factual situation in the present case as in that case, there was an express request by the owner to the repairer to take the car to the new premises after the repairer had already completed his work. Hence it would be possible to say that when the car was being driven to the new premises, the driver did so at the express request of the owner and so was the agent of the owner.

23. Counsel had also drawn my attention to many other cases concerning the principles to be applied in determining whether a given relationship was an employer and employee relationship. It is with no disrespect to counsel that I do not make reference to all of them in this judgment as the facts of each case were different and I do not think that any real assistance could be derived from these decisions.

24. In the circumstances, I am of the view that the 1^st defendant is not vicariously liable for the negligence of the 2^nd defendant. The claim by the plaintiff against the 1^st defendant is therefore dismissed.

25. The claim by the plaintiff against the 3^rd defendant was on the basis that at the time of the accident, the 2^nd defendant was driving the vehicle as the servant or agent of the 3^rd defendant who was the owner of the garage which would be carrying out the work required by the 1st defendant.

26. From the evidence of the 1^st defendant, he did not know the 3^rd defendant. Although he got an invoice No. 984 previously, he never applied his mind to the question as to whether the 3^rd defendant Keung Kee was in fact the employer or principal of the 2^nd defendant when he dealt with the 2^nd defendant on this occasion. In my view, it is a question of fact as to whether when dealing with the plaintiff on this occasion in February 1994, the 2^nd defendant did so as the servant or agent of the 3^rd defendant. If he was in fact the servant or agent, then it matters not that the 1^st defendant was not aware of the existence of the 3^rd defendant or that he was the principal or employer of the 2^nd defendant. Furthermore I am of the view that the doctrine of apparent authority has no application to the claim by the plaintiff against the 3^rd defendant. Plainly the doctrine of apparent authority in the law of agency is rested on the doctrine of holding out by the principal. As against the plaintiff who could only have a claim in tort, there could hardly be any room for any holding out and on evidence before me, I can see no evidence of any holding out whatsoever.

27. Both the 2^nd defendant and the 3^rd defendant gave evidence before me denying that the 2^nd defendant was an employee of the 3^rd defendant. According to the 2^nd defendant, he operated his own business at Sheung Tsuen, Shek Kong which was situated at DD114 Lot No. 654. However he did not have his own business registration on the date of the accident. His first business registration would appear to be effected on 1^st April 1994 when he and two others were registered as partners in a business of car repair and car insurance by the business name of The Classic Service Company. It is however notable that the address of this business was with the same address as the 3^rd defendant's Keung Kee. He said that he rented the premises jointly with a friend who turned out to be the 3^rd defendant. Later he changed his evidence to say that in fact he was the tenant and that he sub-let half of what he rented to the 3^rd defendant for him to operate the Keung Kee Vehicle Services Co. He also said that he sub-let part of the remaining space to one Mr Chow. There was however no partition amongst the parts he sub-let to the 3^rd defendant or to the said Mr Chow and the part he retained. The relevant tenancy agreement covering the date of 28^th February 1994 was never produced and I was told that the same had been lost. Likewise the 2^nd defendant did not adopt any business name for his business and in fact I was told that there was no sign board, (not even that of Keung Kee) at the place where he and the 3^rd defendant ran their respective businesses. He did not have any separate telephone for his operation and from that I infer that he and the 3^rd defendant used the same telephone in their business. He said he had not printed any stationery or invoice for his own business. As I said before, he said that the invoice he issued to Mr Ma of the 1^st defendant in August 1993 was taken by him from the 3^rd defendant without the 3^rd defendant's knowledge, authority and consent. He said that when he obtained a customer, he might carry out all the work himself or alternatively he might sub-contract it out to someone else and Keung Kee was merely one of the persons he regularly sub-contracted his work to. Likewise, he said that he sometimes acted as sub-contractor to do work for Keung Kee. The remuneration for the sub-contract work was agreed between him and Keung Kee. He told me that ever since he started being involved in the motor car repair business, he had always been self-employed. He did not learn his trade from somewhere else and had never been an apprentice.

28. The 3^rd defendant also gave evidence denying that the 2^nd defendant was his employee. Again he said that he and the 2^nd defendant were trading on their respective own accounts although there was a fair amount of passing of work to one another on sub-contract basis. The 3^rd defendant further said that he first moved to the premises at Sheung Tsuen in 1991 and at about the same time the 2^nd defendant commenced his own business. He said while the 3^rd defendant specialised in car body work, the 3^rd defendant also carried on general car repair business involving also the repair of the mechanical parts. However the 2^nd defendant was mainly engaged in welding work only.

29. Having seen the 2^nd and 3^rd defendants giving evidence, I do not think that they are credible witnesses. I am of the view that I cannot accept their evidences that they were trading independently on their own accounts. In particular I am not able to accept as true that at any time before 1^st April 1994, the 2^nd defendant was carrying on his own trade at the premises. I cannot accept that a person carrying on his own trade would not have his own stationery or invoice or separate telephone line. This is particularly so when in some way, the 2^nd and the 3^rd defendants would be business competitors. If it was said that the 2^nd defendant and the 3^rd defendant would each have his own field of interest, then it would surely appear that the work which the 2^nd defendant had been carrying out for the 1^st defendant would fall within the general car repair business which was more within the scope of the 3^rd defendant than that of the 2^nd defendant.

30. After the accident the 2^nd defendant had been asked by a staff of Messrs. Hoosenally & Neo, the solicitors then acting for the insurer of the 1^st defendant to attend an interview. There was a dispute of facts between the 2^nd defendant and the 1^st defendant as to who actually asked the 2^nd defendant to attend this interview and whom did the 2^nd defendant meet in the interview. According to Miss Karen Yip formerly a secretary employed by Hossenally & Neo between 13^th July 1994 to 31^st March 1995, she made the arrangement to see the 2^nd defendant and she personally attended this interview and had taken a statement from the 2^nd defendant. The interview took place on 25^th August 1994. She took notes during the interview in English although the interview was conducted in Chinese. After the interview, she typed out the notes she took and she had discarded the original manuscript notes taken down by her. From the typed notes of the interview, the 2^nd defendant said inter alia that on the day of the accident, he was an employee of the 3^rd defendant and that his garage (which, in the context, I understand as meaning the 3^rd defendant's garage) was responsible for the checking and repair of the 1st defendant's vehicle.

31. The 2^nd defendant on the other hand maintained that he had never been interviewed by Miss Yip. He told me that he did go to the solicitor's office at the invitation of one Mr Leung. He said that he was in fact interviewed by this Mr Leung and told Mr Leung his account of the accident. He said he gave his identity card and driving licence to Mr Leung to make copy. He also told Mr Leung that he had a car and that he also had garage insurance. He gave the garage insurance policy number to Mr Leung. He also said that after he saw Mr Leung, Mr Leung also took him to see a foreigner whom he thought was a solicitor and there was a conversation between him and the solicitor with Mr Leung acting as interpreter. The solicitor advised him to contact his own garage insures for extra protection. The 2^nd defendant denied that he had ever told anyone that he was employed by the 3rd defendant.

32. Miss Yip had been heavily cross-examined and her evidence was severely criticised in many respects. For instance, it was suggested that she should not have destroyed the original manuscript notes taken by her, that it should not be her duty as secretary to interview drivers involved in traffic accidents, and that she should take down her notes in Chinese, the language used in the interview, rather than in English. In the end, notwithstanding all these criticisms, I am of the view that Miss Yip was a credible witness and I accept her evidence. No doubt, it would be better if she could record down per verbatim in Chinese the whole of the conversation. However, it must be born in mind that at that time, she had been employed by the firm for just about a month and it was at a very preliminary stage of the investigation and she might not be astute enough to realise that one day, she might be asked to give evidence of the interview in Court. As to why she should be the person doing the interview, I would consider that this must be a matter of job arrangement within the firm. Overall I see no reason for her to make up a false story about her being involved in the interview. This is particularly so because she had ceased to be employed by that firm since 1st April 1995. On the other hand, as I have pointed out at other places in this judgment, the 2^nd defendant did not strike me as a credible witness. In particular I note that although Miss Yip had made her witness statement as early as in May 1996 exhibiting the typed version of the notes of interview, the 2^nd defendant had not said anything about the interview in any of the 2 witness statements he made notwithstanding that the latter of the two statement was as late as in April 1997. I would therefore find that the 2^nd defendant was in fact interviewed by Miss Yip on 25^th August 1994 and that during this interview, the 2^nd defendant did say that at the time of the accident, he was employed by the 3^rd defendant Keung Kee Vehicle Services Company and that this garage was responsible for the checking and repairs of the 1^st defendant's vehicle. I accept what was said by the 2^nd Defendant on this occasion is true.

33. Apart from the evidence of Miss Yip, the plaintiff and the 1^st defendant further contended that there was also some documentary evidence which may show that the 2^nd defendant was the employee of the 3^rd defendant. On 2^nd February 1994, the 3^rd defendant had taken out a motor trade insurance policy. The 3^rd defendant was the insured. By the term of this policy the insurer agreed to indemnify the insured against all sums including the claimant's costs which the insured shall become legally liable to pay in respect of inter alia death of or bodily injury to any person and also damage to property, where such death or injury or damage arises out of an accident caused by or in connection with the Motor Vehicle or the loading or unloading of the Motor Vehicles. For the purpose of this insurance, the Motor Vehicles would mean any motor vehicle the property of the insured or in his custody or control. Thus any vehicle received by the 3^rd defendant for repair would be covered. Similar coverage was also extended to the "authorised drivers" and the 2^nd defendant was one of the 4 persons named in the policy as authorised drivers. The other 3 were Mr Chow, the alleged sub-tenant of the 2^nd defendant, Tsui Sai Yuen and Tsui Sai Sang. It is quite apparent that unless the vehicle driven by the 2^nd defendant was either the property of the 3^rd defendant or was under the custody and control of the 3^rd defendant, then even though he was an authorised driver, he would not receive any insurance cover under this policy. Accordingly it was contended that the insurance policy would show that the 2^nd defendant was the employee of the 3^rd defendant as it was only in that scenario that he would get the benefit as an authorised driver.

34. Of course, it was the 2^nd and 3^rd defendants' case that from time to time, the 2^nd defendant did drive the vehicles of the 3^rd defendant's customers on the occasions when the 3^rd defendant had sub-contracted out the repair work to the 2^nd defendant. Strictly speaking if the repair of the vehicle had been subcontracted to the 2^nd defendant as an independent contractor, it would usually follow that the 2^nd defendant would have to take care of his own insurance and there was little reason for him to be included as one of the authorised drivers in the 3^rd defendant's policy. However both the 2^nd and 3^rd defendants gave evidence that in fact this policy was not funded by the 3^rd defendant alone, but instead, the 2^nd defendant also paid one quarter of the premium. According to the 2^nd defendant, he paid one quarter of the premium because he thought that as one of the 4 authorised drivers, he would get protection whenever he drove any vehicle of any customers, whether this was his own customer or a customer of any other party. The 3^rd defendant on the other hand said that the reason for his requiring the 2^nd defendant to pay one quarter of the premium was that as the 2^nd defendant was earning his own fees, he should likewise contribute towards the premium for the policy which was also for his protection.

35. In the end, I am of the view that I can derive very little assistance from this policy in deciding whether the 2^nd defendant was an employee of the 3rd defendant at the time of the accident. I do not think that I can derive much assistance from the wordings of the policy to draw any inference as to what must be the relationship between the 3^rd defendant and the 4 authorised drivers named in the policy. I do not think that the 2^nd and the 3^rd defendants fully appreciated what was the extent of the cover of that policy.

36. Of course even if (as I would so find) on the day of the accident, the 2^nd defendant was an employee of the 3^rd defendant, the 3^rd defendant would be liable vicariously for the negligent driving of the 2^nd defendant only if the 2^nd defendant was driving the vehicle in the course of his employment. On this issue, I find that the 2^nd defendant was in fact driving the vehicle in the course of his employment. The 3^rd defendant's garage was located at Shek Kong and was rather far away and probably not very accessible to many customers. It was therefore not very surprising that the 3^rd defendant would provide pick up and delivery service to their customers. Although at the time of the accident, the 2^nd defendant had his wife and child on board of the vehicle, I find that at that time, he was in fact driving back to both the 3^rd defendant's garage and also to his home and that but for the accident, the 3^rd defendant's garage was to be responsible for the checking and repair of the vehicle.

Conclusion on the plaintiff's claim

37. The plaintiff's claim against the 1st defendant is dismissed. The plaintiff is entitled to judgment against the 2^nd defendant and the 3^rd defendant in the sum of $706,050. I will also award the plaintiff interest at the judgment rate from the date of the writ.

On the question of indemnity and contribution

38. As I have dismissed the plaintiff's claim against the 1^st defendant, it must also follow that the 1^st defendant's claim against the 2^nd and 3^rd defendants for contribution and indemnity will be dismissed. If however I am wrong in dismissing the plaintiff's claim against the 1^st defendant, I will hold that the 2^nd defendant should indemnify the 1^st defendant, and on the basis of my finding that the accident was caused by the 2^nd defendant's negligence in the course of his employment by the 3^rd defendant, I will also hold that the 3^rd defendant should be vicariously liable to indemnify the 1^st defendant.

39. The 2^nd defendant also sought indemnity from the 1^st defendant on the basis that the 1^st defendant had impliedly agreed to indemnify him for any loss he suffered as a result of his accepting the 1^st defendant's request to provide the service to the 1^st defendant's vehicle. In support of such contention, the 2^nd defendant relied on the decision of Stanley Yeung Kai Yung v. Hong Kong and Shanghai Banking Corporation [1981] A.C. 787. I do not think that decision has any application to the present case. The implied indemnity arose in Stanley Yeung's case because the Bank was invested with a statutory or common law duty of a ministerial character and was called upon to exercise that duty. In the present case, there was no duty on the part of the 2^nd or 3^rd defendant to accept the 1^st defendant's vehicle for checking and repair at all. I am unable to find that there was any right to any indemnity. Accordingly I will dismiss the 2^nd defendant's claim for indemnity from the 1^st defendant.

40. The 3^rd defendant has also filed contribution and indemnity notice. However I was informed that he would not want to pursue them very early on in the trial. I will give the 3^rd defendant leave to withdraw such notices.

Cost

41. On the issue as to cost, I am invited by the parties to make order nisi on cost, and the orders I propose to make below are orders nisi.

42. As the plaintiff has succeeded in his claim against the 2^nd and 3^rd defendants, I will order that the 2^nd and 3^rd defendants shall pay the plaintiff's cost to be taxed if not agreed.

43. The question as to the cost between the plaintiff and the 1^st defendant and between the 1^st defendant and the 2^nd and 3^rd defendants is less straight forward. In principle the nature of contribution proceedings is in all respects the same as third party proceedings and hence may be treated as a separate claim by the 1st defendant against the 2^nd and 3^rd defendants (see Johnson v. Ribbins [1977] 1 All E.R. 806 at 811c). Hence if I were to apply the general principle enshrined in Order 62, rule 3(2) that cost should follow the event, I would have to order that the plaintiff should pay the cost of the 1^st defendant and the 1^st defendant should pay the cost of the 2^nd and 3^rd defendants. However I do not think that I should make such an order in the particular circumstances of the present case. I have the power to make such order as to cost between the plaintiff and the defendants as the justice of the case may require (see Edgington v. Clark [1964] 1 Q.B. 367). The 1st defendant's claim for contribution against the 2nd and 3rd defendants failed only because the plaintiff had not been able to establish liability against the 1^st defendant. On the substantive issue involved in the contribution proceedings, viz. whether the 2^nd defendant was the agent of the 1^st defendant or whether he was the servant or agent of the 3^rd defendant, in fact my decision is in favour of the 1^st defendant. In the circumstances of this case, I see every justification for a conclusion that the 2^nd and 3^rd defendants should pay the cost of the contribution proceedings. In relation to the plaintiff's claim against the 1^st defendant, I do not think that one can criticise the plaintiff for joining the 1^st defendant as a party and in the light of the fact that the 2^nd defendant by his defence in fact expressly adopted the plaintiff's assertion that the 2^nd defendant was the 1^st defendant's agent, I see every justification for the plaintiff to continue to prosecute the claim against the 1st defendant notwithstanding that all the discovery and interrogatories given by the 1^st defendant would indicate that the 2^nd defendant was either himself, or was working for, an independent contractor.

44. However although I do not think one can criticise the plaintiff for bringing and maintaining an action against the 1st defendant, that is not per se a sufficient reason for saying that the plaintiff should not be subject to the usual consequence of having had to pay the 1st defendant's cost for not being able to prove his case against the 1^st defendant.

45. Another factor which I must bear in mind is the probability of any one of the parties not being able to meet the cost ordered to be paid. This action has taken 6 hearing dates. If I were to order that the 1^st defendant was to have his cost only against the 2^nd and 3^rd defendants, I am in effect requiring the 1^st defendant to take all the risks of the 2^nd and 3^rd defendants not being able to pay his cost whilst I see no reason for the 1^st defendant not being able to look to the plaintiff for at least part of his cost. In view of the vast amount of legal cost already incurred, it is plainly unsatisfactory that I should simply order that the plaintiff, the 2^nd and 3^rd defendants are to pay the cost of the 1^st defendant as such an order would be likely to invite further proceedings to determine the question of contribution for cost between the plaintiff and the 2^nd and 3^rd defendants.

46. Taking the above factors into consideration, I would exercise my discretion to order that the plaintiff is to pay one-third of the 1^st defendant's cost and the 2^nd and 3^rd defendants are to pay two-thirds of the 1^st defendant's cost.

47. I make no apportionment of the liability for cost between the 2^nd and 3^rd defendants as the 2^nd defendant had never sought any contribution from the 3^rd defendant and the 3^rd defendant's contribution notice against the 2^nd defendant had been withdrawn. Hence I take it that there will be no issue between these two defendants.