LEE YUK LING LUCIA v. CHAN KWOK CHUNG t/a CHUNG HING MOTOR CO.

No. A7975 of 1997

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

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J U D G M E N T

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1. The Plaintiff in this action claims damages for conversion of her car by the Defendant. The Defendant who is a motor repairer counterclaims for the balance of the cost of repairs to the car and for the cost of storage of the car from June 1996 to date.

2. Although the Plaintiff is the owner of the car, a BMW, it was bought for her in 1995 by Cheung Wing Chau her then fiancé and now husband. It was Mr. Cheung who principally dealt with the Defendant and it is upon his evidence that the Plaintiff's case depends. Mr. Cheung was introduced to the Defendant by a mutual friend in 1995. In early 1996, Mr. Cheung used the Defendant's services for a minor repair to the Plaintiff's car. Then, towards the end of May 1996 the car overheated. Mr. Cheung arranged for the car to be towed to the Defendant's garage in Hung Hom. He asked the Defendant to repair the car and at the same time obtain a Certificate of Roadworthiness. Soon after, the Defendant informed Mr. Cheung that the necessary certificate had been obtained at the second test but that as he was still rectifying the overheating problem; he did not know how much repairs would cost.

3. In the middle of June, the Defendant asked Mr. Cheung for $10,000.00 on account of parts which had been repaired or renewed. Mr. Cheung paid this sum. The Defendant then told him that it was necessary to replace the car's cylinder head. The Defendant enquired whether Mr. Cheung wanted a new part. Mr. Cheung asked the difference between a new and second-hand part. The Defendant told him the cost was $20,000.00 or $5,000.00 respectively. To save money, Mr. Cheung asked for a second-hand part and enquired what the total cost would be. The Defendant said it would be about $20,000.00.

4. In July, the Defendant told Mr. Cheung that he had obtained a second hand cylinder head and asked for another $10,000.00. As the total cost was to be only $20,000.00, Mr. Cheung paid another $5,000.00 on account intending to pay the balance when the repairs had been completed.

5. After this, Mr. Cheung visited the Defendant's garage every Saturday to check on the state of repairs. The repairs apparently were not completed, the Defendant giving Mr. Cheung a variety of excuses. Mr. Cheung said that he needed the car for a wedding in September. The Defendant, however, failed to return it.

6. In the meantime, the car had been relicenced at the beginning of August. The new licence was affixed to the car although whether it was done by Mr. Cheung or the Defendant is a matter of dispute.

7. After September 1996, Mr. Cheung visited the Defendant's garage less frequently, perhaps once every two weeks. From time to time, he would check the temperature. The Defendant would switch on the engine and let the car run. The temperature gauge would go to the warning limit. Finally, in December, Mr. Cheung said he wanted the car back for his own wedding in January. The Defendant told him no further repair could be made. Mr. Cheung said he would take the car back. The Defendant refused to let him have it saying that because the car had been left for so long he had to make a charge for storage. He asked for $40,000.00 which would not include the $15,000.00 Mr. Cheung had already paid. There was an unsatisfactory argument. Mr. Cheung left without the car.

8. In January 1997, Mr. Cheung and the Plaintiff made a report to the police. The police told them that they should pay the Defendant and then sue him. Mr. Cheung regarded the advice as unreasonable as it would involve "throwing money into the sea", the car then being worth about $120,000.00.

9. Thereafter, Mr. Cheung was busy with his wedding, the Chinese New Year holiday and business overseas. He had no time to pursue the matter until June 1997 when he made another report to the police. On this occasion, a police officer accompanied Mr. Cheung to the garage. The police officer checked that the car was still in the garage. The Defendant said that he had repaired the car but that Mr. Cheung had not paid. Mr. Cheung said that in any event the Defendant had to issue an invoice but the Defendant refused. Again the police officer said he was unable to help and that the matter should be resolved by civil proceedings.

10. Solicitors were consulted and a writ was issued in July 1997.

11. After acquiring the car, Mr. Cheung used to go to work in Kwai Chung where he had rented parking space for the car at $1,300.00 per month from 7 February 1996. He dropped off the Plaintiff in Tsim Sha Tsui on the way. After the car was left with the Defendant for repairs, he and the Plaintiff were obliged to use taxis. A round trip for the Plaintiff cost about $110.00. A one way trip for Mr. Cheung was $60.00 or $70.00 until April 1997 when he moved to a new place of work in Castle Peak Road. A taxi then cost about $50.00. The Plaintiff claims the cost of hiring taxis from 14th December 1996 to 30th July 1997, totalling $57,250.00.

12. The Defendant gave evidence. He said that when the car was brought to his garage Mr. Cheung asked how much the repairs would cost, using the cheapest way. After making a check the Defendant quoted a price of $4,600.00 to $4,700.00. Mr. Cheung accepted this. The Defendant discovered, however, that the cheapest way (which I understand to be replacing the cylinder head gasket) did not work. He informed Mr. Cheung that it would be necessary to buy a new cylinder head which would cost $20,000.00. Mr. Cheung thought this too expensive. It was decided that the Defendant would have the cylinder head reground. Even after regrinding the problem was not cured. The Defendant then discovered that the cylinder head was cracked and could not be used.

13. The Defendant informed Mr. Cheung. It was agreed that the Defendant should obtain a second-hand part. This the Defendant did. The replacement part was installed and the problem cured. By then, according to the Defendant, it was the end of May.

14. The Defendant then obtained a Certificate of Roadworthiness for the car, albeit at the second attempt on 4th June. He called Mr. Cheung to tell him and to come and collect the certificate. Mr. Cheung came about two days later and took the certificate away in order to arrange for insurance cover.

15. The Defendant then worked out the cost of repairing the car and obtaining a Certificate of Roadworthiness. He prepared an invoice dated 10th June 1996 amounting to $36,735.00. The Defendant concedes that Mr. Cheung was never given sent or shown this invoice or a copy. He did, however, telephone Mr. Cheung and tell him the amount due. Mr. Cheung said that this was rather expensive. The Defendant was prepared to reduce the amount to $35,000.00 exactly. To this, Mr. Cheung agreed.

16. The Defendant next saw Mr. Cheung later in June or in July when Mr. Cheung paid him $10,000.00. A short time after, Mr. Cheung paid a further $5,000.00. The Defendant pressed for the balance and asked Mr. Cheung when he would renew the licence. Mr. Cheung told him that he had left it to the finance company to deal with. He would pay the balance after the licence had been dealt with.

17. In August, Mr. Cheung brought the new vehicle licence for the car. The Defendant asked Mr. Cheung when he would pay the balance due. At the same time, the Defendant started the car and demonstrated it to Mr. Cheung. Mr. Cheung said he would pay in a few days.

18. Mr. Cheung came about a week later. The Defendant asked him when he would take car. Mr. Cheung said a few days later. Mr. Cheung did not, however, return until December 1996. In the meantime, all the Defendant's efforts to locate Mr. Cheung failed. One of those efforts was to ask the mutual friend, Buddy Cheung, to try and find Mr. Cheung. Buddy Cheung reported that he was unable to do so.

19. In December, Mr. Cheung suddenly appeared when the Defendant was checking a car outside his garage. The Defendant asked why Mr. Cheung had not come for so long. Mr. Cheung said he had been to the Mainland. The Defendant said that because the car had been left for a few months he had to charge Mr. Cheung for storage. He said Mr. Cheung owed $40,000.00 for the outstanding balance and for storage. Mr. Cheung said nothing in particular and left. On that occasion, however, a friend of the Defendant, Mr. Ng Chau Ming, happened to be present and overheard the conversation.

20. The Defendant next saw Mr. Cheung in June 1997 when he came with a police officer. The police officer told the Defendant that the owner had reported the car as missing. The Defendant said that the car was in the garage and after some debate allowed the police officer to check. The Defendant said to Mr. Cheung that he had not settled the full amount yet wanted the car back and had reported the car is missing. Mr. Cheung said that the Defendant had not given him an invoice (which was true). The Defendant replied that he had told Mr. Cheung on the telephone about the amount due.

21. In November 1997, the Defendant had to give up his premises because they were to be demolished. In order to store the car which was still with him he rented part of a nearby shop space for $8,000.00 per month. This sum he has been paying since November 1997. In addition to the car, he was able to store miscellaneous items.

22. The two accounts of what occurred are irreconcilable. If Mr. Cheung is to be believed, the Defendant was incapable of repairing the car yet not prepared to return it until he had been paid in full for his unfruitful labours. Further, the Defendant was prepared to incur substantial storage charges in furtherance of his position. On the other hand, if the Defendant is correct it appears that Mr. Cheung and his wife were content to allow a perfectly serviceable car to lie idle for the sake of $20,000.00.

23. Mr. Cheung's account received some support from the Plaintiff. The Plaintiff said that she visited the Defendant's garage with Mr. Cheung on some occasions. Each time it appeared the car was not repaired because the Defendant had the bonnet up and his head under it. I have to say that it strains credulity a little that, over the several months that the Plaintiff visited the Defendant's garage, the Defendant always seemed to be tinkering with the car when the Plaintiff went there.

24. More importantly, however, is the fact that the Plaintiff and Mr. Cheung renewed both the vehicle licence and the insurance for the car. These cost over $10,000.00. Why, asked Mr. Cheung rhetorically, should he not have spent another $20,000.00 to get the car back, there being no financial reason for him not to pay. It was put to him that the licence was only renewed because it was a condition of the hire purchase agreement under which the car was held. Mr. Cheung said that was not the case and pointed out that, for the following year, the licence and insurance were not renewed. It is to be noted that, in July 1998, the hire purchase was paid off, payments of approximately $126,000.00 being made after the Plaintiff had been deprived of use of the car. The Plaintiff now has all the registration documents.

25. Although counsel criticised him for it, the Defendant repeated his story several times while giving evidence. He was consistent and not shaken by cross-examination. He gave a detailed and technical account of the work which he carried out, the parts which he purchased and the way in which the true cause of the overheating problem was finally identified. At the second attempt, the car was given a Certificate of Roadworthiness. While it is true that the test for roadworthiness does not include a check on overheating, the fact that the Defendant was able to take the car to the testing station on two occasions is at least an indication that it had been repaired satisfactorily. I reject the suggestion that the Defendant perhaps had the car towed to the testing station. This suggestion was made on the basis that the mileage recorded on the two test reports is only two miles (or kilometres) in difference. There was no evidence, however, least of all called by the Plaintiff, as to the exact distance between the Defendant's garage and the testing station.

26. If, as Mr. Cheung claims, the Defendant was unable to repair the car satisfactorily it is difficult to understand why he should wish to retain the car when he had already been paid $15,000.00 on account of his work. It is even more difficult to understand why, after more than a year had elapsed, the Defendant should choose to rent premises at $8,000.00 per month in order to store the car. Although both the Defendant and his landlord were cross-examined closely about the agreement between them, I see no reason to doubt that there is a genuine agreement between them and that the car is stored in the premises the subject of that agreement.

27. Apart from the landlord, Mr. Buddy Cheung gave evidence for the Defendant. He said that in about September 1996, the Defendant had asked him to try and find Mr. Cheung because the Defendant had been unable to do so. Mr. Buddy Cheung said he tried calling Mr. Cheung without success and informed the Defendant of this. In cross-examination, however, he conceded that he had acutally met Mr. Cheung at a friend's wedding and thought he had seen Mr. Cheung more than once. Surprisingly, he did not mention that the Defendant was looking for Mr. Cheung nor did he tell the Defendant about it.

28. Ng Chau Ming also gave evidence. He was an acquaintance of the Defendant. In December 1996, he passed the Defendant's garage one afternoon and invited the Defendant for tea. While he was waiting for the Defendant to finish a job, a man suddenly appeared. The Defendant asked this man why he had not turned up for such a long time. The man replied he had been busy and had to go to the Mainland often. The Defendant told the man to collect the car and settle an outstanding payment of $40,000.00 including a parking fee as soon as possible. The man argued about the parking fee. The Defendant pointed out that if the car had been in a public place a meter fee would have been payable. Instead, the car had been left in the Defendant's place for a few months. The man said nothing in particular and left. The Defendant explained to Mr. Ng that the man had not come for a few months and that he did not know what to do with the car.

29. It is true that Mr. Ng said he did not hear the Defendant explain that the $40,000.00 comprised $20,000.00 for storage and $20,000.00 for the balance of the repairs. He said, however, that he remembered the conversation because of the manner in which it occurred and because he had never heard of a car being left for a few months.

30. The case is finely balanced. I come to the conclusion, however, that on the balance of probabilities the Plaintiff has proved her case. I cannot accept that the Plaintiff and Mr. Cheung would have deprived themselves of the use of a serviceable car, for which they had parking space available, for the sake of $20,000.00 when there was nothing to suggest that they were unable to find the money. Quite the contrary. The fact that they went on to discharge the hire purchase payments speaks for itself. If they had been prepared effectively to abandon the car for the sake of $20,000.00, it seems likely that they would also have abandoned the hire purchase agreement.

31. The Plaintiff is therefore entitled to damages. By way of damages she claims the value of the car, return of the amount paid on account of repair costs (referred to as deposit) and the cost of taxi fares. Generally, in conversion the measure of damages is the value of the goods at the date of the conversion, in this case mid-December 1996. Mr. Cheung's evidence was that in December 1996 the value of the car was $120,000.00. Objection was taken that this was a purely speculative amount put forward by Mr. Cheung. Further, it was contended on behalf of the Defendant that the Plaintiff had only a limited interest in the car and that the value of the outstanding hire purchase payments should be taken into account. For this proposition, reference was made to the decision of the Court of Appeal in Wickham Holdings Limited v. Brooke House Motors Limited (1967) 1 All ER 117 in which the finance company's damage was limited to the amount of the outstanding payments. I confess I find no assistance from this authority. Subject to payment of the outstanding balance under the hire purchase agreement, the Plaintiff was entitled to the whole car and in my judgment entitled to the value thereof by way of damages. The car had been acquired in June 1995 for $168,000.00. A value of $120,000.00 approximately 18 months later seems not unreasonable. I award the Plaintiff $120,000.00.

32. On behalf of the Plaintiff, Mr. Cheung paid $15,000.00 towards the cost of repairs, which were never carried out satisfactorily, and towards the cost of having the car tested for roadworthiness, a test that was rendered nugatory by the Defendant's subsequent action. I am satisfied that this, too, should be paid to the Plaintiff.

33. The claim for taxi fares includes fares for both the Plaintiff and Mr. Cheung. No account, however, has been made for the period when, on his own admission, Mr. Cheung at least was not in Hong Kong. Nor has any account been made for the daily cost of running a car, in particular petrol. In the circumstances, I think an amount of $25,000.00 is appropriate under this head.

34. Accordingly, there will be judgment for the Plaintiff for $160,000.00.

35. The Defendant's counterclaim is dismissed.

36. I make an order nisi that there should be interest on this sum at the rate of 10% from the date of the issue of the writ until the date of this judgment and hereafter at the rate prescribed by the Chief Justice until payment.

37. I also make an order nisi that the Plaintiff should have the costs of the action.