AIG Finance (HK) Ltd. v. Derlan Ltd. and Others

HCA 6146/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 6146 OF 2000

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Assessment of Damages

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1. This is an assessment for breach of contract and the enforcement of a guarantee.

2. A written agreement was signed between the Plaintiff and the 1st Defendant on 2 June 1998 in which the Plaintiff agreed to finance the 1st Defendant in the purchase of a '97 Bentley Rolls Royce'. Apart from the initial payment of HK$238,440 the 1st Defendant undertook to pay the Plaintiff 54 equal monthly payments of HK$39,740 on the 2nd day of each month thereafter.

3. On the same day of the execution of the finance agreement, the 2nd and 3rd Defendant signed a guarantee to guarantee payment of all monies due and owing by the 1st Defendant to the Plaintiff under the said finance agreement.

4. After the execution of the finance agreement the 1st Defendant made payments to the Plaintiff until April 2000. The 1st Defendant defaulted payment since 2 May 2000. On 6 July 2000 the 1st Defendant paid a further sum of HK$5,000 to the Plaintiff.

5. The Plaintiff took out a writ on 19 June 2000 against all three Defendants to sue for their breaches. Interlocutory judgment was obtained on 7 August 2000 against all 3 Defendants for damages to be assessed.

6. None of the Defendants appeared at the assessment hearing.

7. Clauses 3 and 4 (b) of the finance agreement entitled the Plaintiff to charge overdue interest for late payments. Overdue interest rate was specified at 3% per month in the agreement.

8. Clause 4 (m) of the finance agreement permitted the Plaintiff to seek reimbursement from the 1st Defendant for all costs, charges and expenses incurred towards enforcement of the finance agreement.

9. Clauses 2(iii) and 8.4 of the guarantee entitled the Plaintiff to seek reimbursement from the 2nd and 3rd Defendants for all costs and expenses incurred towards enforcement of the guarantee.

10. The Plaintiff has a contractual right to terminate the agreement pursuant to clause 9 of the finance agreement. Its attempts to repossess the car had met with failure. The Plaintiff was subsequently informed by the 2nd Defendant, director of the 1st Defendant, that the vehicle was detained in the mainland, which reduces the chance of repossession to a sheer hope.

11. I accept the evidence of the witness on behalf of the Plaintiff that the following was a correct quantification of the damages suffered by the Plaintiff as a result of the Defendants' breach:-

(a)	A total of 32 monthly installments of HK$39,740 outstanding since 2 May 2000 (32 x $39,740)	HK$1,271,680.00
(a)	Deducting interest rebate calculated pursuant to the "Rule of 78"	(280,788.93)
(c)	Deducting payment made by the Defendant on 6 July 2000	(5,000.00)
(d)	total sums of overdue contractual interest for late installment payments from August 1998 to 2 June 2000	15,876.00
	Total:	HK$1,001,767.07
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12. I award judgment in favour of the Plaintiff against all 3 Defendants, jointly and severally, in the sum of HK$1,001,767.07. Judgment interest accrued from the date of judgment until payment.

13. I also award costs nisi in favour of the Plaintiff against all 3 Defendants jointly and severally.