CHAN KAI MING v. CHAN SHING LAM

1994, No.A7594

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

-----------------

-------------------

J U D G M E N T

-------------------

Plaintiff's case

1. The Plaintiff's case is a simple one. In July 1994, he instructed the Defendant, who was engaged in the transport business, to transport a container of garments from China to Hong Kong. The container was to be shipped to the Plaintiff's overseas customers. The Defendant transported the container to Hong Kong and before it was delivered to the shipping depot, it was left unattended overnight in a place in the New Territories. The container with the goods disappeared when the driver returned the following day to fetch the vehicle. The container truck was stolen together with the container and the tractor was only recovered three months later. The Plaintiff now claims against the Defendant for the value of the goods together with the rental charge of the container.

2. The arrangement regarding the transportation of the goods from China to Hong Kong was as follows. The Plaintiff booked a shipping space with a shipping company and hired an empty container from the shipping company. The Defendant collected the empty container from the shipping depot in Hong Kong and transported the same to China. The goods were then loaded onto the container in China and the container was carried back by the Defendant.

Defence

3. The Defendant's case is that the Plaintiff was told that as the shipping depot did not have overnight parking facilities for the container, the container upon arriving in Hong Kong must be left in an open space in Ngau Tam Mei in the New Territories. The Defendant had explained to the Plaintiff the danger of leaving the vehicle unattended overnight and the Plaintiff was prepared to accept the risk. The pleaded defence stated that the Plaintiff is estopped from alleging the Defendant was negligent. The Plaintiff had also agreed with Mr Chan Chung Kwong of the Defendant that he would not hold the Defendant responsible for any loss and thus the Plaintiff had waived his cause of action against the Defendant. Furthermore, the Defendant said that he had taken all reasonable care to safeguard the container.

Defendant's evidence : Miss Kam

4. In May 1994, the Plaintiff arranged for shipment of his goods with the Mitisui OSK Line ("Mitisui") and instructed the Defendant to transport the container for him. After receiving this order, Miss Kam of the Defendant informed the Plaintiff that as the container was to be delivered to the Jumbo Depot which was to be closed by 7:00 p.m., it would not be possible for the container to be delivered to the depot within time, so the container had to be left overnight in Hong Kong and there was a chance that it would be stolen or lost. If that happened, the Defendant would not be responsible. The Plaintiff replied that he was trying out the service of that shipping company since the charge was lower. This was all she said in that conversation.

5. Miss Kam then reported the matter to Mr Chan Chung Kwong ("Mr Chan"), the manager of the Defendant. Mr Chan asked Miss Kam to persuade the Plaintiff not to use that shipping company. So Miss Kam telephoned the Plaintiff again but the Plaintiff said that he would try out the Mitisui company. Miss Kam said that Mr Chan then telephoned the Plaintiff and talked to him personally. The May order was executed without any problem.

6. On 5th and 6th June 1994, the Plaintiff placed another two orders for the transportation of containers. Miss Kam called up the Plaintiff again and informed him that these containers look rather risky going to the same shipping company, she told the Plaintiff that the Defendant would not be responsible for any loss caused by theft. The Plaintiff did not say anything apart from carrying on the order with Mitisui.

7. In July 1994, the Plaintiff placed another order for the transportation of containers from China to Hong Kong. Miss Kam had another conversation with the Plaintiff. She informed the Plaintiff that the container would probably stay overnight in Hong Kong.

Mr Chan Chung Kwong

8. Mr Chan said in May he had called up the Plaintiff and told him that because he had changed the shipping company (the Plaintiff had previously used Jardine's and not Mitisui) the goods would have to spend overnight by the time it arrived in Hong Kong. He told the Plaintiff the goods would have to spend the night at where the driver lived. He told the Plaintiff that if he did not want the container to park there, could he give him a place to park. The Plaintiff did not give him any alternative suggestion.

9. Mr Chan told the Plaintiff the name of the driver and where he lived and that, in his view, was the safest place to leave the container overnight. The Plaintiff did not make any special remark but merely said that "I don't think in any probability this is going to happen to me." which Mr Chan understood the Plaintiff was referring to the theft of the goods. Mr Chan then told the Plaintiff that in case the goods were lost, the Defendant would not be responsible.

The Plaintiff's evidence

10. The Plaintiff agreed that in May 1994, he had a conversation with Miss Kam concerning his order. He agreed that Miss Kam informed him that the container would come to Hong Kong after 7:00 p.m., but he disagreed that Miss Kam had told him that people knew of the risk of parking a loaded truck overnight. She did not tell him that the Defendant had no parking facilities and she did not tell him that no car parking was safe. She did not tell him that the Plaintiff was to bear the loss and that the Defendant would not be responsible for any loss.

11. One or two days after this conversation, Mr Chan of the Defendant called him. Mr Chan told the Plaintiff that the container would have to spend a night in Hong Kong and it could not go straight to the quay side. Mr Chan told the Plaintiff that if he was using that shipping line, the container might not make it all the way through to the ship and the situation may be different if he was using another shipping line. The Plaintiff replied that the goods had come out from the production line and the shipping schedule fitted the time slot and Mitisui provided a good service. Nothing else was said. The Plaintiff denied that Mr Chan told him that if the goods were to spend overnight, it would be parked at Ngau Tam Mei, or that the Defendant would not be responsible for any loss if the container was lost by theft. He denied that he had agreed that he would be responsible for the loss.

12. The Plaintiff was not cross-examined as to the conversation between him and Miss Kam in June. In respect of the July conversation, the Plaintiff said that Miss Kam had informed him that the container might have to spend overnight in Hong Kong.

Defence not supported by evidence

13. The Defendant's pleaded case that the Plaintiff had confirmed with Mr Chan that the Plaintiff would not hold the Defendant responsible for the loss of the goods by theft is not supported by the evidence. Mr Chan's evidence was simply that he told the Plaintiff that the Defendant would not be responsible for the loss of the goods. There was no evidence that the Plaintiff agreed to what he had said. This is to be contrasted with what Mr Chan said in his witness statement where he said that in the telephone conversation in May 1994, the Plaintiff agreed that the Defendant's driver could park the loaded truck at the open ground near the village of Ngau Tam Mei; the Plaintiff further agreed that the risk of theft would not be greater than parking the loaded vehicle in any carpark; and the Plaintiff confirmed that he would not require the Defendant to bear any responsibility in case of theft of the goods during the night time before the Defendant accepted his order.

14. The Plaintiff's alleged remark that theft would not happen to him was not even put to the Plaintiff in cross-examination. Mr Chan's evidence and his witness statement left me in doubt regarding the Defendant's evidence as to what had actually transpired at the conversation.

15. I find the Plaintiff to be an honest witness and I accept his evidence. I further find that Mr Chan had not informed the Plaintiff that the container would be parked in Ngau Tam Mei and that the Defendant would not be responsible for the loss of the container. Mr Chan said the Plaintiff was an existing client and a good friend of the Defendant. I do not accept that he would tell the Plaintiff that the Defendant would not be responsible for the loss. I think the attempt was to persuade the Plaintiff to use another shipping line so that it would be more convenient for the Defendant to complete the delivery.

16. Even if Mr Chan had made such a statement, one just could not construe the Plaintiff's lack of response to be an acceptance of what Mr Chan had said.

17. Furthermore, I do not accept the evidence of Miss Kam that she had informed the Plaintiff in the conversation in May 1994 that the Defendant would not be responsible for the theft or loss of the vehicle. The evidence of Miss Kam is not satisfactory. In her first witness statement, she did not say that she had told the Plaintiff that the Defendant was not responsible for the loss of the container. This piece of conversation was only mentioned in her second witness statement filed shortly before the hearing. No explanation was given by her why this evidence was omitted in the first witness statement.

18. It is now conceded by the Defendant that the notification by Mr Chan and Miss Kam does not amount to a waiver by the Plaintiff nor does it specifically refers to the exclusion of liability of the Defendant in negligence.

Duty of care

19. The Defendant accepts that he is a bailor of the Plaintiff's goods. It can hardly be challenged that based on the evidence of this case, there is a high degree of foreseeability that the loaded container would be stolen if it was to be parked in places other than at the shipping depot. Mr Chan of the Defendant was aware of the theft of cars at that time. The requirement of high degree of foreseeability as discussed in cases such as P. Perl (Exporters) Ltd. v. Camden London Borough Council [1984]1 QB 342 is satisfied.

20. Mr Mak submitted that the Defendant was a carrier and the storage of the goods overnight was only incidental to his trade. The Defendant was a carrier no doubt, but it knew that the container would spend a night in Hong Kong and had taken upon himself to store the container. Ultimately the test is as follows :

"The duty of a bailee for reward is to take care of the goods as a reasonable and ordinarily prudent man would, in all the circumstances, exercise for the safety of his own goods of equivalent character. The obligation varies according to the character of the goods, the purposes for which they are bailed, the nature of the premises where they are kept, the nature of the surrounding neighbourhood, the level of precaution adopted by similar bailees in the same vicinity, the types of misadventure which might reasonably be expected to afflict the goods, and the relative cost of different level of precaution ..."

See Lockspeiser Aircraft Ltd. v. Brookslands Aircraft Co. Ltd. The Times, 7 March 1990, as summarized by Palmer on Bailment at p.1677.

21. Mr Mak submitted that the Defendant is exonerated from liability. He referred to Idnani v. Elisha [1979] RTR 488 in which Megaw LJ at p.495 held that the trial judge had given "too much weight to the foreseeability, which of course is present in the case of every motor car left outside overnight, however effectively it may have been immobilised, that this car might be stolen, and too little weight to the practical difficulties which confronted the defendant, and of which the plaintiff was well aware, in accommodating a substantial number of cars in a limited amount of available lock-up accommodation."

22. That decision is based on the facts of the case. Each case is different. Mr Chan had not told the Plaintiff that the parking area in Ngau Tam Mei was an open area, unlit and unguarded.

Security measures not adequate

23. The Defendant claimed that he had taken all necessary precautionary measures to protect the loaded vehicle from theft and damages. The latch connecting the tractor and the trailer was pushed back so that the trailer would fall down if the latch was not pushed to the connecting position, the alarm device was activated and the steering lock which locked the wheel and the crutch was used.

24. Miss Kam said that from previous experience of the Defendant, it is safe to leave vehicles overnight in an open space in Ngau Tam Mei which is outside the place of residence of the driver's father.

25. It is clear that the so-called security measures were not sufficient to prevent the theft of the vehicle and the container. The disconnection of the latch could not even be considered as a security measure which would prevent the removal of the container. The driver said that the area in Ngau Tam Mei was a relatively safe place because it was not conspicuous, the area was remote and could not be seen from the main road and only people who are very familiar with the locality knew the whereabouts of that area. He had previously on three occasions parked vehicles there, on 6th May, 5th June and 6th June, when he was transporting goods for the Plaintiff. Prior to the incident, the driver had not heard of any vehicle being stolen on that piece of ground. In his witness statement, he said he lived in Yuen Long, there was no parking services available for container trucks in the vicinity of Yuen Long. Because of the length of the truck with the container, he could not park the truck in an ordinary carpark. There are a few carparks in Yuen Long which could accommodate vehicles of such size but all of them only offer monthly parking services for container trucks and no hourly service is available. He did not know of any other carpark which would accept his truck.

26. By no stretch of imagination can the area in Ngau Tam Mei be described as a safe area. It is simply an open ground. It is not a parking lot with security guards or fence. To leave a container vehicle loaded with goods at that area because the area was remote and the vehicle was not easily seen is a totally unrealistic move. Mr Chan of the Defendant recognized that there was a lot of car theft at that time. I just could not see how anyone could regard it as safe to leave a fully loaded container truck unguarded in an unlit open ground in a village in the New Territories. The Defendant is simply inviting trouble.

Alternative carparking

27. Mr Chan and Miss Kam accepted that there was a carparking service on the ground floor of the building of the Defendant's office. It is clear from the notice posted by the carpark that container trucks could be parked there. There was a sentry box at the entrance of this car park. The Defendant said that there is only one space for the parking of container trucks. However, no evidence was adduced by the Defendant to show that he had arranged with the carparking services to park the container truck overnight in July 1994. The Defendant never did. Mr Chan mentioned the difficulties of reservation but the fact was that no reservation was made for that space.

28. Furthermore, although this is not something agreed by Mr Chan, Miss Kam said that if the Defendant knew the container truck would not come back to Hong Kong in time to be delivered to the container depot, the Defendant would instruct the driver to stay overnight in Shenzhen. It is clear from the evidence that in respect of each of the orders carried out for the Plaintiff, the Defendant knew in advance that the vehicle would not arrive back in Hong Kong in time to meet the closing deadline of the depot. The simplest way to avoid any risk of loss of the container by theft is to instruct the drivers to stay overnight in Shenzhen. Miss Kam said that she could not recall whether she had instructed the driver to do so.

29. In any event, the Defendant had simply not bothered to find out if there were parking spaces for container trucks in other areas.

Duty not discharged

30. The parking space in the Defendant's building, or in some other places, the alternative arrangement of asking the driver to stay overnight in Shenzhen are matters that the Defendant could easily resort to to safeguard the safety of the container. These simple steps were not taken and I am not satisfied that the Defendant had discharged his duty of care as the bailor of the goods. The loss of the container was caused by the negligence of the Defendant.

31. Ms Yip also submitted that the witness statement of the driver appeared to indicate that the decision to park at Ngau Tam Mei was taken on the spot by the driver. Whether the decision to park there was made pursuant to the approval of his employer or not, I find the Defendant has not discharged his duty in ensuring the safety of the goods.

Value of the goods

32. For these reasons, I find that the Plaintiff is entitled to succeed in his claim. The value of the goods is US$97,861.20 or HK$763,317.36. The hiring charge of the container is US$4,825.09 or HK$37,635.70, making a total of HK$800,953.06. The Plaintiff had paid the manufacturer the cost of the goods at $763,317.36 and had further paid the shipping company the container charge.

Judgment

33. There shall be judgment accordingly to the Plaintiff in the sum of HK$800,953.06. Interest at 10% is awarded on this sum from the date of the service of the writ to judgment and thereafter at judgment rate until payment. Costs of the action shall be to the Plaintiff.

(P. Cheung)

Judge of the High Court