CROWN WORLDWIDE (HK) LTD. v. PHILIP ALEXANDER DEMPSTER STRATTON

HCA 10272/1996

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 10272 OF 1996

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J U D G M E N T

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1. This action arises out of a contract entered into by the plaintiff and defendant for the packing, removal and storage of the defendant's furniture and household effects from his apartment at 72 Mount Kellett Road, The Peak, in November 1995.

2. A quotation was sent to the defendant giving an estimate of the cost on 21 November 1995, and a form of acceptance was signed by him and returned the same day, when he also paid a deposit of $24,000.00. The packing and removal were both carried out the next day, 22 November. On 30 November 1995 the plaintiff issued an invoice to the defendant for a total of $70,099.75 which included charges for packing and crating, dismantling a washing machine, storage from 22 November to 31 December, warehouse handling, transit and storage insurance, and prepayment of redelivery charges. A note at the end of the invoice referred to the deposit of $24,000.00 and requested payment of the balance of $46,099.75.

3. No payment was made under this invoice. Further invoices were sent in January, February and March 1996 for storage charges for those months at $9,428.75 per month, which also remained unpaid. On 16 March 1996 the plaintiff sent a reminder requesting payment of the outstanding invoices. Again no payment was made. On 11 April 1996 a further reminder was sent and again on 2 May and 24 May 1996. Meanwhile monthly invoices for the storage charges were still being sent and the total due had risen to $93,243.50. The last letter requesting payment, on 24 May, demanded payment within 7 days, failing which they would proceed through legal channels. In the absence of any remittance, the plaintiff's solicitors sent a letter before action on 22 June 1996, by which time the balance claimed was $102,672.25.

4. In response to the plaintiff's solicitors' letter, the defendant wrote on 1 July 1996 pointing out that the figure in the invoice included charges for redelivery, which had yet to be carried out, and said that they had not yet received a report on the breakage of a glass table top. No other complaints about the charges were made. The defendant went on to say that he intended to relocate to a new apartment in early August and would settle the outstanding account before the end of the month. By a reply dated 4 July 1996, the plaintiff's solicitors said that it was trade practice to charge redelivery in advance, but were prepared to delay that charge until instructions were received for redelivery. However, they insisted on payment of the balance of $87,552.25. Again no payment was made.

5. The next written communication from the defendant was by a fax from his wife dated 30 August 1996, saying that they were leaving on a trip that night and returning at the end of September, and that the bill would then be fully settled and arrangements made for the goods to be taken out of storage. The writ was issued by the plaintiff on 9 September 1996.

6. It is the defendant's case that the original invoice and subsequent invoices were not paid because they were inaccurate and excessive. In particular, he repeats his claim that the redelivery and outhandling charges should not be added until redelivery takes place, that the goods were insured for the full valuation given by the defendant of $184,750.00, instead of US$20,000.00 as requested by the defendant, that the charge for special crating of fragile items should not include a glass table top which was broken on being removed from his apartment, and the cost of dismantling a washer should be $350 as in the quotation, not $450 as charged.

7. It was originally part of the defendant's case that he was not given credit in the first invoice for the deposit of $24,000.00. This cannot be an issue in this matter. The second page of the invoice clearly gives credit for this sum and requests payment only of the balance. Both the defendant and his wife deny seeing this when the invoice was delivered, but I am satisfied that it was there as they later discovered it among their own papers. In any event, not only was the deposit referred to in every subsequent reminder for payment, they could very well have either pointed out the omission to the plaintiff, had there been one, or paid the balance after deducting the deposit. To claim a right not to pay because of it, borders on the absurd.

8. I have already referred to the matter of the redelivery charges. It is the plaintiff's case that this is payable in advance as a trade practice, and I can see the sense in such a practice. However, the plaintiff was prepared in July 1996 to defer this charge until redelivery, and the defendant continued to ignore requests for payment of the balance, until legal proceedings had to be commenced. Mr Cheung for the plaintiff says that he is prepared to make the same concession now. I will accordingly consider it not payable at this stage.

9. As to the insurance point, it cannot be denied that the defendant requested insurance cover of only US$20,000.00. This was less than his own valuation which he and his wife had carefully calculated at HK$184,750.00. The plaintiff's case is that the insurance company would not permit the goods to be insured for less than their declared value, although their own conditions seem to allow for such an eventuality. Be that as it may, the insurance taken out by the plaintiff for the defendant was on the value of $184,750.00, and the defendant claims to be liable only for premiums based on the lower figure. The difference on the first invoice is a sum of $1,299.15, and on the subsequent monthly invoices $151.75 each. Mr Cheung says that the sums are so modest he is prepared for the sake of argument to accept the defendant's figures. I will accordingly do so. However, in my view he is being unnecessarily generous. The insurance at the higher figure was clearly stated on the first invoice, and the valuation it was based on, and I have no evidence that this was not accepted by the defendant. The matter of the difference in the insurance valuations was not raised until the defendant filed his defence in this matter in October 1996. Had the plaintiff left the matter to me, I would have held that the rate of insurance, although greater than that requested, had been accepted and was payable at that rate.

10. The next issue raised by the defendant is the matter of the broken glass table top. The defendant says that he should not be charged for special crating of this as it was broken and unusable. This may well be. Even if only a corner of the glass was broken as the plaintiff claims, it is not something that can be repaired, and must be considered a write-off. I can see the argument that there is little point in going to the trouble of packing a broken item. The plaintiff is also prepared to concede the charge for this, which the defendant puts at $1,176.50.

11. There was no explanation about the extra $100 charged for dismantling the washer, and this must also be allowed.

12. Apart from the charges for redelivery and warehouse outhandling, which are deferred not disallowed, the total to be deducted from the first invoice is $2,575.65, and from the monthly invoices, $151.75 each. The defendant is accordingly liable to pay $24,724.10 on the first invoice and $9,277.00 for monthly storage thereafter.

13. The defendant has approached this case on the basis that the alleged defects in the amounts charged permitted him, as a matter of principle, to refuse to pay, and to continue to refuse to pay anything at all. Both he and his wife gave evidence that they had raised the matter of the overcharging form the outset, and would have paid had appropriate adjustments been made. They say that they communicated their dissatisfaction verbally to the plaintiff's staff, in particular a Mr Gordon Fong and a Ms. Law, and that they wanted a report on the breakage to the table top. I regret that I cannot accept this. Not only does the documentary evidence before me, by way of reminders to pay from the plaintiff, contain no reference to any complaint, they request the defendant to let them know if there is any reason payment is withheld. There was no response from the defendant until legal proceedings were threatened, and even then the only reservation expressed was as to the redelivery charge, and the report on the breakage. The second communication, from the defendant's wife nearly two months after the defendant had said he would settle the account "by the end of the month", promised to settle the bill "fully" at the end of September. Again the matter of a report on the breakage was mentioned, but no other complaint was made as to the amounts charged. This is not a letter from a client who has had a long-running dispute with the plaintiff about overcharging, and confirms my view that the invoiced charges had been accepted by the defendant who was at the time unable to pay.

14. It is not in dispute that the defendant's company was in difficulties at that time. Indeed, there were proceedings against the company for repossession of its premises in 1996, and later that year it was wound up. At the same time the defendant was being sued for a number of debts and bankruptcy proceedings were instituted against him. I am told that all these proceedings have since been settled, but it is clear that, at the time, he was in considerable financial difficulty, and I am satisfied that it was this difficulty, not any genuine complaint, which resulted in his failure to pay anything at all to the plaintiff.

15. The matter of the broken table top, and the request for a report, is not, in my view, a relevant issue here. There is no dispute that the glass top was broken, and I see no reason why a claim was not made on the insurance policy, unless, of course, it was the knowledge that the premium, along with all the other charges, had not been paid. No good reason has been given to me why a "report" was required before such a claim was made, and I do not accept that the defendant had to wait for redelivery to see if any other items were damaged before making such a claim. There is no provision in the conditions of insurance that only one claim can be made. It is not therefore a valid reason for withholding any payment to the plaintiff.

16. The defendant has maintained throughout these proceedings that he was entitled to withhold payment as the charges were inaccurate, and amounted to a breach of contract, and it is the plaintiff's unreasonable attitude in pursuing the charges that has resulted in the goods remaining in storage for so long. He contends that he should not be liable for any charges after the issue of the writ.

17. I might have had some sympathy with this argument had he made some attempt to pay the charges which are not in dispute. It was not until an order of the court was made, albeit by consent, as a condition a having leave to defend, that any payment into court was made. The defendant has been conducting these proceedings in person, and I take into account that his legal knowledge is not as wide as it might be, although he has demonstrated from his conduct of this action that he is no novice in these matters. He could have protected his position at a very early stage by either offering to pay the amount he did not dispute, or by making payment into court voluntarily. He has maintained that, in spite of his financial circumstances, he was able to pay. Yet from the delivery of the first invoice there has been no attempt to do so, only tactics adopted for the clear purpose of delay. Had he paid the sums claimed less the redelivery charges in July 1996 as was offered by the plaintiff, when no other allegations about overcharging had been made, this action would not have been necessary. He says that he could have had the goods delivered to cheaper storage and the action proceeded for the balance in dispute, but there is no cogent evidence of any request for delivery, nor any instructions from him, and no evidence at all that he had anywhere to put them. He and his wife now live in a small service flat, having moved from a furnished flat in Aplichau, and have either been unable or unwilling to prevent the continuing charges of storage accumulating since 1996. The plaintiff has been entitled throughout to exercise its lien as bailee until the charges are paid, and I am not satisfied that the relatively minor matters now raised by the defendant affect that lien. As has been pointed out by Mr Cheung, the total in dispute now in respect of the charges up to September 1996, without the redelivery charges which had been conceded, was only $2,575.65, and $151.75 a month on insurance. As I have said, even this was not in dispute prior to the writ herein being issued.

18. For these reasons, I am satisfied that there should be judgment for the plaintiff for the sum now claimed, in respect of which Mr Cheung is prepared to accept the defendant's own figure of $535,480.00, and storage charges to the date of taking delivery of the goods continuing at $9,277.00 per month. There will accordingly be judgment for this sum, with interest on the sum of $98,940.10 from date of writ, and on $9,277.00 from the date of each of the monthly invoices thereafter, all at the rate of 9% per annum. There will also be an order for payment out to the plaintiff of the sum in court of $101,836.10 and an order nisi for costs in favour of the plaintiff to be taxed.