OBSERVATORY WATCH & JEWELLERY CO LTD v. KWONG KWOK KIN

IN THE COURT OF APPEAL

1987, No. 77
(Civil)

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JUDGMENT

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Cons, V.-P. delivered the judgment of the Court:

1. At about 2 o'clock in the afternoon of the 14th December 1982 a businessman, Mr. Kwong Kwok Kin, the Defendant in the action below, lent his private motor car to a friend whom he knew only as "Peter Chai", that is to say "Little Peter". Little Peter's own car was out of order. Mr. Kwong had no knowledge of what Little Peter intended to do that afternoon or evening with the car. He merely let him have it. Little Peter returned the car the next day at about one o'clock as he had promised, but with a nasty dent in the boot and back bumper. He explained that the car had been involved in an accident, but that everything had been fixed and that he would pay for the damage, which he later did in the sum of $1,500.

2. That was the last Mr. Kwong heard of the incident for several years. Then in April 1986, to his surprise, he received a solicitor's letter and soon after that a writ, alleging negligence on his part, or on that of his servant or agent. A little over $41,000 was claimed as damage to the Plaintiff company's vehicle. By that time Mr. Kwong had lost touch with Little Peter for something over 2½ years and he was unable to locate him.

3. The action thus started came on in due course before Judge Henry Wong in the District Court. Evidence was given by a director of the Plaintiff company describing how in the early hours of the morning following the day Mr. Kwong lent his car to Little Peter, someone, whom we must take to have been him and who appeared to have consumed more alcohol than was desirable, reversed the Defendant's car into the Plaintiff company's car while the latter was stationary waiting to go through the toll booth at the Kowloon side of the Cross Harbour Tunnel. Further evidence was given as to the extent of the damage and the cost of repairs by respectively a motor surveyor and the receptionist from the appropriate garage. All of that evidence was accepted by the judge.

4. Mr. Kwong also gave evidence. He spoke in substance as we have already outlined. As to that the judge said this -

“Having seen and heard witnesses I feel that defendant's testimony does not take plaintiff's case much further, except the part which I consider to be truthful and relevant in that Peter 'Chai', who was the driver of defendant's car at the time of the accident, drove it with defendant's permission and was therefore defendant's agent.”

Accordingly he gave judgment in favour of the Plaintiff company and the Defendant now appeals with the judge's leave.

5. Before turning to the point raised by the appeal we should mention that by re-amendment to the Defence there was introduced an allegation that immediately following the accident the Plaintiff’s witness and Little Peter had come to a compromise, agreeing to extinguish in each other's favour all rights and liabilities that might have arisen. Apparently the judge did not believe that such a compromise had in fact been made, but that is immaterial. What, is important is that by pleading the compromise the Defendant might be taken to have admitted, by subsequent ratification, that Little, Peter had that night been driving as his agent.

6. In our view that does not follow. The ratification was of the compromise agreement. It went no further. It was indeed no more than the converse of the situation commonly found wherein a person driving as the agent of his employer is not by that token alone authorised to compromise any liability which he may have created by his driving.

7. The single point in the appeal is whether permission alone is sufficient to make the driver the agent of the owner. To dispose of it we need go no further than to the comments of any one of their Lordships in Launchbury v. Morgans(1). For no particular reason we choose the comments of Viscount Dilhorne(2) -

“It is not, and in my opinion has never been, the law of this country that the owner of a chattel is responsible in law for damage done by the negligence of a person to whom he has lent it or whom he has permitted to use it. If all that had to be shown to establish liability on the part of the owner of a vehicle was that he had permitted its use by the person who was negligent, then Hewitt v. Bonvin was wrongly decided. There the son was permitted to use the car and it was held that the father was not responsible for the son's negligent driving as the son was not his servant or agent at the time.”

8. Lord Wilberforce put the true test(3) very simply -

"For I regard it as clear that in order to fix vicarious liability upon the owner of a car in such a case as the present it must be shown that the driver was using it for the owner's purposes, under delegation of a task or duty."

There is not the slightest suggestion in the evidence that Little Peter was driving that night for Mr. Kwong's purposes or under delegation of a task or duty. With every respect to the judge below, his conclusion was incorrect. We therefore allow the appeal and enter judgment for the Defendant.