CHUN FU TRANSPORTATION LTD v. WONG WAN KAU

DCCJ4339/2006

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 4339 OF 2006

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J U D G M E N T

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1.  This is an assessment of damages.  The plaintiff by a writ of summons dated 1 September 2006 claims against the defendant the sum of HK$314,975.90, being costs and damages incurred as a result of the traffic accident occurred on 17 August 2004 due to the negligence of the defendant.  As there is no notice of intention to defend the plaintiff’s claims filed by the defendant, the plaintiff obtained interlocutory judgment on 19 October 2006 with damages to be assessed.  Thereafter, the defendant has been served by the plaintiff the notice of the present hearing of the assessment of damages.

2.  In today’s hearing, the plaintiff is represented by Mr K S Tsui, solicitor, and called one witness, Mr Chan Kai-so, the manager of the plaintiff.  The defendant is absent throughout the hearing.

3.  This morning, Mr Tsui has carefully taken me through the item by item all the particulars of the actual costs incurred by the plaintiff as set out in Mr Chan’s statement.  I noted that the total amount claimed in Mr Chan’s statement is larger than the original amount as appeared in the statement of claim.  After clarification and further instruction was sought, Mr Tsui informed me that the plaintiff will not seek leave to amend the figure but will claim on the basis as claimed in the original statement of claim.

Background

4.  The present case was revolving around a cooperation agreement made between the plaintiff and the defendant dated 31 March 2004.  According to the statement of claim, the defendant was one of the self-employed independent subcontractors to the plaintiff who undertook the carriage and/or transportation of the container cargoes within Hong Kong, and the plaintiff is a company responsible for the logistics and the transportation of carriage and the cargoes.  The agreement is produced  and marked Exhibit 1. 

5.  On 17 August 2004, the defendant took delivery of the cargo from the plaintiff’s container depot at Ping Che Road, Fan Ling, and undertook the carriage of the same by road on board of a tractor (registration number KN 3161) and trailer (registration number 200360T), (“the vehicle”) from Fan Ling to the container terminal in Hong Kong.  The vehicles, however, were later involved in an accident at Tai Po Road junction with Ching Cheung Road, (“the accident”) during the course of a carriage, causing severe damage to the cargo and the container as well as the vehicles, the latter being belonged to the plaintiff.

6.  Before the accident, the vehicles were officially examined and had passed all the overall examination evaluation on 27 March 2004 and 11 September 2003.  The relevant vehicle examination report has been produced and marked Exhibit 2.  It was noted in particular that the braking system of the vehicles in question was passed and was reported as “no defects”. 

7.  As a result of the accident, the defendant was later prosecuted by the Hong Kong Police for not maintaining and/or applying a proper brake system, contrary to the Road Traffic (Construction and Maintenance of Vehicles) Regulations, Regulation 5(4) and Regulation 121(1) under summons No. KCS3283/2005 and was convicted and fined $600 after the defendant had pleaded guilty by letter in writing dated 19 February 2005.  The relevant summons and also the plea-of-guilty letter were also produced and marked Exhibit 3.

8.  It is the plaintiff’s case that the defendant was driving too fast in all the circumstances and the accident was therefore solely caused by the negligence and/or the breach of agreement and/or the breach of duties as a bailee and/or duties of the defendant, its servants or agents.

9.  As interlocutory judgment has been entered against the defendant, I therefore do not have to decide on the issue of liability and my task here is to assess the damages as claimed by the plaintiff, and I shall now examine the particulars of the actual costs of claim claimed one by one in the order as stated in the statement of claim:

(1)  Claim for the Repair Costs of the Damaged Vehicle Parapet Wheel from the Highways Department

10.  According to paragraph 10 of Mr Chan’s statement, as a result of the accident, the plaintiff had received a claim from the Hong Kong Highways Department demanding for a sum of HK$106,520, being the repair costs of the damaged vehicle parapet wheel of the flyover.  The relevant demand note issued by the Highways’ structures department is also produced as Exhibit No. 8.

11.  The plaintiff’s insurers, the Pacific Insurance Company Limited, declined to pay the full amount of the repair costs and instructed their agent, Toplis & Harding (Case Management) Limited, (“the agent”) to inform the plaintiff that they were only prepared to pay 45 % of the repair costs demanded by the Highways Department, that is, HK$43,434.40, and that the plaintiff was required to be responsible for the full balance of the repair cost which was HK$6,386.50.  The plaintiff then drew out a cheque for the same amount made payable to the Hong Kong Government SAR to settle the balance of the repair costs. 

12.  The relevant letter from the agent to the plaintiff, dated 12 August 2005, was produced (Exhibit 9) and also the copy of the cheque drawn by the plaintiff made payable to the Hong Kong SAR Government, ( Exhibit 10), and the copy letter dated 22 September 2005 from the agent to the Highways Department, (Exhibit 11), were all produced.  Finally, there was produced to me a copy letter dated 4 October 2005 from the Highways Department, acknowledging the receipt of the two cheques in settlement of their claim, (Exhibit 12).

13.  After studying all these documents and hearing the witness in particular, I am satisfied that on the evidence before me that the plaintiff is entitled to claim the defendant this whole sum of $106,520.  Although here the insurance underwriter had paid out 45 % of the repair costs, that is $43,434.40, as explained by Mr Tsui in his submission, the plaintiff is obliged to claim back from the defendant the full amount and is obliged to pay back to the underwriter should it succeed in its claim.  The defendant, according to Mr Tsui’s submission, should not be benefited and be better off and took advantage of the insurance taken out by the plaintiff.  This I agree.

(2)  Compensation to the Shipping Company for Damage to the Container

14.  The claim under this head is for $12,395.  According to Mr Chan, the plaintiff was required to pay the shipping company compensation of the container which was badly damaged in the incident.  According to him, a copy of the invoice in the same amount was produced, which is issued by the shipping company, Lloyd Triestino Pacific Limited.  The document was marked Exhibit 15.  I am satisfied, after looking at the document, that the plaintiff had actually incurred the sum as claimed under this head.

(3) Compensation to Owners for the Loss of Cargo

15.  According to paragraphs 8 and 9 of Mr Chan’s statement, as a result of the accident due to the negligence of the defendant, the plaintiff incurred costs and expenses and has suffered loss and damage.  The plaintiff was sued by the cargo owners in the District Court under DCCJ No. 2286 of 2005 as the 1st and 3rd defendants and was required to pay compensation for the loss of the cargo in the sum of Euro 9,271.85.  There is a copy of the amended statement of claim against the 1st and the 3rd defendants filed on 5 September 2005 and the document was marked Exhibit 4 and was produced.

16.  The plaintiff then appointed Messrs Tsui & Company to defend the matter, and a copy of defence was actually filed on 27 July 2005 and was marked Exhibit 5. 

17.  After negotiation between the parties, the cargo owners finally agreed to accept HK$47,000 in full and final settlement of their claim against the 3rd defendant under DCCJ No. 2286 of 2005, the plaintiff hereof.  The copy of the sealed order dated 29 September 2005 made by W K Kwok DJ was marked as Exhibit 6 and was produced. 

18.  In this case, the plaintiff incurred legal costs in the sum of HK$43,060 in order to settle the matter with the cargo owner.  There was also produced in court a letter from Messrs Tsui & Co. enclosing their invoice number 80236 and was marked Exhibit 7 which was a letter dated 22 September 2005.

19.  Again, as on the evidence before me, after looking at all the documents and hearing the witness, I am satisfied that the plaintiff has truly incurred the costs of this $47,000 as full and final settlement with the claim by the cargo owners of the loss of the cargo.

(4)  The Damage to the Tractor and the Chassis and Trailer

20.  The damage under this head is said to be HK$100,000.  Paragraph 11 of Mr Chan’s statement states that after the accident, the vehicles were beyond repair and were required to be demolished.  There was produced to me copies of the certificates of demolition for the vehicles, both dated 23 August 2004 issued by one Lick Shing Auto Parts Limited together with the notice of cancellation of vehicle registration which were produced and marked Exhibit 13.

21.  The plaintiff then had arranged for a valuation of the vehicles in order to evaluate its loss.  There was also produced in court a copy of the assessment of valuation of the vehicle in the total sum of $100,000 issued by one Tung Lee Garage as at 25 August 2004, which was marked Exhibit 14.

22.  Concerning this valuation, enquiry has actually been made by Mr Chan to the garage.  Mr Chan, when testifying in court, said that according to his result of the telephone enquiry, one Mr Choi of the garage had informed him that the present figure was actually based on the ongoing market value at that time of a second-hand tractor and trailer back in 2004.  According to Mr Chan, the tractor was actually over 10 years old while the trailer was 4 to 5 years old.  The value for a new tractor and the trailer was said to be $500,000 and $80,000, respectively. 

23.  Taking into account of the factor of depreciation and also in the absence of any challenge from the defence, I am satisfied that the total amount now claimed by the plaintiff represents the true market value of the tractor and the trailer back in 2004.

(5)  Miscellaneous Expenses

24.  The miscellaneous expenses as claimed in the particulars of claim in the statement of claim were in the sum of $6,000.  Upon clarifications, this $6,000 represented the sum incurred by the plaintiff to engage a crane and eight workers to clear the cargoes as scattered around in the accident scene after the accident and also the fees involved in collecting the same and deliver the cargo back to the plaintiff’s container depot in Fan Ling.  The sum as appeared now in the invoice is $6,000.  Mr Chan’s evidence was that the money has already been paid by cash to the transportation company concerned upon the delivery of the cargo.  I accept Mr Chan’s evidence.

(6)  Legal Costs and Expenses Incurred to Defend the Claim by the Owner of the Cargo

25.  This is actually in relation to the legal proceedings about the compensation claimed by the owners of the loss of cargo under the previous headings.  In paragraph 8 and 9 of Mr Chan’s statement, reference has already been made to the legal costs incurred by the plaintiff in order to settle the matter with the cargo owner. 

26.  I am satisfied that the amount as stated in the invoice by Messrs Tsui & Company to the plaintiff had represented a reasonable legal cost that was incurred by the plaintiff in defending its claim by the cargo owners.  I note that the original sum claimed was in Euro 9,271.85 which was the equivalent of more than HK$100,000.  Numerous pre-settlement talks and letters have been exchanged between solicitors for both parties, resulting in the reaching of a full and final settlement.  I am satisfied here that on the evidence before me, the sum claimed under this head represents the reasonable costs of action by the cargo owner against the plaintiff, which was also reasonably defended, and the costs incurred therefore should be recoverable as being damages which might reasonably be supposed to have been in contemplation of the parties at the time when they made the contract as the probable result of the breach of it.

Findings

27.  Indeed, after examining the particulars of the damages as itemised (1) to (6) in the statement of claim, I am satisfied that they are all supported by documents and/or the evidence from Mr Chan.  In the absence of any challenge by the defence and also on the balance of probabilities, I find that all these items as now claimed are all actual costs incurred by the plaintiff as a result of the negligence of the defendant.  Such being the case, these are all damages that were reasonably and supposed to have been in contemplation of the defendant at the time when he entered into the cooperation agreement with the plaintiff as the possible result of a breach of it.

28.  Lastly, under clause 6 of the cooperation agreement, Exhibit 1, in (a) to (c), there is a clause in relation to apportionment of liability provided.  However, in my judgment, since no defence is ever filed by the defendant in the present proceedings and the issue of apportionment of liability has never been pleaded and raised, it was not warranted to be considered in the assessment-of-damages stage now that especially interlocutory judgment of liability has already been entered against the defendant.

29.  Alternatively, under clause 12 of the same cooperation agreement, it also provided that the defendant should observe and comply fully with all the laws in Hong Kong.  If there is any contravention of the law, the defendant, according to the clause, should bear all the responsibility and to compensate the loss incurred by the plaintiff as a result.

30.  The plaintiff now relied on the clause 12 and pointed out that the defendant had by a letter pleaded guilty to the traffic summons, KCS3283/2005.  The summons alleged that the defendant had committed an offence of “failing to maintain that every part of the braking system of the tractor or trailer be maintained in good and efficient working order and be properly adjusted”.  Defendant had, as I said, on 19 February 2005 already pleaded guilty to the court by a letter and was fined $600.

31.  Mr Chan testified that since the cooperation agreement was signed on 31 March 2004, the defendant has been placed solely in charge of the tractor and the trailer.  It is up to the defendant to inform the plaintiff that the braking system will need to be examined or repaired if there is such a need.  According to Mr Chan, however, the defendant had never brought the plaintiff’s attention to the working order of the braking system of the tractor and the trailer in question.  Clearly, according to the plaintiff, the defendant was in breach of the relevant Road Traffic Regulations under Cap. 374 of the Laws of Hong Kong which, in my judgment, is also relevant to the performance of the cooperation agreement with the plaintiff.

32.  Based on the above two reasons, I find that the defendant is wholly liable to the total amount of $314,975.90 as claimed by the plaintiff.

Order

33.  Upon hearing the submissions by the solicitor for the plaintiff, the evidence of Mr Chan, and in the absence of the defendant, I therefore make the following order.  I assess the defendant do pay the plaintiff the said sum of HK$314,975.90 and also interest on the said sum on half of the judgment rate from the date of the writ to the date of the judgment and thereafter at the judgment rate until payment. 

34.  There is no reason why costs should not follow event.  I grant a costs order nisi that the defendant do pay the costs of the present proceedings and to be taxed if not agreed.