SZE WAI SHUN AND ANOTHER v. HYDRO-KLEEN PROFESSIONAL CAR CARE LTD

DCCJ7909/2002

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 7909 OF 2002

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J U D G M E N T

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1. The plaintiffs' claim against the defendant for damage caused to a private car. The 1st plaintiff is the registered owner of the car and the 2nd plaintiff is the beneficial owner.

2. The plaintiffs claim that the car was sent by the 2nd plaintiff to the defendant's garage for repair. After the repair was effected, the mechanic of the defendant, one Law Kwok-chung drove the car for a test drive and damaged it in a traffic accident.

3. The plaintiffs have called four witnesses to prove their case.

4. The 1st plaintiff gave evidence that he was the registered owner of the car, holding it for the use and benefit of the 2nd plaintiff. It was the 2nd plaintiff who paid the purchase price by part-payment and hire purchase instalments. Insurance premium, registration fees and repair costs were all paid by the 2nd plaintiff.

5. The 2nd plaintiff also gave evidence that the 1st plaintiff only purchased the vehicle on his behalf as he had obtained a driving licence shortly before the car was purchased and he, being a newly qualified driver, could not obtain an insurance policy. He therefore asked the 1st plaintiff to purchase the car in the 1st plaintiff's name but on his behalf. He also confirmed that he had paid the purchase price by part-payment and by hire purchase instalments. The insurance premium, registration, fees and repair costs were all paid by him. Since he was the true owner, the car was used by him and not by the 1st plaintiff.

6. He said in his witness statement that he used to deliver vehicles to the defendant's garage for services and repair since May 2002. He then came to know the defendant's supervisor, Mr Tam Wai-kuen, and the mechanic, Mr Law Kwok-chung. He bought the car in question on 8 August 2002 and spent $10,000 with the defendant on 22 August for repair and replacement of certain spare parts.

7. On 19 October 2002, he telephoned the defendant and asked Mr Law to replace certain parts and make some adjustments to the suspension system of the car. The price was agreed at $1,200. He then delivered the car to the defendant's garage on 20 October 2002 pursuant to the agreement.

8. When he arrived at the defendant's place, Mr Law was not there and he asked an apprentice, Mr Lau Cheuk-leung to relay to Law that Law was required to repair the suspension system. According to Tsang, Law was the only mechanic at the defendant's garage.

9. On 21 October 2002, Tam Wai-kuen telephoned the 2nd plaintiff and said that Law had damaged his car in a test drive and told him to make a claim on his insurer. He then approached the police and got the car back. It was beyond repair and he could not have made a claim on his insurer because there was no coverage in the event of a test drive.

10. He procured the release of the vehicle by the police on 11 November and towed it to a garage for storage in Yuen Long. The towing fee including all the tools and implements was $1,500. He then engaged a surveyor to survey the car on the next day, and the surveyor confirmed that the car was beyond repair. The surveyor's report of 19 November 2002 stated that the car had sustained severe damage to various parts and it was regarded as a total loss with costs of repair exceeding the value before the damage.

11. Regarding the insurance, it could have been transferred to another vehicle but the 2nd plaintiff had not purchased a replacement vehicle and thus the insurance policy expired without having been transferred to any other vehicle.

12. The 2nd plaintiff said that it would have taken about 3 months for him to purchase a comparable car as the one damaged was not commonly available in Hong Kong and there was no authorised dealer for this particular model. He also had to pay up the instalments of the hire purchase agreement.

13. Regarding the car, he had caused some parts to be taken off for his own use. The cost for taking off those parts was $200 and the value of those parts that were retained was at about $600. He also received about $200 as scrap value for the car, whilst the surveyor had put the scrap value at $500 to $1,000.

14. The 2nd plaintiff was firm that he had delivered the car to the defendant for repair and there was no private agreement between him and the mechanic Law Kwok-chung under which the car was delivered.

15. The plaintiffs' third witness was the mechanic, Law Kwok-chung. He adopted his witness statement as his evidence. He was the mechanic of the defendant. He confirmed that the defendant had completed a job of repair and replacement of spare parts for the car at $10,000 in August 2002. He also confirmed that the car was delivered to the defendant for him to effect some repair and adjustment to the suspension system at an agreed price of $1,200. When the car was delivered to the defendant's garage by Tsang, he was not there and the apprentice Lau took the message from Tsang and told Lau that the car had been delivered to the defendant for repair.

16. Law further denied that there was any private arrangement between him and Tsang, and insisted that the car was delivered by Tsang to the defendant for repair. Law further admitted that he had damaged the car in a test drive in the small hours of 21 October 2002, after he had effected the repairs.

17. The plaintiff also called the apprentice, Lau Cheuk-leung, to give evidence. Lau confirmed that the car was delivered by Tsang to the defendant's garage on 20 October 2002 for repair. Law was not there at the time and Tsang asked him to relay to Law to repair the car. Lau duly telephoned Law and Law came back to effect the repair. At about 11 pm that night, Law asked Lau to go for a test drive of the car and Lau followed Law. The car was damaged by Law in the course of the test drive.

18. In the pleadings, the defendant alleged that the car was delivered by Tsang to Law under a private arrangement and not delivered to the defendant for repair, as alleged by the plaintiffs. The defendant, however, has not appeared at the trial.

19. Having heard the evidence proffered by the plaintiffs and considered the documents produced in the plaintiffs' bundle, I accept the evidence of the plaintiffs' witnesses and find that the car was delivered by Tsang to the defendant's garage for repair. The defendant was thus the bailee of the vehicle. It was then damaged by the defendant's employee Law when he took the car for a test drive. The defendant is thus responsible for the loss and damage.

20. On the question of quantum, I agree that the defendant should pay the plaintiffs $140,000 for the value of the car before the damage. The surveyor's report says that the value of the car before the accident was between $130,000 to $140,000, depending on its mechanical condition. Since the car was only purchased on 8 August 2002 at $168,000 and $10,000 had been spent on 22 August for the repair and replacement of spare parts, I find that the car should be in good condition. I therefore take the value of $140,000 as the car's value immediately before the accident.

21. I also allow the fee charged by the surveyor at $900 for the survey of the vehicle and the compilation of the report.

22. The towage fee at $1,500 is also reasonable and should be paid in full by the defendant. It was a necessary expenditure.

23. Regarding the storage fee of $2,000 a month, I find that there did not appear to be the need for storage of the vehicle for a whole month and daily parking was available at many places in the New Territories at the material time. Furthermore, the surveyor came to survey the vehicle on the next day after the car was towed to Yuen Long. However, the surveyor's report was not available until 19 November, and it is difficult to say whether it was unreasonable for the 2nd plaintiff to have committed to a monthly storage arrangement. I therefore reluctantly allow this sum of $2,000 in full.

24. Regarding the $200 for taking off the useful parts from the car before it was scrapped, I would allow it in full.

25. For the loss of premium, although the insurance policy could have been transferred to another vehicle if the 2nd plaintiff should have decided to purchase a replacement, however, the 2nd plaintiff was not obliged to do so and his failure to purchase a replacement and to have the insurance policy transferred is not a failure to mitigate the loss and damage. Furthermore, even if he should have purchased another vehicle, if it were a second-hand vehicle, it might come with some insurance. I therefore would allow the loss of the insurance premium for the remaining 10 months in full; that is in the sum of $11,305 as claimed in the re-amended statement of claim.

26. For the loss of use of the vehicle, the 2nd plaintiff said that he had resorted to taxi for the period from 12 November 2002 to 4 December 2002 in the sum of $598.40. The taxi receipts were produced. He said that he did not use a taxi any more after that period as he did not think it right to ask the defendant to pay his taxi fare for, for example, a year if he should fail to buy a replacement for a year. I allow this sum in full as it covered only a short period and is reasonable. If the taxi fares should have covered a longer period, I might not have allowed it in full as the car had been surveyed to be a total loss in the survey report dated 19 November 2002.

27. On the hire purchase interest payable under the hire purchase agreement, I do not think the defendant is liable for this as it is not part of the value of the car. Hire purchase is just one of the ways and means for the 2nd plaintiff to acquire the car. The defendant is only liable to pay for the value of the car and is not liable, without more, to pay for the additional financing cost for the acquisition. Let us say if the 2nd plaintiff should have sold the car just before the accident for $140,000, he would still have to pay the hire purchase instalments after the car has been sold.

28. On the loss of the registration fee, the plaintiffs have conceded that if refund should have been applied for, the government would have returned a quarter of the registration fee paid. Taking that into account and thus disallowing the same from the amount claimed by the plaintiff, I would allow $2,313 under this head.

29. Regarding the costs of improvement incurred in August 2002 for the repair and replacement of some spare parts, that improvement has already been assessed and reflected in the value of the car before the accident and I would not allow it for the second time.

30. I would also deduct $600 for the value of the parts taken away by the 2nd plaintiff and $750 for the scrap value. Although the 2nd plaintiff said that he had received only $200 for the scrap value, the survey report put the scrap value at $500 to $1,000 and I choose the middle figure.

31. The net sum payable by the defendant is therefore $157,466.40. I also allow interest at the judgment rate from the date of the writ to the date of payment, and I further order that the defendant should pay the costs of the action to the plaintiffs.