PAN STAR LTD. v. ALMA CAR RENTAL LTD.

1989, No. A5024

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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ASSESSMENT OF DAMAGES

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1. The Plaintiff was the hirer of a Porsche sports car owned by the Defendant. By a Statement of Claim filed on 6th September 1989, the Plaintiff originally relied on an agreement in writing dated 3rd March 1989 ("First Agreement"). Under the First Agreement the Defendant was to hire a Porsche 911, 1988 model, to the Plaintiff for a period of one year at an annual rental of $90,000.00. The First Agreement was a hiring agreement simpliciter. A Porsche 911, of 1986 model, was delivered to the Plaintiff on 17th March 1989 after the Plaintiff had made an initial payment of $30,000.00. Wrongfully and in breach of agreement, the Defendant repossessed the vehicle on or about 28th June 1989. The Plaintiff proceeded to obtain judgment in default of a notice of intention to defend, on 19th October 1989, for damages to be assessed and costs. On 9th November 1989 leave was granted to the Plaintiff to adduce evidence at the assessment by way of affidavit. The Defendant was absent throughout the assessment.

2. On 14th November 1989, the Plaintiff relied solely on the affidavit of one Ted Pull, its director, filed on 10th November 1989. The Plaintiff's solicitor submitted that the Plaintiff, being unable to hire a comparable Porsche at the contractual rate offered by the Defendant, had purchased a Jaguar. The Plaintiff claimed damages, on the basis of the difference between the market hire of a similar sports car and the contractual hire, in the total sum of $202,000.00.

3. As the First Agreement was a hiring agreement only not a hire-purchase agreement, it was in law a bailment of the vehicle. I raised the point as to the effect, if any, of the purchase of the Jaguar on the alleged loss of the Plaintiff for the full unexpired period of the hire. The loss to a bailee of the vehicle is the loss of its use, not the actual value of the vehicle (see: Johnson v. Stears(1863) 75 C.B. (N.S.) 330, Brierly v. Kendall (1852) 17 Q.E. 937 and Chinery v. Vaill (1860) 5 H.N. 288). Would the acquisition of the Jaguar go to mitigate the loss of the use of a vehicle by the Plaintiff (which benefit should accrue to the Defendant)? As the Plaintiff's solicitor did not come prepared to address the Court on this point, I reserved judgment and gave liberty to the Plaintiff to submit further written submissions. A further written submission was received on 15th November 1989. I was referred to a passage in McGregor on Damages (para. 850 on page 543, 15th edition) and the case of Interoffice Telephones v. R. Freeman & Co. [1957] 3 All F.R. 479.

4. After further consideration of the said written submission I called for further submissions and information on the particulars relating to the purchase of the Jaguar.

5. On 15th December 1989 when the hearing resumed, the Defendant was still absent. The Plaintiff was granted leave to call Mr. Julian C.V. Pull to give evidence. It then transpired, when Mr. Pull gave evidence, that the First Agreement was in fact superceded by a subsequent agreement dated 6th March 1989 ("Second Agreement"). The Second Agreement was a hire-purchase agreement and not a simple hiring agreement. It provided for a lump sum hire of $40,000.00 for 12 months with an option to purchase at the price of $360,000.00 at the end of the year. Other main terms are similar to the First Agreement. In the event, the Plaintiff's claim took on a totally different basis. I noted that paragraph 4 of the original Statement of Claim referred to the existence of a second hiring agreement relating to a second vehicle hired by the Plaintiff from the Defendant at the same time. However, there is nothing before me to suggest that the Second Agreement produced by Mr. Pull (P.1) has anything to do with the second agreement disclosed in the said paragraph 4. I accept his oral testimony that the Second Agreement is a replacement of the First Agreement. Leave was granted to the Plaintiff to amend the Statement of Claim to substitute the Second Agreement for the First Agreement. The Amended Statement of Claim was filed out of time with the leave of the court on 2nd January 1990. In the amended pleadings, the Plaintiff claimed $140,000.00 as damages.

6. Mr. Pull said in evidence that the Porsche delivered to the Plaintiff would cost about $550,000.00 in the market. He said the total cost the Plaintiff would have to pay to acquire the said vehicle under the Second Agreement would be $360,000.00 plus a year's hire. However, he did mistakenly say the year's hire would be $90,000.00 (i.e. the hire under the First Agreement and not the Second Agreement). In the premises, he came to the erroneous conclusion that the damages the Plaintiff suffered should be $100,000.00 (i.e. $550,000.00 -[$360,000.00 + $90,000.00]). He said all along the Plaintiff intended to purchase the said vehicle. I accept his evidence. However, the proper loss to the Plaintiff ought to be $140,000.00 and not $100,000.00:-

7. In the premises, damages is to be awarded to the Plaintiff in the total sum of $140,000.00 with interest thereon at the judgment rate from 15th December 1989 until satisfaction. There will be no order as to the costs for the hearing on 14th November 1989 and for the amendment to the Statement of Claim which were unnecessarily wasted. Save as above excepted the Plaintiff is to get the costs of the assessment.

Dated this 3rd day of January, 1990.