AUDREY SMITH v. LUK CHI WAH AND OTHERS

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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JUDGMENT

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1. The Plaintiff, an aged lady ordinarily resident in England, is claiming against the Defendants   for damages in conversion, dentinue and negligence for the loss of her furniture, antiques and personal properties entrusted to the Defendants under a gratuitous bailment in March 1976. The Defendants are manufacturers and exporters of furniture and the Plaintiff was, prior to her departure from Hong Kong at the end of 1977/beginning of 1978, a customer of theirs.

2. The Defendants initially denied the existence of any bailment in their Defence. However, at the commencement of the trial their counsel conceded on their behalf the existence of a gratuitous bailment. The dispute has been narrowed down to the quantity and nature of the subject matters of the bailment. The Defendants also contend that the properties were damaged by floodwater from a typhoon in or about 1979, and subsequently by termites, and were thus disposed of by cremation. They say they were entitled to take the course of action as they did in the circumstances, and thus are not accountable to the Plaintiff for the return of the properties entrusted. They also rely on alleged contributory negligence on the part of the Plaintiff in failing to give proper instruction to the Defendants as to the disposal of the properties. Reliance is also placed on an allegation of waiver of proprietary right by the Plaintiff by reason of her inordinate delay in reclaiming the properties, a delay of some 12 or 13 years. Limitation is also being relied on in defence to the Claim for conversion. No reliance has been placed on the other rather vague allegations made in the Amended Defence.

3. The Plaintiff is the widow of the late Captain Smith, a former director of Cathay Pacific. Captain Smith was implicated in the Lockheed scandal in 1976 and disappeared from Hong Kong on the birthday of the Plaintiff in 1976. Before the revelation of the Lockheed scandal, the Smiths were living in leave flats awaiting to move into a company house in Kadoorie Avenue. At this juncture the Plaintiff was experiencing marital problems and went into separation. She lived in hotels and leave flats during that difficult period. She finally ended up living in the servant's quarter, of an unusually generous size of about 1,200 sq.ft., at 34 Braga Circuit, Kowloon. It was while she was staying with her friends, the Stockels, that the Lockheed scandal broke out.

4. The Plaintiff had all her furniture and belongings moved to her accommodation at Braga Circuit. Apparently her accommodation offered quite a lot of storage space, especially when she made use of part of a connecting garage. Whilst soughting out her marital problems with her late husband a list of furniture and properties were prepared by solicitors. Unfortunately, though a copy of this list was made available to and inspected by counsel for both parties it has not been shown to court nor produced. She said she had to move out due to the embarrassing circumstances and had nowhere to turn to for storage of her properties. She telephoned one Cheng Kwang Shin (D.W.1) a salesman of the Defendants from whom she had purchased a substantial quantity of furniture, as well as introduced considerable clientele to. She explained her predicament to D.W.1 who generously offered to provide storage for her properties. She said he then came around on a Sunday afternoon with 2 packers to pack and carried away all her properties in a lorry. She said it took them  considerable time, from about 3:00 p.m. to about 9:00 p.m., and the properties filled a lorry. She said she gave a copy of the list prepared by the solicitors to D.W.1 who accepted it as an inventory of the properties entrusted to him. She made additions to the list properties she had acquired since the preparation of that list.

5. She then left Hong Kong at the end of 1977 or beginning of 1978 in search of her late husband. This led her to Athens, and then Spain, where she found him very ill suffering from cancer. She took him back to England and nursed him until he died in 1985. During all this time they had been living in various accommodations e.g. guesthouses, hotels, rental units. She had to spend most of her time nursing her late husband. After his death she again moved accommodation several times until she settled down on a more permanent basis in 1988. She said she had no time, nor the storage space, to send for her properties during this very difficult period. She said before she left she had instructed D.W.1 to contact Mr. Fairbairn, her solicitors in Hong Kong and a customer of the Defendants through her introduction, or the Stockels, or the Cathay Pacific, with respect to any matter concerning her properties. She said in 1988 she, through Mr. Fairbairn, sent for her properties. When the properties did not arrive she came to Hong Kong in 1989.

6. After some initial demands and contacts with nil result, she went with her solicitor to the Defendants' factory at Aberdeen. She met D.W.1 there but D.W.1 denied knowing her. They then went around the place searching for her properties. They found a picture and tapestry which the Plaintiff recognised as her properties. Though D.W.1 refused to return them to the Plaintiff forthwith, they were ultimately returned to her. She was not able to retrieve any other items of her properties.

7. The Plaintiff was able to describe with detail some of her properties. Others she only managed to give generalised descriptions like "lots of table lamps and shades", chinaware made by "Wedgewood" and "Doulton", "Noritake" pottery etc. There are at least 53 items in her list of particulars of damages (P.1) she failed to recall totally in her evidence. The list of particulars of damages (P.1) was compiled from the list she prepared with her present solicitors in 1989, which was in turn based on the former list prepared by solicitors back in the 1970s. The Plaintiff called no other witness.

8. Cheng Kwang Shin (D.W.1), the sales manager of the Defendants, was a salesman in the late 1970s when he dealt with the Plaintiff. He was reluctant to agree that the Plaintiff was a good customer, and tried to play down their relationship. He said the Plaintiff telephoned him in March 1976 asking if she could store some furniture she bought from the Defendants for a short time as she was leaving Hong Kong. His understanding was that the furniture would be shipped to her not long after that. He denied offering to assist the Plaintiff or that he went to the Plaintiff's residence to pack the properties as she alleged. He said after his boss consented to her request, he told her they would store them for her for the time being and that she should give them her address for shipment once she has an address. He can't recall if they discussed about packing and delivery. He said later about 7 wooden boxes of various sizes were delivered to the Defendants' premises at Chatham Road. He said the boxes placed randomly occupied about half of their 300 sq.ft. storage area in the lightwell. He then described his unsuccessful attempts to try to contact her over the years by telephone, letters and visit by workers at the Plaintiff's old address. Then in about 1979 the Defendants' premises were flooded during a typhoon and the Plaintiff's boxes were soaked wet. As the boxes were made of wood the damage was "not too bad, only wet". The boxes were then removed to a rented premises nearby and placed on racks to dry.  Then they were removed and stored at the Aberdeen premises of the Defendants.

9. Kowk Chin Ho (D.W.2), a packing worker of the Defendants said there were about 10 old wooden boxes stored at the Defendant's premises at Aberdeen. The width of the boxes ranged from 5 to 6 inches to the size of the witness box. Some were about 70 odd inches high and 10 inches long. He said at that time the storage space, which was about 300 odd sq.ft., was filled by about 10 to 12 wooden boxes of the sizes of the old wooden boxes. He said on one occasion between 1982 to 1983 he found 1 of the 10 old wooden boxes came loose and saw "worms" falling out. After seeking instructions from D.W.1 he removed the box to the carpark for D.W.1's inspection. After prizing open a corner of the box, D.W.1 discovered the "worms" to be termites and instructed D.W.2 to remove all the boxes to the carpark for examination. D.W.2 removed 10 such old wooden boxes to the carpark and inspected each by prizing open a piece of wooden board. He was not able to see everything inside the boxes as he did not open up fully the boxes to inspect the full contents. After discovering the presence of termites in all the boxes he, upon the instruction of D.W.1, hired a lorry to remove the 10 boxes for cremation. He did not know personally what happened to the boxes after they were taken away in the lorry. Likewise, D.W.1 did not know the details of the contents of the boxes when he sought instruction from his boss with regard to the disposal of the boxes.

10. I have no hesitation in preferring the Plaintiff's evidence to that of D.W.1. I find the Plaintiff to be an honest witness who was trying her best to recall the events, and details of the very substantial amount of properties she entrusted to the Defendants, which cocurred some 15 years ago without the aid of any documents. When she could not recall she honestly told the court so. She said she keep on remembering things not included in her pleadings and gave a few examples. I do not find her to have exaggerated her claim at all. Cheng Kwang Shin (D.W.1) is a wholly unconvincing and unreliable witness. He alleged that he kept on trying a telephone number of the Plaintiff's (found in the old invoices); despite being told everytime either there was no such person or that they did not know the Plaintiff, and that on each occasion he was not really given the chance of making any further enquiry. He said despite the response he received when he called he still hoped that the Plaintiff would write to the residents at her old address to relay messages to the Defendants. He ultimately admitted, but only reluctantly under vigorous cross-examination, that he did not tell the Plaintiff about the 'truth' of the whereabouts of the properties when the Plaintiff went up to the Defendants' factory at Aberdeen in 1989. Despite the fact that he already knew about the Plaintiffs' case before the said visit, he claimed not to know the Plaintiff when she came. His inability to explain away the picture and tapestry found in the Defendants' factory in 1989 that had miraculously escaped cremation highlights again the improbability of his allegations that all the properties were cremated because of termite damage. Kwok Chin Ho's (D.W.2) evidence of the storage space occupied by the boxes is almost double that of D.W.1's description. Kwok Chin Ho initially said the contents of the boxes were furniture despite his evidence that he only prized open a board to peep inside. And then he said later on that he did not know what was inside. Upon clarification by the court, he ultimately reluctantly said he was not able to see everything that the boxes might contained. He is not a reliable witness either.

11. I find as facts that the Defendants, via their servants, had packed and taken away the Plaintiff's properties under a gratuitous bailment in March 1976. I refuse to accept the Defendants' case that they had tried to contact the Plaintiff for instructions as alleged. I find as a fact that the Plaintiff had left instructions with D.W.1 as to how they could contact her, and that the Defendants had failed to do so. I do not accept the allegations about termites and cremation of the properties. Even if the cremation story can be accepted, it would be a failure to discharge the duty of a bailee to cremate properties entrusted to him without finding out either the full extent of damage to each and every item, or even to ascertain the particulars or nature of the properties let alone compiling an inventory. As I have refused to accept the evidence of D.W.1 on the alleged attempts to seek instruction from the Plaintiff, the Defendants' allegation of waiver must fail as mere passage of time without more cannot be sufficient to support a claim for abandonment in the circumstances of the present case when the understanding was that the Plaintiff would bail the properties until she settles down. For the same reason, the claim for contributory negligence fails. As I do not accept the alleged cremation in 1982/1983, no reliance can be placed on limitation.

12. As to the precise particulars of properties deposited by the Plaintiff with the Defendants as the subject matter of the gratuitous bailment, it is unfortunate that the original list prepared in the 1970s (a copy of which containing some handwritten additions had been given to D.W.1) has not been produced, though available for production. However, I accept her evidence in respect of those items she can clearly described individually. As to those items she identified by more general descriptions, in view of the substantial storage space that the properties had taken up even on the Defendants' own case, I also accept that they have been proved sufficiently. Items 42, 50, 52 and 53 are admitted in the Amended Defence. In the premises, I find the properties forming the subject matter of the bailment to consist of  items 2, 3, 4, 6, 7, 8, 10, 11, 12, 13, 14, 18, 22, 23, 24, 25, 26, 27, 28, 30, 31, 32, 36, 37, 38, 39, 41, 42, 44, 45, 46, 48, 49, 50, 51, 52, 53, 54, 55, 56, 57, 58, 59, 60, 61, 62, 63, 65, 66, 67, 69, 70, 71, 72, 74, 81, 83, 84, 85, 86, 91, 92, 94, 95, 96, 101, 102, 105, 109, 110, 115, 124, 125, 126, 127, 128, 129, 133, 134, 135, 137, 140, 142. They also include the "gold serving dishes" under item 99, the "4 dishes" under item 100, the "1 small Jade vase with engraving of Tao Chi Mask, 1 Jade incense Burner on stand and 1 Lilac Jade Snuff Bottle" under item 113, the "Table Mats" under item 114, the "set of Manila Table Mats, set of Green Linen Mats and several sets of napkins and rings" under item 119, and one of the two "vase in Chinese Blue Colour" under item 139. All references to item numbers are to those to be found in P.1.

13. An order for separate trial of the issues of liability and quantum of damages was made at the trial. In the premises, interlocutory judgment is to be entered for the Plaintiff against the Defendants for damages to be assessed on the basis of the properties set out in this judgment and found to be the subject matter of the gratuitous bailment, with an order nisi for costs to the Plaintiff.

14. Dated this 13th day of November 1991.