Lee Yuk Ling Lucia v. Chan Kwok Chung t/a Chung Hing Motor Co.

CACV 302/1998

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 302 OF 1998

(On appeal from HCA 7975 of 1997)

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J U D G M E N T

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Godfrey, J.A. (giving the first judgment at the invitation of Nazareth, V-P) :

Introduction

1. This is an appeal from an order of Barnett, J. made on 27 October 1998. The action before the judge was an action for damages for conversion of a motor car. The plaintiff was the hirer of the motor car under a hire-purchase agreement; her fiancé, one Cheung Wing Chau, had bought the car for her use. The defendant was a motor repairer. He had received the car from the plaintiff for repair but, contending he had not been paid, refused to return it when asked to do so.

2. Mr. Cheung gave evidence before the judge. So did the defendant. The judge set out the evidence of Mr. Cheung and the evidence of the defendant.

3. The judge found the case "finely balanced". He came to the conclusion that :-

"..... on the balance of probabilities the Plaintiff has proved her case."

4. The judge having preferred the case for the plaintiff and having rejected the case for the defendant, the burden on the defendant in this appeal is a heavy one : he has to satisfy us that the judge was wrong to do so.

The case for the plaintiff

5. The case for the plaintiff was as follows. Towards the end of May 1996, the car, a BMW, presented with an over-heating problem. Mr. Cheung arranged for the car to be towed to the defendant's garage. He asked the defendant to repair the car and at the same time to obtain a Certificate of Roadworthiness. Eventually the defendant informed Mr. Cheung that the necessary Certificate had been obtained but he was still rectifying the over-heating problem and did not know how much repairs would cost.

6. In the middle of June, the defendant asked Mr. Cheung for $10,000 on account of parts repaired or renewed. Mr. Cheung paid this. The defendant then told Mr. Cheung that it was necessary to replace the car cylinder head. After some discussion, Mr. Cheung asked for this to be done by use of a second-hand part and was told that it would cost about $20,000.

7. In July, the defendant told Mr. Cheung that he had obtained a second-hand cylinder head and asked for another $10,000. The total cost was to be $20,000, and so Mr. Cheung paid another $5,000 on account.

8. After that, Mr. Cheung visited the defendant's garage regularly to check on the state of the repairs. But they had not been completed. The defendant gave Mr. Cheung a variety of excuses. Even though Mr. Cheung said that he needed the car for a wedding in September, the defendant failed to return it.

9. The car was re-licensed at the beginning of August.

10. Thereafter, Mr. Cheung visited the defendant's garage from time to time and would check the temperature. The defendant would switch on the engine and let the car run but the temperature gauge would go to the warning limit. Finally, in December, Mr. Cheung said he wanted the car back. But the defendant refused to let him have it. He said the car had been left with him for so long he had to make a charge for storage. He asked for $40,000, which would not include the $15,000 Mr. Cheung had already paid. There was an argument. Mr. Cheung left without the car.

11. He had no time to pursue the matter until much later, when he found the car was still in the garage. The defendant said that he had repaired the car but would not return it since Mr. Cheung had not paid. In due course, the plaintiff (who had kept up the hire-purchase payments) instituted these proceedings against the defendant for damages for conversion of the car.

The case for the defendant

12. The defendant's case was as follows. He said that, when the car was brought to his garage, Mr. Cheung asked how much the repairs would cost. The defendant quoted a price of $4,600 to $4,700 which Mr. Cheung accepted. But later it transpired that a new cylinder head was needed, which Mr. Cheung thought was too expensive. He decided to have the old cylinder head reground, but the problem was not cured. The defendant informed Mr. Cheung of this and it was agreed that the defendant should obtain a second-hand part. Then the problem was cured. By now, it was the end of May.

13. The defendant obtained a Certificate of Roadworthiness for the car, at the second attempt, on 4 June 1996. He called Mr. Cheung to tell him and to come and collect the Certificate. Mr. Cheung came and took the Certificate away so as to arrange insurance cover.

14. The defendant then worked out the cost of repairing the car. He prepared an invoice on 10 June 1996 in the sum of $36,735 but never sent the invoice to Mr. Cheung. He telephoned him to tell him the amount due. Mr. Cheung said this was rather expensive, so the defendant reduced the amount to $35,000, to which Mr. Cheung agreed.

15. The defendant next saw Mr. Cheung in June or July. Mr. Cheung paid him $10,000 and later a further $5,000. When the defendant pressed for the balance, Mr. Cheung told him that he would leave that matter to be dealt with after the vehicle licence was renewed.

16. In August, Mr. Cheung brought the new vehicle licence for the car. At the same time, the defendant started the car and demonstrated it to Mr. Cheung, who said he would pay the balance in a few days.

17. The defendant asked Mr. Cheung when he would take the car. Mr. Cheung said he would take it a few days later. He did not return until December. In the meantime, the defendant was unable to find him.

18. In December, Mr. Cheung suddenly appeared. The defendant asked him why he had not come for so long. The defendant told Mr. Cheung that because the car had been left with him for a few months, he had to charge Mr. Cheung for storage. He said Mr. Cheung owed him $40,000 for the outstanding balance and for storage. But Mr. Cheung simply left. The defendant continued to store the car.

The judgment below

19. The judge, having recited them both, said this :-

"The two accounts of what occurred are irreconcilable."

20. He then drew attention to the inherent probabilities. There was no helpful contemporaneous documentary evidence. The judge had to decide whose case to prefer.

21. As I indicated at the outset of this judgment, he came to the conclusion that, on the balance of probabilities, the plaintiff's case was to be preferred, for he held that the plaintiff had proved her case. He referred to the following matters in support of his conclusion :-

"I cannot accept that the Plaintiff and Mr. Cheung would have deprived themselves of the use of a serviceable car, for which they had parking space available, for the sake of $20,000.00 when there was nothing to suggest that they were unable to find the money. Quite the contrary. The fact that they went on to discharge the hire purchase payments speaks for itself. If they had been prepared effectively to abandon the car for the sake of $20,000.00, it seems likely that they would also have abandoned the hire purchase agreement."

22. So the plaintiff succeeded and the judge made an award of damages in her favour accordingly.

The defendant's case on the appeal

23. So far as liability is concerned, it is said for the defendant that the factors which the judge referred to in supporting his conclusion that the plaintiff had proved her case were irrelevant factors. It is said that he should not have taken these factors, all of which were subsequent to the original agreement for repair of the car, into account. Evidence of these factors was, it was said, inadmissible. But all this seems to me to be wholly misconceived. These were factors which went to the credibility of the plaintiff and Mr. Cheung. They support the judge's conclusion that the plaintiff's case was more probable than that of the defendant. We are not concerned here with the interpretation of a written contract, but with the inherent probabilities of the case.

24. In my judgment, these factors were factors the judge was entitled to take into account. He cannot be faulted for having done so.

25. Then it was said that the car, on the judge's own findings, had been repaired and therefore it followed that the defendant had a lien on the car and was entitled to the storage charges he had claimed. These arguments were based on the fact that at one point in his judgment, the judge had said this (in relation to the test for roadworthiness) :-

"While it is true that the test for roadworthiness does not include a check on overheating, the fact that the Defendant was able to take the car to the testing station on two occasions is at least an indication that it had been repaired satisfactorily."

26. This was a statement of the judge which, I would accept, pointed to a conclusion in favour of the defendant; but it was not a finding of fact. In the end, it was not sufficient to outweigh those indications which the judge found pointed to a conclusion in favour of the plaintiff's case. The judge ultimately found as a fact that the repairs were never carried out satisfactorily. So there is nothing in this point.

27. So far as damages are concerned, a point was taken before us as to the amount which the judge awarded. The car had been valued in June 1995 at $168,000. The judge took a value of $120,000 as its value approximately 18 months later, in December 1996, when the defendant refused to return the car. Allowance should have been made, it is said, for the fact that the plaintiff had only a limited interest in the car.

28. I find nothing wrong with the judge's conclusion that, subject to payment of the outstanding balance under the hire purchase agreement, the plaintiff was entitled to the whole car and was accordingly entitled to the whole value thereof by way of damages for the conversion. The defendant was not entitled to set up the interest of the hire-purchase company in the car in diminution of the plaintiff's damages.

29. The last point made by the appellant was that the judge ought not to have awarded $15,000 to the plaintiff in respect of the sum he had paid towards the cost of the repairs. But, since the judge had found these were never carried out satisfactorily, there had been a total failure of consideration in that connection. The judge's decision that the sum of $15,000 should therefore be repaid also cannot therefore be faulted.

Result

30. There being nothing in any of the points taken in support of this appeal, I would dismiss it.

Liu, J.A. :

31. I agree.

Nazareth, V-P:

32. I also agree.

33. The only matter upon which I wish to add something is the point that Mr Chun made in dealing with the order to repay $15,000. He complained that the judge, at p.23 of his judgment, in valuing the car at $120,000 for the purpose of the claim, took its repaired value, i.e. its value in working order, while at the same time ordering the defendant to repay the $15,000 paid as the cost of repairs, to be refunded. The short answer to this point is that the judge did not so value the car. That is clear from the finding the judge made only a few lines earlier in the paragraph at G-M of p.23 where he accepted the plaintiff's evidence and found on the balance of probability that the plaintiff had proved her case.

34. The appeal is accordingly dismissed.