SINO GENESIS MEDIA GROUP LTD v. LEE KOK WAI

DCCJ 3723/2019

[2021] HKDC 263

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 3723 OF 2019

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ASSESSMENT OF DAMAGES

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Introduction

1.  By an interlocutory judgment dated 29 October 2019, the defendant was adjudged to pay the plaintiff damages to be assessed and costs.

Plaintiff’s case

2.  Miss Candy Heung, who is the sole shareholder and director of the plaintiff, became acquainted with the defendant sometime in October 2018.  They began to discuss the possibility of entering into a business venture.  The defendant mentioned to Miss Heung his wish to buy a car but was unable to secure a hire-purchase loan due to his status as a Malaysian.  He requested Miss Heung to assist him to take out a hire-purchase loan which he would be fully responsible for the repayment.

3.  Miss Heung decided to use the plaintiff to buy a car of the defendant’s choice, ie a Toyota Alphard SC, which would then take out a hire-purchase loan from Hitachi Capital (Hong Kong) Limited.

4.  The loan was for the sum of $600,000 repayable by 60 monthly instalments of $11,375 each which would be deducted from the plaintiff’s account.  The 1^st instalment was to be made on 12 November 2018.

5.  It was agreed between Miss Heung and the defendant that the defendant would reimburse the plaintiff the instalment sum every month.

6.  The defendant had however failed to reimburse the plaintiff any of the instalments.

7.  In July 2019, the plaintiff regained control of the car and repaid the outstanding hire-purchase loan in the sum of $561,336.  The car was subsequently sold to one Compass Motors Company Limited in November 2019 for the sum of $200,000.

Assessment of damages

(a)  Instalment payments

8.  The plaintiff had paid 8 instalments in the total sum of $91,000 ($11,375 x 8) due to the defendant’s failure to honour his promise.  This I would allow.

(b)  Loss of value of the car

9.  It is the plaintiff’s case that it paid $561,336 to redeem the car which was however sold for $200,000 only thereby incurring a loss of $361,336.

10.  I have difficulty in accepting this.

11.  By the time the car was sold in November 2019, it was only 13 months old.  I am quite surprised that the value of the car had dropped to as little as 1/3 of its original price.

12.  According to Miss Heung, she instructed her assistant to sell the car without giving him or her specific instructions that the price so obtained had to commensurate with the current market value.

13.  I note that no tender was invited for the sale.  Nor is there any evidence produced as to the then market value of the car.

14.  To my mind, given the age of the car when it was sold, it is more likely than not that the selling price of $200,000 is below the then market value.

15.  I am of the view that the price the car to be sold should not be less than 60% of its original price, ie $360,000.

16.  Accordingly, I would allow $201,336 ($561,336 - $360,000) under this head.

(c)  Fixed penalty tickets

17.  There were 9 outstanding fixed penalty tickets incurred by the defendant in the total sum of $2,880 ($320 x 9).  The plaintiff settled the said outstanding in order to complete the sale of the car.  I would allow the claim under this head.

(d)  Petrol fee

18.  The plaintiff claims petrol fee in the sum of $1,000.  According to Miss Heung, her assistant filled up the tank before handing over the car to the new owner.

19.  It may be that the plaintiff had promised to deliver the car to the new owner with a full tank.  Nevertheless, this is a matter between the plaintiff and the new owner.  The defendant was not a party to such promise and therefore in no way liable for the costs of it.

20.  I do not think the plaintiff is entitled to claim this item.

(e)  Parking fee

21.  Miss Heung said between the time the plaintiff re-possessed the car in July 2019 and the sale thereof in November 2019, parking fee in the total sum of $600 was incurred.

22.  I do not think such parking fee is claimable for the simple reason that this was incurred during the time the car was under the control of the plaintiff.  The defendant had nothing to do with it at all.

(f)  Legal costs

23.  Miss Heung said the plaintiff had paid its legal representative $88,000 on legal fees.  According to the solicitors’ bill of costs, such fees include the works up to the preparation of the witness statement of Miss Heung.

24.  The matter of costs of this action is subject to this court’s assessment which will be dealt with in paragraphs 26 and 27 hereunder.

Conclusion and order

25.  By reasons of the above, I am satisfied that the plaintiff had suffered damages in the sum of $295,216 ($91,000 + $201,336 + $2,880) which the defendant is liable to pay.

Costs

26.  The plaintiff is entitled to costs of this action on a party and party basis and I would grant a certificate for counsel for this assessment of damages hearing.

27.  By summary assessment, I order the defendant to pay the plaintiff costs of this action including this assessment of damages hearing in the sum of $80,000.