XINYANG (HONG KONG) CO. LTD v. SINOMART TRANSPORT LTD

HCA 1753/2018

[2019] HKCFI 908

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1753 OF 2018

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D E C I SI O N

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1.  This is the application by the plaintiff (“P”) by summons dated 26 March 2019 for an order to issue a Writ of special delivery of certain specific goods (the “Subject Goods”) pursuant to Order 45, rule 4(2)(b).

2.  I have read the 2^nd affirmation of Wang Zhigang filed on 26 March 2019 in support of the application.  In gist, P is the owner of the Subject Goods which were, together with other goods, bailed by P with the defendant (“D”) for safe storage.  They were meant to be stored in a warehouse (the “Warehouse”).  Some of those bailed goods have subsequently gone missing.  According to the evidence before me, D had released them to other parties without P’s authority.  The Subject Goods are some of the residual goods that have remained in D’s possession.  On 27 July 2018, P took out a Writ of Summons for damages and return of, inter alia, the Subject Goods.  The Statement of Claim was filed on 5 December 2018.  D has not filed any defence.  On 22 February 2019, P obtained a Final and Interlocutory Judgment (the “Judgment”). It is adjudicated in §(3) thereof that:

“ [D] do deliver to [P] [inter alia the Subject Goods] or pay [P] the value of the said goods to be assessed.”

3.  P has not proceeded to have the value of the Subject Goods assessed.

4.  In the meantime, on 20 February 2019, P obtained a preservation order in respect the Subject Goods.  The application was triggered by the vacation by D from the Warehouse, and the resignation of its directors.  That Order was subsequently continued by Chow J on 1 March 2019.

5.  The present summons was issued pursuant to Order 45, rule 4(2)(b).  P seeks recovery of the Subject Goods without giving D the option of paying the assessed value, despite the fact that that option is allowed by the Judgment.  The draft order sought and attached to the summons is thus in the form of Appendix A, Form 64 (as opposed to Form 65).  P may so apply.  But following that route means that (1) the present summonsmust be served on D under Order 65, rule 4 notwithstanding Order 65, rule 9; and (2) the granting of the order sought is in the discretion of this Court.

6.  In so far as the issue of service is concerned, I have read the 5^th Affirmation of Chan Wai Ling dated 27 March 2019.  I am satisfied that the summons together with the evidence in support have been properly and effectively served upon D.

7.  On the question of discretion, I have considered Whiteley v Hilt[1918] 2 KB 808, where Swinfen Eady MR observed at page 819 that:

“ … the power vested in the Court to order the delivery up of a particular chattel is discretionary, and ought not to be exercised when the chattel is an ordinary article of commerce and of no special value or interest, and not alleged to be of any special value to the plaintiff, and where damages would fully compensate. In equity, where a plaintiff alleged and proved the money value of the chattel, it was not the practice of the Court to order its specific delivery ….”

8.  Mr Zimmern, counsel for P, submits that P seeks the return of the Subject Goods because damages will not be an adequate remedy.  He submits that D has all but ceased its business operations and is in the process of winding down.  D has never tendered nor is in the position to pay any damages to P.  The Subject Goods are valued at around US$1.77 million.  The Judgment has further adjudicated that D shall pay P other damages to be assessed, which are in the region of US$10 million.

9.  In one sense, damages could have been an adequate remedy if D were in the position to pay them.  But the evidence does suggest that D is financially inviable to pay the assessed value of the Subject Goods.  In that sense, refusing the application and giving D the option to pay damages will not be an adequate remedy for P.

10.  I note also the fact that the Subject Goods are in fact P’s property, and were only bailed to D for safe storage.

11.  In all the circumstances, I am persuaded that this is an appropriate case for this Court to exercise its discretion in favor of granting the order sought.

12.  I am also satisfied that the costs orders sought are justified. I am however not prepared to proceed to summary assessment now without D having been served the Statement(s) of Costs.  At the end of §4 of the summons, I add the directions that P be directed to serve on D the Statement(s) of Costs within 3 days from the date hereof, and for D to file its objections if any within 7 days of receipt.

13.  I grant the application and make an order in terms of the summons as amended.