AVCO FINANCIAL SERVICES (ASIA) LTD v. MAN SHU FAT

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

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ASSESSMENT OF DAMAGES

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1. The plaintiff leased a Volvo motorcar bearing registration number CB3999 to the defendant under a Lease Agreement dated 7.4.95. Under that Lease Agreement the defendant was required, inter alia, to pay 43 monthly payments of $9281 on the 7^th day of each month for the duration of the Lease Agreement.

2. The defendant failed to make payments on the payment installments due on 7.10.97 and 7.11.97. Consequently pursuant to clause 9 (a) of the Lease Agreement, the plaintiff gave written notice to the defendant terminating the agreement and demanding the sum of $129,934 the total sum said to be in arrears.

3. The defendant failed to give notice of intention to defend this action. On 13.1.98. the plaintiff obtained Final and Interlocutory Judgment against the defendant in the sum of $12,139.55 with interest, and costs on full indemnity basis. In that judgment credit was given for the sum of $9281 paid in by the defendant on 8.12.97. Assessment of quantum of damages was adjourned to a date to be fixed.

4. At the hearing of the assessment of damages, the plaintiff called its Assistant Manager Mr Chan Tak Chuen to give evidence on quantum. Mr Chan was given leave to adopt the contents of his affirmation filed on 16.1.98. as his evidence-in-chief.

5. Mr Chan told the Court that to date the Volvo motorcar has not been repossessed.

6. When queried on computation of the sum of $4372.97 interest rebate in paragraph 12 of his affirmation, Mr Chan explained that that figure was calculated by using the so-called "Rule of 78", and adduced in support of that figure a computer printout, Exh Pl.

7. I explained to Mr Chan that the Court was under a duty to assess the damages and to ensure that the defendant is only liable to pay what is found to be a reasonable. Mr Chan was asked to calculate the interest rebate in order to satisfy the Court that the sum claimed ought to be allowed. Mr Chan did so in Court and came to a slightly higher figure of $5159.28. He explained that it was his personal practice to calculate the interest rebate from the date the "issue demand letter" was sent out by the bank. I decided to adopt Mr Chan's method of computing the interest rebate as it was more favourable to the defendant.

8. I considered all the others items claimed and was satisfied they were reasonable.

9. I accepted Mr Chan's evidence and found :-

a.	the agreement was terminated as a result of the defendant's breach
b.	written notice of termination was sent to the defendant on 24.11.97
c.	the quantum of damages to be $111,372 less $5159.28 = $106,212.72.
d.	the sum of $37,124 which the defendant had paid in on 5.2.98 should be deducted from the figure of $106,212.72, leaving a sum of $69,088.72.

10. I therefore give judgment to the plaintiff against the defendant in the sum of $69,088.72 with interest at judgment rate from the date of the writ until payment, together with costs on full indemnity basis pursuant to clause 4(m) of the Lease Agreement.