ZHANG YAN v. VIP WATCH JEWELLERY CO LTD

DCCJ 2131/2017

[2019] HKDC 404

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 2131 OF 2017

--------------------

BETWEEN

--------------------

--------------------

JUDGMENT

--------------------

1.  This is a claim for conversion of a male Audemars Piguet watch (“the Watch”).

2.  The defendant operated a shop in Tsimshatsui (“the Shop”) selling watches.  On 30 August 2016, the plaintiff and Mr Ching Chi Wai (“Mr Ching”) went to the Shop. The Watch was purchased from the Shop at a price of HK$115,000 (RMB99,337.03).

3.  On 12 December 2016, the plaintiff, Mr Ching and his mother visited the Shop, left the Watch there in order to obtain a quotation for polishing service. That evening, Mr Ching instructed the defendant not to proceed with the intended polishing service. He went to the Shop the next day, 13 December 2016, and collected the Watch from the defendant.

4.  The plaintiff claimed that she is the owner and/or bailor of the Watch, and the defendant, who had passed the Watch to Mr Ching, is liable for conversion of the Watch.

5.  The tort of conversion is committed when a person interferes with the possessory title of a claimant and causes harm and injury to the claimant’s right or title. 

6.  The plaintiff has to first establish her ownership and/or possessory rights over the Watch. The circumstances under which the Watch was purchased on 30 August 2016 and the circumstances under which the Watch was left with the Shop on 12 December 2016 are relevant.

Witnesses

7.  The plaintiff was the only witness testified for her case at trial.  The witnesses testified for the defendant were two of its staffs, Mr Tse, a manager, and Mr Fong, a senior sales staff.

8.  In assessing the credibility of a party’s case, the court shall take heed of the following factors:-

(1) the importance of contemporaneous written documents;

(2) the inherent plausibility or implausibility of an event having happened, or the apparent logic of the events;

(3) the extent to which the oral testimony of a witness was supported or contradicted by the other undisputed or indisputable evidence (documentary or otherwise);

(4) the internal consistency or inconsistency of a party’s case and/or a witness’s evidence;

(5) the demeanour of the witnesses, with the caution against the dangers of too readily drawing conclusions about the truthfulness and reliability solely or mainly from the appearance of witnesses.

[Hui Cheung Fai v Daiwa Development Ltd HCA 1734/2009, unreported, 8 April 2014 §§77-80; Lee Fu Wing v Yan Po Ting Paul [2009] 5 HKLRD 513 §53]

Analysis of the evidence

9.  Mr Tse, witness for the defendant, testified that on 30 August 2016, the plaintiff and Mr Ching went to the Shop.  Mr Ching initially wanted to buy a male Audemars Piguetmen watch with a specific model number.  As the Shop did not have stock of that watch, Mr Tse recommended other watches to Mr Ching.  Mr Ching tried on various watches and eventually decided to purchase the Watch.  The original price was HK$149,000, the defendant offered a discounted price of HK$115,000 to Mr Ching.  

10.  According to Mr Tse, Mr Ching took out a Unionpay credit card from his wallet, he entered the password of the credit card and signed on the credit card payment slip to make the payment.  Throughout this process, the plaintiff stayed next to Mr Ching. The defendant registered the personal details of Mr Ching and included Mr Ching as the defendant’s VIP member.  After payment, Mr Ching wore the Watch on his hand, and they left.

11.  The credit card payment slip did not show the name of the card holder.  Mr Tse said he did not know at the time of the purchase that the credit card belonged to the plaintiff.  There was no dispute that the credit card payment slip was signed by Mr Ching. Mr Ching also signed on the invoice issued by the defendant for the sale of the Watch.

12.  The plaintiff’s evidence on the payment of the Watch was different.  The plaintiff produced her credit card statement to show that the credit card used to settle the payment for the Watch belonged to her and a sum of RMB 99,337.03 was deducted from her credit card account.  The plaintiff denied that the credit card was taken out from Mr Ching’s wallet on that date.  She said that the credit card and the password were given to Mr Ching by her.  She agreed at trial that the password of the credit card was entered by Mr Ching although she pleaded in the Reply that the password was entered by her.

13.  The plaintiff also claimed that the Watch was passed by her (not Mr Ching) directly to the staff of the Shop on 12 December 2016 and her details were written on the repair form.  She therefore contended that she was the bailor, and the defendant committed a tort of conversion of her right even if the court finds that Mr Ching is the owner of the Watch.

14.  Having carefully considered all the evidence, I found that the plaintiff was not a credible witness. She was evasive when cross examined.  Her evidence at different stages contained internal inconsistencies.  Some of her evidence is inherently implausible and is not credible.

15.  First, a number of material facts pleaded in the plaintiff’s pleadings, stated in her witness statement and testified by her at trial were inconsistent.

(1) On the relationship between the plaintiff and Mr Ching:-

(a) In the witness statement, the plaintiff stated that Mr Ching was one of her friends, whom she knew through another friend.

(b) At cross examination, the plaintiff was at pain to distant herself from Mr Ching.  She said that she did not consider Mr Ching her friend.  She suggested in court for the first time that Mr Ching was an assistant to a hairdresser in a hair salon in Central where she frequently visited when she came to Hong Kong.  She knew Mr Ching in about 2015 to 2016 and had met him 5 to 6 times prior to the purchase of the Watch on 30 August 2016.

(2) On the circumstances under which she went to the Shop with Mr Ching:-

(a) In the witness statement, the plaintiff stated that on 30 August 2016, while she was walking leisurely with Mr Ching in Tsimshatsui, they went into the Shop.

(b) At cross examination, the plaintiff denied that she had a leisure walk with Mr Ching on 30 August 2016. She said that she had an appointment with a friend in a restaurant in Tsimshatsui that day. Mr Ching asked her to give him a car lift to Tsimshatsui when she was about to leave the hair salon. On their way, the plaintiff’s friend told her that he would be late for about 40 to 45 minutes.  Mr Ching then asked the plaintiff to help him to take a look and comment on something he wanted to buy. They then went to the Shop. The plaintiff said that she agreed to go to the Shop with Mr Ching because she thought it would be embarrassing to wait for her friend in the restaurant for such a long time.

(3) In regard to the purchase of the Watch:-

(a) In the witness statement, the plaintiff stated that Mr Ching told her inside the Shop that he wanted to buy a watch at the price of HK$115,000.  He asked the plaintiff to make the payment for him because he lost his credit card.  He promised to repay within 7 days.  The plaintiff refused, and they left the Shop.  While they were walking on the street, Mr Ching repeatedly requested the plaintiff, and promised to repay her within 7 days.  The plaintiff then decided to purchase the Watch.  They went back to the Shop and bought the Watch.

(b) At cross examination, the plaintiff said that after they entered the Shop, she walked around.  She knew that Mr Ching had tried on several watches, eventually Mr Ching chose the Watch which was purchased on the same visit.  

(4) About the password of the credit card:-

(a) In paragraph 3 of the Reply, the plaintiff pleaded that she entered the password of her credit card when purchased the Watch.

(b) At trial, she admitted that the password of the credit card was entered by Mr Ching.

16.  When the plaintiff was asked to explain the internal inconsistencies of her own factual evidence, she simply said that she did not read the witness statement and the pleadings seriously.  She said that the witness statement and the pleadings were written by the lawyers and she trusted the lawyers.  She admitted that she had read the witness statement before it was signed and she adopted the contents of her witness statement in the evidence in chief.  

17.  Secondly, at cross examination, the plaintiff gave different versions of explanations on why Mr Ching knew the password of her Unionpay credit card, and the logic in some of these explanations is lacking:-

(1) The plaintiff first claimed that she used to ask her assistant to enter the password for her and the cashier was at another part of the Shop.

(2) Upon further cross examination, she admitted that the Shop was not big, and the cashier was only two steps away, indicating that she could easily go and enter the password herself.

(3) The plaintiff then claimed that she gave Mr Ching the password because Mr Ching had promised to repay the money to her, but she was uncertain as to whether she wanted to lend the money to Mr Ching (佢應承還錢，我唔肯定借唔借，所以俾密碼佢入。)

(4) Subsequently, the plaintiff said that she gave Mr Ching the password because she was worried that Mr Ching would not be able to repay the money on time (因為我擔心佢唔能夠準時還錢，所以俾個密碼佢。)

(5) When she was further questioned, the plaintiff claimed that she was lazy and therefore she asked Mr Ching to do it out of convenience.

18.  Thirdly, on the plaintiff’s own evidence, her credit card was operated only by the password, and the user’s signature was not relevant.  The giving of such an important information to Mr Ching did not sit well with the plaintiff’s repeated evidence at trial that Mr Ching was not even a friend of her and the plaintiff was unsure as to whether she should lend the money to Mr Ching.

19.  Fourthly, the plaintiff did not dispute that Mr Ching wore the Watch in the Shop immediately after payment.  When she was asked at cross examination, she simply said that she had the right to allow Mr Ching to wear the Watch. There was no explanation as to why she did not keep the Watch until the repayment by Mr Ching.

20.  At re-examination, the plaintiff said that she lent the Watch to Mr Ching on those few days (在那幾天我借給他帶).  However, it appeared from the evidence that Mr Ching had the Watch for about three and a half month, far more than a few days.

21.  Fifthly, the CCTV recordings of the visit on 12 December 2016 showed the following:-

(1) When the plaintiff, Mr Ching and Mr Ching’s mother entered the Shop, the plaintiff said “我哋有隻錶要攞嚟保養”. It is of note that the plaintiff said “We have a watch” instead of she herself has a watch.  This was contrary to the plaintiff’s repeated and adamant stance in this proceedings that she herself owns the Watch.

(2) The Watch was inside a bag holding by Mr Ching when they entered the Shop.  Mr Ching first passed the Watch to the staff of the Shop^[1].  This contradicted the plaintiff’s allegation that she passed the Watch to the Shop on that day.

(3) When the defendant’s staff explained that the defendant could do the polishing of the Watch, but warned them of the possible undesirable effect, all three of them listened patiently.  Mr Ching’s mother said “yes”, “will consider it”.

(4) The plaintiff moved to another position near the counter when the staff was preparing the repair form, Mr Ching then walked away to another part of the Shop, his mother stayed there with the plaintiff throughout, both listened attentively.

(5) The staff said that they would contact them when a quotation for the polishing service was available, the plaintiff left a telephone number.  When the staff asked for a signature on the repair form, Mr Ching was not at the counter, the plaintiff signed on the repair form.  

(6) The staff explained the procedure if the customers wish to authorize someone else to collect the Watch.  The plaintiff said she would ask her brother to collect. This again contradicted the facts pleaded in paragraph 3 of the plaintiff’s Amended Statement of Claim that she had told the staff on 12 December 2016 that the Watch had to be returned to her personally upon her presence at the Shop.

(7) The three of them then left together.

(8) The plaintiff also pleaded in paragraph 3 of her Amended Statement of Claim that she had told the staff on 12 December 2016 that she paid for the Watch, she was the true owner of the Watch. However, in the entire CCTV recordings, she had said none of these.

22.  The defendant’s evidence on the events after the 12 December 2016 visit (which was not seriously challenged by the plaintiff) was that in the same evening, Mr Ching contacted Mr Tse by Wechat call and asked once again whether the Watch required polishing.  Mr Tse expressed his view on the adverse effect after polishing.  Mr Ching then decided not to proceed with the polishing service.  The next day (13 December 2016), Mr Ching collected the Watch at the Shop.

23.  The plaintiff called the Shop on 1 January 2017.  She was angry when she found that Mr Ching collected the Watch.  She went to the Shop on 2 January 2017 together with a man and requested compensation if she could not get back the Watch the following day.  

24.  On 3 January 2017, Mr Tse contacted Mr Ching who confirmed over the phone that he is the owner of the Watch.  The plaintiff went to the Shop in the afternoon of 3 January 2017.  She called the police.  The police requested the plaintiff to contact Mr Ching, she refused.  Mr Tse successfully contacted Mr Ching over the phone.  Mr Ching spoke to the police officer over the phone.  The police then decided not to proceed with the case.

25.  The defendant did not dispute that the Unionpay credit card which was used to settle the payment for the Watch belonged to the plaintiff. This fact should not be considered in isolation. The entire circumstances under which the Watch was purchased including the way in which Mr Ching made the payment by using the credit card did not support the plaintiff’s case that she is the owner of the Watch.   

26.  Similarly, although the repair form contained the plaintiff’s name and was signed by her, this was not conclusive in the determination of who was the bailor of the Watch. The clear evidence was that the three of them (Mr Ching, Mr Ching’s mother and the plaintiff) went to the Shop together on 12 December 2016. It was Mr Ching who was in possession of the Watch when they entered the Shop, and he (but not the plaintiff) first passed the Watch to the staff of the Shop on that day.

27.  In conclusion, I found that the plaintiff failed to prove that she is the owner and/or bailor of the Watch.    

Pleading issues

28.  Counsel for the defendant, Mr Lui, objected to the plaintiff’s reliance on matters not pleaded, including an alternative case based on the premises that the plaintiff was not the true owner of the Watch.

29.  Mr Chau, counsel for the plaintiff argued that all the material facts for the secondary case of bailment were pleaded and there was no surprise.  Mr Chau relied on the following averments in the Amended Statement of Claim:-

(1) “On or around 12^th December 2016, the Plaintiff left the Watch at the Defendant’s Shop in order to obtain service for a repair to the Watch after she was given a repair form number 1663 with her name, her friend’s contact number …” (paragraph 3 of the Amended Statement of Claim);

(2) “In (sic) or around 13^th December 2016, the Defendant, however, parted with the possession of the Watch to one Mr Ching without presentation of the Repair Form and the Plaintiff’s or Mr Wong’s approval and/or consent. ” (paragraph 5 of the Amended Statement of Claim); and

(3) “Further or in the alternative, in delivering the Watch to the said Mr Ching, the Defendant is acting against the Plaintiff’s immediate right of possession to the Watch and hence liable to the Plaintiff in conversion and the Plaintiff has suffered loss and damage (sic). ” (paragraph 6 of the Amended Statement of Claim).

30.  The purpose of pleadings is to fairly inform the other side and the court of a party’s case. The pleadings shall identify the issues and the true extent of the dispute.  The pleaded issues define the issues in a trial and the scope of evidence to be adduced at a trial.  [Wing Hang Bank Ltd v Crystal Jet International Ltd [2005] 2 HKLRD 795; Kwok Chin Wing v 21 Holdings Ltd (2013) 16 HKCFAR 663].

31.  In a recent case Mui So Bing v Wan Chi Shing [2019] HKCA 1341, the Court of Appeal repeated the desirability of pleading the legal consequences relied upon by a party.

“[The] notion that a legally qualified pleader may only plead facts (or plead the facts with a specific legal consequence), leaving his opponent and the court to have to second-guess what legal consequence (or what other legal consequences) he may choose to argue at trial or on appeal, is … inimical to the underlying objective of the Civil Justice Reform. ”

32.  The plaintiff heavily relied on the argument of bailment at trial notwithstanding that the relationship of bailment and the capacity of the plaintiff as a bailor were not pleaded.  These are the legal consequences that the plaintiff should have pleaded.  I note that the issue of bailment (or the plaintiff’s position as a bailor) was one of the items in the agreed list of issues.  The agreed list of issues is not a pleading and could not replace the pleading.  In any event, I do not ground my decision on this pleading point.  The factual findings above suffice to dismiss this claim.

No adverse inference is drawn

33.  For the sake of completeness, I deal with both parties’ submissions that the court shall draw adverse inference against the other for the failure to call Mr Ching to give evidence. The plaintiff explained in the witness statement that she had contacted Mr Ching immediately after she found that the defendant had parted with the possession of the Watch. Mr Ching refused to meet her. In view of Mr Ching’s attitude, the plaintiff did not find it useful to contact him further. The burden of proof on the ownership of the Watch in this case is on the plaintiff, not the defendant. I decline to draw any adverse inference against the plaintiff or the defendant by reason of not calling Mr Ching to give evidence.

Order

34.  The plaintiff’s claim is dismissed and there be a cost order nisi in favour of the defendant, on a party and party basis, to be taxed if not agreed, with a certificate for counsel.  Any objection to the cost order nisi shall be lodged with the court in writing within 14 days after the judgment is handed down.