ANTHONY RUSHTON v. ALEX NG t/a ACE ENTERPRISE
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DCCJ 4272/2003
IN THE DISTRICT COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
CIVIL ACTION NO. 4272 OF 2003
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BETWEEN
| ANTHONY RUSHTON | Plaintiff | |
| and | ||
| ALEX NG trading as ACE ENTERPRISE | Defendant |
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Coram: Deputy District Judge C. M. Leung in Court
Date of Hearing: 28 and 30-31 March, 1 and 19 April 2006
Date of handing down judgment: 7 June 2006
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JUDGMENT
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INTRODUCTION
1. The Defendant was and is in the business of providing transportation, storage and shipment services in Hong Kong. In this action, the Plaintiff claims for alleged damage to and loss of his properties which were entrusted to the Defendant for storage in Hong Kong and subsequent shipment to Australia. The Plaintiff also claims for the alleged failure of the Defendant to arrange proper insurance in respect of the shipment of his properties.
BACKGROUND
2. In July 2002, the Plaintiff contracted the Defendant to move the furniture and household contents from the Plaintiff’s then apartment in Hong Kong to the warehouse arranged by the Defendant for storage. The period of storage was 1 month. The total cost was HK$11,500. This is evidenced by the Defendant’s invoice/quotation dated 8 July 2002. It expressly provided that the items would be properly packed and storage insurance would have to be arranged by the Plaintiff.
3. The packing, moving and warehousing took place on 9 July 2002. At the Plaintiff’s request, some items of furniture and properties were moved to the apartment of the Plaintiff’s friend, Rosemary, in Hong Kong. Some items packed from the Plaintiff’s apartment were moved to the warehouse on the following day, 10 July 2002.
4. The original dispute as to whether the Plaintiff had paid for the Defendant’s services in July 2002 was clarified. This was no longer in issue at the trial.
5. On 12 November 2002, at the Plaintiff’s request, the Defendant provided the Plaintiff with a quotation for the shipment of the Plaintiff’s properties stored in the warehouse to Brisbane, Australia.
6. The Plaintiff left Hong Kong in the same month for Brisbane.
7. On 2 December 2002, the Plaintiff in Australia requested the Defendant to provide a further quotation for the cost of shipment of the Plaintiff’s properties stored in the warehouse as well as a few items in Rosemary’s apartment to Brisbane, Australia. The Defendant eventually gave a quotation on 20 December 2002. The total cost quoted for door-to-port shipment was HK$63,737. This included the insurance premium at 3.5% of HK$150,000 being the declared value of the shipment.
8. The Plaintiff finally contracted the Defendant to arrange the shipment of the Plaintiff’s properties in the warehouse and items from Rosemary’s apartment “door-to-door” from Hong Kong to Newstead, Brisbane, Australia for storage. This is evidenced by the Plaintiff’s invoice dated 7 January 2003 (“the 7/1/03 Invoice”) issued to Mrs. Tamara Rushton, the Plaintiff’s mother. The agreed cost was HK$54,000 which included normal custom clearance, fumigation, quarantine and documentation fee. The insurance premium remained at 3.5% of HK$150,000 (i.e., HK$5,250) as previously quoted. The total invoice amount was therefore HK$59,250. The 7/1/03 Invoice required full payment on or before 12 January 2003.
9. The shipment was said to contain 119 packages. On 11 January 2003, the packages were shipped in a container by sea.
10. On 14 January 2003, the Defendant was paid the contract sum of HK$59,250 by remittance from Australia. The Defendant also issued a receipt to the Plaintiff’s mother on 16 January 2003.
11. The shipment arrived at Brisbane, Australia on 28 January 2003. Due to dispute over unpaid storage fees in Hong Kong owed by the Plaintiff to the Defendant (which were eventually paid), the packages were not delivered to the Plaintiff’s storage destination, Millers Self Storage, until 6 or 7 February 2003.
THE DISPUTE
12. The Plaintiff alleged that upon unpacking of the packages, the following were discovered:
(1) Numerous items were damaged or missing. The consequential loss was said to be in the total sum of HK$51,553.76.
(2) 2 cartons of the Plaintiff’s properties had not been shipped from Hong Kong. The Plaintiff allegedly incurred HK$2,665 for their delivery afterwards.
(3) The insurance arranged by the Defendant covered loss instead of loss of and damage to the properties.
(4) The Defendant had wrongfully charged the Plaintiff for storage fee in the sum of HK$2,000.
13. The Plaintiff’s case is essentially that the Defendant was in breach of his duty as the bailee of the properties in question. The Defendant was also allegedly in breach of contract or negligent or guilty of misrepresentation in failing to arrange comprehensive insurance coverage for his properties.
14. The Defendant put the Plaintiff to proof of the alleged damaged and missing properties during the bailment. He denied the alleged breach of duties on his part.
15. The Defendant admitted that he agreed to procure comprehensive insurance (i.e., for loss and damage) on the Plaintiff’s behalf. However it was allegedly a condition precedent that the Plaintiff would co-operate with the Defendant in preparing and counter-signing a detailed inventory or packing list which should state the value and the pre-existing damage of the properties to be shipped for the purpose of the insurance company. Upon the Plaintiff’s repeated failure to co-operate, the Defendant was discharged from obligation to procure such insurance for the Plaintiff. He arranged insurance coverage for total loss of the properties instead.
16. The Defendant also denied the alleged wrongful delivery and storage charge.
THE ISSUES
17. There are the following major issues:
(1) Whether the Plaintiff’s properties entrusted to the Defendant were damaged and missing as alleged.
(2) Whether the Defendant was in breach of the duties as bailee.
(3) Whether the Defendant’s procuring comprehensive insurance on the Plaintiff’s behalf was subject to the condition precedent and whether the Plaintiff had failed to co-operate as alleged by the Defendant.
(4) Whether the Defendant was guilty of misrepresentation in relation to the insurance coverage arranged.
(5) Whether the Defendant has failed to ship the 2 cartons of the Plaintiff’s properties as alleged.
(6) Whether the Defendant has wrongfully charged the Plaintiff as alleged.
BAILMENT
18. By receiving and storing the Plaintiff’s properties in July 2002, the Defendant became bailee of the same. The subsequent overseas shipment was door-to-door from Hong Kong to Miller Self Storage. Therefore the period of bailment started on 9 July 2002 and ended on about 6 or 7 February 2003. During trial, Miss Chow for the Defendant confirmed this with qualification. She pointed out that the few items which were moved to Rosemary’s apartment on 9 July 2002 and collected for shipment in January 2003 should not be considered as under the Defendant’s care during this period.
19. As a bailee, the Defendant was under a duty to take reasonable care of the Plaintiff’s properties and to redeliver them (reasonable wear and tear excepted) in the condition in which they were bailed: Palmer, Bailment (2nd ed.) at p.779. This is not in dispute
20. As to the burden of proof in a case of bailment, parties had no dispute either. Nevertheless, it would be helpful to state below what is said in Palmer, Bailment at p.779-781:
“…… The custodian must accordingly show that any established loss or injury to the chattel did not result from a failure on his part to exercise such care and circumspection as could reasonably have been expected from a bailee of his trade and standing in all the circumstances of the case: “It appears to me that here there was a bailment made to a particular person, a bailment for hire and reward, and the bailee was bound to show that he took reasonable and proper care for the due security and proper delivery of that bailment.” This principle, in fact, entitles him to avoid liability by two distinct avenues: either he may show that he had taken reasonable care of the goods, or he may show that his acknowledged or established failure to take reasonable care did not contribute to the loss. In either event, the burden of proof rests upon him.
However, this burden comes into operation only when certain prior conditions have been fulfilled by the bailor. First, he must show that the goods had been “delivered” to the bailee: i.e., that a sequence of events has taken place as a result of which the goods came into the bailee’s possession. The bailee cannot normally be required to answer for their safety until they are within his custody and control, unless it is due to his default that they are not. Secondly, the initial burden of establishing loss or injury, and of satisfying the court that these events occurred during the bailment, must likewise by borne by the bailor……
Once these……interdependent facts have been established, the defendant bailee must either disprove neglect or must detonate the inference of neglect by demonstrating its irrelevance to the ultimate misadventure……”
The alleged damaged items
21. There were 8 items of the alleged damaged properties. The Plaintiff identified them as the contents of 7 packages.
22. There are a handful of photographs of some, but not all, of the items allegedly damaged. Some of the photographs show that the articles were still partially wrapped with carton paper and plastic bubble sheets. Notwithstanding the doubt raised by the Defendant, I believe that the photographs show the condition of these items when they were being unpacked.
23. The photographs show that the antique glass painting was shattered.
24. The Plaintiff complained that the velvet throw rug had holes. The photograph of the velvet throw rug depicts several holes near the fringe of certain part of the rug. The photograph of the overcoat shows a hole adjacent to the buttonhole of the front. The Plaintiff allegedly discovered that the rug and the overcoat were wrapping the other items in the boxes and the sharp edges of these other items might have caused the holes.
25. The photograph of the wedding cabinet does not clearly show the alleged damage to the hinge. However the Plaintiff explained that the doors of the cabinet could no longer close properly.
26. The Plaintiff complained that the bases of all the legs were detached and missing. According to the list of complaint provided by the Plaintiff to the average agent of the insurer and the Defendant after 20 February 2003, the Plaintiff noted specifically that the swivel bottoms of the legs had been broken off. The photograph of the sofa shows the bottom of one of the damaged legs with the connecting nail or screw exposed.
27. There is no photograph of any other items complained about.
28. The Plaintiff complained that the original silk covering of the antique Chinese lantern was torn and the imperial ceramic horse was cracked at its right leg. He complained that the leather cabinet had heavy scratch damage and the door could no longer close properly. He said that they were in good condition and without such damage prior to the packing.
29. The Defendant essentially argued that the Plaintiff’s allegations were assertions unsupported by documents or surveyor’s evidence.
30. Indeed, the Plaintiff had no document or photograph showing the condition of the properties when they were packed. However, this is not unusual or surprising. I have no reason to doubt that the Plaintiff was able to tell whether the items contained noticeable damage and whether they worked properly before the packing in July 2002. After all, these were furniture and household items with which he lived in his apartment.
31. For instance, one could hardly suggest that the antique glass painting was in such a shattered state when it was packed. The Defendant actually agreed during trial that it was probably shattered during transit. Regarding the overcoat, the Plaintiff added that it was new and he had worn it about twice. Equally he was in a position to tell whether the doors of the 2 cabinets worked properly and whether there was heavy scratch prior to the packing.
32. The Defendant personally attended the packing and repacking of the properties. Yet he did not appear to be able to say much about the condition of them either. He noticed scratches, dents and chips on the properties. But the Plaintiff fairly acknowledged that many of these properties were not brand new and some were antiques.
33. The sofa was the only item which the Defendant specifically commented on. He said he remembered that the base of only one leg of the sofa was already missing when it was packed. He recalled reminding his team to take care as the protruding screw of the leg could scratch the floor. If what the Defendant said were true, the sofa then would have been resting with 3 good legs and one damaged leg on the floor of the Plaintiff’s apartment. The Plaintiff either knowingly denied such condition of the sofa in his apartment or simply did not notice it. Neither case is likely. Strangely, the Plaintiff admitted that the fabric of the sofa was torn before the packing which he had pointed out to the Defendant. However the Defendant did not mention anything about that.
34. The contemporaneous documents also show that the spontaneity of and consistency in the Plaintiff’s complaint after the unpacking. The damage reported in the list of complaint provided to the average agent after 20 February 2003 was the basically the same as that pleaded.
35. I believe and find that the damage to the items complained about by the Plaintiff was discovered upon unpacking. I find that such damage was not pre-existing at the time when the items were first entrusted to the Defendant.
36. The Defendant further suggested that these items might have acquired the present condition outside the bailment.
37. First, it was suggested that these items might have been those moved to Rosemary’s apartment in July 2002. Therefore the Plaintiff would not be in a position to tell their condition when they were packed in January 2003. Contrary to that, the Plaintiff said that the items moved to Rosemary’s apartment consisted of only a coffee table, a sofa and some other basic things he needed. During his return to Hong Kong from 10 to 23 December 2002, he stayed at Rosemary’s apartment and still saw those items. In his evidence, he also denied the suggestion that the sofa moved there was the sofa being complained about.
38. Second, it was suggested that no one knows what might have happened to the packages during the period between the delivery and the Plaintiff’s commencement of unpacking. This suggestion was not seriously pursued during cross-examination. As mentioned above, the Plaintiff apparently lodged his complaint to the Defendant and to the insurer quite expediently after delivery of the packages.
39. I do not find that the damage to these items of the Plaintiff’s properties was done outside the bailment.
The alleged missing items
40. The Defendant essentially suggested that the Plaintiff was not able to prove that the alleged missing items were entrusted to the Defendant in the first place.
41. The Plaintiff explained that the alleged missing clothes, among other clothes, were originally inside the closet of his apartment. I do not doubt that the Plaintiff could tell what clothes he had in his closet before the packing. In fact, he managed to tell the brand names of the clothes missing. He was only uncertain about the number of shirts missing because he had many. Eventually he said there were a dozen of them missing.
42. He did not claim to witness the packing of these items at the material time. Apart from setting aside some clothes which he needed and took away after the removal in July 2002, there was really no suggestion that these other items were left in the closet unpacked for any reason. By elimination of those clothes actually received, the Plaintiff should be in a position to know what clothes were missing.
43. As to the neon lights, the Plaintiff received the transformer parts but not the light parts of them. According to the Plaintiff and his list of complaint to the average agent and the Defendant in February 2003, the missing 600 compact discs were originally brought back from his restaurant. There were 3 black folders of them with each holding 200 discs. They were stored inside the wooden trunk in the living room. The trunk did arrive but not the discs inside.
44. Again, the Plaintiff never claimed that he witnessed the packing of these items. However, any instruction to the Defendant to pack the transformer parts but not the light parts of the neon lights or the trunk but not its contents would be most improbable. Neither party suggested that anyway.
45. While the Defendant put the Plaintiff to proof, he really had nothing to contradict the Plaintiff. He was not able to say whether the alleged missing items in fact did not exist or was left behind unpacked at the apartment for any reason.
46. I am satisfied that these items were more likely than not packed but simply discovered to be missing upon arrival at the Plaintiff’s storage.
Whether breach of duty
47. Miss Chow for the Defendant accepted that if there is doubt as to whether the damage or loss was due to the failure of the Defendant to take care of the properties, the burden of proof shifts to the Defendant to prove to the contrary.
48. Palmer, Bailment says (at pp.786-787):
“……The discharge of the duty of care depends on a multitude of factors. The bailee’s precautions must be scaled to the value and vulnerability of the goods, the likely hazards, the availability of auxiliary protective mechanisms (both within the bailee’s own organisation and within the general environment in which the goods are stored), the condition of the goods upon delivery, the specific purpose for which the goods have been delivered to the bailee, and the professional expertise he has held himself as possessing. Generally, it will be no defence for him to show that he employed his own resources to the best of his ability, if those resources or facilities are inadequate for the task he has undertaken……”
49. Halsbury’s Laws of Hong Kong, Vol.26 at 395.040 says:
“……The appropriate measure of care in a given case will depend on all the circumstances, including the nature, value, attractiveness, portability and disposability of the goods, the agreed or known conditions in which they are to be carried, any special practice of a reasonably competent carrier in the situation in question……Where a carrier has a discretion to delegate performance of the whole or any part of the contract of carriage he must take reasonable care in selecting the substitute carrier to ensure the delegate is honest and competent and that his facilities are reasonably suitable for the task in question……”
50. The Defendant argued that inference of reasonable care having been taken should be drawn in the following circumstances.
51. First, the Defendant explained in his supplemental statement how he and his team normally carried out packing for local storage as well as re-packing and preparing for overseas shipment. On this occasion, the Defendant effectively adopted the same usual method.
52. Second, the Plaintiff praised the Defendant’s quality of service on the previous occasions of removal of his apartment as well as his restaurant in Hong Kong. The Plaintiff had also recommended the Defendant to his friends.
53. Third, the majority of the packages including those containing items of similar or higher degree of fragility as those damaged items arrived safe and intact.
54. Fourth, according to Yeung Kwong (“Yeung”), the Chief Executive of Courtesy Insurance Consultants Ltd. (“Courtesy”), the Defendant’s insurance consultant, the Defendant enjoyed a clean claim record with respect to those jobs which were covered by insurance arranged by Courtesy over 4 years.
55. In my judgment, these circumstances do not displace the need to see how the Defendant actually handled this job for the Plaintiff.
56. The Plaintiff complained that a lot of the boxes contained entirely different contents from the descriptions of the corresponding package number on the packing list. I actually pointed this out to the Defendant at least insofar as the problematic packages were concerned. The Defendant explained that he just selected one of the items contained in the particular package as the description of that package on the list. However, I notice that this did not appear to be a consistent practice throughout the same list.
57. Further, if the Defendant’s explanation was true, that would mean the Plaintiff’s overcoat and the rug were packed together with the lamp transformer. The antique Chinese lantern was packed with the dryer. The ceramic horse was not packed with items of similar fragility such as other ceramic or porcelain. According to the Plaintiff, it was packed with other heavy glassware and bowls. This hardly reflected reasonable care in the segregation and combination of the items into the packages.
58. The Plaintiff also complained that there was a package (no.74) which consisted of a coffee table on wheels. He had never seen the item before. There is also no suggestion that this came from Rosemary’s apartment. Otherwise, she would have claimed it from the Plaintiff. There is no evidence that she did that upon her subsequent removal to Australia either.
59. All these cast doubt on how well the shipment of the Plaintiff’s properties had been taken care of.
60. This was a contract for door-to-door delivery and the Defendant’s duty was extended to the arrangement of shipment and onward carriage from the Brisbane port to Miller Self Storage. For arrangement of the marine carriage, the Defendant used International Logistics Gateway (HK) Ltd (“ILG”). The Defendant also had an agent in Brisbane known as Focus.
61. There is no evidence of how delivery arrangement overseas was made by the Defendant, ILG and Focus generally. There is also no evidence with respect to the arrangement made by the Defendant or Focus for the actual delivery in this case from the port to Miller Self Storage.
62. The Defendant referred to the sea freight delivery docket dated 6 February 2003 evidencing the delivery of the packages to Miller Self Storage. The document contained the remark “RECEIVED IN GOOD ORDER AND CONDITION”. The Defendant suggested that this was prima facie evidence of the good condition of the items when they reached Miller Self Storage.
63. These remarks were part of the printed form and could only refer to the apparent condition of the packages instead of their contents. In fact, even the exterior condition of the packages was put in question. On the copy of the delivery docket disclosed, there were hand-written remarks to the effect that the Plaintiff had already noted on the driver’s copy of the docket that some items were damaged. During trial, neither party found it necessary to explore what might be behind these hand-written remarks. Therefore I can say no more about them.
64. However, in the claim form sent to the average agent, the Plaintiff did report that the external condition of some of the packages was ripped, torn or broken. He also suspected unpacking by the custom and dropping. The Defendant argued that the contents of the claim form should be dismissed as being self-serving in nature. Obviously the Defendant had dismissed the Plaintiff’s complaint in the absence of even enquiry with ILG and/or Focus as to how the packages were handled until their delivery to the Plaintiff’s storage destination.
65. In the circumstances, I am not satisfied that the Defendant has discharged its burden of showing that it had taken reasonable care of the Plaintiff’s properties during the bailment.
Shipping the wrong boxes
66. The Plaintiff complained that the Defendant had shipped to him 2 boxes of properties apparently belonging to Rosemary whereas 2 boxes belonging to the Plaintiff had been left in Rosemary’s apartment. The Defendant claimed that he himself collected the boxes from Rosemary’s apartment as instructed by Rosemary.
67. According to the Plaintiff, the boxes were differentiated by the markings of “Rosemary” and “Anthony” written on the exterior of the boxes. The Defendant did not really contradict that. However, I do not believe the Defendant simply went to Rosemary’s apartment and identified the boxes which he should collect for shipment. If the Defendant collected the boxes upon the instruction as he understood then, I do not believe the markings on the box necessarily put him on enquiry as to whether this could be Rosemary’s mistake. Rosemary should be able to see the markings too.
68. Indeed, in the list of complaint provided to the average agent and the Defendant after 20 February 2003, the Plaintiff admitted that this could be Rosemary’s fault.
69. According to the Plaintiff, Rosemary eventually moved to Australia too. He had allegedly paid HK$2,665 to Rosemary for the transportation of his 2 boxes. If the confusion was really the fault of Rosemary and the Plaintiff also had to keep her 2 boxes for her, the Plaintiff should not bear the cost of delivering his 2 boxes. However it may not be realistic to draw any inference strictly from the legal point of view especially when the Plaintiff and Rosemary are friends.
70. Rosemary was not a witness at trial to tell exactly what happened.
71. I am not satisfied this part of claim is proved.
Wrongful charge
72. The claim was for HK$2,000 allegedly wrongfully charged by the Defendant. At trial, Mr. Lam for the Plaintiff confirmed that the Plaintiff was no longer pursuing this part of the claim.
CONTRACT AND TORT
73. According to the pleadings, the claim in contract is based solely on the failure of the Defendant to arrange comprehensive, or Clause A, insurance. The claim in negligence was based on the duty of care on the part of the Defendant to arrange such insurance said to be implied to the contract by law and/or business efficacy.
74. The type of insurance coverage to be arranged was not stated in the 7/1/03 Invoice. However there is no dispute that this was the premium for insurance coverage of both loss of and damage to the properties shipped. The insurance actually arranged by the Defendant covered only loss of, but not damage to, the properties shipped or what was known as Clause C insurance.
75. The Defendant does not dispute that he contracted to procure effectively a Clause A insurance. His case is that it was a condition precedent, express or implied, to procuring Clause A insurance that the Plaintiff would prepare a detailed inventory list or assist the Defendant in the preparation of a packing list which should state the value and any pre-existing damage of the items to be shipped and would counter-sign the same. Parties had serious dispute as to that.
76. According to the Defendant, after the Plaintiff had left Hong Kong in November 2002, the Defendant’s mother effectively took over the liaison with the Plaintiff with respect to the intended shipment of the Plaintiff’s properties. The Defendant alleged that the packing list requirement was made known to the Defendant’s mother at or before the contract for overseas shipment was made. Despite repeated arrangements to meet the Plaintiff in Hong Kong for the purpose of compiling the list, the Plaintiff had failed to appear and without such list, it became impossible to arrange Clause A insurance.
77. The Defendant said in his supplemental statement that his conversation with his mother and the alleged appointments with the Defendant took place in early January 2003. He elaborated during trial that the alleged appointment took place 4 to 5 days before the shipment of the Plaintiff’s properties. In the light of the common ground that the properties must have been repacked by 9 January 2003 (when the container was fumigated) and shipped on 11 January 2003, Mr. Lam for the Plaintiff pointed out that these alleged appointment could not have taken place during the week before shipment as alleged by the Defendant.
78. Reference was made to the Plaintiff’s passport. The Plaintiff was not even in Hong Kong in January 2003. According to him, he was only in Hong Kong during the period between 10 December 2002 and 23 December 2002.
79. Miss Chow for the Defendant categorised this as simply the Defendant’s confusion and uncertainty about the date.
80. The problem of the Defendant’s case is more than this.
81. In his original pleading and his reply to the Plaintiff’s request for further and better particulars of his pleading in 2004, the Defendant stated that these appointments allegedly took place 2 to 3 weeks prior to the shipment. It was only at the commencement of the trial that this was amended. Coupled with his supplemental statement filed at the same time, the Defendant suggested that the appointments allegedly happened in early January instead. If the Defendant was uncertain about such timing, I wonder what drove him to make such last minute amendment and statement.
82. If these alleged events ever took place (at any time prior to January 2003), the Defendant must have been aware of the inability to arrange Clause A insurance by January 2003. Effectively, the alleged condition precedent was not satisfied so that the Defendant was under no obligation to procure clause A insurance. In that case, it defies understanding why the Plaintiff issued the 7/1/03 Invoice to the Plaintiff demanding payment of the premium as previously quoted for clause A insurance coverage. As evidence of the parties’ agreement, the 7/1/03 Invoice effectively affirmed the Defendant’s contractual obligation to procure clause A insurance.
83. In fact, according to Yeung, Eva Hon of ILG did enquire Courtesy about Clause A insurance on the Defendant’s behalf even in January 2003 (contrary to the alleged impossibility of arranging Clause A insurance known by then). Yeung stated that he had no idea why the Defendant decided afterwards to place Clause C insurance instead of Clause A insurance.
84. The subsequent events also show that the Plaintiff had no idea that the insurance taken out was not for comprehensive coverage.
85. After shipment, the Plaintiff accordingly paid the invoice amount, including that of the premium for clause A insurance, by remittance. The Defendant received and issued a receipt for the same on 16 January 2003.
86. Upon discovery of the problems with the packages delivered, the Defendant had engaged in correspondence with the general agent and average agent of the insurer as well as the Defendant. Apparently, the Plaintiff had difficulty in obtaining the insurance policy and claim form from the Defendant in February 2003. He then turned to the general agent directly. The correspondence between 3 march and 24 March 2003 quite clearly shows that the Plaintiff did not come to realise that his properties were not covered by comprehensive insurance until about 20 March 2003. On that day, his mother was informed by the average agent and provided with a copy of the General “ICC-Cargo C” wordings. He then wrote to the Defendant regarding this on the same day as well as 24 March 2003.
87. It was on 12 April 2003 when the Defendant apparently made the allegation about the packing list requirement and the alleged appointments with the Plaintiff. This telephone conversation with the Plaintiff’s father was recorded in the memorandum of the Plaintiff’s father. Only then did the Defendant apparently offer to refund the insurance premium paid by the Plaintiff.
88. The events were simply inconsistent with the alleged understanding of the parties (i.e., the Defendant, the Plaintiff and his mother) that the Defendant was not in a position to arrange, and therefore had not arranged, clause A insurance.
89. I find that the Defendant’s allegation wholly incredible.
90. I find that the Defendant was in breach.
MISREPRESENTATION
91. Since there is no dispute that the Defendant contracted to procure clause A insurance in respect of the shipment of the Plaintiff’s properties, there is really no place for the further pleaded case of the Plaintiff on the basis of the Defendant’s misrepresentation of his intention to procure such insurance. At the trial, Mr. Lam for the Plaintiff confirmed that the Plaintiff would not pursue the argument on misrepresentation.
QUANTUM
92. With respect to the antique glass painting (excluding frame) and the imperial ceramic horse, there was the valuation provided by the Hong Kong company from which the Plaintiff previously purchased them. Quotations for the repair of the Kenzo overcoat, the cabinets and the sofa in Australia were also available.
93. Miss Chow for the Defendant raised the issue of mitigation. She challenged that the Plaintiff had failed to obtain alternative quotations and valuations. Mitigation has not been put in issue by way of the Defendant’s pleading. In any event, I do not find that the amounts quoted per se were unreasonable.
94. With respect to the antique Chinese lantern and the velvet throw rug, the Plaintiff has not produced any valuation. The amounts claimed were, according to him in court, what he paid for when he purchased them from Hollywood Road and Lane Crawford respectively. I accept that these 2 items were damaged beyond repair. I allow the amounts claimed.
95. As to the missing items, the Plaintiff basically estimated their value by referring to the prices he paid for them. A lot of the missing clothes were expensive labels. Considering the variety and number of items, I am satisfied that the amount claimed is reasonable. I am also satisfied that the value of the missing neon lights is reasonable. Considering the number and the unknown variety of the compact discs, the claimed amount of effectively HK$10 each, I find, cannot be criticised.
96. The Plaintiff claims the difference between the premium payable for clause A insurance and that for clause C insurance. According to ILG’s debt note to the Defendant for this shipment, the marine insurance premium amount charged by ILG was HK$500. In his statement, the Plaintiff explained his understanding from the insurer that the premium rate for clause C insurance was 0.5% of the declared insured value. In this case, the amount would have been HK$750. He claims the difference between HK$5,250 and the higher amount of HK$750, i.e., HK$4,500.
97. Miss Chow for the Defendant criticised the amount claimed would amount to double recovery. I disagree. Had the Plaintiff been claiming for damages in the amount obtainable from the insurer under a clause A insurance coverage which the Defendant had failed to procure, his claim at the same time for the premium difference would have been double recovery. He would be claiming for what he would have had to pay in order to get the clause A coverage. However, the Plaintiff is primarily claiming against the Defendant for loss and damage in bailment. Due to the breach of contract to procure comprehensive insurance, the Plaintiff chose to claim only the overpaid premium.
98. Mr. Lam for the Plaintiff argued that a “Quistclose” trust arose where the Defendant was holding the overpaid premium on trust for the Plaintiff upon the failure of the purpose for which the premium was paid. I take this to be an alternative basis of claim for the overpaid premium. Even if no pleading point is taken, this argument is in my judgment unnecessary.
99. If this is necessary, I wonder if this is correct: see Snell’s Equity (31st ed.) at 23-25 to 23-28. In this case, the insurance premium was paid by the Plaintiff to the Defendant expressly for the latter to procure insurance on the Plaintiff’s behalf.
100. The quantum will be as follows:
(1) Loss of the antique glass painting: HK$ 5,500.00 (2) Loss of the imperial ceramic horse: HK$15,000.00 (3) Repair of the sofa: HK$ 922.68 (4) Loss of the velvet throw rug: HK$ 2,500.00 (5) Repair of the Kenzo overcoat: HK$ 605.88 (6) Loss of the Chinese lantern: HK$ 2,000.00 (7) Repair of the antique leather cabinet: HK$ 410.08 (8) Repair of the wedding cabinet: HK$ 615.12 (9) Missing clothes HK$17,000.00 (10) Missing neon lights HK$ 1,000.00 (11) Missing compact discs HK$ 6,000.00 (12) Overpaid insurance premium HK$ 4,500.00 TOTAL:
HK$56,053.76
ORDER
101. I find for the Plaintiff who shall have judgment in the sum of HK$56,053.76 with interest thereon at 1% above base rate from the date of writ until judgment and thereafter at the judgment rate until payment.
102. Costs should follow the event and I make an order nisi that the Plaintiff shall have costs of this action to be taxed if not agreed with certificate for counsel. The Defendant’s own costs shall be taxed in accordance with legal aid regulations.
| Simon C M Leung Deputy District Judge |
Representation:
Mr. Vincent Lam instructed by Messrs. Lau Pui King & Company for the Plaintiff
Mr. Grace Chow instructed by Messrs. Richards Butler for the Defendant on the instruction of the Director of Legal Aid