Chan Wai Tsun v Shum Tak Shing

IN THE SUPREME COURT OF HONG KONG

APPELLATE JURISDICTION

CIVIL APPEAL NO. 23 OF 1968

(On Appeal from O.J. Action No. 967 of 1967)

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JUDGMENT

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MORLEY-JOHN, J: I fully concur and only wish to add that as to the question of estoppel by negligence - if there was in fact any negligence in this case, though I agree that the defendant did say during the trial that in his opinion he was negligent in signing this blank transfer of ownership form - as to the question of estoppel by negligence, it was held as long ago as 1863 in the case of Swan v. The North British Australasian Company⁽¹⁾ that:

This authority, as I say, dated from 1863 and has been consistently followed in such later cases as the one already quoted, Wilson & Meeson v. Pickering⁽²⁾; also Campbell Discount Co. Ltd. v. Gall⁽³⁾ and the Mercantile Credit Co., Ltd. v. Hamblin⁽⁴⁾; and I am satisfied that in this present case the proximate cause of the plaintiff's loss was the fraud on the part of the man Chan Chung Po and certainly not this blank transfer of ownership form which in itself cannot any way be said to be a negotiable instrument.

2. And I also agree that this appeal must be dismissed.

(1) (1863) 2 H. & C., 175.

(2) (1946) 1 A.E.R., 394.

(3) (1961) 2 A.E.R., 108.

(4) (1964) 3 A.E.R., 594.

IN THE SUPREME COURT OF HONG KONG

APPELLATE JURISDICTION

CIVIL APPEAL NO.23 OF 1968

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Coram: Rigby and Morley-John, JJ.

Date of Judgment: 20 September 1968

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JUDGMENT

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Rigby, S.P.J.: Despite the sympathy that one must inevitably feel for the unfortunate plaintiff in this case, and giving every consideration to the persuasive arguments that have been advanced to us by Miss Lee, counsel for the plaintiff, there is no doubt in my mind that this is a perfectly hopeless appeal. It is an appeal from the judgment of Briggs,J., dismissing the plaintiff's claim to possession and ownership of a motor vehicle of which the registered number was AH1162.

3. The facts of the case are very fully set out in the comprehensive and careful judgment of the learned judge. For the purposes of this appeal, the facts may be summarised in a more brief manner.

4. In March, 1966, the defendant entered into a Hire Purchase Agreement with the Chekiang First Bank Limited (which hereafter can be more conveniently referred to as "the Bank") for the hiring and purchase of what is described as an "Isuzu Elf Micro-Bus" of which the registered number was AH1162. It was described as a new vehicle under the terms of the agreement. The defendant made an initial cash payment of $6,050 and the balance of the purchase price was to be completed in twenty-four instalments of $580 per month, commencing as from the 10th April, 1966. The defendant paid the initial deposit, acquired possession of the vehicle and paid the instalments for the next three months. Thereafter, in June, 1966, he transferred possession of the vehicle to one Chan Chung Po (to whom I will hereafter refer as "Chan") upon terms to which I will later refer.

5. It is not disputed, and it is of no real significance in this case, that the transfer of possession of the vehicle to Chan was in fact contrary to the terms of the Hire Purchase Agreement between the defendant and the Bank.

6. In September 1966, Chan - unbeknown to the defendant and without his consent - entered into a written agreement to sell the motor vehicle to the present plaintiff. Under the terms of that written agreement, the plaintiff was to pay - and did in fact pay - the sum of $6,000 to Chan and she was thereafter to continue to pay the hire purchase instalments to the Bank until such payments had been completed and the ownership of the vehicle could then be transferred into her name. Upon the completion of the agreement, the motor vehicle was delivered to the plaintiff together with the following documents:

7. Now, the Hire Purchase Agreement itself clearly showed that the owner of the vehicle was the Bank and the hirer of the vehicle was the defendant and that at that time some eighteen instalments of $580 per month would have to be paid before the ownership of the vehicle passed to the hirer.

8. The plaintiff is an illiterate woman. In evidence she stated that at the time of the transfer of the vehicle she asked if the defendant, as hirer, should not have been a party to the agreement transferring the vehicle into her possession but Chan told her that this was unnecessary since he had the agreement of the defendant for the transfer of the vehicle to her.

9. The learned judge found as a feet that the plaintiff genuinely believed that Chan had the authority to sell the vehicle and, indeed, believed that Chan had transferred to her all the rights of the defendant in that vehicle, namely: registered number AH1162. As the learned judge said, in this she was "woefully deceived."

10. After delivery of the possession of the vehicle to the plaintiff, she and her partner, one So Yuk Po, commenced operations and the mini-bus was put on the road. Unfortunately, in October, 1967, the vehicle, whilst being driven by So Yuk Po, was involved in an accident as a result of which someone was injured and subsequently died from those injuries. The police investigated the matter and found that although the vehicle was in the possession of the plaintiff and So Yuk Po, under the terms of the Hire Purchase Agreement itself the defendant was in fact the stated hire purchaser of the vehicle. Subsequently, the defendant took possession of the vehicle in circumstances which are unnecessary for consideration and, thereafter, declined to return it to the plaintiff. During the period the vehicle had been in her possession, the plaintiff had in fact paid seven instalments, each of $580 per month, under the Hire Purchase Agreement. The plaintiff is a relatively poor woman. She had parted with her life savings for the purpose of purchasing this vehicle and, as the learned judge pointed out, the case was one of the greatest possible importance to her. Upon the defendant refusing to return the vehicle to her, she instituted these proceedings. In the intervening period it is in fact true to say that, after having paid the balance of the Hire Purchase Agreement instalments still due, the defendant, having then acquired the ownership of the vehicle, transferred and sold the vehicle to a third party.

11. The issue for consideration before the learned judge raised the unhappily familiar question: which of two perfectly innocent parties, namely, the plaintiff or the defendant, should suffer by reason of the misconduct and fraud of the man Chan? As is not perhaps surprising, Chan was not called by either party as a witness and it may well be - although it is, of course, purely a matter of speculation - that the reason he was not called was because, for reasons best known to himself, he had disappeared from the scene.

12. The defendant said in evidence that at no time had he authorised Chan to deliver possession of the vehicle to any third party. He said that after he had entered into the Hire Purchase Agreement with the Bank he made use of the vehicle for three months for a specific purpose. Thereafter, having used it for that purpose, he came to an oral agreement with the man Chan whereby he handed over the vehicle to Chan for his exclusive use and profit upon the condition that Chan would be responsible for the...