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Gentleview Investments Ltd v Road And Track Motorsport Ltd

Judgment Cited authorities 5 Cited in Precedent Map Related
Vincent
Judgment Date21 August 2015
Year2015
Judgement NumberHCA285/2013
Subject MatterCivil Action
CourtHigh Court (Hong Kong)
HCA285/2013 GENTLEVIEW INVESTMENTS LTD v. ROAD AND TRACK MOTORSPORT LTD

HCA 285/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 285 OF 2013

_____________

BETWEEN
GENTLEVIEW INVESTMENTS LIMITED Plaintiff
and
ROAD AND TRACK MOTORSPORT LIMITED Defendant

_____________

Before: Madam Recorder Winnie Tam SC in Court
Date of Hearing: 28 July 2015
Date of Judgment: 21 August 2015

________________

JUDGMENT
________________

A. NATURE OF THE ACTION AND THE TRIAL

1. This is an action for damages arising from the failure to return property. The property involved is an Aston Martin race car and spare parts associated with it, all belonging to the plaintiff, which were burned down to ashes while being kept in a locked garage in Malaysia while in the custody and care of the defendant.

2. The defendant ceased having legal representation some time before the trial came on. No witness statement was exchanged by or on behalf of the defendant at the expiry of an Unless Order made by MasterLevy on 5February 2014. As a result, the defendant was debarred from and made no attempt to adduce any factual evidence at the trial. The trial took place in the defendant’s absence.

B. ISSUES FOR DECISION

3. The bases of the plaintiff’s claim having been trimmed down at the pre-trial review, the issues to be determined at trial were confined to the following:

(1) Is the defendant liable to compensate the plaintiff for the value of the car and the spare parts for:

a) breach of duty as a bailee for reward, and/or

b) breach of contract for bailment?

(2) What is the amount of compensations that the defendant ought to pay?

4. MrLiu, for the plaintiff, confirmed at trial that he would no longer be relying on implied terms of contract based on a previous course of dealings between the parties, nor on the doctrine of res ipsa loquitur for establishing a claim in tort.

C. UNDISPUTED BACKGROUND FACTS

5. The material facts upon which the plaintiff bases its claim are largely undisputed. These are set out below.

6. MrPhilipMaChingYeung (“PhilipMa”), one of the plaintiff’s director, has a keen interest in motor racing. The particular vehicle, an Aston Martin GT2 race car purchased from the manufacturer, was to be used by him to take part in a motor race in Malaysia. Prior to the destruction of the vehicle in question he had participated in motor racing in various countries around the world, and had used the services of the defendant on occasions.

7. The defendant (“RTM”) is a Hong Kong company which carried on business in servicing race cars and providing engineering, consultancy and supporting services for participants of car racing events worldwide. At the material time, RTM’s managing director was MrBarryJohnForth.

8. The first of the motor races that PhilipMa intended to participate in using his new acquisition was to take place in Malaysia between 6to 8August 2009. The arrangement between PhilipMa and Barry Forth was for RTM to provide supporting services for his motor racing activities using the newly purchased vehicle. The services to be provided by RTM included arranging for the vehicle to be transported from the UK through Hong Kong to Malaysia for test driving, and later for racing. For the same purpose, a number of spare parts were acquired, and these were also shipped to and kept in Malaysia.

9. On 7April 2009, the vehicle arrived in Hong Kong from the UK and was delivered into the custody and care of RTM. RTM then shipped the vehicle on behalf of the plaintiff to Malaysia for test drive. Between 2June 2009 to 10August 2009, the plaintiff had paid a total of HK$775,506 for the services provided by RTM.

10. The car race in which PhilipMa participated using the subject vehicle took place between 6to 8August 2009 in Sepang International Circuit (“SIC”), Malaysia. Following the race, as admitted in the Defence, the vehicle was duly delivered back into the possession, control and custody of RTM for its safekeeping and proper and due care, to be returned on request.[1] It is not disputed that the engine, gearbox and fuel tank (“the Removed Items”) were removed from the vehicle and shipped back to England for servicing. [2] On 9August 2009, PhilipMa left Malaysia and returned to Hong Kong.

11. According to the Defence filed on 6May 2013, after the race, the vehicle was kept in locked-up garage space No27 within the SIC complex rented by RTM. On 13August 2009, a fire had broken out in Garage Nos26 and27 of the SIP complex. It led to the total destruction of both the plaintiff’s car and the associated spare parts stored in garage space No27. These facts are largely repeated in a translated discovery document headed “Police Report of Malaysia” as statements of the Claimant “IdrisBinIbrahim”, who, I was told, was a member of staff or agent of the defendant in Malaysia. The cause of the fire was unknown. There is also a fire report of the Malaysian Fire Brigade and Safety Control Department that corroborates the date and location of the fire. The occupant of the garage is stated to be “Classic Car Club Hong Kong”. The percentage of destruction caused by the fire is stated to be “100%”.

12. On the same day RTM notified the plaintiff of the fire and that it would not be able to return the vehicle or the spare parts to the plaintiff.

D. ANALYSIS

D1. Proof of breach of duty as bailee for reward

13. As explained above the plaintiff is mounting cumulative or alternative claims both in breach of duties as bailee for reward and breach of contract. The two claims can undoubtedly co‑exist.[3]

14. This is a classic case of bailment for reward, where property is entrusted to the bailee for safekeeping. The transaction of custody of the vehicle and the spare parts in the circumstances of this case arises collaterally to the contractual relationship of provision of race support services from the bailee to the bailor.[4] The duty of the bailee is to exercise reasonable care to:

(a) safeguard the goods with reasonable care and redeliver them (reasonable wear and tear expected) in the condition in which they were bailed; and

(b) return the goods to the bailor or to his appointed agent at the time and place agreed.

See Palmer, opcit, §14‑010 at pp757‑760; 14‑052 at pp798‑799; Brabant & Co v King [1895] AC632 at640 perLordWatson; Dense Billion (supra) at110B‑C perLiuJA; Samsung Electronics Ltd and others v J & C Cargo Services Co Ltd and another [2008]2 HKLRD243 at 252(§52) perStoneJ; Wong Tung Fuk v Tang WingSzeIrene [2013]2 HKLRD627 at638 (§25) perDHCJMarleneNg.

15. The plaintiff’s case is that the failure to return the vehicle and its spare parts was a breach of the reasonable duty of care owed by defendant under the both the agreement and as a bailee for reward.[5]

16. On the burden of proof in an action against a bailee for reward, counsel for the plaintiff MrLiu submits it is a two-stage process. Initially it is for the bailorto prove:

(1) The goods have been “delivered” to the bailee, iethat a sequence of events has taken place as a result of which the goods came into the bailee’s possession.

(2) Loss or injury has taken place.

(3) The loss or injury occurred during the bailment.

See Palmer (op cit), §14‑010 at pp757‑760.

17. Once these threeinterdependent facts have been established by the bailor, it is then for the bailee to “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”. He may defend himself by demonstrating that he has taken reasonable care of the goods, or his acknowledged or established failure to take reasonable care did not contribute to the loss. However, “in either events, the burden of proof rests upon him”: Palmer (opcit), §14‑010 at pp757‑760.[6]

18. “If a custodian declines either to produce the chattel entrusted to him when required to do so by the owner, or to explain how it had disappeared, the refusal amounts prima facie to evidence of breach of duty on his part”: Halsbury’s Laws of England (opcit), §149 at pp100‑101; Coopers Payen Ltd v Southampton Container Terminal Ltd [2004]1 Lloyd’s Rep331 at §29 perClarkeLJ (as LordClarke then was).

19. The bailee’s liability cannot be qualified or excluded by the bailor’s knowledge of the condition of the premises for the safekeeping of the property. In Brabant & Co v King [1895]1 AC62 at 641‑642 LordWatson held that:

“It would be very dangerous doctrine, for which there is not a vestige of authority, to hold that a depositor of goods for safe custody, who, by himself or his servants, has had an opportunity of observing certain defects in the storehouse, must be taken to have agreed that any risk of injury to his goods which might possibly be occasioned by these defects should be borne by him, and not by his paid bailee. The authorities relating to the vexed maxim ‘Volenti non fit injuria’ have no bearing whatever upon the point. From the very nature of the transaction the depositor is entitled to rely upon the care and skill of his bailee. The duty is incumbent upon the latter, in the due fulfilment of his contract, of considering whether his premises can be safely used for the storage of explosives or other goods, and, if they cannot, to take immediate steps for placing the goods in a position of safety. If the defects of these Government magazines were as apparent to the servants of the appellant company as the jury have found they were, they ought to have been equally patent to the official storekeeper, with whom the duty of safe custody rested.” [Emphasisadded]

20. In Palmer on Bailment, 3rdEdition, §14‑026, the position of the burden...

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