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United Merchants Finance Ltd v Tang Woon-wing

Judgment Cited authorities 7 Cited in Precedent Map Related
Vincent
Judgment Date11 July 1980
Subject MatterCivil Action
Judgement NumberDCCJ62/1980
CourtDistrict Court (Hong Kong)
DCCJ000062/1980 UNITED MERCHANTS FINANCE LTD v. TANG WOON-WING

DCCJ000062/1980

IN THE DISTRICT COURT OF HONG KONG

HOLDEN AT TSUEN WAN

CIVIL JURISDICTION

T. W. ACTION NO. 62 OF 1980

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Between
United Merchants Finance Limited

Plaintiff
and
TANG Woon-wing Defendant

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Coram: B.W.M. Downey, District Judge

Date of Judgment: 11 July 1980

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JUDGMENT

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1. By writ issued on January 22, 1980 the plaintiff claimed: (1) $711.42 as arrears of rental due under a hire-purchase agreement dated September 12, 1978; (2) $4,119.99 allegedly due under clause 7 of the agreement; and (3) further or alternatively damages to be assessed.

2. On April 23, 1980, the defendant having failed to file a defence, the plaintiff applied for judgment to be entered in its favour for the sum of $711.42 together with interest at the rate of 2% per month from July 13, 1980 (sic), and an order "in terms" was made on May 20, 1980.

3. On June 10, 1980 the plaintiff sought an appointment for the hearing of the assessment of damages in this action, and I heard the matter on June 24, 1980, when I received evidence from Mr. Cheung Dig-chiu, a supervisor employed by the plaintiff, and the defendant.

4. At the conclusion of the hearing, I set aside the judgment dated April 23, 1980 (under rule 22(8) of the District Court Civil Procedure (General) Rules) and gave judgment for the plaintiff in the amount of $388.05 with interest from August 12, 1979 until payment at the rate of 2% per month, I also indicated that I would give my reasons in writing, which I now do.

5. On September 1978 the plaintiff entered into an agreement with the defendant which is described as a HIRE PURCHASE AGREEMENT in respect of a Daihatsu S60 v van. The cash price was $18,000 to which was added $550 for insurance and $300 for Registration giving a total Cash Price of $18,850. The defendant made an Initial Payment of $7,850 in the form of $2,000 cash and $5,850 as Trade-in for another vehicle. To the Balance of Cash Price of $11,000 Hire Charges of $2,969.80 were added, giving a figure of $13,969.80 as the Balance of Hire. The Hire Purchase Price was $21,819.80 (i.e. Total Cash Price plus Hire charges) The defendant agreed to pay the balance of the Hire Purchase Price by 36 monthly rentals of $388.05 commencing on October 12, 1978 and thereafter on the 12th day of each month. The Agreement was in standard form, printed in English and Chinese, but clause 16 thereof provides:

"In the construction and interpretation of this Agreement the English text shall prevail. The Chinese version is provided for information only and is not intended to be of legal effect."

6. Although described as a hire-purchase agreement, it is not in the form which received the blessing of the House of Lords in the leading case of Helby v. Matthews [1895] A.C. 471, since it does not give the hirer an option to return the goods to the owner at any time. Clause 9 of the Agreement provides that on payment of the Hire Purchase Price and observance of all the terms and conditions, the Agreement and the hiring thereby constituted shall determine and the hirer shall become the obsolute owner of the goods. Until that time the goods remain the sole property of the owner and the hirer is a mere bailee. Nevertheless, for the purposes of this assessment, the law to be applied is, in my view, that which governs contracts of hire-purchase at common law (of Yeoman Credit Ltd. v. Waragowski [1961] 1W.L.R. 1124; Overstone Ltd. v. Shipway [1962] 1W.L.R. 131; Financings Ltd. v. Baldock [1963] 2 Q.B. 104) This view is reinforced by clause 10(1) of the Agreement, which provides that the terms and conditions therein contained in favour of the owner shall be in addition to and not in substitution for the terms and conditions implied in favour of the owner under a hire purchases agreement at common law, "except in so far as such implied terms and conditions are inconsistent with these terms and conditions".

7. In addition to the Initial Payment, the defendant paid 10 monthly rentals, but failed to pay the rental due on August 12, 1979. On September 6, 1979 the plaintiff repossessed the van. By a written notice dated September 7, 1979 (exhibit P2) the plaintiff notified the defendant that the hiring had been terminated and that the van would be sold unless all arrears and expenses were paid within 7 days. The defendant was unable to pay the arrears, and on October 12, 1979 the van was sold by the plaintiff for $5,000. The defendant says (and I so find) that sometime in August 1979 he telephoned and spoke to a Mr. Leung, an employee of the plaintiff and asked for postponement of the instalment, so that he could continue with the Agreement, but he was informed that the plaintiff insisted upon payment on the due dates. In the circumstances, and under the terms of the Agreement, the plaintiff was perfectly entitled to terminate the Agreement and repossess the van.

8. The present application for damages to be assessed is put forward on the basis that the defendant repudiated the agreement by failing to pay the instalment due on August 12, 1979. Ordinarily, a mere failure to pay one or two instalments, even after receiving a reminder or warning letter, would not amount to repudiation by the hirer. See Financings v. Baldock, supra; Brady v. St. Margaret's Trust Ltd. [1963] 2 Q. B. 494; Anglo-Auto Finance Co. Ltd. v. James [1963] 1 W.L.R. 1042. When considering whether there has been a repudiation by one party it is necessary to look at his conduct as a whole, to see whether it manifests an intention to abandon the contract and to refuse performance, and also to consider its impact on the innocent party: see Woodar Investment Development Ltd. v. Wimpey Construction U.K. Ltd. [1980] 1 W.L.R. 277 at 280, 298 and 299. As Lord Wilberforce said (at 283):

"Repudiation is a drastic conclusion which should only be held to arise in clear cases of a refusal, in a matter going to the root of the contract, to perform contractual obligations."

Having regard to the defendant's attempt to obtain further time to pay the August instalment and his desire to continue the Agreement, I do not consider that his conduct manifested an intention to abandon the agreement.

9. But the plaintiff contends that it is unnecessary to examine the actual facts of the defendant's conduct or his state of mind in...

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