Bestshop Technology (Hong Kong) Co Ltd v. Li Qinshun and Another

DCCJ 5316/2023

[2024] HKDC 754

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 5316 OF 2023

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JUDGMENT

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Introduction

1.By Inter Partes Summons dated 16 February 2024 (“the Summons”), the Plaintiff (“P”), applies for default judgment against the 1^st Defendant (“D1”) and the 2^nd Defendant (“D2”) pursuant to O19, r7 of the Rules of the District Court, Cap 336H.

2.In gist, P’s pleaded case is that:

(1)  In or around March 2023, P purchased a motor vehicle (Toyota Vellfire 2.5ZR Hybrid) bearing the registration mark YM4391 (“the Vehicle”);

(2)  To assist in the business of P, D2 was instructed by P on 31 March 2023 to collect from the car dealer:

(a)  the Vehicle;

(b)  the key to the Vehicle (“the Key”); and

(c)  the original copy of the Vehicle’s registration documents (“Vehicle Registration Document”);

(3)  Despite repeated requests by P, D2 failed and still fails to return the Vehicle, the Key and the Vehicle Registration Document to P; and

(4)  D1 wrongfully applied or caused to be applied to the Transport Department to register himself as the new owner of the Vehicle on 6 July 2023 thereby converting the Vehicle to his own use without P’s consent, authorization, approval and/or resolution.

3.P claims against D1 and D2 orders:

(1)  for damages for wrongful conversion of the Vehicle to be assessed; and

(2)  costs of this action including this application.

4.As against D1 only, P seeks:

(1)  a declaration that P was and remains the rightful owner of the Vehicle against 1^st Defendant; and

(2)  the delivery up of the Vehicle, the Key and Vehicle Registration Document.

5.P also claims as against D2, orders for:

(1)  Damages for breach of trust and/or breach of duties to be assessed; and

(2)  An account of the assets, profits and/or benefits obtained by D2 in breach of his duties and/or breach of trusts be taken.

Service of process

6.I am satisfied from the affirmations of service filed on behalf of P that:

(1)  On 29 November 2023, a true copy of the sealed Writ of Summons (“Writ”) together with the Statement of Claim (“SOC”) was sent by registered post to D2 at his usual or last known address (“the Address”); and

(2)  On 14 December 2023, a true copy of the Writ together with SOC was inserted into the letter box of D1’s usual or last known address (“the Letter Box”).

7.I accept that the said service amounts to proper service of the Writ.

8.I also accept that notwithstanding the time limit for acknowledging service of the Writ and service of defence by D1 and D2 had expired, no Acknowledgement of Service, Notice of Intention to Defend or Defence has been filed.

9.The Summons was also served:

(1)  on D1 by inserting the same through the Letter Box; and

(2)  on D2 by ordinary post to the Address. 

I am therefore satisfied that the Summons were duly served on D1 and D2.  Further, it is expedient to proceed with the hearing of the Summons notwithstanding the absence of Ds at today’s hearing.

10.P appears represented by counsel, Mr Lui.

Applicable principles

11.The applicable principles for default judgment under O.19, r.7 RDC are well-settled.  The power to grant judgment under O.19, r.7 is discretionary. The court is required to scrutinize whether the matters pleaded in the Statement of Claim entitle the plaintiff to the judgment sought.  The court’s decision is made on the basis of pleaded facts, rather than on evidence.  See Hong Kong Civil Procedure 2024, Vol.1, §§19/7/11 and 19/7/14.

12.As for declaratory relief, the rule of the court that a declaration will not be granted when giving judgment by consent or in default without a trial is a rule of practice and not of law and will give way to the paramount duty of the court to do the fullest justice to the plaintiff to which he is entitled. The court will consider whether the declaratory relief is properly made out on the pleading and whether it is appropriate in the overall exercise of discretion for such relief to be granted without trial. See ibid, §19/7/14.

Analysis

13.Having considered the SOC, I am satisfied that P appears to be entitled to judgment on the pleaded cause of action of conversion.

14.A definition of conversion was approved in Moorgate Mercantile Co v Finch and Read [1962] 1 QB 701 at 706 as:

“an act of willful interference, without lawful justification, with any chattel in a manner inconsistent with the right of another, whereby that other is deprived of the use and possession of it. Two elements are combined in such interference:

(1) a dealing with the chattel in a manner inconsistent with the right of the person entitled to it, and

(2) an intention in so doing to deny that person’s right or to assert a right which is in fact inconsistent with such right.”

15.It is pleaded that P is the legal owner of the Vehicle.

16.Further, I am satisfied that from the refusal, despite requests by P, by D2 to return the Vehicle, the Key and Vehicle Registration Document it can be presumed that D2 willfully inferred, without lawful justification, with the Vehicle in a manner inconsistent with P’s right to use and possess the Vehicle.

17.Similarly, by wrongfully registering himself as the owner of the Vehicle, D1 also committed an act of willful interference, without lawful justification, with the Vehicle in a manner inconsistent with P’s rights.

18.Accordingly, on the basis of the pleaded facts, both D1 and D2 have committed the tort of conversion.

19.Furthermore, in respect of D2, I am satisfied that when he collected the Vehicle, Key and Vehicle Registration Document he was acting as agent and/or fiduciary of P.  In failing to return the Vehicle, Key and Vehicle Registration Document, D2 acted in breach of his duties or in breach of trust.

Relief and need for declaratory relief

20.Having considered Mr Lui’s submissions, I am satisfied that P is entitled to the relief sought.

21.It is trite that a plaintiff suing for conversion can pray for damages which include the value of the goods and any consequential loss.  See Tort Law and Practice in Hong Kong, 3^rd Edn, §§7.096, 7.119 & 7.120.  Mr Lui confirmed that if the Vehicle is returned and the declaration is granted, P will refrain from claiming the value of the Vehicle to avoid double recovery.

22.Furthermore, I am of the view that there is a genuine need for P to regain its right to possession and use of the Vehicle.  I would therefore grant the declaration sought to do fullest justice to P.

23.Accordingly, I would make an order in terms of the draft minutes of order and judgment that were submitted to me as amended by me (to reflect that the order for delivery up of the Vehicle, the Key and the Vehicle Registration Document are only made against D1).

24.I thank Mr Lui for his able assistance.

Mr Victor KT Lui, instructed by Fung, Wong, Ng & Lam LLP Solicitors, for the plaintiff

The 1^st and 2^nd defendants were not represented and did not appear