Linde Material Handling Hong Kong Ltd v. 100 Storage Cold-chain Logistic Services Co Ltd and Another
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DCCJ 1212/2025 [2026] HKDC 1581 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CIVIL ACTION NO 1212 OF 2025 -------------------------
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-------------------------- DECISION -------------------------- A. Introduction 1.This is the application of the plaintiff (“P”) for summary judgment, and alternatively interim payment, against the 2nd defendant (“D2”). At the hearing, D2 did not appear. Upon satisfaction of P’s evidence regarding service of the relevant documents, I allowed the hearing to proceed in D2’s absence. B. Background and the parties 2.P is a company engaged in the sale, leasing, and maintenance of forklift trucks. The 1st defendant (“D1”) and D2 are cold-chain logistics service providers that share a registered address at 1st Floor, Hing Wai Ice and Cold Storage Building, Aberdeen. 3.Under two rental contracts dated 12 October 2020 and 28 June 2021, P leased a total of ten forklift trucks to D1. Truck 1 was delivered in June 2021 to the said Aberdeen address. Trucks 2 to 10 were delivered to Hutchison Logistics Centre, 18 Container Port Road South, Kwai Chung (“HLC”) on 7 December 2021 and 3 May 2022. All delivery notes were addressed to D1. The General Terms and Conditions (“GTC”) governing the leases expressly retained ownership in P until purchase, and prohibited D1 from assigning, lending, leasing, mortgaging or pledging the trucks without P’s consent (clauses 23.1 and 23.2). 4.D1 allegedly fell into arrears from around June 2023, prompting a demand letter on 23 May 2024 for HK$670,360 in arrears and return of all ten trucks. D1 subsequently bought back one truck and returned five others, leaving four trucks (Trucks 3, 5, 7 and 10) (“4 Remaining Trucks”), with a claimed aggregate “residual value” of HK$107,717. 5.The Writ of Summons was issued on 28 February 2025, with the Statement of Claim (“SOC”) pleading breach of contract and related claims against D1, and conversion and/or detinue against both defendants in respect of the 4 Remaining Trucks. 6.Given that the relevant contracts are alleged to have been breached by D1, it is unsurprising that P is seeking to hold D1 accountable for the 4 Remaining Trucks, in addition to other monetary claims. However, the distinctive feature of this case is that P is also pursuing D2 for wrongful possession of the 4 Remaining Trucks. This is due to P’s allegations that D1 has assigned, lent, leased, mortgaged, or pledged the 4 Remaining Trucks to D2. The basis for these allegations is pleaded in paragraphs 15 to 17 of the SOC, as follows:
7.D2’s Defence was filed on 5 August 2025 which consisted mainly of general denials. By summons dated 29 December 2025 (“Summons”), P sought final judgment against D2 for, inter alia, the return of the 4 Remaining Trucks or an interim payment based on their “residual value” of HK$107,717. The application was supported by the 1st Affirmation of Wu Wai Ki (“Mr Wu”), P’s general manager, dated 24 December 2025. No affirmation was filed by D2. C. P’s submissions and evidence 8.P submitted that D1 lacked the title to pass the trucks to D2, citing the nemo dat quod non habet rule and asserting that D2 could not raise a bona fide purchaser defence. P averred that D2 had constructive knowledge of D1’s lack of title because D1 and D2 shared a common director and registered address, as evidenced by their Annual Returns. 9.To prove D2 was in possession of the 4 Remaining Trucks, P relied heavily on the evidence of Mr Wu, who deposed that a colleague visited the HLC premises twice. In May 2024, the colleague observed individuals “who appeared to be working on the 2nd Defendant’s premises … using one of the 4 Remaining Trucks … and another one of the 4 Remaining Trucks was parked in the 2nd Defendant’s premises”. A video was allegedly taken but not produced. Instead, screen captures were adduced. A subsequent visit on 22 December 2025 allegedly yielded similar observations of two trucks (without a video recording this time). P also relied on a photograph showing the changed signboard at HLC. 10.P emphasised throughout the hearing that D2 had filed only a bare denial and failed to adduce positive evidence to rebut P’s allegations, arguing this justified summary judgment in P’s favour. D. The law 11.It is trite that the burden is on the defendant to show a fair or reasonable probability that a real or bona fides defence exists. The mere assertion in an affidavit of a given situation by the defendant does not, ipso facto, ground leave to defend. To show there is arguable defence or triable issue, the defendant must condescend to particulars and must satisfy the court that his evidence is capable of being believed and that on the basis of such evidence, there is a fair or reasonable probability of the defendant having a real or bona fides defence: Toy Major Trading Co. Ltd v Hang Shun Plastic Toys Ltd [2007] 3 HKLRD 345 at 349F per Ma, CJHC (as he then was). In deciding whether there is a fair or reasonable probability of the defendant having a real or bona fides defence, the court does not isolate each factual issue and consider whether it is possible that the defendant’s story on that issue is credible. Rather, the court must look at the whole situation in the context of so much of the background as is either undisputed or beyond reasonable dispute: Billion Wealth Group Ltd. v Strategic Media International Ltd (unreported, HCMP 2586/2009, 3 May 2010) at §5 per Fok, J (as he then was). 12.On the other hand, a plaintiff applying for summary judgment must first establish a clear prima facie case before the court scrutinises the defendant’s defence. This is explained by Cheung JA in Ju Yan Di Emperory Genesisy v Yan Wai Han [2015] 1 HKLRD 822 at [13]:
13.To grant interim payment, the Court must be satisfied that if the claim were to go to trial, then, on the material before the judge at the time of the application for interim payment, the plaintiff would succeed in his claim, and would obtain a substantial amount of damages; the court must be satisfied on the balance of probabilities, and need not be satisfied beyond reasonable doubt: Rich Profit Creation Ltd v Ko Chung Lun and others [2020] HKCFI 1459 at §§15-16. E. Analysis 14.In my opinion, P’s application suffers from several fundamental flaws. E1. Reliance on D2’s silence is insufficient if P fails to establish a prima facie case 15.P placed considerable weight on D2’s failure to advance a positive case, but as explained above, under Order 14 principles this factor only becomes relevant after P has itself made out a prima facie case. A defendant’s obligation to condescend upon particulars is not triggered by, and cannot cure, a deficiency in the plaintiff’s own evidence. If P’s own evidence does not establish the basic elements of conversion, the application must fail regardless of what D2 has or has not said. 16.P’s submissions focus on D1’s inability to pass property rights to D2. However, this legal argument is entirely academic unless P first establishes, as a threshold factual matter, that D2 is or has actually been in possession of P’s forklift trucks. It is precisely on this foundational element that P’s evidence falls short of a prima facie case. E2. The signboard change does not connect D2 to the trucks 17.Paragraph 15 of the SOC pleads that the HLC signboard was changed from D1’s name to D2’s around May 2024 (approximately two to two-and-a-half years after the delivery of Trucks 2 to 10) while the tenant directories continued to display D1’s name. This may suggest a possible joint or overlapping occupation since May 2024. However, even assuming D2 occupied HLC since then, occupation of the premises where the trucks were once delivered cannot prove possession of the trucks themselves. First, goods delivered to an address in 2021 to 2022 cannot be assumed to have remained undisturbed there in 2024. Second, if they did remain, they could well have remained in D1’s continuing possession rather than being transferred to D2 as claimed by P. E3. Unsound pleading of transfer 18.Paragraphs 16 and 17 of the SOC plead the alleged transfer without any factual basis. The formulation “as far as the Plaintiff is concerned” identifies no facts supporting the bare assertion that D2 came into possession, nor does it specify which of assignment, lease, mortgage or pledge is alleged to have occurred, or when. A plea in this form does not, without particulars, satisfy P’s obligation to demonstrate a properly constituted case before the burden can shift to D2. E4. Problematic eyewitness evidence 19.Paragraph 7 of Mr Wu’s affirmation describes a colleague observing individuals “who appeared to be working on the 2nd Defendant’s premises” using one truck and another parked nearby, on both the May 2024 and 22 December 2025 visits. A video was said to have been recorded only for the first visit but was never produced. The screen captures only show a few forklift trucks of differing colours and shapes at a working logistics site. Therefore, it is unclear how P’s 4 Remaining Trucks were distinguished from others reasonably expected to be present at any logistics operator’s premises. 20.Mr Wu does not elucidate the method by which the colleague distinguished P’s specific trucks from the others present. The SOC provides descriptions of the trucks by model and serial number. A model number is evidently too general for accurate identification during the visits. Further, there is no evidence to suggest that the colleague approached the trucks to verify the serial numbers. The screen captures were taken from a distance, and no serial numbers were visible. A comparable undocumented observation of two trucks was purportedly made in December 2025, exhibiting similar identification deficiencies. E5. Inability to identify the specific trucks claimed 21.Even taken at its highest, P’s evidence does not support recovery of all four trucks. On each visit, the colleague’s observations account for, at most, two trucks (one in use, one parked), not four. Further, there is no evidence establishing whether the two trucks seen in May 2024 were the same as, different from, or partially overlapping with the two seen in December 2025. This creates a practical impossibility for the relief sought. Unless all four trucks are properly and distinctly identified, an order compelling the return of all four risks placing D2 in breach through no fault of its own, if D2 does not in fact hold the particular trucks named in such an order. E6. Unsubstantiated claim for residual value 22.Finally, P seeks an interim payment of HK$107,717 based on the “residual value” of the trucks. The term is never explained, and P has provided no evidence, valuation or otherwise, to support this figure. In the circumstances, there is no legal or factual basis to order payment of such sum against D2 at this stage. F. Conclusion 23.P’s application is therefore dismissed. 24.As D2 has not participated in this application, I make an order nisi that there be no order as to costs.
Dr William Leung, of William K W Leung & Co, for the plaintiff The 2nd defendant was not represented and did not appear | ||||||||||||||||||||||||||||||||
Cases cited in this judgment