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Tai Hang Jewellery (A Firm) v. Swiss Import Export Trading Co Ltd

Read the full judgment text of HCA 1912/1967 on BabelCite. This High Court CFI judgment was delivered on 12 November 1968.

1. This claim arises out of the fraudulent misappropriation by one Lai Kwok Kan of diamonds belonging to the plaintiff firm of jewellers, being three diamonds of 5.05 carats, valued at $22,552 and delivered to Lai on the 31st May 1967, and five diamonds of 6.43 carats, valued at $20,576 delivered to him on the following day. I would first refer to the claim and defence in general terms. The claim is made against the defendant company on the ground that Lai was their servant or agent and as such

Case No.HCA 1912/1967
Court
High Court CFI
Date12 Nov 1968
Judge—
Case Document
100%Judiciary

HCA001912/1967

IN THE SUPREME COURT OF HONG KONG

ORIGINAL JURISDICTION

ACTION NO. 1912 OF 1967

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BETWEEN
Tai Hang Jewellery (a firm) Plaintiff

AND
Swiss Import Export Trading Co. Ltd. Defendant

Coram: Mills-Owens J.

Date of Judgment: 12 November 1968

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JUDGMENT

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1. This claim arises out of the fraudulent misappropriation by one Lai Kwok Kan of diamonds belonging to the plaintiff firm of jewellers, being three diamonds of 5.05 carats, valued at $22,552 and delivered to Lai on the 31st May 1967, and five diamonds of 6.43 carats, valued at $20,576 delivered to him on the following day. I would first refer to the claim and defence in general terms. The claim is made against the defendant company on the ground that Lai was their servant or agent and as such was authorised to deal in, or at least to procure and assume possession of diamonds on the company's behalf; alternatively, that it was within his ostensible authority so to do. The defence is that Lai was merely a 'broker' with whom the defendant company had some association, in the way of making use of his services as and when required; he was not the company's servant or agent and was never invested with authority (whether express or implied, usual, or ostensible) to assume possession of diamonds on its behalf.

2. The evidence was largely undisputed. It embraced the circumstances in which Lai came to be associated with the defendant company and also certain previous dealings between the parties, in the year 1966, in which Lai was concerned. It was common ground that Lai had fraudulently misappropriated, and had pleaded guilty to charges of larceny of, the diamonds in question, and that through one Li Chuen alias Lai Yu Chuen he had pawned the three diamonds of 5.05 carats to the Tai Cheong Pawnshop; the five other diamonds not having been traced. Neither party called Lai as a witness although he was available. Following upon Lai's conviction the plaintiffs applied to the convicting court for a restitution order in respect of the three diamonds pawned to the Tai Cheong Pawnshop. Those proceedings were compromised by the plaintiffs paying $10,000 to the pawnbrokers on their restoring the pawned diamonds to the plaintiffs. The claim is for damages in conversion, namely for $20,576 the value of the five diamonds which remain untraced, and for $10,000 being the sum paid by the plaintiffs to the pawnbrokers to recover the other three diamonds. With respect to the claim for the $10,000 the defence asserts that by instituting the restitution proceedings and compromising them the plaintiffs are estopped from suing the defendant company in respect of the diamonds pawned; the plaintiffs having elected to proceed against the pawnbrokers in respect of those diamonds the defendant company, if liable at all, became exonerated from liability to the plaintiffs in respect thereof.

3. Mr. William Russell gave evidence that he was the managing director of Arnhold Trading Company Limited, which company acted as the administrative and financial manager of the defendant company in Hong Kong, the managing director of the defendant company (Mr. Orlowitz) being resident in Switzerland. Mr. Russell held a power of attorney to act on behalf of the defendant company, and was in overall control of the defendant company in respect of its activities in Hong Kong except when Mr. Orlowitz happened to be here.

4. In the years 1966 and 1967, the defendant company had a manager resident in Hong Kong, a Mr. Huber, but Mr. Huber's contract had since expired and he was no longer in Hong Kong.

5. The defendant company, Mr. Russell said, handled agencies in high class Swiss watches and also did business in diamonds. The company had overseas connections, receiving consignments of diamonds from overseas and disposing of them in Hong Kong. Occasionally the company purchased diamonds locally to meet the requirements of a local customer. Mr. Huber was authorized to transact business on behalf of the defendant company within certain financial limits, and otherwise subject to consultation with Mr. Russell or with Mr. Orlowitz. Mr. Huber was not authorised to sign cheques.

6. Mr. Russell said that Lai Kwok Kan was a broker and had never been paid a salary by the defendant company. So far as the defendant company was concerned, Lai was paid a brokerage on any sales he effected, whether of watches, clocks or diamonds. He was paid monthly on the total turnover of his sales. He was not authorised to sign any documents on behalf of the defendant company; in particular he was not authorized to sign bailment receipts in respect of diamonds, nor was he authorized to buy diamonds on behalf of the defendant company. Lai also, according to Mr. Russell, did other business with which the defendant company had no connection, and he had also personally bought diamonds from the defendant company.

7. Mr. Russell said that when he became attorney for the defendant company in April 1965, Lai was associated with the company as an 'understudy' to his uncle, Mr. Lai Sin Yeung, who was then active as a broker in the watch and clock business. Mr. Lai Sin Yeung retired in June 1965 and Lai Kwok Kan took over from him as a similar broker. At this time, that is to say in 1965, the defendant company had not yet started in the diamond business in Hong Kong. Then the defendant company decided to go into the diamond business and this was partly because Mr. Russell himself had considerable knowledge and experience of the diamond business and partly because Lai Kwok Kan was reputed to have some knowledge of and connection with the diamond business in Hong Kong. Mr. Huber would have had some knowledge of diamonds; high class business in watches and clocks necessarily involved some such knowledge. Mr. Russell agreed that it would be correct to say that Lai was the person most active in seeking local buyers for the diamonds which the defendant company obtained on consignment. It was for the manager, Mr. Huber, to decide the price at which Lai could dispose of diamonds on behalf of the company, but as a generalization it would be true to say that if Lai could obtain a price of 10 per cent over and above the price which the defendant company had paid, he would be entitled to conclude a deal - subject however to this: that Lai could not exceed the credit limits laid down, limits which might vary from person to person and concern both the amount and period of credit. In respect of such limits, Lai was subject to the directions of the manager, Mr. Huber, or of Mr. Russell. Even if a particular credit limit had been fixed in respect of a particular buyer, nevertheless in future transactions with the same buyer, Lai would have to consult Mr. Huber because all sales had to be approved by him. Mr. Huber had to sign the invoice or sale note on behalf of the defendant company; Lai had no authority in that respect. Lai would be entrusted with temporary possession of diamonds belonging to the defendant company on signing and handing to Mr. Huber a receipt therefor. If, as was usual in the diamond business, Lai parted with possession of any such diamond to a prospective customer then he ought to obtain from that customer a bailment receipt acknowledging receipt of the diamonds for the purposes only of inspection. The period for which a prospective customer was allowed to retain a diamond for inspection was five days, basically a working week, so that Lai could by producing a bailment receipt signed, or purporting to be signed, by a prospective customer, secure possession of diamonds belonging to the defendant company and not ordinarily be liable to be questioned concerning their return for about a week. When Lai obtained diamonds from the company in order to go out and seek business, he would sign for them himself, and in that case he was expected to return them the same day unless he had parted with them to a prospective customer in which case he would have to hand over the bailment receipt signed by the customer. In other words, he was allowed to place diamonds on approval for a week against receipts signed by the prospective customers; otherwise he was bound to return them the same day.

8. Mr. Russell agreed that Lai had misappropriated diamonds of very considerable value and that this had come to his notice fortuitously as a result of steps taken by him (Mr. Russell) on behalf of the company to call in its diamonds owing to the disturbances in Hong Kong at the end of May or early June 1967. Mr. Russell agreed also that Lai effected these misappropriations mainly by forging customers', or purported customers', bailment receipts.

9. Mr. Swaine, counsel for the plaintiffs, directed particular attention to the following extracts from Mr. Russell's evidence; concerning with an answer to a previous question -

" A. It was not Swiss Import Export Trading Company's regular business to receive local diamonds.
Q. Occasionally?
A. Occasionally if we had an inquiry we would look for diamonds in the market - Mr. Lai would look for diamonds in the market and bring them in and say 'I can sell this diamond' and ask for it to be signed for, and he would get that and he would take it out to sell it to his prospective customer; but it was not a regular part of Swiss Import Export Trading Company's business to receive local consignments of diamonds.
Q. But it was the case sometimes that a customer would want a particular diamond which could only be obtained locally and then Mr. Lai would go and obtain such a diamond locally for the inspection of Swiss with a view to a possbile purchase?
A. With a view to Mr. Lai selling it. We were not buyers of diamonds locally unless Mr. Lai had a prospective buyer.
Q. But the sale, if materialised would be a sale by Swiss to this particular customer?
A. To a specific customer whom Mr. Lai had in mind when he looked for the particular gem. When I say gem it would be a diamond of 
more than 1/ 1  1  carats.
2
Q. It would be a sale by Swiss on which Lai earned a commission?
A. Yes.
Q. And on Mr. Lai bringing in a diamond in those circumstances, Swiss would sign a bailment receipt?
A. Yes.

x           x           x           x           x           x           x           x

Q. And within Swiss it would be Lai who would be on the lookout for a local supplier?
A. Yes. I mean there are very few good diamond suppliers in Hong Kong. When I say there are few, there are a limited number; it is not unlimited.
Q. Within Swiss itself, in the event that Swiss wanted to get a diamond locally, it would be Lai who would go and look - not Mr. Huber, for instance?
A. He would not necessarily go and look. He might ring them up and ask - he might telephone and say 'Have you got a  2  1  carat

2
blue-white diamond? I have a buyer'.
Q. But Lai was the bridge?
A. Yes.

x           x           x           x           x           x           x           x

Q. i.e. if he found a customer prepared to pay the 10 percent over the invoice price then he might conclude the deal without further reference to the company provided the credit terms were met?
A. The company would know which buyer he was going to, of course.
Q. Yes?
A. In other words, if he went out with a parcel of diamonds, say 20 carats of diamonds, which he was authorised to sell to Mr. Li Chi Yuen, or whoever it might be, at 840 a carat and if he got that price he could close the deal and bring it back to Mr. Huber for signing the invoice.
Q. Isn't the position simpler, Mr. Russell, because presumably for every prospective customer who has done business with Swiss before, you would have already established a limit of credit for that particular customer?
A. That is right.
Q. Now, Lai goes out with a pre-determined price, 10 per cent over the invoice price, to that customer and if the customer is prepared to pay the ten per cent over the invoice price and the credit is within the pre-determined limit, then Lai surely can conclude the deal on the spot?
A. That is right, yes he can, and the invoice is made out and signed by Mr. Huber.
Q. The paper work came later, of course.
A. More or less - it is certainly on the same day.
COURT: What is it Mr. Huber would have to sign?
A. The invoice or you may call it a sale note. It is an invoice with the buyer's name, payment terms, the cost of the goods and the weight and the parcel number.
COURT: Mr. Lai then could not give to a purchaser any sort of document of title?
A. No."

10. I turn to the evidence regarding the previous transactions, in 1966, upon which the plaintiffs rely as going to prove a holding out of Lai by the defendant company. According to Mr. Chan, an elderly and experienced salesman of the plaintiffs, Lai telephoned him on the 10th February 1966 and as a result Mr. Chan took a mumber of diamonds to the offices of the defendant company. Present there were Mr. Chan, Lai, and a European (who, it is agreed, must have been Mr. Huber). Some conversation took place, Mr. Chan and Lai speaking in Cantonese and Lai interpreting into English for Mr. Huber's benefit. Thereupon the diamonds were placed by Mr. Chan on Mr. Huber's desk; it is to be presumed in Mr. Huber's presence. Mr. Huber then signed a bailment receipt presented by Mr. Chan. This document was not exhibited. On the 17th February Lai again telephoned Mr. Chan saying he would take one of the diamonds, being the one of 2.52 carats which had been priced at $23,940 in the bailment receipt. Thereupon Mr. Chan again attended at the office of Mr. Huber with an invoice (Ex.C1) made out by the plaintiffs to the defendant company in respect of that diamond. Again present were Mr. Chan, Lai, and Mr. Huber. It was agreed that payment would be made in one month's time. Mr. Chan asked for a post-dated cheque but was told by Lai that he could not expect to receive a post-dated cheque as 'we big firms do not issue post-dated cheques'. Mr. Chan then said he would call to collect payment on the 17th March. The other diamonds covered by the bailment receipt were returned to him. On the 17th March Mr. Chan duly attended at Mr. Huber's office, accompanied by Mr. Tam of the plaintiff firm. On this occasion Mr. Huber made out a cheque for the $23,940 (Ex. C2) and this was handed to Mr. Chan, but not before Mr. Tam had been required, by or on behalf of Mr. Huber, to go back to the plaintiffs' office to get an official receipt (also marked Ex. C2). As counsel for the defendant company emphasises, the cheque was the cheque of the defendant company, signed by an authorised signatory, Mr. Zindel; the bailment receipt had been signed by Mr. Huber; an official receipt of the plaintiff firm was insisted upon; and this official receipt given by the plaintiffs was addressed to the defendant company. This, the defence say, illustrates the ordinary course of a regular transaction with the defendant company.

11. The next transaction referred to in evidence by Mr. Chan commenced on the 1st April 1966, that is to say about a fortnight later. On that day Lai telephoned Mr. Chan asking for diamonds for inspection and Mr. Chan attended at Mr. Huber's office with three diamonds, priced together at $48,794. The diamonds were handed over to Mr. Huber and a bailment receipt was signed and given to Mr. Chan. Mr. Chan said he could not remember who signed the bailment receipt, Mr. Huber or Lai. The original was not available for production but a copy was produced (Ex.C3) which, however, has the signature space blank. It is addressed to the defendant company. On the 7th April Lai telephoned Mr. Chan saying the transaction had not materialised, and thereupon Mr. Chan attended at Mr. Huber's office. In Mr. Huber's presence the diamonds were returned to Mr. Chan and he returned the bailment receipt. It is impossible to be positive on the point but I think it is likely that the bailment receipt was signed by Mr. Huber.

12. The third transaction referred to by Mr. Chan took a different course. On the 9th July 1966 Lai telephoned Mr. Chan saying he was looking for a 1 carat diamond. Thereupon, Mr. Chan says, he took some diamonds to the offices of the defendant company. On this occasion Mr. Huber was not present. Present were Mr. Chan, Lai, and a Mr. Li. Mr. Chan left the diamonds with Lai, obtaining a bailment receipt - but, he said, he was unable to remember who signed it. The document was not exhibited. (Here, perhaps, it is pertinent to remark that it appears to be common ground that once bailment receipts have served their purpose, owing to either the sale or the return of diamonds, they are not retained). On the 21st July Lai again telephoned Mr. Chan saying one diamond would be bought. This was one priced at $4,551. Mr. Chan attended at the defendant company's offices and saw Lai. Mr. Chan collected the unsold diamonds, returning the bailment receipt, and received also a cheque (Ex.B) for $4,551 which had already been made out and signed before he got there. Mr. Li was present on this occasion also, but again not Mr. Huber. Mr. Chan professed to have been unaware on receiving this cheque that it was not a cheque of the defendant company, as he does not read English, he says. I am unable to accept that. The circumstances are strongly against it. Mr. Huber was not present on any occasion of this transaction; the cheque (Ex.B) is quite obviously a personal cheque; it was post-dated one month (i.e. to the 21st August); the payee is blank; it is entirely unlike the cheque (Ex.C2) of the defendant company received by Mr. Chan on the 17th March. In my view Mr. Chan could not fail to have been aware that this was not a regular transaction with the defendant company but was rather a transaction with Lai personally.

13. Then came the two transactions in the diamonds the subject of these proceedings.

14. On the 31st May 1967 - that is to say after a lapse of some 10 months - Lai telephoned Mr. Chan asking him to bring some diamonds. Mr. Chan attended at the offices of the defendant company with five diamonds. He saw Lai who selected and took possession of three. Mr. Chan deleted the other two from the bailment receipt which he had brought with him and Lai signed this bailment receipt as so altered. It is Ex.C4, and shows the price per carat; it is addressed to the defendant company; Mr. Chan says it was so addressed at the time; it is signed, simply, 'Lai'. These are the three diamonds, of the aggregate value of $22,552, which found their way to the Tai Cheong Pawnshop. There is no suggestion that any officer of the defendant company was present during any part of this transaction.

15. On the following day, the 1st June 1967, Lai telephoned Mr. Chan saying he was looking for a better diamond, one of 3 carats. Mr. Chan took six diamonds to the offices of the defendant company and saw Lai to whom he handed the diamonds on receiving a bailment receipt signed by Lai (Ex.C5). Mr. Chan says this receipt was addressed to the defendant company when signed. On signing it Lai put a 'chop' of the defendant company over his signature. Mr. Russell said this was the 'chop' used by the office boy to stamp the back of envelopes. On this occasion, as on the 31st May, Mr. Chan says, Lai asked him to come back in a few days. Then on the 3rd June, Lai telephoned Mr. Chan saying he wished to return one of the diamonds. Mr. Chan went to see Lai, collected the one diamond and crossed it out in the bailment receipt (Ex.C5) - thus leaving in Lai's possession on the occasion of this transaction the five diamonds of a total of 6.43 carats valued at $20,576. Lai asked Mr. Chan to return another day. There is no suggestion that any officer of the defendant company was present at any stage of this transaction.

16. Following these two transactions of the 31st May and the 1st and 3rd June, 1967, it is evident that Lai absented himself from the offices of the defendant company.

17. The plaintiffs rely also on other evidential matters. It is admitted that Lai's name appeared as a member of the 'staff' of the defendant company in the Dollar Directory issues of 1966 and 1967 (Exs. C6 & 7) and that the defendant company was responsible for those insertions. It is admitted also that the defendant company's solicitors, in a letter dated the 29th August, 1967 (Ex. C9) said that certain negotiations were proceeding into transactions for which "a member of our client's staff" had been convicted.

18. Lai has been referred to as a 'broker', a not uncommon intermediary in Hong Kong. In Fowler v. Hollins(1), Brett J. said, at p.623:-

"The true definition of a broker seems to be, that he is an agent employed to make bargains and contracts between other persons in matters of trade, commerce, or navigation. Properly speaking, a broker is a mere negotiator between the other parties. .................................... He himself, considered as only a broker, has no possession of the goods, no power actual or legal of determining the destination of the goods, no power or authority to determine whether the goods belong to buyer or seller or either; no powers, legal or actual, to determine whether the goods shall be delivered to the one or be kept by the other. He is throughout merely the negotiator between the parties."

If Lai were, strictly, a broker as above defined, and diamonds were handed to him as such, then no liability would have attached to the defendant company for theft or conversion by Lai in the absence of actual or ostensible authority having been vested in him by the defendant company to assume possession of the diamonds on its behalf; the scope of his authority vis-a-vis the defendant company would have been limited to negotiation; for the purposes of negotiation he might be termed the agent of both parties; his possession of the diamonds would have been in the capacity of an agent of the plaintiffs. But the question whether Lai was a broker in the sense expressed in Fowler v. Hollins(1) does not depend simply upon that label being placed upon him. Liability, on the part of the defendant company, depends on the authority, express or implied, usual, or ostensible, conferred upon him by the defendant company; on whether he was acting within the scope of his authority.

19. Bowstead on Agency (12th Ed.) Article 99 says:-

"          2. A principal is liable for loss or injury caused by the wrongful act of his agent, whether or not his servant, in the following cases, namely:

(a) ..................................... ;
(b) if the act done be one of a class of acts within the actual or apparent authority of the agent; and for such an act the principal may be liable notwithstanding that it be done for the benefit of the agent alone and not for that of the principal;"

This statement is, of course, supported by the decisions in Lloyd v. Grace, Smith & Co.(2) and Uxbridge Permanent Benefit Building Society v. Pickard(3). Bowstead, in the same article, contrasts the position of a servant for whose torts the master is also liable when committed in the course of the employment. As Bowstead points out (at p.226) judicial language has varied, in referring to "the course of employment" and "the scope of authority", almost indifferently in the case of servants and of non-servants. In Navarro v. Moregrand Ltd.(4) Lord Denning said:-

"          Thus far there is no room for controversy. But the Judge inferred from those cases the converse proposition - namely, that if a servant or agent is not acting within his actual or ostensible authority, then he is not acting in the course of his employment. I do not think that that is correct: it is a confusion between the responsibility of a principal in contract and his responsibility in tort. He is only responsible in contract for things done within the actual or ostensible authority of the agent; but he is responsible in tort for all wrongs done by the servant or agent in the course of his employment, whether within his actual or ostensible authority or not. The presence of actual or ostensible authority is decisive to show that his conduct is within the course of his employment, but the absence of it is not decisive the other way."

But in Ormrod v. Crosville Motor Services Ltd.(5) Lord Denning did not equate "scope of authority" with "scope of employment". That was a case arising out of the negligent driving of a motor vehicle. In that class of case, it would appear, the law makes no distinction between servants and agents who are not servants. (see also e.g. Scarsbrook v. Mason(6) and Parker v. Miller(7); likewise in the case of deceit (see Briess v. Woolley(8)); and likewise the principal is liable to make good the loss where the money or property of a third person is misapplied by his agent while acting within the apparent scope of his authority (see Bowstead, Article 100 and see also, e.g., Russo-Chinese Bank v. Li Yau Sam(9)). But the master is not liable if the case is merely one where the servant has taken the opportunity of his service to steal or defraud for his own benefit in the absence of circumstances imposing a duty on the master (see Ruben and Landerberg v. Great Fingall Consolidated(10); Russo-Chinese Bank v. Li Yau Sam(9); and Morris v.C.W. Martin & Sons Ltd.(11)); I have no doubt the same applies in the case of an agent not being a servant.

20. The crux of the present case, as it appears to me, is whether the defendant company, in the words of Willes J. in Barwick v. English Joint Stock Bank(12), put Lai in its place as to the receipt of diamonds from others, and must therefore be answerable for the manner in which he conducted himself in doing the business which was the business of the defendant company, or, I would add, whether the defendant company invest? him with ostensible authority to conduct such business (meaning receiving diamonds on its behalf). As it may be put - first, was Lai authorized, actually or impliedly, to receive and personally assume possession of diamonds on the defendant's behalf; secondly, was it in the usual course of his employment so to do; thirdly, was it within his apparent or ostensible authority to receive and assume possession of diamonds, on the defendant's behalf, and did the plaintiffs act on that authority. Or, on the other hand, was it the case merely that Lai took advantage of the opportunities afforded to him by his association with the defendant company to obtain and misappropriate the plaintiffs' diamonds, in which event the defendant should not be held liable.

21. Plainly, in my view, the plaintiffs can derive no assistance from the course of the transactions in 1966. On the contrary, as I have indicated, Mr. Chan could not have failed to realise in the one instance where Lai gave his personal cheque that he (Lai) was acting personally. If Mr. Chan did fail to realise this it is not a matter for which the defendant company is responsible. Indeed Mr. Chan and the plaintiffs should have taken warning from the course of that transaction.

22. I see little of value in the matter of Lai being named as a member of the 'staff', obviously in a lowly position, in the Dollar Directories or in the matter of him being referred to as an employee in the solicitor's letter; neither matter could be taken as implying authority in any particular respect, certainly not authority to receive and assume possession of diamonds on behalf of the defendant company.

23. Clearly, the giving of bailment receipts is an important part of the diamond business as it was conducted by both parties to this action. If in the present case the plaintiffs had bailment receipts signed by Mr. Huber or Mr. Russell no doubt the defendant company would have accepted liability and this action would never have been brought. The absence of any such bailment receipts must operate strongly against the plaintiffs' claim, if not be absolutely fatal. No doubt Lai was authorised to look for diamonds, suitable for the requirements of a customer of the defendant company, from time to time, and to procure them for inspection by the defendant company, but, in my view, his authority stopped short of the taking of diamonds into his personal possession on behalf of the defendant company; nor were the plaintiffs justified, in the circumstances, in ascribing to the defendant company possession of diamonds handed over to Lai personally, on his signature only. It is plain that transactions were always documented and in my view if the plaintiffs relied on bailment receipts signed by Lai personally they did so at peril that the defendant company might not be involved in the transaction. Diamonds are not goods such as an ordinary employee might sign for on delivery. Counsel for the plaintiffs relies considerably on the passages from the evidence of Mr. Russell which are reproduced above. In my judgment that evidence does not go so far as to show that whenever Lai obtained a diamond, such as from the plaintiffs, he must be taken to have assumed possession with the authority of and on behalf of the defendant company. It was surely for the plaintiffs to obtain the defendant company's bailment receipt signed by a person in authority. So far as the evidence goes, the label 'broker' appears to be an apt one to describe Lai's association with the defendant company. As I find, he did not have authority, actual or implied, or usual, to fix the defendant company with possession of diamonds procured through his negotiations; and the defendant company had not allowed him to be invested with apparent or ostensible authority so to do. On the contrary, as it appears to me, the case is one where. Lai took advantage of his association with the defendant company to misappropriate the plaintiffs' diamonds. Accordingly I give judgment for the defendant company, dismissing the claim with costs.

12th November, 1968.

(R.H. Mills-Owens)
Puisne Judge.

(1) (1872) L.R. 7 Q.B. 616.

(2) (1912) A.C. 716.

(3) (1939) 2 K.B. 248.

(4) (1951) 2 T.L.R. 674 at 680.

(5) (1953) 1 All E.R. 711.

(6) (1961) 3 All E.R. 767.

(7) (1926) 42 T.L.R. 408.

(8) (1954) A.C. 333.

(9) (1910) A.C. 174, 184.

(10) (1906) A.C. 439.

(11) (1965) 2 All E.R. 725 732.

(12) (1867) L.R. 2 Exch. 259.