Preamble Properties Finance Ltd v. Italian Motors (Sales & Service) Ltd and Another

HCA002135/2000

HCA2135/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.2135 OF 2000

---------------------

----------------------

Coram: Deputy High Court Judge Muttrie in Court

Dates of Hearing: 24 to 27 June 2003

Date of Judgment: 25 July 2003

-------------------------

J U D G M E N T

-------------------------

1.This action arises out of a road accident on 29 October 1999, when the plaintiff's motor car, a Ferrari Spider registered no.AA 332 ("the car") was in collision with a light goods vehicle registered no.EY 7622 ("the truck") owned and driven by the 2nd defendant and third party, Mr Ma.

2.The plaintiff is a limited company in the mortgage business. In 1997 it bought the car from the 1st defendant ("Italian Motors") for $2,100,000.00 and took delivery of it in 1998. The car was used for personal transport by the plaintiff's director Mr Hui Yu Shing ("Mr Hui"), and from time to time it was returned to Italian Motors for maintenance and repairs.

3.The accident happened on one such occasion while the car was in Italian Motors' custody, and being driven on a road test by an employee, Mr Ho Kwok Wai ("Mr Ho"). He was driving back to Italian Motors' garage in Sun Wong Toi Road, when, just before he reached it, the car came into collision with the truck, and was quite badly damaged on the front nearside.

4.The plaintiff originally claimed against both defendants for repairs, loss of use, diminution in value and other losses. In fact Italian Motors repaired the car, which was off the road until July 2000, and did not charge the plaintiff for it. Subsequently in April 2001, the plaintiff traded in the car to Italian Motors for a new Ferrari, at an agreed trade-in price of $1,200,000.00 and they also gave him a discount of $350,000.00 against the price of the new car. Now the plaintiff has amended his claim so as to claim only for loss of use amounting to $648,000.00 and loss of no claims bonus amounting to $15,600.00. However Italian Motors is seeking to pass on to Mr Ma all the losses, including the repair costs and diminution in value and the sums claimed by the plaintiff.

5.The issues here are, in the first place, whether the accident came about through the negligence of Mr Ho or Mr Ma, or both of them and if so their percentage contribution. There is also an issue as to whether Italian Motors is not liable to the plaintiff, by reason of a disclaimer clause in its repair and maintenance contract. So far as quantum is concerned, there is a dispute as to whether the plaintiff through Mr Hui hired another car at all, for the period of loss of use, and, if he did, whether the amount he says he paid, i.e. $3,000.00 per day is reasonable. There are also issues as to the cost of repairs and the loss of value and generally how much of its losses Italian Motors can pass on to Mr Ma.

The accident

6.Sun Wong Toi Road runs east and west along the southern perimeter fence of the old Kai Tak Airport. Italian Motors' premises are at building no.90 on the south side. For most of its length the road is a four-lane two-way road, but it divides somewhere near building nos.70-78 at which point the west-bound traffic goes straight ahead towards the junction with Kowloon City Road, while the east-bound traffic comes in, around a series of bends culminating in a gentle left-hand bend, from Olympic Avenue. Just to the east of where the road division ends and two-way traffic begins, there is on the north side a gate through the old airport perimeter fence leading to a scrap metal yard within the fence.

7.At about 9.35 a.m. on 29 October 1999, Mr Ma was driving the truck westwards in the outer lane when at a position near building nos.70-78, the truck turned across the east-bound carriageway. Mr Ho was driving the car in the eastwards in the outer lane and had just come out of the final bend. The front nearside of the car came into collision with the rear offside of the truck. The truck ended up on the northern walkway with its front diagonally into the scrap yard gateway. The car ended up in the inner lane with its front diagonally towards the northern walkway.

8.The only evidence comes from Mr Ho and Mr Ma. Mr Ho adopted a witness statement as his evidence-in-chief. He says that he was driving the car to check the performance of the clutch. At about 9:35 a.m., he was driving the vehicle from the old airport to the Italian Motors' garage. He was driving eastwards in the outer lane at 45 kilometres per hour in second gear. The weather was good and the road surface dry. The brakes were in good condition. The traffic was light. As he drove towards the building at nos.70-78 Sun Wong Toi Road, he saw the truck on the outer lane of the opposite carriageway about four car lengths away. When the truck was three car lengths away, it suddenly made a right-turn across the double white lines and across his path without making any signal. He turned to the left, applied the brakes and sounded the horn but was unable to avoid a collision. In oral evidence, Mr Ho said that he thought that the truck was travelling at 60 or 70 kilometres per hour. He was travelling at 45 kilometres per hour, partly because he had to negotiate the series of bends from Olympic Avenue and partly because he was familiar with the road, and knew there was a junction out of which lorries might drive, i.e. the scrapyard gate. He was also about 50 metres from his destination. Also he was not allowed by his employer to drive at excessive speed.

9.Mr. Ho said that when he was three car spaces away, he saw the truck make a right-turn without signalling and as far as he could see, the truck was trying to turn into the scrap yard gate. He could not stop in time and so collided with it. After collision, his car was pushed into a broadside position and it was pushed forward about five feet.

10.It is the evidence of Mr Ma that he was avoiding a pedestrian. Mr Ho's evidence is that he did not see any pedestrian, and if he had, he would also have had to take evasive action.

11.Mr Ho had given two statements to the police. In the first one what he said agreed more or less with his evidence. In his second one, he volunteered to the police that he had seen a scrap metal on the back of the truck after the accident.

12.Mr Ho was cross-examined at length, mainly about what he meant by car spaces or lengths and the perceived differences between what appeared in his statement and what appeared in his evidence. I do not think that anything particularly significant came out in cross-examination. It must be remembered that any estimate of speed, distance and so on is bound to be only an estimate and if often inaccurate . Under cross-examination by the counsel for the plaintiff, it was suggested to him that he had been driving too fast, and had gone out of control; and further that because there were no skid marks he had failed to brake. He maintained that he had not been speeding and explained the lack of skid marks by the car's advanced braking system which does not permit the brakes to lock up. He confirmed the existence of a notice within the office of Italian Motors setting out the terms and conditions of repair, and I will come back to this later on. Re-examined, he said that he did not expect lorries to turn right into the scrap yard from Sun Wong Toi Road because he had some time seen police officers stop lorry drivers at that position. There was in fact no road sign to prevent vehicles from making a right-turn into the scrap yard gate.

13.Mr Ma also adopted a written statement as evidence-in-chief. According to the statement, when he was driving the truck westwards near building nos.70-78, there was a man rushing out from the right front of the vehicle to cross the road. In order to avoid knocking the man down, and seeing that there was no vehicle on his right, he turned the vehicle to the right and braked immediately. The truck then crossed the opposite lanes and stopped on the pavement. When he stopped he heard a bang from his left side and felt a collision at the rear. He alighted and found the car had collided with the left rear wheel of the truck.

14.Mr Ma's oral evidence-in-chief was that he was driving his truck to Tseung Kwan O with waste materials which consisted of refuse and plastic oil containers. He was not heading for the scrap yard. The pedestrian rushed out from his right side to the double white line and stood still there. When he saw that, he decelerated so that the pedestrian could cross the road, and swerved into the opposite lane. When the pedestrian saw that the truck had decelerated he then ran across the road. While the truck was swerving, there was no car coming the other way.

15.He said that when the collision took place, the truck had already crossed the outer east-bound lane. The front of his lorry had already entered the gate and the rear was sticking out about three feet into the inner lane. When he saw the car, it was travelling in a zigzag manner.

16.Cross-examined by counsel for the 1st defendant, Mr Ma estimated the distance from the pedestrian, when he first saw him, at about 20 feet, or about the distance from where he sat in the witness box and the far wall of the court. In fact that distance would be about 30 or 35 feet. The man ran to the double white line and he decelerated, and when he did the man ran across in front of him. He swerved to the right; he did not dare to swerve to the left. His speed before he started decelerating was between 40 and 50 on the speedometer, which he thinks reads in kilometres rather than miles.

17.As to the collision itself, Mr Ma said that when it happened, his truck was still moving. He then said that he was stationary, in the scrap yard entrance and about three feet of the rear of the lorry was sticking out into the slow lane. The collision happened after the lorry had come to a stop. He confirmed that when he first saw the car, it was in the fast lane with its front-end zigzagging. He could see the car moving both ways. He thought it was caused by the driver braking. He had not told the police about this. In any event, according to him, the collision happened when the rear of the truck and the front of the car were both in the inner lane east-bound. He also said that when he first saw the car it was travelling at a very high speed "like a speed boat". He said that his wheel was distorted by the impact.

18.Cross-examined by counsel for the plaintiff, he said that when he saw the pedestrian crossing in front of him, he saw no traffic coming in the east-bound lane. He saw the car when he had crossed to the middle of the east-bound lanes. At this point, he estimated the distance between the car and the truck at a little more than the length of the court room which I estimate at about 60 feet. His foot was still on the accelerator at that point. He saw the car zigzagging when his truck had already almost reached the scrap yard gate. However by the time he heard the bang of the impact, the truck had stopped.

19.In a statement to the police, Mr Ma had said that when he saw the man ran out from his right-hand side, he was half a car length away. Under cross-examination, he said that he could not remember if he had said that to the police. He could remember some things, but other things he could not.

Evaluation

20.The obvious inference from the path taken by the truck is that it was making a right-turn from the west-bound carriageway into the scrap yard gate. In effect this is what Mr Ho says he saw; the truck made a sudden right turn across his path and towards the gate, without indicating. Mr Ho also says that he saw scrap metal on the back of the truck. He volunteered this information to the police in a second statement which may suggest that it is self-serving; but on the other hand it is something the police could easily have checked and therefore it could be awkward for him to tell the police that, if it was not true.

21.Mr Ma says that he was not going to the scrap yard and there was no scrap metal on the truck; he was taking assorted scrap, including plastic oil containers, to a landfill site at Tseung Kwan O. He says that the agreed photographs show this, but they are not of good quality, and they do not help very much. However, even if Mr Ma was not delivering scrap metal to the scrap yard, it is not impossible that he was turning into the scrap yard in order to collect some other kind of refuse.

22.What is important is his story of the pedestrian who suddenly rushed in front of the truck. Of course this is not an unusual situation, and it is true that Mr Ma told the story at an early stage. However, the evidence is full of inconsistencies and improbabilities. So far as inconsistencies go, in the first place, we have the discrepancy between the statement to the police that the pedestrian crossed half a car length away, and the evidence that he crossed something like 30 or 35 feet away. Then we have the evidence of having seen the car "zig-zagging" which had never been mentioned before. And in the police statement, there is mention of the car being in the 2nd lane; but in evidence it moves into the 1st lane, and the impact takes place there, when the truck is stationary.

23.There are also the improbable aspects. In the first place, if a pedestrian suddenly appears, rushing across the road, the driver's instinct is primarily to brake hard. There may or may not be a swerve either way, depending on where the pedestrian is, the space available and the other traffic; but the first priority is to brake. Yet according to Mr Ma, he did not brake; when body of your lorry was on the eastbound his right foot was still on the accelerator though he was decelerating. Further, while according to him the pedestrian was crossing from his right to his left, so that one would only expect a fairly slight swerve to be necessary, he managed to swerve right across the two lanes of the eastbound carriageway and into the scrap yard gateway.

24.It is also difficult to accept Mr Ma's evidence that when he started the swerve, the oncoming lanes were clear. The road plan shows that the curve of the eastbound carriageway is quite a gentle one and the photographs of the vehicles taken towards the bend from the northern kerbside show visibility for a good distance into the bend. The view would be even further, from the outer westbound carriageway. Of course Mr Ma says that the car was going fast, but this is the sort of situation where, for it not to be within the visible area when the manoeuvre is started, the oncoming vehicle would have to be travelling very fast indeed. The more likely scenario is that he did not see the car coming, because he was not keeping a proper lookout.

25.Finally, of course, there is the fact that Mr Ho says, and has said consistently throughout to the police and in evidence, that he never saw any pedestrian. He saw the truck turn right across his path. He could not have failed to see the pedestrian, if there was one, because the pedestrian would have been well within his cone of vision. If he had seen a pedestrian there would be no reason for him to deny it, because the pedestrian's actions would tend to exonerate him, as they would tend to exonerate Mr Ma.

26.Having considered the evidence of the two drivers, I find that I do not believe Mr Ma's story of that he manoeuvred to avoid a pedestrian.

27.It is more probable than not that he turned into the scrap yard gate without signalling and without keeping a proper lookout for oncoming traffic. I find that he drove negligently and so caused or contributed to the accident.

28.I turn to the question of Mr Ho's negligence. The argument is that he must have been speeding. Mr Ma describes the car as travelling "like a speedboat", but a vehicle always seems to be going fast when it suddenly comes into view especially if it is coming out of a bend, and in any event I do not think that Mr Ma's evidence can be relied on, if, as it appears, he has made up the story of the pedestrian. The point of impact is relied on, as is the extensive damage to the car; but it is difficult to infer much from damage without expert evidence.

29.Mr Ho says that he was travelling at 45 k.p.h. i.e. within the general speed limit of 50 k.p.h.; but then so does Mr Ma, and probably so do most drivers involved in collisions, whether it is true or not. Much is made of the fact that he did not tell the police, but did tell the court that his car was pushed by the impact; but I think one can tell, from the pictures of the damage to the car, that the impact must have been at an acute angle and if the truck was moving at the point of impact, as it must have been, the car would be pushed sideways. Certainly it ended up at quite a sharp angle to the line of travel. There is no reason to believe that Mr Ho lost control; the car is a very sophisticated one and I accept his evidence that it had an advanced braking system, which would tend to prevent skidding. Also while the car is a very powerful one, and one of which a driver unused to driving it might easily lose control, Mr Ho has been working for Italian Motors and driving cars of this sort for many years.

30.He says that the truck turned when he was three car spaces away. There seems to be some suggestion that he meant lorry spaces, or lorry parking spaces; he said that at one point in cross-examination, but I asked him what he meant and he said that he meant car parking meter spaces. This was quite consistent with what he had said earlier and in his statements. While such estimates are notoriously inexact this would give a distance of about 15 metres, or 50 feet. He agreed that he could brake to a standstill from 45 k.p.h. in less than 20 metres and I expect that the braking time (excluding the thinking time) would be rather less than that. So there is at least a suspicion that he was going somewhat faster than he says, but I do not see that there is more than that. There is I think insufficient evidence to establish on the balance of probabilities that Mr Ho was driving too fast, and certainly none that he failed to keep a proper lookout, or was otherwise negligent as particularised in the pleadings. I conclude that Mr Ho was not negligent, and that the accident was caused entirely by the negligence of Mr Ma on whom 100% liability must rest.

31.Since I have found Mr Ma 100% liable in tort it will not be necessary to go into the question of Italian Motors' liability in contract or as bailee for reward. Either way, their duty would be to take reasonable care of the vehicle. It was reasonable enough for them to have it test driven by their employee. They would only be liable if he did not take reasonable care. On my findings, he did. So I do not need to consider the question of the exemption clause relied on by Italian Motors; though I would think that in the normal way, since it purports to exempt Italian Motors from liability "unless some deliberate act of damage or negligence on the part of one or more of the Company's employees is proved" it would not have exempted them from liability, if he had driven negligently.

Quantum

32.The plaintiff originally claimed :

(1)	Cost of repairs	$573,125.00
(2)	Motor Survey Fees	$920.00
(3)	Diminution in Value	$500,000.00
(4)	Loss of use	$648,000.00
(5)	Loss of no claim bonus	$15,600.00
(6)	Insurance for period 29/10/1999 to 26/4/2000	$10,730.15
(7)	License fee for period from 29/10/2000	$3,785.34
	Total	$1,752,160.49

33.Now the plaintiff has amended so as to delete all claims save for loss of use and loss of no claim bonus. However the 1st defendant by its Third Party Notice claims the full amount from the 2nd defendant.

34.The plaintiff's claim for loss of use is for the hiring charges for the period from 1 December 1999 to 3 July 2000 of what is described as a Mercedes-Benz SL 600 car. Mr Hui says that this car was hired from one Gorth Properties Ltd ("Gorth") at $2,500.00 per day plus $500.00 per day for insurance. In support of this the plaintiff relies on a hiring contract, a series of receipts which bear to be issued by Gorth, and a series of cheques drawn by the plaintiff in favour of that company.

35.The other parties question whether the plaintiff did in fact hire a replacement vehicle. It is the evidence of Mr Adamczyk, the managing director of Italian Motors, that Mr Hui was offered a replacement vehicle but said that he did not need it because he had many cars. In fact it appears that Mr Hui has at home three other cars, one for his son, one for his daughter and a larger one for the family to use together. In cross-examination he said that he did not use the latter simply because he did not like using it; if he had, he would not have bought the Ferrari. Mr Ip, the service manager of Italian Motors says that Mr Hui asked what replacement cars the company had, and was told that there were no Ferrari cars, so the matter was left there. Mr Hui himself says that it was suggested that he take a much older car, but he did not want it, and then the offer was withdrawn. In fact the plaintiff through solicitors demanded a replacement vehicle on 24 November 1999 but it was never provided. Mr Adamczyk says that this was because the original offer was refused.

36.There are some difficulties with the plaintiff's evidence of the hire. Gorth is not a car hire company; it is a business contact of the plaintiff. The hire is not at arm's length. On my suggestion, the registration document was obtained. It shows the vehicle to be a Mercedes Benz SL 500, manufactured in 1992 and not 1996 or 1997 as Mr Hui said. One may see from the newspaper advertisements that currently seven-year-old Mercedes Benz SL models are offered for sale at less than $200,000.00. Indeed as counsel has pointed out the price of a new Mercedes or BMW car would not be too different from the total claimed. Mr Adamczyk has found out that the Avis car hire company is currently offering its top model, a Mercedes E 240, for hire at about $22,000.00 per month. On any sensible reckoning, the hire charge of $2,500.00 per day for an old car seems excessive. Further, the cost of insurance at $500.00 per day also appears very high. Some arrangement would have been necessary to extend Gorth's insurance policy to cover Mr Hui's use of the car and some kind of document would have had to be issued by the insurer. None has been produced.

37.I would also add that while copies of cheques have been produced, although their dates are far apart their numbers are sequential. Mr Hui says that they came from a cheque book specially used for the purpose of providing this evidence. That may be so, but it is to be noted that the cheques bear no bank chops to suggest that they have been presented. Mr Hui says that they were photocopied before being sent to Gorth but curiously enough the copies are not of each individual cheque; several appear together on the one sheet.

38.Miss Lo, counsel for Italian Motors, argues that Gorth documents are admissible under section 54 of the Evidence Ordinance, Cap.8, but that under subsection (5) I should direct that the provisions of that section do not apply. She gives various cogent reasons namely that the plaintiff has not called any of the persons in Gorth's or the plaintiff's staff responsible for entering into the hiring agreement; the discrepancy over the age of the car; the fact that the receipts show one cheque number, for two different amounts received on two different dates; the final receipt, for three days hire, is for $93,000.00 when it should be for $9,000.00; and if the documents were admitted under section 54, then they would prove themselves and the considerations relevant to the weighing of hearsay evidence in section 49 would not apply. I think this is right. I think these documents are highly questionable. The section 49 criteria need to be applied to them, and applying those criteria it seems to me that they are to be given little or no weight.

39.A plaintiff must prove the fact and the amount of damage before he can recover substantial damages. If he proves liability but does not prove the fact and the amount of damage, at best he will recover nominal damages. See McGregor on Damages, 16th Ed., §2051. It is unlikely that anyone would have to pay so much to hire an old car, so either an old car was hired at an inflated price or the whole thing was a fiction. Either way, it seems to me that this whole story of the hire of a replacement vehicle is a dishonest attempt to exaggerate the plaintiff's claim. This, coupled with the flaws in the evidence and other matters already mentioned leads me to conclude that I am not satisfied on the balance of probabilities that the plaintiff hired the vehicle it claims to have hired, or any other replacement vehicle. Further on the point of whether Italian Motors offered Mr Hui a replacement car from its fleet, I prefer the evidence of Mr Adamczyk that it did.

40.I have found that liability is proved so the plaintiff should have some damages for loss of use. Even if the plaintiff had accepted the offer of a replacement car it would not have been a Ferrari. But it has to be remembered that while the Ferrari was bought for Mr Hui's use, as a "fringe benefit", it is the plaintiff's car and the plaintiff's claim, and not his. There is no evidence that Mr Hui used the car for the plaintiff's business but only to travel between his home and his office, and there is no evidence that the plaintiff was obliged to provide him with home to office transport. He says that the Ferrari was useful to the company to show business contacts such as bankers that it was financially sound, but ultimately he agreed that it would have had that effect if the contacts knew that it had the car but it was off the road temporarily. In any event this kind of prestige is nebulous and difficult to quantify. It attaches to the person who drives the car, rather than his company; there are better ways of gauging a company's worth and a banker will use them rather than relying on the managing director's possession of a fancy car. It seems to me therefore that in any event the plaintiff would only be entitled to nominal damages for its loss of the use of the car. I will put the figure of such nominal damages at $100.00.

41.I turn to the no claim bonus. The only evidence on this is an invoice for insurance for the period from 27 April 1999. There is no evidence as to what the plaintiff was charged for insurance after the accident. In fact it appears from a letter from the plaintiff's insurer to the plaintiff's solicitor that the insurer intended to repudiate liability. If it did there should be no loss of bonus. The matter was not within Mr Hui's knowledge; it was his staff who dealt with it. So there is insufficient evidence to support this head of the claim.

42.These were only two heads of claim still claimed by the plaintiff. There remain the repair costs and diminution in value, which Italian Motors is claiming against Mr Ma. The other heads of claim, namely survey fees, insurance and licence were also abandoned by the plaintiff as against both defendants. They were not, so far as I can see, paid for by Italian Motors so there is no question of their being claimed by Italian Motors against Mr Ma. What remains are the claims for repairs, which Italian Motors carried out, and diminution in value for which the plaintiff has been compensated by the discount given on trade-in.

43.Section 3(4) of the Civil Liability (Contribution) Ordinance, Cap.377 provides :

"(4) A person who has made or agreed to make any payment in bona fide settlement or compromise of any claim made against him in respect of any damage (including a payment into court which has been accepted) shall be entitled to recover contribution in accordance with this section without regard to whether or not he himself is or ever was liable in respect of the damage, provided, however, that he would have been liable assuming that the factual basis of the claim against him could be established."

44.Italian Motors says it has made two payments in bona fide settlement of the plaintiff's claims, namely the cost of repairs and the trade-in discount. It is not liable for the damage but would have been liable if the factual basis of the claim against it, i.e. the negligence of Mr Ho, had been established. Therefore it is entitled to recover from Mr Ma.

45.Mr Ma's argument is that there was never any compromise. The repairs were done because the plaintiff's solicitors demanded it. The trade-in took place against the background of denial of liability. Mr Hui never agreed to give up any claim in consideration of the repairs being done and Mr Adamczyk admitted that.

46.Counsel wrote lengthy and complicated submissions on the law but, with respect, now that liability has been established the position is quite simple. The plaintiff sued both defendants. Italian Motors paid for the repairs and so, one way or another settled that head of the claim. Later, it compensated the plaintiff for diminution in value, by giving a discount on trade-in and so settled that head of claim. Now it has been found not to be liable, and Mr Ma has been found to be liable. There is no need for Italian Motors to bear the cost of these settlements and it must be able to recover them from Mr Ma, except to the extent that they may be excessive.

47.The repair costs claim is for $573,125.00. This is the amount given in Italian Motors' estimate. Mr Adamczyk accepted that this figure would be subject to revision. In fact the plaintiff's own loss adjuster revised the figure down to $466,078 and Mr Adamczyk agreed that this was a proper revision. He also said that the plaintiff, or Mr Hui, was a member of the Ferrari Owners' Club and as such entitled to a discount of 20% on spare parts; and this was not taken into account in the estimate.

48.I think we have to take the figure which the plaintiff would have been able to claim, if the car had simply met with an accident, and had been repaired by Italian Motors; that is, leaving out any consideration of the fact that Italian Motors actually did the job free of charge to him. On that basis the parts discount would have to be taken into consideration as mitigation of damage. The final figure for repairs, taking into account the discount is $458,180.00.

49.There is a claim for diminution in value of $500,000.00. This is based on the actual diminution in the second-hand value of the car, plus the discount given to the plaintiff when the car was traded in against a new model. This was done after the car had met with a second accident, also whilst under the control of Italian Motors. Mr Adamczyk's evidence is that the actual diminution in value of the car, as a result of the accident with which this case is concerned, was between $100,000.00 and $150,000.00. The diminution in value, as a result of the two accidents taken together, was between $150,000.00 and $200,000.00. The discount was, it appears, given in a large part because of the embarrassment factor of having crashed the plaintiff's car twice.

50.Again I think we have to look at the position as if the plaintiff's car had simply met with an accident and been repaired, and the only involvement of Italian Motors was to do the repairs. What could the plaintiff have recovered from the other party involved in the accident? Obviously it could legitimately claim the diminution in value as a result of the accident. I have no doubt of Mr Adamczyk's expertise in this field, for he has been dealing in Ferrari cars for Italian Motors, the sole agent in Hong Kong, for many years, and I accept his figures. I accept the diminution in value as a result of the accident as having been $150,000.00.

51.The plaintiff could not, in my view, have recovered any more than that. By the same token, Italian Motors cannot pass on liability for any more than that difference to Mr Ma. There were various other reasons for the discount, a large one being the second accident and the embarrassment factor arising from the fact of there having been two accidents. But the whole of the discount did not flow directly from the accident. If Italian Motors had been 100% liable for the accident, the plaintiff could have demanded the diminution in value but it could not have demanded and Italian Motors would not have been obliged to give any extra discount.

52.If statutory authority is needed for this it is to be found in section 3(5) of the Ordinance which provides :

"(5) On assessing any contribution under this section the court shall disregard any part of the payment in respect of which the contribution is sought which appears to the court to be excessive."

Any payment in excess of the actual diminution in value would obviously be excessive. The same of course applies to the repairs; any figure which Italian Motors paid (or charged its insurer) which was in excess of what it would have had to pay the plaintiff if it had been liable, would be excessive.

53.It follows that as against the 1st defendant the plaintiff's claims must be dismissed with costs to be taxed if not agreed.

54.The plaintiff is entitled to and will have judgment against the 2nd defendant for nominal damages of $100.00. As to costs I do not think that the plaintiff can have them against the 2nd defendant, because what it has recovered is purely nominal. But a liability however small was established so I do not think the 2nd defendant can have costs against the plaintiff either. There will accordingly be no order as to costs as between the plaintiff and the 2nd defendant.

55.The 1st defendant is entitled to and will have judgment against the 2nd defendant in the third party proceedings in the sum of

$458,180.00 + $150,000.00 = $608,180.00 with interest at the commercial rate on $458,180.00 from the date of the Third Party Notice and on $150,000.00 from the date of the trade-in, i.e. 3 April 2001 to the date of judgment and thereafter at the judgment rate until payment, and costs to be taxed if not agreed.

56.Since the judgment is to be handed down, and there have been no submissions on costs, the costs orders will be nisi.

Representation:

Mr Y.L. Cheung, instructed by Messrs M.L. Tam & Co., for the Plaintiffs

Ms Jane Lo, instructed by Messrs Robertsons, for the 1st Defendant

Mr Andy Hung, instructed by Messrs Y.C. Lee, Pang & Kwok, for the 2nd Defendant and the Third Party