Wayfoong Credit Ltd v. Ho Fai
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1. I have, with some reluctance, determined that I must review this matter as upon further consideration of the facts of the case I do not consider that the original judgment can be allowed to stand.
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DCCJ008264A/1975 IN THE DISTRICT COURT OF HONG KONG HOLDEN AT KOWLOON CIVIL JURISDICTION ACTION NO. 8264 OF 1975 -----------------
----------------- Coram: Judge Power in Court Date of Judgment: 21st October, 1975 ----------------- REVIEW ----------------- 1. I have, with some reluctance, determined that I must review this matter as upon further consideration of the facts of the case I do not consider that the original judgment can be allowed to stand. 2. The Plaintiff pleaded that there had been a repudiation of the Mire Purchase agreement by the hirer and that he had repossessed the vehicle thereby accepting that repudiation. No defence was filed and judgment in default was given for the Plaintiff with damages to be assessed. 3. During the course of the hearing Mr. Chang submitted that the Plaintiff having obtained judgment upon the basis of his pleading which was uncontested and which alleged a repudiation by the Defendant which had been accepted by the Plaintiff the Court should deal with the matter of assessment of damages upon that basis. I indicated to him that it seemed to me that that was the proper approach and I so indicated in the judgment which I am now reviewing. 4. Having now fully considered the matter and having reviewed the evidence and the law I am forced to the conclusion that that is not the proper approach. 5. In order to properly assess the damages the Court must determine upon the evidence whether there was a repudiation accepted by the Plaintiff Co. or simply a breach by the hirer in that he made default in making punctual payment of instalments and a repossession by the Plaintiff Co. under Clause 7 of the Hire Purchase agreement. 6. The fact that the Plaintiff pleaded repudiation even though it is not denied is not in my view sufficient to establish an actual repudiation in circumstances where it lies upon the Plaintiff to show what actually occured in order to establish the measure by which his damages are to be assessed. This is certainly so in the present case as the facts actually proved by the Plaintiff establish a simple breach and not a repudiation. 7. The evidence of Mr. Ho a supervisor of the Plaintiff Co. established that the Plaintiff Co. received no instalment in March and that 7 days after the due date they therefore sent out a "First Notice of Instalment Payment Overdue". (Ex. 1). This was simply a reminder that the payment was overdue and a request that it be paid immediately. There was no response and so 7 days later a "Second Notice of Instalment Payment Overdue" (Ex. 4) was sent out. This stated that the instalment was 14 days in arrears and said that if it was not paid within 4 days "it will be necessary for us to effect repossession of our property without further notice to yourself." There is no suggestion in this document that the Plaintiff Co. was treating the Defendant as though he had repudiated his agreement. It is quite clear that what the Co. was doing was threatening to exercise its right to repossess under Clause 7 of the agreement upon default in payment of an instalment. A Repossession Notice was then sent by the Plaintiff Co. to Repodel, the repossession agent, the date of which appears from Ex. 6 to have been 24/3/75, and the vehicle was repossessed on 12th April. I have no doubt at all that this was a standard repossession under Clause 7 and that the Plaintiff Co. never, at any time, proceeded upon the basis that there had been a repudiation by the hirer. The facts in the present case do not establish, the situation where a Eire Purchase Co. having embarked upon a standard repossession for nonpayment of an instalment and having discovered the vehicle in an abandoned state then comes to the conclusion that there has been a repudiation and accepts it. There was no evidence in the present case that might have established this. One would expect, if it were being suggested that this was so, evidence of the state of the vehicle when seized and of a letter by the owner to the hirer indicating that they had taken possession of the abandoned vehicle, were treating the abandonment as a repudiation and were accepting the repudiation and had the intention, in due course, to sue for damages. It is further to be noted in the present case that at the time when the repossession was ordered by the Plaintiff the Defendant was only 1 month in arrears. Certainly it could not be inferred from that that he had decided to repudiate the contract. The Plaintiff pleaded that it accepted the repudiation on 12th April but Ex. 6 bears the indorsement "Final Warning 22.4.75". There is no evidence as to what this "Final Warning" was but when one bears in mind the evidence of Mr. Matthew Ma of Repodel it seems clear that it must have been a final demand for payment of arrears and repossession expenses. Mr. Ma said "The vehicles we reposses are put into the compound and we leave these until we get instruction from Wayfoong. Either the hirer pays up or we put a notice on the vehicle and put it to public auction". 8. The evidence fails to establish any repudiation of the contract by the Defendant and Plaintiff Co. quite clearly never at any time did anything that might be construed as an acceptance of a repudiation. Repudiation was not raised until the state of pleadings was reached. The pleading however alleged an acceptance of the repudiation by the seizure on 12th April. Upon the facts I am satisfied that there was never any repudiation nor any acceptance or purported acceptance of a repudiation. The Plaintiff Co. found itself, at the time of pleading, in much the same position as the Plaintiff Co. in United Dominions Trust Ltd. v. Eonis (1967) 2 All E.R. 345 where, as set out in judgment of Harmon L.J. at p.349.
In the present case the Plaintiff Co. having realized that they could not succeed by suing on Clause 9 decided that another way to put their case was to sue upon the basis of a repudiation. They certainly in their pleadings went further than the Plaintiff Co. in the United Dominions Trust Ltd. Case in that they alleged not only a repudiation but also an acceptance of it. However I am quite satisfied that this was not so. Indeed the Plaintiff Co. was, even on its own pleading insofar as it relied on Clause 9, suggesting that the contract still bound the parties. The damages to which Plaintiff Co. is entitled are, as set out in Financings Ltd. v. Baldoch (1963) 3 All E.R. 443, the monthly instalments owing at the time of repossession i.e. instalment for 2 months. As in Anglo Auto Finance Co. Ltd. v. James (1963) 3 All E.R. 566 the Plaintiff Co. is also entitled by virtue of Clause 7, but not, of course, by virtue of Clause 9 the penalty clause, "to recover all charges. costs and expenses incurred" in connection with the repossession. I award Plaintiff Co. damages of:
There will be judgment for Plaintiff Co. in that amount. Plaintiff Co. is to have interest at 8% from 12th April 1975 on that sum. I will add, as I have been asked to do so by the solicitor for the Plaintiff Co., that I do not consider the ruling given in this review in any way detracts from the correctness of the approach adopted in my original ruling as to the assessment of damages upon an accepted repudiation.
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