Chan Wai Tsun v. Shum Tak Shing
Read the full judgment text of CACV 23/1968 on BabelCite. This Court of Appeal judgment was delivered on 20 September 1968.
2. And I also agree that this appeal must be dismissed.
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CACV000023/1968 IN THE SUPREME COURT OF HONG KONG APPELLATE JURISDICTION CIVIL APPEAL NO. 23 OF 1968 (On Appeal from O.J. Action No. 967 of 1967) -----------------
Coram: MORLEY-JOHN, J ----------------- JUDGMENT ----------------- MORLEY-JOHN, J: I fully concur and only wish to add that as to the question of estoppel by negligence - if there was in fact any negligence in this case, though I agree that the defendant did say during the trial that in his opinion he was negligent in signing this blank transfer of ownership form - as to the question of estoppel by negligence, it was held as long ago as 1863 in the case of Swan v. The North British Australasian Company(1) that:
This authority, as I say, dated from 1863 and has been consistently followed in such later cases as the one already quoted, Wilson & Meeson v. Pickering(2); also Campbell Discount Co. Ltd. v. Gall(3) and the Mercantile Credit Co., Ltd. v. Hamblin(4); and I am satisfied that in this present case the proximate cause of the plaintiff's loss was the fraud on the part of the man Chan Chung Po and certainly not this blank transfer of ownership form which in itself cannot any way be said to be a negotiable instrument. 2. And I also agree that this appeal must be dismissed. (1) (1863) 2 H. & C., 175. (2) (1946) 1 A.E.R., 394. (3) (1961) 2 A.E.R., 108. (4) (1964) 3 A.E.R., 594. IN THE SUPREME COURT OF HONG KONG APPELLATE JURISDICTION CIVIL APPEAL NO.23 OF 1968 -----------------
----------------- Coram: Rigby and Morley-John, JJ. Date of Judgment: 20 September 1968 ----------------- JUDGMENT ----------------- Rigby, S.P.J.: Despite the sympathy that one must inevitably feel for the unfortunate plaintiff in this case, and giving every consideration to the persuasive arguments that have been advanced to us by Miss Lee, counsel for the plaintiff, there is no doubt in my mind that this is a perfectly hopeless appeal. It is an appeal from the judgment of Briggs,J., dismissing the plaintiff's claim to possession and ownership of a motor vehicle of which the registered number was AH1162. 3. The facts of the case are very fully set out in the comprehensive and careful judgment of the learned judge. For the purposes of this appeal, the facts may be summarised in a more brief manner. 4. In March, 1966, the defendant entered into a Hire Purchase Agreement with the Chekiang First Bank Limited (which hereafter can be more conveniently referred to as "the Bank") for the hiring and purchase of what is described as an "Isuzu Elf Micro-Bus" of which the registered number was AH1162. It was described as a new vehicle under the terms of the agreement. The defendant made an initial cash payment of $6,050 and the balance of the purchase price was to be completed in twenty-four instalments of $580 per month, commencing as from the 10th April, 1966. The defendant paid the initial deposit, acquired possession of the vehicle and paid the instalments for the next three months. Thereafter, in June, 1966, he transferred possession of the vehicle to one Chan Chung Po (to whom I will hereafter refer as "Chan") upon terms to which I will later refer. 5. It is not disputed, and it is of no real significance in this case, that the transfer of possession of the vehicle to Chan was in fact contrary to the terms of the Hire Purchase Agreement between the defendant and the Bank. 6. In September 1966, Chan - unbeknown to the defendant and without his consent - entered into a written agreement to sell the motor vehicle to the present plaintiff. Under the terms of that written agreement, the plaintiff was to pay - and did in fact pay - the sum of $6,000 to Chan and she was thereafter to continue to pay the hire purchase instalments to the Bank until such payments had been completed and the ownership of the vehicle could then be transferred into her name. Upon the completion of the agreement, the motor vehicle was delivered to the plaintiff together with the following documents:
7. Now, the Hire Purchase Agreement itself clearly showed that the owner of the vehicle was the Bank and the hirer of the vehicle was the defendant and that at that time some eighteen instalments of $580 per month would have to be paid before the ownership of the vehicle passed to the hirer. 8. The plaintiff is an illiterate woman. In evidence she stated that at the time of the transfer of the vehicle she asked if the defendant, as hirer, should not have been a party to the agreement transferring the vehicle into her possession but Chan told her that this was unnecessary since he had the agreement of the defendant for the transfer of the vehicle to her. 9. The learned judge found as a feet that the plaintiff genuinely believed that Chan had the authority to sell the vehicle and, indeed, believed that Chan had transferred to her all the rights of the defendant in that vehicle, namely: registered number AH1162. As the learned judge said, in this she was "woefully deceived." 10. After delivery of the possession of the vehicle to the plaintiff, she and her partner, one So Yuk Po, commenced operations and the mini-bus was put on the road. Unfortunately, in October, 1967, the vehicle, whilst being driven by So Yuk Po, was involved in an accident as a result of which someone was injured and subsequently died from those injuries. The police investigated the matter and found that although the vehicle was in the possession of the plaintiff and So Yuk Po, under the terms of the Hire Purchase Agreement itself the defendant was in fact the stated hire purchaser of the vehicle. Subsequently, the defendant took possession of the vehicle in circumstances which are unnecessary for consideration and, thereafter, declined to return it to the plaintiff. During the period the vehicle had been in her possession, the plaintiff had in fact paid seven instalments, each of $580 per month, under the Hire Purchase Agreement. The plaintiff is a relatively poor woman. She had parted with her life savings for the purpose of purchasing this vehicle and, as the learned judge pointed out, the case was one of the greatest possible importance to her. Upon the defendant refusing to return the vehicle to her, she instituted these proceedings. In the intervening period it is in fact true to say that, after having paid the balance of the Hire Purchase Agreement instalments still due, the defendant, having then acquired the ownership of the vehicle, transferred and sold the vehicle to a third party. 11. The issue for consideration before the learned judge raised the unhappily familiar question: which of two perfectly innocent parties, namely, the plaintiff or the defendant, should suffer by reason of the misconduct and fraud of the man Chan? As is not perhaps surprising, Chan was not called by either party as a witness and it may well be - although it is, of course, purely a matter of speculation - that the reason he was not called was because, for reasons best known to himself, he had disappeared from the scene. 12. The defendant said in evidence that at no time had he authorised Chan to deliver possession of the vehicle to any third party. He said that after he had entered into the Hire Purchase Agreement with the Bank he made use of the vehicle for three months for a specific purpose. Thereafter, having used it for that purpose, he came to an oral agreement with the man Chan whereby he handed over the vehicle to Chan for his exclusive use and profit upon the condition that Chan would be responsible for the payment of the remaining monthly instalments as and when they fell due, and that after they had been completed over the period of twenty-one months Chan would then return the vehicle to the defendant and he would then, of course, be able to apply to the Bank for the vehicle to be transferred into his own name for his full ownership. The defendant said that the transfer of the vehicle by Chan to the plaintiff was done entirely without his knowledge or permission. As to the printed form, namely, the Hong Kong Police Transfer of Ownership of Motor Vehicles form signed by him, he admitted that he had in fact signed it and that it was his signature but he said that that form signed by him, as it was, related to an entirely different vehicle and had been signed by him in the following circumstances. He said that he had purchased upon hire purchase terms a dual-purpose vehicle of which the registered number was AD5582. Whilst that Hire Purchase Agreement was still in force, he sold that vehicle to a man named Ngau Ying Bor. After the hire purchase instalments had been paid off by Ngau Ying Bor, he (Ngau Ying Bor) asked the defendant to sign the requisite transfer of ownership form which he, (Ngau Ying Bor), could then complete and send to the Traffic Office. The defendant did so. Some time later, according to the evidence of the defendant, Ngau Ying Bor came to him and said he had lost that form and asked the defendant to sign another form. The particulars relating to that vehicle AD5582 had not yet been filled in on that form. However, the defendant, despite the fact that the particulars had not been filled in, signed the form in blank and handed it to Ngau Ying Bor. He admitted that he was negligent in so doing, but he insisted that that form which he signed in blank related to that vehicle AD5582 and was in no way related to vehicle AH1162, which is, of course, the subject matter of these present proceedings. He further maintained that he had at no time given any blank transfer of ownership form signed by him to the man Chan. He could only assume that Chan had at some time and in some way obtained that transfer form, signed in blank, from Ngau Ying Bor and had thereafter filled in the particulars with reference to the vehicle AH1162 for the purpose of supporting his nefarious venture in fraudulently purporting to transfer that vehicle to the present plaintiff. Ngau Ying Bor was not called as a witness. The defendant did, however, call a man named To Yat who was a member of the hire purchase firm from whom the defendant had obtained the vehicle AD5582. To Yat gave evidence as to the general course of business when vehicles were purchased under Hire Purchase Agreements from his firm. 13. The learned judge accepted the evidence of the defendant as a witness of truth, and he accepted the explanation given by the defendant as to the circumstances in which he had signed that transfer form in blank and, in particular, that that form so signed by him related to vehicle AD5582 and not to the vehicle now under consideration. 14. Miss Lee for the appellant has challenged that finding of fact as against the weight of the evidence. In my judgment it is sufficient to say that it was entirely a question of fact for the learned judge, based upon his assessment as to the credibility of the defendant's testimony, and that there was, undoubtedly, sufficient evidence before him upon which he could properly take the view that he did. In the result, the learned judge came to the conclusion upon the facts that the man Chan had cheated the plaintiff out of her money, that there was no evidence that the defendant was concerned in that unfortunate transaction in any way, and that he had given no authority to Chan to transfer the possession - much less the ownership - of the vehicle to the plaintiff. 15. It is from those findings of fact that the plaintiff now appeals to this Court. Miss Lee, as I understand her arguments, has really based those arguments upon principles of estoppel. She submitted that the transfer of ownership form signed by the defendant, although not to be equated to a negotiable instrument, was a document acceptable for purposes of mercantile convenience as a transfer of title, and the document having been signed by the defendant he was estopped from denying its validity. She maintained that, although the document did not itself afford a right of ownership in the vehicle, the effect of it was. to transfer the possession of the vehicle to the plaintiff and also to give to the plaintiff a right to exercise the option contained in the Hire Purchase Agreement - in respect of which, of course, she was to continue paying more hire purchase instalments - so as to have the vehicle transferred into her name upon completion of the outstanding instalments. Alternatively, Miss Lee argued that the defendant had been negligent in signing the transfer of ownership form in blank, that that form was in the possession of the man Chan and that that fact, coupled with the fact that the defendant had undoubtedly delivered the possession of the vehicle into the hards of the man Chan together with a copy of the Hire Purchase Agreement made between the Bank and the defendant, and the pay-in book of the Bank enabling monthly instalments to be paid in for the purposes of meeting the hire purchase terms, in consequence estopped the defendant, by reason of his own negligence, from denying that the man Chan had the requisite authority to give possession and pass the right to acquire ownership to the plaintiff. 16. The twofold proposition - if I may call it such - put forward by Miss Lee can, I think, very conveniently be described under the principle of the doctrine of "apparent authority". That principle is based not so much on estoppel but as on mercantile convenience. It was clearly described by Lord Ellenborough, C.J., in the case of Pickering v. Busk(1) which is referred to by Devlin, J., as he then was, in the case of Eastern Distributors, Ltd. v. Goldring(2). That was a case upon which Miss Lee placed some substantial reliance. Lord Ellenborough described the principle of apparent authority in these terms. He said:
17. Now, it seems to me that the case of Eastern Distributors, Ltd. v. Goldring(2) is clearly distinguishable from the present case and the very principles upon which it was decided seem to me very clearly to show the fallacy - if I may say so - of the arguments advanced by Miss Lee in the present case. It is unnecessary to refer in any detail to the facts of the Eastern Distributors(2) case. It is sufficient to say that in that case the man named Murphy, who was joined as a third party to the proceedings subsequently instituted, gave a complete and unequivocal written authority to a man named Coker to sell Murphy's motor vehicle. It is true that the exercise of that written authority was subject to certain oral restrictions between Murphy and Coker limiting the authority to sell to the compliance of certain conditions. In abuse of that authority, Coker sold the motor vehicle to the plaintiffs, the Eastern Distributors, Ltd. Murphy was unaware of that sale and later himself purported to sell the vehicle and transfer its possession to a man named Goldring. Eastern Distributors claimed possession of the vehicle. Goldring refused to surrender it. Eastern Distributors commenced proceedings against Goldring and Goldring, in turn, joined Murphy as a third party. In the result, judgment was given for Eastern Distributors against Goldring and for Goldring against Murphy. Murphy being by that time a man of straw, the only remedy left open to Goldring was to appeal against the judgment given against him; which he did. 18. Upon appeal, the judgment of the trial judge was confirmed, the appellate court holding that although Coker had no actual authority to sell the van to the plaintiffs, Murphy, by providing Coker with documents which enabled him to represent himself to the plaintiffs as entitled to sell the van to them, had clothed Coker with apparent authority to sell the van and was precluded (within section 21(1) of the Sale of Goods Act, 1893) from denying Coker's authority to sell. 19. It seems to me that the obvious distinction which at once comes to one's mind between that case and the present case lies in the fact that in that case there was a clear and unequivocal authority, on the face of the written document itself signed by Murphy, authorising Coker to sell the vehicle to a third party. The document was complete on the face of it and the fact that there were oral conditions as between Murphy and Coker placing restrictions upon the manner in which that document was to be used could not adversely affect any third party who acted in good faith in purchasing the vehicle upon the strength of the completed document. I refer again to the basis of the decision: Murphy had provided Coker with a document, which was complete on the face of it, enabling Coker to represent himself to a third party as the person entitled to sell that motor vehicle. 20. Now, it may well be in the present case that if in fact ther was evidence to establish that the defendant had signed the transfer of ownership form completed with particulars in relation to the registered vehicle AH1162, and had then handed that fully completed form to the man Chan, that fact, together with the undoubted possession by Chan of the vehicle itself and other relevant documents, such as those to which I have already referred - I repeat, it may well be that in such circumstances if Chan had then transferred that vehicle to the present plaintiff, upon the principles laid down in the Eastern Distributors(2) case the defendant might well be said to be precluded, - or to have been precluded - as against the plaintiff from denying Chan's authority to transfer both the possession of the van and the right of option to acquire ownership by paying the outstanding hire purchase instalments to the plaintiff. 21. But the facts as found by the learned judge were, of course, entirely different. He accepted that the transfer of ownership, signed in blank by the defendant, was in relation to an entirely different vehicle and he accepted the defendant's explanation as to the circumstances in which he signed that form. 22. In those circumstances it seems to me impossible to say that the defendant had knowingly signed any clear and unequivocal document which, upon the very face of it, together with the fact of possession of the vehicle, could be said to have clothed Chan with authority to transfer the possession of that vehicle to any third party. 23. But leaving that aside for a moment. If one considers the argument of Miss Lee on the basis that the defendant, as Miss Lee contends, is estopped by his own negligence as a result of having signed the blank transfer of ownership form from denying the right of the plaintiff to the possession and to the right to acquire ownership on completion of payment of the outstanding hire purchase instalments - if one considers that argument on the basis, - as Miss Lee contends, - that the defendant in signing that blank document was negligent and is, therefore, precluded from denying the title or the right to acquire the title of the plaintiff in the motor vehicle, it seems to me, again, that that argument is fallacious and bad in law. 24. I am content to base my view as to that aspect of the appeal upon a passage to be found in the judgment of Lord Greene, M.R., in the case of Wilson & Meeson (a firm) v. Pickering(3). In the course of his judgment Lord Greene said:
25. Miss Lee conceded that this transfer of ownership form signed in blank could not be equated to that of a negotiable instrument. 26. Again, in the judgment of Lord Greene one finds the passage - and I quote: "There is a further reason why this type of estoppel ......" - and he is dealing with estoppel by negligence -
27. Similarly, in this case it would seem abundantly clear that the real cause of the fraud carried out upon the unfortunate plaintiff in this case was not - and cannot validly be regarded as - any act of negligence upon the part of the defendant, but was in fact solely due to the misrepresentation and fraud of the man Chan. 28. In my judgment there are no grounds whatsoever for holding that Chan had any implied or apparent authority to transfer the vehicle to the plaintiff or to anyone else. It is transparently clear that Chan acted in a manner which was entirely inconsistent with the terms of the bailment of the vehicle by the defendant to him and, as Mr. Wei has pointed out in the course of his able argument in this case, upon a breach of those terms the defendant was entitled to put an end to the bailment and to recover possession of the vehicle. If any authority is required for that statement of the law, it is to be found in Volumn 2 of Halsbury's Laws of England, the 3rd Edition, page 104, paragraph 205. 29. For these reasons, in my judgment the learned judge was entirely right in the decision to which he came and I, would accordingly, dismiss this appeal with costs. Representation: P. Lee (Miss) (Hoosenally & Co) assigned for Appellant. R. Wei (Hastings & Co.) for Respondent. (1) (1815) 15 East 42 (2) (1957) 2 All E.R. 525 at 530 (3) (1964) 1 All E.R. 394 at 397. |