Dashing Press Ltd v. Cheng Wai Chuen

DCCJ6721/2003

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 6721 OF 2003

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BETWEEN

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Before: Her Honour District Judge Marlene Ng in Court

Dates of Hearing: 6^th and 7^th February, 2006

Date of Handing Down Judgment: 9^th May, 2006

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J U D G M E N T

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Introduction

1.The Plaintiff was/is the registered owner of a Mercedes Benz private vehicle bearing registration no.EW7576 (the “Benz”). In October 2002, the Benz was about 4 months old and insured with HSBC Insurance (Asia) Limited (the “Insurer”). The Plaintiff allowed its shareholder Mr Leung Shui Sang (“Mr Leung”) to use the Benz as a corporate benefit. The Defendant was/is the registered owner and driver of a taxi bearing registration no.JM8159 (the “Taxi”).

2.At about 10:22 am on 26^th October 2002, Mr Leung was driving the Benz along the eastbound lane of Conduit Road. On reaching Gleanely or Robinson Road (Mr Leung thought it was the former but was told by the police it was the latter, the “Road”), the Benz slowed down and stopped to comply with a manual-operated temporary “Stop/Go” traffic direction signboard (the “Signboard”). The Taxi following the Benz ran into its rear (the “Accident”). The Benz and the Taxi were thereby damaged.

3.The Plaintiff claims the Accident was caused by the Defendant's negligence. It claims for the sum of HK$65,429.80 being (a) repairing costs of HK$64,769.80 and (b) motor survey fee of HK$660.00.

4.The Defendant claims the Accident was wholly caused by the Plaintiff's negligence or alternatively it was (a) substantially caused by the negligence of Sun Fook Kong (Civil) Limited (“SFK”) in carrying out road surface repair/maintenance works (the “Works”) at the Road and (b) partially caused (to a minor degree) by the Plaintiff's contributory negligence. The Defendant counterclaims against the Plaintiff for HK$21,800.00 being (a) the Taxi's repairing costs of HK$18,000.00, (b) towing fee of HK$300.00 and (c) replacement taxi rental of HK$3,500.00 from 26^th to 30^th October 2002 at HK$700.00/day.

5.The Defendant has discontinued its third party claim against SFK. Both Ms Fong, solicitor for the Plaintiff, and Mr Finley, solicitor for the Defendant, agree that the respective liability of SFK, the Plaintiff and the Defendant (if any) in respect of the Accident is several and not joint.

Witnesses

6.Mr Leung and Mr Lee Kai Hung Raymond (“Mr Lee”), a loss adjuster and director of Roger Houghton Motor Surveys Limited (“RH”), gave evidence for the Plaintiff. Mr Lee produced his motor survey report dated 12^th November 2002 (the “Report”). The Defendant gave evidence himself.

7.Mr Finley has reservations on Mr Lee's expert status on the basis that he was merely a loss adjuster. I have no hesitation in accepting Mr Lee's expert capacity on vehicle damage, motor survey and loss adjusting matters. The evidence reveals that Mr Lee has been in the motor survey industry and with RH for 25 years. His work includes personally examining motor vehicles (including vehicles with collision damage), assessing their market values/repair costs and carrying out adjustments of estimated repairing costs. Mr Lee has previously given expert evidence in court in respect of these matters. As part of his motor survey work, Mr Lee also checks/opines on whether proposed repairs match accident damage to vehicles. Mr Finley has been unable to suggest any credible ground for challenging Mr Lee's expert status.

8.Mr Tsang Kwok Chau (“Mr Tsang”), SFK's site supervisor for the Works at the Road, and Ms Cheng Tung Mui (the “Worker”), SFK's worker responsible for operating the Signboard at the material time, gave statements to the police, but have not been called to give evidence.

9.There is fairly little dispute on the facts as recounted by the respective witnesses, whom I find to be generally honest. There are some differences between the evidence of Mr Leung and the Defendant in relation to the Accident, but I accept such differences largely arise from their different appreciation of the traffic/road condition over a brief time window instead of concerns over their veracity.

The scene of the Accident

10.Conduit Road has eastbound and westbound lanes and a 50 kph speed limit. It is a winding road but straightens out briefly near the eastern end to continue on as the Road that runs steeply downhill (the “Slope”). At the top of the Slope at the juncture with Conduit Road, there is a set of traffic lights (the “Traffic Lights”) and a pedestrian crossing. The Traffic Lights were in operation at the material time.

11.Mr Leung, Mr Tsang and the Worker said in their statements to the police that at the material time the traffic was smooth. The Defendant claimed in his statement to the police that the traffic was congested, but said in evidence that the distance between the vehicles lengthened as he approached the eastern end of Conduit Road. I accept the traffic became smooth at that stage.

12.Mr Tsang said at the material time traffic cones were placed on the Slope to block/close the westbound uphill lane for carrying out the Works. Consequently, the Workerwas stationed on the flat part of the eastbound lane of Conduit Road before the Traffic Lights to operate the Signboard for implementing single-lane two-way traffic on the eastbound downhill lane at the Slope. The Traffic Lights could not be switched off, so some vehicles followed the green signal of the Traffic Lights instead of the “Stop” direction of the Signboard. This posed a traffic risk, so Mr Tsang instructed the Worker to move the Signboard forward to a position near to a ramp on the Slope beyond the Traffic Lights and pedestrian crossing. Mr Leung said the Signboard was placed on the left (near the pavement) of the eastbound lane.

13.Mr Leung said in his witness statement the Signboard was about 2-3 private car lengths beyond the Traffic Lights. But when he gave evidence, he said it was about 3-4 car lengths. The Worker's statement to the police stated that the distance “between the flat portion and the ramp of [the Road] where [she] operated the “Stop” signboard” was “[about] one private car's space, [she estimates]”. In light of the aforesaid evidence, I accept on balance the distance between the Traffic Lights and the Signboard was about 3 private car lengths.

14.Both Mr Leung and the Defendant were familiar with this stretch of Conduit Road. Prior to the Accident, neither of them knew about the Works. There was no evidence of any notice along the eastbound lane of Conduit Road alerting drivers of the Works ahead.

The Accident

(a) Position and speed of the vehicles

15.Mr Leung was driving the Benz at about 30 kph along the eastbound lane of Conduit Road. The Defendant claimed he was driving the Taxi at about 20 kph on the same lane about 1 (according to Mr Leung) or 1-2 private car lengths (according to the Defendant) behind the Benz. There were vehicles behind the Taxi. The Defendant said he could not have been travelling fast since the traffic was quite congested with vehicles stopping/moving on and off. Mr Leung also believed the Defendant was not speeding and did not break the speed limit. Mr Leung in his statement to the police said : “[accordingly], its speed was not too fast, it might be that it was already too close when realized that [Mr Leung] was stopping”.

(b) Before reaching the eastern end of Conduit Road

16.There was a right bend at about No.8 Conduit Road with a hillside to the right. The Benz was faster than the Taxi, so the Defendant lost sight of the Benz when the Taxi reached the right bend. He did not see the Benz again until after the Benz had stopped on the Slope/Road before the Signboard (see below).

(c) Eastern end of Conduit Road and the Accident

17.When Mr Leung reached the eastern end of Conduit Road, the Traffic Lights showed green. He reduced speed as he was about to go downhill, but could not remember his speed at the time. Mr Leung first saw the Works and the Worker operating the Signboard as the Benz went past the Traffic Lights. When the Benz was halfway past the Traffic Lights, the Signboard facing Mr Leung changed from “Go” to “Stop”. He decelerated and stopped the Benz gradually. There was no vehicle in front of the Benz when it stopped in compliance with the “Stop” direction of the Signboard.

18.When the Defendant reached No.1 Conduit Road near the eastern end, the vehicles were more spaced out and he estimated the Benz was about 3-4 car lengths ahead. The Defendant claimed he was prepared for any change of signals at the Traffic Lights, so he had his foot over the brake. He proceeded through because the Traffic Lights showed green and the Benz had already moved on. As he did so, he saw the Signboard exhibiting the “Stop” direction with the Benz having stopped about 1 private car length ahead of the Taxi. The Defendant immediately braked sharply. But since it happened all of a sudden, he was unable to brake in time (結果我收制不及) and the Taxi skidded forward for about 1 car length to hit the rear of the Benz.

19.Mr Leung also confirmed that whilst he was stopping the Benz, he saw from the rear view mirror that the Taxi was about 1 private car length behind and it also passed through the Traffic Lights. He therefore assumed the Traffic Lights were then still showing green. Mr Leung in his witness statement said the collision occurred after the Benz came to a complete halt for 1-2 seconds, but said in evidence it might be several seconds though he was not sure.

20.There was some concern as to what “結果我收制不及” meant. Does it mean the Defendant was unable to stop in time despite braking or he did not brake in a timely manner? If it were the latter, the Defendant (who had an opportunity to read his statement) claimed it was an inaccurate recording of his verbal response by the police officer.

21.Having considered the totality of the Defendant's statement to the police in its original Chinese language, the distance of 1 private car length between the Benz and the Taxi by the time the Defendant saw that the Benz had stopped, and the moderate force of the impact (see below), I accept on balance that the Defendant braked immediately when he saw the Benz as he passed the Traffic Lights and “結果我收制不及” meant he was unable to stop in time. Had the Defendant not braked at first sighting of the Benz upon passing the Traffic Lights, given the short distance between the vehicles, the collision impact would have been much stronger than as revealed by the evidence. Mr Leung accepted the collision impact was not strong. Although Mr Lee explained that as a result of the Mercedes Benz design the safety mechanism (ie the crumple zone) or cross member would absorb the impact up to a certain force and the driver would not feel the full force of the impact, I note (a) the damage suffered by the Taxi was also not severe (see below) and (b) the Defendant could not say whether the Benz was pushed forward by the collision.

(d) Observation of the Signboard from Conduit Road

22.Mr Leung did not pay attention whether the Signboard could be seen when the Benz was still on the flat portion of Conduit Road at the top of the Slope. He said “[since] the road was a bit complex there, [he] had to pay attention to other road surface condition and pedestrian at the traffic light position.” Mr Leung first saw the Signboard as he passed the Traffic Lights. He was surprised because he did not notice any construction work on the opposite lane the day before, but it had no bearing on his driving.

23.The Defendant clarified it was not possible (and he was unable) to see the Benz on the Slope below when he reached the flat portion of Conduit Road near the top of the Slope. He had to move further ahead to the beginning of the Slope with the front part of the Taxi going past the Traffic Lights before he could see the Benz again.

(e) Post-Accident

24.Mr Leung and the Defendant alighted to check the damage to the vehicles. There were some scratches to the rear bumper of the Benz and the rear boot lid was dented. As for the Taxi, the front bumper was dented, the right front lamp was damaged, the front bonnet was dented/pushed up, and the number plate was cracked.

25.Mr Leung asked the Defendant why he bumped into the Benz. The Defendant said he did not see the Signboard and only stopped when he saw the Benz had stopped. Mr Leung understood from such remark that the operation of the Signboard affected the vehicles behind the Benz. The Defendant complained that the main reason for the collision was the inappropriate positioning of the Signboard.

26.Mr Leung then called the police. When the police arrived, they told the police what happened. Later, they all left the scene.

27.Mr Tsang in his statement to the police said that subsequently the police switched off the Traffic Lights. Mr Tsang and Mr Leung also said in their statements to the police that the Signboard was subsequently moved back to a position on Conduit Road before the Traffic Lights, but when Mr Leung gave evidence he claimed he did not pay attention.

(f) Counterclaim

28.I reject the Defendant's plea that Mr Leung was driving too fast and without due care and attention. It is not disputed that Mr Leung had brought the Benz to a complete halt before the Accident occurred. It was next suggested that Mr Leung failed to heed/observe traffic condition, but such argument has no merit since he was able to stop in time before the Signboard. I further reject the complaint that Mr Leung failed to keep any or any proper lookout or observe/heed the presence of the Taxi. The Taxi was following the Benz, so there was little Mr Leung could have done. I accept Mr Leung was generally aware of the Taxi's presence and he checked its presence from the rear view mirror every now and then.

29.Mr Finley argues the Plaintiff was contributorily negligent for stopping suddenly. He does not dispute that Mr Leung stopped the Benz due to the “Stop” direction of the Signboard but submits that Mr Leung should have driven on despite the same. I reject such submission without hesitation. I cannot see how a road user acting in compliance with a manual-operated road sign is acting in an unreasonable or negligent manner, particularly as the Works were being carried out on the opposite lane on the Slope and single lane two-way traffic was in place. To defy the “Stop” direction of the Signboard by proceeding through without stopping would tempt a head-on collision from the westbound traffic using the same lane and proceeding in compliance with the corresponding Signboard further down on the Slope.

30.Mr Finley next submits that Mr Leung's failure to put on the hazard lights when he stopped the Benz to warn the vehicles behind him of his sudden stop amounts to negligence. But the Defendant did not raise any complaint against Mr Leung at the scene of the Accident or when he gave his statement to the police. In my view, even assuming (but without making such finding) that the Plaintiff's failure to put on hazard lights is inappropriate/unreasonable, such default had no bearing on the Accident. According to the Defendant, he braked sharply immediately upon seeing the Benz again as he passed the Traffic Lights and started to go down the Slope. It was not suggested the Defendant could have braked earlier or taken any other evasive action. The Defendant has failed to establish the causative link between the Accident and Mr Leung's failure to put on the hazard lights.

31.I therefore find on the balance of probabilities that the Defendant has failed to establish any actionable negligence on the part of Mr Leung and/or the Plaintiff. The Defendant's counterclaim is therefore dismissed.

(h) Defendant's and SFK's liability

32.I am of the view that the Accident was caused by SFK's arrangements in relation to the Signboard in conjunction with the operating Traffic Lights. Several matters indicate the Signboard was inappropriately located and prone to cause an accident. First, the Signboard was originally located on Conduit Road before the Traffic Lights. It was returned to this location after the Accident. In my view, such location would at least give some forewarning to drivers of the Works ahead on the Slope before they reached the Traffic Lights and the beginning of the Slope. Placing the Signboard on the Slope gave no forewarning at all.

33.Secondly, the Traffic Lights were still operating. The signals of the Traffic Lights and the Signboard (with just a short distance of 3 private car lengths between them) were not synchronised. Sometimes conflicting signals were given to the drivers (eg at the time of the Accident), which led the drivers to sometimes follow the green Traffic Lights and ignore the “Stop” sign. This gives rise to a traffic hazard.

34.Thirdly, SFK knew of such traffic hazard and Mr Tsang said it was for this reason that SFK moved the location of the Signboard from the flat portion of Conduit Road before the Traffic Lights to near the ramp on the Slope about 3 private car lengths beyond the Traffic Lights.

35.Fourthly, after the Signboard was moved to near the ramp on the Slope, there was no warning sign along Conduit Road before the Traffic Lights to warn drivers of the Works ahead or of the possible need to stop in compliance with the “Stop” sign of the Signboard further down the Road/Slope.

36.I accept on balance that when the Taxi passed through the Traffic Lights, they were green. In the circumstances, with the Defendant being aware that the Benz had passed the Traffic Lights ahead of him and in the absence of any warning of the Works ahead, the Defendant cannot be faulted for proceeding past the Traffic Lights. Unfortunately, whilst the Traffic Lights showed green, the Signboard about 3 private car lengths away showed the “Stop” sign, thus creating a traffic hazard, namely, the Benz had to stop within a short distance without pre-warning and the Taxi within an even shorter distance. It is not disputed that a driver would not have been able to see the Signboard or the Works from the flat portion of Conduit Road until he was passing the Traffic Lights at the top of the Slope.

37.Mr Leung was surprised at seeing the Signboard, but said it did not affect his driving and his ability to stop the Benz as the leading vehicle. However, he fairly agreed (a) the Works and the location of the Signboard might have a bearing on the Accident and (b) the drivers of the vehicles behind him (ie including the Defendant) might be affected because they would not have seen the Signboard from “the flat portion but only be able to observe there was temporary traffic signboard upon getting close to slope session”. Mr Leung considered that better arrangements could have been made. Indeed, his immediate response after the Accident was that the Traffic Lights and the Signboard should be synchronised so that traffic would be more smooth and the drivers would not have to wait twice for the Traffic Lights to change to green and then for the Signboard to change to the “Go” direction over a short distance. Indeed, after the Accident, the police switched off the Traffic Lights and SFK moved the Signboard back to the flat portion of Conduit Road before the Traffic Lights.

38.Considering the above matters, I find on balance that SFK's arrangements in relation to the location and operation of Signboard when it well knew the Traffic Lights were operational caused the Accident. However, I bear in mind that SFK whose conduct created the traffic hazard that necessitated the Benz to stop despite the green Traffic Lights is not a party to the present proceedings, and that the sole issue is whether the Plaintiff, ie the owner of the leading vehicle, can fasten liability on the Defendant, ie the owner/driver of the following vehicle. Therefore, the key question is whether the Defendant was also negligent.

39.Ms Fong accepts that the Defendant was not speeding, but submits that he was driving too fast in the circumstances. She argues that since (a) the Taxi was the following vehicle, (b) the Defendant could not see the Benz or the road/traffic condition ahead even when it reached the Traffic Lights (ie the flat portion of Conduit Road before the top point of the Slope) and (c) he knew he was about to go down the steep Slope which was comparatively more dangerous, the Defendant should move forward in a reasonable manner/speed that would cater for the possibility of the Benz, ie the leading vehicle, stopping on the Slope to comply with the traffic/road condition ahead (eg compliance with a manual-operated Signboard).

40.Neither Ms Fong nor Mr Finley cited any legal authority in relation to the obligations of drivers of leading and following vehicles. In Brown & Lynn v Western Scottish Motor Traction Co Ltd 1945 SC 31, 1944 SN 59, Ct of Sess, a motor lorry was followed by a motor omnibus at a distance of 25 to 30 ft. The speed of both vehicles was approximately 15 mph. The lorry driver swerved left to avoid a pedestrian and pulled up almost instantaneously. The omnibus driver on realising that the lorry was stopping swerved right and applied his brakes, but did not succeed in avoiding a collision despite acting with reasonable promptitude. The lorry driver did not give any signal and the omnibus driver had no reasonable chance to see the pedestrian.

41.It was held that the omnibus driver had allowed sufficient space between vehicles to deal with ordinary exigencies of traffic and the fact he followed the lorry so closely that he could not cope with its exceptionally abrupt stop did not amount to negligence upon his part. Lord Cooper said as follows :

“The distance which should separate two vehicles travelling one behind the other must depend on many variable factors – their speed, the nature of the locality, the other traffic present or to be expected, the opportunity available to the following driver of commanding a view ahead of the leading vehicle, the distance within which the following vehicle can be pulled up, and many other things. The following driver is, in my view, bound so far as is reasonably possible, to take up such a position, and to drive in such a fashion, as will enable him to deal successfully with all traffic exigencies reasonably to be anticipated: but whether he has fulfilled this duty must in every case be a question of fact, just as it is a question of fact whether, on any emergency disclosing itself, the following driver acted with the alertness, skill and judgment to be expected in the circumstances.”

42.Returning to the circumstances of the present case, first, there is no question of the Defendant being at fault for failing to see the Signboard and the Works until the point he did. Indeed, Mr Leung said he himself saw the Signboard and the Works when he was halfway through the Traffic Lights.

43.Secondly, I cannot agree that the Taxi was travelling too close to the Benz so that it left him no opportunity to deal with the exigencies of traffic. The Defendant said that by the time he reached the eastern end of Conduit Road, he was unable to see the Benz but estimated it was 3-4 private lengths ahead. I cannot say that the Taxi was unreasonably close in the circumstances. Until he passed the Traffic Lights there was nothing to suggest there was anything unusual to be expected of the traffic/road condition ahead that would affect his control of the Taxi. Just shortly before the Accident, the distance between the vehicles narrowed to 1 private car length, but that was because the Benz had stopped for 1-2 or several seconds whilst the Taxi approached and passed the Traffic Lights and/or the top of the Slope. The impact on collision was also not severe. In the circumstances, I do not regard the distance between the Benz and the Taxi as unduly short.

44.Thirdly, I reject on balance the assertion that the Defendant was driving too fast in the circumstances. Mr Leung said he was travelling at about 30 kph and accepted the Defendant was not travelling at a fast speed. I accept the Defendant's contention that he was travelling more slowly than the Benz at about 20 kph. There is no evidence otherwise that the Defendant was travelling at a higher speed. The occurrence of the Accident does not necessarily lead to the inference that the Defendant was driving too fast. I regard the speed of both the Benz and the Taxi as moderate.

45.However, Ms Fong suggested the Defendant should go even slower because he could not see down the steep Slope. But there is no evidence that 20 kph was inappropriate for travelling downhill for the gradient of the Slope in question. I am not persuaded the Defendant should reduce speed even further. I bear in mind that just a few moments before the Defendant went down the Slope, Mr Leung drove along the same route and passed the same Traffic Lights at about 30 kph. For the Taxi, the Traffic Lights showed green and the Benz had moved ahead. There is also a line of vehicles behind the Taxi whose drivers might also have seen the green Traffic Lights and in the absence of any road warnings would have anticipated the Taxi to pass through at a reasonable speed.

46.Fourthly, I consider the Defendant did everything possible when he sighted the “Stop” Signboard and the Benz which had stopped. He reacted with reasonable promptitude by braking hard, but could not avoid contact with the rear of the Benz. The Taxi had a shorter stopping distance than the Benz. I have found that the distance between the Traffic Lights and the Signboard was about 3 private car lengths. Although it is not disputed the Benz stopped in front of the “Stop” direction of the Signboard, there is no evidence of the distance from the stop position of the Benz to the Signboard. The Defendant observed that when he sighted the Signboard and the Benz, the Benz was about 1 private car length ahead. Mr Leung also concurred that he noticed from the rear view mirror the Taxi was about 1 private car length behind. In my view, 1 private car length or so on a downhill road would inevitably be too short a stopping distance for the Defendant to avoid contact with the Benz.

47.Ms Fong also relies on the doctrine of res ipsa loquitur. It is trite that if the circumstances of the incident are known and evidence in respect of the same is adduced, the court must examine all the evidence at the end of the case and decide whether on the facts and inferences the court finds that negligence has been established. The burden remains throughout on the party alleging negligence to prove that damage was caused by the negligence of the alleged party (see Ng Chun-pui v Lee Chuen-tai & anor [1988] 2 HKLR 425). Lord Cooper in the Brown and Lynn's case (supra) said “…… unless we can affirm that, in every case in which a following vehicle collides with a leading vehicle, the following driver must be at fault on the principle of res ipsa loquitur. That proposition I reject.” I draw no assistance from this principle as the factual matrix of the Accident was covered in detail by evidence from the parties.

48.I therefore conclude that the Accident was an unfortunate and inevitable result of the Taxi running into the Benz with a moderate degree of force. When the Taxi crested the top of the Slope and had opportunity to see the Signboard and the Benz, the Defendant with appropriate apprehension and reaction braked hard but could not stop in time. In the circumstances, the damage to the vehicles must lie where they fall. The Plaintiff's claim is dismissed.

Quantum

49.In case I am wrong, I proceed to assess the quantum of the Plaintiff's claim for loss and damages.

50.The Plaintiff lodged a claim with the Insurer. The Benz was sent to Zung Fu Company Limited (“ZF”) to obtain a repair estimate. ZF initially estimated the repairing costs (including labour and replacement parts) to be HK$102,570.30. RH as appointed by the Insurer assessedand adjusted ZF's estimated repairing costs to HK$64,769.80 being HK$25,500.00 for labour cost and HK$39,629.80 for the replacement of parts. The Plaintiff accepted such assessment/adjustment. The final repair costs were HK$64,769.80. The Plaintiff only paid HK$6,000.00 as “excess” under the insurance policy with the Insurer. The Insurer paid the balance of the repairing costs of HK$58,769.80 and RH's motor survey fee of HK$660.00 directly.

(a) Whether the Plaintiff's claim is limited to out-of-pocket payment

51.Mr Finley submits that the Plaintiff's claim is at best restricted to HK$6,000.00 being the “excess” it paid under the insurance policy. He argues that the balance of the repairing costs and the motor survey fee were not the Plaintiff's loss/damages since they were defrayed by the Insurer.

52.Mr Finley cites Halsbury's Laws of England 4^th ed Vol.25 para.531 at p.282 in support of his contention. It says inter alia as follows :

“…… [The assured] is not obliged to refrain from suing a third party for damage caused by the third party's negligence merely because he has been paid in full by his own insurers, pursuant to an agreement between them and the insurers of the third party by which each insurance company pays for damage to its own assured. If he sues and is successful he must account to his insurers for any sum recovered in respect of a matter for which they have paid him.” (my emphasis)

53.He further cites Atkin's Court Forms 2^nd ed, Vol.22(1), 1996 Issue, para.9 at p.185, wich paragraph states inter alia as follows :

“           Where an insurer has fully indemnified the assured ……

Subrogation merely effects an equitable assignment of the rights of the assured, and so in the absence of a formal assignment, the insurer may not bring proceedings against third parties in his own name without joining the assured. Where the assured allows the insurer to sue third parties in the name of the assured, or where the assured himself brings proceedings against third parties, any recovery which he makes, up to the amount by which he was indemnified, will be subject to an equitable lien in favour of the insurer, who may also be entitled to intervene in the proceedings.” (my emphasis)

54.Such equitable lien arising from the doctrine of subrogation is also reiterated in Goo and Merkin, Insurance Law and Practice in Hong Kong, at p.390 where the learned editors cited Lord Napier and Ettrick v Hunter [1993] 1 All ER 385 in which the House of Lords found that the insurers, who had earlier paid out on claims, held an enforceable proprietary lien or charge over “settlement monies received by the insureds”.

55.I do not see how the above learned texts support Mr Finley's proposition. These texts suggest that upon being fully indemnified by the insurer, the assured can sue the third party for recovery of the full loss, but is obliged to account to the insurer for the amount he has been indemnified. Such proposition is regarded as incontrovertible by McGregor on Damages 17^th ed at para.35-123 at p.1239 as follows :

“As early as 1974 it was decided in Bradburn v G. W. Ry that, where the claimant had taken out accident insurance, the moneys received by him under the insurance policy were not to be taken into account in assessing the damages for the injury in respect of which he had been paid the insurance moneys. This decision has withstood time and is solidly endorsed at House of Lords level by Parry v Cleaver, not only by the majority who relied upon it by analogy but also by the minority who sought to distinguish it, and more recently by Lord Bridge speaking for the whole House in Hussain v New Taplow Paper Mills and in Hodgson v Trapp, and by Lord Templeman similarly in Smoker v London Fire Authority. The matter is clearly now incontrovertible. The argument in favour of non-deduction is that, even if in the result the claimant may be compensated beyond his loss, he has paid for the accident insurance with his own moneys, and the fruits of this thrift and foresight should in fairness enure to his and not to the defendant's advantage.”

In the circumstances, I reject Mr Finley's submission.

(b) Repairs vs replacement

56.There was some suggestion during Mr Finley's cross-examination of Mr Lee that some replaced parts could have been repaired. It is therefore necessary to consider the relevant evidence on the accident damage to the Benz and the consequent repairing work.

57.In this respect, I accept on balance the evidence of Mr Lee and Mr Leung. The Benz was almost brand new with only 1,763 km on the road. Its condition was good. Mr Lee noted it was moderately damaged at the point of impact (ie the middle to right part of the rear bumper), which tallied with the above description of the Accident.

58.It is true the photographs annexed to the Report indicated that the superficial damage to the Benz did not appear to be major. But I accept on balance the evidence of Mr Leung and Mr Lee that the accident damage to the Benz was not just restricted to minor scratches. Mr Lee testified that it was a Mercedes Benz design feature for the vehicle's structure to absorb the collision impact. Consequently, the internal structure of the Benz (eg the crumple zone) was damaged but the collision left its outward appearance largely unscathed.

59.Mr Lee opined that the rear boot lid, rear bumper assembly, rear bumper brackets and rear lower cross member were distorted, the rear bumper parking sensors were cracked and the rear bumper moulding and rear boot lid garnish were dented. He concluded the above parts (including the rear boot lid) had to be replaced. Further, the back panel and the luggage compartment floor panel had to be repaired. 

60.Mr Lee said he would consider many factors (including the year of manufacture of the vehicle) in determining what repairing works would be required. Here, he had borne in mind that the Benz was almost brand new, but he would not have approved replacements instead of repairs simply because of such fact. He would apply the same standard to all vehicles because replacements or repairs of parts were the same for aged or new vehicles. If a part required replacement, it would be because it was necessary irrespective of the age of the vehicle.

61.Although it was possible to repair the rear boot lid, Mr Lee explained it was less costly to replace it given that ZF's labour costs were about HK$900.00/hour. He did not obtain a formal estimate from ZF on the repair option vis-à-vis the rear boot lid, but explored such option with ZF when he examined the Benz. Indeed, as was usual in conducting motor surveys, Mr Lee would discuss with the repairer's staff on whether replacement or repair of various parts was necessary/appropriate. However, as a matter of practice, such discussions and his own deliberations would not be recorded in the formal motor survey report. Further, Mr Lee explained that the curved rear boot lid of this new model Benz had 2 layers of metal. If the rear boot lid was dented, it had to be cut open in order to manually reshape the dented part. The 2 layers would have to be welded together afterwards, but the end result would not be as nice as the original rear boot lid. Bearing in mind all of the above factors, I find as a fact that it is more time- and cost-effective to replace rather than repair the rear boot lid.

62.Mr Lee disagreed (and I accept his view) that most of the items he suggested should be replaced could have been repaired. He pointed out that plastic items could not be repaired and it was impossible to simply repair the cross-member. Mr Lee explained that the panelling of the rear bumper could not be repaired since it was made of fibre. As regards the item “PTS RAIL, RR BUMBER” in ZF's estimate, it was in fact the moulding on the rear bumper which could not be repaired. He also said the item “CHROMIUM COVER, RR BU” in ZF's estimate could not be repaired since it was electroplated. Mr Lee explained that once electroplating, moulding and plastic parts were cracked/damaged, they could not be repaired and had to be replaced.

63.In the circumstances, I find the Plaintiff has acted reasonably in replacing the rear boot lid and the other parts as suggested in ZF's estimate and adjusted by the Report. I further accept that the eventual repair and replacement of parts done to the Benz by ZF were appropriate and reasonable.

(c) Repairs by ZF vis-à-vis other repairers

64.Mr Lee accepted that ZF's repairing costs were 30% higher than those of other repairers. Mr Finley submits that in the absence of estimates on repairing costs from other repairers, the Plaintiff is not entitled to claim the incurred repairing costs, which should be reduced by 30%.  He refers to Halsbury's Laws of England 4^th ed. Vol.12 para.1194 at p.478 which states as follows :

“The plaintiff is only required to act reasonably, and whether he has done so is a question of fact in the circumstances of each particular case, and not a question of law. He must act not only in his own interests but also in the interests of the defendant and keep down damages, so far as it is reasonable and proper, by acting reasonably in the matter. One test of reasonableness is whether a prudent man would have acted on the same way if the original wrongful act had arisen through his own default. ……”

65.Mr Lee said ZF being the local distributor or sole agent for Mercedes Benz vehicles was most experienced in dealing with and repairing such vehicles. Other repairers would not be able to obtain official spare parts and would have to use parallel imports. Mr Lee said it was usual for Mercedes Benz vehicle owners to return to ZF for reliable repairs and spare parts, especially for new cars. ZF's higher charges reflected its warranty for the superior quality of its repairs. Since the Benz was almost brand new, Mr Lee considered it appropriate for the Plaintiff to return to ZF for repairs.

66.I bear in mind all that is required is the innocent party should act reasonably. His obligation is not to search for the cheapest repairer and, indeed, the Defendant has not pleaded any failure to mitigate on the part of the Plaintiff. I hold that for the above reasons it is reasonable for the Plaintiff to have the Benz repaired by ZF instead of other car repairers. I note that in a similar situation of entrusting a Mercedes Benz vehicle to ZF rather than to small car repairers which might cost about one-third less, Mr Recorder Edward Chan QC in Ching Kin Sang v Galluck International Limited & ors HCA8225/1994 (unreported, 22^nd May 1997) at para.9 also came to the same view that it was wholly reasonable for the plaintiff to have the vehicle repaired by ZF.

67.In the circumstances, I accept that Mr Lee's adjustment of ZF's estimation of the repairing costs, which adjustment was accepted by ZF, is reasonable. Had the Plaintiff been able to establish liability against the Defendant, it would have been able to recover damages in the sum of HK$65,429.80.

Conclusion

68.In the circumstances, the Plaintiff's claim and the Defendant's counterclaim are both dismissed. The loss and damage to both vehicles must lie where they fall. Since neither party succeeded in their claims and both claims arose from the same Accident that was canvassed at the trial, I consider it appropriate that there be no order as to costs in respect of the action (including the counterclaim and all costs reserved). I therefore grant a costs order nisi to such effect.

Ms Fong Wing Kam Amy of Messrs Simon C W Yung & Co for the Plaintiff.

Mr Stephen Finley of Messrs Finley & Co for the Defendant.