Cycle and Carriage Motor Dealer Pte Ltd v Hong Leong Finance Ltd

• Judgment Date: 09 December 2004
• Date: 09 December 2004
• Docket Number: District Court Appeal No 13 of
• Court: High Court (Singapore)

Cycle & Carriage Motor Dealer Pte Ltd

Plaintiff

and

Hong Leong Finance Ltd

Defendant

[2004] SGHC 274

Lai Kew Chai J

District Court Appeal No 13 of 2004

High Court

Tort–Conversion–Respondent purchasing vehicle and entering into hire purchase agreement–Registered owner of vehicle deregistering vehicle in breach of hire purchase agreement–Appellant purchasing Preferential Additional Registration Fee certificate and using it to offset registration fees on another vehicle–Whether certificate capable of conversion–Whether respondent having immediate right of possession of certificate–Whether appellant's dealings with certificate inconsistent with respondent's rights and done with intention to assert rights inconsistent with respondent's

The respondent purchased a vehicle (“the vehicle”) and entered into a hire purchase agreement with one Ang Eng Hian (“Ang”). In breach of the hire purchase agreement, Ang deregistered the vehicle and the Land Transport Authority issued a Preferential Additional Registration Fee (“PARF”) certificate. The appellant purchased the PARF certificate and used it to offset the registration fee for a vehicle that was purchased by one of its customers. The appellant was not aware of the existence of the hire purchase agreement or the circumstances which led to the deregistration of the vehicle. In the District Court, the respondent succeeded in its action against the appellant for conversion of the PARF certificate. The appellant appealed.

Held, dismissing the appeal with costs:

(1) To constitute the form of conversion referred to in this case, “there must [have been] a positive wrongful act in dealing with the goods in a manner inconsistent with the owner's rights, and an intention in so doing to deny the owner's rights or to assert a right inconsistent with them”. There need not have been any knowledge on the part of the person sued that the goods belonged to someone else; nor any positive intention to challenge the true owner's rights. Goods could be the subject of successive and independent conversions by persons dealing with them in such manner and with such intention: at [11].

(2) The PARF certificate was capable of conversion because it was a chattel that evidenced a chose in action: at [13] and [14].

(3) It was not relevant that the appellant had no knowledge that Ang had breached the hire purchase agreement because whether such knowledge existed was immaterial in an action for conversion: at [15].

(4) A finding of liability against innocent parties like the appellant would not provide companies such as the respondent with limitless actions for conversions. Conversion actions could be avoided if proper inquiry was made of the claim of title of the vehicle and its accompanying certificates. Further, once an order for damages was made following the determination of liability, the claimant would be compensated for his entire interest in the chattel and his title would be extinguished: at [16].

(5) The respondent had the immediate right to possess the vehicle once there was a breach of the hire purchase agreement. The PARF certificate actually formed part of the vehicle that was subject to the hire purchase agreement because the certificate was inextricably linked with the vehicle within the scheme of the Road Traffic Act (Cap 276, 1997 Rev Ed) and the Road Traffic (Motor Vehicles, Registration and Licensing) Rules (Cap 276, R 5, 1999 Rev Ed). Once the PARF certificate was taken away from the motor vehicle, the latter could no longer be used for its intended purpose. The respondent therefore had the immediate right to possess the PARF certificate once it was issued and could sue the appellant for conversion: at [17], [21], [22] and [24].

(6) The appellant converted the PARF certificate when it used the certificate to offset the registration fees for its customer: at [27].

Douglas Valley Finance Co Ltd v S Hughes (Hirers) Ltd [1969] 1 QB 738 (folld)

Exklusiv Auto Services Pte Ltd v Chan Yong Chuan Eric [1995] 3 SLR (R) 728; [1996] 1 SLR 433 (refd)

Kleinwort, Sons & Co v Comptoir National D'Escompte de Paris [1894] 2 QB 157 (refd)

Lloyds Bank, Limited v The Chartered Bank of India, Australia and China [1929] 1 KB 40 (refd)

North General Wagon & Finance Co Ld v Graham [1950] 2 KB 7 (folld)

UCO Bank v Ringler Pte Ltd [1995] 1 SLR (R) 399; [1995] 1 SLR 713 (folld)

Road Traffic Act (Cap 276, 1997 Rev Ed) s 2

Road Traffic (Motor Vehicles, Registration and Licensing) Rules (Cap 276, R 5, 1999 Rev Ed) rr 2 (1), 8 (3) (a)

Adrian Ee Hock Hoe and Janice Chia Yong Yong (Ramdas & Wong) for the appellant

Phua Siow Choon (Michael BB Ong & Co) for the respondent.

Lai Kew Chai J

1 This was an appeal from the District Court ( [2004] SGDC 105). It concerned the actionability for conversion of a Preferential Additional Registration Fee (“PARF”)...