Question

On 1 November 2019, Billy, who worked as a banker, returned from Japan for business trip with his luggage in the Hong Kong Airport. There was a long queue for taxi, so he decided to take the airport shuttle bus to meet an important client, Success Ltd., concerning a loan arrangement for the merger and acquisition. Because Billy was in a hurry, he left his luggage in the shuttle bus. The luggage contained his proposal and some business documents related to Success Ltd. which were important and confidential. Billy was extremely nervous to get his luggage back and put an advertisement in a local newspapers. The advertisement mentioned that he was willing to pay a reward of HK$20,000 to any person who returned the luggage to him. To show his sincerity, Billy also deposited HK$5,000 as deposit in the bank account. This has also been referred in the newspapers advertisement.

David, the shuttle bus driver, found Billy’s luggage in the shuttle bus, went to the address printed on the tag of the luggage, and returned the luggage to Billy, without reading the advertisement. Billy was very delighted that his luggage was returned and gave David HK1,000 as a reward for his help. David subsequently read the newspapers advertisement and now wants to claim the HK$20,000 reward. Billy refused to pay and said that David was not entitled to the reward. In fact, Billy would like to claim back the HK$1,000 reward that he paid earlier to David.

Billy then went to a skiing holiday. Before leaving he orders a grey carpet for his new home from Quality Carpet Ltd’s (QCL) sample book and has paid HK$20,000 to QCL. The back of the sample has a sticker on it which describes the carpet as 100 percent wool. Billy also bought an expensive set of new skis from Alpine Ltd. (AL) for HK$25,000. The first time Billy uses the skis they snap into pieces. On his return from holiday, Billy discovers the colour of the carpet is pink and 100 percent polypropylene.

Early this month, Billy booked his car into Tan’s garage for a service. When he collected the car Tan told Billy that the work was complete, but in fact, Tan had forgotten to fully tighten the handbrake cable. Billy lived on a hill and when he got home he applied the handbrake and got out. The handbrake failed to hold the car which rolled down the hill and crushed Jill, who was loading shopping into the back of her car.

As a result of the collision, Billy’s car was damaged and Jill was injured.

1. Advise David: whether he is entitled to claim the HK$20,000 reward from Billy.

2. Advise Billy as to her rights and remedies against QCL and AL under sale of goods law.

3. Discuss the rights and remedies of Billy and Jill against Tan.

(Total: 20 marks)

Answer 1

1. Yes David is entitled to claim the HK$20000 reward from Billy. As Billy is due to pay HK$20000 to any person who returned to him as per the newspaper advertisement. It didn’t mention about if the bus shuttle driver i.e David would return the bag he won’t be entitle to claim the reward. Though David didn’t read the newspaper still he would be entitle to claim.
2. Section 58

Subject to the provisions of the Specific Relief Act, 1877, in any suit for breach of contract to deliver specific or ascertained goods, the court, may, if it deems fit, on the application of the plaintiff, by its decree direct that the contract shall be performed specifically, without giving the defendant the option of retaining the goods on the payment of damages. The decree may be unconditional, or upon such terms and conditions as to damages, payment of the price, or otherwise, as the Court may deem just, and the application of the plaintiff may be made at any time before the decree.

This section may best be explained by an illustration; there was a contract to sell a ship to a German ship owner. The ship was an old ship but her engines and boilers were new, so as to satisfy the German regulations, and the buyer could have her registered immediately in Germany. In view of these facts and the price, the ship was of peculiar value to the buyer, and there was only one other ship on the market that would suit his requirements. The court granted specific performance of the contract[xviii].Originally, the provisions relating to sale of goods were part of the Indian Contract Act, 1872 which as such did not provide for the equitable remedy of specific performance. Subsequently, a separate Act namely Specific Relief Act, 1877, was enacted to provide for equitable remedies including the remedy of specific performance.The section provides a remedy to the buyer, and gives no correlative right to the seller. It is therefore only on application of the buyer when suing as plaintiff, that the contract of sale can be enforced specifically and the section only applies when the contract is to deliver specific or ascertained goods. It has been held that a seller is not entitled to enforce specific performance of the contract under s. 58 because it deals with the case of a buyer of specific goods in respect of a contract to deliver specific or ascertained goods. ‘Specific’ here has the meaning which is given in section 2(14) while ‘ascertained’ means ‘identified in accordance with the agreement after a contract of sale is made’.[xix]

Section 58, as noted above, reproduces with some suitable changes s. 52 of the English Act. Before passing of the Sale of Goods Act, 1930, there existed Specific Relief Act 1877, Chapter II of which dealt with specific performance of an existing contract. This is also why Section 58 of the Sale of Goods Act, 1930 begins with the words “subject to the provisions of Chapter II of the Specific Relief Act, 1877”.

court has wide discretion to impose conditions. In one case, specific performance of agreement to transfer shares was granted subject to a lien to protect the transferor against non-payment of the price of the shares.[xx] In another case, the House of Lords while ordering the specific performance of a contract to sell shares put a condition that the buyer should pay interest on the purchase price which he had been entitled to retain pending the order.[xxi]

In the given case Billy is entitle to special relief as per section 58 against QCL and AL.

3. In this case it is Billy’s fault and Tan’s fault. Billy and Jill can apply for damages from TAN and Billy fault’s is because he should have applied handbrake in this situation and save Jill from Injury.