X. Case Illustration


Mr. B and his wife (Ms. C) are very unlucky, so that they have to face the following problems with some sellers and service suppliers:

1. He took his clothes to a dry cleaner but the clothes were subsequently damaged by the cleaner. Can he claim against the dry cleaner?

The law says the service supplier (dry cleaner) has to take reasonable care of customer’s (Mr. B’s) property. If the dry cleaner fails to do the job properly, Mr. B can ask him to do it again. If the clothes have been ruined, then the dry cleaner will have to fix them or make compensation.

It may be difficult to work out exactly how much money that Mr. B would be entitled to. He has to take into account how old the clothes were and how much wear he has already gotten out of them. Even though there was a notice saying something like “all garments cleaned entirely at customer’s risk”, Mr. B can still make his claim. If the dry cleaner has made a mess of the job then a notice like this won’t shield him. An exemption has to be reasonable before it can be enforced (see: VII. Unreasonable exemption clauses and unfair contract terms ).

2. He has purchased some goods but later he demanded a refund. What will happen if the shopkeeper refuses to give him his money back?

It all depends on the reason for Mr. B’s refusal. He is not entitled to a refund if:

•  he has just changed his mind about the item purchased;
•  before confirming his order, he was told that the goods were damaged or the fault was so obvious that he should have noticed it;
•  he damaged the goods by himself;
•  he subsequently altered the goods (e.g. took up the hem on a skirt); or
•  he has kept the goods for quite a long time without letting the seller know that there was something wrong with the goods (see: III. The Sale of Goods Ordinance ).

3. He took his computer to a shop for repair. When he collects it later he can’t believe that the service charge is so high. He would never have agreed to the job if he had known it would be that expensive. Can he refuse to pay the repair charge?

If the price has not been confirmed before completing the job, the repairer is entitled to charge a “reasonable” rate for the work ( section 7 of the Supplied of Services (Implied Terms) Ordinance ). If Mr. B does not pay what the repairer asks, the repairer is legally entitled to hold onto Mr. B’s computer until he pays the fee.

Even though Mr. B may think that he is being overcharged, he will have to pay the money if he wants his computer back. But in the meantime, Mr. B can make it clear to the repairer that he pays the fee “under protest” and that he intends to dispute it .

Mr. B will need to find out what other repairers would have charged for doing the same job. He shall then put it down in writing and send a letter to the repairer confirming that he was paying the bill under protest and demand a refund of the overcharged portion. If the repairer refuses to make a refund, Mr. B can take his case to the Consumer Council or the Small Claims Tribunal (please go to IX. Channels for Consumer Complaints ).

4. He put a deposit down for a car but then has second thoughts. Can he withdraw from the deal and ask for a refund of his deposit?

It is likely that Mr. B will lose his deposit. He has broken his contract with the seller, and the seller is entitled to compensation.

If Mr. B is asked to put down a deposit (but he is hesitated to confirm the order), he may ask whether or not the deposit is refundable. He may then request the seller to put that down in writing in order to avoid future arguments.

5. He took his camera for repair but the shop lost it. Can he obtain any compensation?

The repairer is required to take reasonable care of Mr. B’s camera and therefore Mr. B is entitled to compensation. If the repairer doesn’t provide other compensation then he must supply a new camera to Mr. B. Sometimes it may be very difficult to assess the actual amount of loss and further negotiations between both parties may be required.

6. He received something in the mail that he has never ordered. Does he have to pay for it?

Mr. B does not owe any money if he receives an item that he has never ordered. If he gets bills or collection letters from a seller who sent him something he has never ordered, he can write to the seller stating the facts and ask the trader to take the goods back. If the bills continue, he should insist the seller to send him the proof of his order. If this still doesn’t stop the bills, Mr. B can try to seek assistance from the Consumer Council .

If Mr. B sent for something in response to an advertisement claiming a free gift or trial period, but is now being billed, he should re-check the whole advertisement in detail. It may say something about charging shipping and handling, or worse, he may have inadvertently joined a club or subscribed to a magazine. He should then write to the seller offering to return the goods and stating that he believes the advertisement was misleading.

7. Ms. C has recently purchased some coupons (prepaid coupons) from a beauty salon but that salon suddenly closes down. Can she claim her money back and by what means?

There is little safeguard on consumer interest in prepayment scheme or coupons. In some cases, a company closes down some time after it has gone into liquidation. In some other cases, a company’s business comes to an end without prior notice to the outside world. The reasons for a company’s demise can be just as diverse: there may be financial difficulties, fierce competition, retirement, fraud, personal reasons and so forth. Consumers who find themselves in such an unfortunate situation may seek legal advice from lawyers, or contact the Consumer Council and the Police.

If a winding-up order has been granted against the company (in case it is a limited company), then the aggrieved consumers are legally entitled to recover their payment for the tickets. However, the consumers will only be treated as ordinary or unsecured creditors on claiming their loss. In reality, this means that the consumers will usually recover no more than a small proportion of the debt.

In order to be eligible as one of the creditors in a winding-up action, Ms. C has to prove that the company owes her money by completing a Proof of Debt Form (Form 63A) . She must also submit the form to the provisional liquidator or liquidator, together with documentary evidence, if any, after the winding-up order has been made against the company. For more details, please refer to “Bankruptcy, Individual Voluntary Arrangement and Winding-up of Companies” under the CLIC website.

If the company closes down suddenly without leaving any assets, the prospect of consumers (holding pre-paid coupons or vouchers) recovering their loss is usually very slim.