REDLAND PRECAST CONCRETE PRODUCTS (CHINA) LTD v. PERMASTEELISA HONG KONG LTD

CACV 422/2020, [2023] HKCA 1278

On appeal from [2020] HKCFI 1820

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 422 OF 2020

(ON APPEAL FROM HCCT NO 35 OF 2018)

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J U D G M E N T

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Hon Kwan VP:

1.  This is the plaintiff’s appeal against the judgment of Mimmie Chan J on 6 August 2020 (“Judgment”)[1]. The plaintiff, Redland Precast Concrete Products (China) Limited, alleged it had a contract with the defendant, Permasteelisa Hong Kong Limited[2], by which the defendant appointed the plaintiff its subcontractor for works to be carried out on the M+ Museum project (“Project”), and claimed damages for breach of contract, alternatively, in the event there was no contract, for a reasonable sum for work done on the basis of quantum meruit. The judge found in favour of the defendant there was no contract as alleged and dismissed the claim for damages. She also dismissed the alternative claim on quantum meruit, holding that there was no basis that the plaintiff should be paid on quantum meruit.

Background and respective pleaded case of the parties

2.  The relevant background taken from the Judgment and the pleadings may be stated as follows.

3.  On 26 September 2015, the West Kowloon Cultural District Authority (“Employer”) awarded the main contract for the Project to Hsin Chong Construction Company Limited (“HC”). By HC’s letter of acceptance dated 22 October 2015 (“Letter of Acceptance”), HC appointed the defendant the subcontractor for the design, supply, fabrication and installation of the curtain wall, skylight, precast ceramic façade system, and the LED lighting and associated works (“Subcontract Works”). HC and the defendant signed a formal subcontract dated 18 April 2016 (“Subcontract”).

4.  On the plaintiff’s case, an agreement was made between the plaintiff and the defendant for the plaintiff to carry out part of the Subcontract Works, identified as the design, supply and delivery of precast concrete façades (“Sub-subcontract Works”), which were to be integrated with the curtain wall forming part of the exterior façade system of the Subcontract Works to a tower and podium of the Project. The plaintiff claimed it had agreed to undertake the Works at the price of $79,432,305.

5.  According to the case pleaded in §§3 and 4 of the amended statement of claim (“SOC”), the alleged agreement was concluded in this manner:

(1)  The plaintiff entered into a pre-bid agreement (“Pre-bid Agreement”) with the defendant that should the defendant be awarded the Subcontract Works, the defendant should sublet the Sub-subcontract Works to the plaintiff. The Pre-bid Agreement was contained in or evidenced by four documents (“4 Documents”), namely, (i) the Confidentiality Agreement between the plaintiff and the defendant made on 10 June 2015 (“Confidentiality Agreement”); (ii) the defendant’s emails to the plaintiff on 23 June 2015 at 10:33 hours and on 25 June 2015 at 08:16 hours and 13:29 hours (“June Emails”); (iii) the plaintiff’s letter to the defendant dated 25 June 2015 (“25/6 Letter”); and/or (iv) the pre-bid agreement between HC and the defendant dated 31 August 2015 (“HC/Defendant Pre-bid Agreement”).

(2)  By the Letter of Acceptance, HC awarded the Subcontract Works to the defendant. Hence, by virtue of the Pre-bid Agreement, the plaintiff had entered into a sub-subcontract with the defendant (“Sub-subcontract”).

(3)  The Sub-subcontract was contained in or evidenced by: (i) such terms and conditions as set out in the HC/Defendant Pre-bid Agreement and the Letter of Acceptance, in so far as they were applicable to the Sub-subcontract Works; (ii) the plaintiff’s quotation dated 15 May 2015 (“Quotation 1”); and/or (iii) as a subcontractor to the defendant, the plaintiff’s performing and/or carrying out the works as envisaged by or otherwise within the scope of the Sub-subcontract “after the Subcontract was awarded by HC to the defendant”[3] (ie 22 October 2015) up to the date of the defendant’s repudiation of the Sub-subcontract on 8 and 11 June 2016.

(4)  The works performed by the plaintiff referred to above included[4]:

(i)  commenting, reviewing, checking, and/or confirming the Sub-subcontract Works programme, the precast concrete façade details and design, the allowable dimensional tolerances and specification for the precast concrete façades, the visual mock up drawings for the precast concrete façades;

(ii)  preparation, provision and/or submission of the following which included: revisions of manufacturing quality plan of the plaintiff (“MQP”); information on lifting anchors for the precast concrete façades; photographs showing trial terracotta façades production; warehouse management documents, safety reports for special equipment control, rectification report for personal protective equipment and hazard control, safety instructions for fire control, waste disposal instruction and official environmental report relating to the plaintiff’s casting yard in Dongguan (“Casting Yard”) for fabrication of the precast concrete façades; business licence and registration certificate relating to the Casting Yard; details to the supplier schedule prepared by the defendant, the plaintiff’s business registration certificate, the plaintiff’s bank account details; method statement and preliminary sketch on steel rack and turning table; production plan, handling plan and installation plan; preliminary RC drawings for the precast concrete façades; programme and shop drawings for visual mock up; schematic drawings for the precast concrete façades;

(iii)  attending meetings including weekly coordination meeting of the defendant to resolve design issues, to discuss workflow diagram, to review dimensional tolerances of the precast concrete façades, to present shop drawing submission packages to meet the requirements of the Employer’s consultants and the Buildings Department and the proposed process for terracotta tile and precast fabrication and design constraints;

(iv)  attending two workshops organised by the architect of the Project in March 2016;

(v)  conducting joint inspection of the Casting Yard with representatives from the Employer’s consultants, the architect, HC and the defendant; and

(vi)  provision of a sample for the precast concrete façade at no costs or charges to the defendant (“Free Sample”).

6.  The plaintiff pleaded in §5 of the SOC that the price agreed for the Sub-subcontract was $79,432,305, subject to the adjustments set out in email exchanges between HC and the defendant in October 2015, and that the unit rates of the Sub-subcontract Works in Quotation 1 were also to be adjusted as set out in the email exchanges aforesaid.

7.  It was pleaded that the defendant repudiated the Sub-subcontract by its letter to the plaintiff on 8 June 2016 and its email of 11 June 2016, by reason of which the plaintiff claimed:

(1)  in respect of the Sub-subcontract Works which the plaintiff had carried out up to the date of the repudiation,

(i)  a sum of $1,596,451.92 alternatively damages of $1,596,451.92 due under the Sub-subcontract [5];

(ii)  alternatively, a reasonable price upon quantum meruit of $7,967,620[6]; and

(2)  in respect of the Sub-subcontract Works which the plaintiff would have carried out but for the defendant’s repudiation,

a sum of $31,140,929.82 alternatively damages of $31,140,929.82, representing profit and overhead due under the Sub-subcontract[7].

8.  The defendant denied the existence of the Pre-bid Agreement or the Sub-subcontract. According to the amended defence,

(1)  the parties were undergoing preliminary discussion in around June 2015 to explore and evaluate the possibility and suitability of having the plaintiff as the defendant’s subcontractor for the Sub-subcontract Works; (§7.1)

(2)  It was the defendant’s practice to invite quotations and then evaluate tenderers by way of assessment and due diligence before any award of contract. The defendant had an internal tendering procedure and analysis for subcontractors and suppliers (“Tender Analysis”), during which potential candidates to be appointed as the defendant’s subcontractors would be subject to evaluation; (§§7.3 and 7.4(a))

(3)  Clause 8 of the Confidentiality Agreement relevantly provided as follows:

“8. Further Obligations

Both Parties acknowledge and agree that the exchange and provision of information under this Agreement shall not commit or bind either Party to any present or future contractual relationship (save for carrying out and continuing with the discussions and negotiations referred to in the Recitals above) nor shall the exchange and provision of information be construed as an inducement to act or not to act in any given manner. Specifically, [the defendant] has no obligation under this Agreement to enter into any contractual arrangement with [the Plaintiff] including but not limited to any pre-bid arrangement for engaging [the Plaintiff] as [the Defendant’s] domestic specialist sub-contractor for the further development of the Conforming Design and installation of the Curtain Wall and Precast Façade Panel System.” (Emphasis added) (§7.2)

(4)  The defendant expressly informed the plaintiff that there was an alternative bidder for the Sub-subcontract Works, and the plaintiff voluntarily submitted to the Tender Analysis for assessment by the defendant; (§7.7)

(5)  The letter of intent issued by the defendant on 24 March 2016 was not signed and returned by the plaintiff and instead the plaintiff gave some comments by email on 12 April 2016. The plaintiff also failed to deliver the Free Sample on 28 March 2016, which was one of the pre-requisites stated in the letter of intent. The defendant therefore informed the plaintiff by email on 11 June 2016 attaching the letter dated 8 June 2016 and stating that the letter of intent had been withdrawn. (§§7.8 to 7.12)

The Judgment

9.  After a trial which lasted seven days, the judge dismissed the plaintiff’s action.

10.  There was no dispute in the court below (and on appeal) about the law on the relevant principles for inferring a contract from the conduct of the parties and from the existence or issuance of the documents relied on by the plaintiff as evidence of the Pre-bid Agreement. The dispute was about the application of the principles in the present case.

11.  The applicable principles[8] may be stated as follows:

(1)  The burden of establishing such a contract is on the party asserting its existence.

(2)  The court will not imply a contract from conduct lightly. There is an obvious difference between the situation where the court is asked to imply a term where there is already an existing agreement and where the court is asked to imply an agreement from scratch. The latter situation demands a stricter requirement for the implication to be made.

(3)  It is not enough to show that the parties have done something more than, or different from, what they were bound to do or intent on doing. It is necessary that the conduct relied upon is unequivocally referable to the contract contended for, in the sense that it is consistent only with there being the contract sought to be implied and inconsistent with there being no such contract. In other words, the party propounding the contract must be able to point to some conduct of the parties which is consistent with, and only with, the contract contended for. This is an objective test.

(4)  The general exclusion of evidence of subjective intent is subject to one qualification. There will be no contract if (despite the objective appearance of agreement) the party seeking to rely on the contract either actually knows that the other party has no intention to contract with him (or to contract on the terms alleged), or does not in fact intend to be bound thereby. The party who did not intend to be bound would not be bound if his state of mind was actually known to the other party, as to apply the objective test in this situation would pervert its purpose, which is to protect a party who has relied on the objective appearance of consent from the prejudice he would suffer if the other party could escape liability on the ground that he had no real intention to be bound.

12.  The judge held as follows in the Judgment:

(1)  There was no Pre-bid Agreement as contained in and/or evidenced by the 4 Documents. In particular, the June Emails are equivocal. The defendant’s issue of the June Emails, the defendant’s request for the letter of intent from the plaintiff and the subsequent issue by the plaintiff of the 25/6 Letter cannot be said to be conduct which is unequivocally referable to the existence of the Pre-bid Agreement and the Sub-subcontract as claimed by the plaintiff[9].

(2)  The work performed by the plaintiff after the award of the Main Contract to HC in September 2015 (as particularised in the SOC §4(c)) is not sufficient to justify a finding that the Pre-bid Agreement or Sub-subcontract can be inferred or implied from the plaintiff’s conduct as the conduct is not unequivocally referable to the existence of a Pre-bid Agreement or a binding Sub-subcontract between the plaintiff and the defendant. The work performed by the plaintiff was, on the balance of probabilities, part of the continuing process of due diligence and Tender Analysis conducted by the defendant as to the appropriateness of appointing the plaintiff as its subcontractor[10].

(3)  The work carried out by the plaintiff in 2016 was pursuant to requests stated by the defendant to be for due diligence and Tender Analysis, and understood by the plaintiff as such when it performed the work. The work was not requested by the defendant in contemplation of the Sub-subcontract being executed, nor in anticipation of the execution of the Sub-subcontract. The present circumstances and facts are distinguishable from those in the cases relied upon by the plaintiff to support its claim for payment on quantum meruit[11], where the costs sought to be recovered had been incurred by way of accelerated performance of an anticipated contract. There was no implied agreement that the work carried out by the plaintiff should be paid on quantum meruit or any other basis[12].

This appeal

13.  Mr Edward Chan, SC, who appeared for the plaintiff on appeal[13] but not below, advanced seven grounds of appeal in the amended notice of appeal. He grouped them under three broad grounds:

(1)  the judge erred in ruling that there was no Pre-bid Agreement between the plaintiff and the defendant as inferred from the conduct of the parties during tendering stage;

(2)  the judge erred in not accepting that the conduct of the plaintiff after the award of the Main Contract to HC was evidence of the existence of a binding agreement between the plaintiff and the defendant; and

(3)  in the event there was no binding agreement between the plaintiff and the defendant, the judge erred in not accepting the plaintiff’s claim based on quantum meruit.

14.  Mr Chan does not seek to challenge the findings of primary fact of the judge. He seeks to dispute the proper inference to be drawn from the primary facts.

15.  Mr Ambrose Ho, SC, who appeared for the defendant on appeal[14], submitted that the plaintiff would need to surmount two fundamental hurdles to succeed on appeal.

16.  First, the plaintiff’s attacks on the Judgment are directed at the judge’s findings of fact and analysis of the evidence. For the appeal court to interfere with the judge’s findings, the plaintiff would need to identify errors of law or demonstrate that the factual findings are “plainly wrong”. It would not assist the plaintiff by seeking to effectively re-run its arguments advanced at the trial. I would add that the appellate process is not designed to give an appellant another chance of repeating his arguments in the hope that the appeal court might be persuaded to accept the account of facts he advanced unsuccessfully below. Duplication of the trial judge’s role on appeal is a disproportionate use of the limited resources of the appeal court and will seldom lead to a different result. It has to be borne in mind that the trial court is the primary tribunal for the assessment of the evidence and making the relevant findings of fact, and that in our litigation system, the trial at first instance is the “main event” and not a “tryout on the road”[15].

17.  Second, the plaintiff’s primary case rests on the existence of a binding agreement to be inferred from the conduct of the parties. The evidence relied upon by the plaintiff is equivocal at best and falls short of satisfying the threshold of being “unequivocally referable” to the agreement contended for.

18.  Mr Ho further submitted that when examining excerpts of the evidence without “a panoramic vista of the evidence as a whole”, the appeal court sees only “a selected series of stills, rather than the complete film”. And it must be borne in mind that the weight of the evidence is a matter for the trial judge[16].

19.  I do not understand Mr Chan to have disputed the relevant principles governing the approach of the appeal court in reversing the trial judge’s findings of fact and analysis of the evidence. I would add this regarding the challenge of inferences drawn by the trial judge.

20.  The appeal court exercises similar restraint in respect of findings of secondary fact drawn from findings of primary fact. Where a judge draws inferences from findings of primary fact which have been dependent on his assessment of the credibility or reliability of witnesses, who have given oral evidence, and of the weight to be attached to their evidence, an appeal court may have to be similarly cautious in its approach to his findings of such secondary fact and his evaluation of the evidence as a whole. The “plainly wrong” test is applicable unless the finding of fact is based purely on inferences, or otherwise has nothing to do with the witnesses’ demeanour or the trial judge’s having received the evidence at first hand[17]. “Plainly wrong” in the context of an appeal against a finding of fact directs the appeal court to consider whether it was permissible for the trial judge to make the findings of fact which he did in the face of the evidence as a whole, and the appellant is required to identify a mistake in the judge’s evaluation of the evidence that is sufficiently material to undermine his conclusions[18].

21.  Where the inference of the trial judge was made not on primary fact (as discussed above) but was based on an evaluation of facts which involved the assessment of a number of factors weighed against each other, this is often a matter of degree upon which different judges can legitimately differ. Such cases may be closely analogous to the exercise of a discretion and appeal courts would approach them in a similar way and would not interfere unless satisfied that the judge’s conclusion lay outside the bounds within which reasonable disagreement is possible[19].

22.  I turn to consider each of the grounds of appeal advanced in the amended notice of appeal.

Ground 1 – the June Emails and 25/6 Letter

(a) 23 June Email

23.  On 23 June 2015 at 10:33 hours, the defendant sent this email to the plaintiff:

“We have just received [HC] version of pre-bid agreement for M+ last night and our contract colleagues are now reviewing the agreement.

Our contract colleagues are also working for pre-bid agreement for [the Plaintiff] to team up with [HC, the defendant & plaintiff] together.

For other main contractors, we are unable to convince them to adopt [the plaintiff] quotation. Some main contractors even take the precast concrete out of our work façade package. We trust that this is to your complete understanding.

Anyhow, please provide your best offer based on pre-bid agreement with [the Defendant] and [HC].”

24.  In the plaintiff’s reply to the defendant by email at 10:59 hours on the same day, the plaintiff informed the defendant there would not be any changes on the previous quotation and expected to receive a pre-bid agreement from the defendant[20].

25.  The judge found the 23 June Email equivocal and does not show the conclusion of any agreement between the plaintiff and the defendant[21]. Mr Chan submitted that the judge failed to give sufficient weight to the background facts leading to the 23 June Email and had failed to understand properly the content of this email.

26.  Regarding the background, he sought to highlight these events prior to the 23 June Email:

(1)  As early as February 2014, the plaintiff was approached by one of the consultants of the Project and invited to attend a meeting with the façade design team working on the Project to discuss technical issues[22].

(2)  In 2015, HC approached the plaintiff and visited the Casting Yard to ascertain whether the plaintiff was technically qualified to be a subcontractor for the fabrication of the precast concrete panel with ceramic tiles and finishing for the Project[23].

(3)  On 15 May 2015, the plaintiff submitted Quotation 1 to both the defendant and HC[24], and in late May or early June 2015 the plaintiff was informed by HC that the quotation for the precast concrete panel was to be included in the tender for the exterior façade, such that if the plaintiff was successful in its tender, the plaintiff would become a subcontractor of the defendant, and the defendant would in turn be a subcontractor of HC[25].

(4)  In an email from the defendant to HC on 5 June 2015 at 13:11 hours, the defendant referred to its meeting with HC earlier that day and recorded its understanding that it “will team up for external façade system works by either Mutual Exclusive Pre-Bid Agreement or One Way Pre-Bid Agreement” and enclosed a copy of a pre-bid agreement for HC’s consideration and acceptance[26].

(5)  The defendant then sent an email to the plaintiff on the same day at 14:40 hours in these terms:

“In order to have pre-bid agreement with Main Contractors as soon as possible, we will submit our best offer to Main Contractors early next week for external façade works.

Since pre-cast concrete works are very important for this project and are integrated together with our terracotta tiles/curtain wall system, you are required to submit your best offer for pre-cast concrete works to us next Monday.”[27]

(6)  On 10 June 2015, the plaintiff signed the Confidentiality Agreement upon the defendant’s request[28].

(7)  On 11 June 2015, the defendant submitted its best offer to HC for the Subcontract Works for $660,021,300, which included $99,565,000 for the plaintiff’s quotation for precast concrete works[29].

(8)  Thereafter, draft versions of the HC/Defendant Pre-bid Agreement were delivered to the defendant by emails on 19 and 22 June 2015[30].

(9)  On 23 June 2015, the defendant submitted its final best offer to HC for the Subcontract Works for $659,888,000, which also included the plaintiff’s quotation of $99,565,000 for the precast concrete works. This was reduced to $630,888,000 on 24 June 2015[31].

27.  Mr Chan submitted that viewed objectively, the above matters should lead one to conclude there had been consensus among the plaintiff, the defendant and HC that they would jointly tender for the Project. While the defendant and HC were finalizing the terms for the HC/Defendant Pre-bid Agreement, there would simply be no reason for the defendant or HC to discuss any pre-bid agreement with the plaintiff had it not been intended by the plaintiff and the defendant that the plaintiff would be part of the team for the Project.

28.  As regards the content of the 23 June Email, he submitted that the judge made these errors in finding against the existence of the Pre-bid Agreement:

(1)  The defendant informed the plaintiff that it had “just received” the draft HC/Defendant Pre-bid Agreement. Had there been no Pre-bid Agreement between the plaintiff and the defendant, there would be no reason for the defendant to inform the plaintiff of this, and it would have been wholly unnecessary for the defendant to “[work] for pre-bid agreement for [the Plaintiff] to team up with [HC, the defendant & plaintiff] together”.

(2)  The defendant had on 5 June 2015 sent an email to the plaintiff requesting its best offer for precast concrete works and later incorporated the plaintiff’s quotation for the precast concrete works in its best offer to HC for the Subcontract Works (on 11 June 2015) and final best offer to HC (on 23 June 2015). As mentioned in the defendant’s email to the plaintiff of 5 June 2015, its request for best offer from the plaintiff was “In order to have pre-bid agreement with Main Contractors”. In the plaintiff’s reply to the 23 June Email at 10:59 hours on the same day, the plaintiff confirmed there would not be any changes on the previous quotation. The judge failed to find that by 23 June 2015, the defendant had accepted the plaintiff’s offer by incorporating the latter’s quotation in its best offer and final best offer to HC.

(3)  A reasonable person upon reading the 23 June Email would have expected the Pre-bid Agreement to be in place as it would appear from the plaintiff’s reply on the same day at 10:59 hours that the plaintiff and the defendant did not need further discussions to reach agreement.

(4)  The judge erred in finding that the term “team up” is general and vague[32]. She failed to appreciate that the chain of sub-contracting was directed by HC; that the plaintiff’s quotation had been incorporated in the defendant’s best offer and final best offer to HC; that it was well understood among the parties from the letter of intent (ie the 25/6 Letter) that the plaintiff would be the nominated subcontractor for the precast concrete works; that the term “team up” appeared in the earlier email of the defendant to HC on 5 June 2015 at 13:11 hours when negotiating the HC/Defendant Pre-bid Agreement, so by using the same term in the 23 June Email, the defendant would have adopted a similar sense to mean sub-contracting for the exterior façade works. Importantly, neither the judge nor the defendant could point to any other possible way to interpret the meaning of “team up”.

29.  The matters highlighted by Mr Chan as relevant background facts leading to the 23 June Email have all been mentioned in the Judgment (for relevant parts of the Judgment see the footnote to each of those matters highlighted by Mr Chan) and apparently considered by the judge. Mr Chan was seeking to re-run arguments raised by the plaintiff before the judge. This is not a proper use of the appellate process. Besides, the weight to be attached to such evidence is a matter for the trial judge and the complaint of insufficient weight is not a proper basis for appellate intervention.

30.  As for the contention that the judge failed to understand properly the content of the 23 June Email, the term “team up” is not a term of art or an expression of defined meaning when used in a particular context. It cannot be said that the judge is plainly wrong in regarding the term as general and vague. It can readily be envisaged that the parties may team up in different ways to work on the Project. As pointed out by Mr Ho, in the defendant’s email to HC on 5 June 2015 at 13:11 hours, the defendant used this term loosely in connection with different types of agreements.

31.  The judge cannot be fairly criticised for holding that this term “does not invariably have the meaning that the Plaintiff contends”, namely, that should the defendant be awarded the Subcontract Works, it should sublet the Sub-subcontract Works to the plaintiff. As noted by the judge, the plaintiff was told in the 23 June Email that some of the main contractors were not agreeable to the inclusion of the plaintiff’s precast concrete works in the defendant’s package tender for the exterior façade works.

32.  Furthermore, there was no mention of the terms of the proposal for “team up” in 23 June Email[33]. Mr Ho made a valid point that this is consistent with the content of this email in that the defendant had only just received the draft HC/Defendant Pre-bid Agreement from HC and was in the process of reviewing the draft and at the same time “working for” a pre-bid agreement with the plaintiff.

33.  In respect of the contention that there was a chain of sub-contracting directed by HC, the judge did not make any such finding and Mr Chan has not referred to any evidence to show that HC had insisted on the defendant to enter into a pre-bid agreement with the plaintiff. HC could have contracted with the plaintiff directly as the plaintiff had submitted Quotation 1 to HC as well and not just to the defendant. There is no provision in the HC/Defendant Pre-bid Agreement imposing an obligation on the defendant to engage any particular subcontractor for any part of the Subcontract Works. Clause 7.4 of that agreement merely provided that neither party shall have the right to assign or in any way transfer any part of its rights or obligations under the agreement without the prior written consent of the other party. Furthermore, there is no evidence of any discussion between the plaintiff and the defendant on the terms of the alleged back-to-back pre-bid agreement arrangements. The alleged representation of HC to the plaintiff in late May or early June 2015 that if the plaintiff was successful in its tender, the plaintiff would become a subcontractor of the defendant, and the defendant would in turn be a subcontractor of HC was made in the absence of the defendant and could not have been binding on the defendant. Nor is it the plaintiff’s pleaded case that its pre-bid agreement with the defendant was back-to-back to and on identical terms as the pre-bid agreement between the defendant and HC[34].

34.  Regarding the inclusion of the plaintiff’s quotation in the defendant’s best offer and final best offer to HC, this does not avail the plaintiff as there is no evidence of any discussion and agreement between the plaintiff and the defendant on the important term of the price for the plaintiff’s work, particularly when the defendant’s quotation to HC was subject to a significant global discount, which the defendant had not consulted or informed the plaintiff with regard to the works covered by the plaintiff’s quotation[35].

35.  The judge was right in holding that the 23 June Email did not express any commitment to the inclusion of the plaintiff’s precast concrete panel works in the defendant’s contractual arrangement with any main contractor including HC[36]. The plaintiff has not identified any error made by the judge that is sufficiently material to undermine her conclusions here.

(b) 25 June Emails and 25/6 Letter

36.  The Employer’s conditions of tendering for the Main Contract[37] required a tender to include the name of one key domestic subcontractor for each key domestic subcontract, as well as confirmation by the named key domestic subcontractor indicating its agreement to carry out the part of the work in question. The relevant part of the conditions of tendering read:

“Name of tenderer:

List of Selected Key Domestic Sub-contractors

We confirm that ALL contractors on the Lists of Key Domestic Sub-contractors under Conditions of Tendering Clause 29 (XI) have been invited to submit tenders and the selected Key Domestic Sub-contractor for each Sub-contract works is as follows:

Key Domestic Sub-contract		Selected Key Domestic Sub-contractor
(1)  In-situ Concrete Installation
(2)  Precast Concrete Façade Panel Fabrication
(3)  …”

37.  The conditions of tendering further specified that after the award of the contract, the tenderer “shall enter into” a subcontract with the respective key domestic subcontractors[38].

38.  The actual tender submitted by HC to the Employer was however not adduced in evidence, as the defendant was not in possession or power of HC’s tender documents to make discovery of this document[39]. The judge was not able to ascertain whether it was the name of the defendant or the plaintiff that had been inserted in respect of the “Selected Key Domestic Sub-contractor” for the “Precast Concrete Façade Panel Fabrication”.

39.  What was known was that following the defendant’s submission of the final best offer to HC, HC requested the defendant and each of its suppliers to provide a letter (“Letter of Intent”) as required by the conditions of tendering mentioned above[40]. On 25 June 2015 at 08:16 hours, the defendant sent the plaintiff an email asking the plaintiff to issue a Letter of Intent to HC as per the draft enclosed, to confirm its willingness “to act as the Key Domestic Sub-contractor of [HC] for the provision of Precast Concrete Façade Panel Fabrication to the captioned tender if the Contract is awarded to [HC]”. The plaintiff complied with the request and issued a Letter of Intent to HC.

40.  At 13:29 hours on the same day, the defendant sent the plaintiff another email requesting the plaintiff to issue a Letter of Intent to the defendant instead as revised. The plaintiff duly complied and issued a Letter of Intent to the defendant – the 25/6 Letter – which read as follows:

“We are writing to confirm our willingness to act as the Key Domestic Supplier of [the defendant] for the provision of Precast Concrete Façade Panel Fabrication to the captioned tender if the Contract is awarded to [the defendant].”

41.  The judge noted that there is no evidence as to which version of the plaintiff’s Letter of Intent was used in HC’s tender to the Employer.[41] Having reviewed the June Emails, she held that the subsequent issue by the plaintiff of the 25/6 Letter cannot be said to be conduct which is “unequivocally referable” to the Pre-bid Agreement and the Sub-subcontract claimed by the plaintiff[42]. Even if the name of the plaintiff had been included in the name of the selected key domestic subcontractor or supplier in HC’s tendering document, it was only HC’s agreement and commitment to the Employer that HC would enter into a subcontract with the named domestic subcontractor or supplier and after the award of the Main Contract, HC would not change the key domestic subcontractor or supplier without proper justification. The 25/6 Letter only committed the plaintiff to act as the key domestic supplier for the provision of Precast Concrete Façade Panel Fabrication, there is no unequivocal agreement expressed by the defendant that it would enter into a contract with the plaintiff if the defendant was awarded the Subcontract[43].

42.  Mr Chan submitted that the judge had taken into account an irrelevant consideration that there is no evidence which version of the plaintiff’s Letter of Intent was used in HC’s tender to the Employer. He contended that it defies common sense for the defendant to request the plaintiff to issue a Letter of Intent if the parties had not intended the plaintiff “to join the tendering for such works”. The plaintiffs’ confirmation to undertake the provision of Precast Concrete Façade Panel Fabrication was not merely for the purpose of HC’s tendering exercise but also showed the chain of contractual relationship if HC should be awarded the Main Contract.

43.  There is no basis to impugn the judge’s reasoning. As analysed earlier, there was no chain of sub-contracting directed by HC. As for the expression “to join the tendering for such works”, if the connotation is merely to be included in the tender to be submitted to the Employer, this does not unequivocally refer to the existence of the Pre-bid Agreement.

44.  The contention that it defies common sense to request the plaintiff to issue a Letter of Intent if there was no intention for the plaintiff “to join the tendering for such works” does not square with the judge’s findings. The judge found it was obviously in the plaintiff’s interest to sign the 25/6 Letter, in order to be included in the tender to be submitted to the Employer, even if there was no Pre-bid Agreement concluded between the plaintiff and the defendant. The judge further found that the request for the 25/6 Letter is consistent with the request for and provision of information which falls within the “Confidential Information” defined in clause 1 of the Confidentiality Agreement (relating to the strategy for tendering for the Main Contract) for achieving the “Objective” set out in recital C to the Confidentiality Agreement (the exploration of the possibility of involving the plaintiff as a proposed specialist subcontractor of the defendant in the tender for the Project)[44]. It has not been shown that the judge’s findings are in error, let alone plainly wrong.

Ground 2 – no discussion on terms of the Pre-bid Agreement

45.  This ground seeks to impugn the finding in §51 of the Judgment that as there was no evidence of any discussion between the plaintiff and the defendant on the terms of the alleged back-to-back pre-bid agreement arrangements, there was no pre-bid agreement between the plaintiff and the defendant.

46.  Mr Chan submitted that the finding of no discussion on the terms should in fact support the plaintiff’s case there was a pre-bid agreement between the plaintiff and the defendant. He referred again to the 23 June Email which mentioned that the defendant was “working for pre-bid agreement for [the Plaintiff] to team up with [HC, the defendant & plaintiff] together”. He pointed out that the draft HC/Defendant Pre-bid Agreement was attached, and this was plainly for the plaintiff’s comments. Further, the plaintiff had entered into the Confidentiality Agreement with the defendant, and the same arrangement of a confidentiality agreement was adopted as between the defendant and HC, see clause 7.3 of the HC/Defendant Pre-bid Agreement.

47.  Mr Chan repeated his contention on the chain of sub-contracting directed by HC and argued that the judge ought to have appreciated that the Pre-bid Agreement could only be premised upon the HC/Defendant Pre-bid Agreement, and thus “the Pre-bid Agreement should be part of the back to back sub-contracting arrangement to the effect that it was a repeat (mutatis mutandis) of [the HC/Defendant Pre-bid Agreement]”. The HC/Defendant Pre-bid Agreement “expressly provided for the type of subcontract to be entered upon for the subcontract work between the Defendant and HC should the latter be awarded with the main contract; and hence, likewise, by virtue of the pre-bid agreement between the Plaintiff and the Defendant, the same type of sub-subcontract would be entered upon for the sub-subcontract work between the Plaintiff and the Defendant”. By this process of reasoning, he argued that “this obviates any need for specific discussion or negotiation of the terms of the agreement” between the plaintiff and the defendant[45].

48.  Lastly, he prayed in aid the proposition that an agreement is not incomplete merely because it calls for some further agreement and that the parties’ later failure to agree on outstanding matters may vitiate the contract only if it makes it unworkable or void for uncertainty.

49.  I have tried to make sense of this argument, which is apparently founded on the assumed existence of the Pre-bid Agreement, being the very question the court has to decide. For the reasons given earlier in the discussion of Ground 1, the June Emails and the 25/6 Letter do not support the existence of the Pre-bid Agreement or the Sub-subcontract, nor do these documents support the contention that the terms of the Pre-bid Agreement assumed to be in existence would be a “repeat (mutatis mutandis)” of the terms of the HC/Defendant Pre-bid Agreement. As mentioned earlier, it is not even the plaintiff’s pleaded case that the Pre-bid Agreement was back-to-back to and on identical terms as the HC/Defendant Pre-bid Agreement.

50.  I am not persuaded that this is a valid ground of appeal.

Ground 3 – lack of agreement on the term of price

51.  This ground seeks to challenge the findings in §§55 and 56 of the Judgment that there was no concluded Pre-bid Agreement because of the lack of agreement on the important term of the price for the plaintiff’s work. It is submitted that the judge was wrong to take into account that the defendant’s quotation to HC was subject to a significant global discount, and that she should have appreciated there could be other financial considerations or pricing strategy between the defendant and HC for tendering. There is no evidence that the plaintiff’s quotation was not accepted or would not be accepted by the defendant or HC. The HC/Defendant Pre-bid Agreement provided in clause 1.2 that “The Parties shall at all times act in good faith with each other in relation to the submission of the Tender”, therefore by the same token the defendant should act in good faith in the negotiation of price (including the final best offer of the plaintiff) with HC. The contention that the terms of the Pre-bid Agreement were to be the same as the HC/Defendant Pre-bid Agreement is repeated.

52.  I agree with Mr Ho the judge was clearly entitled to take into account that the defendant’s quotation to HC was subject to a significant global discount. On 24 June 2015, the defendant’s final best offer to HC submitted the day before was reduced by $29,000,000. HC’s Letter of Acceptance issued to the defendant on 22 October 2015 appointing the defendant its subcontractor for the Subcontractor Works recorded the defendant’s offer of a further discount of $5,000,000. The judge found that the defendant had not informed or consulted the plaintiff with regard to the works covered by the plaintiff’s quotation in view of the discount. There is no challenge to this finding.

53.  The terms of the HC/Defendant Pre-bid Agreement do not assist the plaintiff, for the reasons discussed in Ground 2. And as there was no agreement on the important term of the price for the plaintiff’s work, the proposition invoked by Mr Chan on the failure to agree on outstanding matters would not avail the plaintiff. The judge was right to hold that there was no concluded agreement in the circumstances.

Ground 4 – Confidentiality Agreement

54.  It is contended under this ground that the judge wrongly took into account the Confidentiality Agreement which is irrelevant in deciding whether the plaintiff had established the agreement sued upon. Moreover, the judge erred in her interpretation of the Confidentiality Agreement. Mr Chan’s submissions are along these lines.

55.  First, he drew attention to clause 6 which provided as follows:

“Subject to and without prejudice to other provisions of this Agreement (specifically, Clause 2 hereinabove), this Agreement shall remain valid until the termination of the Parties’ discussion for the Objective referred to in Paragraph C of the Recitals[46] or the date of submission of the Main Contract Tender[47] if [the plaintiff] is proposed as the domestic specialist sub-contractor under [the defendant’s] scope of works for further developing the Conforming Design and for the installation of the Curtain Wall and Precast Ceramic Façade System, whichever is later, …”.

56.  He contended that by virtue of clause 6, by the defendant’s submission of the Main Contract Tender at the latest[48], the Confidentiality Agreement ceased to have effect, save for the duty to continue to keep certain information confidential. On the true construction of clause 8[49], it merely prevents the exchange and provision of information under the Confidentiality Agreement during the validity of the agreement from itself giving rise to any contractual obligation. Clause 8 does not prevent what took place before and after the termination of the Confidentiality Agreement taken together from giving rise to a contract or other enforceable obligation.

57.  Second, he submitted that the latter part of clause 8 merely stated that the Confidentiality Agreement itself does not give rise to any obligation on the defendant to enter into any agreement with the plaintiff and no further. He pointed to the confidentiality agreement between the defendant and HC dated 22 May 2015, and submitted that the Confidentiality Agreement between the plaintiff and the defendant dated 10 June 2015 is “no more than a back to back arrangement in the course of tendering for the Project”. The Confidentiality Agreement concerned just the obligations and liabilities of the parties in respect of the confidentiality of the information passed and exchanged between the parties[50]. It would be way too wide to construe this agreement as having the effect of excluding or negating any binding agreement reached or to be reached between the parties.

58.  It is pleaded in the SOC that the Pre-bid Agreement was contained in or evidenced by the 4 Documents and the Confidentiality Agreement was among them. The judge therefore considered the Confidentiality Agreement. It was also the only agreement executed by the plaintiff and the defendant. The contention raised in ground (4) of the amended notice of appeal that the Confidentiality Agreement is irrelevant in deciding whether the plaintiff had established the agreement sued upon is contrary to the plaintiff’s pleaded case.

59.  The judge held that the terms of the agreement are clear. By recital C, the parties acknowledged they were engaged in discussions and negotiations whereby they were mutually exploring and evaluating the appropriateness and possibility of the plaintiff’s involvement as the proposed specialist subcontractor of the defendant in the tender for the Main Contract of the Project. They further acknowledged and agreed by clause 8 that the provision and exchange of information under the agreement would not commit or bind either party to any present or future contractual relationship, and that the defendant had no obligation under the agreement to enter into any contractual arrangement with the plaintiff, including but not limited to any pre-bid agreement for engaging the plaintiff as the defendant’s specialist subcontractor[51].

60.  The judge held that with the express provisions of the Confidentiality Agreement, it requires very convincing and unequivocal evidence for the court to accept that notwithstanding the parties’ acknowledgment in the Confidentiality Agreement, they had indeed entered into and concluded the Pre-bid Agreement[52].

61.  I do not think her approach can be faulted.

62.  As for the contention that the judge had erred in her interpretation of the provisions of the Confidentiality Agreement, this is of little significance. A similar argument was made by the plaintiff before the judge that the agreement does not preclude the parties from subsequently concluding an oral binding agreement, or from entering into an agreement by their conduct, for the plaintiff’s execution of the Sub-subcontract Works. The judge rejected this argument for two reasons. First, there is no pleading of an oral agreement between the plaintiff and the defendant, and the evidence of the plaintiff’s witness that there was an oral agreement or understanding of a Pre-bid Agreement is not the plaintiff’s pleaded case[53]. Second, as for the conclusion of an agreement by the parties’ conduct, the court will not imply a contract lightly in the absence of conduct which is unequivocally referable to the contract sought to be inferred[54]. I will deal with the plaintiff’s contentions on conduct when I come to Ground 5. I agree with Mr Ho the fact that the defendant and HC entered into a similar confidentiality agreement is irrelevant. As noted by the judge, it is by itself simply an agreement between the defendant and HC, on its own terms and conditions, and makes no provision for any commitment by the defendant or the plaintiff to enter into a subcontract[55].

63.  The interpretation put forward by Mr Chan is not germane to the judge’s holdings and there is no error in her decision.

Ground 5 – parties’ conduct after award of Main Contract to HC

64.  I am prepared to assume, differently from the judge[56], that the plaintiff has pleaded in §4(c) of the SOC the Sub-subcontract was contained in or evidenced by its performing and/or carrying out the works, as a subcontractor to the defendant, as envisaged by or otherwise within the scope of the Sub-subcontract after the Subcontract was awarded by HC to the defendant, up to the date of the repudiation by the defendant. The judge held that even if such a generous reading of §4(c) is warranted, the plaintiff’s execution of the works as particularised in that paragraph is insufficient to justify a finding that the Sub-subcontract or Pre-bid Agreement can be inferred or implied from such conduct.

65.  On the totality of the evidence, the judge held that the parties’ conduct after the award of the Main Contract to HC in September 2015 and the award of the Subcontract to the defendant in October 2015 is not unequivocally referable to the existence of a Pre-bid Agreement or a binding Sub-subcontract between the plaintiff and the defendant. She found that the submission of the plaintiff’s 4^th quotation (“Quotation 4”) for $79,822,596 on 8 January 2016 with express reference to the defendant’s “Request for Quotation” (“RFQ”) issued on 30 December 2015, the submission of the Manufacturing Quality Plan (“MQP”) on 4 December 2015 for the supply and delivery of precast façade and expressly stated to be for “tender”, the meetings held between the plaintiff and the defendant, and the plaintiff’s submission of technical details and samples, are equally consistent with the Tender Analysis being conducted by the defendant on the plaintiff’s capabilities and suitability as a possible subcontractor for the Sub-subcontract Works[57].

66.  Mr Chan sought to challenge the findings of fact and inference made by the judge. The main theme is that on a proper analysis of the evidence, the substantial work done by the plaintiff could not be justified “solely for [the defendant’s] Tender Analysis”[58]. His contentions are along these lines.

67.  First, the plaintiff relies on three MQPs submitted by the plaintiff to the defendant on 4 December 2015, April 2016 and May 2016. In the introduction section of these MQPs, there was a statement which read: “[The plaintiff] has been contracted to supply and delivery of Precast Façade for the captioned project.” This statement is no doubt an express reference to the Sub-subcontract. The MQPs were submitted to the consultant of the project (M+ Consultancy JV; “MJV”) through the defendant and this was an acknowledgment by the defendant of the plaintiff’s status and a representation to HC of the plaintiff’s status. In MJV’s “Response to Contractor’s Submission Form” dated 10 January 2016, MJV commented on the MQP of the plaintiff submitted in December 2015:

“1. MJV’s understanding is that [the plaintiff] is a supplier of [the defendant] and therefore this quality plan must be related to the overall Quality Plan and ITP of [the defendant].

2. This document indicates that [the plaintiff] is ‘supplying and delivering’ the precast façade. The supplier also has a design role of the precast elements which should be clearly stated and covered in all sections of the quality plan[59].

3. This document indicates ‘The Client’, it should be clarified if this refers to [the defendant]/[HC] or to WKCDA.

4. Interfaces between [the plaintiff] and [the defendant] and [HC] for the key team members should be clarified and shown in diagram format.

…

6. Elaborate on Section 1 to highlight how the Design Control is managed between [the plaintiff] and [the defendant].”

68.  Mr Chan made the point that the above further signified the plaintiff’s role to be “a supplier” and one of the “key team members”. Further, it is wrong for the judge to place “overwhelming emphasis” on the fact that the MQP submitted in December 2015 was stated to be for “tender”[60], when this was not repeated in the subsequent MQPs submitted in April and May 2016. Emphasis should be given to the substance of the body of the MQPs.

69.  Second, with regard to the inspections of the Casting Yard, the judge failed to give “sufficient weight” that such inspections (which included representatives of the defendant, HC and MJV) were further recognition of the plaintiff’s role as a subcontractor for precast concrete works. In the executive summary of the MJV Façade Inspection Report No 1 for the inspection on 28 January 2016, it was stated that the visit to the plaintiff’s production facility was to “review the progress of development for the precast units with integrated terracotta tile and associated glaze by MJV”. This signified that by January 2016, it was at the development stage, contrary to the defendant’s assertion that the parties were still at the stage of Tender Analysis.

70.  Third, the judge “failed to appreciate the importance of” the meetings and workshops for discussion on technical and design issues. Among others, the workshop scheduled on 4 May 2016 was “with [the plaintiff] to review the current M+ Façade Design and interface between the Façade and Precast” and part of the agenda was for the plaintiff to present the following: “proposed precast intent to meet the current requirements; review of required precast tolerances and analysis and management on how to improve; proposed shop drawing submission packages to meet MJV and BD requirements; proposed process for Terracotta Tile and Precast Fabrication and design constraints”[61]. It would be against common sense and commercial sense and a complete waste of time and money to have the plaintiff attend and contribute to discussions on technical and complicated matters if they were merely for the defendant to explain to the plaintiff the amended design developed by the defendant which was to combine the defendant’s curtain wall works with the precast concrete works (“Developed Design Intent”)[62]. Furthermore, the other candidate considered for the Sub-subcontract, Shenzhen Hailong Construction Products Co., Ltd (“HL”), was not invited to attend the workshops or meetings arranged by MJV[63].

71.  Fourth, the judge “overlooked” the significant amount of work done by the plaintiff on the preparation of design drawings. There were discussions on the fabrication tolerance of the Precast Ceramic Façade Panel between the plaintiff and the defendant in April and May 2016. Various shop drawings and design drawings had been prepared and/or reviewed by the plaintiff, requiring substantial input and effort. All these could only point to the existence of the Sub-subcontract between the plaintiff and the defendant. It would be a complete waste of time, effort and money to allow the plaintiff to put substantial effort on the design drawings solely for the defendant’s Tender Analysis.

72.  It is irrelevant for the judge to emphasise that the defendant had re-engineered a Developed Design Intent different from the drawings approved by the Buildings Department[64], when there was no finding of the extent or re-engineering or that the plaintiff’s work done was inconsistent with and/or contradictory to the Developed Design Intent.

73.  Fifth, the judge “failed to give sufficient weight” that the provision of mock-up or sample and the Free Sample could only be done unless the plaintiff had already been a subcontractor of the defendant. She also “failed to appreciate” that when insufficient material was provided for production of the Free Sample, the plaintiff had ordered material from its own supplier[65].

74.  Sixth, the judge “failed to appreciate” that in the correspondence inter partes or documents, the defendant had referred to the plaintiff as “the precast supplier”, “our Precast specialist”[66]. The defendant would not have done so had the plaintiff not been designated as the sub-subcontractor for the Precast Concrete Works.

75.  Seventh, it must be highlighted that the single joint expert of quantum estimated the reasonable value of the plaintiff’s work done at $4,879,523[67]. It is “highly impossible” for a reasonable person to appreciate that one would have incurred such substantial sum solely for the purpose of Tender Analysis.

76.  Eighth, the defendant included in the draft letter of intent dated 24 March 2016 this provision (“Payment Condition”):

“In the event that [the defendant and the plaintiff] do not enter into a formal subcontract for these works by 30 April 2016 or such later date as may be agreed in writing between [the defendant and the plaintiff] then [the defendant] will pay to [the plaintiff] all of its proven and reasonable direct and documented costs incurred, up to a maximum sum of HK$5,000,000 which may be increased by [the defendant] at its sole discretion.”

77.  The Payment Condition was deleted in the draft letter of intent returned by the plaintiff with its alterations on 31 March 2016 and its revised alterations on 12 April 2016. Contrary to the judge’s view that the deletion of the Payment Condition signified there was no agreement between the plaintiff and the defendant on compensation or remuneration for any work or service which was required of the plaintiff[68], this “can only signify and strengthen” the plaintiff’s stance that there had already been an agreement between the plaintiff and the defendant in place.

78.  Ninth, the judge found it significant that in the RFQ inviting the plaintiff on 30 December 2015 to submit its most competitive quotation for the Sub-subcontract Works, it was expressly stated that the quotation was “to assist in the evaluation” of the plaintiff’s bid[69]. The judge was wrong to place “heavy weight” on such wordings as wordings in the RFQ can only be regarded as a self-serving statement.

79.  I do not accept the plaintiff’s submissions.

80.  As mentioned above, this ground of appeal is to challenge the judge’s findings of fact and inference. The appellate process is not designed to give the plaintiff another opportunity of repeating its arguments below in the hope that the appeal court may be persuaded to come to a different view on the findings of fact and inference to be drawn. In the contentions as summarised, heavy reliance was placed on the witness statement of Mr Liu. Mr Chan prefaced his arguments with phrases like the judge “failed to give sufficient weight to”, or “failed to appreciate” or “overlooked the significance of” certain matters, or that the judge was wrong to place “overwhelming emphasis” or “heavy weight” on others. The appropriate weight that should be given to a particular piece of evidence is always a matter for the trial judge.

81.  The judge made a thorough analysis of the evidence adduced and explained in some detail in §§66 to 104 of the Judgment how she concluded, on the pleadings and the totality of the evidence, that the parties’ conduct from September 2015 to June 2016 when the defendant finally decided to appoint HL as the Sub-subcontractor is not unequivocally referable to the existence of a Pre-bid Agreement or a binding Sub-subcontract between the plaintiff and the defendant. The contention that the parties could not have conducted themselves in the way they did had the plaintiff not been designated the Sub-subcontractor is missing the point. The hurdle of “unequivocal” reference has not been surmounted when the acts are “equally consistent with the process of due diligence and Tender Analysis being undertaken”[70].

82.  The judge accepted the evidence of Mr Turnbull as set out in §§70 to 73, 83 to 89, 102 of the Judgment as “credible and inherently probable”, namely, that the defendant had to conduct enhanced due diligence on the engineering and design abilities of the candidates in view of the technicality and complexity of the Sub-subcontract Works involved and the defendant did not have prior experience of working with the plaintiff. Mr Chan has not sought to engage, properly or at all, those parts of the judge’s findings. The “plainly wrong” test is applicable for the appeal court to overturn the findings and inferences of the judge, as it cannot be said that the findings of secondary fact are based purely on inferences or otherwise has nothing to do with the witnesses’ demeanour or the judge having received the evidence at first hand. He has not identified any mistake in the judge’s analysis of the evidence sufficiently material to undermine her conclusions. And insofar as the inferences drawn were based on the assessment of factors weighed against each other, it has not been shown that the judge’s conclusions lay outside the bounds within which reasonable disagreement is possible.

83.  Mr Ho highlighted a significant episode in late December 2015/early January 2016 showing there was disagreement between the plaintiff and the defendant whether there existed a Pre-bid Agreement between them[71].

84.  On 29 December 2015, the plaintiff wrote to the defendant stating that such a binding agreement existed between them and that it had come to its knowledge the defendant was inviting tenders/quotations for the Sub-subcontract Works. The plaintiff asserted that it would constitute a blatant breach of contract in the event the defendant was to give the works to another company and it would take every necessary and appropriate action to protect its interest including legal action.

85.  In the defendant’s reply by letter dated 6 January 2016, the defendant “totally [disagreed]” with the allegation that it had signed a Pre-bid Agreement with the plaintiff and referred to the Confidentiality Agreement, which was “no binding commitment from [the defendant] to [the plaintiff]”. Clause 8 of that agreement was quoted, and this provided that the defendant would have no obligation thereunder to enter into any contractual arrangement with the plaintiff including any pre-bid agreement. The defendant further stated that it would take into account the plaintiff’s knowledge on the Project during its tender analysis and ensure that its tender procedure was “fair to all tenders”.

86.  Hence, by the letter dated 6 January 2016, the plaintiff must have known that the defendant did not consider itself bound by any alleged Pre-bid Agreement with the plaintiff. This knowledge of the plaintiff brings into play the principle that there will be no contract if the party seeking to rely on the contract knows that the other party has no intention to contract with him or does not in fact intend to be bound thereby. The judge correctly took into account this knowledge of the plaintiff[72].

87.  With full knowledge of the defendant’s stance, the plaintiff continued to participate in the Tender Analysis. In its letter of 8 January 2016 for the submission of Quotation 4, the plaintiff referred to the defendant’s “tender invitation dated 30 December 2015” (ie the RFQ), by which the plaintiff was required “to submit a quotation in support of [the plaintiff’s] offer to assist in the evaluation of [the plaintiff’s] bid”. As further noted by the judge[73], even in the plaintiff’s email dated 26 February 2016, the plaintiff stated that it would update the MQP “once [the defendant] have awarded the supply contract to [the plaintiff]”, showing its awareness that there was no Sub-subcontract awarded to it. I agree with Mr Ho that all the steps taken by the plaintiff after receipt of the letter dated 6 January 2016 should be considered in light of the plaintiff’s knowledge that the defendant did not consider itself bound by any Pre-bid Agreement alleged by the plaintiff.

88.  The reliance Mr Chan placed on various statements in the response of MJV to the three MQPs is misplaced. They were made by MJV, not by the defendant. The perception of MJV as regards the sub-subcontracting arrangements is not binding on the defendant and is not relevant. Similarly, the statements in the MJV Façade Inspection Reports were the statements of MJV.

89.  As for the defendant’s references to the plaintiff as “the precast supplier” and “our Precast specialist” in the defendant’s emails to the plaintiff, this has been considered by the judge. She found it conceivable that positive comments would have been made as the plaintiff was at one stage the “forerunner” (or front runner) in the bid for the Sub-subcontract and did not regard this as unequivocal evidence proving that the plaintiff had been awarded the Sub-subcontract contended for[74].

90.  Regarding the time, amount and expenses of the work done for six months until early June 2016 repeatedly emphasised by Mr Chan, the judge took the view that on the totality of the evidence, the time and attention taken for the defendant to undergo and complete its Tender Analysis can be appreciated[75]. She found on the evidence that the plaintiff would have acted as it did, even if there was no contract as contended, having regard to the fact that the plaintiff had by then familiarised itself with the tender documents and drawings, that involvement as a sub-subcontractor or supplier in the Project was lucrative, that it would defy commercial and common sense for the plaintiff to stonewall any request for information or samples unless there was concluded the Pre-bid Agreement or Sub-subcontract, and that the direct costs incurred for the six-month period were modest and amounted to less than $70,000 a month[76]. The judge’s conclusion based on her assessment of the evidence and weighing of factors cannot be said to fall outside the bounds within which reasonable disagreement is possible.

91.  It cannot be right that the deletion of the Payment Condition would have signified and strengthened the plaintiff’s case there had already been an agreement between the plaintiff and the defendant in place, as contended by Mr Chan. I agree with Mr Ho the negotiations between them in March and April 2016 on the terms of the contractual documents contradict the plaintiff’s case there already existed a binding agreement, as the judge has found[77].

92.  On 16 March 2016, the defendant sent a draft letter of intent to the plaintiff and requested the plaintiff to countersign and return for the defendant’s record. The draft letter stated that both parties should use all reasonable endeavours to reach agreement and enter into a formal subcontract by 30 April 2016. Apart from the Payment Condition, the appointment of the plaintiff as the defendant’s subcontractor was stated to be subject to two prerequisites: the client’s approval of the plaintiff as the contractor for the Sub-subcontract Works; and the defendant’s approval of the Free Sample to be provided by the plaintiff as per the purchase order issued by the defendant on 18 February 2016. The plaintiff reverted with comments on the draft letter on 22 March 2016 deleting the Payment Condition and the two prerequisites.

93.  On 24 March 2016, the defendant sent the plaintiff another draft of the letter of intent reinstating the Payment Condition and the two prerequisites. Following a meeting with the defendant on 30 March to discuss the letter of intent, the plaintiff responded the next day again deleting the Payment Condition and the two prerequisites. On 12 April 2016, the plaintiff sent the defendant new comments on the draft letter, retaining in large part the two prerequisites and deleting only the Payment Condition. In its email to the defendant on 14 April, the plaintiff pointed out that the revised draft has “lesser comments than the previous one”, expressing the hope that it would be “more acceptable” to the defendant.

94.  On 27 April 2016, the plaintiff provided its comments to the defendant on the draft purchase agreement sent by the defendant for the supply, design, fabrication and assembly of precast concrete panels and precast members.

95.  It is not disputed that the terms of the letter of intent for the Sub-subcontract were not agreed, and no purchase agreement or Sub-subcontract was signed by the plaintiff[78]. As Mr Turnbull has testified, at the end of the Tender Analysis, the defendant had doubts as to the plaintiff’s abilities to fulfil the requirements relating to the design of the precast concrete works and the plaintiff’s design and engineering capability to manage such works, and decided in June 2016 to appoint HL as the Sub-subcontractor, and the appointment was made after HC approved the recommendation[79].

96.  There being no merit in the any of the above grounds of appeal seeking to overturn the finding there was no Pre-bid Agreement and no Sub-subcontract between the plaintiff and the defendant, the plaintiff’s challenge against the dismissal of its primary claim for damages for breach of contract of over $31 million must fail. This leaves the challenge against the dismissal of its alternative claim for quantum meruit for the work done up to June 2016, to which I now turn.

Grounds 5A and 6 – quantum meruit

97.  The judge made these findings of fact in §107 of the Judgment:

“I have found that the work carried out by the Plaintiff and for which payment is claimed was for the purpose of the Tender Analysis and due diligence carried out by the Defendant, and for its objective of obtaining and securing the Sub‑subcontract from the Defendant. On the facts and evidence, the work carried out by the Plaintiff was not requested by the Defendant in contemplation of the Sub-subcontract being executed, nor in anticipation of the execution of the Sub-subcontract. The Defendant’s RFQ of 30 December 2015 required the Plaintiff to submit its quotation for the Works, to assist in the evaluation of the Plaintiff’s bid. The Plaintiff’s Quotation 4 dated 8 January 2016 was submitted by reference to the RFQ. As Counsel for the Defendant highlighted, the evidence shows that the Plaintiff had unreservedly agreed thereafter to participate in the Defendant’s Tender Analysis. The MQP was sought by the Plaintiff in November 2015, and the MQP submitted by the Plaintiff in response was stated to be for “tender” purposes. The updated MQP on 23 March 2016 was likewise prepared as a tender document. The work carried out by the Plaintiff in 2016 was pursuant to requests stated by the Defendant to be for due diligence and Tender Analysis, and understood by the Plaintiff as such when it performed the work for which payment now is claimed. …”

98.  The judge went on to hold that the circumstances and facts of the present case are distinguishable from those in the cases relied upon by the plaintiff to support its claim for payment on quantum meruit. As stated in Goff & Jones on Unjust Enrichment (10^th ed) at §16-04 under the heading of “Expedited Performance”:

“Where the parties have indicated to each other that they are negotiating towards a binding contract, and one party commences performance in advance of that binding contract, it is generally - although not invariably - the case that the basis of any transfer is not gratuitous. Thus, in British Steel Corp v Cleveland Bridge and Engineering Co Ltd the defendants had notified the claimants of their intention to enter a contract with the claimants for the purchase of steel nodes, which were to be of a specified quality and to be delivered in a particular order. Whilst the parties were negotiating towards a contractual agreement, the claimants, at the defendant’s request, began to manufacture and supply the nodes. No contract was ever concluded. Robert Goff J held that the defendant was liable to pay ‘a reasonable sum for such work as has been done pursuant to that request’”.

99.  On the other side of the line are cases “where the claimant’s activity consists not in performance of the anticipated contract but in preparations necessary for a hoped-for contract”, such that “any benefits transferred by that activity are normally conferred at the claimant’s risk”. This is dealt with in §16-06 of Goff & Jones on Unjust Enrichment under the heading of “Preparatory Work”, giving as examples MSM Consulting Ltd v United Republic of Tanzania [2009] EWHC 121 (QB) and Regalian Properties Plc v London Docklands Development Corp [1995] 1 WLR 212.

100.  The judge also quoted from Keating on Construction Contracts, the relevant paragraph (§4-034) in the current edition (11^th ed) read as follows:

“Whilst an obligation to pay a reasonable sum has been held to apply in a number of cases, it does not apply to all cases of failed contracts. In Regalian Properties v London Docklands Development Corp, the following matters were held to show that there was no such obligation[80]: that the negotiations were entered into on express terms that each party was free to withdraw from negotiation at any time and were ‘subject to contract’ and the costs which were sought to be recovered had been incurred, not by way of accelerated performance of an anticipated contract at the other party’s request, but for the purpose of putting that party in a position to obtain and perform the contract and the other party had received no benefit.”

101.  The judge reasoned that although there was no express reservation in this case of the parties’ negotiations being “subject to contract”, the terms of the Confidentiality Agreement made it clear that they were not committed to any present or future contractual relationship, and there was no obligation on the defendant’s part to enter into any agreement with the plaintiff. The work performed by the plaintiff in 2016 was undertaken after it had been invited to submit its quotation to assist in the defendant’s evaluation of its bid, and it can hardly be said that both parties confidently expected at the time that a formal contract was bound to eventuate. The judge regarded it as significant the Payment Condition in the draft letter of intent was deleted by the plaintiff on 12 April 2016, and hence “the Defendant cannot be taken to have understood that any services carried out by the Plaintiff would have to be remunerated in any way”. In the circumstances, she found “there was no implied agreement that the work carried out by the Plaintiff should be paid on quantum meruit or any other basis”[81].

102.  The judge has used the language in the older authorities of an implied agreement or promise to pay reasonable remuneration[82]. The modern approach, as stated by Christopher Clarke J in MSM Consulting Ltd at §171(a), is to determine “whether or not the circumstances are such that the law should, as a matter of justice, impose upon the defendant an obligation to make payment of an amount which he deserved to be paid”. Keating on Construction Contracts explained this further at §4-032:

“Where there is no contract, the correct approach to the amount to be paid by way of a quantum meruit is to ask whether the defendant has been unjustly enriched and, if so, to what extent. In such a case, four questions have to be considered:

(1) Has the defendant been enriched?

(2) Was the enrichment at the claimant’s expense?

(3) Was the enrichment unjust?

(4) Are there any defences available to the defendant?”

103.  See also Shanghai Tongji at §67.

104.  It has been recognised that it is difficult, if not impossible, to formulate a clear principle which satisfactorily governs the different factual situations which may arise for a claim in restitution in this context. Nicholas Strauss, QC, sitting as a deputy High Court judge in Countrywide Communications Ltd v ICL Pathway Ltd & Anr [2000] CLC 324, mentioned a number of considerations identified in the authorities that the court will take into account and emphasised the need for flexibility as to the weight to be given to the factors in each case. The relevant part of his judgment, which was cited with approval in MSM Consulting Ltd at §170, read as follows:

“The first is whether the services were of a kind which would normally be given free of charge. Secondly, the terms in which the request to perform the services was made may be important in establishing the extent of the risk (if any) which the plaintiffs may fairly be said to have taken that such services would in the end be unrecompensed. What may be important here is whether the parties are simply negotiating, expressly or impliedly ‘subject to contract’, or whether one party has given some kind of assurance or indication that he will not withdraw, or that he will not withdraw except in certain circumstances. Thirdly, the nature of the benefit which has resulted to the defendants is important, and in particular whether such benefit is real (either ‘realised’ or ‘realisable’) or a fiction, in the sense of Traynor CJ’s dictum[83]. Plainly, a court will at least be more inclined to impose an obligation to pay for a real benefit, since otherwise the abortive negotiations will leave the defendant with a windfall and the plaintiff out of pocket. However, the judgment of Denning L.J. in the Brewer Street case[84] suggests that the performance of services requested may of itself suffice amount to a benefit or enrichment. Fourthly what may often be decisive are the circumstances in which the anticipated contract does not materialise and in particular whether they can be said to involve ‘fault’ on the part of the defendant, or (perhaps of more relevance) to be outside the scope of the risk undertaken by the plaintiff at the outset. I agree with the view of Rattee J that the law should be flexible in this area[85], and the weight to be given to each of the factors may vary from case to case.”

105.  In addition, these propositions formulated by Christopher Clarke J in MSM Consulting Ltd at §171(b) to (e) are also of assistance:

“(b) Generally speaking a person who seeks to enter into a contract with another cannot claim to be paid the cost of estimating what it will cost him, or of deciding on a price, or bidding for the contract. Nor can he claim the cost of showing the other party his capability or skills even though, if there was a contract or retainer, he would be paid for them. …

(c) The court is likely to impose such an obligation where the defendant has received an incontrovertible benefit (e.g. an immediate financial gain or saving of expense) as a result of the claimant’s services; or where the defendant has requested the claimant to provide services or accepted them (having the ability to refuse them) when offered, in the knowledge that the services were not intended to be given freely;

(d) But the court may not regard it as just to impose an obligation to make payment if the claimant took the risk that he or she would only be reimbursed for his expenditure if there was a concluded contract; or if the court concludes that, in all the circumstances the risk should fall on the claimant: Jennings & Chapman[86];

(e) The court may well regard it as just to impose such an obligation if the defendant who has received the benefit has behaved unconscionably in declining to pay for it;”.

106.  In seeking to overturn the dismissal of the claim for quantum meruit, Mr Chan sought to challenge the judge’s findings of fact. He contended that she should have found that the facts and evidence are “equally if not more consistent with” the plaintiff’s argument that the work carried out by the plaintiff, which was valued by the single joint expert of quantum at $4,879,523, was “requested by the defendant in contemplation of the Sub-subcontract or for [the defendant’s] own benefit in its own subcontract with HC”, and that the principle and approach in the line of cases distinguished by the judge (an example being British Steel Corp v Cleveland Bridge and Engineering Co Ltd) should be applicable. His arguments ran as follows:

(1)  It is illogical for the judge to conclude that the works carried out by the plaintiff should not be regarded as at the request of the defendant, whether or not they were done for the purpose of the Tender Analysis. But for the request of the defendant, the plaintiff would not have carried out the works without sanction or free acceptance from the defendant; for instance, it would not be possible for the plaintiff to attend meetings without the defendant’s invitation. The Tender Analysis conducted by the defendant does not negate or preclude the fact that the plaintiff and the defendant were expecting to enter into the Sub-subcontract, otherwise the plaintiff would not have participated in the Tender Analysis.

(2)  Whilst it is correct that drafts of the letter of intent and purchase agreement were exchanged in March and April 2016 and the terms were not agreed and no contract was signed, the judge failed to find that such evidence objectively demonstrated the parties were truly negotiating and contemplating a binding agreement. She was wrong to reject the plaintiff’s case that the parties were working towards the making of a contract. In stating in its email to the defendant on 26 February 2016 that the plaintiff “will update the [MQP] once [the defendant] have awarded the supply contract to [the plaintiff]”, the plaintiff showed that it was expecting the Sub-subcontract to be made.

(3)  The judge was wrong to find that by deleting the Payment Condition in the draft letter of intent, the plaintiff voluntarily gave up any remuneration for its work done. She should have found that the deletion of the Payment Condition was indicative of the strong stance of the plaintiff there had been an agreement in place[87] and the deletion “only negatived the ceiling on [the plaintiff’s] remuneration”.

(4)  Importantly, the judge failed to appreciate in the drafts of the letter of intent prepared by the defendant, it was unreservedly stated that the defendant “will pay to [the plaintiff] all of its proven and reasonable direct and documented costs incurred, up to a maximum sum of HK$5,000,000 which may be increased by [the defendant] at its sole discretion”. By the defendant’s own assertion, it is not open for the defendant to submit that the work done by the plaintiff was of no value or conferred no benefit to the defendant. A “more sensitive” approach to ascertaining the basis on which benefits are conferred, in line with the general principles of failure of basis, should be adopted, and applying such an approach to the facts the defendant’s liability for the benefit conferred by the plaintiff’s work would be governed by the principle of free acceptance[88].

107.  In his oral submissions, Mr Chan raised a new ground not covered by the amended notice of appeal. He contended that the work done by the plaintiff was at the specific request of the defendant to enable the latter to use the plaintiff’s work to meet the requirements of HC and that the defendant did make use of the plaintiff’s work for its own purpose, thus conferring a benefit on the defendant and taking this outside the normal work which a contractor performs gratuitously in the tendering process, citing Keating on Construction Contracts at §§2-006 to 2-008.

108.  To make good his contention, he referred the court to various documents in the appeal bundles[89]. Thus, the plaintiff was asked to prepare power point presentation for a meeting that it was required to attend with HC in July 2015. The defendant passed on HC’s post tender query to the plaintiff for the plaintiff to respond. The defendant’s tender to HC had incorporated the plaintiff’s quotation. Particular reliance was placed on the MJV’s “Response to Contractor’s Submission Form” dated 10 January 2016, in which MJV commented on the MQP of the plaintiff submitted in December 2015. Mr Chan also drew attention to Mr Liu’s witness statement dealing with the provision of the Free Sample, the tower façade prototype fabricated by the plaintiff for the inspection and comments of MJV, and the allowable fabrication tolerances[90].

109.  Mr Chan argued it could be inferred that a benefit was conferred on the defendant if the work done was at its specific request. He contended the fact that the defendant was awarded the Sub-contract meant that the defendant had made use of work done by the plaintiff and that the plaintiff’s work was of benefit to the defendant. He emphasized there is no evidence the work done by the plaintiff was useless.

110.  Mr Chan’s contention that the present case should fall within the line of cases distinguished by the judge – where the parties have indicated to each other they are negotiating towards a binding contract and one party commences performance in advance of that binding contract – must be rejected. This is contrary to the findings of fact and inferences in §§107, 111 and 112 of the Judgment. The judge specifically found in §107 that the work carried out by the plaintiff and for which payment is claimed “was for the purpose of the Tender Analysis and due diligence carried out by the Defendant” and “was not requested by the Defendant in contemplation of the Sub-subcontract being executed, nor in anticipation of the execution of the Sub-subcontract”. The judge further found in §§111 and 112 that the terms of the Confidentiality Agreement made clear the parties were not committed to any present or future contractual relationship, that it cannot be said both had confidently expected at the time a formal contract was bound to eventuate, and that the plaintiff performed the work in 2016 after it had been invited to submit its quotation to assist in the defendant’s evaluation of its bid.

111.  There is no basis to interfere with the judge’s findings of fact and inferences when it has not been shown that the findings are plainly wrong or that the inferences lay outside the bounds within which reasonable disagreement is possible.

112.  Further, as rightly submitted by Mr Ho, it is not sufficient to show that the facts and evidence are “equally if not more consistent with” the plaintiff’s argument that the work it carried out was “requested by the defendant in contemplation of the Sub-subcontract or for [the defendant’s] own benefit in its own subcontract with HC”. Nor is it sufficient to show that work was done by the plaintiff at the defendant’s request, when it was not by way of accelerated performance of an anticipated contract but was done for the purpose of putting the plaintiff in a position to obtain and then perform the hoped-for Sub-subcontract.

113.  In light of the above findings and inferences, it is not open to contend that this is a situation of expedited performance when one party requested the other to commence contract work in the confident expectation of both that a formal contract would materialise. Rather, the case falls on the other side of the line when preparatory work was done pursuant to an invitation to treat in a tendering process. As explained by Bingham LJ in Blackpool and Fylde Aero Club Ltd v Blackpool Borough Council [1990] 1 WLR 1195 at 1202:

“A tendering procedure of this kind is, in many respects, heavily weighted in favour of the invitor. He can invite tenders from as many or as few parties as he chooses. He need not tell any of them who else, or how many others, he has invited. The invitee may often, although not here, be put to considerable labour and expense in preparing a tender, ordinarily without recompense if he is unsuccessful. The invitation to tender may itself, in a complex case, although again not her, involve time and expense to prepare, but the invitor does not commit himself to proceed with the project, whatever it is; he need not accept the highest tender; he need not accept any tender; he need not give reasons to justify his acceptance or rejection of any tender received. The risk to which the tenderer is exposed does not end with the risk that his tender may not be the highest or, as the case may be, lowest. …”

114.  In the latter kind of situation, any benefit transferred by the activity of the tenderer in preparation for a hoped-for contract is normally conferred at the tenderer’s risk. In ordinary circumstances, there is no implication that the tenderer will be paid for this work even though the costs of tendering may be considerable. The tenderer’s hope is that the costs will be met out of the profits of contracts in the successful tenders[91].

115.  The deletion of the Payment Condition in the drafts of the letter of intent does not take the present case out of the normal situation. In respect of the maximum sum of HK$5 million for all proven and reasonable direct and documented costs incurred by the plaintiff that the defendant was willing to pay (which may be increased by the defendant at its sole discretion), it was argued that this is a cogent pointer that the work performed by the plaintiff must be of value and benefit was conferred on the defendant. It does not appear that this was gone into at the trial and the judge made no finding and expressed no views on this. I have reservations whether it is appropriate to draw such an inference on appeal, bearing in mind there is the evidence of Mr Turnbull[92] that the Payment Condition is a standard term of the defendant adopted from its in-house template, and that the standard cap amount of HK$5 million is not project-specific. He explained that this was done “with a view to reimbursing potential sub-contractors for their reasonable time costs incurred after the issuance of the [letter of intent] in the event that formal sub-contracts are not signed.” (emphasis supplied)

116.  More importantly, it is apparent from the above evidence of Mr Turnbull and the wording of the Payment Condition that the defendant made an offer to the plaintiff to pay all of its proven and reasonable direct and documented costs incurred, up to a maximum of HK$5 million, which may be increased at the defendant’s sole discretion, in the event that they did not enter into a formal Sub-subcontract by 30 April 2016 or such later date as may be agreed in writing between them. By deleting the Payment Condition, the plaintiff made clear it did not accept this offer in the draft letter of intent and hence no letter of intent was issued by the defendant. The plaintiff asserted it did so owing to its belief that the Payment Condition was “contrary to the Defendant-Plaintiff Pre Bid Agreement”. It is beside the point that this belief was ill founded. On an objective analysis, in rejecting the defendant’s offer, the plaintiff chose to take the risk that the work performed in the tendering process might go unrecompensed if no Sub-subcontract was entered into.

117.  The circumstance that the Sub-subcontract did not materialise could not be said to involve any ‘fault’ on the part of the defendant[93] or to be outside the scope of the risk undertaken by the plaintiff as the outset as borne out by the Confidentiality Agreement. There is nothing to indicate that the defendant had behaved unconscionably in declining to pay the plaintiff its reasonable costs in performing the works for the Tender Analysis.

118.  The new point raised by Mr Chan that the work performed by the plaintiff was outside the normal tendering process in that work was done at the defendant’s specific request to meet the requirements of HC and the defendant did make use of such work and benefit was thereby conferred on the plaintiff was not raised in the grounds of appeal in the amended notice of appeal. I do not agree with Mr Chan (who referred to §7 of SOC which contained the opening words “By reason of the aforesaid” and thereby imported §4(c)) that this was properly pleaded in SOC. As this fact-sensitive matter had not been pleaded, the evidence led in the trial did not address this expressly and specifically. It did not appear from the written opening and closing submissions of the parties that this point has been dealt with and the judge certainly made no findings on this.

119.  It would not be right in the circumstances to allow Mr Chan to raise this new point on appeal.

Conclusion

120.  For the above reasons, I would dismiss the plaintiff’s appeal in the entirety. I would make an order nisi that the plaintiff is to pay the defendant’s costs of this appeal, with a certificate for two counsel.

Hon Barma JA:

121.  I agree with the judgment of Kwan VP.

Hon G Lam JA:

122.  I agree with the judgment of Kwan VP.