MAXKING CONCRETE CO LTD v. CHINA CIVIL-ROAD & BRIDGE JOINT VENTURE

HCCT 2/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTRUCTION AND ARBITRATION PROCEEDINGS

NO. 2 OF 2003

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J U D G M E N T

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Overview

1.  The Plaintiff (“Ken On”[1]) was a supplier of concrete.  By an agreement (“the May 2000 Agreement”) constituted by a quotation no. 116951 dated 9th May 2000 issued by Ken On and countersigned by the Defendant (“the JV”), Ken On agreed to supply various mixes of ready mixed concrete to the JV for a reclamation and drainage contract at Tseung Kwan O (“the Project”). 

2.  The May 2000 Agreement was supplemented by a further agreement (“the February 2002 Agreement”) constituted by a quotation no. 120969 dated 1^st February 2002 and countersigned by the JV.  However, the main focus of this action was concrete supplied by Ken On under the May 2000 Agreement.

3.  In the course of this Judgment, references will be made to a number of technical terms relating to ready mixed concrete.  The parties have helpfully provided me with a glossary of technical terms, which is reproduced as Appendix 1 to this Judgment.

4.  The JV was the main contractor for the Project.  The employer was the Hong Kong Government (“the Employer”).  The main contract between the Hong Kong Government and the JV was dated 26^th June 2000 (“the Main Contract”).  Part of the works under the Main Contract required the construction of a total of 260 large diameter bored piles (1,800mm and 2,000 mm diameter) for the foundations of three box culverts and the desilting compound.  The three box culverts were respectively numbered 1, 2 and 3. 

5.  The JV sub-contracted the installation of the bored piles to Paul Y-ITC Construction and Engineering Co. Ltd. (“Paul Y”).  Paul Y, in turn, sub-contracted the installation of the 1,800 mm diameter bored piles (51 in total) to Kin Wing Construction Co. Ltd. (“Kin Wing”). 

6.  Under the May 2000 Agreement Ken On was to supply various mixes of ready mixed concrete to the JV and the mixes were defined by their mix descriptions and slump values.  These mixes had to be approved by Maunsell Consultants Asia Limited, the Engineer under the Main Contract (“the Engineer”). 

7.  One of the mixes had a mix description of 40/20D and slump value of 175mm (as stated in quotation no. 116951).  In the original design, this mix had a Pulverised Fuel Ash (“PFA”) ratio of 25%.  This mix (namely 40/20D slump 175 with 25% PFA) was not approved by the Engineer.  Eventually a revised mix, with mix description 40/20D slump 200 40% PFA, was approved by the Engineer.  This mix had been referred to in this trial as “Mix 1”. 

8.  Ken On began to supply concrete for the bored piles in September 2001.  Differences arose between Ken On and the JV shortly after commencement of concrete supply.  Eventually in early February 2002 it was decided that another mix (referred to throughout the trial as Mix 2) was to be used for the bored piles in place of Mix 1.  The February 2002 Agreement referred to in paragraph 2 of this Judgment was for the supply of Mix 2.  The mix description of Mix 2 was 45/20D slump 200 with 25% PFA. 

9.  Disputes over the concrete supplied by Ken On continued between the parties.  They remained unresolved by May 2002.  Payment was withheld by the JV: the amount due at that time was HK$1,742,561.  Matters came to a head in late May 2002 when the JV appointed an alternative supplier of concrete namely China Concrete Company Limited (“China Concrete”) in place of Ken On.  There were allegations and cross allegations of breach of contract. 

10.  The Writ herein was issued on 8^th July 2002. 

The issues

11.  There is no real dispute as to Ken On’s entitlement to be paid for the concrete that it had actually delivered to the JV.  The trial essentially turns on whether the JV was able to set up a counterclaim to extinguish Ken On’s claim.  The following issues arise for consideration (though within each issue there is scope for sub-issues to arise):

(1)     Was Ken On in breach of contract in supplying concrete which was not of the requisite quality?

(2)     If so, what loss had the JV suffered as a result of such breach?

(3)     If not, was Ken On entitled to treat the JV’s non-payment of invoices as a repudiation of the contract between them and cease supply of concrete and if so, what loss and damage has Ken On suffered as a result of such repudiatory breach?

12.  I propose to deal with these issues in turn.

Was Ken On in breach of contract in supplying concrete which was not of the requisite quality?

13.  The starting point in discussing this issue is to identify the terms (as to quality) which had been incorporated into the May 2000 Agreement.

14.  Ken On did not dispute that the implied terms as to merchantablility and fitness for purpose (under the Sale of Goods Ordinance (cap. 26)) were implied into the May 2000 Agreement and February 2002 Agreement. 

15.  Nor did Ken On dispute that the following standard terms were incorporated into both agreements:

(1)     The General Specifications (“GS”) for Civil Engineering Works, 1992 edition (expressly referred to as “CED 1992 edition” in clause 13 of quotation no. 116951).

(2)     Particular Specifications (“PS”) clauses 16.94 to 16.96 (expressly referred to in the “remarks” column of quotation 116951[2] as follows “AAR[3] shall strictly be complied with (sic) PS clauses 16.94 to 16.96”). 

16.  Ken On also accepted that, even though not specifically mentioned in any of the quotations, it was obliged to comply with the requirements in PS clause 16.97 (which dealt with reinforced concrete structures in marine environment) for concrete to be used in bored piles.  This was because Ken On had been specifically instructed by the JV to comply with this clause.  However, the obligation to comply with PS clause 16.97 ceased in February 2002 when, under the February 2002 Agreement, it agreed to provide Mix 2 which was a concrete the composition of which did not comply with PS clause 16.97. 

17.  Apart from the above, however, Ken On disputed that any other terms were incorporated as part of its contract with the JV. 

18.  The JV, on the other hand, contends that the whole of PS16 (i.e. not just the few specific sub-clauses in PS16 accepted by Ken On as having been incorporated) has been incorporated into the 2000 Agreement. 

19.  The significance of this is that the JV alleged that Ken On had breached a number of quality requirements in the concrete it supplied, and a number of these requirements (such as the requirement to be “self-compacting”) were founded upon certain specific provisions in PS16 which Ken On denies having been incorporated.

20.  Quotation no. 116951 dated 9^th May 2000 (the document constituting the May 2000 Agreement) contained Conditions of Sale on its reverse side.  Clause 20 of the Conditions of Sale expressly stated:- “No document, specification, representation, term, condition or provision shall be part of any contract formed pursuant to this Quotation unless it is specifically incorporated overleaf.  This Quotation automatically supersedes all previous quotations for the Project unless specifically stated overleaf as being supplementary.”  Nothing in this quotation specifically incorporated the entirety of PS16.  How, then, does the JV make good its case that the whole of PS16 has been incorporated?

21.  The JV relied on the following sequence of events:

(1)     On 18^th February 2000, CCECC (one of the joint venturers of the JV) sent a fax to Ken On inviting tenders for the Project.  The fax referred to PS16.  Seven sheets containing addenda to certain provisions of PS16 were attached to this fax.

(2)     On 6^th March 2000 Ken On replied to this invitation by a quotation no. 116516.  This quotation contained a remark “Subject to the Main Contract being awarded to [CCECC]”.

(3)     In the event, the Main Contract was awarded to the JV and not CCECC.  Ken On made another submission to the JV.  That submission was quotation no. 116951 which, as I have said above, was accepted by the JV and which became the May 2000 Agreement.

22.  On the basis of the above, the JV contended that:

(1)     The earlier quotation no. 116516 had the effect of incorporating PS16.

(2)     Quotation no. 116951, being a replica of the earlier quotation and a re-submission of the earlier quotation (albeit submitted to the JV instead of to CCECC), incorporated PS16 as well. 

23.  I reject the JV’s arguments on incorporation, for the following reasons:

(1)     The JV had not established that the earlier quotation, namely quotation no. 116515, incorporated the whole of PS16. 

(2)     PS16 was referred to at the end of CCECC’s fax dated 18^th February 2000 and seven sheets of addenda to PS16 were faxed over to Ken On.  However, there was nothing in quotation no. 116516 (sent by Ken On) which showed that the quotation intended to incorporate the whole of PS16. 

(3)     In fact quotation 116516 contained a clause 20 which was identical to clause 20 of quotation 116591.  This pointed against the incorporation of any terms which were not mentioned in that quotation. 

(4)     Further, on the face of quotation 116516 the following manuscript remarks appeared “AAR shall strictly be complied with PS clauses 16.94 to 16.96”.  This also pointed against the incorporation of the whole of PS16, because had it been the intention to incorporate the whole of PS16 then there would have been no need to single out PS16.94 to 16.96 for specific manuscript notation on the face of the quotation. 

(5)     Insofar as CCECC’s act in referring to PS16 in the invitation to tender (and the sending of the seven sheets of addenda together with it) amounted to an invitation to treat on the basis of a wholesale incorporation of PS16, Ken On, in sending its quotation 116516 to CCECC, was refusing to contract on the basis of a wholesale incorporation of PS16.  It was making an offer to contract on the basis of incorporation of only certain specific sub-clauses of PS16.

(6)     Even if, assuming for the sake of argument, quotation no. 116516 somehow incorporated the whole of PS16, it does not follow that the later quotation, namely quotation no. 116951 (and hence the May 2000 Agreement) must necessarily have incorporated PS16 as well.  The wording of clause 20 specifically caters for the scenario of a subsequent quotation following a previous quotation.  For the terms of a previous quotation to be “carried over” to a subsequent quotation, the subsequent quotation had to state that it was supplementary to the earlier one.  In this case quotation no. 116951 (the subsequent quotation) did not state that it was supplementary to any quotation, let alone the earlier quotation namely quotation no. 116516. 

24.  The JV also contended that PS16 was incorporated in its entirety because Ken On already had PS16 in its possession when it submitted quotation no. 116951.  Reference was also made to the evidence of Mr. Ip (a witness called by Ken On) that during the design of the concrete mix he was given PS16.97. 

25.  However, I know of no principle of law (and I have been referred to none) to the effect that mere possession of a set of contractual terms by a contracting party had the legal effect of incorporating those terms into a contract.  Texts of contractual terms might have been given to (or in the possession of) a party for various reasons.  Some of these reasons may lead to contractual incorporation (say, an express request and an express acceptance on the face of the quotation that the terms shall be incorporated); some may not.  The JV had failed to plead or prove anything surrounding Ken On’s possession of PS16 which would have the effect of incorporating PS16.  I reject the JV’s argument in this regard.

26.  Lastly the JV contended that correspondence between the JV and the Engineer had been copied to Ken On, and in some of the correspondence references were made to PS16.  I reject that argument as well.  I know of no principle of law (and I have been referred to none) to the effect that references to a contractual term in correspondence between a contracting party (in this case the JV) and a non-party (in this case the Engineer) would incorporate that term into a contract.  Even assuming that PS16 was part of the contractual requirements as between the JV and the Employer (and hence the JV might have to liaise or correspond with the Engineer about PS16) it does not necessarily mean – as a matter of law - that the same clause must be incorporated into the contract between the JV and Ken On.  If the JV wished to ensure that its contractual arrangements with Ken On mirrored its arrangement with the Employer it was up to the JV to take the necessary steps which had this legal effect.  On the evidence, the JV had not.

27.  I therefore reject the JV’s arguments about incorporation of the entirety of PS16. 

28.  A number of miscellaneous implied terms were relied on by the JV.  For reasons that I shall briefly outline below, they either add nothing to the implied terms as to quality, or they could not be implied under the well known test for the implication of terms:

(1)     Term relating to exercise of care, due diligence and dispatch in the execution and performance of the May 2000 Agreement (paragraph 21(1) of the re-re-amended Defence and Counterclaim): 

(a)     Insofar as this relates to the speed or promptness with which the concrete was delivered, it can add nothing to (and cannot contradict) the requirement expressly provided in clause 4 of the Conditions of Sale.  In any event, as I understand the JV’s complaint, its case is not that somehow Ken On had been “dragging its heels” in the delivery of concrete to the site.  Its case about delay was founded on Ken On’s breach of the implied term as to quality, which led to rectification works, which works in turn led to delay.  That being so, the delay claim is dependent on breach of the implied term on quality, and not a self-standing implied term about not causing delay.

(b)     Insofar as this relates to the exercise of care and diligence in the manufacture of the concrete, it adds nothing to the implied term as to quality.  If the quality of concrete fell short of the requisite standard, then (subject to proof of loss) Ken On would be liable, however careful it had been in the design and manufacture of the concrete.  I therefore cannot see under what circumstances (and why) the JV would wish to take on the added burden of proving lack of due diligence on the part of Ken On in the manufacture of the concrete.

(2)     Term as to execution of Agreement in accordance with the programme of the Main Contract (paragraph 21(4) of the re-re-amended Defence and Counterclaim):-  This term cannot be implied.  Clause 4 on the Conditions of Sale provided expressly for the timeframe within which deliveries were to be made.  Any implied term as to adherence with the Main Contract programme would be inconsistent with clause 4. 

(3)     Terms as to delay to the Project (paragraph 21(5) of the re-re-amended Defence and Counterclaim):  The only possible candidate for causing delay to the Project was defective concrete.  If Ken On supplied defective concrete and this caused delay which, according to the relevant rules on remoteness and causation, caused loss and damage to the JV then the JV will have its remedies based on breach of the term as to quality.  Beyond the term as to quality, I fail to see any basis for implying a self-standing term as to delay.

(4)     Term as to rectification costs (paragraph 21(6) of the re-re-amended Defence and Counterclaim):-  There is no necessity for such a term to be implied.  If the concrete was defective and it caused loss to the JV then the JV would have its remedy in breach of contract (including damages assessed by the usual rules).  There is no need, and no scope, for implying any further terms.

Concrete quality

29.  Having dealt with the question of incorporation of terms, I now turn to the issue of concrete quality. 

30.  The JV’s complaint was that:

(1)     The concrete supplied by Ken On was defective in that it failed to meet the requirement of a “self-compacting, free flowing and cohesive concrete” in PS clause 16.12(6) and clause 16.43(5).

(2)     Further, honeycombs and voids were found in the concrete cores when, under the contractual requirements, there should be no honeycombing and voids in the core should be “no more than `few’” (GS clause 16.12(6)). 

31.  I have held, in paragraphs 23 to 27 above, that the clauses in PS16, save and except clauses 16.94 to 16.97, did not form part of the contract between the parties.  Therefore the “self-compacting” requirement in PS16.12(6) and PS16.43(5) were not part of the contract.

32.  On the facts of this case it may well be that the allegation of breach of the “self-compacting” requirement adds little, if anything, to the requirement of no/few voids and honeycombs (part of the GS requirements, and which is indisputably incorporated into the contract).  This is because the physical manifestation of the failure to “self compact” relied on by the JV was the existence of voids and honeycombs in the placed concrete (there was also an allegation of segregation but I do not think this adds to the “voids/honeycombs” complaint – if there was segregation between cement paste and aggregates, that would in all likelihood be manifested in the appearance of voids and honeycombs).  However I shall, for the sake of completeness, still discuss the issue of “self-compacting concrete” in a later part of this Judgment in the context of an inherent inconsistency in the specification for Mix 1. 

33.  I now turn to deal with the cause of the defects. 

34.  There are two matters which I would like to dispose of at the outset, namely:

(1)     an allegation that Ken On had “overdosed” the concrete with a superplasticiser called “Sikament NN”;

(2)     an allegation that Ken On had, in departure from the design mix approved by the Engineer, used Crushed Rock Fines (“CRF”) instead of river sand in the concrete.

Overdose of Sikament NN

35.  In Ken On’s application for trial mix approval (which was given to the Engineer on 2^nd May 2001), the mix description of Mix 1 was set out as follows:

(1)	Slump	200 mm
(2)	Cement	255 kg
(3)	PFA	170 kg
(4)	Agg 20 mm	730 kg
(5)	Agg 10 mm	280 kg
(6)	Fines	720 kg
(7)	River sand	[blank]
(8)	Water	170 kg
(9)	Sikament NN	8 litres
(10)	Sika Plastiment	[blank]
(11)	W/C ratio	0.4
(12)	A/C ratio	4.071

36.  There was a reference, in this submission, to a superplasticiser called “Sikament NN”.  It was an admixture manufactured by a manufacturer called Sika[4].  Enclosed among the papers submitted for approval was a data sheet published by Sika setting out the recommended dosage for Sikament NN.  The relevant part of this data sheet reads as follows:

“Addition rates

0.5%-3% by weight of cement.  Exact dosage rates are dependent on the type of effect sought, quality of cement and aggregates, water:cement ratio and ambient temperature.  It is advisable to carry out trial mixtures.

Effects of overdosing and underdosing

Significant overdosage will result in increased workability and setting time of the concrete.  Underdosage will result in reduced workability (more difficult placing) and shorter setting times (reduced workable life).  However, provided the concrete is cured effectively, ultimate strength and properties will not be affected.”

37.  In this data sheet, the word “cement” instead of the phrase “cementitious content” was used.  “Cementitious content” is a wider concept, and it covered (among other things) both cement and PFA. 

38.  If the recommended dosage of 0.5%-3% was to be measured by reference only to the weight of cement but not cementitious content, then simple calculation would show that the amount of Sikament NN in Mix 1 was above the recommended dosage contained in the data sheet:

(1)     Amount of Sikament NN in Mix 1 = 8 litres   

(2)     Weight of cement alone = 255 kg

(3)     1.196 (specific gravity of Sikament NN) x 8 x 100/255 = 3.75% which is above 3%. 

39.  However, if the recommended dosage in the data sheet was to be measured by reference to “cementitious content” (i.e. cement and, among other things, PFA), then the amount of Sikament NN in Mix 1 would be within the recommended dosage:

(1)   Amount of Sikament NN in Mix 1 = 8 litres

(2)   Weight of cement and PFA = 425 kg

(3)   1.196 x 8 x 100/425 = 2.25% which is below 3%.

40.  The JV contends that the recommended dosage in the data sheet was by reference to the weight of cement only and hence the design of Mix 1 contained an overdose of Sikament NN. 

41.  Ken On contends that the recommended dosage in the data sheet was by reference to the weight of cementitious content and that there was no overdose. 

42.  I should state at the outset that even if it is shown that there had been an overdose, this does not by itself give rise to a claim to damages.  Likewise, failure to prove overdose does not necessarily defeat the JV’s case.  The JV’s case is that defects in the quality of the concrete led to problems with the bored piles (honeycombs, voids, etc) which, in turn led to various items of expenses and losses which the JV seeks to counterclaim by way of damages.  At the end of the day, to succeed on its counterclaim the JV had to show that the problems found in the bored piles were attributable to defective quality inherent in the concrete itself.  The defective quality could be due to overdosing, bad mixing in the plant, or a whole host of other reasons.  The cause of the defective quality, if there was indeed defective quality, is not a necessary ingredient of liability which the JV has to establish.  Overdose is something which may make it more likely that the honeycombs, etc in the bored piles were due to defective quality of the concrete itself rather than extraneous factors such as bad workmanship.  It is something to be put into the balance, together with all the other evidence in the case.  But it is neither a necessary, nor a sufficient, condition for Ken On’s liability.  Discussions on this topic must be viewed in this light. 

43.  In my view the recommended dosage was by reference to cementitious content (and not cement alone).  Therefore there was no overdose of the Sikament KK admixture.  My reasons are as follows:

(1)     The JV’s key point was the wording of the Sika data sheet enclosed with the trial mix submission.  The term is “cement” not “cementitious content”.

(2)     However, the task facing the court is not one of mere literal interpretation of the data sheet.  The task currently facing the court is to find out whatthe manufacturer actually intended to recommend by way of dosage.  The literal wording in the data sheet is one factor to be taken into account.  But that is not all.  The data sheet might not be expressed felicitously.  It might not have been expressed entirely accurately or it might not have foreseen or taken into account subsequent uses (in the industry) of cementitious materials other than cement (and thus omitted to expressly provide for it).  There is therefore scope to look beyond the words in the data sheet to ascertain the true position. 

(3)     One way of ascertaining what the manufacturer really intended, by way of the dosage recommendation, was to ask Sika.  In fact this has been done by Dr. Anderson (Ken On’s expert) and information has been provided by Sika in the form of a letter dated 12^th June 2006, stating that “When Sika concrete admixtures are added to the concrete, the proportion of admixtures added is calculated on total cementitious content, i.e. cementitious content includes OPC and all cement replacements whether it is PFA and/or GGBS”. 

(4)     Further, the entry for “addition rates” in the current data sheet published by Sika for Sikament NN (as of September 2005) is differently worded from the one attached to Ken On’s submission to the Engineer.  The current version states, under “Addition rates”, as follows:-

“0.5% - 3% by weight of total cementitious.”

(5)     The present position of Sika, both evidenced by the September 2005 data sheet and the 12^th June 2006 letter, is that the recommended dosage of 0.5% to 3% was by reference to cementitious content. 

(6)     Mr. Harris, the JV’s expert, took the view that it was possible that the current position of Sika might have reflected changes in the ingredients/composition of Sikament NN subsequent to the time of Ken On’s submission.  He therefore wrote to Sika on 8^th  August  2006 seeking an explanation on the background behind the changes to the data sheet, especially the change in the recommended dosage from one based on cement content to one based on cementitious content.  He has had no reply to this letter.  I shall return to this aspect of the evidence later.

(7)     The above was not the only evidence on the subject.  I have before me evidence as to Sika’s contemporaneous understanding (as of early 2002) that its recommended dosage was by reference to the weight of cementitious content and not merely the weight of cement.  The position arose as follows.

(8)     In February 2002 there was a dispute between the parties about the long “setting time” for test cubes of Mix 2 concrete (it will be recalled that in February 2002 Mix 1 was replaced by Mix 2).  The complaint was that test cubes using Mix 2 was still wet and soft after 6 days of casting.

(9)     In this connection, Sika was approached with a view to ascertaining whether the problem had anything to do with the admixture.  Sika responded by a letter on 22^nd February 2002.

(10)   In this letter (among other things) Sika set out calculations with a view to checking whether the dosages applied by Ken On (in the context of Mix 2) were within Sika’s recommended dosage.

(11)   I set out the design mix for Mix 2 as follows:

(a)	Slump	200 mm
(b)	Cement	375 kg
(c)	PFA	125 kg
(d)	Agg 20 mm	600 kg
(e)	Agg 10 mm	285 kg
(f)	Fines	700 kg
(g)	Water	190 kg
(h)	Sikament NN	6.5 litres
(i)	Sika Plastiment	4.5 litres
(j)	W/C ratio	0.38
(k)	A/C ratio	3.170

(12)   Part of Sika’s calculation in its 22^nd February 2002 letter involved applying its recommended dosage to (among other things) the Sikament NN and Sika Plastiment content (used by Ken On in Mix 2) to see whether there had been any Sikament NN and Sika Plastiment overdose.  At page 4 of the letter, Sika referred to the suggested dosages.  The point to note is that there was, inserted in parentheses, the remark “by way of total cementitous”.  There then followed, for Sikament NN, the numerical value of the recommended dosage found in the data sheet, namely 0.4% to 3%[5].

(13)   Sika’s letter then set out Sika’s reckoning of the percentage (by weight) of Sikament NN used in Mix 2.  It was stated to be 1.56% (based on 6.5 litres per cu. m.).

(14)   The figure of 1.56% was plainly arrived at by Sika by reference to cementitious content as opposed to only cement. 

(a)     Sikament NN content = 6.5 liter.

(b)     Weight of cementitious content (cement + PFA) = 500 kg.

(c)     1.196 x 6.5 x 100/500 = 1.5548% which is very close to the 1.56% figure mentioned in Sika’s letter and which is below the maximum recommended dosage of 3%. 

(15)   Sika’s letter of 22^nd February 2002 therefore contains two points in favour of Ken On:

(a)     It expressly referred to cementitious content, instead of cement. 

(b)     In the actual calculations Sika also used the weight of cementitious content, not cement.

(16)   The JV submitted that this letter by Sika of 22^nd February 2002 addressed a wholly different issue and reliance on it would be misleading.  I strongly and firmly disagree:

(a)     It is true  that the immediate purpose of the letter was to address a different problem namely that of long “setting time” for Mix 2.

(b)     However, it did, in terms, set out Sika’s understanding as to what “cement” meant in its data sheet.

(c)     Further, as an integral and essential part of Sika’s reasoning, Sika had to test the dosage used by Ken On in Mix 2 by applying its recommended dosage.  An analysis of the underlying rationale of the calculations would reveal Sika’s perception and understanding as to what exactly was encompassed by the concept of “cement” in the recommended dosage.  This is directly relevant to the issue we are now dealing with.  I find this letter, representing the contemporaneous thinking of Sika, highly probative.

(17)   A combination of (i) Sika’s current data sheet, (ii) Sika’s letter dated 12^th June 2006 and (iii) Sika’s letter dated 22^nd February 2002 lead me to conclude that even as of late 2001/early 2002 (the relevant timeframe) the recommended Sikament NN dosage of 0.5%-3% was to be reckoned by reference to the weight of cementitious content and not the weight of cement alone.  On this basis there was no overdose. 

(18)   I should state that there is also evidence from Ken On (through Mr. K. K. Ip, Ken On’s Technical Manager at the material time) that Ken On had consulted Sika and had been informed by Sika that “cement” meant OPC plus PFA (in other words cementitious content).  This evidence is, however, not entirely satisfactory because (without impugning Mr. Ip’s honesty) it came rather late (it was only mentioned in cross examination) and it relied on a rather unparticularised inquiry without documentary support.  I have placed little weight on this evidence in coming to my conclusion above.

(19)   I now return to Mr. Harris’s argument that the latest data sheet and Sika’s 12^th June 2006 letter could simply represent a recent change in the composition of Sikament NN.  If these two documents had stood on their own and had there been no other evidence, this may be a fair point.  But as I said above these are not the only items of evidence I have relied on.  And I do not think that one should view each item of evidence in isolation.  The latest documents from Sika, when viewed in conjunction with Sika’s 22^nd February 2002 letter, showed (and I so find) that the latest data sheet simply reflected what had all along been intended to be encompassed by the term “cement” in the earlier data sheet. 

(20)   As to Sika’s lack of response to Mr. Harris’s inquiry, Mr. Harris made the comment, under cross examination, that he had drawn a blank in his inquiry, that “somewhere, someone did not want to tell me the truth” and that he could conclude that “the truth was being withheld in some way”.  These are rather “pointed” words.  If the wording of his answer was simply intended to convey the factual point that he had not obtained any response to his query, I would have little problem with that: one then needs to look at other items of available evidence.  But insofar as these comments were intended to suggest that there was some underhand or nefarious reason for deliberately wanting to favour Ken On and not wanting to assist the JV, I reject any such suggestion.  In any event, Mr. Aiken SC in his submissions did not put forward any such suggestion. 

(21)   There could be a number of reasons why there was a change in the data sheet.  One possibility would be, as Mr. Harris suggested, that there had been a change in the composition of the product.  Another possibility would be that the earlier data sheet simply did not take into account the use of cement substitutes either because at the time the data sheet was prepared such substitutes had not yet become prevalent and that the data sheet had not been updated later, or that at the time it was prepared such substitutes had already become prevalent but Sika just failed to reflect that in its literature.  As Mr.  Clayton SC (for Ken On) submitted, if the real reason for the change was indeed a change in composition, then there would be little difficulty for Sika to give a response to that effect without any sense of embarrassment.  However, if the change was intended to reflect what had all along been the case (i.e. “cement should have read cementitious”) then one can readily see why Sika could feel somewhat concerned (or coy) about openly admitting in a letter that its corporate literature had not actually used accurate or precise language for some time. 

(22)   There is no need to me to make a positive finding about why Sika had not responded to Mr. Harris’s letter.  Suffice it for me to say that, viewed against the totality of evidence on this issue, the lack of response from Sika is not something which should cause me concern; it is certainly not something which should prevent me from finding, which I do, that there had been no overdosing. 

(23)   I should also mention that Mr. Harris made a further point in paragraph 6.2.8 of his report (in his words, “by way of a check on [his] opinions”) that in connection with the issue of recommended dosage, he had made a comparison with another similar admixture manufactured by W R Grace Construction Products Ltd. (“WR Grace”) and the result was that the WR Grace admixture had a recommended dosage of 1.8% by weight of cementitious content.  He then made the point that this was considerably less than the 2.25% in Mix 1 (measured by reference to cementitious content). 

(24)   In my view this is an unsound way of checking his opinions and I have no hesitation whatsoever in rejecting it.

(a)     There is no evidence as to the precise ingredients used in the product of W R Grace which Mr. Harris used as a “comparable”.

(b)     There is therefore no way in which one can reasonably say that one is comparing like with like (as opposed to comparing apples with oranges). 

(c)     When Mr. Clayton SC asked Mr. Harris in cross examination whether he knew the constituents of the WR Grace product and whether there was any secret formula, Mr. Harris responded that the “fundamental components” were published.  But fundamental components are one thing, precise constituents are another.  Secret formulae are yet another.  To speak of “fundamental components” was not really answering the question.

(d)     One can test the matter further.  The only evidence of any “fundamental component” in the papers (and which Mr. Harris alluded to) was that WR Grace was a Nathphalene Formaldehyde Sulphonate admixture.  So was Sikament NN (as described in the data sheet submitted by Ken On to the Engineer).  But then the Sikament NN admixture covered by the latest Sika data sheet was also a Nathphalene Formaldehyde Sulphonate admixture (see top of page 2) and yet, this particular Nathphalene Formaldehyde Sulphonate admixture indisputably had a recommended dosage of 0.5%-3% by reference to cementitious content (as opposed to the WR Grace recommended dosage of 1.8%).  This shows how unreliable it was to draw comparison with another product based on broad, “fundamental” generalizations such as the fact that they were all Nathphalene Formaldehyde Sulphonate admixtures.

 (25)  Lastly I note that the Engineer actually approved the design mix of Mix 1 even though the admixture/cement ratio exceeded 3%.  I refer to this just for the sake of completeness.  I do not place any weight on it, because one does not know whether in giving such approval, (i) the Engineer had actually checked with Sika and received any confirmation that “cement” should read “cementitious”, or (ii) the Engineer had (without consulting Sika) construed “cement” as covering “cementitious”, or (iii) the Engineer had simply missed the point.

Use of CRF instead of river  sand

44.  I now turn to another point raised by the JV, namely that contrary to the approval given by the Engineer, Ken On had used CRF instead of river sand in Mix 1. 

45.  This argument has to be understood by reference to the following facts. 

(1)     Apart from submitting design mixes “on paper” for the Engineers approval, Ken On also had to submit actual trial mix sample for the Engineer to approve.  In this case Ken On did so, and the Engineer gave its approval for Mix 1 on 18^th August 2001 (this was in relation to concrete coming from Ken On’s Chai Wan plant: there was another approval dated 14^th November 2001 for concrete coming from Ken On’s Cheung Sha Wan plant).

(2)     In the Engineer’s approval, a number of laboratory test certificates were attached, showing the results of various tests conducted on the ingredients of Mix 1.  Some of these certificates described one of the ingredients as “sand”.  There was no mention of CRF.

(3)     In the joint report of Dr. Anderson and Mr. Harris it was stated that the trial mix for Mix 1 contained river sand instead of CRF. 

(4)     It is common ground that the actual Mix 1 concrete delivered by Ken On contained CRF but no river sand. 

46.  On the basis of the above evidence, the JV made the point that the Engineer granted his approval to the trial mix on the basis that river sand was going to be used, but Ken On departed from that approval by using CRF, instead of river sand, in the actual Mix 1 concrete delivered to site.

47.  Like the point about “overdosing”, proof that CRF had been used in place of river sand does not automatically constitute a breach of contract which entitles the JV to damages.  The evidence before me shows that a mix containing CRF (as opposed to river sand) would exhibit certain characteristics (e.g. being “dry” and “harsh” and having higher friction) which necessitated the use of high dosage of superplasticizer[6] (which would in turn make the mix more vulnerable to segregation).  Put in this way, the JV’s criticism as to the use of CRF in place of river sand (as approved) simply provides a reason as to why any defects in the cored piles were more likely to be attributable to defects inherent in the concrete itself.  It is neither a necessary nor a sufficient ground for the JV’s counterclaim.

48.  During the course of the evidence, it was suggested by Mr. K. K. Ip (who designed the trial mix for Mix 1) that in fact CRF, not river sand, has been used in the trial sample submitted to and approved by the Engineer.  Mr. Aiken SC initially complained that this was contrary to the statements in the joint report of the experts (to the effect that river sand and not CRF was used in the trial mix) and that Ken On should not be allowed to retract from that position.  However, this is not a case where a party has pleaded an assertion and the other side has admitted it in a pleading or conceded it.  The issue of “CRF versus river sand” was not a pleaded issue when the joint report was compiled (the JV’s pleading was only amended during trial to raise the point specifically).  There is nothing, procedurally, to preclude Ken On from now maintaining the position that CRF and not river sand had been used.

49.  This, of course, only goes so far to permit, as a matter of procedure, Ken On from contending that in fact CRF was used.  Whether I should accept this factual case depends, in the ultimate analysis, on the evidence.  For reasons I shall explain in the following paragraphs I accept that CRF, not river sand, had been used in the trial mix for Mix 1 and that there is no substance in the JV’s complaints on this point.

50.  The situation can be analyzed as follows:

(1)     In one of the laboratory certificates (accompanying the Engineer’s approval) which mentioned “sand” (page 6 of certificate no. NL01-000837) there was a manuscript remark of “BS882”.  That was a reference to a British Standard Specification for aggregates from natural sources for concrete.  There was a 1983 version and there was a 1992 version.

(2)     In the 1983 version, there was a table 5 under the heading of “fine aggregate”.  There was no table for “sand”. 

(3)     In the 1992 version, there was a table 4 under the heading of “sand”.  I had noticed that save for the wording of a “note” at the end of the two tables, the contents of table 5 of the 1983 version and table 4 of the 1992 version are the same.  They set out the percentage (by mass) of particles passing through BS sieve of different sizes.  It is quite clear that both tables are concerned with the same subject matter, albeit described by different names. 

(4)     In fact the introduction to the 1992 version makes it clear that among the changes introduced to the previous (i.e. 1983) version, “fine aggregate” in the 1983 version was replaced by “sand”, “which now refers to natural uncrushed, partially crushed and crushed rock material.  Fines replaces `clay, silt and fine dust’ and refers to any solid material passing a 75 µm sieve”.

(5)     In the same 1992 introduction, one finds the following description of “sand”:

“2.3 Sand.  Aggregate mainly passing a 5.0 mm BS410 test sieve and containing no more coarser material than is permitted for the various gradings in this specification.

 NOTE.  Sand may be described as uncrushed or partially crushed as defined in 2.3.1, as crushed gravel sand as defined in 2.3.2, as crushed rock sand as defined in 2.3.3, or as a blended sand as defined in 2.3.4.

2.3.1 uncrushed or partially crushed Sand.

(a)     Uncrushed.  Sand resulting from the natural disintegration of rock.

(b)     Partially crushed.  Sand produced from a mixture of uncrushed sand and crushed sand resulting from the crushing of associated particles during product processing.

2.3.2 crushed gravel sand.  Sand produced by crushing gravel.

2.3.3. crushed rock sand.  Sand produced by crushing rock.

2.3.4. blended sand.  Sand produced by the controlled blending of two or more of the types of sand defined in 2.3.1, 2.3.2 or 2.3.3.”

(6)     There is, in the 1992 version, a separate description for “fines” in 2.3.5 “any solid material passing a 75 µm BS410 sieve.”

(7)     I have looked at the “Introduction” to the 1983 version to see the description of what was covered by the (then) heading of “fine aggregates” (which under the 1992 version was termed “sand”).  I found the following:

“2.3 fine aggregate.  Aggregate mainly passing a 5.0 mm BS410 test sieve and containing no more coarser material than is permitted for the various gradings in this specification.  NOTE. Fine aggregate may be described as sand (uncrushed or partially crushed) as defined in 2.3.1, as crushed gravel fines as defined in 2.3.2, as crushed rock fines as defined in 2.3.3, or as a blended fine aggregate as defined in 2.3.4.

2.3.1 Sand.

(a)     Uncrushed sand.  Fine aggregate resulting from the natural disintegration of rock.

(b)     Partially crushed sand.  Fine aggregate produced from a mixture of uncrushed sand and crushed gravel fines resulting from the crushing of associated gravel particles during production processing.

2.3.2 crushed gravel fines.  Fine aggregate produced by crushing gravel.

2.3.3. crushed rock fines.  Fine aggregate produced by crushing rock.

2.3.4. blended fine aggregate.  Fine aggregate produced by the controlled blending of two or more of the types of fine aggregate defined in 2.3.1, 2.3.2 or 2.3.3”

(8)     The descriptions of “fine aggregates” in the 1983 version and the description of “sand” in the 1992 version were, save for the replacement by the word “sand” (in the 1992 version) for words such as “fine aggregate” and “fines” (in the 1983 version), identical. 

(9)     The word “sand” as used in the laboratory certificate was being seized upon by the JV as meaning “river sand”.  But apart from the fact that the word “sand” happened to feature in the term “river sand” there is nothing to link the use of the word “sand” in the laboratory certificates with the concept of “river sand”.  On the other hand there is evidence that there is a linkage between the word “sand” in the laboratory certificates and the concept of “sand” in the 1992 version of BS 882: “BS 882” was written in manuscript on one of the certificates (page 6 of certificate no. NL01-000837) and the manuscript markings on that certificate plainly showed that the test results (typed out on the certificate) were being juxtaposed and verified against the requirements of table 4 of the 1992 version of BS 882 (written out in manuscript on the certificate) which, it will be recalled, was headed “sand” but which was the same as table 5 in the 1983 version headed “fine aggregates”.

(10)   In my judgment, the reference to “sand” in the laboratory certificates attached to the Engineer’s 18^th August 2001 approval was a reference to the matter described as “sand” in the 1992 version of BS 882 (which was expressly marked in manuscript on one of the certificates, as noted above).  That was equivalent to the matter formerly described as “fine aggregates”.  The description “fine aggregates” in the 1983 version (as “sand” was formerly known) included CRF.  Under the current description of “sand” in the 1992 version CRF became “crushed rock sand”.  But they are, I am satisfied, the same thing.  At the very least, I am not satisfied that the JV had shown on a balance of probabilities that “sand” on the laboratory certificates meant that river sand was being tested 

(11)   There is another point.  There are two documents showing the sieve test results of what is indisputably (i) CRF and (ii) river sand:-  There is a laboratory certificate issued by Materialab dated 14^th November 2000 showing sieve test results for CRF (we know that this was the case because the certificate expressly described the test sample as CRF), and there is another certificate dated 8^th December 2000 showing sieve test results for river sand (again we know this because the sample was expressly stated on the certificate to be “river sand”).  A comparison of the test results shown on the laboratory certificates for the Mix 1 trial mix attached to the Engineer’s 18^th August 2001 approval with the results set out in these two certificates show that the test results for the Mix 1 trial mix are consistent with the test results for CRF:-  They are not identical but they are of the same order of magnitude.  They are different from the test results for river sand[7] (which showed a much greater passing rate).  This is another pointer towards the conclusion that the subject matter of the laboratory test certificates was not river sand. 

(12)   A similar conclusion can be drawn from the documents in relation to the approval for trial mix coming from the Cheung Sha Wan plant.

(13)   For this particular approval, the laboratory certificate attached to the Engineer’s approval dated 14^th November 2001 described the particles not as “sand” but as “sand (fine aggregate)”.  As a preliminary observation this shows that the word “sand” was more likely to be used in this laboratory certificate the sense of “fine aggregate” (under the 1983 version of BS882) rather than in the sense of “river sand”. 

(14)   The percentage of the particles passing the sieve test is again consistent with the particles being CRF (when juxtaposed with the test results of a sample of CRF in the Materialab certificate dated 14^th November 2000).   Dr. Anderson expressed the view (which again I accept) that the percentage passing through a 2.36 mm BS sieve (75%) was too low for the particles to be river sand.

(15)   And there is, of course, the oral evidence of Mr. K. K. Ip himself to the effect that CRF was actually used (which I have no reason to doubt and which I accept). 

(16)   I should add that Mr. Harris did not really venture any positive view or interpretation of the documents to show that the particles used in the trial mix were river sand.  From time to time he resorted to language such as that the evidence pointed a number of ways and that he was confused by all the evidence.  The first point to note is that I do not think that, analyzed properly and objectively, there is any confusion in the evidence.  The second point is that the JV bears the burden of showing that river sand was used in the trial mix and that there had been a departure, and this burden is not discharged by the expert merely expressing a view that the evidence was “confusing”. 

(17)   The JV submitted that the fact that the test certificate by Materialab dated 8^th December 2000 referred to “river sand” and the fact that in Ken On’s submission to the Engineer for design approval there is a reference to “River sand – River sand ex Wang Kwong Sand and Quarry Ltd.”[8] shows that river sand was in fact used in the trial mix sample.  In my view this is a misreading and misunderstanding of the nature of these documents. 

(18)   The fact that the documents submitted to the Engineer (at the design approval stage) included a test certificate for “river sand” is readily explicable by the fact that in one of the mixes the design of which was being submitted to the Engineer for approval[9], river sand was stated to be an ingredient (see the mix for “40/20D OFA R/S Carriageway 25mm slump” at page 8 of the 21^st April 2001 document).  The reference to “river sand ex Wang Kwong Sand and Quarry Ltd.” on the 21^st April 2001 document merely tells the Engineer where the river sand was to be sourced from. 

(19)  Whilst on the subject of obtaining design approval from the Engineer in May 2001, I should point out that in the mix description of Mix 1 for this submission, it was not stated that river sand would be used.  Instead, it was stated that “fines” would be used.  I refer to paragraph 35 above which sets out the design for Mix 1 as submitted to and as approved by the Engineer. 

Defects in cored piles and the reasons for such defects

51.  Having disposed of the above two matters I now come to what I regard to be the crux of the case, namely the cause or reason for the defects that were found in the cored piles.

52.  It would be fair to say that problems had been encountered with the cored piles and as a result, the Engineer directed that there should be a 100% coring of the piles with a view to assessing the nature and extent of the defects found in the in situ concrete piles.  It is not in dispute that the results showed defects in some of the cores.  Dr. Anderson and Mr. Harris agreed that table 1 in Dr. Anderson’s report, whilst not precisely accurate, presented an overall picture which was reasonably accurate for assessment purposes and identifying trends.  Table 1 is set out below. 

53.  I have also been shown, by way of exhibits D5, D6 and D7, actual physical samples of some of the cored piles. 

54.  The fact that honeycombs and voids existed in some of the cores does not necessarily mean that the concrete supplied by Ken On was defective.  After delivery to the site, the concrete was handled by various people such as staff and employees of the JV’s contractors.  The manner and workmanship of placing the concrete could just as well have caused the defects found in the cores. 

55.  Upon delivery of the concrete to the site but prior to the pouring of the concrete, a number of procedures would be carried out by the JV to ensure that the concrete was of satisfactory quality.  There were, for example, visual inspections of the concrete and slump tests conducted on the concrete to determine the workability of the concrete.  Any concrete which failed the visual inspection or the slump test would be rejected automatically.  And it is Ken On’s case that the visual check on the concrete in this case was particularly stringent and that although on some occasions the rejection might not have been justified, Ken On accepted the rejection.

56.  These are all very well by way of background and I do bear them in mind, but I do not think that a stringent acceptance procedure prior to the placing of the concrete rules out the likelihood that the concrete was still defective, and that such defects led to the voids and honeycombs found in the cores.  The propensity of a mix to form voids and honeycombs (when placed by tremie, without being vibrated into place) is not something which could necessarily be identified by the visual checking or slump tests conducted on the concrete. 

57.  As part of the “monitoring” of concrete quality, 28-day compressive strength testing would be conducted on cubes made from the concrete and if any cubes were to fail such test, then cores would be taken from the relevant pile(s) in question and further testing would be done.  In this case there had been complaints that Ken On’s concrete had failed the 28-day compressive strength testing in a number of instances.  However, I do not regard this as sufficiently probative to indicate any defect in the concrete itself.  I have in mind Ken On’s evidence about (i) its own control cube tests; (ii) subsequent concrete cube making exercise whereby the JV and Ken On each made test cubes (from the same concrete) under their own conditions and (iii) Castco’s cube tests after the joint cube-making exercise.  These tests showed that cubes made and cured by the JV had a greater tendency to “under-perform”.  They also showed that under appropriate conditions, satisfactory results could be achieved.  I therefore cannot place too much weight on the results of the JV’s own 28-day cube tests.

58.  In my view, the most telling part of the evidence is the fact that the problems in the cores were found predominantly in the piles installed by Paul Y and only very few defective piles were found in those installed by Kin Wing. 

59.  The figures in Table 1 (paragraph 52 above) bears this out.  The percentage of “bad” piles installed by Paul Y using Mix 1 was 48.39%, compared with that of 6% among the piles installed by Kin Wing.  After Mix 1 had been replaced by Mix 2, the percentage of “bad” piles installed by Paul Y had reduced to 10.59%, a marked decrease from the percentage for Mix 1, but this was still higher than Kin Wing percentage of “bad” piles using Mix 1.  There were no “bad” piles installed by Kin Wing using Mix 2.

60.  It is not in dispute that both Paul Y and Kin Wing used the same concrete supplied by Ken On.  As a matter of common sense, if the same concrete could be used by Kin Wing to yield such relatively low percentage of defective piles, then in the absence of explanation, the logical conclusion would be that the defects found in the Paul Y piles were not attributable to any defects in the concrete itself, but due to other factors such as the manner and workmanship in which Paul Y had installed the piles. 

61.  The JV, through its expert Mr. Harris, did venture to suggest an explanation for the different results yield by Paul Y and Kin Wing.  He attributed the difference to the different method of placing adopted by Paul Y and Kin Wing.

62.  Both Paul Y and Kin Wing installed the piles by using the tremie method.  According to Mr. Harris, Kin Wing adopted a technique involving the construction of the concrete within protective temporary steel casings which were subsequently recovered.  The casings were oscillated into position through the surrounding crushed rock filling and the material contained within the casing was progressively removed.  Throughout the operation the casing was flooded with sea water which was maintained at higher level than the surrounding ground water.  Following cleaning out of the pile formations using air lifting techniques, the steel reinforcement cages were placed in the cased excavations.  The concrete was then placed into the bottom of each excavation through tremie pipes.  The casings were extracted in stages as soon as each concrete pile had been fully cast but while the concrete remained wet. 

63.  Paul Y’s method involved the installation of temporary steel casings which were vibrated into place.  The casings were flooded with a bentonite slurry.  Following cleaning out using air lifting techniques, permanent corrugated steel liners were placed concentrically within the temporary casings and the steel reinforcement cages were lowered through the bentonite slurry into position.  Thereafter, the bentonite slurry in the cased excavations was adjusted to reduce its density to below that of concrete but just higher than that of sea water.  The concrete was placed into the bottom of each excavation through tremie pipes and slowly displacing the bentonite slurry upwards as the concrete level rose.  The temporary casings, but not the permanent casings, were then extracted as soon as each concrete pile had been fully cast but while the concrete remained wet. 

64.  Based on this difference in method between Paul Y and Kin Wing, Mr. Harris set out his theory of re-compaction in paragraphs 8.2.2, 8.3.3 and 8.3.4 of his report.  I set out this part of his report in full

“8.3.2       …..Further, at the time just prior to the temporary casings being withdrawn it is considered that both piling methods would probably have given rise to similar percentages of piles with severe, moderate and minor honeycombing as they both used the same concrete.

8.3.3         In the case of Paul Y’s piles, these defective piles retained their honeycombing, voids and poorly consolidated areas as they set even though the temporary casings were withdrawn as soon as the pile had been fully cast.  The concrete in these piles was shielded from external water by their corrugated casings it did not undergo any re-working or re-compaction as the temporary casings were extracted and so solidified retaining the defective features which were subsequently revealed by the coring process.

8.3.4         In the case of Kin Wing’s piles however, as soon as the temporary casings were filled with concrete, the casings were withdrawn, allowing the sea water to flood around the still wet concrete and redistributing the concrete into the annular voids left by the extracted casings.  It is my opinion that under these circumstances, where piles exhibited severe honeycombing, then the redistribution led to re-compaction of the concrete.  The re-compaction process which manifested itself by the concrete surface level dropping each time the temporary casings were withdrawn densified the concrete, filling many of the honeycombed areas, collapsing the honeycombs and re-distributing the cement paste.  Piles with all but the most severe honeycombing may well therefore have lost the honeycombs, the end result being a collapsed structure with re-densified concrete.  Such re-densified concrete may not visibly appear to be different from good concrete when exposed by coring.”

65.  The wording of paragraphs 8.3.3.and 8.3.4 may at first sight suggest that the sea water which flooded around the still wet concrete had some part to play in the “re-distribution process”.  In oral evidence Mr. Harris clarified, however, that it is not his position that sea water had any positive contribution in the re-distribution or re-compaction process.  Mr. Harris amended his paragraph 8.3.4 by deleting the word “and” between the words “still wet concrete” and the word “distributing”, replacing it with a comma. 

66.  Put very briefly, his argument is that each time the temporary casing was lifted up in the Kin Wing piles, annular voids (representing the space previously occupied by the temporary casing) would momentarily appear.  The concrete level would drop slightly whilst the still wet concrete found its way up to fill the annular void.  The weight of the concrete (which dropped) led to re-distribution.  Voids or honeycombs which were previously present were filled up (or, in the words of Mr. Clayton SC for Ken On “self-healed”). 

67.  As an additional argument, Mr. Harris argued that Kin Wing used oscillator to remove the temporary casing and that the concrete would be rotated and moved around by such oscillation during the temporary casing removal process.  The force of such oscillation also contributed to the re-compaction process. 

68.  I reject Mr. Harris’s attempt to explain the performance of the Kin Wing piles by reference to the difference in methodology and by reference to the use of the oscillator in removing the temporary casing. 

(1)     As a matter of fact not all the Kin Wing piles were installed without the use of permanent steel casings.  Further, not all the Paul Y piles were installed with permanent casings.  This was borne out by table 4 in Mr. Harris’s report which I set out below. 

(2)     I shall focus on the Mix 1 columns.  They showed 6 Paul Y piles installed without permanent casing.  On Mr. Harris’s theory, in the absence of a permanent casing the re-compaction phenomenon should have taken place.  Yet the percentage of piles showing defects (whether severe, moderate or minor) was 50%.  For those Paul Y piles installed with permanent casing (which on Mr. Harris’s theory should not have undergone any self-healing or re-compaction), there were 115 of them[12].  54 were defective.  The percentage was 47%.  Thus, the percentage of defective piles installed without permanent casing (in Mr. Harris’s theory, piles which should have “self-healed”) was actually higher than the percentage of defective piles installed with permanent casing.

(3)     I turn to the figures for the Kin Wing piles.  14 piles were installed with permanent casing (according to Mr. Harris, “self healing” should not have taken place).  None had defects (0%).  36 were installed without permanent casing (according to Mr. Harris, “self-healing” should have taken place), 3 had defects (8.3%).

(4)     The figures in Mr. Harris’s own table 4 are therefore completely inconsistent with his theory of “self-compaction” (or “self-healing”).  When confronted with the above analysis of the table 4 figures in cross examination, Mr. Harris had no satisfactory explanation for it.  He resorted to generalizations such as looking at the “overall magnitude” and the “general picture”.  But the general picture and the overall magnitude shown by table 4 is against his theory and so I fail to see what sort of “general picture” he could be referring to. 

(5)     The theory that the drop in concrete level during the removal of the temporary casing was apparently a novel one.  While there is no dispute that, as a physical phenomenon, the level of concrete would drop during this process, there is no literature or study in the industry to support that this “drop” could lead to the curing or healing of imperfections in the manner suggested by Mr. Harris.  Or the evidence, such wholesale healing of the Kin Wing piles seemed unlikely.

(6)   The theory that the oscillation that occurred when the temporary casing was removed had contributed to the re-compaction was a theory that had not featured at all in Mr. Harris’s written report.  It is, as he acknowledged, a “newcomer”.  That by itself is not a reason for rejecting it, since very often points which are conceived late could well be very good points.  I would, however, scrutinize late points like this with extra care and caution.  Having considered the point with care I do not accept this “oscillation” theory.  I also reject the JV’s suggestion that the oscillation force was so large that the force could be felt by the sonic tubes inside the cage (and so large that the tubes were thereby damaged).  I prefer Mr. Jesse’s evidence that the oscillation was controlled and not at great speed, as well as his explanation as to why some sonic tubes might be damaged. 

(7)     Generally speaking, for the reasons given in paragraph 7.6 of Mr. Clayton SC’s written closing submissions (with which I entirely agree), I had viewed Mr. Harris’s opinion with a great degree of caution when it is in conflict with that of Dr. Anderson and Mr. Jesse. 

(8)     Another reason which caused me to view Mr. Harris’s evidence with great caution is his unsatisfactory treatment and interpretation of the Concrete Placement Records, which I shall deal with in paragraphs 81 to 87 below. 

69.  I conclude, therefore, that the JV had failed to prove on a balance of probabilities that the concrete supplied by Ken On was defective or that the problems encountered by it were caused by any problems in the concrete supplied by Ken On. 

70.  I should add that by using the performance of the Kin Wing piles as the “standard” against which the Paul Y piles were judged, I am not necessarily finding that the percentage of defective Kin Wing piles were acceptable.  The relatively low (by that, I mean relative to Paul Y) percentage of defective Kin Wing piles might or might not be acceptable.  It could well be that the defects in Kin Wing piles were due to defects in the concrete, or Kin Wing’s own workmanship problems, or other reasons.  For example, the cause for a defective Kin Wing pile (pile 56E) had been identified as being the interruption of pouring of concrete for 3 hours.  It is, however, not the purpose of this Judgment to adjudicate on the cause of defects for the Kin Wing piles.  The reference to the “failure rate” of the Kin Wing piles was for the purpose of contrasting with the Paul Y piles.

71.  I would also add that the fact that the performance of Paul-Y piles improved when Mix 1 was changed to Mix 2 does not necessarily mean that Mix 1 was defective.  The relevant comparision is that between the performance of Paul-Y piles (whether Mix 1 or Mix 2) with the Kin Wing piles.  It could well be that Mix 1 was more sensitive to bad workmanship.  That does not mean that it was defective. 

72.  I have also borne in mind that this was the first time that Ken On had designed a mix with the design of Mix 1 and that Mix 1 did not appear to have been used by Ken On subsequently.  I do not think that this factor was sufficient to detract from my conclusion on quality.

73.  I was able to come to the above conclusion without recourse to the evidence about bad workmanship.  However, my conclusion is reinforced by a consideration of the possible scope of bad or defective workmanship by Paul Y.  I shall now come to that.

Defective workmanship and interpretation of the Concrete Placement Records

74.  As indicated above, Ken On’s contention is that the problems encountered by the JV were not attributable to any defects in the concrete supplied.  Strictly speaking, there is no burden on Ken On to suggest or prove the real cause or reason for the problems.  However, cases are not decided in a vacuum, and in the course of addressing the JV’s expert evidence on the cause of the defects, Ken On had suggested that the problems faced by the JV were largely caused by poor or defective workmanship on the part of Paul-Y.  The JV responded by contending that there was little scope for workmanship problems or errors between the time when the concrete arrived at the construction site and the time when the concrete was poured.  Ken On retorted by contending that there was scope for:

(1)     excessive speed in pouring and

(2)     insufficient, or lack of, immersion depth of the tremie pipe during the concreting process. 

(These are the two specific complaints which Ken On relied upon in its Closing Submissions at paragraphs 7.13 and 7.14)

75.  The significance of this dispute, as I see it, is as follows.  It is not for Ken On to prove such alternative causes.  However, as soon as Ken On could point to evidence that there was scope for defective workmanship (which was causative of the problems), then as part and parcel of the burden on the JV to prove its case, the JV would have to show – on a balance of probabilities - that there was no such defective workmanship (or that any such defective workmanship was not causative of the defective piles). 

76.  This is not to require the JV to eliminate all sorts of fanciful possibilities under the sun.  One needs some evidence from the Plaintiff to raise an issue first.  If one wants to deploy the technical language of the law of evidence, then the Plaintiff has the evidential burden, but once that is discharged, the legal burden of eliminating that is on the Defendant. 

77.  In terms of what evidence is needed from the Plaintiff, I do not think one needs an eye-witness from the site to swear that he saw a worker conduct the pouring in a particular way.  Such direct, eye-witness testimony is only one of the possible types of evidence which may be used to raise an issue.  One is entitled to rely on legitimate inferences which can be drawn from objectively observable facts and common sense. 

78.  On the question of direct, eye-witness testimony, insofar as anything may turn on what the staff of Paul Y might have done, or what he might have meant by a particular entry in contemporaneous documentary records (this is particularly relevant to the question of interpretation of the Concrete Placement Records, which I shall discuss below), the JV (as opposed to Ken On) is the natural party to call such a person as a witness.  First, Paul-Y was the JV’s contractor.  Ken On had no contractual relationship with Paul-Y.  Second, since Ken On’s argument/contention was going to be critical of Paul-Y’s manner of work, it would be fanciful to expect Ken On to be able to call or subpoena someone from Paul-Y to testify or admit that its manner of work was defective.  Lastly, as a matter of fact the JV did manage to procure a witness from Paul-Y (namely Mr. Winston Luk) to testify in support of its defence.  I therefore do not see any practical difficulty in the JV procuring witnesses from Paul-Y to address the specific suggestions of bad workmanship or the meaning of the Concrete Placement Records as discussed in greater detail below. 

79.  I now address the two specific complaints of bad workmanship.

80.  First, as to excessive pouring speed, the Plaintiff’s evidence is contained in paragraphs 144 to 147 of the Report by Mr. Jesse on Bored Pile Construction.  I have considered the JV’s response to this part of his evidence but I see no reason why this part of his evidence should not be accepted. 

81.  The next suggestion is insufficient or lack of immersion depth of tremie.  This part of the evidence was more controversial.  Upon reviewing the totality of the evidence (written and oral) I accept the Plaintiff’s case as to lack of immersion and prefer Mr. Jesse’s evidence on the subject to that of Mr. Harris’s.  My reasons are as follows.

82.  In Mr. Jesse’s Expert Report on Bored Pile Construction, he produced a number of charts based upon his analysis of Concrete Placement Records prepared by the contractor as required by PS clause 8.73A.  The charts concerned 19 Paul-Y piles and 9 Kin Wing piles.  Of the 19 Paul-Y piles, the charts showed that for 14 piles there was a possible loss of and/or insufficient tremie immersion.  Out of these 14 Paul-Y piles, 12 exhibited imperfection or defects (as seen from Concrete Core photographs).  I should add, for the sake of completeness, that:

(1)     Of the 5 Paul-Y piles which were not shown by the charts to have a loss of or insufficient tremie immersion, 4 exhibited imperfections (though none exhibited defects).

(2)     Of the 9 Kin Wing piles which were analyzed, none of them showed loss of or insufficient tremie immersion.  One of them exhibited imperfections; none had defects. 

83.  Analysis of these samples of piles showed a significant correlation between lack of/insufficient tremie immersion and the existence of imperfections and/or defects in the Concrete Cores.  This analysis lends credence to the theory that problems in the Concrete Cores were caused by insufficient or lack of tremie immersion. 

84.  Mr. Jesse’s evidence is that insufficient or lack of tremie immersion during the concrete pouring process would, in various ways (such as disturbance of concrete near the surface), lead to defects in bored piles.  In his experience, he would usually try to keep the depth of immersion at 3m or more (on the other hand Mr. Harris suggested that he had seen specifications where 2m was regarded as appropriate).  As the depth of immersion dropped below 3m, the risk of defective piles would increase. 

85.  For the purpose of illustration I attach, in Appendices 2 and 4 to this Judgment, three Concrete Placement Records (all these concerned Paul-Y piles).  I have chosen Appendices 2 and 3 as illustrations because they each used a slightly different method of entering the relevant data (due to the fact that these records were made by different engineering staff on site and different staff member would or might have a different way of entering the data).  Appendix 4 was compiled by using the same “convention” as Appendix 2 and I have included this because it serves to demonstrate a point made by Mr. Harris in his cross examination, as will be seen below.

(1)     Appendix 2:-   Concrete Placement Record relating to Pile No.18B.

(2)     Appendix 3:-  Concrete Placement Record relating to Pile No.22C.

(3)     Appendix 4:- Concrete Placement Record relating to Pile 12A.

86.  The difference in opinion between Mr. Jesse and Mr. Harris on this subject mainly concerned the interpretation of two items in the Concrete Placement Records under the heading “Total length (F)” and “Embedded Length (D = F-a)”.  Put simply, their views can be summarized as follows:

(1)     In the view of Mr. Jesse:-

(a)     In a record such as Appendix 2, where there was an entry in a particular box under the column “Total Length (F)” (say, “42” for load 5) and then an arrow leading up, the total length of the tremie was changed to 42m prior to the pouring of load 5 (and at the conclusion of load 4[13]). 

(b)    For a record such as Appendix 2, the value of “Total length” for load 1 should not be 42 (despite the indication of the arrow) but 48.5 (m), because 48.5m was the length of the tremie pipe as recorded in the top right hand corner of the Concrete Placement Record and that would have to be the “starting length” of the tremie at the beginning of load 1. 

(c)    Likewise for the entry “33” in load 10, it indicated a lifting of the tremie to a length of 33 at the end of load 9 (i.e. before the commencement of load 10). 

(d)    In short, the lifting would take place at the end of the load immediately preceding the load against which the relevant entry was made. 

(e)    For a record such as Appendix 3, where the maker used the arrows in a different way, the number of “47” indicated the length of the tremie for loads 1 to 3 (i.e. 47m – which was also the length of the tremie pipe as recorded in the top right hand corner of the Concrete Placement Record).  At the end of load 3 (but before the commencement of load 4) the tremie would be lifted and the length would become 42m.  It would remain 42m until the conclusion of load 6 (but before the commencement of load 7), whereupon it would be lifted to become 36m, and so on and so forth.

(f)     In short, for such a record, the tremie would be lifted at the end of the load where a particular “downward arrow” terminated. 

(2)    In the view of Mr. Harris:

(a)   He would only rely on the particular “boxes” where an item of data was entered.  One could not plot a graph to show the correlation between the tremie level and concrete level because the arrows could be interpreted to bear different meanings.

(b)   For a record compiled in the manner of Appendix 2 or Appendix 4, for the actual “box” with data entered (say, the box in load 5 with “43.5” in it in Appendix 4), Mr. Harris would interpret that entry to mean that the tremie pipe was moved at the end of the particular load.  In the case of Appendix 4, therefore, Mr. Harris would say that the “starting length” of the tremie was 45.5m, and then it remained 45.5m for loads 2, 3, 4 and the duration of load 5 as well.  In Mr. Harris’s view, the tremie was only lifted to 43.5m at the end of load 5 (as I understand him, Mr. Jesse would say that the lifting occurred at the end of load 4). 

(c)   For a record like that of Appendix 3, where there was one “start figure” of 47m (in load 2) and an arrow straddling loads 1 to 3 and then the next figure of 42m (in load 5) and an arrow straddling loads 4 to 6, Mr. Harris would say that the tremie length was still at 47m for loads 4 and 5 and it was only lifted to 42m at the end of load 5.  Likewise the tremie length during loads 6, 7 and 8 would be 42m and that the tremie pipe was only lifted at the conclusion of load 8. 

87.  On all the issues within the subject of tremie immersion I accept Mr. Jesse’s evidence and reject Mr. Harris’s evidence.  My reasons are as follows:

(1)     Mr. Jesse’s evidence made much more sense than Mr. Harris’s.  Common sense dictates that the purpose of making an entry for a particular load was to tell the reader information pertaining to and relevant to that particular load.  Taking a record such as that in Appendix 2 as an example, the value of “42” in load 5 tells the reader that the tremie length was 42m as at the conclusion of load 5.  Given that the tremie pipe was not moved or lifted during a load, it makes sense to reason that at the beginning of (and hence during) load 5, the tremie length must already be 42m.  And it could only have become 42m because it was lifted to become 42m at the end of load 4 (i.e. the load immediately preceding load 5).

(2)     Mr. Harris’s interpretation, however, means that immediately at the end of load 5 the tremie length was still 48m (the “starting length” of the tremie pipe for load 1).  The tremie pipe would then be lifted to become 42m, and it was only then that the staff would write down 42m in the box for load 5.  But then this value of “42” would have absolutely nothing to do with what occurred during or immediately after load 5.  The value would represent the consequence of one act of human intervention after load 5, namely the lifting of the tremie.  That would only be of interest to someone who wanted to know about the next load namely load 6.  It would make no sense to write it in the load 5 box.

(3)     Mr. Harris’s interpretation made even less sense in the context of a record in the form of Appendix 3.  One would have thought that for a Record such as Appendix 3 the “ambit” of an entry was reasonably well defined by the arrows going upwards and downwards.  However, according to Mr. Harris, despite the fact that the downward arrow (leading from the first entry of 47m) ended in the box for load 3, the value of 47m continued until the end of load 5 (where, in the box for that particular load, the value of 42 appeared).  In so interpreting the data, he had to disregard the clear sense of the upward and downward arrows. 

(4)     In developing his argument that the arrows could not be interpreted (or that one could not be certain that the arrows all meant the same thing), Mr. Harris referred to the fact that in Appendix 3 under “Embedded Length (D=F-a)” there was a figure of 4.1m in load 2 and arrows going up to load 1 and down to load 3.  He made the point that these arrows could not be right because the embedded length must change from load to load and one could not have a constant value of 4.1m (for embedded length) for the first three loads.  In fact the same point could be made for the usage of the arrows under the heading “To poured concrete surface (a)”, since the concrete level must change from load to load and the value cannot (as apparently suggested by the arrows) be constant for the first three loads.

(5)     I have no difficulties with the view that, for the “To poured concrete surface” column as well as the “embedded length” column, the use of the upwards and downwards arrows did not mean and could not have meant that the relevant values were constant or “locked in” as being the same for the relevant three loads straddled by the arrows[14].  But it is, in my firm judgment, a non-sequitur to reason (as Mr. Harris did) that because the arrows made little sense for those columns, therefore the use of ALL arrows by the engineering staff was rendered uncertain or suspect and therefore one could only place weight on the actual data entered into a box.  From time to time Mr. Harris stated (dogmatically) that he “must” conclude that the arrows had no meaning.

(6)     To start with, ideally one would hope that the actual maker(s) of the records would be called to “speak to” the records and explain the Records (and I repeat that if any one is in a position to call these makers it would be the JV because the makers were engineering staff either of the JV or Paul-Y).  However, none has been called.  That, however, does not preclude or prevent the Court from doing its best to make sense of the Records.  This (i.e. the interpretation of documentary records on their own without the benefit of having explanatory testimony from the makers) is a task which the Court has to regularly perform (always making due allowance for the fact that there might be certain features which could be better explained by oral testimony). 

(7)     These records were compiled by engineering staff to enable the concrete pouring process to be monitored by professionals.  The starting point in considering such records (as in the case of all forms of documentary records, whether in the construction industry, in the banking or commercial world, or indeed any form of serious documentary records in everyday life) is that they were intended to make sense. 

(8)     Because of the fact that different individuals were involved in the compilation of such records and the fact that their habits might differ, these records might be made in different formats and from time to time there might be entries which (at first glance) did not make complete sense.  However, for the purpose of trying to understand what the makers of these records were trying to convey, I have no doubt that the approach that would be adopted by sensible and objective consultant engineers (and this is also the approach that I would adopt) was to try to make sense of as many items as possible and, in case there are items which on their face do not make sense, to try to rationalize those items with those which do make sense. 

(9)     In fact, one can go further.  It can be said that it is precisely because it makes no sense for the arrows under the “embedded length” column to mean a “constant” embedded length for successive loads, that the arrows under that column must be intended to mean something else.  Instead of trying to make sense of the arrows, Mr. Harris dogmatically dismissed all the arrows (including those in the columns which made sense).  I can see no justification for this approach. 

(10)   In the present case, I find it perfectly possible and acceptable to interpret the arrows under the various columns in a way that makes sense as a whole:

(a)   Whenever arrows were used for the “To poured concrete surface”, “total length” and “embedded length” columns, the arrows were largely co-extensive (i.e. an entry would be made under all these columns for the same load and from the entry in that load, arrows would be drawn upwards and/or downwards, as the case may be). 

(b)        It is therefore highly probable (and I so find) that the arrows were intended as a convenient device of “batching” the relevant entries under these columns together by reference to a particular tremie length (F). 

(c)        This reading of the arrows makes sense - certainly more sense than Mr. Harris’s reading which involved completely invalidating the clear sense of the arrows under the “total length” column. 

 (11)  In my view, Mr. Clayton SC’s criticism of Mr. Harris’s evidence in paragraph 7.6 (6^th to 7^th lines) of Ken On’s Closing Submissions would apply to Mr. Harris’s approach to the question of interpretation of the Concrete Placement Records. 

(12)   On top of the above considerations, Mr. Jesse had more experience than Mr. Harris in seeing and interpreting such records.  He had seen and considered about ten thousand such records in his career.  Mr. Harris had only interpreted such records on 4-5 occasions.  Mr. Harris did say that the number of records was considerable, but there was no suggestion that the number was as high as that of Mr. Jesse’s. 

(13)   On the subject of what an acceptable depth of immersion would be, I also prefer Mr. Jesse’s evidence.  I also accept his explanation (in cross examination as well as re-examination) as to the reference to “1m immersion” in GS16.43(2).  In any event, GS16.43(2) only prescribed the minimum.  It does not mean that in all cases it would be sufficient to adhere to the minimum without more. 

88.  The JV argued that there was no evidence that the Engineer had complained about insufficient tremie immersion.  It is said that this is therefore evidence that the Engineer did not even regard it as a problem that some records on their face showed an immersion of only 2.1m[15] – less than Mr. Jesse’s 3m limit. 

89.  However, I doubt the probative value which one could place on the action (or inaction) of the Engineer to a particular matter.  The action or inaction could be due to a large number of reasons.  One just does not know.  Too many imponderables are involved.  And at the end of the day the Court has to be guided by the expert evidence.

90.  Mr. Jesse was cross examined on the apparent “mismatch” between some of the zones of insufficient immersion (as seen from his graphs) and the actual location of defects on some of the piles.  However, Mr. Jesse had explained (and I accept his evidence on this) why there might not always be an exact correlation.  For example, insufficient immersion may not always result in defects.  Also, zones with defects might be “lifted up” during the concrete pouring process.  The more important point which emerges from Mr. Jesse’s analysis of the Concrete Placement Records is, in my judgment, that there was evidence of insufficient immersion and there was scope for defects being caused by this. 

91.  Finally I should mention a challenge that was made to Mr. Jesse’s graphs.  Reference was made to the fact that Mr. Jesse had produced three successive versions of his charts.  For reasons which follow, I reject any attempt to “discredit” the latest version of Mr. Jesse’s charts (which was the version which Mr. Jesse relied on at trial). 

(1)     The first version was produced by Mr. Jesse during the “Without Prejudice” stage of preparing the expert reports.  Mr. Jesse did not exhibit this set of graphs in his own report for he placed no reliance on them.  Mr. Harris, the Defendant’s expert, exhibited this set of charts in his final report for the purpose of commenting on certain anomalies in the records.  But Mr. Harris’s views and comments on this set of charts had been overtaken by what the experts had agreed on their joint, without prejudice, meeting.  It is not entirely clear to me (despite Mr. Harris’s explanation under cross examination) why he still exhibited the earlier set of graphs.  The whole point of having without prejudice meetings between experts was so that views and comments could be exchanged and modifications/ corrections made to one’s report and work.  The fact that Mr. Jesse has, during an earlier stage of the preparation of expert reports, produced a set of graphs which were not relied on at trial is, in the circumstances of this case, not something to which I would attach any significant weight in the assessment of his evidence. 

(2)     In his final report, Mr. Jesse exhibited another set of graphs (the second version).  At trial, Mr. Jesse replaced the graphs in his final report (the second version) with a further set of graphs (the final version).  He had given explanations to the changes.  They related, for example, to the input of the wrong entry into the computer.  I see no reason to doubt the reasons he gave. 

(3)     More importantly, there is no suggestion or evidence before me that the final version of Mr. Jesse’s graphs contained any erroneous inputs of the primary data or were otherwise not an accurate “plot” of the primary data as interpreted by Mr. Jesse.  The dispute between Mr. Jesse and Mr. Harris over the issue of the Concrete Placement Records and the resulting graphs was reasonably well defined.  There is no suggestion or evidence that Mr. Harris did not understand or appreciate the way Mr. Jesse interpreted the data in the Concrete Placement Records (of course Mr. Harris disagrees with the way in which Mr. Jesse had interpreted them, but that is a separate point).  There is nothing to show that it was unduly burdensome for Mr. Harris to cross check the latest version of graphs based on Mr. Jesse’s methodology.  There were no “counter-graphs” from Mr. Harris or the Defendant to suggest or show that even on Mr. Jesse’s interpretation of the Concrete Placement Records, the entries should be put in a different place on the graphs or that the graphs should be plotted in a way which would result in less (or no) “insufficient immersion zones”. 

(4)     That being so, I think I can safely proceed on the basis that Mr. Jesse’s final version represents a fair and accurate graphic depiction of the correlation between (i) concrete elevation and (ii) tremie toe level. 

92.  I therefore find that the JV had not satisfactorily eliminated “bad workmanship” as a cause of the problems.  If necessary, I would also find that Ken On had successfully shown that there was insufficient or lack of immersion.

93.  I therefore find against the JV on its counterclaim.  Even if (which I do not find to be the case) some of the defective piles can be shown to be caused by defective concrete supplied by Ken On, the JV had not attempted to identify (in evidence or submissions) exactly which defective piles were attributable to defective concrete and which ones were not.  In other words the JV’s case was an “all or nothing” one. 

94.  In the circumstances once the JV had failed to prove that all the defective piles were caused by Ken On’s defective concrete, its counterclaim just stands dismissed. 

95.  I have dealt with what I regard to be the major evidential considerations in relation to the issue of defective concrete.  Understandably the parties had referred to many more items of evidence in support of their case.  I shall not overburden this judgment by setting them out and dealing with them in full.  Suffice it to say that I have had regard to all of them and reviewed the parties’ opening and closing submissions in conjunction with the relevant documentary and oral evidence.  I do not think that these items of evidence, collectively or individually, are sufficiently strong or probative to affect or influence my findings on concrete quality set out above.   Without intending to be exhaustive, such minor points include:-

(1)     Incidents of tremie pipe blocking and cement balls:   I am not persuaded by the evidence that these were indicative of any problems with the concrete which were causative of the defects in the piles. 

(2)     The sub-vertical nature of some of the voids:-  The JV relied on the sub-vertical nature of some of the voids to negate the suggestion of poor workmanship.  However, Dr. Anderson had suggested some explanations for the appearance of such voids which were consistent with there being no problem/defects in Ken On’s concrete.  The evidence in this regard is inconclusive. 

(3)     Contemporaneous correspondence whereby the JV made complaints about defective quality:-  There was a good deal of such correspondence.  They may or may not reflect what the JV believed or perceived to be the cause for the problems with the concrete piles.  But even if they truly represented the JV’s views, they are nothing to the point.  The JV may be right, or the JV may be wrong.  That is for me to resolve in this trial having regard to the evidence of primary facts, and admissible expert evidence.  The fact that the JV might have written numerous letters to the effect that the fault was with Ken On was of little probative value. 

(4)     The same can be said of a lot of the witness testimony in this case.  The primary factual witnesses might interpret the contemporaneous events or documents in a particular way, but what the witnesses think the documents meant is nothing to the point.  Contents of contemporaneous documents normally speak for themselves and no amount of “glossing” by skilful drafting of witness statements can detract from that.  The witness statement and testimony of Mr. Jerry Siu (a JV witness) is a good example.  The witness statement interpreted a number of the documents and events with a particular “spin” against Ken On.  But when the contemporaneous documents and events were analyzed objectively, the “spin” disappeared.  A stark example is paragraph 65 of his 1^st witness statement where he said that “Out of the blue [Note: the timeframe here is mid-January 2002], after three months of discussions and agreements to improve concrete quality, [Ken On] suddenly alleged that the low test cubes strength was caused by bad workmanship of our staff that made the test cubes.”  When the documents were objectively analyzed it was abundantly clear that Ken On’s suggestion of bad workmanship did not come “out of the blue” at all but had in fact been consistently made for some time (this is a different and separate point from whether Ken On was right in so suggesting).  There are other points, and I shall not repeat them here.  They were brought out by Mr. Clayton SC’s cross examination of Mr. Siu.

Self-compacting concrete

96.  It will be recalled that I have, earlier in this Judgment, dealt with the issue of incorporation of terms.  I have held that PS16 was not incorporated in its entirety, in consequence whereof PS16.12(6) and 16.43(5) were not incorporated.  However, given the importance attached by the JV to the issue of the concrete to “self compact” and for the sake completeness, I will proceed to deal with the case on the basis that the entirety of PS16 had been incorporated and that there was a requirement to “self compact”. 

97.  This immediately raises one point as to a possible internal inconsistency of the contractual requirements.  

98.  The point is this – It will be recalled that it was a specific requirement of the contract that concrete to be used for bored piles should comply with PS clause 16.97.  This clause sets out (among other things) the requirements of what has been referred to at trial as “marine grade concrete”.  The requirements are as follows:

(1)	Maximum water/binder ratio	0.4
(2)	Total cementitious concrete range	360-430
(3)	PFA replacement level	25-40%
(4)	Minimum characteristic strength	40 Mpa[16]
(5)	Minimum slump	75 mm
(6)	Use of superplasticiser	Competent person on site to spervise second dosage

99.  There is no dispute that the design of Mix 1 complied with the requirements of PS16.97.  But it is common ground between the experts (Dr. Anderson for Ken On, Mr. Harris for the JV) that the stipulations in PS clause 19.97 were inconsistent with the requirements for making a “self-compacting concrete”.  In this connection, the experts are agreed that “self-compacting concrete” should have a collapse slump, flow values of 500 mm or more and 500 kg/cu.m of cementitious binder. 

100.  The JV submitted that Ken On tried to deal with this inconsistency but failed to provide a good concrete.  Specifically the JV suggested that, faced with the constraints of a water/binder ratio of 0.4 (imposed by PS clause 16.97), the only way Ken On could achieve the requisite level of workability or flow was to add more superplasticiser and in doing so, Ken On “overdosed” the superplasticiser. 

101.  I have already dealt with the allegation of “overdosage”.  However, for present purposes, the JV’s bottomline is that Ken On could try as hard as it could to resolve the inconsistency (and the JV had not put forward a positive case as to how the inconsistency could be resolved) but at the end of the day if the inconsistency was unresolvable, then Ken On had to accept the consequences of that.  It is, to put bluntly and in layman’s terms, just “tough luck” for Ken On if it had agreed to a set of terms that were not possible to reconcile. 

102.  Perhaps to soften the harshness of this stance, the JV had contended that faced with this inconsistency, Ken On ought to have returned to the Engineer for instructions, relying on an answer given by Dr. Anderson in cross examination (what Dr. Anderson said was that he agreed that it would be sensible tom discuss and communicate).  I do not think that it is being alleged or suggested that somehow Ken On was in breach of contract or in breach of some sort of duty of care in not discussing this with the Engineer; the implication was simply that if Ken On found itself in the present predicament then it had itself to blame in not resolving this issue with the Engineer earlier. 

103.  I do not agree with the JV’s submissions as to the significance of the inconsistency and how it should have been dealt with by Ken On. 

(1)     First of all I do not think it is relevant to inquire whether Ken On ought to have returned to the Engineer for instructions.  No doubt, on a high level of generality it is always sensible to discuss and communicate.  The contractual terms, however, had to be reconciled and analyzed on their own without regard to how any conflict or inconsistency might have been avoided beforehand.

(2)     More importantly I do not accept the “tough” stance taken by the JV, namely that if Ken On found itself faced with inconsistent specifications then it had to accept the consequences.  It is trite that one must construe the terms of a contract as a whole and that where possible, clauses and requirements within a contract are to be construed to avoid inconsistency rather than as giving rise to inconsistency.  In my view there is a way in which the contract between the parties can be construed to reconcile the requirements of clause 16.97 on the one hand, and the requirement of “self-compacting” on the other.

104.  The key to the issue is that the concept of “self-compacting” is not necessarily one which admits of only one immutable meaning.  In other words, “self compacting concrete” does not necessarily mean only the type of concrete defined by the parameters which I mentioned in paragraph 99 above namely “a collapse slump, flow values of 500 mm or more and 500 kg/cu.m of cementitious binder”. 

105.  In the context of the present case (where the specifications did not permit a concrete of such parameters to be made) the concept could simply mean a concrete which was merchantable and fit for purpose, namely a concrete which was (as submitted by Ken On in paragraph 3.23 of its Closing Submissions, which I accept) capable of compacting under the process that was used to place it in the piles.  The concrete supplied by Ken On was so capable (as demonstrated by the relatively small number of Kin Wing defective piles).  Alternatively it has not been demonstrated by the JV that the concrete was not so capable. 

106.  It may be that had the concrete been “self-compacting” in the sense of concrete “having a collapse slump, flow values of 500 mm or more and 500 kg/cu.m of cementitious binder” it would perform even better, or easier to work, or be more “free flowing”.  But that does not mean that the actual concrete supplied by Ken On was not “self-compacting” (in the sense contended by Ken On). 

107.  The JV relied on an answer given by Mr. Ip (in accepting that Ken On’s concrete had to be self-compacting) as supporting the incorporation of a contractual requirement that the concrete should be self-compacting.  First of all I do not think that the question of the requisite concrete quality under a written contract like that in our case was to be ascertained or defined by what a witness subjectively thought to be the required quality.  Either the requirement was incorporated by reference to the applicable legal rules or it was not. 

108.  More importantly, I accept Ken On’s submissions in paragraph 3.24 of its Closing Submissions as to how Mr. Ip’s answer was to be understood or interpreted.  It meant no more than a concrete which was merchantable, fit for purpose, and was capable of compacting under the process which was used to place it in piles.

Repudiatory breach and Ken On’s entitlement to cease supply

109.  Following my finding that Ken On had not supplied defective concrete, it followed that it was not in breach of any contractual obligations it owed to the JV.  The JV was therefore not entitled to withhold payment of Ken On’s invoices. 

110.  By early May 2002 the JV had withheld payment of certain invoices issued by Ken On.  On 6^th May 2002, Ken On wrote to the JV chasing for payment of HK$1,742,561.  Correspondence then ensued.  To cut a long story short, by letter dated 16^th May 2002 Ken On sought to suspend further deliveries until the overdue amount had been paid.  By letter dated 17^th May 2002 (received by Ken On by fax on 21^st May 2002) he JV sought to justify its withholding of payment on the basis that because of the voids and honeycombs in the concrete the Employer had withheld payment to the JV and that enormous expense had been incurred in remedial works.  Delivery of concrete in fact ceased on 17^th May 2002.  There were then offers and attempts to resolve the matter, but on 17^th May 2002 the JV had already obtained a quotation from China Concrete.  In the end China Concrete was appointed by the JV as supplier of concrete in replacement of Ken On. 

111.  The question boils down to this:   Did the JV’s (unjustified – on the basis of my finding against the JV’s counterclaim) withholding of payment entitle Ken On to cease delivery of concrete?  If the answer was yes, then Ken On would not be acting in repudiatory breach in ceasing to supply concrete to the JV from 17^th May 2002 (and JV would be in repudiatory breach by replacing Ken On as concrete supplier and by continuing to refuse to pay).  If the answer was no, then in ceasing supply of concrete Ken On would itself be acting in repudiatory breach of contract (even though the JV was also acting in breach in not paying the outstanding sums).

112.  The JV contended that refusal or delay in paying an outstanding contractual sum (even if unjustified) did not go to the root or essence of a contract so as to entitle the other party to suspend further work or delivery.  The JV further contended that, in the context of sale of goods, if it was intended that payment for goods already delivered should be a condition precedent to further deliveries under the same contract then this should be expressly provided for.

113.  The answer to the JV’s arguments, in my judgment, lies in clause 13 of Ken On’s Conditions of Sale, which provided as follows:- “Ken On reserves the right to stop delivery without notice in the event of any non-payment by the Contractor”.  I interpret this provision as conferring an express entitlement on Ken On to cease supply of concrete in the event of non-payment by the JV irrespective of whether, under the general law, such non-payment amounted to a repudiatory breach of contract. 

114.  The JV contended that clause 13 did not give such an entitlement, because it spoke of “reserving” a right and if the general law did not confer a right upon Ken On to cease delivery, there was no contractual right to “reserve”.  On the JV’s contention, the clause only had the effect of “reserving” the right to stop supply of concrete in case the non-payment of purchase price by the JV constituted a repudiatory breach.

115.  I reject the JV’s argument.  The argument would render clause 13 otiose, for if clause 13 only “reserved” a right which Ken On enjoyed under the general law anyway, one might ask rhetorically what the point was in “reserving” it.  It may be said, on the basis of the JV’s argument, that clause 13 was included as part of a “belt and braces” approach but there was nothing to indicate there was any risk that Ken On would otherwise lose (or be held to have waived) that right so as to call for any specific reservation. 

116.  I therefore hold that Ken On was entitled to cease delivery.  The JV was in repudiatory breach of contract.  Ken On was entitled to (as it did) accept the JV’s repudiatory breach.

Quantum of judgment

117.  This clears the way for me to assess the quantum of Ken On’s claim.  It comprises the following:-

(1)     HK$5,467,983.5 being invoiced amounts for concrete delivered in May, April and May 2002.

(2)     Contractual interest as set out in paragraph 5.4 of Ken On’s Closing Submissions and continuing thereafter at 2% per month to the date of Judgment.

(3)     Loss of profits of HK$362,853 as set out in paragraph 6.5 of Ken On’s Closing Submissions.  I shall leave it to the parties to work out the rate and period of any interest payable on this sum, failing which there is to be liberty to restore the matter before me for argument.

118.  I grant Judgment for the above sums, with a costs order nisi in favour of Ken On. 

Further issues on the JV’s counterclaim

119.  In case this matter is to go further, I should set out my brief findings on the JV’s counterclaim on the hypothetical basis that the JV had been able to prove the defective nature of Ken On’s concrete.

120.  If Ken On’s concrete was defective then the JV would be entitled to the costs of remedying the defective piles.  The original remedial costs as agreed were HK$11,050,781.  However, during the course of the trial a sum of HK$264,226.79 was agreed to be deducted from the remedial costs because the problems with six honeycomb piles were caused by matters other than defecgive concrete supplied by Ken On.  The said sum of HK$264,226.79 represented the rectification costs referable to these six piles.  The final figure representing the JV’s claim for remedial costs is HK$11,050,781.17 – HK$264,226.79 = HK$10,786.554.38. 

121.  There is a further claim for the JV’s liability to three of its sub-contractors for liquidated damages which the JV had to pay to them as a result of delays caused by the remedial work resulting from the defective concrete.  The breakdown is:

(1)     Sub-contractor for pre-fabrication of box-culverts (Harbour Engineering Co. Ltd.  “Harbour”):- HK$260,000.

(2)     Sub-contractor for lifting ashore of pre-fabricated box culvert units (Honesty Shipping (Hong Kong) Co. Ltd. “Honesty”):- HK$905,000.

(3)     Sub-contractor for box culvert installation (FETDC of Guangzhou Railway Group “Guangzhou”):- HK$863,964. 

122.  There is no dispute that the JV had paid the relevant amounts (as stated above) to the three contractors in question.  However, to succeed in this claim, the JV has to prove (among other things) that there was a legal liability for it to pay the three contractors. 

123.  For Harbour and Guangzhou, Mr. Aiken SC acknowledged that there were no liquidated damages provisions in the relevant sub-contract.  However, Mr. Aiken SC contended that there was a common law right to damages for delay which was foreseeable by Ken On.  However, that presupposes a contractual duty on the part of the JV to ensure that the sub-contractors would be able to finish their work by a particular deadline (or a duty not to prevent the sub-contractor from finishing the work before such a deadline).  I have not been referred to any such deadline or any evidence that the JV had so prevented the sub-contractor. 

124.  Further, if one is to rely on the sub-contractor’s common law right to recover damages for delay then the JV would have to prove what such recoverable common law damages would be.  There had been no attempt to do so. 

125.  For Honesty, there is a document entitled “Loading of Construction Site Pre-Cast pieces special clauses”.  It bears the notation “SC/001” at the bottom.  It was not signed.  It contained a provision (clause 4) to the effect that if the second shipment of pre-fabricated units could not be completed by 31^st July 2002 then a sum of HK$10,000 per day would be payable. 

126.  This is, however, a curious document because in the trial bundles it was placed after a document called “Conditions of Sub-Contract” (bundle 20 pages 205-236) and a number of other documents apparently of a contractual nature, such as Special Conditions of Contract and Supplementary Conditions of Sub-Contract, etc (bundle 20 pages 237-331).  All these documents, as well as SC/001, were listed out in the “contents” page (bundle 20 page 204) of what appeared to be a booklet or volume of sub-contract documentation for the loading work. 

127.  However, when one examines the provisions in the “Conditions of Sub-Contract” (which appears to be the main contractual document which defines what other documents were to form part of the sub-contract), one gets into the following difficulty about SC/001.  In the Conditions of Sub-Contract the phrase “the Sub-Contract” was defined as the “Conditions of Sub-Contract” together with any such other documents as were specified in the Third Schedule.  When one turns to the Third Schedule, under the heading “Further documents forming part of the Sub-Contract”, the words “Not Used” appeared.  SC/001 was not listed there as having been incorporated as part of the Sub-Contract.

128.  I do not have any evidence as to how the booklet (or the bound volume) came to be compiled or the status of the booklet/volume.  I do not have any evidence that the JV and Honesty had in fact reached agreement on the terms set out in SC/001 (and that someone had simply omitted to include a reference to SC/001 in the Third Schedule), or whether SC/001 was included in the booklet/volume for other reasons.  I note, however, that from time to time in the text and Schedules of the Conditions of Sub-Contract there were manuscript references to particular clauses in SC/001:-  see e.g. clause 17(3) of the Conditions of Sub-Contract contained a manuscript reference to SC/001 clause 7; and in the Fourth Schedule of the Conditions of Sub-Contract (dealing with “Price”) a part of it was deleted and there was a manuscript reference to S/C001 item 8.  It is therefore a distinct possibility that the inclusion or appending of SC/001 after the Conditions of Sub-Contract was not intended to signify a wholesale incorporation of all clauses in SC/001, but simply to serve the purpose of enabling these particular clauses to be incorporated by manuscript reference (the document SC/001 being possibly a working draft used by the parties during negotiations and which happened to be a handy document to be appended for the purpose of incorporating those few specific items).  The status of SC/001 was not touched upon in the witness statements or oral testimony.  It is not necessary for me to speculate or investigate or adjudicate on the status of SC/001.  The burden is on the JV.  Suffice it for me to say that the JV had failed to adduce evidence or address any legal arguments to support the incorporation of clause 4 of SC/001. 

129.  The JV had therefore failed to show that it was legally liable to pay the various sums (or indeed any sum) to the sub-contractors by way of liquidated damages or compensation.  No attempt was made to establish any alternative case that the JV’s payments were a reasonable compromise of a questionable claim.  Its claim for damages based on such supposed liability would therefore fail even if Ken On’s concrete was defective. 

130.  This renders it unnecessary for me to deal with the expert evidence on programming.  In case the matter goes further, I would simply make some very brief findings as follows.  I should start by saying that the evidence in this regard is not entirely satisfactory as both experts (Mr. Jesse for Ken On; Mr. Allington for the JV) had to act on the basis of a lot of assumptions and hypotheses, many of which could not be proved or verified.  There is, put bluntly, a good deal of guesswork involved. 

131.  I do not think that I can safely act on Mr. Allington’s evidence for the purpose of ascertaining the period of delay caused by the remedial works, for the reasons set out in paragraph 8.22(3) of Ken On’s Closing Submissions.

132.  That, however, is not the end of the matter.  There is still Mr. Jesse’s evidence.  As to this:

(1)     I do not accept Mr. Jesse’s blanket rejection of the JV’s Master Programme as being reasonable plans for the execution of works (paragraphs 43 and 63 of his report). 

(2)     I therefore reject his conclusions in paragraphs 91 and 92 (both of which had their “root” in the baseline programme which he constructed based on the JV’s Rev 0 and which he explained in paragraphs 64 to 73). 

(3)     On the basis of the reports and evidence before me, the JV’s Rev 7 is close to a “reliable” baseline programme because it was the closest to the start of the uncertainty over the disputed concrete quality.  I do not think that the points set out in Mr. Jesse’s paragraphs 77(a) to 77(c) detract from this.

(4)     On a broad brush basis, I accept Mr. Jesse’s reckoning of the figures in paragraph 89 of his Programming Report except that I do not accept his speculative discounting of 35 days as being due to “prolongation of remedial works”. 

(5)     My finding on this aspect is therefore the period of delay was 51 days (being 16 days in paragraph 90, plus the 35 days in paragraph 89(c) which I had “disallowed”). 

133.  I should state that I have considered the possible impact of my rejection of parts of Mr. Jesse’s evidence (on this topic) on the weight which I should attach to his evidence in relation to the concrete quality and piling issues (and on my assessment of him as an expert witness).  In my judgment my rejection of parts of his evidence in relation to the present topic in no way affected my view on (and acceptance of) his evidence on “the concrete issues”. 

134.  I have not in this judgment dealt with each and every point raised by Counsel.  I have, however, taken them all into account in coming to my conclusions.

135.  I thank Counsel on both sides for their assistance. 

Mr Nigel Aiken SC leading Mr James Lee, instructed by Messrs Fung Wong Ng & Lam, for the Defendant

[1] At the time when the relevant events took place, the Plaintiff was called Ken On Concrete Company Limited.  Its name was subsequently changed to Maxking Concrete Company Limited.  Throughout the trial the Plaintiff has been referred to by its former name.  In this Judgment the Plaintiff shall also be referred to by its former name, Ken On.

[2] These clauses were not mentioned in quotation no.120969 (which was the basis of the February 2002 Agreement) but Ken On accepted that as quotation no.120969 was stated to be supplementary to quotation 116951, these clauses would apply to the February 2002 Agreement in the same way as they would apply to the May 2000 Agreement.

[3] AAR stands for “Alkai-aggregate reaction”.

[4] There was also a reference in that document to Sika Plastiment though none was used in this particular mix, Mix 1.  This was another admixture made by Sika but unlike Sikament NN it was not a super-plasticiser.

[5] In fact the letter “split” the recommended dosage into “Normal application – 0.5%-2%; For special requirement – 2% above to max 3%” but I do not think it was disputed that this tallied with the figures found in the data sheet. 

[6] I have some difficulty in following this argument.  The JV’s argument is that the Engineer gave its approval to the trial mix on the basis that river sand was used.  Let us assume that this was in fact the basis.  The “approved Mix 1” (I use this to cover both the “paper approval” of the design and the approval of the trial mix) would therefore have contained an approval of (i) use of a dosage of Sikament NN (8 lit/kg) which, on the JV’s case, was already an overdose (see above) and (ii) use of river sand.  The JV’s argument goes on to say that because CRF instead of river sand was used, this would necessitate use of even more (words used in the JV’s closing submissions at paragraph 50) superplasticiser.  The words “even more” could only be mean “even more than that specified in the design mix of Mix 1, namely more than 8 lit/kg” (it cannot mean that the 8 lit/kg approved dosage was itself the result of using CRF; otherwise this point adds nothing to the “overdose” point).  But there is no evidence that a dosage higher than the approved dosage namely 8 lit/kg had been used in the actual concrete delivered to site.   Be that as it may, I shall still proceed to deal with the “CRF argument” on its merits to see if there had been any departure from the approved sample.

[7] This is also Dr. Anderson’s interpretation, which I accept.

[8] This is found on a document headed “Mix Design Information” dated 21^st April 2001 and this document was also part of the materials submitted to the Engineer in order to secure approval for the design of Mix 1. 

[9] One must not lose sight of the fact that whilst the focus of this action is Mix 1, at the time concrete of other design mixes were also being submitted to the Engineer for approval, and Mix 1 was only one of them.

[10] In Mr. Harris’s report this figure was originally stated to be 21 but as accepted by Mr. Harris in cross examination, the figure of 21 was the result of a computational error and the correct figure should be 18.

[11] In Mr. Harris’s report this figure was stated as 118 but, as Mr. Harris accepted in cross examination, the figure of 118 was the result of a computational error and the correct figure should be 115.

[12] Mr. Harris’s actual table 4 says “118” but he accepted in cross examination that this was an arithmetical error and it should have been 115.

[13] It is common ground between the experts that the tremie would only be lifted after the completion of one load – i.e. the tremie would not be lifted half way through a load.

[14] Ideally one could have measured the “embedded length” for each and every load and then inserted them in the boxes.  That, however, was not what Paul-Y had done.  I note that this was in fact what Kin Wing had done for some of its piles (e.g. piles 46D and 53E).

[15] Pile 14C.

 [16] The unit “Mpa” is the same as the unit “N/sq. mm”