LIANG JIAN XING v. JINGO INTERIORS DESIGN LTD

DCCJ 5986/2008

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 5986 OF 2008

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JUDGMENT

1.  This is an action brought by the Plaintiff against the Defendant for damages for defective works and liquidated damages.

Background

2.  At all material times, the Plaintiff is and was the registered owner of a residence duplex being House No. 22, Margaux Avenue, The Vineyard, Yuen Long, New Territories (“the said property”).  And the Defendant is and was at all material times carried on the business of interior design and construction of renovation work.

3.  In early 2008, the Plaintiff had to carry out renovation work at the said property.  On 1 April 2008, the Plaintiff and the Defendant entered into a design agreement whereby the Plaintiff instructed and the Defendant agreed to carry out the design and drawings for the renovation work to be carried out in the said property (“the Design Agreement”).

4.  It is not disputed that, according to the Design Agreement, the fees payable to the Defendant is HK$135,000.00.  The payment terms are as follows:

(a) 50% upon confirmation of the Design Agreement.

(b) 40% upon issue of CAD drawings and material schedules.

(c) 10% upon completion of works by contractor.

5.  It is not in dispute that the Plaintiff had already paid HK$121,500.00 to the Defendant representing 90% of the fees payable under the Design Agreement.  The Plaintiff refused to pay the balance of the 10% on the ground that the Defendant has failed to provide the as-built drawings for the said property.  The Defendant denies that they have to supply the as-built drawings as there is no such contractual term/duty under the Design Agreement. Accordingly, the Defendant counterclaims for payment in the sum of HK$13,500.00.

6.  It is not disputed that when the Plaintiff entered into the Design Agreement with the Defendant, they have not instructed the Defendant to carry out any fitting out work or renovation work in the said property in accordance with the design to be prepared by the Defendant.  On 20 May 2008, the Plaintiff and the Defendant entered into the fitting out agreement (“ the FO Agreement”) whereby the Plaintiff agreed to engage the Defendant to carry out interior fitting out works at the said property for a sum of HK$832,395.80.  Full details of the items of works to be carried out by the Defendant had been set out in the FO Agreement.

7.  According to the FO Agreement, the contract price shall be paid in the following manners:-

(a) 30% on the signing of the FO Agreement.

(b) 30% on the completion of the pipe works of the project.

(c) 20% on the arrival of the wooden furniture at the said property.

(d) 15% upon completion and hand over of the said property to the Plaintiff.

(e) 5% upon the expiry of 1 month after the maintenance period.

8.  For completion, the FO Agreement further provides that:-

“預計工程為50個工作天(最終已工程進度表為準)。”

9.  Terms and condition No. 9 of the FO Agreement further provides that:

“若因非天氣，自然災害及客戶要求外，承判商未能按合約進度完工時，客戶有權保留向承判商追討延遲完工的賠償，賠償金額為每日港幣 $5,000.00。客戶之後加工程項目如影響進度，我司會順延完工，期敬希垂注。”

10.  It is the case of the Plaintiff that on 26 May 2008, the Defendant provided a construction program to the Plaintiff which stated that the completion day of the fitting out work be on 1 August 2008.  On 11 June 2008, the Defendant sent another construction program to the Plaintiff by an e-mail stating that the completion day would be 29 July 2008.  The Plaintiff claims that the works had only been completed and the said property was handed over to the Plaintiff on 11 November 2008.  Accordingly, the Plaintiff said the Defendant has failed to complete the work in time and claims liquidated damages for delay from 31 July 2008 to 11 November 2008, a total of 72 days and a sum of HK$360,000.00.

11.  The key defence by the Defendant on the claims for liquidated damages is the date for completion has subsequently been varied by agreement of the parties to 11 November 2008.  The Defendant relies on 4 construction programmes issued from time to time.  There is no dispute on the first two construction programs (which I refer to above).  The Defendant’s claim is that on 31 July 2008, they had issued the 3^rd construction program when the completion day was revised to 31August 2008.  The Plaintiff denies that he has agreed to the revision.  The Defendant further claims that on 8 August 2008, they have issued the 4^th and final construction programs when the completion day/hand over day was revised to 11 November 2008.  They also claim that the Plaintiff has agreed to the completion date of 11 November 2008 in a meeting on 23 October 2008.  The Defendant also claims that the delay is caused by the delay on the part of the Plaintiff and his agent to approve the variation orders added after the commencement of the work, and they are entitled to extend the completion date.

12.  It is not disputed that the said property was handed over to the Plaintiff on 13 November 2008.  It is the case of the Defendant that they could hand over the said property to the Plaintiff on 11 November 2008 and there is no delay in completion.  

13.  On the day of hand over on 13 November 2008, a defect list was prepared by the parties.  There was a further joint inspection on 26 November 2008 and there was a further revision to the defect list.  For the purpose of this trial, the parties have agreed at the outset of the trial that the defects in dispute are limited to 67 items listed in an agreed list of defects (“the Agreed List”).  It is the Plaintiff’s case that the Defendant has failed and refused to carry out rectification works for the said defects until sometime after this proceeding has been commenced.  The Plaintiff has lost trust with the Defendant and instructed another contractor, Mei Nga Decoration Engineering Company (“Mei Nga”) , to carry out the necessary rectification works.  The Plaintiff claims that they are entitled to be indemnified by the Defendant for the price of the work done by Mei Nga in the total sum of HK$322,680.00.

14.  It is the case of the Defendant that the Plaintiff has denied access for the Defendant to enter the said property to carry out the rectification works. Each party has instructed one independent expert to comment on the defects, and the cost of the rectification works. 

15.  It is not disputed that, the Plaintiff had paid HK$665,917.82 for work done under the FO Agreement.  As the work was carried out, variation of work had been made by the Plaintiff.  Some of the variation orders submitted by the Defendant are denied by the Plaintiff.  And it is agreed that the Plaintiff had made a sum of HK$36,240.00 in payment of the agreed variation orders.

16.  After this proceeding has been commenced, the parties have instructed experts to assess the charges of the variation orders. When an item in the FO Agreement has been varied, and variation order is given, the charges of the original items would not be included in the claim for price of the FO Agreement, but under the corresponding variation order. The experts have agreed the value of the completed work done under the FO Agreement, namely, a sum of HK$618,558.82 was agreed to be payable for the work done under the items completed under the FO Agreement.  It is also agreed that, for the agreed variation orders, the price payable to the Defendant is HK$65,860.00.  There are another 11 variation orders in dispute.  According to the Plaintiff’s expert, he assessed the amount payable under such disputed variation orders at HK$50,904.00, and the Defendant’s expert assessed the value at HK$112,794.00. It is the Defendant’s case that the valuation of the expert they engaged should be adopted and at the end of the day, there is an amount due and payable to them under the FO Agreement and/or the variation orders.

17.  When the writ was issued, there was a further dispute between the Plaintiff and the Defendant on the conduct of debt collectors engaged by the Defendant. The Plaintiff seeks an injunction against the Defendant.  The matter has been resolved and I am not invited to adjudicate on the issue, and no evidence has been adduced.

18.  The followings are the issues in dispute:-

a. Whether the Defendant has to supply as-built plans;

b. The second issue in dispute is whether the Defendant and the Plaintiff had agreed to extend the completion day to 11 November 2008, or is there any contractual basis that the Defendant may unilaterally defer the completion to 11 November 2008, and whether the Plaintiff is entitled to any liquidated damages;

c. The third issue in dispute is the items of defects and the reasonable costs for rectification; and

d. The value of the disputed variation orders.

19.  I will first consider the dispute on the agreement as to the completion/hand over day for the project.

20.  There is only one factual witness for the Plaintiff, Mr. Cheung Wai Ming Larry (“Mr. Cheung”).  He is a staff or agent of the Plaintiff and was at all material times responsible for negotiating and supervising the project.  There is no dispute that he has entered the Design Agreement and the FO Agreement on behalf of the Plaintiff with the Defendant’s agent.  Having referred to the FO Agreement, Mr. Cheung gave evidence that the agreed construction period is 50 working days.  The said property was handed over to the Defendant on or about 20 May 2008 and the practical completion day shall be by 31 July 2008.

21.  I believe it is not really in dispute that the first completion day agreed by the parties should be either 31 July 2008 or 1 August 2008.  The day 1 August 2008 was given by the Defendant in their first construction program. In the closing submission, Mr. Leung, counsel for the Plaintiff agrees that the Plaintiff accepts 1 August 2008 to be the agreed completion day.

22.  Mr Cheung also complained that the Defendant had poor site management. He had issued a number of e-mail to the Defendant reminding them to catch up with the progress, but had no reply.

23.  Before considering the evidence of the Defendant, I have a quick consideration of the relevant clause on completion day.  Although the terms “estimated practical completion” was used in the FO Agreement, and the date is subject to the final construction program, the contract must provide a mean to fix a completion day otherwise the subsequent liquidated damages clause would be meaningless.  I believe the 50 working days is a rough estimate.  The main emphasis must be on the construction program agreed by the parties.

24.  There is no dispute that the 1^st and/or 2^nd construction program has been agreed by the parties.  Once the construction program has been agreed, the Defendant should not be entitled to vary the completion day save and except in accordance with the provisions of the contract, or by mutual agreement.  Accordingly, given 1 August 2008 has been agreed between the Plaintiff and the Defendant, the burden rests on the Defendant to prove that this completion day has been varied subsequently, either by mutual agreement with the Plaintiff, or pursuant to the express provision in the FO Agreement, such as delay by variation orders.

25.  It is indeed the Defendant’s case and the evidence of Mr. Lau Wai (“Mr. Lau”), that after the construction has commenced, Mr. Cheung made a number of amendments to the design drawings.  Amended drawings, new material samples had to be approved by the Plaintiff.  The Defendant had to wait for the confirmation by Mr. Cheung before they could proceed with the construction work.  Mr. Lau complained that only in late July when Mr. Cheung confirmed certain drawings.

26.  Further, as the final drawings and design are different from the original drawings and design, a number of variation orders had to be made.  Again, Mr. Cheung was late in confirming the variation orders causing further delay to the construction.

27.  Mr. Lau said in earlier October 2008, the Plaintiff Mr. Liang Jian Xing (“Mr Liang”) made a telephone call to the Defendant asking about the progress of the works.  They were required to prepare a fresh construction program.  On 8 October 2008, the 4^th construction program was sent to Mr. Cheung.

28.  Mr. Lau gave evidence that on 23 October 2008, he and his colleague, one Miss Tsang Chui King (“Miss Tsang”), visited the Plaintiff Mr. Liang in his office for a meeting on the progress of the works.  In the meeting, he had explained to Mr. Liang that the works had been delayed because Mr. Cheung could not confirm the material for use.  Mr. Liang requested Mr. Cheung to confirm the material immediately and in the same meeting, Mr. Liang confirmed and agreed that the completion day be extended to 11 November 2008.

29.  On cross-examination, Mr. Leung put to Mr. Lau that on 21 July 2008, he issued to Mr. Cheung the 3^rd construction program, and applied for extension of the completion to 31 August 2008.  He pointed out to Mr. Lau that by an e-mail dated 23 July 2008, Mr. Cheung refused the application for extension.  Mr. Lau had no quarrel with the wordings of the e-mail.

30.  On the 4^th construction program when the completion day was extended to 11 November 2008, Mr. Leung put to Mr. Lau that Mr. Cheung never agreed to the extension.  Mr. Lau said if Mr. Lau rejected their application, he should have given them e-mail as in the previous occasion.  He did not know that Mr. Cheung disagreed with the extension.

31.  Mr. Leung cross-examined Mr. Lau on a number of e-mails issued by Mr. Cheung to Mr. Lau and its staff Alan.   Mr. Leung put to Mr. Lau that some time in earlier September 2008, Alan left the employment of the Defendant, and there was no project manager to supervise the works at the said property.  Mr. Lau confirmed that he was still in charge.  The reason why there was delay is that the drawings had not been finalized by Mr. Cheung.  He also claimed that part of the delay was due to non-payment of their fees by the Plaintiff.

32.  On the issue of the meeting with Mr. Liang, Miss Tsang also gave evidence to confirm their meeting.  Mr. Leung had not cross-examined either Mr. Lau or Miss Tsang on this meeting and the Plaintiff had chosen not to give evidence in Court.  In his closing submission, Mr. Leung submitted that it is improbable that having delegated the renovation project of the said property to be handled by Mr. Cheung, the Plaintiff Mr. Liang would unilaterally grant and approve an extension of time to the Defendant at an alleged meeting held on 23 October 2008. However, given that Mr. Cheung is an agent for the Plaintiff, there is nothing to prevent the Plaintiff from having further agreement with the Defendant directly.  As rightly pointed out by Mr. Ho, counsel for the Defendant, both Mr. Lau and Miss Tsang had not been cross-examined in this point.  And the Plaintiff himself chose not to give evidence in Court.  Further, according to the evidence of Mr. Lau and Miss Tsang, Mr. Cheung was present in this meeting to approve the materials.  There is no denial by the existence of this meeting.

33.  Mr. Ho, also referred me to an e-mail by Mr. Cheung to Mr. Lau dated 9 October 2008, it reads:-

“In receipt of your revised program for the captioned project, this is fully complied with the telephone conversation between our side and [Mr. Lau]. We effected the payment as per request upon receipt of your revised program.”

34.  The revised program is the 4^th construction program. It is interesting to note what Mr. Cheung referred to a telephone conversation between “our side” with Mr. Lau.  It suggests there were some other persons on behalf of the Plaintiff (which may include the Plaintiff) having telephone conversation with Mr. Lau.  This supports the evidence of Mr. Lau that he had been requested by the Plaintiff to prepare the 4^th construction program.  Further, in this e-mail, Mr. Cheung did not mention about the original scheduled completion day on 1 August 2008 anymore nor had he reserved their right to claim for liquidated damages.

35.  Mr. Ho further referred to the payment pattern by the Plaintiff.  After 1 August 2008, the Plaintiff had made three other payments for the FO Agreement.  He suggested to Mr. Cheung that if he had not agreed to extend the day of completion, he should deduct liquidated damages from the payment.  I do not agree that the failure by the Plaintiff to set off the liquidated damages from this payment could amount to an estoppel or denial of their right to claim for liquidated damages, if applicable.  However, the payment effected on 9 October 2008, reading with the said e-mail from Mr. Cheung to Mr. Lau added weight to the evidence of Mr. Lau that the Plaintiff himself has interfered with the progress. 

36.  When cross-examined by Mr. Ho, Mr. Cheung tried to explain that he asked for the 4^th construction program for the purpose of ensuring when the project could be completed, and for calculation of liquidated damages. Given the character of Mr. Lau as reviewed in his various e-mail with the Defendant, I will be surprised that he did not put down on record that he reserved the right for the Plaintiff to claim for liquidated damages.

37.  In summing up, I accept the evidence of Mr. Lau that in early October 2008, he had been requested by the Plaintiff to submit the 4^th construction program.  I also accept his evidence that he had had a meeting with the Plaintiff on 23 October 2008 when the Plaintiff agreed to extend the completion day on 11 November 2008.  Accordingly, the completion date has been varied by mutual agreement to 11 November 2008.

38.  It is not disputed that the said property was handed over to the Plaintiff on 13 November 2008.  Mr. Cheung in his evidence said the hand over time was originally fixed at 6 p.m. on 11 November 2008.  He found out many outstanding works and defects at the said property, and required the Defendant to rectify such outstanding issues before hand over.  Mr. Cheung also stated that on 12 November 2008 at 5 p.m., the situation remained the same and he rejected the hand over.  And finally, the hand over took place at 10 a.m. on 13 November 2008.  Accordingly there is a possible claim for 2 days’ delay and liquidated damages therefore.

39.  In cross-examined by Mr. Ho, Mr. Cheung did not point out the exact defects, other then some nozzles not installed.

40.  Mr. Lau in his evidence said on 11 November 2008, it was originally scheduled for Mr. Liang, the Plaintiff to attend the said property for the hand over.  At 6 p.m., Mr. Liang did not turn up.  He requested Mr. Cheung to check the items for hand over.  He accepted that the nozzles for the air-conditioners were on the way to the said property and had not been installed.  It could be easily installed once they arrived.  Mr. Cheung refused to check the works and left.

41.  In the evening of 11 November 2008, the Defendant received Mr. Cheung’s e-mail requesting for inspection and hand over on 13 November 2008.  On 13 November, both have agreed a list of rectification.  Mr. Cheung said the gardening company had to carry out their construction work and after they left, he would inform the Defendant to rectify the agreed items.

42.  I accept the evidence of Mr. Lau that, save the nozzles, the works had been completed and ready for hand over on 11 November 2008.  It is not disputed that even on 13 November 2008, after the hand over, there were rectification works to be done.  From the conduct of the parties, these defects would not affect the hand over and completion.  And given that Mr. Cheung only referred in his evidence to the Defendant’s failure to fit the nozzles of the air-conditioners, and that Mr. Lau said, and which is not disputed, that the nozzles could be installed in 5 to 10 minutes upon arrival, I conclude it is an item that would not defer the completion.  In the circumstances, I find that the Defendant had completed all the works on 11 November 2008 and there are no liquidated damages payable.

43.  I shall now move on to consider the complaint of the defective works and workmanship in the renovation project carried out by the Defendant in the said property.  According to the evidence of Mr. Cheung, on 13 November 2008, after the joint site inspection, they had prepared an agreed list of defects.  Two weeks later, on about 26 November 2008, an update list of defects was recorded during the second joint site inspection in which there are 81 defective items pending rectification by the Defendant.  Mr. Cheung claims that he had repeatedly requested the Defendant to carry out the rectification, but the Defendant failed to rectify the works.  As a result, in or about January 2009, he started locating a substitute contractor to carry out the rectification works.  On about 26 February 2009, Mei Nga was engaged to complete the outstanding works and the defect works.  The works were completed by Mei Nga in about mid May 2009 and the Plaintiff paid a sum of HK$406,050.00 to the contractor.  Further, new wallpaper in the sum of HK$3,600.00 had been purchased for the rectification works.  The Plaintiff therefore claims a sum of HK$409,650.00 as damages against the Defendant.  Expert opinion was introduced for a number of issues which include:-

(a) The value of work done under the FO Agreement.

(b) The defective works or workmanship.

(c) The cost for rectification.

44.  Two expert reports had been prepared respectively by Mr. Wong Man Hong (“Mr. Wong”), an authorized person engaged by the Plaintiff, and Mr. Yu Lik Sang (“Mr. Yu”) an associated member of Chartered Institute of Building engaged by the Defendant.  Both experts attended Court for cross-examination and I shall come to their evidence later.

45.  At this juncture, I should mention the effort of both experts and legal representatives of the parties for sensibly agreeing on matters that are not in dispute leaving only items in dispute for my adjudication.  Such sensible steps have greatly reduced the work of this Court.

46.  According to a supplemental joint statement by the said experts dated 12 May 2010, the experts agreed that the actual work done of the FO Agreement is HK$618,558.82.  Counsels confirm the agreement of parties that this is the amount payable under the FO Agreement by the Plaintiff to the Defendant subject to the claim for damages and liquidated damages by the Plaintiff.

47.  Further, as mentioned above, there were various variation orders made between the parties during the course of works.  The experts agreed that the value of 14 variation orders as set out in paragraph A1.1 of appendix I of the joint statement are HK$65,860.00 and both parties agreed that this sum is payable by the Plaintiff to the Defendant for these variation orders.  There are 11 variation orders as set out in paragraph A1.2 of appendix I of the said joint statement which the value could not be agreed and I shall rule upon them later.

48.  I shall now proceed to deal with each item of defects and to find whether it is a defect which the Defendant is liable to rectify, and the cost. In coming to my conclusion, I have in front of me all the expert reports of Mr. Wong and Mr. Yu and the quotation from Mei Nga.  I am grateful to counsels as they have prepared written submission in respect of each item and I have considered their respective submission before my ruling.  I do not intend to repeat all the material I read in this judgment.

49.  Item 1 relates to the uneven wooden platform on the roof of the said property.  The Plaintiff claims a replacement for the whole platform.  The main complaint as reviewed by Mr. Wong is uneven wood stripe, crack and lose timber stripe on the platform.  But Mr. Yu says there is only one piece of stripe that requires replacement.  Having considered their evidence, I agree with Mr. Yu that it only calls for replacement of one piece of the stripe and not a defect that requires replacement of the whole platform.

50.  Another observation by Mr. Wong is that the nails used to build the wooden platform were not made of stainless steel.  Given that the platform may be subject to rains, the nails could get rusty and shorten the life span of the platform.  Mr. Yu comments that the use of stainless steel screw or nail has not been specified in the drawings.

51.  The Defendant has at all time tried to run a very clever argument.  They claim that they are wearing two hats.  First, they are the designer for the Plaintiff in preparing all these drawings under the Design Agreement.  But they have a separate entity when dealing with the Plaintiff under the FO Agreement. Accordingly, if there is any defect in the drawings, it is for the Plaintiff to take action against them under the Design Agreement.

52.  This argument is artificial.  Paragraph 7 of the Statement of Claim does refer to both the Design Agreement and the FO Agreement and claims that they contain an implied terms that the Defendant shall execute and progress the design works and the fitting out works with due diligence and regularly.  If there is a mistake in the design and did not specify the requirement of stainless steel nail or screw, this would be a defective design and would call for rectification or claim for damages and shall carry out the design works and the fitting out works with reasonable care and skill.  It is clear that the Plaintiff is suing the Defendant under both contracts.  If it is a defect resulting from the Design Agreement, the Defendant would still be responsible. 

53.  I agree with Mr. Wong that the failure to provide for stainless material in the plan is a defect in the drawings.  But I do not agree with Mr. Wong the whole wooden platform needs to be replaced.  Supplemental reinforcement of the platform by nail of stainless steel material would strengthen the platform and restore its life span.  I accept that it may look less beautiful, as there would be more openings for the nail.  But it would serve the same purpose and I consider that is the reasonable remedy necessary for items 1.  Unfortunately there is no estimate for the cost for such kind of work.  The platform was 250 sq. metres in area.  Assuming two workers are required to work for two days at HK$800 per man day, that comes down to HK$3,200.  I would give a round up figure for HK$5,000 to include the material.  I would also award another HK$100 for replacing one piece of timber stride as agreed by Mr. Yu, and the total is HK$5,100.00. 

54.  Item 2 relates to re-printing of the wooden platform.  In cross examination, Mr. Wong agrees that it is not necessary.  Mr. Yu opines that this is not necessary.  I therefore made no award.

55.  Item 3 relates to the metallic flower planters which were to be placed inside the wooden flower planter.  The Plaintiff complains that they are taller than the wooden planter with their edges emerges outside the rim of the wooden flower planter.  Mr. Wong shows some of the uneven protrusions in his photographs.  From subsequent photographs produced by Mr. Yu, such protrusion only exists in some metal planters. The protrusion is not serious.  And Mr. Yu says in his evidence that the protrusion appears because the metal planters had not been properly placed.  Clearly, this is a matter of appearance and there is no suggestion that these metallic planters could not be used or did not serve their purpose.  I am not satisfied on evidence that all 22 metallic planters are emerging outside the rim of the wooden flower planter.  Therefore, I do not adopt the opinion of Mr. Wong.  On the one or two planter there is protruding, that does not call for replacement and I disallow this item of claim.

56.  Item 4 relates to a drainage pipe of the planter discharging to the adjacent flat roof.  However, Mr. Wong does not inspect the outlet at the adjacent flat roof.  He has only seen some water on the other side of the flat roof.  There is no proof of the existence of the defect.  The Plaintiff has not made out the case and I dismiss this claim.

57.  For Item 5, Mr. Wong says the U-trap has not been installed at pedestal basin.  On cross-examination, he is not very clear if he had come closer to inspect the position where the U-trap should be installed.  And Mr. Yu gives evidence that the U-trap has been installed.  I accept the evidence of Mr. Yu.

58.  It appears that Mr. Leung is not pursuing this item in his closing submission.  I found the Plaintiff fails to prove on the balance that the U-trap has not been installed.  I therefore disallow this claim. 

59.  For Items 6 and 7, the Plaintiff agrees that they have not been checked by Mr. Wong.  Mr. Yu opines that no work needs to be done.  In these circumstances, no award is made for these two items.

60.  Item 8 relates to the unevenness of the wooden platform at the balcony of the master bedroom on first floor.  Mr. Wong further gives evidence that there was no opening for drainage in the wooden platform.  He suggests replacing the whole uneven wooden platform.  According to Mr. Yu, a drainage outlet was provided by the developer at the balcony.  It can be understood that the wooden platform was placed on top of the floor of the balcony.  Water could seep through the wooden stripes. 

61.  I do not accept the evidence of Mr. Wong that the platform is so defective that it has to be replaced.  It appears that the main complaint by Mr. Wong is that no access has been provided in the platform  for routine maintenance of the floor drain, which I agree.  Again that would be a defect in the design drawings.  But I can imagine that an opening could be made at the platform near the floor drain.  In such circumstances, I would make allowance for a worker for one day with materials for HK$200, being a sum of HK$1,000.

62.  In respect of Items 9, 10 and 11, Mr. Wong makes no comments and I have no evidence on the remedial work needed.  No remedial work is required according to Mr. Yu.  Accordingly, I make no award.

63.  Item 12 relates to the down lights on the false ceiling in the living room.  Mr. Wong opines that three down lights have to be replaced at the unit price of HK$500 each.  Mr. Yu says he did not see the defect.  I accept the opinion of Mr. Wong and award a sum of HK$1,500 for rectification work.

64.  Item 13 relates to some stains and loose paint on the casing of the down lights in the false ceiling in the dining room.  Mr. Yu says he did not see the defect.  I accept the opinion of Mr. Wong about the stains.  But the remedy required is to touch up the casing by paint.  There were 6 to 7 down lights.  I cannot see why it could not be completed by a worker in one or two hours.  I award HK$400 for this item. 

65.  For Item 14, Mr. Wong makes no comment and Mr. Yu does not recommend any rectification.  There is no award for this item.

66.  Item 15 concerns unevenness of the ceiling grid in the maid’s room.  Mr. Wong comments that the sliding door is distorted and cannot operate smoothly. This is irrelevant to this item.  There is no other opinion and I therefore disallow this item.

67.  Item 16 relates to the poor workmanship of painting of the frame around the window.  Mr. Wong suggests that one man day is required to rectify the defect.  Mr. Yu does not notice any problem.  I have the benefit of looking at the photographs taken by Mr. Yu which is much clearer.  The defects which appear in the photocopy of the photographs taken by Mr. Wong are minor.  If they do exist, they could be rectified easily by a worker handling painting work in other rectification work.  Accordingly I make no award under this head.

68.  For Items 17 and 18, Mr. Wong gives no comment.  There is no award for these two items. 

69.  For Item 19, Mr. Wong gives no comment.  But Mr. Yu opines that HK$400 should be allowed for plaster touch up of the TV cabinet.  I accordingly award HK$400.

70.  Item 20 relates to glass fitting next to the TV cabinet.  Adjustment of the alignment of the glass is required.  According to Mr. Wong, one man day is required.  According to Mr. Wong half man day is required.  Having heard their explanation in Court, and reading the photographs, I do not consider the rectification needs more than an hour.  I adopt the suggestion of Mr. Yu and award HK$400. 

71.  For Item 21, both counsels agree to adopt the opinion of Mr. Yu and I accordingly award a sum of HK$1,100.

72.  On Item 22, Mr. Wong does not express an opinion.  Mr. Yu agrees that the defects have to be rectified but could be done at the same time with Item 20. I agree with Mr. Yu’s opinion.  Accordingly no extra cost is required and no award made.

73.  Item 23 relates to the sub-standard louvers installed in the living room above the TV cabinet.  According to Mr. Wong, a total of four sets of louvers have to be replaced.  Mr. Yu comments that only one set of louver has to be replaced.  Having considered the evidence, I accept the evidence of Mr. Wong that the four louver panels have to be replaced.  It would cost HK$2,000 and I see no reason why one worker could not finish the replacement within one working day.  Accordingly a sum of HK$2,800 is awarded under this item.

74.  Item 24 relates to a mirror panel near the main entrance was broken. Mr. Wong assesses the cost of rectification with item 25.  Mr. Yu opines that the cost is HK$1,300.  I award HK$1,300 accordingly.

75.  Item 25 relates to the misaligned mirror panel on the wall inside the ground floor living room.  Mr. Wong opines that the whole mirror panel should be replaced.  But he only identifies four panels which do not match perfectly. It is his submission that since they do not match perfectly, it is not possible to replace only these four panels.

76.  Mr. Yu is of the opinion that only two pieces of mirrors panels are uneven and need replacement.  It could cost HK$1,000 for new mirror panel and could be carried out by the same worker who replaces the mirror under Item 24.

77.  I have the benefit of the photographs taken by Mr. Yu and attached to his report.  Looking at his photograph no. 9893, the misalignment is very minor in nature.  It does not create any odd or uneven feeling when looking at the mirror panel as a whole.  The defects which shown in the photograph no. 49 of the report of Mr. Wong is extremely minor.  I do not even consider it necessary to have any replacement.  I award to the Plaintiff damages at HK$1,000 as suggested by Mr. Yu to replace two glass panels.

78.  In respect of Items 26 to 30, Mr. Wong gives no comment.  Mr. Leung agrees to adopt the opinion of Mr. Yu.  Accordingly, I make the following awards, in respect of Item 26, HK$400, in respect of Item 27, no award, Item 28, no award, Item 29, no award, Item 30, no award.

79.  For Items 31 and 32, Mr. Wong opines that HK$2,000 is required.  Mr. Yu opines that HK$800 is required.  The difference is Mr. Wong considers that the timber skirt has to be replaced.  Having heard the evidence, I am not convinced that a replacement is necessary.  Touch up by worker is sufficient to rectify the defect.  I adopted the opinion of Mr. Yu and allow HK$800.

80.  Item 33 relates to the missing sealant on the mirror of the cabinet in the living room.  Mr. Wong suggests an award of HK$500 which I believe is half man-day.  Mr. Yu opines that it could be carried out at the same time with the rectification of Item 21 which I agree.  Accordingly, no separate award needs to be given.

81.  Mr. Wong does not comment on Item 34 to Item 36.  Mr. Leung agrees to adopt the opinion of Mr. Yu to allow HK$400 for Item 34, no award for Item 35 and HK$250 for Item 36.  I make the award accordingly.

82.  Item 37 relates to the incomplete laying of wallpaper for guest toilet. Mr. Wong opines that rectification would cost HK$4,000.  Mr. Yu is of the opinion that this item has not been included in the FO Agreement.  Given that the Defendant is responsible for renovation of the whole unit, I see no reason why the Defendant would fail to include this area.

83.  In summing up, I adopt the opinion of Mr. Wong and award HK$4,000.

84.  Item 38 is about the tree pattern wallpaper on the corridor of first floor.  Mr. Wong opines that there are stains and tearing marks on the wallpaper and have to be replaced.  Mr. Yu is of the view that supply of wallpaper is not within the scope of the FO Agreement.  To that I agree.  But it is not disputed that the wallpaper was supplied by the Plaintiff to the Defendant who has agreed to put it on the wall.  The work becomes part of the FO Agreement. When the wallpaper was damaged,  the damages is recoverable against the contractor.  And this is an agreed defect. I adopt the opinion of Mr. Wong that damages for rectification in the sum of HK$1,000 should be awarded.

85.  Item 39 has been dealt with under Item 8 and no further damage is awarded.

86.  Item 40 relates to the damage to a corner of the door in the master bedroom.  Judging from photograph no. 19 of Mr. Wong’s report, the damage is minor.  I see no reason why the touch up could not be done by a worker carry out rectification in other items.  I do not allow any separate award under this item.

87.  For items 41 and 42, Mr. Wong gives no comment.  Mr. Leung agrees to adopt the opinion of Mr. Yu.  Accordingly there is no award under Item 41 and HK$400 is awarded for Item 42.

88.  Item 43 is about the buckled-up and wave-like mirror door in the master bedroom.  Both experts agree that rectification is necessary.  Mr. Wong opines that HK$6,000 is reasonable and Mr. Yu opines that HK$4,400 is reasonable.  I found Mr. Yu’s assessment is more accurate.  But on the safe side I would allow one more man day.  A sum of HK$5,200 is awarded.

89.  For Item 44, Mr. Wong gives no comment. Mr. Yu comments that what is needed is to apply sealant and it could be carried out by the worker to replace the mirror under Item 43.  I agree.  No separate award is allowed.

90.  Items 45 and 46 are about the stains found on the wallpaper of the game area and the missing of sockets on the wall.  Both experts agree that rectification work is required. Mr. Yu opines that these defects could be carried out in conjunction with Items 36 and 26.  I do not agree.   I agreed with Mr. Wong and award HK$800 for item 45 and HK$600 for item 46.

91.  Item 47 is about the poor finishing of the painting work on the wardrobe inside the boy’s room.  Both experts agree that rectification is required. Mr. Wong opines that a half day work is required.  I agree with Mr. Yu that this item could be rectified at the same time with Item 46. No separate award is allowed.

92.  For Items 48 and 49, it is a very tricky issue.  According to the FO Agreement, the wooden platform should be covered with wood veneer.  On completion, the Defendant covered the platform with timber.  It is not disputed that timber is more expensive than veneer, and more durable.  At such, the Defendant has provided a better material.

93.  Mr. Wong is of the opinion that veneer and timber would give different feeling.  I agree in part.  These are two common materials that we could find in everybody’s home.  Both look very much alike.  They also serve exactly the same purpose.  And as agreed, timber serves the purpose better.  If it is the appearance, my question is whether that is a “defect” for rejecting the work done all together.  In this particular case, I do not accept that the Plaintiff is entitled to reject the work done.  There is no suggestion that it does not serve the same purpose.  There would at most be a nominal loss to the Plaintiff and I would award a sum of HK$1,000 for both items.

94.  For Item 50, it relates to the same matter as stated in Item 47.  I adopt the opinion of Mr. Yu to allow an additional of HK$400 as damages.

95.  For Item 51, both experts give no comment and I make no award.

96.  Item 52 relates to the brush mark on the painting of the ceiling in the guest bedroom.  Mr. Wong considers this item with item 64.  When being cross examined, Mr. Wong opines that three man day is required to touch up the whole ceiling.  Mr. Yu does not object that the brush marks have to be rectified, but opines that it could be done in half a day by one worker and could be done by the worker carrying out rectification work for Item 50.  Mr. Yu says the area is 4 feet by 5 feet.  I find that one man day is more than sufficient and I award HK$800.

97.  Item 53 is about the repainting the ceiling of first floor corridor. Mr. Wong does not comment on this item separately and I could safely assume he includes the item under his opinion that the ceiling of the whole property has to be touched up, and the total cost is HK$28,000.  Mr. Yu comments that it could be carried out at the same time with Item 50.  I would consider the award with item 64.

98.  Item 54 is about the stains on the marble floor tiles in the sitting room and dining room.  It is also mentioned in the defect list that when work was carried out, protection was not properly done.  The stain could not be removed and waxing is required.  Mr. Wong opines that the cost would be HK$4,000.  Mr. Yu opines that this is not an item of work under the FO Agreement.

99.  It is true that the Defendant has not been instructed to install the marble tiles at the dining room and the sitting room.  However, it must be part of the contract that the Defendant is responsible for general cleaning of the whole premises after work.  That must be included removal of stains and markings resulting from work of the Defendant’s workers.  In the circumstances, I do not agree with Mr. Yu that this is not an item of defects.  I adopt the opinion of Mr. Wong and assess the loss at HK$4,000.

100.  Item 55 concerns the drainage hole in the kitchen floor which could not be opened, and uneven mosaic tiles.  Mr. Wong assesses the cost at HK$1,300. Mr. Yu assesses the cost at HK$800, representing one man day’s work.  I agree with Mr. Wong and award HK$1,300.

101.  Item 56 is about the darkening of the foot of a cabinet inside the kitchen.  Mr. Wong opines that replacing the darkened part of the veneer would cost HK$2,000.  Mr. Yu opines that the cabinet is not supplied by the Defendant and suggests no award.  This is an agreed item of defects.  I assess the damage at HK$1,000.00. 

102.  Item 57 is about the connection of the drainage pipe for the refrigerator.  Mr. Wong opines that cost of HK$300 is required to reconnect the pipe.  I accept his opinion and award HK$300.

103.  Item 58 relates to the dented surface on the refrigerator. Mr. Wong opines that it would cost about HK$1,200 for the relevant agent to repair the dented surface.  Mr. Yu notes that this was not an item under the FO Agreement.

104.  Clearly this is not an item supplied by the FO Agreement.  It would be a claim against the Defendant for damages.  Technically, this is not a defective work.  Nevertheless, I am not minded in any event to grant any award.  Having heard the experts, these are minor defects.  If there is such a defect caused by the Defendant’s workers, there is no evidence suggesting that they would affect the function of the refrigerator.  The damage would therefore become nominal.  The damage awarded would in such event be nothing more than nominal and since there is no evidence on how the refrigerator is damaged, I make no award.

105.  Mr. Wong expresses no view on Item 59 and Mr. Yu considers no remedies required for Item 59.  No award is granted.

106.  Item 60 is to replace the uneven wall tile adjacent to the refrigerator.  Mr. Wong opines that HK$500 is required and Mr. Yu opines that HK$800 is required.  I allow HK$500 for this item.

107.  Item 61, Mr. Wong expresses no view.  Mr. Yu considers no defect.  I make no award accordingly.

108.  Item 62 is about the touch up of painting on the wall of the garage. Mr. Yu is of the view that this item has not been covered by the FO Agreement. I did not notice and items of work for painting the garage in the FO Agreement.  Photograph no. 82 of Mr. Wong’s report shows loose paint caused by the Defendant at car park.  If that is the only damage to the wall, I believe the damage could easily be touched up by one of those workers doing remedial work on the items of painting I approved herein.  In conclusion, I find no damage needs to be awarded for this item.

109.  Item 63 is to remove a mark/stain on the lamp post at the roof floor. It looks like a circle made by a marker.  Mr. Yu opines that it could be removed easily by thinner.  He concedes in his evidence that he has not tried thinner.  Mr. Wong says it could not be cleaned by thinner.  He suggests that it has to be cleaned by a worker for 2 hours using special chemical.  The chemical would cost HK $200.  I accept the evidence of Mr. Wong and allow HK$400.

110.  Item 64 is to make good all the brush marks on painting in the ceiling of the said property.  Mr. Wong opines that HK$28,000 is required.  Adopting HK$800 per day, that is equal to 35 man days.  Mr. Yu opines that to make good the defects, only two man days are required.  Mr. Leung submitted that the opinion of Mr. Yu is very much in the low side.  The said property is a duplex with three floors composing of at least one master bedroom, one boy’s room, one living room, one dining room, one guest room and two bathrooms.

111.  According to the report of Mr. Wong, he only records in two pictures about the problem of the paint mark, or brush stroke.  They are photograph nos. 24 and 34.  According to the FO Agreement there is a total of 165 sq. metre in area for painting with a contract sum of HK$21,450.  I conclude that four man days would be sufficient to do the touch up in addition to the touch up I allowed above for item 52.  In the circumstance, I would allow HK$3,200 for this item.

112.  Item 65 relates to the unfirmly fixed doors of the book cabinet.  Mr. Wong opines that HK$1,800 is required and Mr. Yu opines that HK$400 is required.  I assess the award for this rectification item be at HK$800.

113.  For Items 66 and 67, the cabinet in the master bedroom and the window of the roof have to be cleaned.  Mr. Wong gives no comment.  Mr. Yu agrees that they should be cleaned but can be covered by the workers carrying out the remedial work for Item 36.  I accept the opinion of Mr. Yu that cleaner could carry out work for the three items and I do not make additional award for Items 66 and 67.

114.  Mr. Ho is arguing that the Defendant is at all times willing to perform and rectify the defects.  It was the fault of the Plaintiff who did not allow the Defendant to enter the said property to carry out the necessary work.  He therefore submitted that the Defendant should not be responsible for making good the said defects.

115.  As rightly pointed out by Mr. Leung, it is clear from the evidence of Mr. Lau that the Defendant has refused to carry out the work unless the Plaintiff is prepared to pay the balance of the contract price.  I also accept the evidence of Mr. Cheung that he had repeatedly requested the Defendant to carry the rectification, but there is no response.

116.  While I agree that the Plaintiff may not be entitled to withhold the balance of the contract price, if any, this is again not a reason why the Defendant should not proceed to rectify the defects.  It is too often a tactic used to press for payment.

117.  It is not disputed that the Defendant has engaged debt collectors to seek payment from the Plaintiff resulting in unhappy dispute between the Plaintiff and the debt collector.  This naturally breaks the trust and confidence between the Plaintiff and the Defendant.  While the Defendant, after these proceedings has been issued, offers through solicitors to rectify the defects, I cannot say that the refusal by the Plaintiff is unreasonable.  Subject to the duty of mitigation, I see no reason why the Plaintiff is not entitled to engage his own contractor to rectify the defects and recover the reasonable loss from the Defendant. Accordingly, I allow the Plaintiff’s claim for damages as I assess above.

118.  Mr. Leung submits that I should allow all the contract fees charged by Mei Nga in respect of the 67 items of defect.  But it must be the agreement of the parties that they are bounded for the defect list and those are the items of work required for rectification.  I have gone through all the items in the defect list to quantify the damages.  Neither of the experts used Mei Nga’s contract price to substantiate the cost.  I would only make the award as above.

119.  I shall now move on to the variation orders.  Some of the variation orders have been agreed and I do not need to repeat.  Mr. Ho has kindly set out a list of the variation orders in dispute and they have been commented on by both experts.  And both experts have expressed their opinion if the variation is a variation of work and the reasonable cost. 

120.  For VO 21, it is not disputed that the rail for hi-fi cabinet has been made.  Mr. Wong opines that the charge is reasonable but this is an item included in Item 7.1(b) of the FO Agreement.  Mr. Yu has clearly explained that Item 7.1(b) has been deleted according to VO 21.  Hence it had not been charged under the FO Agreement.  It is not disputed that a sliding rail has been built.  I agree with the observation of Mr. Yu that HK$6,000 should be paid.

121.  For VO 27 (R1) it relates to a set of bed acquired from 皇室家居室內設計有限公司.  One Miss Wong give evidence on behalf of皇室家居室內設計有限公司 that Mr. Cheung through the Defendant ordered the bed from their company.  The bed was delivered on 15 November 2008.  And through the arrangement of Mr. Lau, they had sent a worker to maintain the bed on 28 December 2008, but no one was at home.  Another arrangement was made on 25 February 2009 but was cancelled.

122.  It is not disputed that the bed had been delivered.  Mr. Cheung complained that the bed was not working and subsequently they had requested the Defendant for maintenance or repair.   Since the Defendant failed to properly maintain or repair the bed, they had subsequently thrown away the bed. 

123.  According to Mr. Yu, he had observes the bed on site and the only defect is, two supplementary hinges below the bed board are outstanding.  The bed is workable and the remedy of defects is simple.  He opines that the full value should be paid and it is a reimbursement item.  Mr. Wong makes no comment on the defects.  He suggests a sum of HK$11,360 should be paid which appears on the variation orders, after deducting the price of item 7.4(f).  The deduction should not be taken into account, as item 7.4(f) has not been taken into account at the final measurement for payment.

124.  I am not satisfied that the bed is so defective that it ought to be thrown away.  It had been installed and I also accept the evidence of Miss Wong that they have attempted to send their management staff to repair the bed.  I accept the opinion of Mr. Yu that it is a minor defect that could be rectified easily.  In those circumstances, the Plaintiff is liable to pay for this VO at the sum of HK$23,000.

125.  For VO 28, both experts agree that it should be paid and the sum is HK$1,500.

126.  The next VO is VO 29 (R1).  There is no dispute that additional electricity socket and installation had been ordered.  The main difference between the opinion of Mr. Wong and Mr. Yu is that some of the sockets are indeed provided by the developer.  Mr. Yu explains that he has checked all the socket position and he found that there was variation.  I adopt the evidence of Mr. Yu and award the amount for VO 29 (R1) at HK$31,900.

127.  VO 31 is the repair work to the ceiling after installation of the antenna for mobile phone.  Mr. Yu says the work has been done.  There are 3 areas where repair is required and the charge is reasonable.  Mr. Wong misunderstands the work as making of the holes.  I do not accept his evidence. I assess the work done at HK$1,500.

128.  VO 34 relates to making outlet for the 26 metal planters for flowers. Mr. Wong agrees that the work has been done.  However he considers that such metal containers must have outlet.  Hence there should be no additional charge for making the outlet.

129.  I refer to the photographs and comments made by Mr. Wong.  It is clear that it is not only making a hole in these metal planters.  They are connected to drainage pipe.  Comparing to the FO Agreement, what had been charged is to supply and deliver rectangular shape metal container for flowers.  And the charge is HK$400 each.  Clearly no additional work for connecting the outlet if any to drainage pipe had been provided.  In the circumstances, I agree that the work is additional work and the Defendant should be reimbursed.  However, I must pay attention to the cost of all these metal containers, namely HK$400 each.  It is way out of proportion to charge HK$500 for making the hole and connecting to the draining pipe.  Making the hole for all these containers could not take more than half a day.  I allow two man days to carry out making of the hole and the connection and HK$1,300 for the material.  Allowing profit, I round off the figure to HK$3,500.

130.  For VO 36, from the evidence, it appears that no one has sight of the light installed.  Although Mr. Wong has sight of the purchase order, I am not satisfied that it has been installed at the said property and this item is disallowed.

131.  For VO 37, Mr. Wong agrees that the wooden base has been made and the value at HK$5,050 is reasonable.  However he considers it was included in the FO Agreement, and no additional sum should be charged.   According to the evidence of Miss Tsang, the original item in the FO Agreement is to provide mirror under Section A Item 7.1 (e).  Subsequently, the Plaintiff required to use glass and wooden base had to be added. 

132.  Taking all these matters into account, I accept this is a variation to the said item at Section A 7.1 (e).  The additional work is chargeable and I assess it at HK$5,050.

133.  For VO 38, both experts conclude that there should be no charge. Accordingly I make no award.

134.  For VO 39, it is the adding of a new wooden trough for plantation.  Mr. Wong opines that it was not a new item, but in addition to Item 1.1 of Section C of the FO Agreement.  Accordingly, he only agrees a sum of HK$13,344.  Mr. Yu opines that this is a new item. 

135.  But Item 1.1 is the making of a new metal frame.  From the measurement of VO 39, it is not exactly the same.  It appears there is no dispute that this item has been built and in the circumstances I adopt the opinion of Mr. Yu and this item is payable.  Item 1.1 is for a different matter and there is no suggestion that VO 39 included Item 1.1.  I allow the amount in full, i.e. HK$27,244.00.

136.  VO 40 is for the new aluminum ceiling for the maid’s room.  Work has to be done in the room and the Defendant claims that it is more expensive to keep the aluminum ceiling during the renovation work.  I see no reason why the ceiling could not be retained for use and it is unreasonable to charge from the Plaintiff.  I disallow this item.

137.  I shall now proceed to determine the claim by the Defendant for balance of the contract price under the Design Agreement in the sum of HK$13,500.

138.  I refer to the witness statement of Mr. Cheung.  He conceded that the Design Agreement did not expressly state that the Defendant is required to submit all the as-built drawings.  He said he did in the very stage requested Mr. Lau to provide the location drawings in relation to all the conceal pipes and electrical lines and cables.  But he did not mention if Mr. Lau agreed.  I see no reason why such an important matter would be left out from the Design Contract if the Defendant has agreed.  The Plaintiff has failed to prove that this is a term of the Design Contract.

139.  There is suggestion that it is a trade practice.  But I have no expert evidence on the trade practice.

140.  Further, if the failure by the Defendant to provide the as-built drawings may be the breach of a term of the contract, there is nothing in the Design Contract which allows the Plaintiff to stop the payment for the balance of the purchase price which is payable upon completion of work by the contractor.  The amount is due and has not been paid and I see no reason why the Defendant should not be entitled to the judgment for the sum.  I grant judgment accordingly.

141.  Having made the above finding, I shall now summarize the amount I award to the Plaintiff and the Defendant respectively: -

a. Balance payable to the Defendant under the Design Contract in the sum of HK$13,500;

b. Agreed price for the FO Agreement payable to the Defendant in the sum of HK$618,558.82;

c. Total price of agreed VO payable to the Defendant in the sum of HK$65,860;

d. Total price of disputed VO payable to the Defendant in the sum of HK$99,694.00;

e. Less payment from Plaintiff for the FO Agreement in the sum of HK$665,917;

f. Less payment from Plaintiff for VO in the sum of HK$36,240;

g. Less damages award to the Plaintiff for the defects in the sum of HK$42,550

142.  The net judgment in favour of the Defendant is the sum of HK$52,851.82.

143.  The usual order for costs is for the Plaintiff to have costs of the claim and the Defendant to have costs of the counterclaim.  But the Plaintiff has only proved damages of HK$42,550.00 which is within the jurisdiction of the District Court.  The Defendant is successful in defending the main claim of the Plaintiff on liquidated damages.  And the Defendant has proved payment for disputed variation orders in the sum of about HK$99,694.00 and the balance of the Design Contract.  Taking all these into account, I depart from the usual rule and give an order nisi that the Plaintiff do pay the Defendant 75% of the costs of the whole action (including both claim and counterclaim) with certificate for counsel for the trial to be taxed if not agreed.  The order nisi shall become absolute within 14 days from today.