WIDE PROJECT CONSTRUCTION (HK) LTD v. THE INCORPORATED OWNERS OF YEN DACK BUILDING

CACV 136/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 136 OF 2006

(ON APPEAL FROM HCA NO. 3759 OF 2002)

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REASONS FOR JUDGMENT

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Hon Tang VP (giving the reasons for judgment of the Court):

1.  Yen Dack Building (“the Building”) in North Point was built in 1966.  It is a multi-storey reinforced concrete building.

2.  By the building order dated 13 September 2001 (“the Building Order”), the defendant was required to carry out the following work to the Building:

“	For exterior of the building:
	(a)	Remove loose cracked and otherwise defective concrete from the reinforced concrete structure of the building, clean existing exposed steel bars of loose rust and foreign matter, provide and securely fix in place additional steel bars as necessary and reinstate. New concrete is not to be placed prior to inspection by the Building Authority.
	(b)	Remove all loose and defective external rendering.
	(c)	Repair, secure or replace all loose and defective window frames and glazing.”

3.  As a result of the Building Order, on 23 December 2001 the plaintiff and the defendant entered into a formal contract (“the Contract”) regarding certain renovation and maintenance work at the Building.

4.  One Sunfield Engineering Consultants Limited (“Sunfield”) was the contract administrator.

5.  Under the Contract, the plaintiff was employed to carry out the following work:

“Original Item Nos.
	(1)	Preliminaries	470,500
	(2)	Scaffoldings	1,361,200
	(3)	Reinforced concrete structural works and Plastering maintenance works (‘the Concrete Repair Works’)	850,000
	(8)	External wall painting	960,000
	(14)	Roof plant room waterproofing works	120,000
	(15)	Roof waterproofing works	210,000
		Total:	3,971,700	”

6.  Under the Contract, the plaintiff was entitled to be paid following the issue of Interim Certificates.  Two such Certificates, the 5^th and 6^th for HK$482,278.00 and HK$69,921.30 respectively were unpaid.  By letter dated 10 April 2003, the defendant purported to terminate the Contract with immediate effect.  As a result, the plaintiff claimed, inter alia, for payment under the two Interim Certificates.

7.  At trial both parties called two factual witnesses and three experts:

“	24.	… For the plaintiff, they were :
		(1)	Mr Chan Kong Sing (‘Mr Chan’), director of the plaintiff, who was in charge of the Contract.
		(2)	Mr Chung Shu Chun (‘Mr Chung’), the chairman of the defendant at all material times until his resignation in August 2002.
		(3)	Mr Shum Dai Chung (‘Mr Shum’), architect.
		(4)	Mr T.Y. Ho (‘Mr Ho’), structural engineer.
		(5)	Mr Albert Ng, quantity surveyor.
	25.	For the defendant, the witnesses were :
		(1)	Mr Chong Shu Wong (‘Mr Chong’), the deputy secretary of the defendant since April 2003.
		(2)	Mr Sezto Wah (‘Mr Sezto’), the treasurer of the defendant.
		(3)	Mr Paul Tsang (‘Mr Tsang’), architect.
		(4)	Mr Adrian Bell (‘Mr Bell’), material scientist.
		(5)	Mr Ivan Cheung, quantity surveyor.”

8.  In para. 19 of the judgment, the judge identified the defendant’s principal complaints as follows:

“	(1)	Partial completion (no more than 57.05%) of the Concrete Repair Works.
	(2)	Defective workmanship on the external wall painting works.
	(3)	Failure to complete the roof plant room top waterproofing works.
	(4)	Failure to complete the roof waterproofing works.”

9.  Of these complaints, the Concrete Repair Works were the most complicated and took up most of the time at trial.

10.  Essentially, they concerned 3,060 locations.  According to the learned judge:

“	43.	… In the end, Mr Tseng identified 3,060 locations :
		(1)	2,444 blue locations with hollow sound (‘the Blue Locations’);
		(2)	72 locations with crack/exposed reinforcement (‘the 72 Locations’);
		(3)	40 locations marked which appeared to have been marked red by the plaintiff but no remedial work had been carried out thereat (‘the 40 Red Locations’); and
		(4)	504 locations where remedial work had been carried out by the plaintiff (‘the 504 Locations’).”

11.  The Blue Locations were identified by the defendant’s expert Mr Tseng (and his staff) by what was called the hammer tapping test.  The surface of the internal walls was tapped with a plastic head hammer, and if a hollow sound was detected it would be marked with a blue circle.

12.  The Concrete Repair Works would be necessary if the hollow sound was caused by corrosion of the reinforced steel bars in the concrete leading to spalling of the concrete.

13.  However, the defendant’s expert did not carry out any inspection or test until March 2004.  By which time, the scaffoldings had been removed and the defendant was only able to conduct tests to the interior common areas of the Building.  As the learned judge said:

“

37.

… The defendant’s experts were put in a least enviable position.  They did not have any contemporaneous data or materials to assess the plaintiff’s performance of the Contract almost two years ago. …”

14.  The parties accepted that when concrete spalling existed at a location, a hollow sound could be detected by the hammer tapping test.  However, that was not the only cause of the hollow sound.

15.  Mr Ho, the expert called for the plaintiff, said at para. 3.2 of his report dated March 2005:

“

3.2

… it was difficult to tell whether the hollowness was due to the separation of the plaster finish from the concrete face or due to separation within the concrete matrix caused by expansion of corroding steel reinforcing bars without removing the plaster finish.  Some cutout areas even revealed brickwork infill, as shown in Photos 21 to 23 and the hollowness sound in some areas ringed in blue could be due to the separation of the plaster finish from the brickwork and not from the concrete.”

16.  Further:

“

64.

Under cross-examination, Mr Tseng agreed that one could not tell whether the defects lied with the plaster or concrete by the hollow sound detected.  In order to ascertain that it was in fact ‘concrete spalling’, it was necessary to first remove the plaster.  Mr Bell also agreed that it is not unreasonable to remove the plaster and then opened up those areas that sound hollow to ascertain that ‘concrete spalling’ existed.”

17.  However, according to Mr Tseng, only 20% of the work at the internal common areas had been properly executed.

18.  That was rejected by the learned judge because:

“

49.

… Upon my query if Mr Tseng’s projection was statistically sound, Mr Chai, counsel for the defendant, conceded that no reliance would be placed on Mr Tseng’s conclusion that only 20% of the work at internal common areas were properly executed.  Instead, Mr Chai accepted that out of the 504 Locations, the concrete repair work at 500 was properly executed.”

19.  For the external walls of the Building, Mr Tseng relied on the infra-red test conducted at exterior walls of the Building and concluded that there were possible defects.  It is unnecessary to deal with this aspect of Mr Tseng’s evidence which as the judge said, was “plagued with difficulties” and:

“

55.

In the end, Mr Chai [counsel then appearing for the defendant] placed no reliance on this aspect of Mr Tseng’s evidence.”

20.  The learned judge concluded:

“

57.

Mr Tseng’s evidence on the issues relating to the Concrete Repair Works is so poor that I cannot but cast grave doubt on other issues that he dealt with.  In other words, with all due respect to him, I find Mr Tseng an unreliable expert witness.”

21.  The defendant’s case on the Blue Locations depended on the hollow sound being the result of concrete spalling and also that such hollow sound could have been detected in 2002, about two years before Mr Tseng conducted the hammer tapping test.

22.  So, not surprisingly the learned judge rejected Mr Tseng’s evidence on both counts.

23.  On appeal, Mr Dawes, appearing for the defendant, did not rely on Mr Tseng’s evidence, but he sought to rely on Mr Bell’s evidence to show that the probabilities were that most of the hollowness in the Blue Locations were caused by concrete spalling.

24.  He relied in particular on para. 2.2 on Mr Bell’s report:

“

2.2

Breakouts were made at 56 no locations previously marked up in blue paint as hollow areas. The test locations were distributed across the corridors and stairways of floors 1 to 19 of the building and across the walls, columns, ceilings, beams and staircases of the structure and can be regarded as reasonably representative of the concrete in these public areas. In addition 19 areas marked up in red paint, stated to be areas repaired in 2002, were also opened up and examined visually. Small samples of rebars and repair mortar were taken from these areas and examined in our laboratory.”

25.  Mr Dawes made the point that in relation to the 56 locations which Mr Bell checked by opening up, the result was that 46 of them was caused by concrete spalling.  Since the 56 locations were according to Mr Bell “reasonably representative of the concrete in these public areas”, he asked us to infer that the hollow sound at most of the 2,044 Blue Locations was also caused by concrete spalling.

26.  However, Mr Bell’s evidence was not presented to the court nor relied on as evidence from which one could infer that the bulk of the Blue Locations also suffered from concrete spalling .

27.  First, as Mr Dawes accepted, Mr Bell did not say so in his report.

28.  Secondly, Mr Bell’s evidence was not relied on by counsel appearing for the defendant at trial as evidence from which such an inference could be drawn.  Nor did Mr Tseng rely on Mr Bell’s evidence in support of his own opinion that only 20% of the work had been properly done.

29.  We did not see how we could conclude on the basis of Mr Bell’s evidence that any percentage of the Blue Locations suffered from concrete spalling which were detectable in 2002.

30.  Moreover, the learned judge had concluded in his judgment that in any event he was not satisfied on the evidence of Mr Bell that even if there had been concrete spalling, it could have been detectable in 2002.

31.  The judge gave reasons why he did not accept the evidence of Mr Bell.  He preferred the evidence of Mr Ho, the expert called on behalf of the plaintiff.  Having read their respective reports and evidence, we were not surprised.

32.  Mr Dawes has referred us to what Lord Hoffman said in Biogen Inc. v Medeva PLC [1997] RPC 1 HL at 45:

“

The need for appellate caution in reversing the trial judge’s evaluation of the facts is based upon much more solid grounds than professional courtesy. It is because specific findings of fact, even by the most meticulous judge, are inherently an incomplete statement of the impression which was made upon him by the primary evidence. His expressed findings are always surrounded by a penumbra of imprecision as to emphasis, relative weight, minor qualification and nuance ... of which time and language do not permit exact expression, but which may play an important part in the judge’s overall evaluation.”

33.  We were also reminded of what Bokhary PJ said in Ting Kwok-keung v Tam Dick-yuen and Ors [2002] 5 HKCFAR 336 at 350 E-F:

“

42.

… The question for the Court of Appeal is whether, even though it does not enjoy the advantages enjoyed by the trial judge who received the evidence at first-hand, it is nevertheless satisfied that his conclusion on the facts is plainly wrong. The Court of Appeal should intervene if so satisfied. But if not so satisfied, the Court of Appeal should defer to the trial judge’s conclusion even if in some doubt as to its correctness.”

34.  We could see no basis upon which we could interfere with the learned judge’s conclusion.

72 Locations

35.  Nor were we satisfied that the judge was wrong so far as the 72 Locations are concerned.

The Red Locations

36.  The judge preferred the evidence of Mr Chan on behalf of the plaintiff.  The learned judge said:

“

84.

The defendant’s case is that the plaintiff had marked these Red Locations but had failed to carry out the requisite repair work.  If there (sic) were true, the omission would be blatant.  It would be inconceivable that Sunfield would certify 100% completion of the work when such certification would not survive any visual inspection.  Mr Chan gave evidence that some occupants marked up the red circles by themselves.  On balance, I accept Mr Chan’s evidence in this regard.  Thus I rule that the defendant has failed to discharge its burden of proof here.”

Painting of External Walls

37.  Mr Dawes’ criticism was directed at para. 95 of the judgment:

“

95.

Second, the paintings were fading out.  Mr Tseng attributed the fading colour to the use of over-diluted paint.  Earlier I have already found Mr Tseng to be an unreliable expert witness.  I have doubt as to the veracity of his claim.  I therefore refuse to accept his evidence in this aspect.”

38.  Mr Dawes’ complaint was that the judge should not have rejected the evidence of Mr Tseng on this aspect of the matter simply because he had found him to be unreliable in other aspects.

39.  Mr Tseng was an expert witness.  His evidence had been found by the learned judge to be unreliable.  Mr Dawes did not challenge those findings.

40.  Having regard to the judge’s assessment of Mr Tseng’s reliability, we believe that the judge could not be faulted for having dealt with the evidence so briefly in relation to the painting of the external walls.

Waterproofing works

41.  The learned judge had also rejected Mr Tseng’s evidence on the waterproofing works on the roof and the roof plant room top.  We would only refer to the learned judge’s conclusion on the waterproof of the roof.  He said:

“

111.

The main difficulties with Mr Tseng’s evidence are these.  The so-called opening up at a few locations was no more than removing the waterproofing layer on the top.  Visual inspection of the uncovered surface cannot reveal if the concrete underneath at those locations was defective or if any repair work need to be carried out there.   There is no other evidence to show that the concrete underneath those locations was defective either.  His assertion that the plaintiff did not carry out any concrete repairing works as specified under the Contract is therefore not maintainable.  Further, it is not sufficient just to rely on the result of inspection at a few locations to say that the plaintiff had not carried out any waterproofing work at all at the entire roof top.  These points again vividly illustrate Mr Tseng’s tendency to jump to conclusion from insufficient data.  I reject his evidence.”

Conclusion

42.  To conclude, the defendant sought to challenge findings of primary facts by the learned judge.  We are satisfied that the learned judge had dealt with each of the issues raised carefully and correctly, and there was no basis upon which we could possibly interfere.

43.  For these reasons, we dismissed the appeal with costs.