DMA SOLUTIONS LTD v. ALFACOM SOLUTIONS LTD

DCCJ 1774/2005

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 1774 OF 2005

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DECISION

1. This is the Plaintiff’s application for summary judgment for a debt.  The undisputed facts are these: Both parties were and are providers of information technology (“IT”) services, Deft had clients to whom Deft was to provide such services, but as a result of Deft owing wages, all the Deft’s 7 staff members resigned.  Two such members then formed the Plaintiff company, and the other members joined as its staff.  Deft not wishing to disturb its relationship with its clients, agreed to pay the Plaintiff for its staff to continue providing the ongoing IT services to those clients, the clients remaining with the Deft, so that the Deft itself would continue to charge these clients.  In other words, the agreed new route of payment of services was now Clients to pay Deft, and Deft to pay the Plaintiff.

2. The Plaintiff completed provision of IT services to the Deft’s clients, and issued invoices to Deft totalling $250,570.00 which, after some adjustments, came to $182,781.00.  But the Deft failed to pay.  The Writ was issued on the 18th April 2005 and duly served to the Deft on the 3rd May.  The Deft did not file a Defence immediately, but the Plaintiff did not wait for the statutory 14 days before issuing an Order 14 Summons on the 10th May.  While the Plaintiff may be criticised for having prematurely issued the Summons, this is only a side issue which has no bearing on the proceedings today, because the Deft’s defence is spelt out clearly today inside the affidavits, so that it is as if I have a filed Defence before me.  The O.14 Summons was first listed for hearing on the 30th May 2005, but by consent the hearing was adjourned in order for parties to file affidavits, and this is why the O.14 hearing takes place today. 

3. The Plaintiff’s case is clear from the Statement of Claim, which is supported by documents inside “Bundle C (Exhibits)”.  For example, satisfactory completion of projects for the Chinese YMCA and IBM China ITSD have been acknowledged by the clients (see Bundle C at pages 99 and 97 respectively), but the Deft has failed to pay the Plaintiff despite having been invoiced for the completed projects.

4. The Deft contests summary judgment and furnishes basically the following three grounds:

(1)	That the Plaintiff has breached an oral agreement by failing to supply Deft with the source and program codes. This “obligation” is denied by the Plaintiff, and Deft has not produced any documentary proof of same. The Deft agrees that there was no written contract between it and the Plaintiff, so that Deft cannot physically point to such a term. On the balance of probabilities I find this to be a mere assertion, without even a scintilla of evidence to support the same, and I do not give this ground any weight. Furthermore, as Deft admits it has no computing expertise of its own, I find it incredible to say that it needed the source and program codes “so that it could provide maintenance to the completed projects”.
(2)	Secondly, Deft says that Plaintiff had failed to inform Deft of the progress of work so that Deft did not know how to demand payment from its own clients. I find this incredible because: (a) again there is no written contract or any document to evidence this alleged contractual term, (b) the clients were Deft’s own clients, and if Deft did not know what progress had been made, as a service provider interested in being paid it would, and could easily, have asked its clients by a simple telephone call, (c) Deft could, in addition, easily have telephoned the Plaintiff regarding progress of any project, (d) alternatively, if Deft and Plaintiff were not in speaking terms, which I find incredible seeing on Deft’s own case it had made the relevant arrangements with the Plaintiff, Deft could easily have written to the Plaintiff inquiring about progress. If that had been done, Deft would today have at least some documents to support its allegation. As matters stand I simply find this ground incredible.
(3)	Thirdly, Deft says Plaintiff does not deserve to be paid because of clients having complained, the Chinese YMCA and IBM being the only two to which Deft can point today. However, while I note that with YMCA there is some evidence of work being slow, in the end the relevant project had been completed, and more importantly, the Plaintiff had not invoiced the Deft prematurely: see Bundle C at page 99. Accordingly the ground of defence under YMCA is unsupported. As to the only other complaint matter, IBM complaining of progress being slow (Bundle page 79), this one in fact belongs to a different IBM from the subject of the invoices, because page 79 refers to Macau IBM, while page 97 refers to IBM China ITSD. The Deft is unable to point to any other “client complaint” than these two. Accordingly I find this third ground of “Defence” to have no substance.

5. In addition to the Deft not being able to show any credible, triable or arguable ground to resist today’s application, the Deft admits it had received payments from its clients but had intentionally not released payment to the Plaintiff: see “Bundle B (Affirmations)” on page 23 at paragraph 8.  This point is highly unfavourable to the Deft’s case.

6. In all the circumstances I find no bona fide, credible, triable, or arguable case as raised by the Deft today.  Accordingly there will be Summary Judgment entered in favour of the Plaintiff in the sum of $182,781.00 together with interest at 5 % per annum from the date of the Writ to today, and 8 % per annum from today until payment is made. 

7. Costs of today’s application and for the preparation of the Consent Summons (for 30th May 2005) to the Plaintiff, to be taxed if not agreed.

DATED the 9th day of September, 2005.