MITSUBISHI ELEVATOR HONG KONG CO LTD v. MARRIOT ENGINEERING & CONSTRUCTION CO LTD

DCCJ3970/2011

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 3970 OF 2011

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DECISION

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Background

1.  By summons dated 9 September 2013, the defendant applied for leave to appoint Mr Albert So and/or a quantity surveyor as its nominated expert witness on quantum in this action.  During the course of the hearing today, Mr Nigel Francis, solicitor for the defendant, informed the court that the defendant no longer wishes to pursue the application as regards Mr Albert So.

2.  The application is made pursuant to Order 38, rule 44 of the Rules of the District Court, Cap 336.  In effect, the defendant seeks to vary the order of Master KK Pang dated 13 December 2012, giving, inter alia, expert directions as follows:-

“1. Leave to the parties to adduce expert evidence on quantum, limited to one registered lift contractor for each party in relation to the issue as to whether there is a market, and if yes the market values, of the equipment and machinery, or parts and materials of the goods to be supplied under the Letter of Award and the said sub-contract referred to in the Statement of Claim, to the plaintiff at the time and place of the breach.”

3.  It is common ground between the parties that such valuation evidence is relevant to the pleaded question of whether the plaintiff has taken all steps to mitigate its loss.  As Mr Nigel Francis puts it in paragraph 7 of his skeleton submissions, it is the defendant’s case that the plaintiff failed to take the necessary steps to mitigate the loss and damage that it in fact suffered by reusing or selling the lift equipment and machinery originally contracted to be purchased by the defendant.

Relevant legal principles

4.  Under Order 38, rule 44, it is the duty of the defendant to show “sufficient cause” to justify the proposed change of experts [see: Lo King Fung v China Overseas Property Services Limited, DCPI 380/2008 (Judgment of Her Honour Judge Marlene Ng dated 4/02/09), at paragraph 31].

5.  The conditions for admissibility of expert evidence depend on, inter alia, whether the expert is qualified to give evidence on the subject matter in question.  The question is whether the proposed expert has acquired by study or experience sufficient knowledge of the subject to render his opinion of value in resolving the issue before the court [see: Li Siu Ping v Perfecta Dyeing, Printing & Weaving Works Limited, DCPI 901/2006 (Judgment of Her Honour Judge Marlene Ng dated 18/07/07), paragraphs 38 and 39; and Fung Chun Man v Hospital Authority, HCPI 1113/2006 (Judgment of Bharwaney J dated 24/06/11) at paragraph 12].

6.  In the present case, the proposed expert must have the expertise and experience on the valuation of the lift and machinery referred to in Master KK Pang’s order. 

Whether possible to appoint Registered Lift Contractor

7.  I agree with Mr Tim Kwok, counsel for the plaintiff, that the defendant has not shown that the appointment of a registered lift contractor cannot be achieved.  In this regard, I accept and adopt as my reasons the facts and matters deposed to in paragraphs 20 to 23 of the 6^th Affirmation of Lee Kwok Li filed herein on 19 September 2013 by the plaintiff in opposition to the summons. 

8.  Mr Nigel Francis frankly admitted in his oral submissions that a judgement call had been made by the defendant at the time not to approach certain registered lift contractors because it was perceived that they had no background in being experts.  I do not regard this as the proper approach to take.

Whether quantity surveyor is an appropriate expert

9.  To answer this question, is it important to bear in mind the factual background of this case.

10.  The lift in question ordered by the defendant was in an oval shape.  Its design had been tailor-made by the plaintiff and approved by the defendant.

11.  In order to make this lift, the plaintiff had to order, inter alia, a regular lift which was in rectangular shape and modify it into oval shape, pending installation at the building site.  Such modification clearly went beyond modification to the car cage of the lift (see: paragraph 19 of the Witness Statement of Lee Kwok Li filed herein on 6 November 2012).

12.  As required by the order of Master KK Pang, the expert will have to give an opinion as to whether there is a market for such an oval-shaped lift.  If not, the valuation exercise will involve the cost of restoring the lift into its original rectangular shape.  A registered lift contractor, who is in the business of supplying and maintaining lift equipment and machinery, has the expertise and experience to determine how much such restoration cost and the market value of the parts and equipment at the time and place of the breach by the defendant.

13.  In this case, the expert should have expertise in the valuation of the lift and its parts.  He has to determine whether there is a market, and if so the market value of the equipment and machinery, of parts and materials of the lift.  He should also have knowledge and experience in relation to the past value of the lift and its parts in 2006.  Most importantly, he should also have expertise on the technical issues, procedure and hence the related cost involved in the restoration of the oval-shaped lift to its original rectangular shape.

14.  From the evidence filed by the defendant, I am not satisfied that quantity surveyors are qualified to give expert opinion on the questions outlined above.  The work of searching for a market for any particular second-hand or abandoned item of machinery and putting a valuation on the same appears to fall outside the scope of the work of a quantity surveyor.

Conclusion

15.  For the reasons set out above, I am not satisfied that the defendant has shown sufficient cause to justify a variation of the order of Master KK Pang in the manner sought in the summons.  The defendant’s summons is dismissed.

16.  For the same reasons, I would allow the plaintiff’s appeal against the order of Master A Yim dated 17 June 2013.

17.  I shall now hear the parties on the form of the order to be made and the question of costs.

(Discussion re costs)

18.  Costs of the summons be paid by the defendant to the plaintiff in any event, such costs to be taxed if not agreed (with certificate for counsel).

(Submissions re plaintiff’s Notice of Appeal dated 28 June 2013)

19. (1) Paragraph 1 and paragraph 13 of the order of Master A Yim made on 17 June 2013 be set aside.

(2) Unless the defendant do by 5:00 pm on 1 November 2013 fix a date with the plaintiff for its nominated expert (Registered Lift Contractor) to conduct joint examination with the plaintiff’s nominated expert within 28 days thereafter, the defendant be debarred from adducing any further expert evidence at the trial and leave be granted to the plaintiff to prepare, file and serve the solo expert report within 42 days thereafter.

(3) Costs of and incidental to the hearing on 17 June 2013 before Master A Yim be to the plaintiff in any event, such costs to be taxed if not agreed.

(4) Costs of this appeal be to the plaintiff in any event, such costs to be taxed if not agreed (with certificate for counsel).

(5) Paragraph 2 of the order of Master A Yim dated 17 June 2013 be varied as follows:- “Where a joint examination is carried out in accordance with paragraph (2) of the order dated 4 October 2013, within 42 days after the joint examination, the respective experts are to prepare a joint report which succinctly identifies:-”, and then it carries on as before.

(6) The CMC hearing scheduled for 17 October 2013 be vacated and adjourned to a date to be fixed (with an estimated time of 30 minutes).

(Discussion re plaintiff’s summons dated 3 September 2013)

20.  In respect of the plaintiff’s summons for leave to appeal against my previous order, the summons is adjourned sine die with liberty to the plaintiff to restore.