FURGO TECHNICAL SERVICES LTD v. MARRIOT (CT) CO LTD

DCCJ 3364 / 2005

 IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 3364 OF 2005

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JUDGMENT

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 1.  This is an application for summary judgment pursuant to Order 14 of the Rules of the District Court, Cap. 336, sub. leg. H. I heard Counsels for both parties on 22 December 2006.  Lest I should forget, I immediately record my thanks to Miss WONG (Counsel for the Plaintiff) for her diligence, perseverance and, in particular, her patience with me. Unfortunately, I find myself unable to express the same sentiments for Mr. LI, Counsel for the Defendant.

2.  I dismiss the application. I make an order nisi that costs of and incidental to this application be in the cause with certificate for Counsel.  This order will be made absolute on expiration of 14 days after the handing down of this Judgment unless any party makes application thereto.

3.  In the paragraphs that follow, I state matters considered in arriving at my decision.

4.  It does no harm to repeat some of the principles pertinent to such applications:

a)	It is only in cases where it is clear that there is no defence and that the Plaintiff is entitled to judgment that summary judgment will be granted. The corollary is that where there are issues of material facts or law to be resolved, summary judgment is not appropriate.
b)	The Court may dismiss the summons and give unconditional leave to defend. The Court may, in appropriate cases, grant only conditional leave to defend e.g. conditional on payment into Court. Towards the end of her address, Miss WONG  did in passing ask me to consider, if need be, the alternative of conditional leave to defend.
c)	There cannot be a trial on affirmations/ affidavits (see Hong Kong Civil Procedure 2006, paragraph 14/4/9). The affirmations of the Plaintiff and the Defendant must match certain desiderata (see Hong Kong Civil Procedure 2006, paragraph 14/2/5 to 14/2/8 and 14/4/4 respectively). In particular, the Defendant’s affirmation ‘must “condescend on particulars,” and should, as far as possible, deal specifically with the plaintiff’s claim and affirmation, and state clearly and concisely what the defence is, and what facts are relied on to support it…’

5.  The Defendant’s affirmation in this case (affirmation of LIM Boon Yong, page 41 to 46 of the Bundle of Documents prepared for purposes of this hearing, “Bundle”) did not meet with the requirements just now mentioned. One is entitled to criticize it as containing mere denials and arguments. Arguments have no place at all in the affirmation. The affirmation did not bother to deal with such matters as, for example, the relationship (if any) between the Defendant and Ricker RMC Company Limited (“Ricker”); the arrangement (if any) between the Defendant and Marriot Consultancy Limited (“Marriot Consultancy”) in dealings with the Plaintiff; how it was that Marriot Consultancy came to issue cheques to the Plaintiff apparently in response to invoices issued by the Plaintiff to the Defendant and the involvement of a Miss Annie Chiu (“Miss CHIU”) in dealings with the Plaintiff. The relevance of these and other matters will become more apparent in the text that follows. 

6.  In the Statement of Claim, the Plaintiff listed in the attached schedu1e 147 invoices alleged to be overdue and unpaid for (page 6 to 9 of Bundle). The Plaintiff’s first affirmation (affirmation of CHAN Ka Fai, page 29 to 36 of Bundle) sought to produce the invoices (and related  documents) as exhibits (Exhibit “CFK-7”, page 121 to 771 of Bundle). Regrettably, the invoices were not exhibited in the sequence as listed in the attached schedule. It was sheer agony trying to marry the two. In the outcome, I could not see exhibited 5 invoices i.e. invoice number 989828 dated 17 September 2004; invoice number 990001 dated 22 September 2004; invoices number 991410 and 991413, both dated 30 October 2004 and invoice number 994557 dated 19 January 2005. There was no explanation for their absence. I thought that was already sufficient reason not to grant summary judgment for the amounts covered by such invoices.   

7.  “Pursuant to various agreements by way of quotations and acceptance between the Plaintiff and the Defendant during the period from 26th August 2000 to 21st March 2002 (hereinafter called “the Agreements”)… it was agreed that the Plaintiff would provide professional services of conducting tests on various building materials and chemicals …pursuant to the Defendant’s request” (paragraph 3 of Statement of Claim, page 3 of Bundle).

8.  It is the Plaintiff’s case that request for tests in the form of Test Order Form (“TOF”) was made (by the Defendant); in response to the TOF, a Job Requisition Form (“JRF” - this was an internal document of the Plaintiff) was made out and tests done; a test report was prepared and then an invoice issued (see, for example, paragraph 5 of the Plaintiff’s first affirmation, page 30 of Bundle).

9.  I note that paragraph 3 of the Statement of Claim seems to suggest the existence of a number of accepted quotations. I note also that in the Bundle the relevant documents are presented in reverse order of their coming into existence i.e. the invoice was first exhibited followed by the relevant JRF and then the TOF.

10.  The Plaintiff’s first affirmation stated that –

“	3.	The Defendant had instructed the Plaintiff to provide professional services of conducting various tests ever since 2000. Ms. Annie Chiu (“Ms. Chiu”) had agreed and accepted, on behalf of the Defendant, various quotations submitted by the Plaintiff. There is now produced and marked “CFK-1” copy of the quotation dated 26th August 2000…
	4.	Ever since the acceptance and agreement of the quotation by Ms. Chiu…the Plaintiff had provided continuous testing services to the Defendant…” (see page 31 of Bundle).

11.  On one interpretation of these 2 paragraphs, it seems that the tests (relating to the invoices in the present case) were conducted pursuant to requests made under the quotation dated 26th August 2000 i.e. quotation number 002170A2. That is the only quotation exhibited as “CFK-1” (see page 48 to 52 of Bundle). There was no explanation as to why the other quotations (if they existed and are relevant to the present claim) were not exhibited.

12.  I note that of the 147 invoices allegedly unpaid for, only 52 recited and appeared related to quotation number 002170A2. The rest of the invoices variously recited and appeared related to quotation number 020750B2, 002170I1 and 020750C1.  I do not think it the duty of the Court to construct and interpret affirmation evidence in the best light for the Plaintiff (or for any party). Are these other quotations relevant to this case? If so, why are they not exhibited? What are their terms?

13.  I might also say that there is no page 393 or 398 in Exhibit “CFK-7”.  Page 425 and 426 in the same Exhibit appear to be page 3 and 4 of  “Statement/ Reminder” from the Plaintiff to the Defendant for account made up to 31 May 2005. I facetiously suggest that they were put in just to surprise. I strongly advise that more care be exercised in preparing bundles for use at hearings.

14.  The Plaintiff alleges that the Defendant made the requests for tests. The requests were made by way of TOFs. It is noted, however, that all the TOFs in Exhibit “CFK-7” were on the letterhead of Ricker. The thrust of Defence case is that whatever tests done were done at the request of Ricker to which the Plaintiff has to look for payment. It is noted further that in all the TOFs  there are the words “Bill to Marriot (CT) Company Limited” (i.e. the Defendant) and a circular stamp bearing the words “Marriot Consultancy Limited” in the outer rim with “Q.C.” in the centre (this is save for the TOFs in relation to invoice number 989130 and 994367 which carry no such stamp). There is simply nothing to explain how and in what circumstances these TOFs came into being. In particular, there is nothing to explain:  a) why it was stated that the Defendant was to be billed and b) the significance of the stamp.

15.  I need to point out that there is no TOF exhibited for 9 invoices i.e. invoice number 989505, 990503, 991642, 992303, 992952, 993967, 995268, 996268 and 997199. Why is this so? Who, if anyone, made the TOF? Assuming those TOFs existed, what are their terms?

16.  As earlier indicated, the JRFs are internal documents of the Plaintiff. Even if they mentioned that the Defendant was to be billed, I do not see how that can (without more) bind the Defendant. I note that the same 9 invoices without TOF exhibited are also without the related JRF. Of the JRFs exhibited, only 55 mentioned that the Defendant was to be billed (all TOFs exhibited provided that the Defendant was to be billed). 10 JRFs mentioned that “Marriot” was to be billed (those relating to invoice number 988372, 988373, 989878, 989982, 990622, 991973, 991974, 993329, 994462 and 994772). On the Plaintiff’s evidence there were 2 “Marriots” – the Defendant and Marriot Consultancy. The remaining JRFs mentioned Ricker as Client and that “Client” was to be billed. These JRFs suggest that it was Ricker to be billed - if it was the Defendant, then one would expect mention of the Defendant’s name as in the 55 invoices already referred to. The JRFs, for what they are worth, at least suggest that the Plaintiff did draw a difference between billing the Defendant and Ricker.

17.  I digress to say that on more than one occasion a number of JRFs and TOFs were exhibited in relation to the same invoice. I cite as an example invoice number 989982 with 6 JRFs and 4 TOFs (page 313 to 324 of Bundle). I will simply say that it was not easy to rationalize why this was so. I also refer to invoice number 991142 (page 384 to 400 of Bundle). I can only suspect that some of the JRFs and TOFs exhibited really related to invoices other than that numbered 991142.

18.  Paragraph 6 of the Plaintiff’s first affirmation (see page 31 of Bundle) crystallizes the basis for alleging liability on the part of the Defendant. The material part of that paragraph stated that:

“

Throughout the years from 2000 to 2005, the Defendant had instructed the Plaintiff to conduct various services frequently. The Plaintiff was also given to understand from the Defendant that some of the TOF were to be issued and instructed from one Ricker RMC Company Limited (“Ricker”), the Defendant would be liable for such services requested by Ricker. In fact, it is stated clearly on the TOF issued and instructed by Ricker that the bill was made to the Defendant, and all along the Defendant had made payments for such services as instructed by Ricker…”

19.  There seems only 2 reasons for the Plaintiff saying that it “was given to understand…the Defendant would be liable for…services requested by Ricker” viz. 1) the TOFs issued and instructed by Ricker and 2) past payments had been made by the Defendant for services requested by Ricker. I do not see evidence indicating anyone representing the Defendant directly informing the Plaintiff that the Defendant would assume liability to pay for tests ordered by Ricker.

20.  I have already mentioned the unsatisfactory evidence in relation to the TOFs (and also the JRFs). I note further that there is no evidence of the relationship, if any, between Ricker and the Defendant.

21.  Exhibits “CFK-2” and “CFK-3” in the Plaintiff’s first affirmation show (some of) the invoices that the Defendant paid for in the past. In most instances, the related TOF, JRF and test report are also exhibited. In Exhibits “CFK-4” and “CFK-5”of the same affirmation, copies of the payment cheque and receipt voucher respectively relating to the invoices in Exhibits “CFK-2” and “CFK-3” are shown (it seems clear that the cheques covered payment of other invoices as well).

22.  Exhibit “CFK-2” contained 6 invoices all dated 30 June 2004 whereas Exhibit “CFK-3” contained 4 invoices all dated 31 July 2004. Only 4 invoices recited quotation number 002170A2 (invoice number 986885, 986888 and 986891 in Exhibit “CFK-2” and invoice number 988099 in Exhibit “CFK- 3”. Invoice number 986888 also mentioned quotation number “I1” (I understood this to mean quotation number 002170I1). The other 6 invoices variously mentioned quotation number 020750B2 and 003568E1. I echo the queries expressed earlier in paragraph 12 above viz. whether these other quotations are relevant; if so, why are they not exhibited and what are their terms.

23.  Exhibits “CFK-4” and “CFK-5” show the Plaintiff addressed their invoices and issued their receipt vouchers to the Defendant. It is noted, however, that the payment cheques were issued by Marriot Consultancy and not the Defendant.

24.  Miss WONG referred to the second affirmation of the Plaintiff (page 37 to 40 of Bundle). It can be seen, inter alia, that at all material times:  a) the Defendant had 3 shareholders viz. Miss CHIU, Marriot Consultancy and another person; b) Miss CHIU was a director of the Defendant and director as well as authorized person of Marriot Consultancy and c) the registered office of the Defendant was the same as Marriot Consultancy’s principal place of business in Hong Kong. I understood Miss WONG to say that in such circumstances the acts of Marriot Consultancy must be regarded as the acts of the Defendant and vice versa. My view is that each corporation is a separate and distinct legal entity. Coincidence of directors and shareholders as well as use of the same address cannot, without more, merge the 2 corporations and convert the acts of one into that of the other. 

25.  Unsatisfactory though the Defendant’s affirmation may be, the Plaintiff’s affirmation evidence is wanting in many material aspects. On such evidence, I cannot say that clearly the Defendant has no defence and that judgment should be granted to the Plaintiff forthwith. There are at least issues of material facts to be tried.  I therefore decided to dismiss the summons, grant the Defendant unconditional leave to defend and make the cost order as above-mentioned.