YEUNG SAN MING PETER v. MING KEE CONSTRUCTION (STEELWORK) ENGINEERING LTD

DCCJ 3609/2017

[2020] HKDC 390

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 3609 OF 2017

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JUDGMENT

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INTRODUCTION

1.  The plaintiff (“P”) was, between November 2016 and April 2017 (“the material time”), a contractor of the defendant, supplying labour for a project in which the defendant was one of the sub-contractors of the Far East Aluminium Works Company Limited (“Far East”).  The project involves building works at Tuen Mun Town Lot No 427, So Kwun Wat Road, Area 56, So Kwan Wat (“the Site”), for which the Main Contractor was China Overseas Building Construction Ltd (“China Overseas”)[1].

The claim

2.  The claim involves two contracts and variations to the second contract, as follows:-

(i)    By an oral agreement between the plaintiff and the defendant on or about 1 November 2016, it was agreed that the plaintiff would supply workers for certain preparatory works for 17 houses (“the Project”) at the Site.  It was agreed that the defendant will pay the plaintiff for each man-day (namely, the supply of one worker for a full working day at the Site), the sum of HK$1,400 (“the 1^st Agreement”).  The 1^st Agreement was terminated on 19 December 2016, on which day, the plaintiff had cumulatively supplied workers pursuant to this Agreement for 417 man-days[2];

(ii)   On 20 December 2016, the plaintiff and the defendant entered into a written contract to undertake works in only 5 of the 17 houses on the Site (2^nd Agreement”)[3]. This was a lump sum contract of HK$1,300,000 at HK$260,000 per house[4];

(iii)  Between 20 December 2016 and 19 April 2017, the defendant and/or Far East Aluminium Works Company Ltd (“Far East”) which sub-contracted the works to the defendant at the Site, requested various variations to the works concerning the 5 houses forming the subject-matter of the 2^nd Agreement (“Additional and Variation Works”[5]), at the agreed rate of HK$1,400 per man-day.  The plaintiff supplied, pursuant to such Additional and Variations Works, the following man-days of workers:-

Description	Work Done/Charges
Assistance works under the directions of the Defendant/Contractor	215 man-days at HK$1400 per man-day
Assistance works requested by the Defendant/Contractor	79 man-days at HK$1400 per man-day
Total number of        man-days	(215 + 79) man-days at HK$1400 per man-day or 294 man-days x HK$1400 = HK$411,600

3.  The plaintiff alleges that the total amount payable under the 1^st and 2^nd Agreements and the Additional and Variation Works was HK$2,295,400.00, made up as follows:-

	Charges under 1st Agreement	HK$583,800.00
	Charges under 2nd Agreement	HK$1,300,000.00
	Charges under the Additional
	and Variation Works	HK$411,600.00
		_______________
	Total:	HK$2,295,400.00
		=============

4.  The plaintiff accepts that the defendant made partial payment of HK$1,878.360.00, thereby leaving a balance of HK$417,040 unpaid.  This is the sum constituting the claim in this action.  There are ancillary claims for interest and costs.

The defence and counterclaim

5.  The defence consists of the following allegations:-

(i)  The unit rate of payment by the defendant to the plaintiff was agreed at HK$1,200 per man-day except for two workers who would be paid at HK$1,400 per man-day[6];

(ii)  The 1^st Agreement terminated on 7 December 2016 (instead of 19 December 2016, as alleged by the plaintiff) but notwithstanding this variation of the 1^st Agreement, the defendant was duly paid a sum of HK$204,000 to the plaintiff representing the agreed 170 man-days at the agreed rate of HK$1,200 per man-day and this sum of HK$204,000 was paid notwithstanding the duplication of work to the subsequent all-inclusive contract as particularized in paragraph 5 of the defence[7];

(iii)  The 2^nd Agreement was a lump sum contract at the agreed sum of HK$1,300,000 (HK$260,000 each unit) for 5 units[8];

(iv)  The number of man-days for the Additional and Variation works was indeed (215 + 79) man-days but the unit rate of payment should be HK$1,200 per man-day[9];

(v)  Accordingly, the plaintiff should have been paid HK$1,856,800, of which HK$1,878,320 had already been paid, and so the plaintiff is not owed any money.

6.  The defendant also counterclaims against the plaintiff for:-

(i)  Damages claimed by its Contractor (Far East) for various failures to comply with Site Safety Requirements, in the total amount of HK$14,950;

(ii)  Damages for water seepage notified by its Contractor at Unit C22 for which no particulars were available, to be assessed;

(iii)  Ancillary claims for interest and costs.

THE ISSUES

7.  The parties filed a Joint Statement of Issues but at the opening of the hearing, Counsel for the plaintiff admitted the defence’s counter-claim of HK$14,950 for breach of site safety, for which the plaintiff will give credit in its claim.  The issues before the court therefore boiled down to the following three:-

(i)  Whether the unit rate payable for the 1^st Agreement and the Additional and Variation Works was HK$1,400 as alleged by the plaintiff or HK$1,200 (except two workers) as alleged by the defendant, or any other rate (Issue 1);

(ii)  What were the man-days worked under the 1^st Agreement (Issue 2); and

(iii)  Whether the plaintiff was liable for the water seepage in Unit C22 (Issue 3).

8.  Both parties were represented by Counsel.  The plaintiff gave evidence.  Mr Au Kai Ming (歐繼明) and Mr Tsang Hon Keung (曾漢強) gave evidence for the defendant.  All witnesses were cross-examined by Counsel.

THE CASE FOR THE PLAINTIFF

9.  The plaintiff in his witness statement asserted that his claims were based on records kept on site, including the records of signing in and out of his workers.  At trial, the plaintiff testified that every working day he kept a record of the attendances of his workers on site and also received from the “Sub-Contractor (Far East) daily workers’ attendance List” (“Far East Daily Lists”)[10] at noon and he would take a photo of it and WhatsApp it to the defendant every afternoon.  He had to confirm to Far East the attendances set out in this document from his own records, as can be seen from the confirmatory signature of Ming Kee by one 「輝」on the document.  The plaintiff said he believed there were hard copies of this document, one was given to the Main Contractor China Overseas, another hard copy was provided to the defendant and the remaining hard copy was kept by Far East.  The plaintiff only provided one of these Far East Daily Lists dated 22 April 2017 to the court but he assures the court that he did receive these daily lists and he had to make a daily confirmation to Far East for his workers’ attendances.

10.  Based on these Far East Daily Lists, the plaintiff would compile a monthly record of man-days worked by each of his workers, which he would send to the defendant at the end of each month or at the start of the following month by WhatsApp, to facilitate payment so that the defendant would know exactly how many staff was involved in working for that particular month, so as to enable the calculation of man-days.  These monthly lists are made out in handwriting at the end of each month for wage payment to his workers (方便一個月後，工人出糧，核對出席記錄).[11]  These monthly lists (“Monthly Man-days Lists”) showed the man-days worked by each worker on site from 1 November to 30 November 2016, to be a total of 194 man-days and from 1-19 December 2016, the total man-days worked were 223, broken down by each worker.  The plaintiff thus asserts that the defence claim of 170 man-days for the 1^st Agreement was not supported by any documentary evidence whereas the actual number of man-days worked for the defendant by workers supplied under the 1^st Agreement were documented by the records at the Site.  The Monthly Man-days Lists, the plaintiff says, support the number of man-days claimed by him.

11.  As to the unit rate, the plaintiff in his witness statement (taken as evidence-in-chief) pointed out that the defendant usually paid the plaintiff around the 7^th and 20^th of each month.  On the first occasion, the amount paid per man-day was about HK$800 (which was labelled as 大糧) and the second occasion, the remaining HK$600 (which was labelled as 細糧) would be paid.  The plaintiff further explained at trial that the defendant will autopay wages or pay via EPS to him around the 7^th and 20^th day of the following month.  This could be ascertained from the Wage Payment Record at item 9 in Trial Bundle B(pages 12 to 15) (“Wage Payment Record”), which is a document that is relied upon by the plaintiff but attracts much arguments from each side indeed.

12.  There is a somewhat controversial document prepared by the defendant which the plaintiff would like to make use of, to corroborate his evidence.  But the plaintiff pointed out that certain parts of this document was self-serving and should be ignored.  Indeed, the plaintiff says, the self-serving parts of the document were contradicted by the parts which corroborated the plaintiff’s evidence.  This document is headed「楊新明工數更正」[12] (this is in fact the “Wage Payment Record”), which is a document generated by the defendant.   This Wage Payment Record was handed to him (the plaintiff) by the defendant’s staff or its representative such as Mr Tsang Hon Keung of the defendant on or about 11 or 12 May 2017 when the Project was finished and discussions took place between the plaintiff and the defendant for outstanding wage payments. The self-serving part, which is not agreed by the plaintiff, is in the column headed 「日薪」, as well as the heading「楊新明工數更正」.

13.  At paragraph 11 of the witness statement of the plaintiff (adopted as evidence-in-chief), he said that the defendant all along paid the plaintiff on the basis of HK$1,400 per man-day between November 2016 and February 2017 and there was no ground for the defendant to allege that it is HK$1,200 per man-day for every worker (「從被告人出糧單，被告人從2016年11月1日至2017年2月出糧都是按照每工HK$1,400出給本人的，現又說每工HK$1,200是沒事實根據。」).  The plaintiff, in his supplemental evidence-in-chief, said that “when Tsang said he had paid all the wages, of course I disagreed.  As to the column of daily wage is HK$1,200 and HK$1,400, I disagreed”, referring to the Wage Payment Record handed to him on or about 11 or 12 May 2017 and to another set of documents relied upon by the defendant exhibited as Annex 4 to Mr Tsang’s witness statement.

14.  The plaintiff pointed out that the number of man-days said to have been worked by his workers for the Project in the Wage Payment Record (a document generated by the defendant) roughly tallied with the Monthly Man-days Lists of the plaintiff, as shown in Item 13 of the Trial Bundle B at pages 23-29, which is a document generated by him.  For example, the plaintiff was asked by his Counsel in supplemental examination in chief, to explain why in this document (the Wage Payment Record), the number of man-days under the column Nov-16 showed 195 man-days whereas, the record for November 2016 in the Monthly Man-days List (at page 23 of Item 12 of the Trial Bundle B) recorded 194 days.  The plaintiff explained that the columns headed Nov-16 and Dec-16 in the Wage Payment Record (page 12 of item 9 of the Trial Bundle B) should refer to man-days worked for the calendar months of November and December 2016.  The plaintiff’s Monthly Man-days List for November 2016[13] showed 194 days but the defendant paid him for 195 days and when he (the plaintiff) noticed that the defendant had paid him an extra day, he (the plaintiff) therefore repaid this to the defendant on the following month, which explained why for the following month, the days for December 2016 shown was 366 in the Wage Payment Record whereas in the plaintiff’s monthly record, was 368, albeit there is still a two days difference. 

15.  Whilst the Wage Payment Record purported to show that the unit rate per man-day was HK$1,200 except for two workers in the「日薪」column, the table in the document, read as a whole, actually showed that the real unit rate was indeed HK$1,400 per worker.  By way of illustration, Counsel for the plaintiff, took the court to the table on the Wage Payment Record[14], which showed:-

(i)  For the period 1-16 November 2016, the defendant was paid HK$163,800 against the line 「明記當月支付（MPF + 工人糧）」.  That was for 195 man-days worked, which works out per man-day at HK$840 per man-day.  This was the 1^st occasion payment made around 7 December 2016 for the first part of the November wages[15].

(ii)  Then under this line there are two lines: (i) 支票號碼#005127 and (ii) HK$109,200.  This represented the wages made under the 2^nd payment made on 22 December 2016.  For 195 man-days, this works out at the unit rate of HK$560.  Adding this amount to the 1^st Payment unit rate of HK$840, the total unit rate is HK$1,400.

(iii)  The same calculations may be repeated for the payments up to 17 February 2017.  In other words, the unit rate per man-day applied was uniformly HK$1,400.

16.  The plaintiff in his witness statement stated that the defendant had been relatively punctual in paying him until February 2017, after which the defendant paid nothing and tried to renege on its commitments to the plaintiff, resulting in this action, after solicitors’ letters came to nothing.

17.  As the defendant had admitted that (215 + 79) man-days were worked for “Additions and Variations Works”, the plaintiff being entitled to claim for HK$1,400 per man-day, is entitled to be paid HK$294 days x HK$1,400 = HK$411,600.

18.  Accordingly, the plaintiff asserts that he (and through him his workers) were entitled to the unpaid amount of HK$417,040 giving credit for the breach of safety penalty of HK$14,950 counterclaimed by the defendant.  The plaintiff denies that he was responsible for the alleged water seepage in Unit C22.

THE CASE FOR THE DEFENCE

19.  For the defence, Mr Au Kai Ming (歐繼明), a director of the defendant and Mr Tsang Hon Keung gave evidence.  Mr Tsang works as 工料測量員 (quantity surveyor as the court understands the Chinese terminology to mean) for the defendant.

20.  Mr Au, in his witness statement, alleges that he has known the plaintiff since 2015 and in about October 2016, he, on behalf of the defendant, entered into an oral agreement to supply workers for a building project in Tuen Mun Town Lot 427 for 17 houses.  The oral agreement was struck just before 1 November 2016, when supply of workers for the 17 houses would begin.  The defendant was a subcontractor to Far East (遠東鋁質工程有限公司), which in turn was a sub-contractor to the Main Contractor, China Overseas (中國海外房屋工程有限公司).  Mr Au alleges that he agreed with the plaintiff for a unit rate of HK$1,200 per man-day except for two workers and that such agreement was evidenced by a series of WhatsApp exchanges which occurred sometime in October 2016[16].

21.  Mr Au also alleges that sometime in March 2017, the plaintiff also confirmed in the course of a series of WhatsApp messages that the unit rate was HK$1,200 per man-day except for two workers[17].  Mr Au also stated in evidence (para 9 of his witness statement, which is admitted as evidence-in-chief) that in May 2017, the plaintiff entered into a written agreement dated 12 May 2017, unconnected with the works at Tuen Mun Town Lot 427, but he alleges that it was entered with a view for the ease of assigning subsequent projects to the plaintiff, so that unless otherwise stated, same terms will apply for every project since then, including the payment of HK$1,200 as unit rate per worker.[18]  It is pertinent to note that this written contract dated 12 May 2017 was never mentioned in the defence’s pleadings.

22.  In further elaboration of his case, Mr Au in his supplemental evidence-in-chief at trial explained that the plaintiff was indeed paid HK$1,400 per man-day (as indicated in the Wage Payment Record at Bundle B at page 12) despite the oral agreement that the unit rate was HK$1,200 except for two workers.  This was, according to Mr Au, an intentional overpayment for the following reasons:-

(i)  The plaintiff would have sufficient funds to operate；

(ii)  The plaintiff’s funds would be relatively abundant;

(iii)  The plaintiff would have more reserve funds;

(iv)  The plaintiff would be financially flexible;

(v)  In case some workers performed poorly, the plaintiff would have sufficient funds to fire them and employ others.

23.  The above defence case was elaborated upon, in evidence by both witnesses for the defence.  Mr Tsang supplemented that more funds were paid to the P to cater for the legal obligation on fund allocating. During the trial, Mr Au was asked by Counsel for the plaintiff about the Wage Payment Record which was produced by the defence (at Item 9 of the Trial Bundle B at page 12).  The court’s note of his testimony is as follows (as understood and translated into English, with critical words taken from the original Punti testimony):-

“Q: This table - what’s that?

A: It’s our Account Dept internal record for Project 427

Q. For Nov 2016, 195 days

A: Yes

Q: Right hand side, 明記已支付

A: Yes

Q: Lower bottom is HK$163,800 + HK$109,200 = 明記已支付

A: Yes but it was paid tentatively.

Q: HK$273,000/195 days = HK$1,400?

A: See the left hand side column on daily wages日薪, 支多支小, 確保楊新明 (P) 有錢, 備用金, 最終會俾大數, to make room for employing staff or give penalty for firing poor staff. 錢鬆動啲 to make the plaintiff more flexible.

Q: Why HK$1,400?

A: Because there were two staff at HK$1,400, 預鬆啲

Q: For excess amount of money paid to the plaintiff, how would you do it?

A: Usually you will do a set off, 前支付, 總結算, ultimately 對數.

Q: Is it common practice or your special favour to P?

A: Common practice.  靈活, ensure project can be proceeded smoothly”

24.  As can be seen from Mr Au’s testimony, it is the defendant’s case that initial over-payments to subcontractors was a common practice in the construction industry.  The over-payments were only “interim payments” or “provisional payments”(中期糧款)[19] and ultimately the proper amount would be calculated in the “set-off process” when the project was about to finish.  Mr Tsang when giving evidence agreed that this was indeed the case.

25.  In relation to alleged water seepage in Unit C22, Mr Au alleges that on 3 October 2017, the defendant did by its solicitors, ask the plaintiff to perform its duty to maintain the unit in good order, according to the 2^nd Agreement.  But the plaintiff has to date failed to do so.  Mr Au agreed that China Overseas informed Far East in July 2017 that Unit C22 had water seepage.  It was put to him during cross examination by Counsel for the plaintiff, that the 1^st time the plaintiff was notified by the defendant’s solicitor was in October 2017 and it was also put to Mr Au that he did not know the causation of water seepage.  Mr Au replied that “according to my experience, I believe it’s poor workmanship, the origin of the water seepage was not identified, I guess it’s the problem of workmanship(手工問題, 沒有確認源頭，但我猜測是手工問題) but ultimately it was repaired.  And Far East no longer pursued this against us, because China Overseas, the Main Contractor, issued a letter to Far East on 22 July 2017.”

26.  Mr Tsang repeats Mr Au’s allegations regarding the unit rate per man-day but adds that on about 7 December 2016, as a result of retrenchment of certain of the houses in Tuen Mun Town Lot 427 by Far East, the defendant was reduced to working only on 5 of the 17 houses.  As a result, the defendant agreed with the plaintiff to enter into the 2^nd Agreement dated 20 December 2016. 

27.  Mr Tsang asserts that the 1^st Agreement was in fact terminated on 7 December 2016, and the work undertaken by the plaintiff from 8 December 2016 onwards was work undertaken pursuant to the 2^nd Agreement, notwithstanding that the date of the 2^nd Agreement was 20 December 2016.  The defence case is that the reduction to 5 houses was notified to various parties including the defendant via a WhatsApp message on 7 December 2016.  The plaintiff did not dispute that he knew about this though he was not among the WhatsApp chat group where the message was conveyed. 

28.  After the completion of the works on site, Mr Tsang asserts that he agreed with the plaintiff that the total man-days were: 170 for the 1^st Agreement and (215 + 79) for the Additional and Variation Works arising from the 2^nd Agreement[20].  This agreement, Mr Tsang asserts, was evidenced in writing by a set of documents, all in handwriting, produced as Annex 4 in his witness statement also appears in the Trial Bundle B[21] (“Annex 4 of Tsang’s witness statement”).  Annex 4 was marked as「工程數量記錄」.    

29.  Annex 4 to Mr Tsang’s witness statement is in two parts.  The first part (internal pages 64 to 67), contains a rendering of the man-days for Additional and Variation Works under the 2^nd Agreement.  The number of man-days in relation to these Additional and Variation Works, ie 215 + 79 or 294 man-days as set out in pages 64 to 67 were agreed, as signified by the signature of Mr Tsang of the defendant as its QS (Quantity Surveyor) upon his 批核並確認 (approval and confirmation) together with 「判頭」 (which refers to the plaintiff) as to 79 man-days [22] and then under the  phrase “2017/5/12 曾與楊新明覆對 V.O. 記錄”, as to 215 days” at the bottom of page 67 of Annex 4.  Thus, there is no controversy to this first part.

30.  There is, however, much controversy between the parties as to the second part.  The second part from pages 68 to 74 of Annex 4 to Tsang’s witness statement is a purported rendering of the man-days worked from 10 or 11 November 2016 to 7 December 2016 under the 1^st Agreement.  None of these pages have the mutual signatures of either Tsang or Au together with the plaintiff, as appears in the first part (pages 64 to 67).  Mr Tsang of the defendant relied on pages 68 to 69 in particular, which pointed out that Fai 「輝」of the plaintiff worked out the number of man-days for the 1^st Agreement, ending on 7 December 2016, to be 170 days. 

31.  The court notes that the parties hotly dispute the number of man-days for the 1^st Agreement under Issue 2.  On the one hand, the plaintiff said it was 417 man-days, according to its own attendance record [23], as the 1^st Agreement should be counted from 1 November 2016 to 19 December 2016, just the day before the 2^nd Agreement was signed.  On the other hand, the defendant disagreed and said it was 170 days as it is the defence case that the 1^st Agreement lasted from 1 November 2016 to 7 December 2016 when Far East informed all parties concerned about “immediate termination of construction work of the 12 houses”, with 5 houses remaining to be worked on.  The defence therefore submitted that the number of man-days involved under the 1^st Agreement is directly dependent on the duration of the 1^st Agreement.[24] This controversy goes to Issue 2.  Therefore, the analysis of the differences between the parties will be undertaken under the Discussion heading below.

32.  Mr Tsang referred to the deduction of HK$14,950 for penalty due to non-compliance of site safety instructions.  He also referred to the complaint by the Main Contractor of water seepage in Unit C22 and pointed out that the plaintiff had the responsibility to maintain each of the 5 houses under the 2^nd Agreement within one year of completion, and despite the defendant’s solicitors’ letter of 3 October 2017, nothing was done.

DISCUSSION AND DETERMINATION

Approach of the court

33.  Although both the 1^st Agreement was orally concluded and the Additional and Variation of Works arising from the 2^nd Agreement were orally requested, the case of the plaintiff is principally based on a set of documents.  The defence case is also based on an overlapping set of documents.  But each side interprets the documents differently and each side relied on different parts of the documents, resulting in a very messy situation indeed.  

34.  Common Law courts have through long experience in the adjudication of cases established a hierarchy of probative value for different types of evidence.  In this hierarchy, contemporaneous documentary or other physical evidence (such as photographs) stands at the top when proven in accordance with applicable standards of proof[25], and such evidence represents the cornerstone by which oral assertions made in court on oath are to be tested[26]. However, this is not simply a case of testing oral evidence against proven documents whose contents are not contested or found to be reliable.  Here, each side relies on the parts of documents asserted to be favourable to their case. Although the authenticity of these documents is not contested (the court record showing that no party has served a notice challenging authenticity of any document within the time limit after discovery), each side contests the accuracy of different parts of each document.

35.  This overlapping set of documents comprises: (1) “Wages Payment Record of the plaintiff” (covering November 2016 to April 2017)[27], (2) “Monthly Man-days List”[28], and (3) Annex 4 to Mr Tsang’s witness statement (工程數量記錄)[29].

36.  The defendant also relies on a set of WhatsApp messages to support the oral assertions of its two witnesses.  There are four sets of WhatsApp messages, one said to have been exchanged in October 2016 and December 2016 [30] and the other sets said to have been exchanged in March, April and May 2017[31].  The defendant also relies on part of a document described as “Handwritten schedule of works dated 10 May 2017”[32] (which is in fact the last few pages of Annex 4 to Mr Tsang’s witness statement) and two written agreements, the first of which is dated 20^th December 2016[33] (this is the 2^nd Agreement) and the second is dated 12 May 2017[34] (this is the new contract signed on 12 May 2017) which is unconnected with the works at Tuen Mun Town Lot 427.  (See above paragraph 21 for details)

37.  The authenticity of the WhatsApp messages is also not contested, although each side differs as to their interpretation and effect.  The court will now proceed to discuss the relevance and importance of these documents to the issues before it, bearing in mind that in this forensic exercise, it is the task of the court to decide, which side, based on the burdens of proof that it undertook in its assertions, has the better case, on a balance of probabilities.

Issue 1: The unit rate per man-day

38.  The two documents relevant to this issue are the documents described as “Wages Payment Record”[35] and the「每月員工記錄表」(Monthly Man-days List)[36] (or what the defence called “P’s Attendance Record”).  Each document attracted a different set of controversies between the parties.

39.  In the first of these documents, namely the “Wages Payment Record”, the daily rate was set out in in a column called「日薪」but further analysis showed that all workers were actually paid HK$1,400 (paid on about the 7^th of each month as to HK$840 and later, on about the 22^nd of each month, as to the remaining HK$560, making a total of HK$1,400).  The plaintiff had actually been paid at this unit rate until February 2017, after which no further payments were made, as explained by the plaintiff (see: paragraphs 11-15 above).  Not only that, the number of man-days for November and December 2016 were set out in the Wages Payment Record as 195 and 366 respectively.

40.  As regards the “Wages Payment Record”, the court notes that the following excerpts from the defence’s closing submissions (paras 13, 25 to 27 therein):-

(i)  “As per the payment record [B/12] which P relies upon, D admitted that it has made payments to P at the rate of $1400 per manday from November 2016 up until February 2017. Despite this, both DWs had consistently explained before the court that it was a general practice adopted by D in settling provisional payments (中期糧款) to sub-contractor at a unit rate slightly higher than the agreed rate for the purpose of business efficacy.  DW1, Mr Au, particularly pointed out that it is in fact a well-recognized common practice within the construction industry for contractor to provide an additional funding at provisional stage to lower level working units in order to cope with any unexpected situation that may arise in the course of the building exercise (e.g. the dismissal of infavourable (sic) labour which would result in compensation costs).  This corresponds to the evidence of DW2.   In order to ensure the agreed figure will be ultimately arrived at, both DWs emphasized that a final account would be exchanged between all parties in co-ordination to set off any overdraft spending (對數) when it comes to the conclusion stage of any construction work.  Mr Au further explains that the figure of $1400 was applied as the provisional unit rate in the Construction Project for the sake of effective management since workers responsible for surveyance work are already charging at this “higher” rate”;  [Para 13 of D’s closing]

(ii)  “As per P’s reliance on the attendance records [B/23-24] and the schedule of works [B/12], it is D’s case that the figures therein only represented the then provisional number of mandays at the building stage of construction work, which were still subject to final verification at about the conclusion stage of the same by the representatives of P, D and the main contractor (see also paragraph 21-22 above).  At the stage of cross-examination, P admits that the attendance records were internal documents maintained and marked up by him at the corresponding date, and were not signed or verified by either D or the main contractor.  P further acknowledges that the so-called number of mandays in November 2016 and December 2016 as stipulated under the schedule of works provided by D were mainly stemmed from the figures that P himself records in the attendance records during the corresponding periods.  Furthermore, P, although having claimed that at every noon time during work under the Construction Project, he would follow his own practice and forward to D via whatsapp a sub-contractor’s workers daily attendance list [B/22] (which both DWs do not admit), it is apparent that the validity of this type of documents is in severe stake since it appears that P would have jumped the gun and arranged his workers to fill in the “out time” column in the morning by the time when they allegedly enter into the construction site for work.  In this respect, it is submitted that the court should disregard this piece of evidence with self-admitted forged information.”  [Para 25 of D’s closing]

(iii)  “On the other hand, both DWs consistently pointed out that D received phone calls from P on daily basis in relation to the report of provisional mandays during the Construction Project.   The provisional mandays were thereupon treated as a basis for making provisional payments to P every month [B/12], subject to final verification towards the end of the Construction Project.” [Para 26 of D’s closing]

(iv)  “As Mr Au of D had explained when he was cross-examined, there are very often duplication of works (番手工夫，報大數等等) committed by sub-contractors which should not be counted for the purpose of payment, and yet this kind of problem could not be accurately reflected in the sub-contractor’s own attendance records [B/23-24], and hence the performing of final verification would be essential to every construction project.” [Para 27 of D’s closing]

The three legs of the defence: Customary practice, WhatsApp, new contract

41.  From the above submissions and the evidence of the defence witnesses presented in court, the defendant in effect relies on three legs of defence, namely: (1) customary practice, (2) the exchange of WhatsApp messages, and (3) a new contract signed between it and the plaintiff in May 2017, agreeing a uniform rate of HK$1,200 for all workers.

Customary practice

42.  In evidence expanding upon his witness statement, Mr Au asserted that the plaintiff was overpaid initially to enable him to operate normally, smoothly and on a flexible basis and that this was a common practice in the construction industry.  Mr Tsang also in evidence supported this evidence.  These assertions were not, however, included in both witness statements of Mr Au and Mr Tsang but were made in the course of their giving oral evidence in court.  Nevertheless, the court notes that defence counsel did in cross-examination of the plaintiff, with regard to the document headed 「楊新明工數更正」[37] (“Wage Payment Record”) (at Item 9 of Bundle B at page 12 therein), put to the plaintiff that while he was given HK$273,000 for the month of November 2016 which works out to HK$1,400 man-day, (1) it was not agreed by the defendant that HK$1,400 per man-day; (2) the reason why the plaintiff was given HK$1,400 per man-day, was “because it’s common for over-expenditure (超支) and there were two workers with HK$1,400 per man-day; and (3) thus the plaintiff was given in the rate of each worker as HK$1,400 per manday so that there is room for the plaintiff to make up for any excess or over-expended amount.”  The plaintiff retorted immediately thus: 「梗係唔係啦！邊有老闆咁大方! 」(“Of course not, no boss will be so generous!”).   

43.  Also, Counsel for the plaintiff did, in cross-examination, manage to point out to the defence witness Mr Au that this alleged “common practice” (行業特色 as described by Mr Au, who testified in Cantonese) of “paying more to the plaintiff initially with a view to enable flexibility and at the end the parties will do the calculation by 「對數 (set off)」[38] was not recorded in his witness statement and it was made up by him.  Mr Au agreed such “common practice” was never mentioned in his witness statement but he denied that his allegation of “initial overpayment” to the plaintiff for the sake of flexibility or business efficacy, was made up by him on behalf of the defence.   

44.  It is interesting to note that Mr Au testified that although the funds paid earlier or initial payment are regarded as interim payment or provisional payment (中期糧款), and are intended to be set off ultimately (去到尾聲 最後會對數), money that has been overpaid (which is the total amount minus previous paid amount), he admitted, would be difficult to recover.  The plaintiff’s Counsel asked Mr Au “if it is overpaid, why not ask the Plaintiff to return it?”.  Mr Au, in reply, said: “We will not ask for return, we will simply not pay further (唔再支付)”.  However, if it turns out that the amount previously paid was not enough, then they need to pay it, Mr Au added.  Mr Au testified that this was not the first time the defendant worked with the plaintiff. The defendant had previously worked with the plaintiff for 4 to 5 times on projects basis, starting in 2015, as set out in his witness statement at paragraph 4.  The court notes that the defendant apart from making these oral assertions, did not produce any evidence of previous dealings with the plaintiff evidencing such setting off.

45.  Mr Tsang, the other defence witness, apart from adopting his witness statement as evidence-in-chief also supplemented his evidence at trial when he testified in-chief as follows, according to the note of the court (as translated and understood by the court, with critical words in Chinese characters spoken in Punti by the witness):-

(1)  In respect of the document at Bundle B at page 12, namely the document marked as 「楊新明工數更正」, November 2016 每月工數:-

“Q: Right hand column November 2016 (HK$163,800 + HK$109,200)/195 days = HK$1,400 per day?

A: Yes.

Q: But you said the agreement was not HK$1,400 per day?

A. We paid more to the plaintiff because it’s for 資金調配、資金、法律責任. Avoid the plaintiff cannot pay wages to staff, thus we paid the salary plus MPF.

Q: HK$1,400 included salary plus MPF, any other items inclusive?

A: Include other additional items such as tea, fees for replacement of workers, etc.”

(2)  Tsang’s witness statement at para 9

“Q: Here you said … 170, represents what?

A. In May 2017, the plaintiff came to our office to 對數, the plaintiff said 原先工程 31 October 2016 to 7 December 2016, 170 days included work done for this period.

Q. Document at Bundle B at p 12, namely the document marked as 「楊新明工數更正」 – who prepared this ?

A: Me.

Q: Then how come your document at Bundle B at page 12 said for the month of November 2016 is 195 days?

A: Plaintiff reported to us everyday by phone as working days record. We will record it, interim payment, then when work almost finished, there will be a對數 (結算) between me as QS, contractors such as the plaintiff, and sometimes Main Contractor.

Interim payment預多 is better than 預少. Common practice to pay more.  Payment in excess, may be reserved for other projects.”

46.  In cross-examination by Counsel for the plaintiff, Mr Tsang testified as follows:-

“Q: You were involved in this project right from beginning?

A: Yes.

Q: Para 6 of your witness statement, you knew there were only two workers HK$1,400 while others are HK$1,200?

A: Yes.

Q: You still pay more to the plaintiff at HK$1,400?

A: Yes

Q: Did the plaintiff ever tell you he has financial strains?

A: No

Q: Did the plaintiff request to pay him more?

A: I only knew from the Accounts Department to pay HK$1,400 per worker. I knew Mr Au requested the Account Department to pay more to the plaintiff.

Q: Did you know the defendant has paid slightly more to the plaintiff?

A: Our common practice is to pay more to provide buffer to contractor, it is the request from Mr Au to pay more to the plaintiff.

Q: Did you know that the plaintiff and his staff had each signed “employment” contract with D?

A: Heard of.

Q: The salary HK$800 + $40 MPF had already paid to each?

A: Yes

Q: You said預多, why not HK$1,300 per worker?

A: It’s Mr Au’s directions or instructions.

Q: Your witness statement does not say anything about this payment in excess or the above reason in your witness statement, why?

A: Right, but it’s our practice.

PUT:

30 October 2016 – oral contract

20 December 2016 – written contract

1 November to 7 December 2016 – agreed payment was in 代工形式 paid?

A: Yes.

PUT: The reason why the plaintiff was paid HK$1,400 man-day was because it was agreed between the defendant and the plaintiff!

A: 原意不是兩張合約 (Originally, it was not thought to have two agreements)

PUT: the Workers’ Daily Attendance Record (at Bundle B at pp 23 to 29:-

Do you know the plaintiff will what’s app to Far East and the defendant about workers daily attendance sheet everyday?

A: Not Sure.

PUT: p 23 at Bundle B, the Workers’ Daily Attendance Record for Nov 2016, the actual working days were 194 but the defendant paid 195 days.

A: Not Sure. We issued wages according to our company internal record, and then read the hard copy provided by the plaintiff in about mid-month subsequently, I saw 194 and 195 days, I think it’s alright as we would pay more as buffer.

Q: So if the plaintiff did not sign contract on 20 December 2016, that would be risky?

A: No, the plaintiff and the defendant had agreed to work on this project and also they had worked for other 4 to 5 projects before.”

47.  From the evidence given by the two defence witnesses, it can be seen that they insist that the plaintiff had been deliberately overpaid as a buffer to weather financial difficulties, despite the plaintiff not having indicated that he had financial difficulties.

48.  The plaintiff denies that there was any practice of initially overpaying and then at the end of the project, a final adjustment.  The plaintiff, under cross-examination when it was put to him overpayment was made by the defendant to him on purpose, promptly retorted with this sentence: “Of course not, there is no boss who is so generous!”.  The plaintiff suggests that this alleged practice was contrary to commercial common sense. The court is also skeptical of the practice of initially overpaying, when no independent witness was called to prove such practice nor was any document placed before the court which showed the existence of such practice either with the plaintiff or any other subcontractor.  The court on the other hand has clear evidence by way of the “Wages Record of the Plaintiff from November 2016 to April 2017”[39] (which even Mr Tsang, defence witness, did not deny that such document was prepared by him as the plaintiff had testified) that workers supplied by the plaintiff to the defendant were uniformly paid a unit rate of HK$1,400 per man-day. 

49.  In the circumstances, the assertions of the defendant of customary practice remains unproven by independent evidence.  The court therefore does not accept the claim that there was the customary practice alleged by the defendant.  The first leg of the defence thus falls away.  The court will now consider the second leg of the defence, namely, the WhatsApp messages.

WhatsApp messages

50.  The two defence witnesses (Mr Au and Mr Tsang) also sought to attack the unit rate of HK$1,400 per man-day asserted by the plaintiff by way of the WhatsApp exchanges appended to their witness statements. 

51.  The first in time of these WhatsApp exchanges may be found in the 2^nd page of Annex 2(consisting of two pages) to Mr Tsang’s witness statement.  There was an exchange of messages between Mr Au and the plaintiff from 17:47 to 17:52 on 31 October 2016 as follows:-

“[31/10 17:47]	區(Au): 94379693
	steve: 427叫两个开线的一起，开些线，首10工人，当作代工[40]
[31/10 17:49]	楊新明（细明）：开线每工1,400
[31/10 17:52]	區(Au): 94379693
	Steve: 可以”

52.  Mr Au suggests that the above exchanges showed that only 「开线」 (drawing line/surveying) workers were to be paid HK$1,400.  The court notes that while these exchanges do show that「开线」 (drawing line/surveying) workers were to be paid HK$1,400, they do not indicate that other workers were to be paid less.

53.  In Annexes 1 and 2 toMr Au’s witness statements were the further WhatsApp messages between Mr Au and the plaintiff.

54.  The first set was exchanged on 7 April 2017 (which took place well after the 1^st Agreement and the 2^nd Agreement which were respectively in November 2016 and December 2016), as follows:-

“Au:	新明427
	每工1200
	开綫的1400	17:25
Plaintiff:	是	17:51
Au:		17:52”

55.  From this exchange (which was heavily relied upon by the defendant), it was explained that “427” referred to the project in question with the lot number 427 So Kwun Wat.  It appears that the plaintiff had agreed to HK$1,200, with the exception of the「开线」(drawing line/surveying) workers.  However, this must be seen against the situation at the time.  The day of this WhatsApp message was supposed to be the day when the defendant was to pay the plaintiff, and no payment had been made.  Also, the rate for a man-day should have been discussed and fixed before the start of the project on or before 1 November 2016, and yet this WhatsApp message took place in April 2017.

56.  On 7 April 2017, wages for the first half of March 2017 were due and owing, and the plaintiff said in evidence that he had already started chasing for these outstanding payments.  Again, on 27 April 2017, when  2^nd half of wages were dues, the plaintiff chased again[41]: see the subsequent WhatsApp message on 27 April 2017 at 9:24 hour whereby the plaintiff asked Mr Au of the defendant when would the last batch of wages due in late March 2017 be paid (區生，几時，出到，3 月尾糧？通知一聲。謝!) (See para 59 below) Two days later on 29 April 2017, the plaintiff chased Mr Au again for outstanding wages (See para 61 below) (區生，3月尾糧，几時出到，公司也 (乜/有) 事？伙記追糧? …”).

57.  The plaintiff’s evidence is that the WhatsApp messages on 7 April 2017 were in fact exchanged while he chased for payment of wages due and owing, and when Mr Au tried to negotiate with him. The testimony by the plaintiff in this regard at the trial was recorded by the court (as understood and translated by the court with critical words or phrases in Chinese characters as orally expressed in Punti), as follows:-

“Q: Bundle A at page 37 WhatsApp, any telephone contact before 7 April 2017?

A: Yes, should be in late March 2017.

Q: About what?

A: 關於 Additional & Variation work 代工的追糧，但 Mr Au asked whether I can give discount, $1,200 and $1,400, he said 開綫 $1,400 and others $1,200

Q: Did you agree?

A: No

Q: With regard to the message of Mr Au on 7 April 2017 at 17:25, you said “是” at 17:51, what does it mean?

A: In April 2017, I agree that for Variation & Additional work done on 20 December to May 2017, the man-day would be charged at $1,200 and $1,400 rate.”

58.  Counsel for the plaintiff submits, correctly, that if there had been a pre-existing agreement for payment at the rate of HK$1,400, the mere agreement to take less without any consideration moving from the defendant, did not have the effect of changing the pre-existing agreement[42].  In the circumstances, the affirmative statement「是」by the plaintiff to Mr Au’s insistence that only 「开线」 (drawing line/surveying) workers were to be paid HK$1,400 and the rest at HK$1,200 does not change the original terms of the contract if indeed it was agreed that all workers would be paid at HK$1,400 per man-day.

59.  The next WhatsApp exchange took place on 27 April 2017, as follows:-

“Plaintiff:	几時，出到，3月尾糧？
	通知一聲。謝！	09:24
Au:		09:24”

60.  The plaintiff in his testimony explained that he was chasing Mr Au for payment of outstanding wages as the defendant had paid the大糧 (via Autopay + EPS) on every 7^th day of month, as the wages for March 2017 was due and owing.  In this WhatsApp Message, he therefore queried whether there is any problem on the part of the defendant, but Mr Au used an emoji that symbolized a puzzling or baffling feeling. 

61.  The next WhatsApp exchange took place on 29 April 2017, as follows:-

“Plaintiff:	區生，3月尾糧，几時出到，
	公司乜事？ 伙記，追糧？	12:56”

62.  This message showed that plaintiff was chasing for payment again but the defendant (Mr Au) was not helpful.

63.  A fortnight later, on 17 May 2017 (the accuracy of this date was not in dispute), another WhatsApp exchange took place as follows:-

“Au:	你比齊工人簽收正本 比曾及龔去睇	09:58
	您細明先攪好理由能夠去取遠東
	你寫得出未 ? ?	09:59
	您你寫得出未？？	09:59
Plaintiff:	俾咗公司[43]	09:59
Au:	你比齊工人簽收正本比曾及龔去睇：
	如何計粮 清清楚楚	09:59
Plaintiff:	測量，燒焊，擠膠 千四	10:01
	其它千二	10:01
Au:	我要你真正比工人几多呀！！	10:02
	你系判来做呀！！细明	10:02
	你係判來做呀細明 你先要明白	10:03
Plaintiff:	你的价不夠做	10:05
	其它判頭 四十万左右一間	10:05”

64.  This exchange, the longest so far, took place after the last day of work on this project at Tuen Mun Town Lot 427 So Kwun Wat, that is 11 May 2017.  This exchange also took place after the time of five documents exhibited in Annex 4 to Tsang’s witness statement (the handwritten documents relating to the time spent on the works at Tuen Mun Town Lot 427). According to Mr Au of the defendant, who testified under cross-examination, that when this WhatsApp conversation took place on 17 May 2017, it has already passed the time when the parties (the plaintiff and the defendant)「對數」with each other. Mr Au said the date for「對數」should be 9 May 2017.  No unit rate, it seems, has so far been included in the particulars to Far East and Mr Au was asking what rate should be included at 09:59 (如何計糧).  The exchange also indicates that the plaintiff has not agreed to the rate of HK$1,200, by way of his (Au’s) inquiry (如何計糧) at 09:59.

65.  The plaintiff was asked about this WhatsApp message at trial.  The plaintiff’s explanation of his reply in this WhatsApp reply at 10:01, was that his reply, in the WhatsApp message, referred to the Variations & Additional Orders outstanding wages which were then still owing as at 17 May 2017.  The plaintiff explained that his reply at 10:01 in the WhatsApp message was to tell the defendant what he had paid to his own employees at HK$1,400 for 測量、燒焊、擠膠 and HK$1,200 for others, and this has nothing to do with the rate he agreed with the defendant, which was HK$1,400 for all workers.  The court notes that even on the defence case, it only seeks to argue that only workers “drawing the line” (defence called it as “surveying work”) (開線) was HK$1,400 but in this WhatsApp Message, the class of workers mentioned by the plaintiff who was paid at HK$1,400 far exceeded the defendant’s single class of (開線) workers. 

66.  The WhatsApp exchanges between the plaintiff and Mr Au of the defendant continued to 22 May 2017[44], as follows:-

“Au:	你要求我救你
	你要全放出一切文件簽收人工支出	10:17
Plaintiff:	你就千二計吧	10:18
Au:	你要求我救你
	你要全放出一切文件签收人工支出	10:20
Plaintiff:	还差二十万	10:20
	現在做了一千五百五十工	10:21
	按代工計	10:21
Au:	現在做了一千五百五十工按代工計	10:21
	你要求我救你
	你要全放出一切文件签收人工支出	10:22
	(tt – 楊新明 (細明)
	按代工計
	不用想
	有合約	10:22
Plaintiff:	你都不想解决问题的？	10:27
	我前兩天已經几个人搞好追款事宜	10:28
	你的合約根本不夠做，
	一心想幫你做好点！	11:00
	工人明天去勞工處？…..請解決問題！	14:08”

67.  Mr Au, defence witness, under cross examination agreed that in this WhatsApp message (at Bundle A at page 58) the reply of the plaintiff was that the rate can be reduced to HK$1,200.  But Mr Au disagreed (when Bundle A at page 37 was put to him), that he had ever agreed to give HK$1,400 to the plaintiff. Mr Au said for work done from 1 November 2016 to 19 December 2016, there should be some drawing of line/surveying tasks (開綫) and this kind of tasks only involved a small number of staff.  When plaintiff’s Counsel put to Mr Au that in the WhatsApp message (Bundle A at page 59), it did not mention “other employees are HK$1,200”?  Mr Au agreed and said it was because it only mentioned 開綫 HK$1,400.

68.  This last exchange clearly showed that the parties were negotiating.  The plaintiff was at the end of his tether, indicating that he had still not been paid and that he and others had made arrangement for recovery of the unpaid amounts.  This exchange also indicates that there was still a dispute over the unit rate, even as in May 2017, when the wages had been outstanding from March 2017 onwards and the parties were negotiating with each other. 

69.  The plaintiff apparently was willing to accept a lesser sum in order to get the outstanding wages for workers because at the time, the workers were going to Labour Tribunal.  In the evidence by both sides there was a brief reference to a Labour Tribunal Case (see Bundle B at item 20) for recovery of the unpaid amounts by workers of the plaintiff, whose case was that proceedings in Labour Tribunal were brought by the plaintiff and other 11 workers against China Overseas, Far East and the defendant but the case was subsequently withdrawn as the workers’ outstanding wages were later paid by the plaintiff.  The court therefore can derive little assistance from this episode in the Labour Tribunal.

70.  Having carefully considered the WhatsApp messages, the court finds little which is of assistance in determining the agreed rate of payment.  These WhatsApp messages showed a course of negotiations, which at one stage, resulted in the plaintiff agreeing to take a HK$1,200 daily rate for all workers but this accommodation was not supported by any consideration moving from the defendant, and was made by the plaintiff under a degree of duress.  Whether or not there was duress, the agreement of the plaintiff to accommodate the defendant by taking a uniform daily rate of HK$1,200 for all workers, is not enforceable as a variation of the 1^st Agreement, it not being supported by legal consideration.

71.  Accordingly, the second leg of the defence, namely, the WhatsApp messages, also falls.

New contract

72.  But the defendant puts forward a final defence, supplemental to the WhatsApp messages.  The defendant’s witnesses referred to a written contract, which is written in Chinese called 「代工合約」 signed between the plaintiff and the defendant on 12 May 2017[45] immediately after the undisputed last day of work for the present Tuen Mun Town Lot 427 project on 11 May 2017 as evidence corroborating the unit rate of HK$1,200 per man-day, and the defence said this agreement firmly indicated that all forthcoming construction works performed by the plaintiff for the defendant commencing on 12 May 2017 which are calculated by way of manday will be charged at the standard unit rate of HK$1,200. [46]  Defence Counsel contended: “Although this agreement is not directly related to either the 1^st Agreement or the Additional and Variation Works, it is defendant’s case that this agreement strongly indicates and re-affirms the parties’ common practice on the calculation of unit rate, i.e. HK$1,200 per manday and would serve as a basis with high persuasive value for drawing inference in the present case.”[47] 

73.  The court notes that Defence Counsel in his closing submissions said that “one shall take note that this agreement was executed immediately upon the completion of the Construction Project.  If, which the defendant strictly denies, the defendant has been in default of payment since March 2017 as the plaintiff alleges, why would the plaintiff enter into another new piece of co-operation agreement with the defendant when the dispute was apparently on the rise; and why would the plaintiff be agreeable on the standard rate of HK$1,200 if the previous practice was in fact otherwise.” [48]  Continuing with his closing submissions, Defence Counsel said “one may reasonably be suspicious and ask, if the defendant has been in default of payment since March 2017 as the plaintiff alleges, why would the plaintiff enter into another new piece of co-operation agreement with the defendant when the dispute was still ongoing; and why would the plaintiff be agreeable on the figure of HK$1,200 if the common practice was in fact otherwise”[49].

74.  In fact, the plaintiff, in the supplementary examination-in-chief, was asked why was this 代工合約 contract dated 12 May 2017 signed by him, the plaintiff explained 「日後工作，以這個為準，與前期無關」 (this contract applies to all work to be assigned thereafter and this contract is not related to any previous work or projects).  The court notes that it was put by the plaintiff’s Counsel to the defence witness Mr Au that this 代工合約was signed by the plaintiff under the pressure of the defendant or “economic duress” in order to get paid for the outstanding wages, as opposed to what Mr Au had said in his witness statement that it was signed by the plaintiff “out of convenience for the defendant’s allocation of jobs to the plaintiff”[50].  The court notes that Mr Au disagreed with such proposition of economic duress.  The defence contended that this was such a bare allegation on the part of the plaintiff. 

75.  The court takes the view that this new contract was for 鐵器工程 or metal works sub-contracting, unconnected with the works at Tuen Mun Town Lot 427.  The sub-contracting works under this contract was for any metal works contracted by the defendant with any main contractor. The unit rate agreed was HK$1,200 per man-day from 8 am to 6 pm but if overtime is required from 6 pm to 8 pm, then the hourly rate shall be HK$266.  The court can derive little assistance from this contract firstly because it is of a different nature, namely metal works, as compared to the different types of building works connected with the building works in Tuen Mun Town Lot 427 and secondly, it is totally unconnected with the contracting work under dispute.  Also, the over-time rate of HK$266 per hour could mean that any worker can earn more than HK$1,400 if only one hour of overtime was worked.  Furthermore, the last day of completion of work for the Tuen Mun Town Lot 427 project was 11 May 2017 and this new contract was agreed after that. Therefore, it is not reasonable to draw any inference that the work done earlier from November 2016 to 11 May 2017 should be at the same unit rate of HK$1,200. This new contract is therefore of little comparison value and provides little assistance to the court.

76.  The third leg of the defence therefore also falls away.

Conclusion

77.  In the final analysis, the plaintiff’s assertions find better corroboration in the “Wages Payment Record of the plaintiff in November 2016 to April 2017”[51], whereby some of the records therein especially the Wage Payment Record by the defendant marked as「楊新明工數更正」 [52] were only handed to the plaintiff by defendant’s staff or its representative sometime in May 2017.  This document, which was revised by the defendant, set out the various amounts paid by the defendant to the plaintiff from November 2016 to at least February 2017 (which the plaintiff said the defendant paid on time), is accepted as containing the correct calculations for work done from November 2016 to February 2017, and showed that workers were paid on a unit rate of HK$1,400, as asserted by the plaintiff.   

78.  In the circumstances, the court finds, on a balance of probabilities, that the unit rate was HK$1,400, as claimed by the plaintiff.

Issue 2 : Number of man-days worked under the 1^st Agreement

79.  The defendant asserts that the 1^st Agreement terminated on 7 December 2016 when the Main Contractor Far East took over 12 houses leaving only 5 houses to be worked on and so the total man-days worked to 7 December 2016 were only 170.  The plaintiff disagrees with this assertion.  Instead, the plaintiff alleges that the 1^st Agreement in fact terminated on 19 December 2016 and the total of man-days worked under the 1^st Agreement was 417.

80.  The plaintiff both in his witness statement and in giving evidence before the court, pointed out that the 1^st Agreement ended only on 19 December 2016.  In corroboration of this termination date, the plaintiff pointed out that the date of the 2^nd Agreement was 20 December 2016 and there was nothing in the terms of the 2^nd Agreement which pointed to any earlier start of this 2^nd Agreement.

81.  Mr Au in giving evidence before the court referred to a WhatsApp message from Far East of 7 December[53] whereby a 「叶sir (远东)」communicated a message to the defendant in the following terms:-

“yip59315256 马山停止除C26/27/25/23/22五间屋仔作业。其他屋仔还未收线收场！14:16”.

82.  This WhatsApp message was not included in either of the witness statements of the defendant’s witnesses, although it was a group chat between Far East and defendant, also included in the Trial Bundle B at page 1 and was referred to in the trial when the plaintiff and defence witnesses testified.  

83.  The plaintiff acknowledged that he knew that Far East informed the defendant that 12 houses will be taken back, leaving only 5 houses for them to work on.  However, the plaintiff’s evidence both in his witness statement and before this court at trial, is that while the WhatsApp message on 7 December 2016 showed that Far East took back the other 12 houses out of the original 17 houses (that is houses other than Units C22, 23, 25, 26 and 27), it was not until the 2^nd Agreement was signed on 20 December 2016 (covering the  remaining 5 houses), that the plaintiff completed the work on those 12 houses.  Between 8 and 19 December 2016 “because of 分派碼件”, the plaintiff explained that the corridor in the houses were narrow, needed to distribute, otherwise it would block the road.  Thus, work had to continue after 7 December 2016 on all houses until 19 December 2014, accounting for the man-days recorded in the Monthly Man-days List.  The plaintiff’s own site records and in fact confirmed to Far East through the daily lists sent by Far East[54], they cannot be falsified.  Not surprisingly, the plaintiff, under cross-examination, disagreed with the proposition put to him that, “after the Far East notification on 7 December 2016, he could only cover work on the remaining 5 houses.”

84.  The Monthly Man-days List for the months of November 2016 and December [55] 2016 showed that 417 man-days were worked by workers supplied by the plaintiff from the beginning of the 1^st Agreement to the 19 December 2016.  This document showed that the total man-days worked by the labour force supplied by the plaintiff to be 194 for the month of November 2016 and the number of man-days for 1-19 December to be 223 and end of December to be 366[56].  According to the first two pages of this document (pages 23 and 24), the total number of man-days for labour supplied to the defendant was 417 up to 19 December 2016.  The Wage Payment Record (Item 9 of Trial Bundle B, page 12) showed the number of man-days worked for the defendant by the plaintiff’s work force to be 195 for November 2016 and 366 for the month of December 2016.  These two documents corroborate each other and showed that certainly the work under the 1^st Agreement could not have stopped after 7 December 2016 as alleged by the defendant.

85.  Despite mutual corroboration of the Wage Payment Record and the Monthly Man-days List as regards the plaintiff’s claim for the man-days for the 1^st Agreement, the defendant says that Annex 4 to Tsang’s witness statement tells a different story and it is this story which should prevail.

86.  The background to Annex 4 has been set out in paragraphs 29 to 31 above.  This document consists of a non-controversial part and a controversial part.  The non-controversial part lies in pages 64 to 67 of the document.  These four pages is a rendition of the Variations and Additional Works undertaken by the plaintiff, as requested by the defendant, under the 2^nd Agreement.  There appeared in these pages the joint signatures of the plaintiff and Tsang, as representative of the defendant.  The parties agreed that the Variations and Additional Works came to (79 +215 man-days) for the months of March to early May 2017.

87.  The controversial part of Annex 4 toTsang’s witness statement starts from page 68 to page 74 of the document.  These pages were all hand-written by an employee of the plaintiff by the name of  Fai (輝) and, the plaintiff points out, are not made out in the form of the previous four pages, namely the uncontroversial part, in which the signatures of both parties appear signifying agreement.  None of the following pages have anything signifying agreement of the parties and were prepared for the purposes of the defendant’s intended claim to Far East.

88.  At page 68 of the document, Fai (輝) purports to work out the number of days worked by the plaintiff under the 1^st Agreement to be 170 man-days.  At page 69 of the document is a note by Tsang (admitted by him, in evidence to be the case), repeating the assertion of 170 days.  Then at the end of the document, there is another estimation by Fai (輝) of the number of days worked by the plaintiff, now at 350 days, for the 1^st Agreement.  This part of Annex 4 of Tsang’s witness statement is confusing and the oral evidence given by Tsang and Au were equally confusing.

89.  The plaintiff’s evidence was that pages 68 to 74 were written by Fai (輝) at a time when he (the plaintiff) was chasing for payment and either Tsang or Au was trying to negotiate him down.  Also, the plaintiff believed that the information was intended to be used by the defendant for chasing Far East for payment.  Because of these very stark difference between the versions, it is necessary to delve deeper into the evidence and the submissions.

90.  The defendant submitted that, as a result of retrenchment of 12 houses in Tuen Mun Town Lot 427 by the Main Contractor Far East on 7 December 2016, the defendant was reduced to working only on 5 of the 17 houses since 8 December 2016.  The defence case is “any works performed by P under the Construction Project in between 8 December 2016 and 19 December 2016 must be and could only be in relation to the 5 remaining houses, and were hence covered by the Sub-Contract (also labelled as the 2^nd Agreement) with broad terms and conditions.[57]

91.  The defence says that its case that the 1^st Agreement came to an end on 7 December 2016 is well supported by the “Manday Record” dated 30 March 2017 at Annex 4 to Tsang’s witness statement marked at page 68 therein as (1) it explicitly draws the line at “7 December 2016” for the purpose of calculation of man-days provided by the plaintiff, along with detailed descriptions as to the works already performed under the Construction Project[58]; (2) it specifies and declares that the agreed number of man-days up to 7 December 2016 had been about 170[59]; (3) the plaintiff described it as a「對數表」, it was admitted by to have been produced and executed by the plaintiff’s representative when the Construction Project was approaching to the conclusion stage; and the plaintiff is estopped from denying and going back on such admitted fact acknowledged by his own representative acting upon apparent authority[60] , and (4) it was executed as late as on 30 March 2017, the number of man-days described therein must have been checked and verified by all relevant parties, unlike the attendance records and the schedule of works which the plaintiff now relies upon.[61]

92.  On the other hand, the plaintiff disagrees that what was set out in pages 68 to 69 in Annex 4 to Mr Tsang’s witness statement, represents the true number of man-days worked by the plaintiff’s workers under the 1^st Agreement.  In evidence, the plaintiff said that, at page 68 in Annex A,  the estimation of 170 man-days to 7 December 2016 for the 1^st Agreement was done by Fai (輝) his employee sometime in March 2017, with a view for the defendant to claim wages from Far East.  And the plaintiff said it was on 12 May 2017, one day after the completion of the project on 11 May 2017 that he had discussion with MrTsang, who was the defendant’s quantity surveyor, on the outstanding wages owed by the defendant to the plaintiff. 

93.  Interestingly, Mr Tsang, who testified that the date chop of 10 May 2017 was stamped by him on the same day when he received this document at page 68.  For document at page 69, he received it on 12 May 2017 as he stamped the date chop therein.  In page 69, Mr Tsang wrote, inter alia, (1) 170 @1200 (2) HK$204,000 (3) 8.8%, preceded by a word starting with “w” but otherwise illegible (4) 9 間屋有… (followed by an English word which is illegible probably defective) (5) 每間 22,666 (each house at HK$22,666).  This was what was recorded in this page 69 and the court would not speculate on its significance, as no further evidence was led in this regard.

94.  It must also be noted that in this page 69 of Annex A to Mr Tsang’s witness statement, it was put to Mr Au under cross-examination by Counsel for the plaintiff, that the plaintiff never agreed all workers were at HK$1,200 per man-days.  Mr Au agreed and said because even the plaintiff said some workers are HK$1,400 man-days for drawing line/surveying, thus at page 69, it should not be 170 (days) x HK$1,200. 

95.  Interestingly, page 70 of Annex 4 to Mr Tsang’s witness statement mentioned about work done for distribution of parts (分派碼件) before 7 December 2016.  From page 71 onwards were further notes as to supplemental work instructions and as the negotiation progressed, culminating in the long note at page 74, pointing to 350 work-days for the 1^st Agreement, which the plaintiff said in evidence, was a figure the defendant wanted to claim from Far East but at trial, the plaintiff said this figure of 350 work-days was not a final figure as one had to compare this with the workers’ daily attendance record.  

96.  The court noted that the defence in its closing submissions at paragraph 24, said, “Insofar that P alleged that the Manday Record (page 68 of Bundle A among the Annex 4 of Tsang’s witness statement) and the handwritten schedule record (page 74 of Bundle A among the Annex 4 of Tsang’s witness statement) were produced by P’s representative on request to suit D’s needs to obtain remuneration from the main contractor, it is submitted that such allegation is plainly unsustainable.  If, as P claims, that these two documents were demanded by D for the said purpose, one shall be suspicious as to why the respective figures of 170 and 350 were less than the alleged “actual” number of mandays (417 man-days) claimed to be provided by P during the corresponding periods from P’s attendance records (Bundle B at pp 23 to 24) and hence deprives D from claiming certain proportion of the remuneration from the main contractor.”

97.  The language of these hand-written pages 68 to 74 of Annex 4 toTsang’s witness statement is difficult to read and understand.  Without a clear explanation of their contents, these pages are thoroughly confusing.  Unfortunately, neither the plaintiff nor Mr Tsang, nor Mr Au, were able to provide a clear explanation to the court. The evidence of the plaintiff was that he never agreed that the number of days worked under the 1^st Agreement was 170 man-days, pointing to page 74, which ended up with a figure of 350 man-days.  Bearing in mind that these pages were created at a time when the parties were negotiating back and forth about the final bill, the court cannot place much reliance on this part of Annex 4 to Mr Tsang’s witness statement, when the parties are at such divergence as to its true meaning.  On the other hand, there is much mutual corroboration between the WagePayment Record and the Monthly Man-days List, the former generated by the defendant and the latter by the plaintiff.  Given that each party has its own interest to serve, it cannot be mere co-incidence that the two documents mutually corroborate each other as to the plaintiff’s version of the number of many-days worked for the 1^st Agreement by the plaintiff.

98.  The court, having carefully considered the evidence of all three witnesses and having observed the manner by which each gave evidence, regards the plaintiff as being by far the most straightforward of the three witnesses and his oral evidence is corroborated in significant ways by the three documents as analysed above.  In the circumstances, when it comes to conflict between the oral evidence of the plaintiff and the evidence of the two defence witnesses, the court prefers the evidence of the plaintiff.

99.  In the absence of credible evidence to the contrary, the court must rely on the mutual corroboration of the two documents, namely, the WagePayment Record and the Monthly Man-days List.  These documents, by virtue of their mutual corroboration, give more support to the plaintiff’s claim as to the number of days worked for the 1^st Agreement. 

100.  The court accordingly, finds, on a balance of probabilities, that the 2^nd Agreement only took effect upon its date, namely, 20 December 2016.  This means that the 1^st Agreement was not terminated until 19 December 2016.  Also, in the absence of credible evidence to the contrary, the total number of man-days worked by the plaintiff were 417 man-days as corroborated by the documents analysed above.

101.  In passing, the court will note that the number of man-days worked by the plaintiff for the “Additional and Variation Works” had been agreed between the parties at (79 + 215) man-days, as shown in the handwritten notes signed by the parties[62].

Issue 3 : Damages for water seepage in Unit C22

102.  Both parties did not dispute that there was water seepage in Unit C22, but no evidence was placed before the court of the nature of the seepage or its causation.  Even the defence witnesses Mr Au and Mr Tsang both testified that they did not know the source of the water seepage nor the source of water seepage being identified.  As stated in paragraph 25 above, Counsel for the plaintiff put to Mr Au that he did not know the causation of water seepage.  Mr Au replied that “according to my experience, I believe it was poor workmanship, the origin of the water seepage was not identified, I guess it’s the problem of workmanship(手工問題, 沒有確認源頭，但我猜測是手工問題) but ultimately it was repaired.  And Far East no longer pursued this against us, because China Overseas, the Main Contractor, issued a letter to Far East on 22 July 2017.”  As for Mr Tsang, he said he only knew that Far East issued a site memo (at Bundle A at page 91) dated 22 July 2017 about water seepage.  Furthermore, the project at Tuen Mun Town Lot 427 was completed by the defendant in May 2017 and so far no claim has been made by either Far East or China Overseas.

103.  Perhaps, the only evidence in support of the counterclaim was the letter dated 4 September 2017 purportedly sent by Mr Au of the defendant to the plaintiff whereby it was said that the defendant received an email from Far East on 2 September 2017, which alleged water seepage appeared in Unit C22 and the defendant gave a deadline to the plaintiff to fix it by 7 September 2017.  This letter is exhibited in Annex 6 (which should be Annex 7) to the witness statement of Mr Tsang (and same as Trial Bundle B at page 227), together with a memo issued by China Overseas to Far East and Shun Hing dated 22 July 2017 about water seepage in a few houses during raining days in June and July 2017.  However, the plaintiff disputed that he had ever received this letter from the defendant or water seepage was ever brought to his attention ever since he had finished his work for the defendant in the Tuen Mun Town Lot No 427 project on 11 May 2017. 

104.  Mr Au said in evidence that the defendant did send workers to undertake repairs but was unable to present any evidence of the kind of repairs undertaken nor the costs of such repairs.  Nor is there evidence presented linking the causation of the water seepage to any negligence or breach of contractual terms on the part of the plaintiff.  Indeed, Defence Counsel agreed that the source of water seepage is not identified but the defence case is to ask the plaintiff to do the repair work for the water seepage.  Defence Counsel argued that it is the plaintiff’s contractual obligation that the quality of work is well done as warranted.  The defence asked for assessment of damages.  Butwhen asked by the court whether liability needs to be established before assessment of damages, Defence Counsel reasonably agreed.  In the circumstances, the court could not possibly find for the defendant on this part of the counterclaim.

105.  The amount of HK$14,950 counterclaimed by the defendant for failure to comply with safety requirements of the Contractor (China Overseas) has been agreed and the court will find for the defendant in respect of this amount.

Determination

106.  In relation to each of the three issues, the court’s determination is as follows:-

(i)  Issue 1: Unit rate per man-day

The court finds that the Unit Rate per man-day for all workers supplied by the plaintiff under the 1^st Agreement and for the “Additional and Variation Works” requested by the defendant under the 2^nd Agreement to be HK$1,400.

(ii)  Issue 2: Man-days worked under the 1^st Agreement

The court finds that the 1^st Agreement terminated on 19 December 2016 and the total number of man-days worked by the plaintiff’s workers to be 417 man-days from 1 November to 19 December 2016.

(iii)  Issue 3: Water seepage in Unit C22

The court is unable to find for the defendant in relation to its counterclaim for water seepage to Unit C22 as no evidence as to its causation was ever adduced. The court will however find for the defendant in relation to the other part of its counterclaim for the sum of HK$14,950, as agreed by the plaintiff.

DISPOSITION

107.  In light of the above, this court will give judgment for the counterclaim in the amount of HK$14,950, which sum shall be set off against the claim of the plaintiff to be allowed in full.

108.  The court will therefore give judgment to the plaintiff in the amount of HK$417,040 for his claim, out of which the sum of HK$14,950 is to be deducted.  Accordingly, judgment shall be entered in favour of the plaintiff for the sum of HK$402,090.00.

109.  The aforesaid sum should have been payable no later than end of May 2017.  Accordingly, the court will allow interest from 1 June 2017 at the rate of 1% over the best prime rate of any one of the three note issuing banks in Hong Kong, as published from time to time, in accordance with the general practice in commercial cases heard by the Hong Kong Courts. Such interest shall be calculated to the date of judgment, after which, the judgment sum plus interest shall as a global sum attract interest at the judgment rate until payment.

110.  As the defendant would have had to expend some time in preparing the case for the counterclaim of HK$14,950, the court will make an order nisi that the defendant pays 95% of the costs of this Action to the plaintiff, with certificate for counsel, to be taxed if not agreed at the District Court scale.  This order nisi shall become absolute after 14 days from today, if no application for variation is made.

CONCLUDING NOTE

111.  This has been a messy case where the court was presented with a set of documents (many hand-written) which had to be carefully scrutinized, dissected and considered against the oral evidence of witnesses for the parties.  One cannot leave this case without making the observation that the Construction Industry might as a service to its members create standard documentation for sub-contracting and/or provides basic contract administration training, so that disputes could be minimized.  This case is a good illustration that the costs involved in its resolution could have been avoided if the contracts had been better prepared in writing and duly administered.  The costs involved in this case could therefore have been better spent in more productive activity than litigation before the courts.

112.  This has not been an easy case and the court is mindful of the industry and assistance provided by Counsel and the respective legal teams of the parties in its preparation and presentation in court.  To them, the court expresses its sincere gratitude.

113.  But for the intervention of the unforeseen events of recent months, one after another including the worldwide coronavirus, the lives of all of us would not have been so disrupted.  As a result, this judgment could only be made available to the parties now despite its readiness for delivery some time before handing down today.  We are reminded, yet again, that whilst man proposes, it is God who finally disposes.  May all concerned be blessed with good health and happiness for now and for the times ahead!