XCHRX B & G ENGINEERING LTD. v. YUEN CHAK CONSTRUCTION CO. LTD.

HCCT119/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTRUCTION AND ARBITRATION PROCEEDINGS
NO.119 OF 1999

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REASONS FOR DECISION

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1. This is an Order 14 summons. The plaintiff was the defendant's subcontractor who was engaged to carry out pre-boring works at the MTR Tung Chung Development site. In May, June and July 1999, the plaintiff made three payment applications, totalling $3,468,220. They have been paid $1,000,000. This claim is for the balance of $2,468,220. The Statement of Claim was issued on 3 December 1999, the Defence and Counterclaim on 3 February 2000 and the Reply and Defence to Counterclaim on 16 March 2000. The Order 14 summons followed some time later, on 19 June 2000.

2. The contract was for the plaintiff to carry out drilling and pre-boring works for sheet piling. Their claim is that they have performed the contract, they are entitled to payment and the defences raised are unsustainable. It is for the defendant, in this Order 14 application, to demonstrate that there are serious issues to be tried. I will deal briefly with the four issues which the defence submit are at least triable issues.

(a) Delay

3. The contract was for 50 working days. The plaintiff was on site from 7 May to 26 July, a period of 81 days. The plaintiff says that the overrun of 31 days is entirely accounted for by 13 days which were Sundays or public holidays and 19 days "idling time" which was not caused by them. The issues which arise are (i) do Sundays count as working days, and (ii) whether the 19 days idling time should be counted as part of the 50 days? The second issue gives rise to a sub-issue as to whether the defendant provided the plaintiff with sufficient access to enable it to carry out the works. The defendant further submits there are additional disputes as to facts which are both relevant to the issue of delay and which can only be resolved at trial. For example, the defendant claims that the plaintiff was 11 days late in commencing the works, the plaintiff failed to operate machinery efficiently and, further, they suspended the works without good reason. These issues cannot be resolved on affirmation and documentary evidence alone. They are triable issues. Once this threshold has been reached, it is superfluous to comment on the relative merits of the respective cases.

(b) Abandonment

4. The plaintiff claims it performed the contract. The defendant says it did not. Put simply, the defence is that the plaintiff left site having failed to drill the holes to a sufficient depth. There is a plain issue as to this. The defendant counterclaims, with particulars, all the expense to which they have been put to complete the drilling to the required depth which had to be done before they could return to the site and commence its work.

(c) Defective work

5. Two issues are raised here : (i) failure to drill to the required depth (this has already been referred to at (b) above) and (ii) the plaintiff's failure to backfill the pre-bored holes with excavated material. It is plain from the correspondence and the affirmations that there is a fundamental difference between the parties both as to the facts and as to contractual obligations on this issue. A court could not come to a conclusion that the defendant has no credible defence on this issue or on the issue concerning the sufficiency of the depth of the drilling.

(d) Clause 9

6. Clause 9 of the contract states as follows :

"B&G guarantee that the prebored holes are capable for the installation of steel sheet piles at specified depth. In the event that the prebored holes claimed by the Client do not meet this requirement, B&G will demonstrate with their own resources i.e. vibrating or drop hammer to prove the workability of driving the sheet pile, failing which B&G shall undertake to carry out necessary re-drilling work but any abortive work done on sheet piling shall not be the responsibility of B&G. B&G's drilling plaint shall remain on site for a period of 5 days after the completion of preboring work for the sheet piling to complete after which period our plant will be demobilized & removed off site. If re-drilling work is subsequently required by the Client, re-mobilization cost at HK$60,000.00/rig will be charged."

7. The defendant, for the reason already referred to, claims the plaintiff is in breach of this guarantee clause. There is evidence that the vast majority of the holes were not to the required depth. The following questions can only be answered at trial. Is this correct? If so, did the plaintiff fail to bore deep enough? If they did, did debris later fall in to the holes? If so, was it the defendant's fault or was it caused or contributed to, by the plaintiff's failure to backfill?

The plaintiff's case

8. In short, the plaintiff submits that there is independent evidence that if there was any delay, it was caused by the defendant; the allegation of insufficient depth lacks particulars and evidence and was not raised at the material time; the counterclaim is strong on figures but weak on evidence, and much of what the principal contractor, Chun Wo, has said in correspondence supports their claim. So be it. They will have an opportunity of calling a representative of Chun Wo at the trial. However, a trial cannot be avoided. Both counsel have helpfully referred the court to extracts from the competing affirmations and the correspondence between the parties. To refer to it here would only serve to highlight the differences between them and particularize the issues which undoubtedly exist and are triable.

Order

9. The application for summary judgment is dismissed. I have further considered but rejected the possibility of making the leave to defend conditional. It will be unconditional. The parties have also addressed the court on the question of costs. I make the usual order. Costs will be in the cause.