AU YEUNG LUN KAN v. CHO & PARTNERS ENGINEERING LTD

DCCJ4297/2005

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 4297 OF 2005

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D E C I S I O N

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1.  The defendant asks for leave to appeal against my judgment of 6 March 2009 in this action.

2.  Mr So, counsel for the defendant submitted a skeleton and also made oral submissions today.  His grounds for appeal are that:

A.  I have erred in disregarding the price list（總價清單）of the Sheung Shui slaughter house contract project.

3.  As Mr Wong, counsel for the plaintiff correctly summarised in his skeleton, what the defence meant is that I have paid no or sufficient regard to the contents of the price list.  This is obviously not correct.  The price list was referred to in my judgment at paragraphs 26 and 39. 

4.  The defence case relied on the price list which sweepingly referred to the dimensions were internal dimensions, so called 「內孔尺寸計數」.  In fact, I have devoted paragraphs 39 to 46 of my judgment on why I accepted the plaintiff’s case that the pricing of the quotation was based on external dimensions and rejected the defence claim that the Plaintiff’s quotation was based on internal dimensions.  I had further emphasised the plaintiff had specified the dimensions on the interim payment applications were external dimensions and the defendant had repeatedly approved and paid these interim payment applications. 

5.  I have also accepted the plaintiff’s evidence that it was the practice of the construction trade that payments for manholes were always based on external dimensions.  There was no rebuttal evidence from the defendant on this point. 

B.   The second ground of appeal the defendants raised was the terms of the defendant’s main contract with the main contractor could reflect the intention of the plaintiff and defendant. 

6.  This was not a point raised at the trial.  In any event, the terms and conditions that the defendant subsequently agreed with the main contractor has no effect on the contract between the plaintiff and defendant reached two months before.

7.  The defendant made a commercial decision when he reached an agreement with the main contractor regarding the prices for each portion of the contract.  For example, he may quote a lower price for one part of the contract while charging a more profitable price for another part of the contract.  The defendant being an engineering firm of a certain size had very different considerations from a small contractor for labour such as the plaintiff.  It is not uncommon for a contractor to quote one part of the main contract at a lower price to attract and accommodate the main contractor.  This, of course, is mere speculation because this point was not canvassed at the trial.  Whether the main contract reflected the intention of the parties is not an issue I need to consider, for it was reached 2 months after the agreement between the Plaintiff and the Defendant and the Plaintiff was not a party to the main contract.

C.  I have drawn an adverse inference against the defendant for overpaying the plaintiff by 50 per cent. 

8.  The reason given by the defendant for overpaying the plaintiff was that the plaintiff’s workers would stop work and they could not hire anyone to do the work if the defendant did not pay the plaintiff’s workers wages demanded under the interim payment application.  It is clear the defendant knew if he paid anything less, there would be no one willing to do the manholes.  The defendant clearly knew the prices of labour in 2007.

9.  It is also clear from the plaintiff’s evidence and from the plaintiff’s expert evidence that the plaintiff’s quotation was based on labour charges for the Plaintiff was a contractor for labour.  Charges for labour working on manholes is not a trade secret, it is well known to all contractors.  Current labour charges which are available from the Construction Site Workers Union, they are also well understood in the construction trade.  That was the reason why the defendant accepted the plaintiff’s quotation in the first place and why he paid the plaintiff upon approval of the interim payment applications.  It was my finding the payments were not overpayments but correct payments agreed between the plaintiff and the defendant. 

10.  There are no merits in the defendant’s appeal.  I do not think the defendant has any reasonable prospects in the appeal to the Court of Appeal.  For this reason, I refuse leave with costs to the plaintiff to be taxed if not agreed with certificate for counsel.  The Plaintiff’s own costs to be taxed in accordance with Legal Aid Regulations.