CHEN GUOXI v. HUMANIZED DESIGN LTD

DCCJ 2048/2023

[2025] HKDC 1569

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 2048 OF 2023

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BETWEEN

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ASSESSMENT OF DAMAGES

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A. Introduction

1.  This is the assessment of damages arising from a contractual claim in relation to the renovation of a residential premises.

2.  In the absence of any notice of intention to defend, Interlocutory Judgment was entered against the Defendant on 3 July 2023, with damages to be assessed.

3.  The Plaintiff is self-represented. The Defendant is absent.

4.  The Plaintiff has provided me with a receipt demonstrating he has posted the hearing bundle to the Defendant’s registered address pursuant to para. 5 of the order of Master B Mak dated 2 September 2024 (“the Order”). The Order which notifies the Defendant the date and place of the assessment of damages also appears to be served on the Defendant. I am satisfied that the Defendant has notice of this hearing. I shall proceed in the Defendant’s absence pursuant to O35, r1 of the Rules of the District Court, Cap 336H.

B. Background

5.  The underlying dispute pertains to a renovation contract. The Plaintiff had engaged in the Defendant’s services for renovation of the Plaintiff’s flat.

6.  The Plaintiff and the Defendant agreed to proceed by way of a quotation signed by both parties dated 11 November 2022 (“Quotation”). The agreed cost for the renovation works to be provided by the Defendant was HK$698,668, discounted from the original quoted price of HK$1,014,950 (ie at a discount of about 68.8%).

7.  The Plaintiff, the Defendant and“深圳雅舍家居設計家俬店”(the “Furniture Shop”) entered into a tri-partite agreement dated 6 February 2023 (“Tri-Partite Agreement”).

8.  The Plaintiff has paid the Defendant a total of HK$681,750.

9.  The renovation work began in December 2022. It transpired that the Defendant had cash flow problems and was unable to complete or substantially complete the renovation works on or before the agreed completion date of 15 March 2023.

10.  On 22 March 2023, the Plaintiff terminated the renovation contract with the Defendant. The Defendant retrieved their tools from the Property. The Defendant also acknowledged that the Defendant will pay damages for loss suffered.

11.  On 28 March 2023, the Plaintiff engaged JJ Mars Interior Design & Construction Ltd to complete the renovation work.

12.  The new contractor finished the work by Mid-May 2023. The Plaintiff and his family moved into the renovated property on 15 May 2023.

13.  On 1 February 2024, the Defendant voluntarily repaid the Plaintiff the amount of HK$8,000 as partial payment of damages.

C. The Plaintiff’s Claim

14.  There appears to be some slight inconsistencies in the Plaintiff’s case against the Defendant in respect of the quantum. At the hearing before me, the Plaintiff confirmed that the correct quantum amount claimed against the Defendant is based on the amount as state in his Supplemental Witness Statement dated 29 February 2024, as being HK$339,521.40, calculated by:

(1) Materials and transportation cost incurred by the Plaintiff which under contract were the obligation of the Defendant: HK$152,133;

(2) Remedial renovation cost resulting from the Defendant’s incompletion: HK$164,924;

(3) Rental expenditure as a result of the Defendant’s delay in completion: HK$46,000;

(4) Miscellaneous costs arising from the Plaintiff’s claim: HK$1,382.40;

15.  Deducted by:

(1) Unpaid remainder of contract price: HK$16,918;

(2) The Defendant’s repayment of HK$8,000.

D. Evaluation of Evidence

16.  The Plaintiff has produced substantial documentary and photographic evidence in support of his case. Having considered their contents, I give full weight to the documents adduced before me by way of documentary evidence, I find that most of the documents are inherently plausible and consistent with one another.

17.  The Plaintiff also testified at the hearing. I find the plaintiff’s oral testimony to be credible and consistent with the documentary evidence adduced in this case.

18.  The Defendant did not appear at the hearing. In such circumstances, I accept the Plaintiff’s evidence as unchallenged.

E. Legal Principles

19.  Neither party in this case is legally represented. I therefore do not have the benefit of assistance from the parties on the governing legal principles.

20.  Having said that, it is trite that in the case of the defendant breaching a contract, the plaintiff is entitled to be placed, so far as money can do, in the same position as if the contract has been performed, provided that all reasonable steps have been taken to mitigate their loss: British Westinghouse Electric and Manufacturing Co Ltd v Underground Electric Railways Co of London Ltd [1912] AC 673 at 688.

21.  The employer would be able to recover consequential loss in the shape of liabilities incurred to third parties, or loss or business or rentals, on the same principles as those in relation to defective work and delay in completion. In addition, the employer would on normal principles be entitled to other damages that result directly from the failure to complete, including most obviously the additional costs of completing by another contractor: Hudson’s Building and Engineering Contracts, 13^th edition §7-040.

F. Discussion

Materials and transportation cost

22.  Under this heading, the Plaintiff claims for additional expenditure incurred in relation to materials and transportation costs (in respect of the custom-made furniture) which were provided under contract to be borne by the Defendant but which was ultimately borne by the Plaintiff.

23.  I have considered the same. I consider that items 1 to 24 are reasonable.

24.  As to items 25-29, the Plaintiff claims for the amounts in respect of items which were ultimately not provided by the Defendant. I note that the Quotation is itemized with the cost item clearly set out in the next column. Given that the contract is divisible into separate items of works, it is permissible for the Plaintiff to claim for the refund of overpayment made to the Defendant: Chan Yee Tak Rachel v DSM Interior Design Ltd HCA 1641/2020 (unreported, 2 Feb 2023) at §§18-23; Prime View Inc Limited v Asian Richly Limited HCA 1672/2015 (unreported, 28 September 2017) at §§25-30.

25.  At the hearing before me, the Plaintiff has explained that he very fairly applied the 68.8% discount from the quoted charge of the item in the Quotation, reflecting the proportionate charge of the relevant items. I also accept them as reasonable.

Remedial renovation cost

26.  The Plaintiff claimed that as a result of the Defendant’s failure to complete, the Plaintiff confirmed that he engaged JJ Mars Interior Design and Construction Ltd to finish the incomplete works, in the amount of HK$138,000.

27.  While items 17 to 20 are works that were not covered in the original contract, I am satisfied that the items specified therein (including installation of aircons, fans, doorbells and water heaters) are necessary and reasonable items. The Plaintiff also testified that the Defendant orally undertook and confirmed that the parties agreed that the works are all inclusive（全包）. He was able to point to me Whatsapp evidence between the parties to support this. In any case, given the description of the items, I consider that the Defendant ought to have put such items into the quotation.

28.  Item 26 is the formaldehyde application to the premises. I consider this to be necessary and reasonable.

29.  Items 27 and 29 are items which were services ultimately not provided by the Defendant but not pursued by the Plaintiff with the new contractor. By reason of the aforesaid, given the divisible nature of the contract, it is permissible for the Plaintiff to claim for the refund of overpayment made to the Defendant. Similar to the previous heading, the Plaintiff has also applied the 68.8% discount on the relevant items. I accept them as reasonable.

Rental Expenditure

30.  Lastly, the Plaintiff claims for the one month rental expenditure resulting from the Defendant’s delay as his family had to stay an extra month at a different location which costs HK$46,000 per month. Recovery for this head of damages could be allowed if they are reasonably foreseeable and result from the Defendant’s failure to complete.

31.  In respect of this item, the Plaintiff was unable to give me particulars or any documentary evidence to support this claim. I am not satisfied that this item was made out and will disallow this item.

Miscellaneous Items

32.  Lastly, the Plaintiff claims for the modest sum of HK$1,382.40 for costs incurred in relation to the Plaintiff’s claim against the Defendant, including postal stamp, registration fees etc.

33.  I am satisfied that these items are reasonable and proper costs incurred as a result of the Defendant’s breach of contract.

G. Conclusion

34.  In summary, the amount of damages payable by the Defendant to the Plaintiff is as follows:

Adding up:
(1)	Materials and Transportation Cost	HK$152,133
(2)	Remedial Renovation Cost	HK$164,924
(3)	Miscellaneous costs	HK$1,382.4
Deducted by:
(1)	Unpaid remainder of contract price	HK$16,918
(2)	The Defendant’s repayment	HK$8,000
Total:		HK$293,521.4

H. Disposition

35.  For reasons as aforesaid, I enter a final judgment that the Defendant pay the Plaintiff the sum of HK$293,521.4, together with interests thereon at 1% above the HSBC best lending rate from the date of the Writ, 24 May 2023, to the date of this assessment and thereafter at judgment rate until full payment.

36.  The Plaintiff shall have costs of the Action, to be summarily assessed on paper. I direct that the Plaintiff should file to Court and serve on the Defendant within 14 days his Statement of Costs. The Defendant has leave to file 7 days thereafter his list of objections (if any) in relation to the Defendant’s Statement of Costs.