LIU CHI CHIU v. EVER KNOWN BUILDING TECHNOLOGY LTD.

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 6475 OF 2000

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J U D G M E N T

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1. This is an assessment of damages following the entry of interlocutory judgment on 26 July 2000 against Ever Known Building Technology Limited, the defendant herein ("the defendant").

2. The plaintiff, Mr Liu Chi-chiu ("the plaintiff") launched proceedings under HCA 6475/2000 against the defendant over the defendant's failure to satisfactorily complete a contract for the building of a house in the New Territories.

3. The plaintiff is and was at all material times the grantee of land situated at Lot No. 1982 in Demarcation District No. 52, Sheung Shui, New Territories under new Grant No. 13016. He being an indigenous male resident of the New Territories, the plaintiff was entitled to apply for a grant of land from the Government for the purpose of building what is commonly known as a "ding house". Upon such grant of land, the grantee is entitled to put up on the plot a house of no greater size than 700 square foot and no higher than three storeys.

4. The defendant is a limited company incorporated in Hong Kong and at all relevant times was carrying on the business of a building and fitting out contractor. An agreement was reached between the plaintiff and the defendant, partially orally and partially in writing, pursuant to which the defendant as a contractor agreed for a remuneration of $1.82 million to design, build and fit out a three-storey village house on the land that was granted to the plaintiff. It was anticipated and indeed was a term of the contract that the house should be completed from the time of the commencement of building in eight months. Most unfortunately for the plaintiff, the defendant failed to carry out the building work with due diligence and, in fact, had left the house virtually uninhabitable and incomplete, thereby breaching the contract.

5. During the building stage, the plaintiff, as was his obligation, paid $1.456 million to the defendant. As it turned out, by the defendant's breach of the contract in not properly executing the building works, the plaintiff had suffered considerable loss and damage and now pursues damages as particularised on page 13 of his Statement of Claim. There are three heads, namely;

6. The plaintiff made a witness statement dated 16 February 2001. He adopted the contents of that statement as his evidence and confirmed the veracity and truthfulness of that document. I find all the matters stated in the witness statement to be true and correct and properly reflecting the facts of the case particularly insofar as they turn on the steps that he had taken to put right the breach of the defendant. Exhibit 1 to that witness statement contains a quotation from Shun Yip Construction Company Limited. It sets out the estimated cost of remedial works which forms the first head of his claim. He has also exhibited two receipts from Vincent T K Cheung Yap & Co., solicitors acting on his behalf until very recently, for professional services rendered. This item amounts to $58,500 but as I have indicated to the plaintiff, those are costs which should be claimed at the proper time.

7. He has also put in an expert report from Fotton Ela Architects Limited setting out the estimated cost of completing what the defendant ought to have done properly and within time. The estimated cost under paragraph (c) of that report suggested a figure of $1,283,812.71. The plaintiff, as an indication of his fairness, has testified that he would be pursuing remedial works costing less with an estimate of $1,166,932.

8. The plaintiff is clearly entitled by virtue of the breach of the defendant to damages which arise reasonably from that breach that can be regarded as properly and reasonably within the contemplation of the parties at the time of the contract. It must be within the minds of the contracting parties in this case that if the defendant defaulted or failed to execute the building works properly someone else would have to step in to put right matters not executed to the right contractual standard. In this case, the house was left in a virtual mess, for example, the pipes were not connected, the roof was incomplete and considerable work would have to be undertaken to make the house habitable.

9. Turning to the first head of damages, I am satisfied on the evidence, which is uncontradicted, that the plaintiff would have to incur additional costs, time and money to complete the building works. He claims that the estimated cost will be $1,166,932. I allow that claim.

10. Whilst the building works were being carried out inaptly, to use the most neutral term, and because of the defendant's breach of contract, the plaintiff has had to resort to alternative accommodation at the cost of $5,500 per month. He has had to rent a unit at 2nd Floor, No. 10, New First Lane, Po Shung Tsuen, Sheung Shui, New Territories from January 1998. He claims 32 months in the Statement of Claim and informs me that he is still residing there but has decided not to pursue continuing loss in this regard. Again, that is an attribute of the plaintiff's fairness. The claim under this head works out at $5,500 x 32 months, or $176,000. I award this amount to the plaintiff as well.

11. Finally, because of the incomplete building works and the delay in putting up the building, the plaintiff has had to pay additional premia to the Government to extend the building covenants. This he has done twice according to the Statement of Claim, at $210 each time, totalling $420. The plaintiff informs me this morning that he has had to pay this yet again and has incurred an additional sum of $210, but he is foregoing that extra cost in this assessment. Under the third head of claim, I award $420.

12. The total amount of damages I assess to be payable by the defendant to the plaintiff amount to $1,343,352.

13. The plaintiff shall have interest on the adjudged sum from the date of the writ at judgment rate until full payment. He shall also have his costs of this assessment against the defendant, taxed if not agreed.