TANG CHI KEUNG t/a CHING KEE ENGINEERING TRANSPORTATION CO v. HONG KONG CONSTRUCTION (HOLDINGS) LTD

HCA2909/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.2909 OF 2002

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BETWEEN

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IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.3291 OF 2002

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(CONSOLIDATED)

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J U D G M E N T

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1. The plaintiff, trading as Ching Kee Engineering Transportation Company, engaged in the business of supplying plants including dump trucks and materials to construction sites.  The defendant was at the material times the main contractor of the Highways Department’s project for widening Tolo Highway between Island House Interchange and Ma Liu Shui Interchange (“the Project”).

2. Between 1 December 2000 and 21 May 2001, the plaintiff supplied plants and materials to the defendant at the site for the Project.  The plaintiff issued Invoices Nos. 149 – 256 to the defendant.  The defendant in turn issued Interim Payment Certificate (“ICPs”) Nos. 25 – 30 covering the Invoices.  It then made payment under the ICPs Nos. 25 and 26 for the respective sum of HK$639,925.80 and HK$885,279.00, totalling HK$1,525,204.80.  But it had not made any further payment.  The particulars of the Invoices, ICPs and the two payments by the defendant appear as follows :

Month	Invoices & Sums Claimed (HK$)	ICPs & Sums Stated (HK$)	Sums paid (HK$)
Dec 2001	149 – 160 639,935.80	25 639,925.80	639,935.80
Jan 2002	161 – 177 885,279.00	26 885,279.00	885,279.00
		Total :	1,525,204.80
Feb 2002	178 – 198 608,512.36	27 608,512.36	Nil
Mar 2002	199 – 222 1,397,221.07	28 1,397,221.07	Nil
Apr 2002	223 – 242 1,863,097.52	29 1,863,097.53	Nil
May 2002	243 – 256 1,582,061.89	30 1,582,061.89	Nil
		Total :	5,449,423.64

The issue

3. The plaintiff commenced these consolidated proceedings, claiming for the sum of HK$5,449,423.64.  Initially, the defendant denied liability on a number of grounds and counterclaimed for overpayment under ICPs Nos. 25 and 26.  But at trial, Mr Harris, SC, appearing for the defendant, effectively abandoned the counterclaim.  He and Mr Yip, appearing for the plaintiff, framed the only issue between the parties in these terms :

“The issue between the parties is the quantity of plants supplied between 1/12/2001 and 31/5/2002 and in particular the accuracy and/or completeness and/or adequacy of the records relied on by the plaintiff as proving the quantity of plants brought into site during the material period.”

Subject to the determination of this issue, the parties agree that the defendant pays the plaintiff at the rate as set out respectively in Invoices Nos. 149 – 256.

4. Although the issue refers to plants supplied by the plaintiff to the defendant, the only item disputed by the defendant at the end of the trial is the number of and hence the amount for the dump trucks supplied by the plaintiff, namely, HK$3,064,171.66.  The balance of HK$2,051,703.03 (HK$5,449,423.64 – HK$3,064,171.66) is no longer in issue.

The number of dump trucks supplied

5. How the plaintiff supplied the dump trucks to the defendant at the site for the Project is not seriously disputed.  After receiving orders from the defendant for the following day, the plaintiff contacted his supplier, Six Choice Eng. Transpo Co. (六合工程運輸公司) (“Six Choice”) and placed the orders accordingly.  Six Choice then sent drivers driving the trucks to the site.  Six Choice had sets of the plaintiff’s hauling tickets.  Particulars of the orders were filled up in the hauling tickets.  When the drivers drove the dump trucks to the site, they presented the hauling tickets to the defendant’s representative at the site for him to sign and acknowledge, which he did.  At the end of the month, the plaintiff relied on the hauling tickets duly signed by the defendant’s representative at the site to prepare the Invoices.  The plaintiff had produced all the hauling tickets which correlate with the corresponding Invoices.  It is the plaintiff’s case that the defendant then issued the ICPs to certify the amounts claimed in the Invoices.  He had also paid Six Choice in full for the dump trucks ordered.  The documentary evidence in support of such payments is not challenged.

6. Under cross-examination, the plaintiff admitted that he did not have any record of the orders for dump trucks placed by the defendant.  He did not fill up the hauling tickets personally.  He basically left the paper work for filling up the hauling tickets to Six Choice.  He did not have any personal knowledge as to the actual number of trucks supplied either.

7. On documentary evidence, the defendant relied on a red/black book (“the Book”) kept by its staff at the site which allegedly contained records of dump trucks ordered.  The amount of dump trucks ordered differed from the Invoices and the ICPs.  The defendant also relied on the daily records prepared by the consultant engineer at the site, Maunsell Consultants Asia Ltd (“the Manusell Records”), which purported to record, inter alia, trucks attending the site daily (without indicating who ordered or used the trucks).  The data in Maunsell Records differed from not only the hauling tickets but also the Book.

8. The defendant had not called the maker(s) of the Book or the Maunsell Records to give evidence.  The only factual witness that it had called is the Head of its Civil Construction Department, Mr Tom Tang Sau Wai (“Mr Tang”).  However, Mr Tang did not have any personal knowledge of the number of dump trucks supplied by the plaintiff to the site.  He said that the headquarters of the defendant first became suspicious of the amount claimed by the plaintiff when there was a sudden surge in March 2002.  But he accepted under cross-examination that the increase was possible in light of the fact that the Highways Department had urged the defendant to speed up the progress of the work.  He also accepted that the defendant could have consulted their own records before issuing the ICPs and that if the hauling tickets were inconsistent with the data in the Maunsell Records or the Book, the defendant would not have certified the amounts sought in the ICPs but the amounts it believed to be correct.

9. The parties further relied on evidence from their surveyor to support their case on the number of dump trucks supplied to the site by reference to the works carried out there and productivity at the time.  For reasons which will become apparent in a moment, it is not necessary for me to deal with the expert evidence in length.

10. In my view, the case essentially turns on the accuracy and reliability of the hauling tickets, the Invoices and the ICPs for the plaintiff’s case on the one hand, and the Book and the Maunsell Records for the defendant’s on the other.

11. The defendant sought to challenge the accuracy of the hauling tickets, the Invoices and the ICPs and asserted that the amounts of dump trucks were over-stated.  But why did its representatives at the site sign the hauling tickets to acknowledge the amount of dump trucks delivered?  Further, the ICPs were prepared by the defendant’s quantity surveyor, checked by its project quantity surveyor and approved by its project manager.  The responsible officers of the defendant had apparently gone through a careful procedure of checking and approval before issuing the ICPs, certifying the amounts claimed in the Invoices.  And according to Mr Tang, the defendant would not have certified the amounts stated in the ICPs if the data derived from the hauling tickets (reflected in the Invoices) were inconsistent with the defendant’s own record.  In the circumstances, it does not now lie in the defendant’s mouth to dispute the accuracy or reliability of the hauling tickets, the Invoices or the ICPs.

12. Mr Harris very fairly drew my attention to Pak Ki Company v. Sung Foo Kee Limited, CACV68/1996, unreported, 4 October 1996.  That case was an appeal against the first instance judge’s order striking out the defence and entering judgment for the plaintiff.  Godfrey JA had this to say :

“30. The plaintiff was employed by the defendant as a daywork contractor. It supplied workers to the defendant's sites for which supply it claims to have been underpaid. The defendant says that, on the contrary, it has overpaid the plaintiff. The procedure which the parties agreed would be used in quantifying the payments which were to be made to the plaintiff involved the preparation by the defendant of daily daywork record sheets confirmed by the signature of a duly authorised representative of the defendant.

31. The plaintiff's claim against the defendant is based on these daywork record sheets. As it seems to me, in the case of each and every daywork record sheet which has been so confirmed on behalf of the defendant, the defendant can have no defence to the plaintiff's claim.

32. The defendant claims that its representative signed the daywork record sheets (or some of them) believing them to be accurate, a belief which it now contends was mistaken. It wants to fish around in the plaintiff's documents for material which it hopes will justify its assertions that the daywork record sheets were inaccurate.

33. In my judgment, it cannot be allowed to do this; nor can it be heard to say, in the face of its representative's signature to them, that the daywork record sheets were inaccurate. As a matter of law, by the signature of its representative on the daywork record sheets, the defendant, as it seems to me, expressly or impliedly represented to the plaintiff that the money to be paid for the work was truly due and owing. This was a representation on which the plaintiff was entitled to act and did act throughout the working out of the contract, by paying the workmen in accordance with their recorded work. The whole point of the agreed procedure was to establish machinery which would enable the plaintiff to be paid promptly for labour accepted by the defendant as having been supplied to it under the contractual arrangements the parties had made. Those arrangements provided the defendant with a safeguard against an inflated claim; the right to withhold its confirmation of the daywork record sheets by refusing to sign them. They provided a safeguard for the plaintiff against an unjustified refusal to accept a claim based on the daywork record sheets; the signature of the defendant's representative on the daywork record sheets. The defendant cannot now be allowed to throw over these arrangements and demand that the plaintiff justify anew its claim for payment in accordance with the daywork record sheets. There is no legal or other merit in its refusal to pay what is, according to the daily record sheets confirmed by the defendant's representative's signature, still due and owing to the plaintiff, nor in its attempt, in the face of its representative's signature on the daywork record sheets, to recover what it now says were overpayments.

The observations by Godfrey JA are equally apt in the present case.

13. The defendant ought to have called the maker(s) of the Book and the Maunsell Records to explain and verify the data contained therein but it had not.  Mr Tang’s evidence on the Maunsell Records is his own speculation.  In the absence of the evidence from the maker(s), the veracity of the data contained in the Book and the Maunsell Records has not been properly tested.  I am not going to attach any weight to either of them.

14. For the above reasons, I find on a balance of probabilities that the hauling tickets, the Invoices and the ICPs are reliable and accurate.  They contained the number of the dump trucks supplied by the plaintiff to the defendant at the site for the Project.

15. I have been able to reach the above finding without resorting to the experts’ evidence.  I will therefore leave them as they are.

16. For completeness, I note that the parties disputed as to what happened at a meeting held on 16 August 2002 attended by the plaintiff Mr Tang and others.  Mr Tang said that the plaintiff agreed to provide records of dump truck drivers of their attendance on site for verification and in return the defendant agreed to make any on account payment of HK$1,000,000.  The plaintiff said that he only agreed to provide a further set of copies of the hauling tickets.  I think what happened at the meeting does not affect the central question relating to the reliability and accuracy of the documents that the parties sought to rely on.  As it is immaterial, I will also leave the evidence concerned without making any finding.

Conclusion

17. I find that the plaintiff is entitled to its claim.  So I will enter judgment for the plaintiff in the sum of HK$5,449,423.64 with interest at the judgment rate from the date of writ to the date of judgment and thereafter at judgment rate until full payment.  I will also dismiss the defendant’s counterclaim.  Finally, I make an order nisi that the plaintiff shall have the costs of the action, to be taxed if not agreed.