M & L ENGINEERING & MATERIALS LTD v. YUEN CHAK CONSTRUCTIONS CO LTD

DCCJ525/2002

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 525 OF 2002

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JUDGMENT

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1. The Plaintiff is a limited company incorporated in Hong Kong in accordance with the provisions of the Companies Ordinance, Cap. 32 of the Laws of Hong Kong.

2. The Defendant is also a limited company incorporated in Hong Kong in accordance with the provisions of the Companies Ordinance, Cap. 32 of the Laws of Hong Kong.

3. By this claim, the Plaintiff claims against the Defendant in respect of the balance of hiring charges in respect of three Equipment Rental Agreements related to "MENCK" Hydraulic Piling Hammers in the total sum of $201,414.55. The three Agreements are as follows:-

1st Agreement

4. On 24th March 2000, the Plaintiff and the Defendant entered into an Equipment Rental Agreement (contract no. 000131) whereby the Plaintiff being the owner of 1 set of "MENCK" Hydraulic Piling Hammer MHF5-12 ("the 1st Hammer") let out on hire rented the 1st Hammer to the Defendant. A copy of the Agreement is found at pages 3 - 6 of the Agreed Bundle of Documents (BD2), some of which terms are:-

(a) The 1st Hammer was to be let on hire by the Plaintiff to the Defendant on a minimum of two (2) months' basis at $87,000 per month (clause 2 of the 1st Agreement);

(b) 1 month rental in $87,000 was to be paid by the Defendant to the Plaintiff in advance on or before the 1st day of each rental month (clause 9 of the 1st Agreement); and

(c) Any late payment from the Defendant will incur interest charges at 0.75% per month accumulative (clause 13 of the 1st Agreement).

2nd Agreement

5. On 13th November 2000, the Plaintiff and the Defendant entered into another Equipment Rental Agreement (Contract No. 000436) whereby the Plaintiff being the owner of 1 set of "MENCK" Hydraulic Piling Hammer MHF5-14 ("the 2nd Hammer") let out on hire the 2nd Hammer to the Defendant. A copy of the 2nd Agreement is found at pages 44 - 50 some of which terms are:-

(a) The 2nd Hammer was let on hire by the Plaintiff to the Defendant on a minimum one (1) month's basis at the net rental rate of $105,000 per month (clause 2a of the 2nd Agreement);

(b) Rental rate beyond the minimum period was to be charged on daily-pro-rate basis with daily rental rate of $4,100 per day (clause 2b of the 2nd Agreement);

(c) The rental rate as stated above is based on normal nine (9) working hours from 8:00 a.m. to 12:00 p.m. and 1:00 p.m. to 6:00 p.m. per each normal working day. Sunday and Public holiday is excluded from being as normal working day. There was reckoned to be a total of 26 normal working days per month. Overtime surcharge was to be charged at HK$460 per hour if working beyond the above mentioned normal working hour. This overtime surcharge is applicable even if the operator is provided or not provided by the Agent (clause 5 of the 2nd Agreement);

(d) A deposit of 1 month's rental (in $105,000) was to be paid by the Defendant to the Plaintiff in advance before mobilization. This is refundable at the end of the rental period. Rental charges and the overtime surcharge, if any, are payable immediately from dates of invoice. Invoice will be issued on the first day of rental and thereafter on the first day of each subsequent month of rental (clause 9 of the 2nd Agreement); and

(e) Any late payment from the Defendant will incur interest charges at 3% per month accumulative (clause 13 of the 2nd Agreement).

3rd Agreement

6. On 14th November 2001, the Plaintiff and the Defendant again entered into another Equipment Rental Agreement (Contract No. 010461) whereby the Plaintiff being the owner of 1 set of "MENCK" Hydraulic Piling Hammer MHF5-14 ("the 3rd Hammer") let out on hire to the Defendant the 3rd Hammer. A copy of the Agreement is found at pages 104 - 110 of BD2 some of which terms are:-

(a) The 3rd Hammer was to let out on hire by the Plaintiff to the Defendant on a minimum of one (1) month's basis at the net rental rate of $80,000 per month (clause 2a of the 3rd Agreement);

(b) rental rate beyond the minimum period to be charged on a daily-pro-rate basis with daily rental rate of $3,076 per day (clause 2b of the 3rd Agreement);

(c) the rental rate as stated above is based on normal nine (9) working hours from 8:00 a.m. to 12:00 p.m. and 1:00 p.m. to 6:00 p.m. per each normal working day. Sunday and Public holiday is excluded from normal working day. There was reckoned to be a total of 26 normal working days per month. Overtime surcharge to be charged at HK$460 per hour if working beyond the above mentioned normal working hour. This overtime surcharge is applicable even if the operator is provided or not provided by the Agent (clause 5 of the 3rd Agreement);

(d) a deposit of 1 month's rental (in $80,000) be paid by the Defendant to the Plaintiff in advance before mobilization and which is refundable at the end of the rental period. Rental charges and the overtime surcharge, if any, are payable immediately from dates of invoice. Invoice will be issued on the first day of rental and thereafter on the first day of each subsequent month of rental (clause 9 of the 3rd Agreement);

(e) any late payment from the Defendant will incur interest charges at 3% per month accumulative (clause 13 of the 3rd Agreement); and

(f) the Defendant shall be responsible for the return of the machine in good condition. For any parts of the equipment found missing or damaged or abused, the Plaintiff shall be authorised to make such repairs and replacement and charge all costs to the Defendant except for normal wear and tear items. If equipment has to be done by the Defendant, then the Defendant shall use only genuine parts approved by the Plaintiff (clause 17 of the 3rd Agreement).

The Defendant's Defence and Counterclaim in relation to the Agreements

1st Agreement

7. The Defendant pleaded in the Defence & Counterclaim that prior to the making of the 1st Agreement, the Defendant had made known to the Plaintiff that:

(1) it required a hammer with a drop height of not less than 1.2 meters for the purpose of driving the piles to the specified depth at the site of the St. George's School project;

(2) the main contractor of the project engaging the Defendant in driving piles would claim and deduct liquidated damages against the Defendant if the progress of the Defendant's work should be delayed.

8. It was pleaded that the 1st Agreement had the following implied terms:-

(1) that the 1st Hammer should be fit for that purpose;

(2) that the 1st Hammer could operate and function properly during the rental period.

9. The Plaintiff was in breach of the two implied terms afore-mentioned in that:

(1) The 1st Hammer could only reach 1.08 meters and hence it failed to drive and final set the driven piles to the specified and final set depth under the St. George project.

(2) The 1st Hammer frequently failed to operate due to mechanical failure.

10. The Defendant pleaded that by reason aforesaid, the Plaintiff had repudiated the 1st Agreement with the repudiation had been accepted by the Defendant both orally and in writing on 21st June 2000.

11. The Defendant denied that it was in possession of the 1st Hammer in the period between 5 May 2000 and 4 July 2000 or that it should be responsible to pay the Plaintiff the sum of $174,000 rental fee for the said period. This was because of the Plaintiff's stated repudiation of the 1st Agreement as pleaded by the Defendant which had been accepted by them.

12. They claimed that the sum of HK$69,661.60 was paid by them on account of costs of the 1st Agreement and not in partial satisfaction of the rental. They denied the sum of $60,838.40 claimed by the Plaintiff in this Agreement was due by them.

13. The Defendant Counterclaimed the sum of HK$69,661.60 paid by them on account of costs of the 1st Agreement . They claimed a sum of HK$483,158.10 damages in respect of their loss made up as follows:-

(1) HK$180,000.00 being costs related to the hire of another hammer

(2) HK$182,618.10 being costs of the staff equip and tools being made idle during the period of breakdown of the 1st Hammer

(3) HK$120,540.00 being the liquidated damages deducted by the main contractor.

2nd Agreement

14. The Defendant pleaded in the Defence to Counterclaim that prior to the making of the 2nd Agreement, the Defendant had made known to the Plaintiff that:-

(1) it required a hammer with a drop height of not less than 1.5 meters for the purpose of driving the piles to the specified depth at the site of the KCRC 403 project;

(2) the main contractor of the project engaging the Defendant in driving piles would claim and deduct liquidated damages against the Defendant if the progress of the Defendant's work has been delayed.

15. It was pleaded that the 2nd Agreement had the following implied terms:-

(1) that the 1st Hammer should be fit for that purpose;

(2) that the 2nd Hammer could operate and function properly during the rental period.

16. The Plaintiff was in breach of the two implied terms afore-mentioned in that:-

(1) The 2nd Hammer was unable to reach the drop height of 1.5 meters but could only reach 1.20 meters and hence it failed to drive and final set the driven piles to the specified and final set depth under the KCRC 403 project.

(2) The 2nd Hammer frequently failed to operate due to mechanical failure.

17. The Defendant pleaded that by reason aforesaid, the Plaintiff had repudiated the 2nd Agreement and with the repudiation had been accepted by the Defendant on 10th January 2001.

18. The Defendant denied that it was in possession of and renting the 2nd Hammer in the period between 15th December 2000 and 14th January 2001 or that it should be responsible to pay the Plaintiff the sum of HK$105,000.00 being the rental for the said period. This was because of the Plaintiff's stated repudiation of the 2nd Agreement pleaded by the Defendant, which had been accepted by the Defendant.

19. The Defendant's case is that the sum of HK$36,346.85 paid by them was on account of costs of the 2nd Agreement but not for partial satisfaction of the said sum of HK$105,000.00 in rental payment.

20. The Defendant denied that a sum of HK$60,576.15 is due from them to the Plaintiff as claimed by the Plaintiff by virture of the Plaintiff's repudiation of the 2nd Agreement.

21. The Defendant counterclaimed for recovery of the costs on account paid under the 2nd Agreement in the sum of HK$36,346.85.

22. The Defendant further counterclaimed for damages for loss by reason of the Plaintiff's repudiation of the 2nd Agreement in the sum of HK$1,060,900 made up of:-

(1) HK$160,000, being costs of hiring another hammer.

(2) HK$510,900.00 being costs of the staff equip and tools being made idle during the period of breakdown of the 1st Hammer

(3) HK$390,000.00 being the liquidated damages deducted by the main contractor.

3rd Agreement

23. Prior to the making of the 3rd Agreement, the Defendant made known to the Plaintiff that:-

(1) it required a hammer that would have a drop height of not less than 1.5 meters for the purpose of driving the piles to the specified depth at the site of Science Park at Pak Shek Kok, Phase 1C, New Territories; and

(2) the main contractor of the project engaging the Defendant in driving piles would claim and deduct liquidated damages against the Defendant if the progress of the Defendant's work has been delayed.

24. The Defendant pleaded that the 3rd Agreement had the following implied terms:-

(1) that the 3rd Hammer should be fit for that purpose;

(2) that the 3rd Hammer could operate and function properly during the rental period.

25. The Plaintiff was in breach of the two implied terms afore-mentioned in that:-

(1) The 3rd Hammer failed to operate due to mechanical failure after being delivered to the site of the Science Park project on 15th November 2001;

(2) Despite the Defendant's repeated request and demand, the Plaintiff was unable to repair the 3rd Hammer and hence the 3rd Hammer still failed to function before 27th November 2001.

(3) In the premises, the Plaintiff has repudiated the 3rd Agreement and the Defendant accepted the repudiation on 27th November 2001.

26. The Defendant denied that it was in possession of the 3rd Hammer in the period between 29th November 2001 and 28th December 2001 or that it should be responsible to pay the Plaintiff the sum of $80,000.00 rental fee for the said period. This was because of the Plaintiff's stated repudiation of the 3rd Agreement as pleaded by them.

27. The Defendant pleaded that they have never used the 3rd Hammer since its delivery to the site of the Science Park project. They counterclaimed for the one month's rental paid in advance by them under the 3rd Agreement in the sum of HK$80,000.00.

28. They counterclaimed for damages for loss by reason of the Plaintiff's repudiation of the 3rd Agreement in the sum of HK$1,233,900.00 made up of:-

(1) HK$190,000.00 being costs of hiring another hammer.

(2) HK$393,900.00 being costs of the staff equip and tools being made idle during the period of breakdown of the 3rd Hammer.

(3) HK$650,000.00 being the liquidated damages deducted by the main contractor.

The Issues

1. Whether the Defendant did make known its requirements in each of the Agreements as pleaded in the Defence & Counterclaim.

2. Whether the Defendant had been able to establish that there was mechanical failure regarding the 1st 2nd and 3rd Hammers at the times alleged by the Defendant and such mechanical failures were due to the defect or fault of the respective hammers and not the fault of operation of the respective hammers and whether the Defendant was entitled to deduct the rent for the periods of breakdown as alleged by the Defendant.

3. Whether the Defendant was in possession of the 1st, 2nd and 3rd Hammers at the material times of the hire as claimed by the Plaintiff and liable to pay the rental therefore.

4. The nature of the payments made by the Defendant to the Plaintiff namely the sum of $69,661.60 on 14th November, 2000, the next day immediately after the parties herein entered into the 2nd Agreement: see paragraph 8 herein; and the sum of $36,346.85 on 15th November 2000, the next day immediately after the parties herein entered into the 3rd Agreement: see paragraph 17 herein.

5. Whether the Defendant is able to establish the counterclaim on the balance of probability.

Evidence of the Plaintiff

29. The Plaintiff called three witnesses. They are Mr. Jeremy Ng Lai Ming a director of the Plaintiff Company, Mr. Lee Chi Keung, a former sales manager of the Plaintiff Company and Mr. Lam Chi Wing a technician of the Plaintiff Company.

Evidence of Mr. Jeremy Ng Lai Ming

30. Mr. Jeremy Ng Lai Ming gave evidence and adduced the content of his Witness Statement and Supplemental Witness Statement into evidence, having confirmed its contents to be true. He stated that he dealt with Mr. Peter Ho Kwok Wa (hereinafter referred to as "Mr. Ho") of the Defendant in relation to the 2nd and 3rd Agreements. However as the Director of the Company he knew that the 1st Hammer hired to the Defendant under the 1st Agreement did not stop working during the period when it was hired to the Defendant. He knew that because the site staff told his staff.

31. In relation to the 2nd Agreement, he stated that in November 2000 the Defendant wanted to hire another hammer. He stated, "no problem". However he asked the Defendant to pay the sum outstanding for the 1st Agreement. It was then that the Defendant paid the sum $69,661.60.

32. Before entering into the 2nd Agreement, the Plaintiff sent to the Defendant a copy of the 2nd Agreement and attached thereto the specification of the 2nd Hammer.

33. He told Mr. Peter Ho the hammer was a 14 ton hammer the specification is the same as that in the written Specifications attached to the Agreement. He gave the Catalogue of the 2nd Hammer to the Defendant as found at pages 202 to page 227 of BD2 to the Defendant in a box. In the Catalogue at page 203 of BD2 it states the technical data of the hammer including the drop height stated to be 1.07m.

34. Mr. Ho never told him that the Defendant required a hammer with a drop height of 1.5 meters, or that the Defendant was required to pay liquidated damages should there be any delay in the piling works of the Defendant, or that the 2nd Hammer would be used in the KCRC project, and that the piling works could only be carried out within a limited period of time each day or at all.

35. In relation to the 3rd Agreement, Mr. Jeremy Ng stated that Mr. Peter Ho telephoned him when he was in Beijing stating that he wanted to hire the 3rd Hammer urgently. Mr. Ng stated that the 3rd Hammer was in need of repair and could not be used immediately. He stated that it required 1 week's time for repair. They had to await the spare parts that could arrive in the week commencing 19th November 2001. Despite, that Mr. Ho said he needed the hammer to be delivered urgently to the site and accepted the 3rd Hammer to be delivered in that condition subject to the repair as stated by Mr. Ng. Mr. Ng stated that he did not state that the repair would be completed on the 19th November.

36. In fact the 3rd Hammer is the same as the 2nd Hammer hired under the 2nd Agreement as the serial number of the two are the same. Before entering the 3rd Agreement, the Plaintiff sent to the Defendant a copy of the 3rd Agreement and attached thereto the Specification of the 3rd Hammer.

37. Mr. Ho accepted the Plaintiff's delivery of the 3rd Hammer in that condition to the Defendant's site first and would arrange the Defendant's site staff to assist the Plaintiff's mechanics to fix the 3rd Hammer upon arrival of the spare parts.

38. Before the Parties entered into the 3rd Agreement, Mr. Ho never told him that the Defendant required a hammer with a drop height of 1.5 meters, that the Defendant was required to pay liquidated damages should there be any delay in the piling works by the Defendant, or that the 3rd Hammer would be used in Science Park construction site, and that the piling works could only be carried out within a limited period of time in each day or at all.

39. Further, Mr. Ho told him that the Defendant would settle the outstanding rentals of the 1st and the 2nd Hammers which the Defendant owed the Plaintiff under the 1st and the 2nd Agreements if the Plaintiff should agree hiring to the Defendant the 3rd Hammer.

40. As far as the 3rd Hammer is concerned, Mr. Ng further testified that on 4th December 2001, the Plaintiff's staff did go to Science Park and carried out a routine checking; see page 142 BD2.

41. In his evidence, Mr. Ng also informed the court that whenever the technician of the Plaintiff repaired the Plaintiff's hammers, the Plaintiff's technician would supply a copy of the related service order to the Defendant.

42. Mr. Ng further testified that it was the Defendant that collected the 2nd and 3rd Hammers from the warehouse of the Plaintiff and returned the 2nd and the 3rd Hammers to the same; see pages 062; 072; 116 and 152 of BD2.

43. At the time when the Defendant wanted to hire the 3rd Hammer, the Defendant gave the Plaintiff the sum of $36,346.85.

44. Mr. Ng gave evidence that in piling work according to his experience and observation, there were three stages of piling, namely the opening stage, the middle stage and the final set. This is not disputed by the Defence case. Hammers are not usually able to be used in all 3 stages of piling. It depends on the nature of the soil. Each of the 3 stages need different hammers with different capacities.

Evidence of Mr. Lee Chi Keung

45. Mr. Lee Chi Keung (hereinafter referred to as "Mr. Lee") confirmed the truth of his witness statement and adduced it into evidence. He further gave evidence that he contracted with Mr. Peter Ho Kwok Wa in relation to the 1st Agreement. Mr. Ho telephoned him to discuss about information of hammers. He went into the office of Mr. Ho to introduce information about the hammers. He gave to Mr. Ho the Catalogue at pages 202 to 209 of BD2. He spoke about the specification and the configuration of the hammer and the hire charges. Page 203 of BD2 contain the technical data of the relevant hammer which is MPH5-12, a 12 ton hammer. Therein it states that the maximum stroke of the hammer is 1.07m. He informed Mr. Ho a number of times about the maximum stroke of the hammer. Mr. Ho asked him about the maximum stroke and Mr. Lee told him a number of times. Mr. Ho did ask him whether the hammer could reach 1.2m. Mr. Lee told him that it could only reach 1.07m. He stated that Mr. Ho did not say to him before signing the agreement that the hammer needed to have a maximum stroke of 1.2m. He only enquired whether it could reach 1.2m and Mr. Lee told him that it could only reach 1.07m.

46. The 2nd Agreement at pages 7 to 10 of BD2 is signed by Mr. Lee on behalf of the Plaintiff and Mr. Ho on behalf of the Defendant. He referred to the Delivery Order of the hammer at page 11 of BD2. It was clearly stated that it was "self pick up" to be delivered to Tin Shui Wai the job site.

47. The invoice at page 13 of BD2 was issued on 5 April for the month to 4 May for 1 month's rental. He stated that there were some changes as Mr. Ho stated that the hammer was not suited for use in the Tin Shui Wai site and wanted to move it to another site. The Plaintiff's workmen went to the Tin Shui Wai site and found that they had not used the hammer. He therefore charged them for the period starting from 5 April 2000. The hammer was moved to the St. George's School Site. He knew about this move after the 27 March 2000, the date of the contract.

48. In relation to whether Mr. Ho informed him that should the contract be delayed they would be liable for liquidated damages. Mr. Lee said he did not remember if Mr. Ho said that. However he stated that liquidated damages was not something they would be responsible for. It had nothing to do with the Plaintiff. That was because liquidated damages comes about because the principal contractor or owner required the contract to be completed within a stated period. The liability falls on the contract not the owner of the hammer.

49. He knew that at the St. George's School Site, piling time allowed on the site was only 3 hours per day. However he stated that he only knew that the Defendant was moving the hammer to the St. George's site after the 1st Agreement was signed.

50. Regarding knowledge of St. George's School Site, Mr. Lee testified during his examination-in-chief and re-examination that he was informed by the Defendant sometime between 27th March 2000 and 5th April 2000 that the 1st Hammer was moved to the St. George's School Site. He informed the court that the Defendant had never informed the Plaintiff before the Defendant moved the 1st Hammer from Tin Shui Wai to the St. George's School Site.

51. He stated that sometime after the middle of June and before the end of June, Mr. Ho telephoned him. He had something to say about the performance of the hammer. He stated that the problem was that the principal contractor told him the performance of the hammer was not ideal. It could not reach the required force. Nothing else was said apart from that. He stated that he would stop the hiring of the 1st Hammer but an alternative is to move the 1st Hammer to another construction site where the 1st Hammer could be used.

52. In relation to whether the hammer could do 3 stages of piling, he stated that it is hard to tell because it depends on the soil condition and the type of pile that is used and the depth of piling.

53. Mr. Lee further testified that it was the Defendant who returned the 1st Hammer to the warehouse of the Plaintiff.

Evidence of Lam Chi Wing

54. Mr. Lam Chi Wing (hereinafter referred to as "Mr. Lam") confirmed the truth of his witness statement and adduced it into evidence. Mr. Lam gave oral evidence and stated that he was and still is a technician of the Plaintiff and at the material times was responsible for fixing the 3rd Hammer on 28th November 2001.

55. In his evidence, he told the court that when he arrived at the Science Park Site on 22 and 26 of November 2001, the Defendant's staff at the site did not offer him assistance in fixing the 3rd Hammer. As a result he could do nothing on those two days. After he returned to the Plaintiff's company, he reported the matter to the Plaintiff.

56. On the first two occasions when he went to Science Park Site, he found the hammer on the ground. He asked the staff to help him to hang up the hammer. No one was available to do so. Until he left on each of the first two occasions, no one helped to hang up the hammer. He could not change the spare part without hanging up the hammer.

Evidence of the Defendant

57. The Defendant called only one witness Mr. Ho a Director of the Defendant Company.

58. Mr. Ho stated that he dealt with Mr. Wallace Lee of the Plaintiff in relation to the 1st Hammer. Mr. Lee who introduced him to the "MENCK" hydraulic free fall hammer.

59. At that time, he specifically told Mr. Lee of the Plaintiff that the Defendant required a hammer that had a drop height of not less than 1.2 meters for the purpose of driving the piles to the specified depth at the site of the St. George School project. Mr. Lee told him that the "Menck" hydraulic Piling Hammer Model No. MHF5-12 would be with a drop height of 1.2 meters and recommended him to hire such hammer for the St. George School project.

60. He told Mr. Lee that the Plaintiff must give him a good hammer otherwise it is likely that they could be penalized with liquidated damages. He stated that he told Mr. Lee that the total operation time on the site for driving piles was only 3 hours per working day and that the main contractor would claim liquidated damages against the Defendant if progress of work were delayed. He referred to the 1st Agreement at pages 3 - 6 of BD2.

61. He also stated that he had told Mr. Lee that the hammer had to be able to drive the steel H-piles of 305x305x180 kg./m, with a loading capacity of 5,916 KN. This however was not pleaded and not stated in his first witness statement and only added in his Supplemental Witness Statement.

62. He collected the 1st Hammer from the Plaintiff. He stated that he took delivery of the 1st Hammer to the St. George's School Site.

63. He stated that thereafter he had many problems with the 1st Hammer. It was slow and its force was less than his own 10 ton hammer. He complained about the power pack. They sent a new power pack and it was worse than the 1st one. He stated that his principal contractor complained that the 1st Hammer was too slow and not of sufficient force. They appointed a foundation consultant to check it at page 181 - 201 of BD2. However, having read through the whole report of Foundation Techniques Limited, I could see no reference to the Plaintiff's 1st Hammer therein and see no relevance in this report to what Mr. Ho stated.

64. He sent a letter to the Plaintiff to complain that the 1st Hammer could not drop the height of 1.2m. It cannot give out the energy required and progress is slow. The loading capacity could not be reached. He submitted a letter marked Exh D1 from his principal contractor expressing concern at the belated progress of piling work delaying the contract work. It stated that the piling work had failed to achieve the final set requirement hence further delaying the completion of work. He was asked to conduct the final set test to H-pile by using a 16 ton hammer. He had to hire a 16 ton hydraulic hammer which he did.

65. He referred to evidence of hire of such at total cost of $180,000 for 1 month and 4 days, at pages 93, 95 and 96 of BD2. Subsequent to that the owner would not hire it to him.

66. Later the principal contractor had to hire another piling frame and hammer so as not to delay the contract further. The expenses of this deducted from the sums due to him was at page 91 of BD1 (Appendix 3 of his Supplementary Statement) in Item 13 therein. This expense was not pleaded in the Defendant's Counterclaim. He stated that he had to pay liquidated damages to his principal contractor for a delay of 49 days. He claimed a total of 6.0271 days from the Plaintiff at $20,000.00 per day which totalled $120,540.00. His calculation of the period in which the 1st Hammer broke down is at paragraph 10 of his Witness Statement at page 61 of BD1. He stated that he could not proceed with work during those days when the 1st Hammer was idle requiring repair and he claimed the idling charges in the sum of HK$483,158.10 calculated as in Appendix 2 at pages 89 and 90 of BD1.

67. He rented the 1st Hammer until 20.6.00. He telephoned Mr. Lee to tell him that he would not rent the 1st Hammer anymore because it could not reach the required standard. He stated that Mr. Lee said, "I have no customer, could I leave the hammer on your site until I find a new customer and you could deliver it for me to my new customer". Mr. Ho said "no problem, if it does not obstruct my work". He returned the 1st Hammer on 30 June 2000. He paid the Plaintiff $69,661.60. This sum was calculated by his accountant and the calculation is at page 59 of BD2. He reserved the right to claim damages against the Plaintiff as stated at the bottom of the statement.

68. In relation to the 2nd Agreement, he stated that it was signed on 13th November 2000 and it is at pages 51 to 57 of BD2, with the Specifications of the 2nd Hammer attached thereto. Prior to the signing of the 2nd Agreement he told Mr. Jeremy Ng that he wanted to hire a 14 ton hammer with the drop height of 1.5m. He stated that he would use the hammer to final set. He stated he required a hammer to drive the H-pile of 305x305x223 kg/m Grade 50B with a loading capacity of 5,086KN. However this had not been pleaded in his Defence and Counterclaim and had not been stated in his Witness Statement dated 14 August 2002. It was only stated in his Supplemental Witness Statement dated 18 November 2002. He asked whether the hammer worked and was told that it had just been used in another site.

69. He stated that the 2nd Hammer could only be used in the afternoon of 21 November 2000 because the spare parts was not there and the power pack could not be started. The oil pipes leaked. The wiring was not long enough and also it cracked. He used the 2nd Hammer from 21st November 2000 until the Defendant by letter accepted the repudiation of the 2nd Agreement by the Plaintiff on 10 January 2001 and by oral notification on 8 January 2001 from Mr. Ho to Mr. Ng of the Plaintiff.

70. He stated that the 2nd Hammer often broke down. His foreman would telephone Mr. Ng or their technician. They would wait for them to come to repair or they would repair it themselves. He stated that he kept a record of this. However the record had not been discovered by him nor adduced into evidence. Sometimes when the Plaintiff's mechanic came to repair, they would give a Service Order. He referred to some of these at pages 65, 66, 69, 70 71 and 73 of BD2. He also stated the times the 2nd Hammer was in disrepair at para 12(2) of his Witness Statement at page 17 of BD1.

71. He received a complaint letter from his principal contractor China State Construction Engrg. (Hong Kong) Ltd at page 68 of BD2. The letter stated that the driven piles could not reach final set. It stated that the 14 ton hydraulic hammer (Menck) did not possess sufficient energy as a result of the fact that the drop height of the 2nd Hammer was lower than that of his other 14 ton hydraulic hammer (BSP) at 1.5m.

72. He was asked to rectify the situation immediately. He hired a BSP 14 ton oil hydraulic hammer. The receipt is at page 97 BD2. The time for hire is from 12.1.01 to 1.2.01

73. He delivered the 2nd Hammer to the Plaintiff on 11.1.01 (Page 72 BD2).

74. He stated that on 15 November 2001 he paid $36,346.85 and he referred to the receipt at page 120 which stated the sum to be balance payment. He referred to page 26 which set out the calculation of $36,346.85. He paid this when Mr. Ng asked him to make payment and Mr. Ng agreed to give a credit of $48,273.65. This credit is at page 135 of BD2. The balance due was stated to be $60.838.40 in the Statement of Account of the Plaintiff at page 127 of BD2.

75. He set out his claim for idling cost shown in Appendix 6 at pages 98 to 99 of BD1. He also stated his claim for reimbursement related to the liquidated damages he had to pay. He stated that he had reached a commercial settlement with his principal contractor related to this. He only claimed reimbursement of liquidated damages payable to his principal contractor at $390, 000.00 for 13 days of delay caused by the breaking down of the 2nd Hammer.

3rd Agreement

76. Mr. Ho stated that on the evening of 13th November 2001, he telephoned Mr. Jeremy Ng and stated that he had a site at Science Park that required a 14 ton hammer that could do piling to final set. He stated that the contract is time sensitive and he was liable to pay damages should there be delay. Mr. Ng stated that he had a hammer but it required repair. Mr. Ng stated that it would take 3-4 days to repair. Mr. Ng stated that on the 19th November it could be used. Mr. Ng promised that the hammer would be ready by the 19th November.

77. On the 15th November 2001, the contract was brought for him to sign. The 3rd Agreement together with the specifications attached is at pages 104 to 110 at BD2.

78. He stated that the 3rd Hammer was not repaired on the 19th November as promised and he wrote to the Plaintiff by their letter dated 23rd November 2001 at page 130 of BD2 to state this. The Plaintiff's reply by letter was dated 26th November 2001 at page131-132 of BD2. Mr. Ho's case was that no one came to the site to repair. He replied by letter dated 26 November 2001 at page 133 of BD2 stating that if they did not come to repair on 26 November 2001 the Defendant would have no alternative but to hire another hammer. Again on 27 November 2001, the Defendant wrote to state that they had no alternative but to hire another hammer since the 3rd Hammer had not been repaired. He received a telephone call from Mr. Ng on the morning of 29 November stating that the 3rd Hammer was now available for use. He wrote a letter dated 29 November 2001 wherein the Defendant stated that they have hired another hammer on 27 November 2001 as the repair was not completed until 28 November 2001 and the 3rd Hammer was only available for use on 29 November 2001. This is at page 138 of BD2.

79. Mr. Ho stated that Mr. Ng asked whether he could leave the 3rd Hammer on their site. He stated that Mr. Ng stated that it would look bad to his colleagues were the 3rd Hammer returned. Mr. Ho agreed to have the 3rd Hammer left on the site on a no charge basis.

80. He received a letter from the Plaintiff dated 3 December 2001 at page 139 of BD2 stating their position related to the repair. He wrote back by their letter dated 11 December 2001 stating that they have hired another hammer. They stated that there was no payment due on the two previous agreements and requested the refund of the deposit of $80,000 paid under this agreement. The letter also referred to their liability for liquidated damages and reserved their rights to claim loss etc.

81. He received the Plaintiff's solicitors' letter dated 14 January 2002 at page 148 of BD2. He replied thereto by the Defendant's letter dated 22 January 2002 at page 150 of BD2.

82. It was the Defendant's case that they did not use the 3rd Hammer at all during the time it was left on the site until its return to the Plaintiff on 5 February 2002 (see Plaintiff's Return-In Note at page 153 of BD2).

83. Mr. Ho referred to his hire of another hammer a 16 ton hydraulic hammer for the period from 27 November to 26 December at the total sum of HK$190,000 and the receipts and cheques at pages 143,145, 154 and 155 of BD2.

84. He claimed damages for 13 days idling charges from 15 November 2001 to 28 November 2001. This is set out in the statement at page 109 of BD1. He claimed reimbursement of liquidated damages in the sum of $650,000.00. This is for the time of delay of 13 days at HK$50,000.00 per day as charged by their principal contractor. He referred to documents at pages 158 to 163 of BD2.

Credibility of Witnesses

Mr. Jeremy Ng Lai Ming

85. I found Mr. Jeremy Ng to have been a credible witness both from his demeanour and from the content of his evidence. I found him to have been an honest and reliable witness and I accept his evidence. I believe his evidence in relation to the 2nd and 3rd Agreements that Mr. Ho did not state to him the requirements about drop height or liquidated damages or the required force of the hammers or the required capacity of such. There was no mention of such in the 2nd and 3rd Agreements and it is clear that the 2nd Agreement had been amended at the request of Mr. Ho in clause 23 thereof and the 3rd Agreement had been amended by Mr. Ho in relation to the daily rental rate. If these requirements were so important to Mr. Ho, as he stated, surely Mr. Ho would have required their incorporation into the agreements. Further, according to Mr. Ng, the drop height of the hammers could be calculated from the Specifications of the Hammer attached to the 2nd and 3rd Agreements. If that was the case, if Mr. Ng had misrepresented the drop height of the 2nd and 3rd Hammers to Mr. Ho, surely he would not have attached the Specifications of these hammers to the respective agreements?

86. Further it is not in dispute that the Catalogue related to the 3rd Hammer was faxed to the Defendant on the 15th November 2001. If the Plaintiff had misrepresented the drop height and other specifications of the 3rd Hammer to the Defendant, surely the Plaintiff would not have faxed the Catalogue of the 3rd Hammer to the Defendant.

Mr. Wallace Lee Chi Keung

87. In relation to the evidence of Mr. Lee Chi Keung, I find him a credible witness both from the content of his evidence and from his demeanour. He gave evidence in an open and straightforward manner. In relation to the evidence of Mr. Ho that before the 1st Agreement he stated that the hammer was required for the St. George's School Site and therefore he had told Mr. Lee about the restricted hours of piling on that site and the requirement of liquidated damages to be paid by him for delay, Mr. Lee's evidence was that such had not been said to him before the 1st Agreement. Mr. Lee's evidence was supported by the Delivery Order of the 1st Hammer at page 11 of BD2. Although the 1st Hammer was collected by the Defendant, it states that the 1st Hammer was "to be located at Tin Shui Wai site". Mr. Lee stated that these words were written on the Delivery Order when the staff of the Defendant informed the Plaintiff's staff where the 1st Hammer would be used. Mr. Lee stated that he only came to know that the hammer was to be moved to the St. George's School Site after 27th March 2000, the date of the 1st Agreement. In my view the Delivery Order evidence supports this.

88. Mr. Lee also stated that he told Mr. Ho by reference to the Catalogue of the 1st Hammer that it could not reach the drop height of 1.07m. I accept his evidence.

89. I am of the view that the evidence of Mr. Lee is reliable and to be accepted.

Mr. Lam Chi Wing

90. I find Mr. Lam to be a reliable and credible witness both from his demeanour which was open and straightforward and from the contents of his evidence. He was not shaken under cross-examination. I find his evidence credible and to be accepted.

Mr. Peter Ho Kwok Wa

91. I find him to be totally unreliable as a witness and his credibility to be sadly lacking. He was most indirect under cross examination and prevaricated in his answers.

92. There is also clear evidence of dishonesty. His evidence that he had told Mr. Wallace Lee that the 1st Hammer would be used at the St. George's School Site before the 1st Agreement was clearly contradicted by the Delivery Order at page 11 of BD2 was referred to above.

93. These are instances where his evidence was clearly unbelievable.

1. In his Defence supported by his witness statement which he adduced into evidence and confirmed to be true, Mr. Ho gave evidence in relation to the 3rd Hammer and stated that he had told Mr. Ng that he required a hammer with a drop height of 1.5 meters. In his oral evidence he stated that he informed Mr. Ng that he required a 14 ton hammer. He knew full well that the 3rd Hammer was a 14 ton Menck hydraulic piling hammer. From the 3rd Agreement it could clearly be seen that the 3rd Hammer was the same as the 2nd Hammer in Specifications and even in serial number. From his own experience of the 2nd Hammer he well knew that the 2nd Hammer did not have a drop height of 1.5 meters and in fact he had complained that it could not do the final set of piling. Hence his evidence in relation to his representations to Mr. Ng as regards the required drop height of the 3rd Hammer is totally unbelievable. He could not have made this requirement as he well knew the 3rd Hammer could not meet it. In my view Mr. Ho was clearly lying.

2. The lack of integrity of Mr. Ho and the Defendant can be seen in the claim for idling costs of 13 days in relation to the 3rd Hammer. Mr. Ho claimed 13 days idling costs when he stated that he had agreed to take the 3rd Hammer despite the fact that it required repair. He stated that Mr. Ng said it would be ready by 19th November for use. Yet he claimed idling costs for the days from 15th to 18th November which would be beyond what he was entitled to claim even based on his own evidence.

3. In relation to his contention that he had told Mr. Lee, and Mr. Ng the Specifications required for the 1st 2nd and 3rd hammers, he did not refer to these in his Defence & Counterclaim. Nor did he refer to them in his Witness Statement. These were only 1st referred in his Supplemental Witness Statement. In my view, the fact that these were first remembered so long after the event is not believable.

The 1st Issue

94. In my view, Mr. Ho did not make the requirements related to the 1st Hammer to Mr. Wallace Lee pleaded in para 4(1) of the Defence & Counterclaim. Reference has been made to the fact that Mr. Ho could not have made known to Mr. Lee that the 1st Hammer would be used in the St. George's School Site before the signing of the 1st Agreement and therefore, he could not have made known to Mr. Lee about the requirements related to the ST. George's School Site before the signing of the 1st Agreement. He could not have made known the requirement on him to pay liquidated damages by the principal contractor of the St. George's School Site upon delay of work. I accept the evidence of Mr. Wallace Lee that Mr. Ho did not make the alleged requirements related to the 1st Hammer and I disbelieve the evidence of Mr. Ho. I also accept the evidence of Mr. Ng that Mr. Ho did not make known the requirements as alleged by him related to the 2nd and 3rd Hammers in para 11(1) and 19(1) of the Defence & Counterclaim respectively. Reference has been made to the fact that Mr. Ho's evidence related to the requirement of the drop height of the 3rd Hammer to be unbelievable and untruthful in view of his knowledge of the actual drop height of the 3rd Hammer before the signing of the 3rd Agreement as it was the same as the 2nd Hammer. Hence I am of the view that the evidence of Mr. Ho related to the stated requirements are not true.

2nd Issue

1st Agreement

95. It was the Defendant's case that during the rental period, the 1st Hammer required services on a number of occasions. The period of mechanical failure was pleaded in para 5(2) of the Defence & Counterclaim and was also stated in para 10 of the Witness Statement of Mr. Ho. Of these times of alleged mechanical failure, there were four service orders adduced in the trial bundle at pages 21, 30, 31 and 33 of BD2 which supported the contention of mechanical failure on the 26.4.00, 31.5.00, 1.6.00 and 2.6.00. Mr. Ho stated that there were other occasions when the hammer broke down requiring assistance from the Plaintiff's staff over the phone. Mr. Ho stated that the site foreman kept daily piling records to show these instances of breakdown where there were no service orders. He stated that the times of breakdown not supported by the service orders came from these piling records. However such had not been discovered. There is no way in which such times of breakdown could be investigated by the Plaintiff or by the Court. This does affect the weight of evidence of such breakdown of the Defendant as the Defendant's evidence of such breakdown was not substantiated.

96. Further Clause 7 of each of the Agreements required the presentation of a machine operating sheet to be submitted to the Plaintiff when claiming a deduction from the rental arising from stoppage of work of 1 working day's duration. The purpose of submitting the operating sheet as stated by Mr. Ng is that if the hirer wanted to make a claim against the Plaintiff arising from the breakdown of the hammer, the machine operating submitted could show the Plaintiff whether the breakdown arose out of operation by the hirer's staff.

97. The Defendant submitted the Credit Note dated 10th August 2001 at page 92 wherein the Plaintiff granted a reduction of rental for the breakdown of the 1st and 2nd Hammer not in compliance with Clause 7. Mr. Ho stated that Mr. Lee and Mr. Ng had both stated that deductions would be given based on hours of breakdown and the machine operating sheet was not required. Mr. Ng stated that it was never the practice of the Plaintiff to allow for hourly rental deduction in this way. Mr. Ng stated that the Plaintiff did so because the Plaintiff wanted to collect money as soon as possible. The Plaintiff's Counsel referred to the letter dated 17th July 2001 from the Plaintiff's Solicitor demanding the Defendant to settle the outstanding rental under the 1st and 2nd Agreement at page 89 of BD2.

98. In relation to this aspect as regards whether Mr. Lee and Mr. Ng told Mr. Ho that he was not required to comply with Clause 7 and instead could claim a deduction of hourly rental during breakdown of the hammers, I prefer the evidence of Mr. Ng. I have regard to Clause (16) of the Agreement which states,

"The Hirer shall be responsible for the correct use of the rented equipment and the supply of competent operators who are liable for the daily service and maintenance of the equipment. All fuel, oil, lubricant, consumables and wear and tear items like hoses, etc are to be supplied by the Hirer."

99. In the light of this clause the purpose of the requirement of submitting a machine operating sheet is clear.

100. As submitted by the Plaintiff's Counsel, Mr. Ng's evidence was further supported by the fact that the Credit Note was dated 10.8.01 when the 1st Agreement was ended on 21.6.00, over a year before the date of the Credit Note. It would seem therefore that the concession was granted in order to collect payment speedily.

101. I agree with the Plaintiff's Counsel that if the allegation of Mr. Ho regarding the oral promise from Mr. Lee and Mr. Ng were true related to deduction of rental on an hourly basis for breakdown, such practice would have been adopted soon after termination of the 1st and 2nd Agreements respectively and not after the Plaintiff had instructed their solicitor to issue a demand letter.

102. The allegation of the occasions of breakdown and the downtimes as stated in his witness statement and Defence & Counterclaim apart from those times where there are service orders could not be established through the lack of supporting evidence. Further owing the lack of the opportunity by the Plaintiff to check the reason of any alleged breakdown whether it is caused by defect in the hammer or in operation by the staff of the Defendant, there is no evidence that such breakdown was due to defect in the hammer and not the fault of the operator of the hammer, being the staff of the Defendant.

103. There is a letter dated 8 April 2000 from the Defendant to the Plaintiff at page 14 BD2 which stated that the progress of driving of steel H-piles since the first day 5.4.00 was very slow due to the Pile Hat provided to the Defendant not being suitable for H-piles and the Hat is over sized etc. The Plaintiff replied to the letter by their letter dated 10.4.00 at page 15. It seemed that the Pile Hat could have been changed by 7.4.00 but for the fault on the Defendant's side and in fact the matter had been resolved on 8.4.00. Mr. Lee stated that the Pile Hat supplied could be used for both types of H-piles and concrete piles.

104. The next letter from the Defendant was dated 12 April 2000 related to the power pack not working well. Mr. Lee stated that they remedied that (see Plaintiff's letter dated 14 April 2000 at page 18 BD2). The last complaint by letter was a letter dated 21 June 2000 stating that the 1st Hammer did not have sufficient energy to final set their driven piles. However, the requirement of the level of energy to final set the piles was not a requirement or a condition to the hire of the 1st Hammer nor a term of the 1st Agreement.

105. Having considered the aforesaid, I find that the Defendant had not been able to establish that the period of breakdown of the 1st Hammer apart from those supported by service orders. As the Defendant had not complied with Clause 7 of the 1st Agreement, for the reasons aforesaid the Defendant is not entitled to claim for the periods of alleged breakdown evidenced by the Service Orders. Having regard to the aforesaid there is insufficient evidence from the Defendant to support their contention that the 1st Hammer could not function properly during the period of hire owing to the defect in the 1st Hammer or due to the fault of the 1st Hammer and not because of damage caused by usage.

2nd Hammer

106. Paragraph 22 of the Witness Statement of Mr. Ho stated the times of breakdown of the 2nd Hammer according to the Defence claim. The occasions of breakdown were supported by Service Orders at pages 65, 66, 69, 70, 71 and 73 of BD2. The times of breakdown supported by Service Orders were on 7.12.00, 8.12.00, 14.12.00, 30.12.00, 2.1.01, 3.1.01, 5.1.01 and 11.1.01. Mr. Ho stated that there were other occasions when the 2nd Hammer broke down requiring assistance from the Plaintiff's staff over the phone. Mr. Ho stated that he received various oral complaints over the substandard performance of the Plaintiff's 2nd Hammer.

107. Mr. Ho referred to page 126 of BD2 wherein was stated the downtimes of the 2nd Hammer and deductions therefore and the balance due. Mr. Ho stated that the Plaintiff accepted the Defendant's payment of HK$36,346.85 as payment of balance as can be seen in the Receipt therefore dated 15.11.01. However, the Plaintiff's Counsel submitted that the receipt was dated 4 days before this statement was faxed to the Plaintiff on 19 November 2001. Hence, the receipt could not have referred to the contents of page 126 in referring to $36,346.85 as the balance of hire.

108. The Defendant's Counsel referred to the Credit Note dated 27 November 2001 at page 135 of BD2 and the statement at page 127 of BD2 which seemed to be issued to accept the Defendant's calculation. The Plaintiff's letter dated 21.11.01 accepted the Defendant's calculations in their notice at page 126. However Mr. Ng in evidence stated that it was a concession in settlement conditional to the Defendant's payment of $60,838.40 within the day following the date of the letter. As such sum had not been settled the concession was no longer valid.

109. The number of occasions when Service Orders were issued and the Plaintiff's staff came to repair the 2nd Hammer were 7. The first time was on 7 December 2000 about 3 weeks from date of commencement of hire. This lasted two days to the 8 December. The service order on 14 December was at the time when the Defendant arranged the repair. The repair appeared to have been a change of a part and was stated not to have been done within the operation hours of the Defendant. The next occasion was on 30 December over two weeks later and took up 1 hour. One of the repairs on that occasion was to change a loose screw. The next occasion of repair lasted over two half days on 2 and 3 January 2001. The next occasion of repair related to the repair of an electrical wire on 5th January 2001 and the time of repair lasted 1 hour.

110. There is no evidence as to whether the breakdown was caused by damage from usage or from its own defect. There was no compliance with Clause 7 of the 2nd Agreement although it was the Defendant's case that the Plaintiff had conceded to the breakdown periods stated by them at page 126 of BD2. Apart from the periods of disrepair evidenced by the service orders, there is no supporting evidence of other periods of breakdown or cause of such breakdown. I am of the view that periods of breakdown that have not been substantiated by the Service Orders could not be established by the Defendant.

111. I accept the evidence of Mr. Ng that he accepted the calculations in the notice from the Defendant at page 126 of BD2 purely for the purpose of settlement. There had been no evidence produced to substantiate the allegations in such hearsay statement in the said notice.

112. Having considered the aforesaid, I find that the Defendant had not been able to establish that the period of breakdown of the 2nd Hammer apart from those supported by service orders. As the Defendant had not complied with Clause 7 of the 2nd Agreement, for the reasons aforesaid the Defendant is not entitled to claim for the periods of alleged breakdown evidenced by the Service Orders. Having regard to the aforesaid there is insufficient evidence from the Defendant to support their contention that the 2nd Hammer could not function properly during the period of hire owing to the defect in the 2nd Hammer or due to the fault of the 2nd Hammer and not because of damage caused by usage.

113. In my view having regard to the aforesaid the Defendant is not entitled to deduct the Rental of the 1st and 2nd Hammers for the periods stated in para 5(2) and para 12(2) of their Defence & Counterclaim.

3rd Agreement

114. I accept the evidence of Mr. Ng and Mr. Lam related to the reason why the 3rd Hammer was only repaired and set up on the 28th November 2001. I accept the evidence of Mr. Ng as regards the agreement between Mr. Ng and Mr. Ho related to the repair of the 3rd Hammer after its delivery to the site of the Defendant. The only period of breakdown of the 3rd Hammer was from 15th November 2001 to 28th November 2001. It is the Plaintiff's case that this period of breakdown is not chargeable against the Defendant.

3rd Issue

The 1st and 2nd Agreements

115. In the light of the aforesaid, and my acceptance of the evidence of Mr. Lee and Mr. Ng, I find that the 1st and 2nd Agreements were terminated by agreement between the parties and not by breach of the Plaintiff in respect of the 1st and 2nd Agreements.

The 3rd Agreement

116. It was the Defendant's pleaded case that they had accepted the repudiation of the Plaintiff in relation to the 3rd Hammer by their letter dated 27 November 2001 and orally by telephone call from Mr. Ho to Mr. Ng, by reason that the 3rd Hammer had failed to function. However the letter of the Defendant dated 27 November 2001 at page 134 of BD2 did not state acceptance of repudiation of the 3rd Agreement by the Defendant. In fact in the 3rd paragraph thereof the Defendant still requested the Plaintiff to look into this as a matter of great urgency in order to rectify the situation.

117. The letter from the Defendant dated 29 November 2001 stated that they had already hired another hammer from another company since 27 November 2001. However it did not state repudiation on the part of the Plaintiff nor acceptance of such.

118. The Plaintiff had however replied by their letter dated 3 December 2001 stating their version of facts at page 139 of BD2.

119. According to the 3rd Agreement, paragraph (10) states that "The rental period shall commence on the day of delivery to site and shall terminate on the day that the equipment is returned to the yard as specified by the Owner."

120. Mr. Ho stated that Mr. Ng told him to leave the 3rd Hammer on site as it would be embarrassing for colleagues to hear that the 3rd Hammer had been returned. I do not find Mr. Ho's evidence credible and I do not accept this.

121. Mr. Ho stated that he did not use the 3rd Hammer at all during the time it had been on his site until 5 February 2002. It is strange that in the light of invoice sent from the Plaintiff to the Defendant for rent for the period from 29 November 2001 to 28 December 2001 and the Plaintiff's Solicitors' letter dated 14 January 2001 at page 148 of BD2 seeking payment of rental in arrears stating that were payment not made within 7 days they would be entitled to terminate the agreement forthwith, repossess the hammer and recover all amounts due, the Defendant never responded with the statement that the hammer had been left on their site at Plaintiff's request on condition that the Plaintiff would not change. Nor did they immediately return the 3rd Hammer to the Plaintiff. All that they said was that they never used the Plaintiff's hammer. It was only after the issue of the Writ herein on the 23 January 2002, that the Defendant returned the 3rd Hammer.

122. It is also interesting to note that the hammer hired allegedly in substitution for the 3rd Hammer was a 16 ton hammer and not a 14 ton hammer. Evidence had been given that hammers with different capacities and drop heights would be suited for use for different stages of piling. The fact that the hammer allegedly hired in substitution of the 3rd Hammer was not the same weight may indicate that the 16 ton hammer was hired to serve a specific purpose and function different from that of the 3rd Hammer.

123. I note the fact that during this period the 3rd Hammer was left with the Defendant's site there was only 1 service order. The Defendant's Counsel submitted that this would suggest that the 3rd Hammer had not been used. Alternatively it could suggest that the 3rd Hammer had not been put to heavy usage. The Defendant's Counsel submitted that it must have been the case that the 3rd Hammer had not been used at all. The Service Order stated that the machine had been checked as normal and in proper order. The Service Order could have been a normal check undertaken by the Plaintiff or a service of the 3rd Hammer on request.

124. The deciding factor in relation to whether the Defendant had been in possession of the 3rd Hammer from 29th November 2001 for hire is the term in the Agreement in clause 10 thereof which states that the hire is terminated on the day the hammer is returned to the Plaintiff. The Defendant must have notice of this term in the 3rd Agreement signed by him. In my view the Defendant had not established that the Defendant was not in possession of the 3rd Hammer from 29 November 2001 to 5 February 2002. In my view, the Defendant had not proved that during the period the 3rd Hammer was on their site, the 3rd Hammer had not been used.

125. The Plaintiff stated that the 3rd Agreement had been terminated by breach on the part of the Defendant (see the letter from the Plaintiff's Solicitors dated 14th January 2002 to the Defendant at pages 148-9 of BD2). This fact would be consequent upon my finding in the earlier paragraph.

126. The Defendant was in possession of the 1st 2nd and 3rd Hammers at the material times of the hire as claimed by the Plaintiff and liable to pay the rental therefore.

4th Issue

127. In which event, it is clear that payments of $69,661.60 on 14 November 2000 was towards payment of the 1st Agreement and the payment of $36,346.85 made on the 15 November 2000 was towards payment of the 2nd Agreement.

5th Issue

128. The Counterclaim of the Defendant rested upon the allegation that the Plaintiff was in breach of the 1st, 2nd and 3rd Agreements. As I have found that the Plaintiff was not in breach of the 1st, 2nd and 3rd Agreements, the Counterclaim could not be maintained. Hence the entire Counterclaim of the Defendant must fail.

The Plaintiff's Claim

129. I find that the Plaintiff has established the sums due on the 1st and 2nd Agreement. In relation to the 3rd Agreement the Plaintiff claimed 2 months rental totalling the sum of $160,000. The Plaintiff sought to forfeit the deposit paid by the Defendant in the sum of $80,000.00 on the basis that the Defendant had repudiated the 3rd Agreement the Plaintiff having terminated the agreement pursuant to clause (12) of the Agreement. The Plaintiff sought a declaration that this deposit paid be forfeited. The Plaintiff had not previously given notice that the deposit would be forfeited on termination of the agreement. I am not willing to grant the declaration sought for forfeiture of the deposit. The deposit would be used to set off the Plaintiff's claim in respect of the 3rd Agreement.

130. I grant Judgment to the Plaintiff in the sum of $60,838.40 due on the 1st Agreement, the sum of $60,576.15 due on the 2nd Agreement and the sum of $80,000.00 due on the 3rd Agreement totalling the sum of $201,414.55 together with interest thereon from the date of Writ to date of judgment at judgment rate and thereafter until payment at judgment rate. I dismiss the Counterclaim. I grant an order nisi for costs of the action to the Plaintiff to be taxed if not agreed.