ETERNITY CONTRACTING & ENGINEERING CO LTD v. CHUNG TAI ROLLER SHUTTERS CO LTD

DCCJ 716/2010

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO.716 OF 2010

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J U D G M E N T

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BACKGROUND

1.  This is a contractual dispute case between a general fit-out contractor, the plaintiff (P), and its roller shutters sub-contractor, the defendant (D), in relation to the supply and installation of roller shutters at three new shops at the DFS Galleria, Four Seasons Hotel, the Venetian Resort, Macau. P claims damages of HK$498,777.17 against D for the alleged delay in completion of the installation works, while D counterclaims HK$61,100 against P for the unpaid balance of the contract price plus additional materials.

2.  P engaged D to supply and install roller shutters for the three subject shops, namely, Chloé (shop 1123A), Emporio Armani (shop 1112) and Loewe (shop 1121) by a written purchase order issued on 26 June 2008 and was accepted by D in writing on 30 June 2008 (“the Contract”).  The total contract price after discount was HK$116,000. It is common ground that P has paid D 50% of the contract price leaving an unpaid balance of HK$58,000.

THE PLAINTIFF’S CASE

3.  According to P, the Contract specified that D’s installation programme should match with the GC Master Programme which indicated 11 July 2008 as the date of completion of the roller shutters works.  The site handover was scheduled for 22 July 2008.  D delivered the roller shutters to the sites on 16 July 2008 and finished installation for Chloé on 19 July 2008 and the other two shops on 23 July 2008.

4.  In order to catch up with the grand opening of the shops scheduled for 25 July 2008, P incurred extra costs of HK$556,777.17 to put on temporary cover up and finishing works which were subsequently replaced by permanent works.  The above works were done after the business hours of the shops. 

5.  After setting off the undisputed unpaid balance of the contract price of HK$58,000, P therefore claims D for HK$498,777.17 (HK$556,777.17 − HK$58,000).

THE DEFENDANT’S CASE

6.  D contends that no GC Master Programme was provided, but the parties have verbally agreed that the progress of D’s works shall match the actual site progress, and D would be given 17 to 18 days after P’s confirmation of the shop drawings to complete the works. Such verbal agreement was negotiated by Mathew Tong (“Matthew”), sales manager of D and Alan Chung (“Alan”), director of P. Matthew, considers such verbal agreement as a verbal term of the Contract or a collateral agreement to the Contract.

7.  D alleges that it relied on Alan’s oral representation to enter into the Contract and argues that P should be estopped from relying on the GC Master Programme to claim against D for the alleged delay under the Contract.

8.  D also complains that their works were prevented or delayed by P, in particular, by the late approval of the drawings on 3 July 2008 which D provided to P on 30 June 2008 by email.  According to D, the contractual completion date should be 20 or 21 July 2008, ie counting 17 or 18 days from 3 July 2008, instead of 11 July 2008 as per the GC Master Programme alleged by P.

9.  It is common ground that the dates of completion of works in question refer to the dates of completion of installing the main body of the roller shutters at the material shops, but parties have differences in the actual completion dates.  Such completion dates according to D are as follows:

(i) Chloé shop: 16 July 2008;

(ii) both Loewe and Emporio Armani shops: 17 July 2008.

10.  Given that D considered 20 or 21 July 2008 as the contractual completion, D actually completed the works before the deadline.  D therefore denies any delay in completion of the Contract and thus denies P’s claim of damages.

11.  The counterclaim of HK$61,100 consists of two sums: unpaid balance of HK$58,000 and HK$3,100 for replacement of shutter components.  There is no dispute that HK$58,000 being 50% of the contractual price remains unpaid and the remaining HK$3,100 is eventually conceded by P.

ISSUES

12.  The parties have filed an agreed statement of issues disputes during the interlocutory stage as follows with the last point omitted regarding the counterclaim of material costs of HK3,100, as P has conceded on such issue:

(1)  Whether the time for completing the roller shutter works under the Contract was 11 July 2008?

(a) Whether the GC Master Programme was incorporated into the Contract?

(b) If (a) is in the affirmative, whether on a proper interpretation of the GC Master Programme and the Contract, D was required to complete the roller shutter work by 11 July 2008?

(c) Whether or not there was any oral agreement between Chung of P and Tong of D as pleaded?

(d) If (c) is in the affirmative, how, if at all, did the oral agreement affect the completion date of the Contract?

(e) Whether Chung had made any representation as pleaded?

(f) If (e) is in the affirmative, was the representation relied upon by D in entering the Contract such that P is estopped from relying upon the GC Master Programme?

(2)  Whether there was an implied term under the Contract that P was to coordinate the site works and/or provide a proper site coordination for D to carry out the works and to supply all necessary information and instruction in reasonable time?

(3)  Whether or not D was liable for any delay in the completion of the roller shutter works?

(a) When did D in fact complete the roller shutter works?

(b) Whether and to what extent was the completion of works prevented and/or delayed by P?

(c) Taking into account the matter in (b), was D late in completing the roller shutter works?

(4)  Whether the extent of delay attributable to D, if any, caused any loss and damage to P having regard to the matters as pleaded by P and D?  If yes, what is the quantum of loss and damages caused by such delay?

13.  D’s Counsel succinctly summarised them into 3 main issues:

(i) What was D’s obligation under the Contract;

(ii) When did D complete the main body of the roller shutters;

(iii) If D is liable, what is the quantum of damages.

14.  Each party has called two factual witnesses: Miss Emily Wan Po Kei (“Emily”), P’s project manager and Alan for P; Matthew and Mr Lai Ho Yan (“Lai”), D’s managing director for D.

15.  Leave has been granted to the parties to adduce expert evidence on quantum of reasonable costs of extra works incurred by P caused by the alleged D’s delay. A joint report dated 27 April 2004 compiled by P’s expert Mr So Fai Ting and D’s expert Mr Honby Chan, and their respective solo supplemental reports dated 29 July 2014 and 8 September 2014 were adduced as evidence without calling the experts.

CONTRACTUAL COMPLETION DATE

GC Master Programme

16.  P started the fit-out works at the subject 3 shops on 28 May 2008 in accordance with the instruction from the project consultant, Page Kirkland (Hong Kong) Limited (“PKG”) received on the previous day.  Then P asked D for fresh quotations for the roller shutter installation for the 3 shops and P received 3 separate quotations from D on 11 June 2008.  After some discussions of the quoted prices between Alan and Matthew, D revised the 3 quotations and sent them to P on 23 June 2008. 

17.  On 26 June 2008, P issued a purchase order to D containing a controversial remark relied upon by P that the installation programme should match with the GC Master Programme. It is hotly disputed as to whether P’s programme dated 20 June 2008 was also enclosed when the purchase order was faxed to D. 

18.  On 30 June 2008, P sent a revised purchase order to D with amendment of the payment term pursuant to the discussion between Alan and Matthew.  D countersigned the revised purchase order and returned to P the same day.  P also paid D later that day HK$58,000, being 50% of the contract price according to the revised payment term and pursuant to D’s invoice sent to P on 27 June 2008.

19.  In gist, P relies on a remark on the purchase order: “Installation programme should be match to GC master programme (sic)” and alleges that a one-page master programme of the 3 shops dated 20 June 2008 indicating the completion date of 11 July 2008 has been faxed to D.  D denies receipt of such GC Master Programme at all but relies on an alleged verbal agreement between Alan and Matthew that D would be allowed to have 17 to 18 days from the date of confirmation of the drawings to complete the works.

20.  Although the exact contractual completion date is of great dispute, it is common ground that the time allowed for completing installation works is an important matter for both parties.  Given that the time for the installation works is such an important issue, it is rather strange that it was left out on the purchase order in the first place.  It would be quite unlikely that D did not raise any questions or make any complaints when it received a purchase order without any reference to the alleged 17 to 18 days for completion, but just a reference to the GC Master Programme without attaching the same. 

21.  The GC Master Programme was also referred to in a subsequent email dated 4 July 2008 sent from Emily to Henry Hui (“Henry”) of D, reminding D to proceed with the installation work according to the GC Master Programme and to complete on time before the deadline.  There is no evidence before the court that D has queried the non-existence of the GC Master Programme or the deadline mentioned in the email.  Further, D has never asked P to provide any master programme. Therefore, it is quite inconceivable that D would fail to respond if D has never received the GC Master Programme when the purchase order and the subsequent email both referred to it.

22.  On balance of probabilities, I find that it is more likely that a GC Master Programme was enclosed with the purchase order when they were faxed to D together on 26 June 2008. 

Any Representation / Verbal Agreement / Collateral Agreement

23.  D’s position on the time limit of the works is that the verbal representation or agreement between Alan and Matthew should prevail, ie the time should be 17 to 18 days after confirmation of the drawings.

24.  However, Alan categorically denied that he had ever agreed with Matthew of such time limit.  According to Alan, after receiving D’s revised quotation on 23 June 2008, he talked with Matthew about the quoted price, and enquired about the estimated time for completing the works and Matthew replied 15 days. 

25.  It appears that such evidence of Alan is corroborated by the quotation sent by P to the E&M contractor, Sun Weng Engineering Co Ltd (“Sun Weng”) on 23 June 2008 in which P estimated that it would take about 15 days to complete the roller shutter works.

26.  On the contrary, D’s contention of the 17 to 18 days’ time limit is not corroborated by any contemporaneous records before the court.  It was first mentioned by Matthew in his own statement dated 31 December 2013, which was a lapse of more than 5 years after the conversation took place.  Then the Defence and Counterclaim filed on 8 April 2010 was re-amended on 2 December 2014, adding such time limit of 17 to 18 days in line with the Matthew’s statement.

27.  Indeed, I have reservation as to whether Matthew has ever mentioned D needed 17 to 18 days after confirmation of drawings to finish the works.  In fact, such time limit does not appear in both the initial and revised purchase orders.  On the contrary, the GC Master Programme contradicts such contention.  The payment method has been amended in the revised purchase order upon Matthew’s request. It is quite inconceivable that D would accept and sign on the revised purchase order which made no reference to D’s alleged time limit for the works, if there was any verbal agreement reached between the parties.

28.  According to D, the deadline for the works should fall on 20 or 21 July 2008, by counting 17 to 18 days from 3 July 2008, the date of approval of the shop drawings.  However, there is evidence before the court that P and other parties have adopted P’s deadline instead.

29.  D has been referred to the P’s alleged deadline of the works on various dates.  From 10 to 17 July 2008, P and other parties have made several complaints about D’s delay.  Surprisingly, there is no evidence that D has raised any queries about P and other parties adopting P’s deadline and D has not made any protest against them.

30.  First of all, Emily sent an email to Henry at the early hours of 4 July 2008 reminding D to proceed as the time was tight and to complete the installation work on or before “10 July 2008[1]” in accordance with P’s GC Master Programme. 

31.  It is not in dispute that there were complaints by P and the E&M contractor Sun Weng about D’s delayed progress and this matter was raised at a weekly site meeting on 10 July 2008 attended by PKG and all general contractors but not by D.  As a result of the meeting, there was a series of email correspondence complaining about the delay of D, including the following:

(1)  Sun Weng’s email dated 12 July 2008 sent to PKG;

(2)  PKG’s email dated 12 July 2008 sent to D making reference to Sun Weng’s email on the same day about the delay of the shutters and mentioning that the matter might have to be brought to the attention to the employer of the Four Seasons Hotel;

(3)  Emily’s letter to PKG dated 13 July 2008 pointing out that D’s shutter materials had not been delivered to site yet, and P’s shop front work would be seriously delayed;

(4)  Emily’s letter addressing directly to D dated 15 July 2008 pointing out that D’s works were seriously delayed as compared against the programme and any costs incurred related to such delays would have to be borne by D;

(5)  Sun Weng’s email dated 17 July sent to D and P and copied to PKG saying that there was serious delay in D’s works when compared against the programme, urging D to complete the works as soon as possible.

32.  Although D claimed that it was not aware of the complaints because no one from D attended the site meeting and it did not receive the emails because the emails were sent to a wrong email address, Matthew admitted on 16 July 2008 he received P’s faxed letter of complaint dated 15 July 2008 about D’s serious delay from the GC programme[2]. Matthew then related the matter to his boss Lai immediately.  However, it is strange that D did not query P’s complaint of serious delay if D considered the deadline should be 17 to 18 days from the approval of drawings and the time limit had not lapsed by that time.

33.  Lai alleged that he came across Wayn Barlett of DFS, the employer, at the site on 16 July 2008. Wayn requested D to complete the works by 17 July 2008. Lai then acceded to Wayn’s request by deploying extra workers to work overnight to complete the works.  Bearing in mind that there should be 4 to 5 days left before reaching D’s alleged deadline at that time. It is unbelievable that D would incur extra resources to finish the work ahead of the alleged deadline without any protest or any queries.

34.  In light of the above analysis, I prefer P’s evidence in this regard and found that Matthew mentioned 15 days when he gave the estimated time for completing the works only.  I found that there was no verbal agreement or collateral agreement between the parties that D would be allowed 17 to 18 days after confirmation of the drawings to complete the works.

35.  If my above findings were wrong and I should have found Matthew did request 17 to 18 days to complete the works as alleged, and he then encountered no objection from Alan, I am still not persuaded that P thus made a representation of the alleged time limit to D and P should be estopped from relying on GC Master Programme. I agree with Mr Vincent Li for P that it was not a representation made by P at all, as Alan was not the representor in the first place.  Matthew admitted under cross-examination that it was not Alan but he himself who suggested such time limit when they had telephone conversation on 26 June 2008 and Alan did not oppose it. 

36.  I do not think that Alan’s “no objection” could amount to an acquiescence or a representation of D’s alleged time limit by conduct, because the remark found on the subsequent purchase orders (both the original and the revised) making reference to the GC Master Programme not only failed to support but also contradicted D’s alleged time limit.  Given that D eventually accepted the revised purchase order and entered into the Contract by signing on the revised purchase order, I could not agree that P has made any representation of D’s version of the time allowed for the works in the circumstances.

37.  Since I am not with D that P has made representation of D’s version of the time allowed, it logically follows that the doctrine of estoppel should not apply against P.

38.  As the purchase order accepted by D only referred to the GC Master Programme which stipulated 11 July 2008 as the deadline for D’s installation works and no other completion dates or time limit of the installation works could be found on the purchase order, I therefore find that the GC Master Programme annexed to the purchase order has been incorporated into the Contract and on a proper interpretation of the GC Master Programme and the Contract, D was obliged to complete the works by 11 July 2008.

DELAY IN THE COMPLELTION OF THE WORKS

39.  As I have found 11 July 2008 as the contractual completion date of the works, there is a prima facie case of delay in completion of the works by D, even if I fully accept D’s alleged completion dates, ie 16 July 2008 for Chloé shop and 17 July 2008 for the other two shops.  The major dispute on this issue is whether D should be liable for such delays if the delays were caused or contributed by P.  Besides, the different versions of the actual completion dates also affect the quantum of damages if D is found liable.

Actual Completion Dates of the Works

40.  The evidence of the actual completion date of the installation works comes from 2 witnesses, namely Emily for P and Lai for D. Their respective evidence of the completion dates are summarised as follows:

Shops	P’s version	D’s version
Chloé	19 July 2008	16 July 2008
Loewe	23 July 2008	17 July 2008
Emporio Armani	23 July 2008	17 July 2008

Emily  vs  Lai

41.  Notwithstanding that the completion dates are hotly disputed, no contemporaneous documents recording the completion dates are adduced by either party.  Parities instead spent quite substantial time during the trial arguing the two site photos exhibited as “WPK-5” in Emily’s 2^nd Supplemental Witness Statement, purportedly to illustrate that roller shutters were still not installed at Loewe and Emporio Armani as of 18 July 2008.  Lai gave two supplemental statements in reply disputing Emily’s interpretation of the photos. Elaboration evidence of the two site photos were produced as exhibits P1 - P10 including copies of the said photos with brightness enhanced and drawings marked by Wan. 

42.  However, those photos do not cover Chloé shop and are unable to help resolving the dispute regarding the completion date of Chloé shop.  At the end of the day, the court has to decide on this issue by weighing the evidence of the respective witnesses in light of their reliability and credibility and other circumstantial evidence.

43.  There is no dispute that Emily was P’s project manager for the fit-out works and was stationed full-time on site in Macau to supervise and coordinate the works. 

44.  Lai is the proprietor and executive director of D.  According to Lai, during 2007 to 2008 D was responsible for the supply and installation of roller shutters for 31 shops totalling 32 roller shutters at Four Seasons Hotel in Macau, including the 3 roller shutters in the present case.  Apart from Four Seasons Hotel, Lai said under cross-examination that in 2008 D had other overseas projects like in Singapore and the Middle East and D was also the contractor in another project in Macau at about the same time of the Four Seasons Hotel project, namely the City of Dreams (新濠天地) project. 

45.  Lai admitted that D had deployed its own staff to look after other bigger local or overseas projects.  D in fact contracted out all roller shutters installation works at the Macau Four Seasons Hotel to local sub-contractors in Macau, including the 3 shops in the present case.  The installation sub-contractor of the subject 3 roller shutters was “Ah Wing” who should have the first hand information of the whole process and supposedly the person in the best position to give evidence for D, but for reasons unknown he did not give any statements or come to court to give evidence for D. 

46.  Surprisingly, the evidence of the work process and even some technical details of works mainly come from D’s “big boss”, Lai, who claimed that he was responsible for overseeing the works and travelled to Macau very often, and occasionally stayed overnight in a hotel.  However, I doubt his evidence in this regard.  Given the total contract price of the 3 shops was HK$116,000 only and D also had other projects in Macau and elsewhere then, it is quite unlikely that a person in such top position like Lai would personally take charge of supervising such a contracted out project.  Having said that I do not rule out the possibility that Lai might have paid visits at the subject site sometimes such as to check the progress of work or to meet someone at the site, but I do not think that Lai’s involvement could be compared to Emily who was working full-time at the site as a project manager.

47.  In light of the above background, it is fair to say Emily should be in general more familiar with the works at the site when compared to Lai and in general a more credible and reliable witness than Lai. 

Delivery of the Roller Shutter Materials

48.  Parties also dispute the date of delivery of the roller shutters materials to the site.  Emily said 16 July 2008 and Lai said 12 July 2008.

49.  Citing a shipping order placed on 11 July 2008, Lai stated in one of his statements[3] that the subject materials were delivered to site on 12 July 2008.  But Lai later agreed with P’s counsel under cross-examination that 12 July 2008 was indeed the shipment date, not the actual delivery date of the goods.  According to both witnesses for D, the time estimates of shipment from Hong Kong to Macau would normally take 3 to 4 days.   Therefore, counting 3 to 4 days from 12 July 2008, the materials should arrive at the site on 15 or 16 July 2008. 

50.  Besides, Lai’s evidence on the delivery date is also contradicted by the contemporaneous letter sent by Emily to PKG on 13 July 2008 stating that the roller shutters materials under the Contract were still not yet delivered to the site on 13 July.

51.  For the above analysis, I prefer the evidence of Emily that the roller shutters materials were delivered to the site on 16 July 2008.

Chloé Shop

52.  It is D’s case that D needed 17 to 18 days from the approval of drawings to install the roller shutters and D accepted 3 July 2008 as the date of approval of drawings and they gave instruction to manufacture the shutters on that day. According to D’s time estimates, the installation works should have been completed on 20 or 21 July 2008 by counting 17 to 18 days from 3 July 2008. The actual completion dates: 16 & 17 July 2008 alleged by D are well ahead of the expected completion dates: 20 or 21 July 2008. 

53.  According to D’s instruction to manufacture dated 3 July 2008, the expected completion date was 10 July 2008, ie 7 days for the manufacture process which tallied with the shipping order placed on 11 July 2008.  It is the D’s case that the shipment of the materials would take 3 to 4 days to arrive at the site in Macau. Taking D’s estimate of 17 days to complete the whole process of works from approval of drawings, after deducting 7 days of manufacturing and 3 to 4 days for shipment, the time for installation on site should be 6 to 7 days according to D’s estimates.

54.  Although Lai had said that he acceded to the request of the Wayne Bartlett of the employer to speed up the works by deploying extra manpower to work overnight to complete the works of Emporio Armani and Loewe shops on 17 July 2008, it is not D’s case that Wayne requested to speed up the works of Chloé and Lai did not mention that extra manpower was deployed to speed up the installation of Chloé as well. Allegedly, the installation works of Chloé had been completed on the day when Lai met and talked with Bartlett on 16 July 2008.  Therefore, there is no evidence to suggest that the works of Chloé had ever been expedited.

55.  In the absence of expediting the works of Chloé shop, it is inconceivable that the main installation works there could be completed within the same day when the materials arrived on 16 July 2008, contradictory to the D’s estimated installation time of 6 to 7 days after the delivery of materials to the site.  I therefore reject D’s evidence that the installation works of Chloé were completed on 16 July 2008.  I prefer P’s evidence that D completed such works at Chloé shop by 19 July 2008 instead.

Emporio Armani & Loewe shops

56.  Although parties dispute the exact dates of completion of the works, it is common ground that the installation works of Emporio Armani & Loewe were completed after the completion of Chloé.  Since I have found that Chloé shop’s installation was completed on 19 July 2008, the works of the other two shops must be completed after that date and definitely could not be 17 July 2008 as alleged by D. 

57.  The above analysis is consistent with P’s case that the installation works at these two shops were still not done by 18 July 2008 and P produced site photos in support of it.  Parties had put much effort and time arguing on those site photos.  However, such arguments hinge on different interpretations of the contents of the photos and the shooting angle and location etc.   It is an impossible task to decide those arguments simply by looking at the photos.  At the end of the day, it is to be decided by weighing the evidence of Emily against Lai, ie a matter of credibility and reliability of the witnesses concerned. 

58.  In fact, prior to disclosing the site photos in the Second Supplemental Witness Statement of Wan Po Kei, Emily has rebutted D’s alleged actual completion dates and made the following observation in her previous supplemental statement dated 28 November 2014:

“In paragraph 12 of his supplemental statement, Mr Lai alleged that the main body of the roller shutters at the Emporio Armani shop and the Loewe shop had been installed before 2:00 am on 17 July 2008, and that at the Chloé shop had been installed even earlier on 16 July 2008. Such allegations were false. From my observations on site, the Defendant did not carry out any roller shutter installation works at any of the 3 shops on 16 or 17 July 2008 at all.[4]”

59.  As I have found that Emily being more familiar with the project and in general a more credible and reliable witness than Lai, I accept her evidence about her observation that D had not carried out any installation works at any of the three shops in question on 16 or 17 July 2008 and the site photos taken by her on 18 July 2008 showed that the roller shutters of Loewe and Emporio Aramani had not been installed as of 18 July 2008.

60.  I thus reject D’s case in this regard and accept P’s case that the main installation works of Emporio Armani & Loewe shops were completed on 23 July 2008 according to Emily’s evidence.

Any Delay Caused or Contributed by the Plaintiff

61.  D pleaded in paragraph 9(a)&(b) of its Re-amended Defence and Counterclaim as to the prevention or delay of D’s works caused by P.  Such complaints relate to the late approval of the drawings by P in paragraph 9(a)[5] and the following items in paragraph 9(b):

(i)    Incomplete metal structural support for the shutters installation;

(ii)   Some metal frames obstructing the shutters installation;

(iii)  Delay in completion of floor finishes, causing delay to the adjustment of limited switch of shutters;

(iv)  No permanent electricity supply for testing and commissioning and final electrical connection to shutters until 23 July 2008;

(v)   Metal cladding for installation of shutters’ switch were not completed until 23 July 2008.

62.  Emily responded to all the complaints in her first two statements.  During the cross-examination of Emily, counsel for D did not challenge her rebuttal evidence against D’s allegations as per paragraph 9(b).  Further D’s counsel only complained about the late approval of shop drawings in paragraphs 46 to 51 of his Closing Submission for the Defendant without mentioning those complaints in paragraph 9(b).  Thus I take that D no longer relies on the allegations as per paragraph 9(b) but the allegation of P’s late approval of the drawings causing D’s delay as per paragraph 9(a) only.

63.  In case I misunderstood D’s closing submissions, I therefore give my decisions on those complaints as per paragraph 9(b) after considering such evidence before the court and submissions. I accept paragraphs 98 to 104 of P’s closing submissions and reject D’s evidence as to any delay or prevention caused or contributed by P as alleged in paragraph 9(b) for the following reasons:

(i) No contemporaneous records of any complaints about P’s prevention or delay lodged by D to P, Sun Weng or PKG;

(ii) Emily has rebutted paragraph 9(b) and Lai’s evidence alleging P causing delay in her first two statements;

(iii) Lai’s evidence that the metal structural support for the shutters installations at the Armani and Loewe shops were incomplete as of 16 July 2008 was rebutted by the contemporaneous record of the email sent by Sun Weng to P dated 29 June 2008 confirming that the structural support frame for the shutters at the 3 shops were all completed on 25 June 2008;

(iv) Emily’s evidence is preferred when compared to Lai in light of their general reliability and credibility.

64.  The remaining issue is whether P was late in approving the shop drawings on 3 July 2008.  D’s counsel submitted that P should have approved the drawings subject to comment on 30 June 2008 instead of issuing comments without approving the drawings then. 

65.  P issued the purchase order on 26 June 2008 which was countersigned by D on 30 June 2008.  It is not in dispute of what happened on 30 June 2008.  Henry sent some shop drawings to P by email at 12:20 pm and P’s designer Michael Fung checked the drawings and passed his comments to Henry at 4:21 pm on the same day by email.  Michael mentioned in his reply email that all dimensions and work issues should be coordinated on site. 

66.  It is the evidence of Emily that D then sat on the comments for a few days without doing any site measurements or drawings updates until 10:33 am on 3 July 2008 when Henry sent the revised shop drawings to P by email.  P then checked the revised shop drawings and sent to D by fax the approved shop drawings subject to site measurements. 

67.  Emily also gave an account of site measurements in her first statement. She took the initiative to call Ah Wing, asking him to do the site measurements, as she had received no reply from D to her requests for site measurements.  Finally, Emily managed to get hold of Ah Wing to do the site measurements at the 3 shops on the night of 3 July 2008.  After doing the site measurements with Ah Wing, Emily asked Ah Wing to liaise with D, but Ah Wing declined to do so because he considered it was inappropriate for him being a contractor of D to do so. Emily then sent an email to Henry at 00:35 on 4 July 2008 giving the rough dimensions of the roller shutters for his reference and reminded D to coordinate with Ah Wing for the detailed dimensions and other site changes[6].

68.  Indeed, Lai also confirmed such site measurements done by Emily and Ah Wing on the night of 3 July 2008 in his first and last statements[7].

69.  Having reviewed the above chronology, I do not agree with D’s counsel that P has been late in approving the shop drawings on 3 July 2008 but rather D should be blamed for its delayed site measurements and drawings updates.  I therefore find that P has not caused or contributed to any delays.  D is solely liable for the delays of the works.

LOSS AND DAMAGES

P’s Additional CostsForWorks Before & After theShops’Opening

70.  P claims D for loss and damages caused by the delay in completion of the installations on 23 July 2008.  As there were only 2 days left before the grand opening of the shops on 25 July 2008, P incurred extra costs for temporary cover up and finishing works applied to catch up the scheduled opening and the costs of replacing the temporary works by permanent works.   The extra costs were incurred mainly for carrying out overnight work at the shops on 23 and 24 July 2008, in particular for Loewe and Emporio Armani.

71.  Besides, PKG had deployed other contractors to help P finish the shop front finishing works at Emporio Armani and Loewe shops and such costs were imposed against P by PKG, known as the project consultant’s contra-charges and Armani’s contra-charges.

72.  The heads of damages are set out as follows:

1.	“Project Consultant’s Contra-charges” (Day work costs incurred by the project consultant)	HK$140,940.00
2.	“Armani’s Contra-charges” (Labour costs incurred by Emporia Armani)	HK$ 61,471.80
3.	3. Additional day work incurred by P on 23 and 24 July 2008 (“P’s Additional Costs For Works Before Shop Opening”)	HK$199,775.37
4.	4. Additional labour costs for taking down the temporary works and reinstating the permanent works	HK$154,590.00
	Total:	HK$556,777.17

73.  Parties sought expert evidence on quantum and leave was granted to adduce expert evidence on the following issues:

(i) the reasonable costs of P for completing the temporary cover up and finish works as pleaded in paragraph 9 of the Statement of Claim; and

(ii) the reasonable costs of the plaintiff for carrying out the subsequent replacement of the temporary works by permanent works as pleaded in paragraph 9 of the Statement of Claim.

74.  Leave was also granted for parties to adduce a Joint Experts Report on quantum issues dated 27 April 2014 (“the Joint Report”) in which the experts were able to give unanimous assessments.  Subsequently, P sought to adduce a supplemental report from his expert to revise his previous opinion because P’s expert alleged that he had missed out some important information in forming his opinion as recorded in the Joint Report when he read the Joint Report again.  Consequently, leave was granted to adduce a supplemental expert report by each party.  Here is a table prepared by P’s counsel summarising P’s claims and the experts’ assessments:

	Project Consultant’s Contra-charges (HK$)	Armani’s Contra-charges (HK$)	P’s Additional Costs for Works before Shop Opening (HK$)	P’s Additional Costs for Works after Shop Opening (HK$)
P’s Claim	140,940.00	61,471.80	199,775.37	154,590.00
Joint Expert Report’s Assessment	No assessment	No assessment	37,223.34   (7,550.84 + 29,672.50)	8,085.00   (3,437.50 + 4,290.00 + 357.50)
Assessment as per P’s supplemental expert report	No assessment	No assessment	96,925.84   (7,550.84 + 89,375.00)	136,664.00   (133,247.40 + 3,416.60)
Assessment as per D’s supplemental expert report	No assessment	No assessment	37,223.34   (7,550.84 + 29,672.50)	8,085.00   (3,437.50 + 4,290.00 + 357.50)

75.  Although D’s pleaded case is denial of any liability for damages due to no delay caused and “even if the Defendant delayed (which is denied), the delay did not cause the Plaintiff to suffer any loss or damage as alleged or at all[8]”, counsel for D conceded at the closing submissions stage that D should be liable for some damages based on the Joint Report if the court finds D liable and accepts P’s case of the contractual completion date and the actual completion dates of the works.  D’s stance on quantum of damages in different circumstances is set out in the Supplemental Closing Submission for the Defendant.

76.  However, the Joint Report and the subsequent solo supplemental expert reports do not cover the first two heads of claims, ie the contra-charges.  My understanding of the stance of D on the issue of damages is that the liability of the first two heads of claims is no longer in dispute as I have found D liable for the delay and the dispute of those two heads is on the quantum only.  D maintains its stance of denial of liability of the contra-charges.

77.  The most controversial issue of the expert evidence is whether the court shall accept P’s expert, Mr So, retracting from his previous opinion of the joint assessment of the total reasonable costs at HK$45,308.34 and then giving a quite substantially different opinion by his own assessment at HK$233,589.84.

78.  The main reason of the change according to Mr So is that he missed out some important information when he read the Joint Report again and he revised his opinion after receiving additional documents. 

79.  D’s counsel opposed Mr So retracting from his previous opinion on the following grounds:

(i) lack of reasons for the change;

(ii) irrelevant consideration; and

(iii) misleading opinion.

80.  Firstly, according to D’s counsel  in his closing submission, Mr So fails to specify the “important information” to justify his change of opinion:

“However, upon reading the whole report, it is not possible to identify any “important information” which Mr So allegedly missed out in the 1^st report. As commented by D’s expert Mr Chan[D/290/§22], there was no important information which missed out from the 1^st report.[9]” 

81.  Secondly, D’s counsel criticised Mr So of using some additional information which did not form part of the factual evidence of the case to change his opinion and D’s counsel quoted paragraph 20 of D’s supplemental report in support:

“A meeting was held on 12 June 2014 (“Further Meeting”) to review the necessity of the proposed changes raised by SFT. During the Further Meeting, SFT tabled some drawings and documents which I had never seen before. I asked SFT if those documents came from the documents disclosed by the parties under discovery. SFT could not ascertain whether the documents were within the list of documents under discovery. He only claimed that those documents were provided by the Plaintiff. He further added that if there was any mistakes or problems incurred on these documents[sic], that was the Plaintiff’s problem and not his.”

82.  D’s counsel gave further examples of new documents which are relied on by Mr So but they are not included in the trial bundle and not supported by any factual evidence:

(i) additional plans purportedly showing the transportation route of materials;

(ii) additional drawings purportedly showing the construction details; and

(iii) additional photos purportedly showing various works at the shops.

83.  Thirdly, D’s counsel accused Mr So of adopting irrelevant additional information resulting in misleading opinion.  For example, Mr So adopted another set of statistics of wages to compute the labour costs in his supplemental report.  It is common ground that the additional works were carried out in July 2008. Therefore the third quarter statistics of wages were adopted for assessment in the Joint Report. However, Mr So changed his opinion and adopted the second quarter instead in his supplemental report. D’s counsel believed that the change was due to the higher and more favourable figures in the second quarter.  Therefore, D asked the court to reject Mr So’s supplemental report.

84.  Counsel for P, however, urged the court to accept P’s supplemental report and treat it as updating or superseding the opinion of P’s expert as contained in the Joint Report, as Mr So has explained why it was necessary for him to update his opinion. Counsel for P submitted that Mr So gave more detailed explanations in assessing the costs and more detailed measurement calculations regarding the quantities of the temporary covering up and finishing work in his supplemental report.

85.  Having considered the above arguments, I think P should explain why its expert has missed out some important information when compiling the Joint Report. Besides, it is doubtful why P has failed to supply those “additional documents” initially to both experts when they were preparing the Joint Report. Especially the Joint Report was compiled in 2014, after more than 5 years from the incident. All relevant documents are not new and they must be all along in P’s possession. Thus there are no reasons why P had missed out those documents when supplying those documents to the experts to prepare the Joint Report in the first place. It appears to me that P just wants to have a second bite of the cherry after receiving a joint report which is not in favour of P. 

86.  After all, the difference in P’s two versions of assessment is quite substantial for which more detailed explanations are demanded.  For the above reasons, I am not satisfied with Mr So’s explanation of his change in opinion. Therefore, I reject his opinion as per P’s supplemental expert report.  I prefer the opinion given in the original Joint Report.

87.  Counsel for D just opposed P’s supplemental expert report without challenging the Joint Report in his Closing Submission for the Defendant, but later in his Supplemental Closing Submission, D’s counsel took away two items adopted in the Joint Report in all his calculation of damages for no apparent reasons, namely item (III) replacement of the temporary works at HK$4,290.00 and item (IV) the defect rectification works at HK$357.50.  I am of the view that such deductions are unfounded and reject such deductions.  I allow the assessed sum in full as per the Joint Report.

88.  I therefore assess the damages for the additional costs for works before and after the opening of the shops at HK$45,308.34 (HK$37,223.34 + HK$8,085).

Contra-charges

89.  There are two heads of claims not considered by the experts, namely, (i) the ProjectConsultant’s Contra-charges of HK$140,940.00; and (ii) Armani’s Contra-charges of HK$61,471.80 which PKG contra-charged such costs incurred against P.

90.  According to Emily, a lot of the finishing works had to be done within a very short time and PKG incurred extra costs by deploying other contractors to carry out all necessary overnight works and temporary covering up works to ensure that the shops could open as scheduled.  

91.  Emily further stated that if D’s works were completed on time on 11 July 2008, there would have been sufficient time (at least 10 days) for P to attend to the remaining shop front works, including making good defects.  All these costs would not have been incurred but for D’s delays in completion of the works. 

92.  These two items of contra-charges are supported by the final account.  D in fact has not disputed the reasonableness or the quantum of these contra-charges in its pleadings but it just totally denies liability of damages by denying causing any delay at all, or if there is any delay caused by D, it would not cause P any loss or damages.  Besides, Emily’s evidence on contra-charges has not been challenged by D’s counsel at trial, nor rebutted by any of D’s documents.

93.  Therefore, I accept P’s evidence in this regard and find that D should be liable to pay damages to P for such contra-charges in the sum of HK$202,411.80 (HK$140,940.00 + HK$61,471.80).

CONCLUSION AND ORDER

94.  In light of the undisputed counterclaim, D should be liable to pay P damages after set off as follows:

	Items	HK$
1.	P’s additional costs for works before and after the shops opening	45,308.34
2.	Contra-charges by PKG	202,411.80
LESS
3.	Outstanding contract sum under the Supply and Installation Contract	(58,000.00)
4.	Outstanding contract sum under the Further Supply Contracts	(3,100.00)
	Total:	HK$186,620.14
		=============

95.  For the above reasons, I order D to pay P damages of HK$186,620.14 with interest at judgment rate from the date of writ until full payment of such sum.

Costs

96.  In consideration of the concession made by P’s counsel in relation to the costs of the counterclaim, I make an order nisi that 90% costs of the whole action be to P, to be taxed if not agreed, with certificate for counsel and such order nisi shall become absolute after 14 days from the date hereof, unless parties make any applications to vary it within such time.

97.  Last but not the least, I am thankful to both counsel for their kind assistance rendered to this court.

[1] In paragraph 13 of her statement dated 31 December 2013, Emily clarifies that the completion deadline should be 11 July 2008 instead, according to the programme.

[2] Paragraph 11 of the statement of Matthew Tong dated 31 December 2013.

[3] Paragraph 12(c) of Lai’s second supplemental statement dated 27 August 2015.

[4] Paragraph 6 of the Witness Statement of Wan Po Kei dated 28 November 2014.

[5] The original pleaded case of D is that P has never approved the drawings but only gave some rough dimensions to D by email dated 4 July 2008, but at the trial D changed its stance and accepted that P approved the drawings on 3 July 2008.

[6] Paragraphs 12-13 of the Witness Statement of Wan Po Kei dated 31 December 2013.

[7] Paragraph 8 of Lai’s own statement dated 31 December 2013 and paragraph 3 of his third supplemental statement dated 16 September 2013.

[8] Paragraph 11 of the Re-amended Defence and Counterclaim.

[9] Paragraph 82 of the Closing Submission For the Defendant.