KITAK MACHINERY ENGINEERING CO LTD v. FIGURE WELL LTD

DCCJ 768/2010

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 768 OF 2010

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JUDGMENT

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Background

1.  The plaintiff is a company specialized in welding and metal works.  In October 2003, the plaintiff was awarded a contract by the Hong Kong and China Gas Company Limited (“Town Gas”), namely Contract No. GSPD/SP/ETP/010/2003(“the Underlying Contract”), for the installation of gas pipeline along (1) Hiram’s Highway between Marina Cove and Pak Sha Wan (“Section 1”) and (2) Clear Water Bay Road between Hiram’s Highway and Tseng Lan Shue (“Section 2”).

2.  The defendant is a contractor of general construction and engineering works.  By an agreement(“the Sub-contract”) made partly orally and partly in writing between the plaintiff and the defendant, the plaintiff subcontracted part of the works under the Underlying Contract, such as pipe trench excavation and backfill(“the Works”) to the defendant.  Insofar as it was made in writing, the Sub-contract was contained in and evidenced by a letter in Chinese language from the defendant to the plaintiff dated 8 October 2003 and signed by both parties (“the Letter”) and the bills of quantities appended to the Letter.

3.  It was an express term of the Sub-contract, as contained in the Letter, that the plaintiff and the defendant are each to bear half of the rent, water charges, electricity charges and miscellaneous expenses of the depot (“the Depot Expenses”).  The parties have dispute on whether the word “depot” (“倉” in Chinese) stated in the Letter includes the site office used by the parties, and hence whether the defendant has to bear half of the rent, water charges, electricity charges and miscellaneous expenses of the site office as well.

4.  The parties, however, have no dispute that the Depot Expenses would first be paid out by the plaintiff from time to time when became due, and the defendant would reimburse the plaintiff its share of the Depot Expenses on the plaintiff’s demand after completion of the Works.

5.  The plaintiff contends that from October 2003 to November 2006, it paid a total sum of $1,011,759.28 for the Depot Expenses and hence the defendant’s share is $505,879.64.  According to the plaintiff, the Works were completed in July 2007, and hence on 5 December 2007, the plaintiff sent an invoice (“the Invoice”) to the defendant and demanded reimbursement of the sum of $504,749.64, which was $1,400.00 less than the defendant’s share and was caused by accounting error.

6.  As the defendant failed to reimburse the plaintiff its share of the Depot Expenses or any part thereof, the plaintiff claims against the defendant in the present action for payment of the sum of $505,879.64 or such sum as this court may award, or alternatively damages.

7.  The defendant contends that the Depot Expenses referred to in the Letter should be restricted to those incurred for providing storage for equipment, machine and parking of trucks used for the purpose of the Underlying Contract including the Works to be carried out by the defendant, and should not include the rental of the site office and charges for telephone, fax, internet, water and electricity relating thereto.

8.  The defendant further contends that at a meeting on 25 January 2008 (“the Meeting”), the plaintiff and the defendant discussed about the amount outstanding from the plaintiff to the defendant for the Works carried out under the Sub-contract, which amounted to $3,977,479.80, as well as the Depot Expenses, and they agreed that the plaintiff would pay and the defendant would accept $2,450,000.00 in full and final settlement of the amounts owing from each other (“the Compromise Agreement”).  There is no dispute that the settlement sum of $2,450,000.00 was later paid by the plaintiff to the defendant.

9.  The plaintiff, on the other hand, contends that the Depot Expenses should include the rental of the site office and the expenses incurred while using the site office, because a depot should normally include a site office.  As to the Compromise Agreement, the plaintiff contends that the Depot Expenses were not discussed at the Meeting and the settlement sum of $2,450,000.00 was only for the Works carried out under the Sub-contract by the defendant.

10.  Thus, there are only 2 issues involved in this case, namely, (1) whether under the Sub-contract the defendant is liable to bear half of the Depot Expenses concerning the site office, and (2) whether the Compromise Agreement covers the plaintiff’s claim for half of the Depot Expenses.

11.  There were other issues raised by the defendant in the Amended Defence concerning estoppel and whether the defendant is liable to pay for the Depot Expenses incurred during the approved extension period for the Works, but the defendant no longer relies on these matters.

Compromise Agreement

12.  For convenience sake, I shall deal with the issue on the Compromise Agreement first.  It is common ground that the Meeting did take place on 25 January 2008 between Mr Ma Chiu Fung (“Mr Ma”) of the plaintiff on the one hand and Mr Chan Kwok Cheung (“Mr Chan”) and Mr Lee Kai Man (“Mr Lee”) of the defendant on the other.  The defendant contends that both the amount outstanding from the plaintiff and the Depot Expenses were discussed at the Meeting, and the settlement sum of $2,450,000.00 was for full and final settlement of the amount owing from each other.

13.  The plaintiff, on the other hand, contends that the Meeting was not held to discuss a global settlement as alleged by the defendant and the Depot Expenses were never discussed at the Meeting.  The plaintiff avers that the Meeting was convened to discuss about the fees payable to Marco Consultants Limited (“Marco”) and the apportionment between the plaintiff and the defendant of the sum of $6,700,000.00 offered by Mott Connell Hong Kong Ltd (“Mott Connell”).

14.  Mott Connell was the engineer appointed by Town Gas to monitor the works under the Underlying Contract on their behalf.  The plaintiff had to submit interim invoices to Mott Connell, normally on a monthly basis, with a chart showing the items of work done in the relevant period for Mott Connell’s approval and payment.  After the plaintiff had received the payment from Mott Connell, the defendant would be paid according to the amount of work done by them as approved by Mott Connell, and for that purpose, the defendant would issue an application for interim payment to the plaintiff.

15.  From November 2003 to December 2006, the plaintiff submitted a total of 34 interim invoices to Mott Connell.  From time to time, Mott Connell disputed substantial amounts claimed by the plaintiff.  With the introduction of Mr Chan and Mr Lee, the plaintiff engaged Marco, a company specialized in construction claims, to claim for the disputed amounts.  With the assistance of Marco, the plaintiff submitted a claim of $20,270,702.88 to Mott Connell on 12 June 2007, and by the end of November 2007, Mott Connell made a final offer of $6,700,000.00 to the plaintiff.  Both the plaintiff and the defendant accepted this final offer.

16.  The plaintiff avers that the above was the background leading to the Meeting.  At the Meeting, it was agreed that $504,725.90 would be paid to Marco and the defendant would receive $2,450,000.00, being a round down figure of 42.9% of $5,804,347.90 (ie $2,490,065.25).  The figure of 42.9% came from an apportionment agreement reached between the plaintiff and the defendant shortly after Marco was engaged, in which the parties orally agreed that Marco’s fees would be deducted from any money received from Town Gas and the plaintiff and the defendant would apportion the balance between them based on the ratio of the total tender amount in the Underlying Contract and the Sub-contract tender amount, ie 57.1% to 42.9% respectively.  The main purpose of the Meeting was for Mr Ma, Mr Chan and Mr Lee to discuss and approve the consultancy fees payable to Marco, the deduction of certain items, such as insurance, government levy and accountancy fee and the apportionment of the balance between the plaintiff and the defendant, but the Depot Expenses were never mentioned.  The details of the calculations can be found in a summary of accounts (p 841-1 of Core Bundle 3) and 2 other summaries in respect of Marco’s fees (p 840 and 841 of Core Bundle 3).

17.  Thus, the crucial issue for me to decide is whether the Depot Expenses have ever been discussed during the Meeting or have been taken into account when the parties reached the agreement at the Meeting.  This is simply a factual issue on what happened during the Meeting, and it depends on whether the plaintiff’s or the defendant’s evidence should be believed.  As said in Star Glory Investment Ltd v Kai Tuo (H.K.) Technology Co Ltd and others, HCA 3523 of 2002, the appropriate tests to adopt in assessing a witness’s credibility are as follows:-

“There are two objective tests for assessing a witness’s credibility regarding a matter to which he has testified:-

(a) Whether that part of his testimony is inherently plausible or implausible;

(b) Whether that part of his testimony is, in a material way, contradicted by other evidence which is undisputed or indisputable (an example often given of such evidence is contemporaneous documents).

Further, where it is shown that a witness has been discredited over one or more matters to which he has testified (using the above tests), this fact is relevant to the assessment of his overall credibility.  Likewise, regard may be had to a witness’s motive for deliberately not giving truthful testimony.  For example, telling the truth may prejudice his interest, or a just determination of the litigation may affect his interest.”

18.  Having considered the evidence and the parties’ submissions carefully, I come to the view that the plaintiff’s evidence is more credible than the defendant’s in this regard.  First of all, the plaintiff’s witness Mr Ma gave a very detailed and coherent account of what were discussed at the Meeting and his evidence is supported by documentary evidence, ie the 3 summaries above mentioned.

19.  Mr Ma’s evidence is that at the Meeting, the parties went through the summary of accounts prepared by a May Mok.  The summary of accounts showed that after deducting the various costs from the settlement sum of $6,700,000.00 offered by Mott Connell, the balance was $6,309,073.80.  Based on this amount, the consultancy fees payable to Marco were in the sum of $504,725.90 and the net balance for apportionment between the plaintiff and the defendant was $5,804,347.90.  After the parties had agreed on the calculation in the summary of accounts, May Mok prepared 2 separate summaries of accounts for Marco.  The total fees payable to Marco in these 2 summaries amounted to $504,725.90.  The summaries were faxed to Marco for their comments.  Later that day, Marco confirmed that the summaries were in order by sending their invoice in return charging $504,725.90 as their consultancy fees and attaching the summaries to it.

20.  Regarding the net balance of $5,804,347.90, the apportionment between the parties was based on the proportion of the parties’ tender amounts as the parties had previously agreed.  The Sub-contract tender amount was 42.9% of the total tender amount of the plaintiff and hence the defendant’s share was $2,490,065.25.  The defendant agreed to round down this figure to $2,450,000.00 at the Meeting.  Thus, the payment of $2,450,000.00 was only for full and final settlement of the defendant’s share of the settlement sum offered by Mott Connell.  The Depot Expenses were never mentioned nor taken into account.

21.  From the summary of accounts, it is clear that the various costs deducted from the settlement sum of $6,700,000.00 were for the following items:-

22.  The total sum for these items is $390,926.20, which gives the exact balance figure of $6,309,073.80 after deducting it from the settlement sum of $6,700,000.00.  It is plainly obvious that the Depot Expenses have not been included or taken into account in the calculations.  I do not believe that the parties would have omitted to mention the Depot Expenses in the summary of accounts, if the parties had indeed discussed about the Depot Expenses.

23.  On the other hand, the defendant’s witnesses, Mr Chan and Mr Lee, did not give much detail about the negotiation or how the figures came about.  They said they were not shown with any of the aforesaid summaries.  Mr Ma merely mentioned a number of deductions to be made from the sum of $6,700,000.00, including Marco’s fees and the Depot Expenses, but the exact amounts of Marco’s fees and the other deductions were not mentioned.  Mr Ma initially offered $2 million.  Mr Chan returned a figure of $3 million because the defendant had incurred costs in providing labour and machines over the prolonged period.  Mr Ma then offered $2,450,000.00, which was accepted by Mr Chan and Mr Lee because the defendant wanted to maintain a working relationship with the plaintiff and to receive payment as soon as possible.

24.  I do not accept that the parties would have negotiated in such an arbitrary manner.  It is inconceivable that the parties would just use ballpark figures to negotiate, as suggested by the defendant, without the aforesaid summaries.  If it were a ballpark figure, why did Mr Ma offer $2,450,000.00 and not $2,500,000.00, especially when the preceding offer and counter-offer were $2 million and $3 million respectively and $2,500,000.00 would be the middle figure?  The defendant’s own query on why the sum was rounded down and not rounded up to $2,500,000.00 in fact also suggests that $2,500,000.00 should be a more reasonable figure than $2,450,000.00 if the parties were just using ballpark figures.  However, I do not accept that Mr Ma would have offered $2,450,000.00 without making reference to any figures or calculation.  In fact, even according to Mr Lee’s evidence, he sensed that money would be discussed at the Meeting and hence he prepared a document (pp 48-49 in Bundle B) supporting a payment of $3.9 million.  I believe Mr Ma, being the paying party and the one initiated the Meeting, would certainly do his homework too in getting some figures and calculation to see how much the plaintiff had to pay.  The defendant’s suggestions that there were no summaries used at the Meeting and Mr Ma did not mention any exact figures of the deductions or how much fees were to be paid to Macro are simply not credible.  I think this is just an excuse used by the defendant to try to cover the fact that the Depot Expenses do not fit into the calculation giving rise to the final settlement sum.  Once they reached the exact figure of $2,490,065.25, it is conceivable that the parties would negotiate for a round figure.  Whether it was rounded up or down is just a matter of negotiation, as either way is not going to affect the settlement sum significantly.

25.  According to the defendant, the apportionment agreement between the parties was that the parties should split the sum paid by Town Gas equally without any deductions.  I do not find that there is any truth in this allegation.  Under cross-examination, both Mr Chan and Mr Lee admitted that this so called 50-50 apportionment was not mentioned during the Meeting. Mr Chan alleged that he was surprised or shocked to know that Marco’s fees would be deducted first, but being in a weaker bargaining position, he would accede to whatever requests made by Mr Ma.  This does not make sense to me, as Mr Chan did counter-offer $3 million in the bargaining process.  There is absolutely no reason why he could not raise the 50-50 apportionment basis allegedly agreed by the parties.  Mr Lee’s evidence that he only overheard the conversation between Mr Ma and Mr Chan in which Mr Ma informally mentioned to Mr Chan about the 50-50 apportionment is also very dubious and hard to believe.  Thus, I do not accept this 50-50 apportionment agreement as alleged by the defendant.

26.  There is no logic in the defendant’s contention that Marco’s fees should not be deducted from the sum received from Town Gas.  If that was the case, the plaintiff would have to shoulder Marco’s fees entirely on its own, whereas the defendant would be able to recover a substantial amount (50% according to the defendant and 42.9% according to the plaintiff) without incurring any cost.  I do not believe that Mr Ma would make such a bad commercial decision, as the claim was clearly for the benefits of both the plaintiff and the defendant.  It is inconceivable that the defendant would introduce Marco to the plaintiff and be involved in most of the meetings with Marco and yet the defendant “believed” that the plaintiff was only claiming the fees for itself, not for the defendant.

27.  As to the other deductions concerning insurance, government levy and accountancy fee, the defendant submits that Mr Ma just picked the figures that suited him to make up a figure that would come close to the settlement sum of $2,450,000.00.  If the defendant’s allegation were correct, it means that these deductions could only be made after the parties had reached an agreement on the settlement sum.  However, these deductions were also reflected in the calculations of Marco’s fees as shown in the said summaries, and Marco did not challenge these deductions.  It is inherently improbable that Mr Ma could just pick some figures to match the settlement sum and yet they could be accepted by Marco without any challenge.

28.  It is also highly unlikely that the plaintiff would make up the summaries subsequently as the 2 summaries to Marco were faxed out on the same day of the Meeting, and an hour later, Marco faxed back an invoice for their contingency fee in the sum of $504,725.91.  There was absolutely no reason for the plaintiff to fabricate any evidence on the same day of the Meeting when the parties had settled amicably.  It cannot be disputed that the two summaries for Marco, which were consistent with the summary of accounts, were prepared and faxed to Marco on the same day after the meeting.  This point was mentioned by Mr Ma in his first witness statement and was never challenged in Mr Chan or Mr Lee’s witness statements.  It was in fact not disputed until the defendant mentioned it in the closing submission.  However, Marco also issued an invoice of exactly the same sum of $504,725.90 to the plaintiff on the same day, and shortly after that, the defendant sent an Interim Payment No. 35 to the plaintiff asking for the payment of $2,450,000.00, which was in accordance with the practice for all the other earlier payments.  There was no indication at all that there was settlement of the Depot Expenses included in this document.

29.  Thus, the defendant’s allegation that the Depot Expenses were mentioned during the Meeting was not supported by any of the contemporaneous documents.  I do not find that there is any truth in this allegation.

30.  However, the defendant relies on the fact that the plaintiff did not make any claim for the Depot Expenses for two full years and it shows that the Depot Expenses must have settled at the Meeting, or alternatively, the plaintiff must have waived such claim.  I do not accept this contention either.  It is not disputed that after the completion of the Works, the plaintiff continued to have other works with the defendant and its sister company.  The defendant and its sister company were short of funds at the material times and had to borrow money from the plaintiff from time to time. The plaintiff also made various prepayments to the defendant and its sister company.  The defendant does not dispute that there were such loans and prepayments, but alleges that the repayments were made by way of deductions from contract sums.  With this background, I do not find it strange or surprising for the plaintiff to give indulgence to the defendant and to make the claim for Depot Expenses after two years.  It is not unreasonable for the plaintiff to keep the working relationship with the defendant as the plaintiff was still relying on the defendant to finish the other works.  To help the defendant financially so that it could continue with the works was clearly in the plaintiff’s interest too.  Thus, even though there was a delay of two years before the plaintiff made a formal claim against the defendant, it is absolutely understandable.  I do not accept that this delay was caused by the settlement or waiver as alleged by the defendant.

31.  The defendant alleges that the plaintiff normally made deductions from the payment to the defendant to seek repayment of the money owed by the defendant, and this pattern of repayment by deductions was not seriously challenged by Mr Ma in the course of evidence.  However, Mr Ma did take issue on this issue and said that he consulted Mr Chan before making the deductions.  Indeed, the evidence does not support any pattern of automatic deductions as alleged by the defendant.  On the contrary, there was this deferred deduction of the $100,000.00 loan made on 22 November 2005, which supports the plaintiff’s case that it is willing to give indulgence to the defendant on the time of repayment.

32.  In the premises, I accept the plaintiff’s account of the events as the truth of the matter and find that the Depot Expenses were not covered by the Compromise Agreement.  There was also no waiver of the claim for the Depot Expenses whatsoever as alleged by the defendant.

Site office expenses

33.  On the issue of the site office expenses, it is concerned with the interpretation of the clause in the Sub-contract, particularly the word “depot” (“倉” in Chinese) in the letter dated 8 October 2003.  The term is stated in Chinese as follows:-

“至於以下項目, 是由貴公司及本公司共同承擔各佔一半:-

1. 倉租

2. 倉之雜費及水電費”

34.  It cannot be disputed that the word “depot” in Chinese is not the same as the words “office” (“寫字樓”) or “site office” (“地盤寫字樓”) in Chinese.  Thus, if one adopts a literal interpretation, the Depot Expenses cannot include the expenses related to the site office.  However, I agree with the plaintiff that in the interpretation of the above contractual term, one must look at the objective intention of the parties as well, particularly when the term was not professionally drafted by lawyers.

35.  One clear example is that in the letter dated 8 October 2003, the defendant was stated to be responsible for “traffic signs”(“交通標誌” in Chinese), but in actual fact the defendant was responsible for many more items associated with “traffic signs” as listed out in clause 5.13 of the Underlying Contract, ie “temporary road furniture, cones, traffic signs, traffic signal lights, self-adhesive temporary road marking tapes, granular sub-base, concrete, bituminous material, anti-skid steel plate etc. for traffic diversions”.

36.  Thus, it is clear to me that the terms in the letter dated 8 October 2003 did not give an exhaustive list of the entire scope of responsibilities, especially when the Sub-contract was made partly orally as agreed by the parties.

37.  The plaintiff’s case is that a depot normally includes a site office as a site office is often found within a depot.  The defendant disagrees with this assumption and suggests that if the parties had intended to include the expenses for a site office in the Sub-contract, they would have used the words “depot” (“倉”) and “office” (“寫字樓”) together and not just “depot” (“倉”).  The defendant uses the example of the depot receipts (in pages 355 and 362 of Core Bundle 2) written by Mr Ma to say that if in his mind “depot” always includes “depot” and “site office”, Mr Ma would have written “part of depot expenses” in the receipts and not just “depot rent fee” (“倉租費”) or “depot rent” (“倉租”).

38.  First of all, I do not find the example used by the defendant reasonable.  The receipts were for the depot rent.  Separate rent was payable for the site office.  There is nothing wrong to write down “depot rent fee” (“倉租費”) or “depot rent” (“倉租”) in the receipts.  It is a counsel of perfection to expect Mr Ma to write down in the receipts that the rent received is “part of the depot expenses”.

39.  Secondly, Mr Chan himself also gave evidence that he had anticipated a container office was to be put inside the depot for the workers to rest and get changed and the container office required water and electricity for the workers’ use.  From the evidence, it is clear that the workers required water for cleaning up and electricity for lighting and welding work.  Although the site office in question was rented after the letter dated 8 October 2003 was issued and was not inside the depot as such, and the defendant argues that the water and electricity charges covered by the contract term were for those incurred at the depot only, it is clear to me that the parties must have the understanding that a depot would include an office as well.  In fact the site office was very close to the depot and the defendant’s staff had worked at the site office.  Even though the defendant disputes about the capacity of his staff working at the site office, namely whether Mr Chan was the site superintendent and a Mr Joe Ng was the site foreman, it is clear that an office was required for the Works and such requirement was within the contemplation of the parties.  The set up of a site office was actually a mandatory term under the Underlying Contract, and the defendant should be aware of that requirement.

40.  Moreover, the plaintiff had all along issued monthly invoices of the expenses of the depot and the site office for the defendant to settle.  The defendant does not seem to dispute the authenticity of these invoices, but denies that Mr Ma gave them to Mr Chan by hand at the site office.  I have no reason to disbelieve Mr Ma in respect of his evidence on the mode of passing these invoices to the defendant.  In any event, it is not important whether these invoices were given by hand, by fax or by email.  The crucial fact is that the defendant did not raise any objection or protest to the plaintiff in respect of these invoices when they were received.

41.  Apart from these invoices, on 5 December 2007, the plaintiff also issued a summary statement of the Depot Expenses, which contained the expenses of the site office, and again the defendant raised no objection or protest to this summary.  Mr Chan explained that he did not raise objection because Town Gas would pay $6.7 million and the site office expenses were minor sums.  The defendant just wanted to have a quick solution to final payment because it was experiencing financial difficulty and had to pay its workers when Chinese New Year was approaching.  After all, the defendant never had a say in money matter and there were other on-going projects with the plaintiff. I do not find the defendant’s explanation acceptable.  The site office expenses amounted to more than $110,000.00, a similar amount to its other loans from the plaintiff.  Surely, it was not a small sum to the defendant especially when it was having financial difficulties.  If the defendant had not agreed to pay such expenses, there was absolutely no reason for it to keep quiet on this matter.  As admitted by Mr Chan under cross-examination, the summary could have been erroneously prepared.  It is extremely strange that the defendant did not even try to clarify the matter with the plaintiff.  It was not necessary for the defendant to be confrontational in raising such a query and hence there was no reason to think that the plaintiff would be offended.  The only probable conclusion I can draw from the defendant’s inaction in this regard is that the defendant had in fact agreed to pay the site office expenses. 

42.  The defendant seems to suggest that the plaintiff failed to prove a separate agreement for the site office expenses by saying that Mr Ma’s evidence in this regard was very vague.  However, the plaintiff’s case was not that there was a separate agreement for the site office expenses. The agreement was still found in the contractual term for the Depot Expenses.  The plaintiff’s case is just that the term “depot” includes the site office because of the understanding between the parties.  As aforesaid, I do find that the parties did have that understanding.  The said invoices and the summary, being contemporaneous documents, do support the plaintiff’s case.

43.  The defendant argues that the plaintiff was obliged to bear the cost of the site office under the Underlying Contract, and hence it should not be the defendant’s responsibility to pay.  No doubt the plaintiff would have such an obligation under the Underlying Contract and be liable for it ultimately, but it does not mean that the plaintiff could not agree with the defendant to share the expenses under this obligation.  No matter how hard the defendant was trying to downplay its use of the site office, it remains the fact that the defendant’s staff did make use of the office to do some work. The actual frequency of the use of the office by the defendant is irrelevant. As long as the parties had agreed to share the Depot Expenses and the site office expenses were included in their contemplation, the defendant has to bear half of such expenses.

44.  In fact, the words “miscellaneous expenses” in the term of the Sub-contract also suggests that the site office expenses were included, as the defendant could not give any plausible explanation on why such words were used.  If, as contended by the defendant, the parties had only in mind of a storage place, there would not be any miscellaneous expenses, even when the defendant could explain away the water and electricity expenses.  The explanation given by the defendant is that this term covered some kind of contingent compensation or penalties, but I do not accept that such an explanation is reasonable in the context of the Sub-contract.

45.  Thus, I agree with the plaintiff that when all the factual matrix of the case including the intention and understanding of the parties are taken into account, the word “depot” in the Sub-contract does cover the site office in question, and hence the defendant is liable to pay half of the site office expenses.

Credibility of the witnesses

46.  Both parties have argued at length on the credibility of the witnesses.  I do not find it necessary to go into depth of their arguments.  Suffice to say is that I accept Mr Ma’s evidence being more credible than those of Mr Chan or Mr Lee, as Mr Ma’s evidence is well supported by contemporaneous documents as aforesaid.  I therefore find Mr Ma’s account of the events to be the truth of the matters and reject Mr Chan and Mr Lee’s evidence.

Conclusion

47.  In the circumstances, I find that the plaintiff has proved its case against the defendant, and the plaintiff is entitled to the reliefs as claimed.

48.  Thus, I order that the defendant do pay the plaintiff the sum of $505,879.64 together with interest thereon at judgment rate from the date of judgment until payment.

49.  There be a costs order nisi that the defendant do pay the plaintiff costs of the proceedings including those costs that have been reserved and counsel’s certificate to be taxed if not agreed.