SINOFAITH ENGINEERING LTD v. HOMWELL HOLDINGS LTD t/a JOIN WELL CONSTRUCTION ENGINEERING CO

DCCJ3785/2012

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 3785 OF 2012

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JUDGMENT

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1. This is the plaintiff’s claim against the defendant for outstanding payment in the sum of $940,305.76.

2. On 19 March 2015 the defendant filed a Notice to Act in person.  On the day of the trial, the defendant was absent.  Since the plaintiff is legally represented and all documents filed were in English, I decided to conduct the proceedings in English.

3. The plaintiff called 2 witnesses.  The expert report is adduced in evidence without being required to give oral evidence.

Background

4. The defendant (“Joinwell”) was the principal sub-contractor of the construction and renovations project at 14-18 Dorset Crescent and 1B Cornwall Street Kowloon Tong commissioned by The Church of Jesus Christ of Latter-day Saints Hong Limited.

5. The plaintiff (“Sinofaith”) was Joinwell’s sub-contractor and responsible for carrying out works set out in Bill No 3 – External Works of the Bill of Quantities (“External Works”).  The price charge by Sinofaith for the works is set out in the annotated copy of the Bill No 3 (“the Agreement”) (see Bundle pages 194 – 203).

6. Sometime since July 2009, Sinofaith and Joinwell agreed that variation works (“Variation Works”) would be done.  These are set out in Sinofaith’s final payment application dated 19 May 2011 (Bundle pages 268-275). 

7. Joinwell paid Sinofaith a sum of $2,039,882.80 for the sums due under the Agreement and the Variation Works. Sinofaith claims there are still sums outstanding under the Agreement and Variation Works.  

8. The outstanding sum as pleaded in the Re-Amended Statement of Claim is $995,706.01.  However counsel for Sinofaith concedes they should adopt the figures set out in the expert report and therefore now only seek to claim a sum of $940,305.76.

9. Despite repeated demands, Joinwell has failed to pay the said outstanding sum.

Discussion

10. In its Amended Defence and Counterclaim, Joinwell does not dispute Sinofaith was engaged to carry out the external works and the variation works.  The main dispute lies in the quantum of those works.

11. Since Joinwell chose not attend the proceedings, no evidence was called for and on behalf of Joinwell to prove the matters raised in its Amended Defence and Counterclaim. In such circumstances, I find Joinwell is unable to prove the assertions made in its Amended Defence and Counterclaim.  

12. I therefore dismiss Joinwell’s counterclaim against Sinofaith.

13. I now deal with Sinofaith’s case and whether it is able to prove its case.  

14. I have considered Sinofaith’s evidence and the submissions of counsel. I find Sinofaith’s witnesses to be credible and reliable.  Furthermore, I accept the valuations using the method of calculation proposed by Sinofaith as being the proper and accurate valuation of the External Works and Variation Works completed by Sinofaith.

15. By reason of the matters set out above, in addition to the matters not disputed by the parties as deduced from the pleadings, I find the following facts:-

(1)    Sinofaith completed the External Works and the Variation Works as set out in Appendix B of the expert’s report.  Such works were completed under the instructions of Joinwell.

(2)    The parties agreed that the value of the works completed by Sinofaith will be calculated in accordance with the actual work done.

(3)    The correct valuation of the External Works and the Variation Works are set out in the expert report as follows:-

(a)     According to the measurement principles of the Trade Practice as adopted by Sinofaith, the total value of the works done by plaintiff is $2,000,825.31 and the Variation Works are valued at $922,468.90.

(4)    Up to the date of the trial, Joinwell has only paid Sinofaith a sum of $2,039,882.85 for the external works and variation works.

(5)    There are no further sums that should be deducted from the payment due to Sinofaith.

(6)    Sinofaith is not liable to Joinwell for any sums relating to the External Works or Variation Works.

16. I note Sinofaith’s claim of $940,305.76 is based on the calculations set out in counsel’s closing submissions at paragraph 100.  However I note counsel has erroneously cited the figure of $2,057,719.71 as being the value of the external works as assessed by the expert according to Sinofaith’s method of calculation. The correct figure should in fact be $2,000,825.31.

17. Hence according to the valuations set out in the expert report, the sums owing to Sinofaith should be:-

Value of external works assessed by the expert according to Sinofaith’s method of calculation	$2,000,825.31
Add: the value of Variation Works assessed by the expert according to Sinofaith’s method of calculation	$922,468.90
Less: the payment made by Joinwell	($2,039,882.85)
Sum still outstanding to Sinofaith	$883,411.36

18. I therefore find Joinwell liable to pay Sinofaith the outstanding sum of $883,411.36 pursuant to the Agreement and the subsequent agreements for variation works.

19. I therefore order the defendant to pay the plaintiff a sum of $883,411.36.  The said sum shall bear interest at judgment rate from the date of the issuance of the writ of summons until full payment of the said sum.

Costs

20. Since Joinwell’s counterclaim is dismissed and Sinofaith has succeeded in its main claim, I award costs of the action and the counterclaim be to the plaintiff, with certificate for counsel.

21. The plaintiff applied to have the costs summarily assessed and submitted a statement of costs for the purposes of costs assessment. 

22. Having considered counsel’s submissions, I allow Sinofaith’s application for summary assessment and I order that the costs of this action and the costs of the counterclaim be to the plaintiff, with certificate for counsel, summarily assessed at $370,000.