YK CONSTRUCTION CO LTD v. RICH ENGINEERING LTD

HCA 56/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 56 OF 2005

______________________

_________________________

__________________________

Assessment of Damages

__________________________

Background

1. The plaintiff claimed for damages for breach of contract in respect of a building project at 148-150 Nga Tsin Wai Road.  In that project the plaintiff was the main contractor whilst the defendant was the sub-contractor responsible for the electrical installations.  It was alleged that the defendant had not completed the work on time, and/or that some of the work was defective.

2. The plaintiff obtained interlocutory judgment on liability in default of defence on 29 March 2005.

3. The plaintiff issued an Inter-partes Summons dated 3 October 2005 for directions for the hearing of the assessment of damages.  The Summons was heard by the Practice Master that very afternoon.  A representative of the defendant company, Mr Wong Ka Fai was present.  According to the notes of the Practice Master (Master J Wong) no leave was given for him to represent the defendant company because Mr Wong Ka Fai did not qualify under the rules as he was not a director of the defendant company.

4. The Practice Master directions on 3 October 2005 in respect of the hearing of the assessment of damages.  Although he was not given leave to represent the defendant company, Mr Wong Ka Fai was present and should have been aware of the directions given by the Master.

5. The defendant company did not renew it's application, and the hearing before me on 26 July proceeded in the absence of the defendant.

The amount claimed

6. Mr Ho Yuen Sum the project manager of the plaintiff gave evidence at the hearing, and explained how the plaintiff's claim in the amount of $236,812.70 was computed in paragraph 2 of his supplemental witness statement.  The plaintiff sought payment for the sums (discussed below as ("a") and ("b")); the total of the sums sought were then deducted from the contract sum of $1,888,000 together with the sum of $1,795,912.70 already advanced to the defendant; leaving the claimed amount of $403,972.70.

The evidence

7. Mr Ho deposed that he had worked on the project in question and had personal knowledge of the items claimed.  He explained the circumstances relating to the claim (a), that is, $260,000 for the purchase of a 200k VA Emergency Generator.  I accepted Mr Ho's evidence that the defendant company had contracted to provide this generator, but failed to do so, therefore the plaintiff was compelled to purchase and install one before the building could pass fire inspection.

8. Mr Ho also explained the computations at paragraphs 2 and 4 of his supplemental witness statement dated 20 July 2006.  He conceded that the sum claimed from the defendant therein was different to the sum claimed in paragraph 7 of the Statement of Claim filed on 8 November 2005.  As the plaintiff was content to pursue the lesser sums stated in the later document, leave was given and the assessment continued on that basis. 

The costs of rectification or remedial works totaling $68,900

9. Mr Ho then explained the costs of 6 items of rectification or remedial works listed in paragraph 4 of his supplemental witness statement.  (These were the ("b") items referred to in paragraph 6 above).

Item 1 related to an access card reader for the 18^th floor costing $3900. He relied on a quotation from the supplier, and deposed that the access card reader had been paid for, and installed by the plaintiff.  I accepted his evidence that it was done and the sum a reasonable one. 

Item 2 related to the remote control device of the carpark costing $4500.  He made reference to a quotation from the supplier, and deposed that the device had been paid for, and installed by the plaintiff.  I accepted his evidence that the work was done and that the sum was a reasonable one. 

Item 3 was a claim for $4000, being the cost of a 17" television monitor to be installed in the management office.  It transpired that the plaintiff was merely claiming for the cost of a TV monitor they were planning to install.  Mr Ho explained that the main contract stipulated 2 TV monitors, but the defendant had only installed one. Since the plaintiff had not yet completed the job, the plaintiff agreed to withdraw the claim for this item.

Item 4 related to a "Satellite TV Disk Installation Safety Certificate" at the cost of $10,000.  Mr Ho explained that the defendant left the job site before completion of the work.  He explained that unless the work was completed, and the safety certificate obtained, use of the satellite disk would be against the law.  I accepted his evidence that it would be necessary to obtain such a certificate, and that it was necessary to spend $10,000 sought in order for the inhabitants to use the satellite legally.

Item 5 related to 26 electric locks costing $1500 each. He explained that the defendant had failed to install these.  He referred to a quotation from the supplier, and deposed that the locks had been paid for, and installed by the plaintiff.  I accepted his evidence that the work had been done and the sum of $39,000 for 26 locks to be a reasonable one. 

Item 6 related to 3 Detex locks costing $1500 each. He explained that the defendant had failed to install these.  He referred to a quotation from the supplier, and deposed that the locks had been paid for, and installed by the plaintiff.  I accepted his evidence that the work had been done and the sum of $7,500 for these 3 special locks to be a reasonable one.

Costs

10. I voiced my concern that this claim should properly have been brought in the District Court, and I would only allow the plaintiff costs on the District Court scale.

11. The sum claimed was so modest that I decided to, and did assess the costs of the action on a gross sum basis pursuant to Order 62 rule 9(4)(b) so that there would be no need for the plaintiff to attend another hearing for the purpose of taxation of the costs of the action. 

Conclusion

12. The damages payable by the defendant to the plaintiff is $232,812.70. together with interest thereon.

13. The costs of this action taxed on a gross sum basis on District Court scale is assessed at $14,700.00.