WU YIN FAI v. NG KAM TONG

DCCJ 6305/2002

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 6305 OF 2002

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JUDGMENT

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1. The Plaintiff claims against the Defendant for breach of contract for failure to complete the construction work on her house within the agreed time and for defective work performed rendering her house unfit for habitation.

2. The Defendant denies that he was in breach of the oral contract and counterclaims for the payment of the balance of the contracted lump sum payment agreed and for the additional work done.

Background

3. The Plaintiff is and was the registered owner of a three-storey residential house situate at 72 Tseung Kwan O Village, Sai Kung, New Territories ("the suit property").

4. It is common ground that the Plaintiff and the Defendant entered into an oral agreement in or about early December 2001 that the Defendant would carry out certain refurbishment and renovation work at the suit property at the lump sum price of $540,000.

5. The oral agreement is evidenced by an undated quotation in writing submitted by the Defendant to the Plaintiff setting out the work to be performed and the lump sum price of $540,000. It is not disputed that work commenced in early December 2001.

6. It is common ground that the Plaintiff at the request of the Defendant paid 3 instalments of a total of $450,000 between December 2001 and February 2002 as part payment to the Defendant. $200,000 of which was paid before commencement of work, $150,000 was paid in January 2002 and $100,000 on 5th February 2002.

7. The Plaintiff moved into the 1st and 2nd floors of the suit property on or about 10th February 2002 although the work was incomplete. The Plaintiff complained of the delay and the defects in the completed part of the work, evidence of such complaints in writing can be found in the three letters from the Plaintiff to the Defendant in June 2002 (p. 266, 267 and 271-273 of the bundle).

8. The Plaintiff ("Madam Wu") obtained a survey report on the work done by the Defendant on 19th July 2002. The Defendant ("Mr. Ng") obtained his own survey report on 28th April 2003.

The Plaintiff's Case

9. Madam Wu wished to renovate her house and to supplement her income by letting out the ground floor of her 3-storey house in Tseung Kwan O Village after her divorce in September 2001. The work would involve complete reconstruction of the staircase from the ground floor up to the 1st floor and internal staircases from 1st floor to 2nd floor and 2nd floor to roof-top where the kitchen would be relocated. She further required the installation of a living room, a bedroom and bathroom on both the ground and 1st floors, 3 bedrooms to be located on the 2nd floor, and a shower to be housed under the staircase.

10. Mr. Ng's mother and sister are friends of Madam Wu, they and Mr. Ng are neighbours of Madam Wu in the same village. At Mr. Ng's mother's suggestion and recommendation, Madam Wu offered the job to Mr. Ng to carry out the said renovation work after informing Mr. Ng of her requirements. Mr. Ng gave Madam Wu a written quotation for the job (p. 195 of bundle) at a price of $540,000. This was accepted by the Plaintiff after she orally specified certain details to the Defendant. These details were recorded on her copy of the quotation which she showed to the Defendant (p. 120 of bundle). They included the requirements of renovation work on the roof and walls to render it free from leakages, the installation of windows in green colour, the installation of window grilles, marble windowsills and tiles on the front of the house.

11. She specifically asked that work be completed before the Chinese New Year so that she could move into a fully renovated house before the Chinese New Year. It is her evidence that the Defendant had agreed to it.

12. She then moved into rented premises owned by Mr. Ng's mother for a period of 2 months at $6,000 per month to enable the Defendant to carry out the renovation at the suit property in early December 2001.

13. The renovation work did not finish before the Chinese New Year, Mr. Ng only managed to complete the work on the 1st and 2nd floor on 10th February 2002. It was Madam Wu's evidence that in spite of the failure to complete the renovation work before the Chinese New Year, she had to move back to her house because the Defendant's mother had already rented out to another tenant the accommodations let to her in December 2001. By 5th February 2002, Madam Wu had paid a total of $450,000 to the Defendant at his requests.

14. The work resumed on 22nd February 2002, the 11th day of the Chinese New Year. She complained to Mr. Ng during this period about the steepness of the stairs, the cracks on the walls and ceilings and the untiled parapet wall on the roof top.

15. Though the quotation price of $540,000 was inclusive of materials, Madam Wu had to purchase and pay for some of the items which the Defendant failed to obtain and she spent a total of $10,843 on window grilles, bathroom accessories and locks etc.

16. In early March 2002, Mr. Ng told Madam Ng the work was almost complete and asked for the balance of the lump sum price of $90,000. The Plaintiff refused to pay the balance because of the incomplete and defective work.

17. Madam Wu complained that shortly after 9th March 2002 she found water bubbles, air holes and cracks on the walls. In late March 2002, she found water seeping through the windowsills on the ground floor on rainy days. Damp and mouldy patches on the ceiling of the living room and bedroom of the ground floor appeared. The problems worsen in April 2002.

18. Mr. Ng returned to rectify the defects in late April 2002, in spite of such attempts, the damp and mouldy patches appeared again in May. Problems appeared in the form of bubbles on the wall below the window in one of the rooms on the 1st floor and the base of the doorframe of the bathroom had turned black. Mr. Ng returned to fix the problems on a few occasions but the problems recurred after a short while.

19. In June and July 2002, Madam Wu found the CD cabinet in the rear room on the 2nd floor damaged by water seepage from the window behind the cabinet. On 27th July 2002, the electricity supply was cut off on the ground floor. Madam Wu was told by the electrician that it was caused by water leaking into the electricity cable tube installed by the Defendant from the external wall of the suit property.

20. In early September 2002 damp patches appeared on the wall of the rooftop structure erected by the Defendant after a heavy rainstorm.

21. Madam Wu claimed that she had repeatedly complained to Mr. Ng about the steepness of the staircases, but Mr. Ng told her in January 2002 soon after the staircase between the 1st and 2nd floor was formed that the problem would disappear after the tiles were laid. She accepted his explanation but soon complained again to the Defendant about its steepness on 22nd February 2002. She claimed that she, her two sons and her niece had skidded and fell on the staircases due to their steepness. Her niece had to be taken to the hospital for treatment after one of such falls on 14th September 2002.

22. It is the Plaintiff's evidence that because of her complaints, Mr. Ng had returned on a number of occasions between March and June 2002 to rectify the defects at the suit property including the cracks on the walls and the water seepages. However, the problems only got worse with time. After failing to get any positive results, she sought professional legal advice in the second half of June 2002.

23. Madam Wu claimed that Mr. Ng inspected the suit property on 22nd June 2002 and erected scaffolding at the rear of the property on 26th June 2002 without prior notice. She requested Mr. Ng to specify the remedial work he intended to perform at the suit property but he failed to do so. Mr. Ng took some pictures at the suit property and on 28th June 2002, he returned and drilled two holes on the ground floor. The Plaintiff thereupon gave him two letters, one of which was a list of work to be performed which she asked the Defendant to complete. The Defendant refused to do so. After that incident, he removed the scaffolding.

24. The Plaintiff claims the return of the sum paid of $450,000 or alternatively the costs of repair of the defects at the suit property and the loss of rental on the ground floor and alternative accommodation during the repair of the defects.

The Defence Case

25. The Defendant, Mr. Ng adduced evidence from his sub-contractor Mr. Cheung Sik Ching on the construction of the staircases at the suit property. It is Mr. Ng's evidence that he had visited the suit property with the sub-contractor Mr. Cheung in December 2001. After the visit, he gave Madam Wu a written quotation for the renovation work for a lump sum price of $540,000. He had at the outset informed Madam Wu he would only be responsible for the painting work himself. He claimed that the renovation work was performed at the instructions of the Plaintiff.

26. Mr. Ng claimed that after the demolition work was done, Madam Wu had given instruction to move the planned 1st floor kitchen to the roof-top and to add a LPG shed to the back of the ground floor with connecting hoses. Further, the lighting installations were additional work for they were never part of the quotation; only the electricity fuse box, meter and light switches were included in the agreement.

27. The Defendant agreed that the contract between Madam Wu and himself was a lump sum contract, but he denied it was a design and build contract. He admitted that there was no timetable for payment of the contract price or the number of instalments payable other than the initial instalment payment of $200,000.

28. Mr. Ng further claimed that though Madam Wu expressed the wish for completion before the Chinese New Year on 12th February 2002, he had informed her it would not be possible due to the shortage of time. He had only agreed he would try to complete the work on the 1st and 2nd floor before the Chinese New Year. At the hearing, he claimed his estimated work should take 3 months or 13 weeks to complete and the earliest date for completion would be 11 weeks or 65 working days.

29. He claimed he had advised Madam Wu against the erection of straight staircases in place of the originally planned spiral staircases. That he had informed her that the straight staircases would be steep and steps short, but Madam Wu insisted and instructed that straight staircases should be erected after their shapes were marked out on the walls and shown to her.

30. According to Mr. Ng, on 7th March 2002 the renovation work had practically completed and he demanded for the payment of the balance of $90,000 and $26,200 for the additional work done. Madam Wu agreed to pay him after completion of the work and the installation of the electricity meter.

31. Mr. Ng admitted that there were water seepages at the suit property and eventually did have the electricity meter installed in June 2002. He further claimed that he had carried out repair work between April and June 2002 upon Madam Wu promising to pay the balance of the contract price upon completion of repair work. However, Madam Wu refused to pay in spite of the repair work undertaken and had further refused to allow the Defendant and his workman entry to perform the repair work in June and insisted upon his acknowledging the list of defects drafted by her. Mr. Ng made no admission to the Plaintiff's list of defects; he claimed the list was exaggerated and untrue.

32. The Defendant counterclaims for payment of the balance of $90,000 and additional work at $26,200.

Expert evidence

33. The Plaintiff and the Defendant each adduced evidence from their respective surveyors on the condition of the suit property. The Plaintiff's surveyor was Mr. Kenny Kong Siu Man of DCL Consultants Ltd. ("Mr. Kong"), and the Defendant's surveyor Mr. Patrick Lau Wing Wai formerly of Vigers ("Mr. Lau"). Mr. Kong's report was prepared on 23 July 2002 while Mr. Lau's on 14 June 2003.

34. The findings of the Plaintiff's surveyor, Mr. Kong, was that defects were found generally:

A. In the exterior,

1.	failure to seal the pipe work that passed through the external wall resulting in rain water seepages from the exterior into the ceiling of the house;
2.	water test on the external walls showed serious water pounding at the joining on window hoods which may be the cause of water seepages;
3.	incomplete window sealant had been applied;
4.	water ingression shown in the inside of the cover of the wall light at the rear external wall;
5.	missing mosaic tiles on the surface of the roof parapet wall;

B. At interior of the house,

6.	at the ceiling of the ground floor living room two damp and mouldy patches caused by rainwater seepage into the ceiling light area from the toilet wall;
7.	damp patches on the wall of the bedroom on the 1st floor;
8.	damage to the CD cabinet in the 1st floor bedroom by water seeping through the window;
9	damp patches found in the vicinity of the bedroom window on the ground floor due to water seepage through the window;
10	the staircases from 1st floor to 2nd floor and 2nd floor to 3rd floor failed to comply with Regulation 39 of the Building (Planning) Reg. Cap. 123 Subsidiary Legislation F, for they exceeded the statutory specification of treads of 175 mm x 225 mm and width of not less than 900 mm causing hazard to their users;
11	the stair walls were not in proper alignment exceeding reasonable tolerable standard;

C. General furnishing:

12.	the internal wall and ceiling plastering work was poor in material and workmanship, crazing cracks appeared in most of the ceilings and walls and cracks were found at the junction along the ceilings and walls on 2nd floor;
13.	mould on the ceiling of the living room and bedroom on the ground floor;
14.	the wall tiles in the bathroom of the 2nd floor were poorly laid exposing sharp edges;
15.	the refrigerator plinth in the kitchen of the ground floor was made with timber;
16.	the shower cubicle on the 2nd floor was wrongly positioned for the shower door to be installed;

D. Metal work

17.	the stainless steel doors at the front and rear walls of the house were rusting at the bottom, door hinges and locks within 3 months of installation;

E. Electricity work

18.	the switch (fuse) box on the roof is found to be sub-standard;
19.	the air-conditioning switches in the bedrooms of the 2nd floor and roof were inappropriately located.

35. The repair work suggested by Mr. Kong is set out in pages 9 to 11 of his report; the total cost estimated is $285,100.

36. The Defendant's surveyor Mr. Lau reported no serious incomplete work at the suit property but he agreed that defects were found in several areas. (para. 6.1 of report at p.139 of bundle).

37. He agreed there were incomplete work consisting of missing tiles at the roof parapet wall and insufficient paint coatings on the staircase wall on the ground floor.

38. He agreed with Mr. Kong's findings that at the exterior of the house: the sealant between the window frame and wall was substandard on the 2nd floor bedroom, rusty stainless steel doors on the ground floor, water droplets inside the cover of the wall light at the ground floor rear wall; substandard sealant work between the drain pipe and the wall at the rear external wall on the ground floor.

39. While inside the house, Mr. Lau agreed hairline cracks were found on the ceiling of the bedroom on the 2nd floor; crazing cracks were found on the living room wall on the 1st floor; a further crack was found on the 2nd floor of the bedroom ceiling; rough edges on the wall tiles at the 2nd floor bathroom and timber was used to construct the concrete plinth on the ground floor kitchen.

40. Mr. Lau agreed that the staircases do not comply with the statutory requirements but suggested that exemption could have been applied for prior to construction work. He further suggested that the misalignment of the walls of the staircases might have been caused by the alignment of the external wall of the house although he did not investigate if the external walls were misaligned.

41. He agreed the damp patches were caused by water seepages at the wall below the window in the bedrooms on the 2nd floor and the gap between the rear external wall and pipe bracket or due to seepages via the window frame.

42. He did not consider the location of the switch on the opposite side of the window air conditioner should affect its operation. He rated the renovation work 97% completed and estimated that the defects may be repaired at a cost of $100,000.

Findings

43. The defects found by both the Plaintiff's and the Defendant's surveyors are similar. The Defendant himself admitted there were defects and he had been attempting to fix the defects between April and June 2002. The list of defects is long, judging from which it is quite apparent that the renovation work was not up to standard. Mr. Lau and Mr. Kong estimated the cost of repair differently. Major differences in the two lists of repairs are the costs of repairing the misaligned and steep staircases and the reapplication of sealant on windows and the electricity cable tube entry point on the external wall. As suggested by Counsel for the Plaintiff, I shall not go into the question of whether the work was defective in detail save as to say any building work with unsafe staircases, leaky windows and ceilings, cracks appearing on the walls and ceilings within a couple of months of completion cannot be considered as satisfactory work of renovation. Should there be just one or two minor defects or unfinished items, the job may be accepted as complete, but where they are in such large numbers and degree, the job cannot be accepted as practically complete. For this reason, I reject Mr. Lau's assessment of 97% completion by the Defendant.

I. Is the Renovation Contract a design and build contract?

44. Mr. Lau submitted that the renovation contract between the Plaintiff and the Defendant was not a design and build contract. However, I find the background evidence from Madam Wu and Mr. Ng clearly indicated that the renovation contract was a design and build contract.

45. Chitty on Contracts vol. 2 para. 37 - 003 states that:

" Work, material and design. Construction contracts involved the provision of work (also referred to as labour and, more recently, services) and materials (including goods, plant or equipment). In addition, construction contracts usually involve an element of "design", a ubiquitous and imprecise term which is often a source of dispute. At its lowest level, design involves the choice of appropriate materials and working methods, where not specified in the contract. An another level, design includes determination of the detailed physical characteristics of the building or works to comply with stated requirements or performance criteria. Such a contract is usually termed "design and build" but there are many intermediate stages. Similarly, "management" is comprehended to some degree in all construction contracts. Where this is the primary contribution of the contractor, who is intended otherwise to sub-let all physical work, the arrangement is usually called a "Management Contract".

46. The evidence of Mr. Ng was that he undertook the painting work; he sub-contracted the cement/concrete work to Mr. Cheung, while other sub-contractors did the plumbing and electricity work. He admitted to have been at the suit property almost on a daily basis. Mr. Cheung admitted that on the occasions when he discussed the construction of the staircases with Mr. Ng and when he marked out the staircases in ink Madam Wu was present. However, he admitted that he had taken instructions only from Mr. Ng. On the other hand, Madam Wu admitted to have a primary education only and knew little about building construction or renovation, she had agreed to engage Mr. Ng on the recommendation of Mr. Ng's mother and his sister. She understood Mr. Ng was a building contractor and she had admired his work at Mr. Ng's sister's house involving the construction of a cockloft. Had Mr. Ng declared he was only a painter to Madam Wu and would only be responsible for the painting work at the suit property, it is unlikely Madam Wu would entrust the job to him. His role is indicated by the fact that Mr. Cheung when constructing the staircases had consulted Mr. Ng and take instructions only from him.

47. On the balance of probability, based on the evidence before me, I am satisfied that at the recommendation of Mr. Ng's mother who had been her friend of over 10 years, Madam Wu agreed to appoint Mr. Ng to take up the renovation job. Mr. Ng accepted the appointment and on the next day, attended Madam Wu's house where they went through her renovation requirements. Mr. Ng then gave her a written quotation for the renovation job on the house for a lump sum price of $540,000. Madam Wu agreed to it after making certain amendments and clarification of the work involved which she had written down in the quotation sheet and shown to Mr. Ng (see p. 120 of the bundle). These clarifications included items to be included in the lump sum price.

48. It is obvious from the evidence that the Plaintiff had relied completely on the skill and judgment of Mr. Ng. She accepted his expertise in renovation work because of what was recommended to her and the work he had performed at his sister's house. From the evidence of Madam Wu and also from the sub-contractor Mr. Cheung, it is obvious that Mr. Ng was consulted at each and every step by both Madam Wu and Mr. Cheung. Though Madam Wu may have been present and acknowledged the ink markings on the walls of the staircases and other details, they were done only after consulting Mr. Ng and accepted at his suggestion. This was a job where no draft plans were prepared with prior approval of Madam Wu, and Mr. Ng would seek the necessary information and requirements from Madam Wu at different stages of the work at the site.

49. Chitty on Contracts, Volume 2, para. 37-013 on p. 518 states that:-

"Design and build contracts. This type of contract may be regarded as broadly a "package deal" as the employer obtains all or substantially all of the design and construction through the contractor although the works may well also involve sub-contractors and a professional team."

Keating on Building Contracts 7th ed. p. 9 para. 1-21 has this to say:-

"In recent times it has become increasingly common for contractors to offer, in addition to building the works, to perform some or all of the duties of architect, engineer or even surveyor, as performed in traditional contracts. The commercial argument for such an approach is either that it is necessary because the contractor alone possesses the specialist knowledge and skill to design and carry out specialist works or, in other cases, that there will be savings of costs or time or both compared with the traditional procedure. Such contracts are sometimes termed 'package deal' contracts."

50. The evidence before me clearly points to a 'package deal' contract. Madam Wu had little experience of renovation work, all she wished to have done to her house was the conversion of the ground floor into a separate unit to be let out for rental income, leaving the 1st and 2nd floor for her and her children's use. The reconstruction of the ground floor to 1st floor staircase was therefore of vital importance, so was the relocation of the kitchen and the waterproofing of the roof and 2nd floor ceiling. These were matters uppermost in her mind as can be gathered from the evidence and her specifications written on the quotation sheet that she showed Mr. Ng (p. 120 of the bundle).

51. Given the aforesaid criteria, she accepted the price of $540,000 demanded for the work to be performed by the Defendant and emphasized to him a few items of importance i.e. on the waterproofing of the roof, the windows and grilles and the wall tiles etc. She had relied on and accepted the Defendant's design, skill, recommendations and judgment from start to finish, believing he possessed the necessary specialist knowledge and to save both costs and time, the 'package deal' was entered into. There is no doubt in my mind, the contract between the Plaintiff and the Defendant was a design and build contract where the Plaintiff relied on the Defendant as her architect, engineer and surveyor.

II. Was there an agreed completion date before commencement of work?

52. The evidence of Madam Wu and Mr. Ng differed on whether there was an agreement as to the completion date. Madam Wu claimed that there was an agreement by Mr. Ng, she would otherwise not have taken out a 2 months' lease on Mr. Ng's mother's property for the duration of renovation work to be performed at the suit property. Mr. Ng on the other hand claimed he had never agreed to any completion date. Mr. Ng's surveyor Mr. Lau in his report on p. 136 of the bundle stated the contractor (Mr. Ng) had anticipated a working period of 12 weeks.

53. After due consideration of the evidence of Madam Wu and Mr. Ng, the correspondences and other documents, I find Madam Wu to be an honest witness and I accept that she was given to understand that the renovation work would be completed before the Chinese New Year falling on 12th February 2002. She had clarified from Mr. Ng this fact before she awarded the contract to Mr. Ng to start work in early December 2001. She was obviously motivated to give the job to Mr. Ng by Mr. Ng's mother who told her she would be able to move into a newly renovated house before Chinese New Year. She then went ahead and took out a 2 months' lease of Mrs. Ng's property for this period. On this basis, I accept Madam Wu's evidence that the parties had agreed the work involved would be completed before the Chinese New Year.

54. Based on my finding that there was an agreed completion date, it is not necessary to make any further findings as to what is a reasonable time for completion of work. It is obvious that the increase in manpower would speed up the time required to complete the work. It has also not escaped my notice that according to the evidence adduced, the cost of construction of a brand new house of this size was expected to be between $800,000 - $1 million, it follows that the renovation costs of $540,000 should have taken into account the costs for additional manpower required to complete the renovation work within 2 months from early December 2001 to early February 2002.

55. The authors of Chitty on Contract have this to say in para. 37-071 and 072:-

"Fitness of works. There will be a further implied warranty that the work carried out by the contractor will on completion be reasonably fit for its particular purpose where: (1) the employer makes known to the contractor the particular purpose for which the building is required; (ii) the work is of a kind which the contractor holds himself out as performing; and (iii) the employer relies on the contractor's skill and judgment. The scope for the implication of a warranty as to fitness for intended purpose will vary considerably depending upon the nature of the express obligations of the contractor. Where the express obligations of the contractor are broadly in the nature of "design and build" obligations, then there will be far greater room for the implication of the warranty as to fitness for intended purpose."

56. I find Madam Wu had relied on the expertise of Mr. Ng throughout. Her letters to Ms. Ng in June clearly expressed her disappointment and dissatisfaction with the quality of the work he performed at her house. These letters supported her claim that she was not told by Mr. Ng that he was just a painter and would only be responsible for the painting work on this job.

57. Furthermore, the two surveyors' reports showed defects that any experienced and competent builder should be able to avoid. It is inconceivable that any owner would accept the long list of defects set out in the surveyors' reports, particularly, when the renovation cost for a village house of this size (400 sq. ft.) was not a small amount but a lump sum of $540,000.

The Staircases

58. The staircases clearly failed to comply with Reg. 39 of the Building (Planning) Regulations Cap. 123 which states:-

"39. Staircases

(1) Every building which exceeds 1 storey in height shall be provided with a staircase or staircases to give access to upper floors unless there is separate access to such upper floors.

(2) The main staircase of every building which exceeds 4 storeys in height shall be continued to the roof of the building unless a secondary staircase of fire escape is provided.

(3) The main staircase of every building which exceeds 1 storey in height shall-

(a) have a clear height of not less than 2m;

(b) have a clear width of not less than 900mm;

(c) be constructed with treads not less than 225mm in width (measured at the centre of the flight) from the face of one riser to the face the next riser and with risers not exceeding 175mm in height;

(d) have not more than 16 steps in any flight without the introduction of a landing;"

59. The measurements of the two staircases taken by Mr. Kong (p. 290 of the bundle) clearly demonstrated that Reg. 39 (3) (c) had not been complied with. I do not accept Mr. Dawes' submission that the implied term of the contract that the staircases built should comply with building regulation and be safe for use could be overridden by express agreement of the parties. In any event, the parties could not have agreed to waive the statutory requirements when neither admitted they had any knowledge of the statutory requirements in the first place. As this is a design and build contract where Madam Wu had relied on the skill and judgment of Mr. Ng, there is an implied warranty that the work done would be reasonably fit for its purpose. Mr. Lau, surveyor for the Defendant claimed that exemption for Reg. 39 compliance may be applied for before work commenced; unfortunately, no such evidence of prior or subsequent exemption had been adduced at the hearing.

60. Item 2 of the written quotation submitted by Mr. Ng to Madam Wu clearly indicated that the staircases might be straight or spiral. This supports Madam Wu's evidence that she had initially asked for two internal spiral staircases for the 1st floor to 2nd floor and 2nd floor to the rooftop. If Mr. Ng had already decided on internal spiral staircases at the initial stage, he would not have put down under item 2 the alternative choice of straight staircases.

61. As Madam Wu had relied on the expertise of Mr. Ng to design and build the staircases, it is not opened to Mr. Ng to deny liability by blaming his unsuspecting customer Madam Wu for accepting his advice on the poor design and defective construction of the finished structures which failed to comply with building regulations and are unsafe for use.

62. As para. 1-24 of Keating on Building Contracts observed:-

"In a design and build contract there is ordinarily an implied term that the finished work will be reasonably suitable for the purpose for which the contractor knows it is required."

63. If the staircases erected are unsafe for use due to their steepness and reduced tread, the work cannot be suitable or fit for its purpose and is therefore defective. The misalignment of the staircases only made it worse. As neither survey report investigated the aspect of the external walls, it is impossible to conclude that the misalignment of the staircases was due to the external walls of the house as suggested by the Defendant.

Other Defects

64. Defects such as leakages due to poor application of sealant on the walls and windows, poor insulation of the roof leading to leakages in the ceiling of the 2nd floor, door less shower, thin paint coatings, timber plinth in the kitchen, rusty stainless steel doors etc. were all attributable to the Defendant's unprofessional and sloppy workmanship. An example of Mr. Ng's lack of professional judgment can be found in the erection of the shower underneath the staircase, the installation of a shower door had clearly not been taken into account before construction work commenced.

III. Was the Plaintiff unreasonable to refuse the Defendant's offer to rectify the defects?

65. There is a long list of defects in the renovation work undertaken by Mr. Ng; most of these had begun to appear in April 2002 within one month of his alleged 'practical completion' in March 2002. Mr. Ng admitted to have returned on a number of occasions to the suit property to fix the defects between April and June 2002. However, these efforts were clearly ineffective. It was not until late June that Madam Wu decided to ask Mr. Ng to sign a list of the items of defects that he would rectify. I am satisfied that Madam Wu had given Mr. Ng reasonable time to complete the work and to perform the remedial work at the suit property between April and June 2002. It is reasonable for Madam Wu to conclude at that stage that Mr. Ng either lacked the necessary expertise to render the roof and ceiling of the suit property waterproof or had economised on the use of materials such as paints and sealants. In either case, Madam Wu was reasonable not to trust Mr. Ng any further without a clear specification of the remedial work he would undertake at the suit property in late June 2002.

66. Based on the aforesaid findings, I am satisfied on a balance of probability, that the Defendant's renovation work was far from practically complete or substantially complete. The Defendant's counterclaim must fail.

67. The Defendant is entitled to be paid on a quantum meruit basis though the contract was a lump sum contract and the Defendant was in breach for the delay in completion and poor quality of work. I am satisfied that remedial work should be performed and the Defendant should be liable to the Plaintiff for the costs of such remedial work. The above conclusion is reached following the Court of Appeal case of Big Island Contracting (HK) Ltd. v. Skink Limited CACV No. 198 of 1989.

Quantum of Damages

68. On the Plaintiff's claim for remedial work and unfinished work at the suit property, I find Mr. Lau had greatly underestimated the remedial costs. His estimates were clearly unrealistic. I am satisfied that Mr. Kong's estimate of costs is reasonable. I allow damages claimed under this head at $285,100.

69. I also accept the evidence of Madam Wu that the accessories purchased by her were items that the Defendant had included in his original quotation of $540,000. These items were specified in her own handwriting and the shower door and window grilles amongst other items should be included in the lump sum price, the only exception is the sum of $1,800 conceded by the Plaintiff for the two LPG hoses. I allow the claim under this item at $9,043.

70. On the other hand, I find the Plaintiff had failed to prove she would be able to let out the ground floor unit at $4,500 p.m. The size of that unit is small at approximately 350 sq. ft., no rental valuation had been satisfactorily adduced. Further, she also failed to show that she had put the unit in the open market. Her brother Mr. Wu's own valuation cannot be considered as an open market value. There was no evidence that she had contacted any estate agent for that purpose.

71. As to the rental during renovation period at $7,000 x 3 = $21,000; it is not disputed that Madam Wu had rented accommodation from Mrs. Ng before in December 2001 and January 2002, it is reasonable for her and her family to move out of her home for the remedial work to be done and I allow it in full.

72. Cost of removal at $7,000. I find this item to be reasonable and I also allow it in full.

73. Conclusion: Judgment to the Plaintiff in the sum of:-

Costs of repair work	$285,100.00
Costs of accessories and materials	9,043.00
Costs of rental	21,000.00
Costs of removal	7,000.00
Total	$322,143.00

74. Interests on the costs of accessories and materials at half judgment rate from date of writ to date of judgment, thereafter at judgment rate.

75. Cost nisi. Costs to the Plaintiff to be borne by the Defendant to be taxed if not agreed with certificate for counsel.