HUI KIM YUEN t/a HARDWOOD ENGINEERING CO v. TECHNIQUE DECORATION & ENGINEERING CO LTD

HCMP 4281/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO. 4281 OF 2003

(ON APPEAL FROM DDCJ NO. 382 OF 2003)

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REASONS FOR JUDGMENT

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Hon Yeung JA (giving judgment of the Court):

1. On 15 January 2004, we refused the renewed application for leave to appeal. We indicated that we would hand down the reasons of our decision. These are the reasons.

2. The Plaintiff, Hui Kim Yuen, trading as Hardwood Engineering Co. (Hardwood) claimed against the defendant Technique Decoration & Engineering Company Ltd (Technique) for services rendered under four agreements. The total amount of the invoices was $1,163,090.

3. Technique only paid $787,510.55, leaving a balance of $375,579.45.

4. Invoices concerning works done under the four agreements were issued to Technique for settlement from June 2002 to November 2002. The invoices contained detailed description of the works done, the quantities and the unit price.

5. The defence filed by Technique was somewhat unusual.

6. Instead of denying any specific items in Hardwood's invoices, Technique suggested that Hardwood's claim was not admitted on the basis that there were no particulars pleaded in the Statement of Claim. It was also suggested that Technique's employer should accept the quality of the works before its liability to pay arose.

7. Technique drew a distinction between rectification of defective works and variation from the original quoted works. It was suggested that Technique was only liable to pay for the variation works if such works were approved and paid for by the employer.

8. There was vague suggestion that some of the variation works was not requested, instructed or agreed to by Technique and hence Technique had no obligation to pay for them.

9. Technique did not state which items of the works performed by Hardwood were not approved or in any way defective so as to relieve it from the obligation of payment.

10. Despite the supply of further and better particulars of its claim by Hardwood in pursuance to the Technique's requests, Technique still failed to identify which item[s] of the works performed by Hardwood were unapproved, or defective or not accepted by the employer.

11. The dispute went before Deputy Judge M. Wong in the District Court in July 2003. Prior to that date, Technique made two further payments of $13,50 and $3,900 respectively, thus reducing Hardwood's claim to $358,129.45.

12. Having heard the evidence from both parties, the judge found Hardwood's claim proved. In relation to the defence of Technique, the judge made the following specific findings:

(1) On the 1st agreement relating to House 5 and 92 of Casa de Costa, Tai Po: the judge rejected the argument advanced for Technique that a 15% final payment was not payable until the expiration of the six months defect liability period from the date of completion, namely 9 April 2002. The judge pointed out that such defence had not been pleaded and Technique was not entitled to rely on the general denial or non-admission of Hardwood's claim;

(2) On the 2nd agreement relating to the putting up of wooden partition walls and other additional words for the Panda Hotel: the judge pointed out the defence raised was that the quality of the works should be accepted by the employer, yet Technique had not suggested that the employer had rejected any item of the works rendered by Hardwood. No such particulars were presented even at trial. The judge refused to deal with the other pointes not mentioned in the defence such as the failure to charge according to plans, the works performed by Hardwood being unauthorized and the right to withhold 15% as retention money.

(3) On the 4th agreement which again related to Panda Hotel, the judge also pointed out that "Again, no particulars have been pleaded in respect of the works that the Defendant [Technique] alleged were not variation works or not validated by Panda Hotel [the employer]". As Technique did not indicate which items were disputed and there was no evidence that Panda Hotel rejected any of the works, the judge rejected Technique's defence.

13. The judge pointed out that invoices categorizing the works done under the four agreements had been issued to Technique. However, Technique insisted on the appointment of an independent surveyor to assess the works done instead of appointing his own surveyor to challenge Hardwood's claim.

14. On the evidence, the judge accepted Hardwood's case that the works as set out in the invoices had been performed; the prices had been agreed upon or were charged according to the measurement (as agreed) and in the absence of any specific challenge by Technique, Hardwood would be entitled to its' claim in full.

15. Technique sought leave from the judge to appeal against his decision. The judge refused. The ex parte application to the Court of Appeal for leave was also refused by Rogers VP. Technique sought to renew the application before us.

16. In the proposed grounds of appeal, which was completely different from those placed before the judge and Rogers VP, Mr. Simon K.C. Lam argued that the judge had not properly identified the issues; had wrongly ignored the defence of Technique simply because of lack of particulars; and had wrongly shifted the burden of proof to Technique.

17. Mr. Lam suggested that Hardwood's statement of claim was defective and was unsupported by adequate evidence. He also suggested that the judge wrongly prevented Technique from cross-examining Hardwood's witnesses on the invoices.

18. Hardwood's claim was simple, namely that works agreed upon had been performed. Invoices categorizing the works had been issued and sent to Technique. The invoices contained detailed description of the works done and the prices charged. None of the items in the invoices had been challenged in the pleadings.

19. Hardwood's evidence that all the works had been approved and prices agreed upon either expressly or according to the standard scale charge listed in the memorandum for the 1st agreement was accepted by the judge.

20. Clearly in our view, Hardwood had discharged the legal burden of proof.

21. If it was Technique's case that part of the works was defective, unapproved or not agreed upon so that there was no obligation to pay, it must identified those items of works so that the issue could be properly dealt with. Technique was in a position to identify such items with reference to Hardwood's invoices.

22. It simply was unrealistic to expect Hardwood to prove each and every item of works in the absence of any specific allegation.

23. We did not agree with Mr. Lam's submission that in a case such as the present one when Technique did not and could not dispute all the items of works set out in Hardwood's invoices, Technique could simply make a general traverse clause and require Hardwood to prove each and every items of its invoices with full particulars.

24. While accepting that Hardwood still had the burden of proof, such burden could be quite easily discharged and Hardwood did discharge such burden with evidence accepted by the judge.

25. In our views, the judge had dealt with the issues properly and correctly.

26. The judge, not surprisingly, commented adversely on the way in which Technique chose to plead its defence. However, there was no shifting of burden of proof. The judge found Hardwood's claim proved on its evidence.

27. The judge was right in his refusal to deal with unpleaded matters, such as the alleged defective or unapproved works and the 15% retention money. The judge was also right to resist cross-examination of such matters when they had not been specifically pleaded in the defence.

28. None of the proposed grounds of appeal had any realistic prospect of success.

29. The application for leave to appeal was therefore refused.