GLOBAL BRIGHT ENGINEERING LTD v. CWF PILING & CIVIL ENGINEERING CO LTD

HCMP 1242/2006

in the high court of the

hong kong special administrative region

court of appeal

MISCELLANEOUS PROCEEDINGS no. 1242 of 2006

(on AN INTENDED appeal from DCCJ NO. 930 of 2004)

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REASONS FOR JUDGMENT

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Hon Rogers VP:

1.  This was an application for leave to appeal from a judgment of HH Judge H. C. Wong given on 7 April 2006.  The matter before the judge was a claim in respect of 2 building contracts.  The defendant was the main contractor.  The plaintiff was a sub-contractor in respect of two sub-contracts.  The first sub-contract was in respect of the supply and installation of soil nails and the second was in respect of the supply and installation of mini-piles.  The judge gave judgment in favour of the plaintiff for the sum of $218,911.46.  That was after taking into consideration the value of the work done in respect of which the plaintiff was claiming the balance of payments due and damages for the delay and other charges which the judge held the defendant was entitled to.  At the conclusion of the hearing, leave to appeal was refused.

2.  In opening the application Mr Chik, who appeared on behalf of the plaintiff both on this application and at the trial in the court below, presented his case on the basis that the proposed appeal was one as to fact.  The primary basis of the appeal was that the judge had been wrong to hold that the plaintiff should be held liable for 14 days delay and in, consequently, awarding liquidated damages of $280,000 and additional costs of $103,679.64 due to delay caused as a result of the rectification of the defective mini-piles.

3.  In the course of a lengthy and detailed judgment, the judge examined the defendant’s case of claims in respect of delays caused by the plaintiff’s defective work and by the plaintiff failing to rectify that when requested to.  Originally the defendant had claimed in respect of 117 days delay.  That was subsequently reduced in the amended defence and counterclaim to 29 days.  The judge held that the defendant was responsible for 14 days delay.  Mr Chik criticised this on the basis that it had become known to the defendant that the plaintiff’s work was defective, at least to some extent, as early as 15 May 2003.  He placed great stress on paragraph 72 of the judgment where it was said that;

“...when preparing the loading test for mini-piles CP18-P1 and CO10-P3 that the steel bars of the mini-piles had been installed without the centralisers and spacers.”

4.  However, Mr Chik also drew attention to what was, apparently, conceded namely that, as set out in the defendant’s letter of 1 December 2003 (in a passage immediately following a statement in the same terms as that quoted above) when the defendant had carried out pile works from August to October 2003 it discovered similar defects in other mini-piles during excavation.

5.  On that basis it seems to me that the judge was justified in coming to the conclusion that the plaintiff was responsible for 14 days delay.  If the judge accepted that it was not until October 2003 that the defendant was fully aware of the extent of the defendant’s defective work, then there can be no point that the defendant had failed to mitigate its loss earlier.  In paragraph 79 the judge had said:

“Therefore, the total period of delay of completion of the main contract should be between the permitted the extension of the contract completion date of 8^th October 2003 and the date of practical completion of the works certified by the architect (page 451) i.e. 4^th November 2003.”

6.  The judge clearly did not attribute, as apparently the defendant would have wished, all that period of delay to the plaintiff.  Clearly the judge made a balanced finding taking into account all the relevant facts.

7.  I regret I see no basis upon which this court could interfere with the finding of fact in relation to the responsibility for 14 days delay.  Once that finding of fact stands the plaintiff’s argument in respect of the charges and costs which follow from the 14 days delay must fail.

8.  The only other matter related to a total of amount of $13,000 in fines that had been imposed on the plaintiff.  It is the plaintiff’s case that these fines had been included not only as a separate item, No.5 in the contra charges, but they had also been included under the heading No.1 of the contra charges: “materials and services”.  This point appears to have been taken in the pleadings: see paragraph 77 of the amended defence and counterclaim in which this item is raised and in paragraph 36B of the amended defence to counterclaim.  Unfortunately this matter appears to have been overlooked and it was not dealt with in the judgment.

9.  I regret that I could not see that it would be right to give leave to appeal on this point alone.  A discrepancy of $13,000 in the calculation of the amount of the judgment would not merit an appeal to this court where the costs and indeed the irrecoverable costs, even of the plaintiff, would no doubt far exceed that.

10.  For these reasons for leave to appeal was refused.