WAI MING (LING'S) ENGINEERING CO LTD v. K.H. FOUNDATIONS LTD

HCCT 7/2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTRUCTION AND ARBITRATION PROCEEDINGS

NO. 7 OF 2007

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BETWEEN

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J U D G M E N T

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INTRODUCTION

1.  The Defendant in this action was the main contractor for the foundation works at a construction site at Tin Shui Wai Area 101, Phase 2, New Territories (the “Site”).  The employer was the Hong Kong Housing Authority.  The construction works related to 4 buildings (Blocks 6, 7, 8 and 9), a Car Park and a Primary School.  The Plaintiff was the Defendant’s sub-contractor in respect of the pile cap works (the “Sub-Contract Works”).

2.  The contract between the Plaintiff and the Defendant was entered into sometime in June 2001 (the “Contract”).  There is a major dispute between the parties as to what documents constituted the Contract between them.  There is no dispute, however, that:-

(1) the Plaintiff commenced the Sub-Contract Works in June 2001 and completed the works on 15 December 2001;

(2) the value of the Sub-Contract Works done by the Plaintiff amounted to HK$7,160,000; and

(3) the Plaintiff has been paid HK$6,201,614.18, leaving an outstanding balance of HK$958,385.82.

3.  It is the Defendant’s case that:-

(1) the Contract between the parties incorporated a standard form sub-contract of the Defendant (the “Formal Sub-Contract”), under which it was agreed, inter alia, that the Sub-Contract Works to be carried out by the Plaintiff should be completed on or before 28 October 2001 and the Plaintiff was to pay liquidated damages of HK$55,700 for each day of delay in the completion of the works;

(2) the Plaintiff completed the Sub-Contract Works on 15 December 2001, meaning that there was a delay of 48 days; and

(3) accordingly, the Plaintiff is liable to pay liquidated damages of HK$2,676,960 (HK$55,700 per day x 48 days) to the Defendant.

4.  The parties have identified two main issues for determination in this trial:

(1) whether the Formal Sub-Contract was incorporated as part of the Contract between the parties; and

(2) if the answer to (1) is “yes”, which party was responsible for the 48 days of delay in the completion of the Sub-Contract Works.  I should add at this juncture that the Plaintiff does not accept that the Contract stipulated any fixed completion date, and hence the Plaintiff does not accept that there was any “delay” in the completion of the Sub-Contract Works.

5.  On the pleadings, there are other items of claim and counterclaim raised by the parties.  However, the parties have now narrowed down their differences to just one item, namely, the use of “rock fill” to mitigate the effect of the delay in the completion of the Sub-Contract Works, and have also agreed on the quantum of the claim and counterclaim in relation to this item, namely:-

(1) if the Court finds that there is delay on the Plaintiff’s part, HK$72,900.00 is payable by the Plaintiff to the Defendant, but

(2) if the Court does not find that there is delay on the Plaintiff’s part, HK$33,210.00 is payable by the Defendant to the Plaintiff.

BACKGROUND FACTS

6.  On 10 January 2000, the Defendant entered into a main contract with the Hong Kong Housing Authority for carrying out certain foundation works, including piling and pile cap works, at the Site.

7.  In March 2001, the Defendant invited, amongst others, Vanbo Engineering Ltd (“Vanbo”) to act as the Defendant’s sub-contractor and submit a tender for the pile cap works (ie the Sub-Contract Works).  In turn, Vanbo invited the Plaintiff to act as its own sub-contractor to prepare the tender.  Vanbo was represented by Mr Edmond Chan, and the Plaintiff was represented by Mr Ling, a director and shareholder of the Plaintiff, in relation to this matter.

8.  According to Mr Ling, he was given 3 documents by Mr Edmond Chan to prepare the tender.  In particular, one of the documents was a site plan on which were written two dates for completion of the works, namely, 11 November 2001 for Blocks 6, 7, 8 and 9, and 26 November 2011 for the Primary School and Carpark.

9.  The Plaintiff then prepared a tender and submitted the same to Vanbo in late March 2001.  The Plaintiff’s original tender was for an amount of just over HK$8 million.  Based on the Plaintiff’s tender, Vanbo submitted a tender in an amount of over HK$9.5 million dated 30 March 2001 to the Defendant.

10.  Apparently, in March or April 2001, Vanbo found that it did not have sufficient capacity to take up the Sub-Contract Works and, with the consent of the Defendant, invited the Plaintiff to act as the direct sub-contractor of the Defendant.  There is some dispute as to the date on which Vanbo invited the Plaintiff to take over its position, but nothing much turns on this minor dispute of fact.  Apparently, discussion ensued between Mr Ling and the Defendant’s staff regarding the Defendant’s requirements in respect of the Sub-Contract Works.

11.  According to Mr Ling, he was invited by one Mr Pang of the contracts department of the Defendant to go to the Site in the morning on 5 June 2001 to meet Mr Simon Fung, the site manager of the Defendant.  Mr Ling went with Mr Edmond Chan and met Mr Simon Fung at the Site.  Mr Ling saw the site conditions, and there was some discussion regarding the nature and procedure of the works to be carried out. Mr Simon Fung also told Mr Ling that the works were extremely urgent, and explained to him about the work progress requirements according to a “construction flow chart” posted on a notice board in the site office.  Mr Ling said that the construction flow chart did not clearly state the estimated dates for the preparation, submission, examination or approval of the construction drawings, or for commencement or completion of the works.  The construction flow chart did, however, state the estimated number of days for carrying out the works for each block.  Based on the information that Mr Ling had previously received for preparing the original tender, he thought that he would have about 8 months to complete the works (having regard to the fact that he was invited to prepare the original tender in March and the completion dates were in November 2001). Mr Simon Fung did not give evidence about this meeting at the Site, which is not surprising because it appears to be the Defendant’s pleaded case, at paragraph 2(b) of the Re-Amended Defence and Counterclaim, that there was no meeting at the Site on 5 June 2001.  However, in his closing submissions, Mr Calvin Cheuk for the Defendant accepts that a meeting between Mr Ling and Mr Simon Fung did take place at the Site on 5 June 2001.

12.  In any event, there is no dispute that there was a meeting at the office of the Defendant in Mongkok in the afternoon on 5 June 2001.  Present at the meeting were Mr Ling, Mr Edmond Chan, and Mr Simon Fung, Mr Lai and Mr Paul Yu of the Defendant.  Mr Paul Yu was the managing director of the Defendant.

13.  According to Mr Ling, at that meeting, Mr Paul Yu asked him whether he had been to the Site. Mr Ling told Mr Paul Yu that he had and recounted to him what had been discussed at the site meeting earlier on that date.  After some discussion on technical issues, Mr Paul Yu suggested that the parties should enter into a contract immediately so that the Plaintiff could deliver machinery to the Site and start work on the next day (6 June 2001).  Mr Paul Yu reiterated that the works were very urgent and requested Mr Ling to do his best to co-ordinate with the Defendant and supervise the works personally so that the works could be commenced and completed as soon as possible.  Mr Ling told Mr Paul Yu that he would do his best to complete the works as soon as possible. However, Mr Ling says that Mr Paul Yu did not stipulate any definite date for completion of the works.  Since Mr Ling had not brought along with him the company chop of the Plaintiff, it was agreed that the contract would be signed on the following day, ie 6 June 2001.

14.  On the other hand, according to Mr Paul Yu, there was discussion on (amongst other things) work programmes, specifications, measurement methods, safety issues, general statutory obligations, etc. at the meeting with Mr Ling.  Mr Paul Yu said that during the meeting, he asked Mr Ling whether he had previously worked on any government construction sub-contracts and Mr Ling claimed that he had.  Mr Paul Yu also said that he made it clear to Mr Ling that the Defendant’s acceptance of the Plaintiff’s quotation was subject to the Plaintiff’s acceptance of the terms and conditions set out in the Defendant’s formal sub-contract, to which Mr Ling agreed.  This is disputed by Mr Ling.

15.  It is also Mr Paul Yu’s evidence that the contract sum of HK$7,998,046 was agreed at the meeting on 5 June 2001.  The significance of this piece of evidence is that, according to Mr Paul Yu, the rate of the liquidated damages in the Formal Sub-Contract would depend on (i) the contract sum of the main contract and (ii) the contract sum of the sub-contract.  It follows that there could not have been any agreement between the parties prior to the meeting on 5 June 2001 on the precise amount or rate of the liquidated damages.  Moreover, Mr Paul Yu said that there was no discussion of liquidated damages with Mr Ling at the meeting on 5 June 2001.

16.  I pause to mention that Mr Paul Yu also said that he had previously instructed his staff to contact Mr Ling to discuss about the sub-contract requirements and explain to him about the mechanism for calculating the rate of the liquidated damages, and his staff had told him that those had been done.  In his re-examination, Mr Paul Yu said he had been told by Mr Pang that the details of liquidated damages had been discussed with and agreed by Mr Ling.  However, neither Mr Pang nor any other relevant staff on the Defendant was called to give evidence on the discussion with Mr Ling, and it is not known what (if any) discussion actually took place between Mr Pang or other staff of the Defendant and Mr Ling on the issue of liquidated damages.  I am unable to place any weight on the hearsay evidence given by Mr Paul Yu on this point.

17.  Mr Simon Fung also gave evidence on what transpired at the meeting in the Defendant’s office on 5 June 2001.  He said that at the meeting, a draft master programme (rev Q) was provided to Mr Ling, in which 137 days were allowed for the Sub-Contract Works.  This evidence is disputed by Mr Ling, who said that he had never seen the master programme (rev Q) at the meeting on 5 June 2001, or prior to the signing of the contract on 6 June 2001 (as to which see below).

18.  The version of the master programme (rev Q) produced at the trial is dated 21 June 2001, but I am told by Mr Cheuk that at the meeting on 5 June 2001, the same document, save in respect of the date, was produced.  In the master programme (rev Q) produced at the trial, the dates of commencement and completion of the Sub-Contract Works are stated to be 14 June 2001 and 28 October 2001 respectively.

19.  Mr Simon Fung further said that what happened at the meeting was recorded in a memorandum dated 8 September 2001 from the Defendant to the Plaintiff.  In that memorandum, it is stated that at the meeting, Mr Simon Fung and Mr Lai explained to Mr Ling in detail about the programme of the Sub-Contract Works.  It is also recorded that the parties agreed that the commencement date of the works would be 21 June 2001.  This “record” of the meeting is disputed by Mr Ling.

20.  What is not in dispute, though, is that Mr Ling and Mr Paul Yu met again on 6 June 2001 at the Defendant’s office and signed two documents on behalf of the Plaintiff and Defendant respectively, namely, (i) the Plaintiff’s quotation dated 5 June 2001 (“Quotation”) for carrying out the Sub-Contract Works at the price of HK$7,998,046, and (ii) a letter from the Plaintiff to the Defendant dated 28 March 2001 (“Letter”) setting out various further terms for the carrying out of the Sub-Contract Works by the Plaintiff. It is the Plaintiff’s case that the Quotation and Letter constituted the entire written agreement between the parties.  On the other hand, it is the Defendant’s case that their agreement also incorporated the Formal Sub-Contract as orally agreed at the meeting on 5 June 2001.

21.  Whatever might have been the agreement as regards the formal commencement date of the Sub-Contract Works, as a matter of fact, the Defendant started work at the Site on or shortly after 6 June 2001. Soon afterwards, it became apparent that there would be delay in the carrying out of the Sub-Contract Works.  There are disputes between the parties on the cause or causes of the delay.

22.  On or about 23 August 2001, the Defendant produced to the Plaintiff a letter which the Defendant had previously sent to Vanbo dated 3 April 2001, in which it was stated that Vanbo was required to enter into and be bound by the terms and conditions of the Defendant’s formal sub-contract documents upon acceptance of Vanbo’s tender for the Sub-Contract Works.  Apparently, the Defendant’s purpose of producing this letter to the Plaintiff at that time was to inform the Plaintiff that, like Vanbo, it was required to enter into and be bound by the Formal Sub-Contract.

23.  The Plaintiff responded by letter dated 27 August 2001 to the Defendant, in which the Plaintiff pointed out that it was the Defendant’s direct sub-contractor pursuant to a written contract signed on 6 June 2001 and that the Defendant’s previous communication or understanding with Vanbo had nothing to do with the Plaintiff’s written contract with the Defendant.

24.  Later, the Defendant delivered a set of the Formal Sub-Contract to the Plaintiff at the Site in September 2001.  The Formal Sub-Contract included, inter alia, (i) General Conditions of Sub-Contract, (ii) Special Terms of Sub-Contract, (iii) Bill of Quantities of Sub-Contract, (iv) Appendices, and (v) Main Contact Documents (see Clause 4 of General Conditions of Sub-Contract).

25.  Clause 1 of the General Conditions of Sub-Contract sets out certain details of the main contract between the Hong Kong Housing Authority and the Defendant.

26.  Clause 2 of the General Conditions of Sub-Contract provides (inter alia) that (i) the commencement date of the works was on 21 June 2001, (ii) the completion dates of the works were on 9 October 2001 (for Blocks 6, 7, 8 and 9) and 28 October 2001 (for the Carpark and Primary School), and (iii) the liquidated damages for delay in completion of the works were to be HK$55,700 per day (it is agreed by the parties that the stated figure of “HK$55,7700.00” per day was a mistake).

27.  Clause 3 of the General Conditions of Sub-Contract provides that the provisions of the main contract between the Hong Kong Housing Authority and the Defendant were to form part of the sub-contract between the Defendant and the Plaintiff.

28.  Various other provisions of the General Conditions of Sub-Contract were referred to by the parties at the trial, including Clause 25 (progress of works) and Clause 28 (holidays and overtime).

29.  As a matter of fact, the Formal Sub-Contract was never signed by the Plaintiff.

30.  The Plaintiff completed the Sub-Contract Works on 15 December 2001.

31.  The Writ herein was issued in September 2004, and the trial took place in June 2012, nearly 8 years after the commencement of the action.

WHETHER THE FORMAL SUB-CONTRACT WAS INCORPORATED AS PART OF THE CONTRACT BETWEEN THE PARTIES?

32.  The Defendant’s case that the Formal Sub-Contract was incorporated as part of the Contract between the parties rests on the evidence of Mr Paul Yu that at the meeting on 5 June 2001, there was an oral agreement reached with Mr Ling on behalf of the Plaintiff that the Defendant’s acceptance of the Plaintiff’s quotation was subject to the Plaintiff’s acceptance of the terms and conditions set out in the Defendant’s formal sub-contract.  On the other hand, Mr Ling said that there was no such agreement reached at the meeting, or at any time, with the Defendant.

33.  This dispute between the parties is one on primary fact.  Having considered the totality of the evidence before me, I have decided to accept the evidence of Mr Ling and reject that of Mr Paul Yu on this issue, for the following reasons.

34.  First, I consider that the starting point should be the documents that the parties actually signed on 6 June 2001.  There is no reference in either the Quotation or Letter to the Formal Sub-Contract, and there is nothing in those documents to indicate that the Plaintiff agreed to sign the Formal Sub-Contract or be bound by the terms thereof.  I appreciate that the two documents signed on 6 June 2001 were both prepared by the Plaintiff, but I see no reason why, if there was in fact an oral agreement reached between Mr Paul Yu and Mr Ling as alleged by the Defendant, the Defendant would not insist on including an appropriate provision in either of the two documents or in a separate document signed by the parties to reflect that oral agreement.  In this regard, the Defendant appears to me to be a construction company of considerable size (with a contracts department) and experience in the construction industry in Hong Kong, and presumably would know well on how to protect its rights from a contractual angle.

35.  Second, there is no contemporaneous document which records or reflects the alleged oral agreement reached between Mr Paul Yu and Mr Ling on 5 June 2001.  On the other hand, the “record” of the meeting on 5 June 2001 produced by the Defendant dated 8 September 2001 does not support the existence of such oral agreement.

36.  Third, as soon as the Defendant raised the issue on or about 23 August 2001 that the Plaintiff ought to sign the Formal Sub-Contract, the Plaintiff responded in writing on 27 August 2001 that the documents signed on 6 June 2001 constituted the Contract between the parties. It does not appear that there was any refutation by the Defendant of the position taken by the Plaintiff until much later.

37.  Fourth, it is clear on the evidence that it was only in September 2001 that the Defendant first delivered a set of the Formal Sub-Contract to the Plaintiff.  According to Mr Ling, the Formal Sub-Contract was a long document containing over 200 pages.  From the copy or extract of the Formal Sub-Contract produced at the trial, it is clear that the Formal Sub-Contract was a complicated document containing numerous provisions, some of which would obviously be of interest and significance to the Plaintiff, eg the rate of the liquidated damages which, on Mr Paul Yu’s evidence, could not have been worked out prior to the meeting on 5 June 2001.  It is, I consider, inherently unlikely that Mr Ling would agree to be bound by the provisions of the Formal Sub-Contract at the meeting on 5 June 2001 without having seen a copy of the same.

38.  I pause to add that it is common ground that the Plaintiff has not, even up to now, been given a copy of the main contract by the Defendant although, as mentioned above, the main contract is considered to form part of the Formal Sub-Contract.

39.  Fifth, in paragraph 2(c) of the Re-Amended Defence and Counterclaim, the Defendant’s case on the incorporation of the Formal Sub-Contract into the Contract is put on the following basis:

“In about June 2001, the Plaintiff and the Defendant met and agreed to the carrying out of the foundation construction work (‘the Construction Work’) by the Plaintiff for the Defendant in the site at Tin Shui Wai Area 101 Phase 2, New Territories, Hong Kong (‘the Site’). In the beginning of September 2001, the Defendant had delivered a document titled ‘Sub-Contract’ (‘the ‘Sub-Contract’) to the Plaintiff containing all documents and terms and conditions that the parties had agreed for the Construction Work to be performed by the Plaintiff for the Defendant at the Site. The Plaintiff by its conduct and his willingness to and continue to carry out the Construction Works had thereby accepted the terms and conditions contained in the Sub-Contract.”

40.  It would seem that the Defendant’s pleaded case on the incorporation of the Formal Sub-Contract into the Contract is primarily based on the Plaintiff’s conduct after having received a copy of the Formal Sub-Contract in September 2001 instead of on the alleged oral agreement made by Mr Ling on behalf of the Plaintiff at the meeting on 5 June 2001, although there is a general statement that the Formal Sub-Contract contained “all documents and terms and conditions that the parties had agreed”.  I do not say that the Defendant is precluded by this plea in paragraph 2(c) of the Re-Amended Defence and Counterclaim from advancing the case of an oral agreement made on 5 June 2001, but the focus of the pleaded case does not sit well with the primary case now advanced by the Defendant that there was an express oral agreement reached at the meeting that the Plaintiff would enter into and be bound by the terms of the Formal Sub-Contract.

41.  In reaching my conclusion on this issue of fact, I have taken into account Mr Cheuk’s submission that the Plaintiff’s case is inherently incredible because (amongst other things) (i) the works were urgent and it was unlikely that there was no discussion of the completion date, (ii) Mr Ling did not raise any objection when he came to know in June 2001 after the Plaintiff had entered the Site that the completion date was to be 28 October 2001 (as shown on a construction programme in the site office) notwithstanding his claim that he thought that the completion date would be on 26 November 2001, and (iii) the execution of the Formal Sub-Contract by the Defendant’s sub-contractors was a matter of importance to the Defendant without which the Defendant would not be able to ensure that its sub-contractors would comply with the various obligations under the main contract and further the Defendant could be liable to the Hong Kong Housing Authority for a substantial amount of liquidated damages in the event of delay by its sub-contractors without being able to recover the same from the sub-contractors.

42.  In respect of (i), there is, I think, some force in the argument that it is inherently unlikely that there was no discussion at all on the question of completion date during the 2 meetings at the Site and in the office of the Defendant respectively on 5 June 2001, in view of the fact, as admitted by Mr Ling, that he was told by both Mr Simon Fung and Mr Paul Yu that the works were urgent.  However, even if there was some discussion on the expected completion date of the Sub-Contract Works, I do not accept that there was any agreement by Mr Ling on behalf of the Plaintiff at either of the two meetings on 5 June 2001 with the Defendant’s representatives that the Plaintiff would complete the Sub-Contracts Works on or before any specified date.  If there was some such agreement, it would have been a material term of the Contract and I consider that the Defendant would have inserted a provision to reflect such agreement in either the Quotation or Letter or set it out in a separate document signed by the parties.  I may add that in many subsequent letters or memoranda, for example, those dated 8, 10, 14 and 22 September 2001 and 3 October 2001, sent by the Defendant to the Plaintiff complaining about delay in the carrying out of the Sub-Contract Works, the Defendant in fact referred to completion dates or deadlines falling in November 2001 instead of on 28 October 2001.

43.  In respect of (ii), although Mr Ling accepted in his evidence that he saw a construction programme in the site office soon after the Plaintiff had entered the Site in June 2001 which stipulated a completion date of 28 October 2001, from his point of view the construction programme was not part of the Contract and I see no reason why Mr Ling would necessarily have raised any complaint at that early stage.

44.  Lastly, in respect of (iii), I accept that it was desirable, form the Defendant’s point of view, that its sub-contractors should all sign the Defendant’s Formal Sub-Contract, and it may even be the case that the Defendant thought that the Plaintiff would do so.  However, if the signing of the Formal Sub-Contract was of such importance that the Defendant could not do without it, as mentioned above, I would expect the Defendant to include an appropriate provision in the Quotation or Letter or in a separate document signed by the parties to make it clear that the Formal Sub-Contract formed part of the Contract.

45.  On the question of incorporation of the Formal Sub-Contract, Mr Cheuk also relies on the witness statement of Mr Edmond Chan as hearsay evidence.  Mr Edmond Chan was not called to give evidence at the trial.  In the cross examination of Mr Ling, it was suggested to him that Mr Edmond Chan did not attend the trial to give evidence because he had been persuaded by Mr Ling not to do so.  This was denied by Mr Ling, although he did admit that he had a couple of telephone conversations with Mr Edmond Chan about a week before the trial in the course of which Mr Edmond Chan told him that he did not intend to give evidence in court.  Mr Cheuk did not seek any adjournment of the trial in order to have an opportunity to secure the attendance of Mr Edmond Chan to give evidence.  I should make it clear that I am not criticizing Mr Cheuk for not seeking an adjournment in the circumstances.  The Defendant might have good reasons for not wishing to delay the trial of the action and in any event it was by no means certain that an adjournment if sought would be granted.  The fact remains, however, that Mr Edmond Chan did not give evidence and was not cross examined.  I am not prepared to find that the absence of Mr Edmond Chan from the trial was caused or procured by Mr Ling, nor am I prepared to attach any weight on the witness statement of Mr Edmond Chan on a material issue as to whether the Plaintiff was aware of the Defendant’s requirement that its sub-contractor should enter into the Formal Sub-Contract and had agreed to do so.

46.  In all, I reject the Defendant’s case that the Formal Sub-Contract was incorporated into the Contract.

47.  In his closing submissions, Mr Cheuk sought to run a secondary or alternative case that, instead of the whole Sub-Contract being incorporated into the Contract, only a part of it, namely, the provision regarding the completion date (ie 28 October 2001) was incorporated into the Contract.  This alternative case is based on the evidence of Mr Simon Fung that the draft master programme (rev Q) was provided to Mr Ling at the meeting in the Defendant’s office on 5 June 2001, in which the completion date of 28 October 2001 was stated.

48.  Mr Mike Lui for the Plaintiff objected to the Defendant’s reliance on this alternative case on the ground that it had not been pleaded.  I accept Mr Lui’s pleading objection.  In any event, for the reasons given above, I do not accept that Mr Ling agreed, on behalf of the Plaintiff, to a completion date of 28 October 2001 for the Sub-Contract Works at the meeting on 5 June 2001, and thus I would reject the Defendant’s alternative case in any event.

DELAY

49.  It follows from the above discussion that the Contract did not stipulate any fixed date for completion of the Sub-Contract Works.  The consequence is that the law would imply an obligation on the Plaintiff’s part to complete them within a reasonable time.

50.  It is no part of the Defendant’s case that the Plaintiff failed to complete the Sub-Contract Works within a reasonable time. The Plaintiff’s programming expert, Mr Wong Kwok Sang, has nevertheless considered the question and expressed the opinion that the Plaintiff had completed the Sub-Contracts Works within a reasonable time.  The Defendant’s programming expert, Mr W K Chang, has not considered this issue.  In the circumstances, I do not find that there was delay on the Plaintiff’s part in carrying out the Sub-Contract Works for the purpose of the issue identified in paragraph 5 above.

51.  The above conclusions make it unnecessary to consider the details of the allegations and counter allegations of delay by the Plaintiff and Defendant respectively.

DISPOSITION

52.  I give judgment to the Plaintiff against the Defendant for the amounts of HK$958,385.82 and HK$33,210.00, making a total of HK$991,595.82.

53.  Mr Lui for the Plaintiff asks for interest on the judgment sum at the rate of prime plus 1% per annum, such interest to run from 16 March 2002 (in accordance with the payment provision in the Letter, namely, 3 months from the date of completion of the works) to the date of judgment.  Mr Cheuk does not dispute the interest rate sought, but submits that interest should not be awarded for the whole period from 16 March 2002 on the ground that the Plaintiff has delayed in the prosecution of this claim.  It was agreed in the course of the final submissions that the Defendant would provide the court with a chronology of the proceedings without further submissions by the parties.

54.  I have considered the chronology provided by Mr Cheuk’s instructing solicitors.  The Writ herein was issued in September 2004. Pleadings were closed in November 2004. There were some amendments to the pleadings in 2005 and 2006, discovery took place in 2007, and some witness statements were filed in 2008. The pleadings were further amended in 2008. Apparently, nothing much happened thereafter until January 2010 when the Plaintiff filed a notice of intention to proceed.  The application to set down the case for trial was filed in April 2011, followed apparently by an attempt to resolve the disputes by mediation.  Further discovery was given in early to mid 2012, and the trial took place in June 2012.  The present action is a relatively simple one, and normally it should not take 8 years to bring this action to trial.  I bear in mind, however, that the Defendant also has a substantial counterclaim and thus it should also have been in the Defendant’s interest to press ahead with the action to trial.

55.  On a rough and ready basis, I consider that, with reasonable diligence, the action could be brought to trial within a period of about 21 months from the date of commencement of the action, and I would split the subsequent delay of 6 years equally between the Plaintiff and the Defendant.  Hence, I would award to the Plaintiff interest on the judgment sum at the rate of prime plus 1% per annum from 16 March 2005 to the date of judgment and thereafter at judgment rate to the date of payment.

56.  I also make a costs order nisi that the Plaintiff shall have the costs of the action to be taxed if not agreed.

57.  Lastly, it remains for me to thank counsel for their assistance in this matter.