LAW KIN BONG TRADING AS K.B. LAW & ASSOCIATES v. 中國鐵路工程總公司 AND ANOTHER

HCCT20/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTRUCTION AND ARBITRATION PROCEEDINGS NO. 20 OF 2009

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D E C I S I O N

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1.  The Plaintiff applies for specific discovery of:

A.  Un-redacted version of the final account (“the Main Contract Final Account”) of the subject building project, including an un-redacted version of the revised Engineer’s certificate no. 72;

B.  Volumes 5 and 6 of the Main Contract; and

C.  Un-redacted version of Shu Kee’s sub-contract interim certificate payment no. 32.

2.  The existence, custody and possession of the documents are not in dispute.  The Defendant has provided the redacted versions for these Classes.  The redacted parts are said to contain confidential commercial information and not relevant to the present dispute.

THE PRINCIPLES

3.  There is nothing objectionable against provision of redacted copies that black out commercially confidential figures.  To decide whether the un-redacted version should be disclosed, the ultimate question is still one of relevance: G.E. Capital Corporate Finance Group Ltd v. Banks Trust Co & ors [1995] 1 WLR 172.

THE FACTS

4.  The Defendant was the Main Contractor and the Plaintiff was the Sub-Contractor of the subject project.  The Plaintiff’s claims are for (i) outstanding payments under the Sub-Contract; and (ii) reasonable payments under a Termination Agreement.  The claims comprised the original works, variations, idling costs, prolongation costs and loss of profits.

5.  The Defendant disputes both liability and quantum.  One of the issues concerns the terms of the Sub-Contract.  The Plaintiff’s case is that the Sub-Contract was orally made.  The Defendant’s case is that it was governed by a letter dated 27 August 2003 and that the alleged variations were in fact covered by the Sub-Contract.  It is not in dispute that on either party’s version of the Sub-Contract, a Bill of Quantities applied, which related to specific works undertaken by the Plaintiff.

CLASSES A AND B OF THE DOCUMENTS

Bases of the Application

6.  The Defendant has purportedly produced the documents with redaction of all rates assessed by the Engineer.  The Plaintiff wants the full set un-redacted. 

7.  The Plaintiff claims that there had been variations outside those scope of work in the Bill of Quantities.  Without sight of the final accounts, the Plaintiff will be unable to say whether those variations constituted a matter under the Main Contract or under the domestic contract between the parties.

8.  Further, under the Termination Agreement, the Plaintiff was entitled to reasonable quantum for the work done.  The relevant terms of the Defendant’s version of Sub-Contract provide for the Sub-Contractor’s claims to be calculated on a “back-to-back” basis with the Contractor’s same claims under the Main Contract.  If there is any dispute as to the rates, the rates shall be determined by that finally assessed by the Engineer less 15%.  Accordingly, the Plaintiff submits that even on the Defendant’s version of the Sub-Contract, the figures assessed by the Engineer in these classes of documents are still relevant to the question of quantum.   Production of the redacted version shows that Defendant admitted the documents to be relevant but it is really the redacted figures that are required for the fair disposal of the action.

9.  The documents produced were incomplete in that they covered only extracts of Bills 9.3 and 9.4 with variations thereof but not all items set out in the Bill of Quantities.

10.  As to Volumes 5 and 6 of the Main Contract, they contain the Main Contract Bills of Quantities.  The Plaintiff’s position is that the rates provided therein for the Defendant are highly relevant to the fair assessment of the reasonable payment for works under the Termination Agreement. 

11.  As to the Engineer’s certificate no. 72 (revised), the Plaintiff’s position is that this formed part of the Main Contract Final Account.

Grounds in Opposition

12.  The Defendant contests these Classes on the following grounds.

(i)   Irrelevance to the pleaded issues;

(ii)  Fishing expedition;

(iii)  Better discovery has been provided by the Defendant;

(iv)  Evidence not required for expert’s opinion.

(v)  Averment on oath that there was nothing relevant.

Relevance to the Pleaded Issues

13.  It is not in dispute that relevance is to be defined by the pleadings.  Mr Wong, counsel for the Defendant, rightly points out that there is no alternative claim by the Plaintiff for assessment based on the Defendant’s version of the Sub-Contract.

(i)      Appendix A to the Amended Statement of Claim (“ASOC”) pleaded the special damages for the variations.  The defence is that those items were included in the Sub-Contract. 

(ii)     Appendix C to the ASOC pleaded the special damages for idling costs and prolongation costs.

(iii)    Appendix D to the ASOC pleaded the value of work done by the Plaintiff under the Sub-Contract (excluding the variation, prolongation costs and idling costs).

14.  Insofar as the question of quantum is concerned, the Plaintiff is therefore asking for damages on his pleaded figures.  The bases for those figures are unclear (e.g. it is not clear whether they were based on practice or past dealings).  There is no alternative plea that the assessment should be on the Defendant’s version of the Sub-Contract.  There is no application as yet to amend the claim.  Therefore, how the Engineer assessed the work done under the Main Contract Final Account or the rates contained in Volumes 5 and 6 of the Main Contract are not relevant to the issues or needed for the fair disposal of the cause.

15.  This ground of opposition is valid.

Fishing Expedition

16.  In respect of the Main Contract Final Account, Mr Wong submits that the Plaintiff’s application is a fishing expedition. 

17.  The recurring theme of the Plaintiff’s case was that the Defendant failed to assess his variations as per his 2 versions of oral Sub-Contract.  Therefore, he was entitled, on back-to-back basis, to the Engineer’s assessment under the Main Contract, less 15%.

18.  Mr Wong, however, points out that the Plaintiff only on site for 8 months and disappeared after 30 April 2004.  He made several vague requests for payment before a “letter before action” was issued in February 2009.  Mr Wong pointed out that there could not have been any assessment in the Main Contract Final Account of the Plaintiff’s various claims because:

(i)   The claims under an “oral Sub-Contract” were only formulated by the Plaintiff by in his Statement of Claim in May 2009.  The new version of the “oral Sub-Contract” on which such claims were based were formulated even later in October 2010.

(ii)  Therefore no corresponding claim was, or could be, submitted to the Engineer under the Main Contract when the Plaintiff left the site in early May 2004.

(iii)  The Engineer therefore has never made an assessment under the Main Contract.

(iv)  Despite requests by the Defendant, the Plaintiff himself could not produce any contemporaneous documents by which he had asserted the present claim prior to the action.

19.  I agree with Mr Wong that these 2 Classes of documents will not be able to show assessment of the Plaintiff’s work.  Having regard to the lack of alternative plea for assessment based on the Defendant’s version of the Sub-Contract, I agree with Mr Wong that the Plaintiff’s application is a fishing expedition.

Better Discovery Provided by the Defendant

20.  The Defendant has left the site a lot earlier than when the works were completed. Therefore insofar as the Final Account sets out all the final measurements, that will not assist the Court.  Mr Wong also points out that better discovery has been provided to the Plaintiff already in the form of site diaries to assist him in assessing the value of his work.  I agree with him.  This ground of opposition is valid.

Evidence Not Required for Expert’s Opinion

21.  The order of Mr Justice Saunders dated 12.4.2011 provided for (in paragraph 6) expert evidence to be obtained from quantity surveying experts as to the measurement of work completed by the Plaintiff (excluding the variations, idling costs and prolongation costs) up to the Plaintiff’s departure from the site on 2 May 2004, in accordance with the one-page Sub-Contract Bill of Quantities signed by the Plaintiff.  There was, however, no requirement for the present Classes of documents for the expert’s assessment.  This ground of objection is valid.

Averment on Oath That There Was Nothing Relevant

22.  Finally, the Defendant’s solicitors have deposed to the fact that the Main Contract Final Account does not contain any of the prolongation and idling claim assessed by the Engineer suspected by the Plaintiff to be relevant. There is nothing to contradict this averment and that is conclusive.

CLASS C – SHU KEE’S SUB-CONTRACT INTERIM PAYMENT CERTIFICATE NO. 32

23.  The Plaintiff claims that it had done the blast protection doors whereas the Defendant claims that it was Shu Kee (another sub-contractor) who provided them.  The extent of works and payments to Shu Kee in this regard are highly relevant to quantum. 

24.  To this, the Defendant says that it has disclosed the relevant document to show that payment (with figures) re blasting doors had been made to Shu Kee.  The Defendant’s solicitors had examined the un-redacted version and confirmed on oath that there was only one relevant item for “provision of labour and plant to erect blasting door at North Portal” with an amount supplied and that there was no mention in that document of Shu Kee having erected a (or half of a) blast door at the South Portal.  Other irrelevant items have been redacted.  There is nothing from the Plaintiff to contradict this piece of evidence and that in my view must be taken to be conclusive.  Mr Zimmern accepts that he cannot take his case on this class of documents further.

CONCLUSION

25.  The Plaintiff has not made out a case of relevance on any of the Classes of documents and I dismiss his summons.

26.  There shall be summary assessment of costs on the papers on 16 January 2012 at 9:30 am.  No attendance is required. The Defendant shall file and serve its statement of costs by 6 January 2012.  The Plaintiff shall file and serve his grounds in opposition by 13 January 2012.

27.  I express my special thanks to Mr Zimmern and Mr Wong for having summarized the facts so succinctly and focused well on the core matters in their arguments.