XCHRX SZETO WAI MAN t/a TAT WO ENGINEERING CO. v. YIU WING CONSTRUCTION CO. LTD.

HCA 4424/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 4424 OF 2000

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D E C I S I O N

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1. This is the Plaintiff's appeal against the order of the Master dated 14 December 2000 whereby unconditional leave to defend was given to the Defendant.

2. The Plaintiff brings this action against the Defendant for the sum of $359,400.00 (together with interest and costs) being the alleged outstanding balance of the price for work done. The Plaintiff alleges that by :

(1) an agreement made in January 1999, the Plaintiff agreed to supply labour to perform plastering work at a construction site in Tseung Kwan O, New Territories at $850 per man day ("the 1st agreement");

(2) an agreement made in July 1999, the Plaintiff agreed to sub-contract plastering work at the said site for the lump-sum price of $220,000.00 ("the 2nd agreement").

3. The Defendant resists this claim on the following grounds :

(a) in breach of an express term of the 1st agreement, the Plaintiff failed to provide qualified workers holding Tradesman Certificate issued by the Construction Industry Training Authority (CITA) but provided unqualified and inexperienced workers instead;

(b) breach of the 1st agreement in that :

(1) the quality of the Plaintiff's work was not up to the standard required by the Housing Society, the employer of the said site;

(2) the Defendant's work was delayed;

(c) despite the Plaintiff's remedial work, the defects were not rectified.

4. The Defendant also alleges that it suffered a loss estimated at more than $500,000.00. It further states that the sum of $100,000.00 (which the Plaintiff said was partial payment) was in fact paid in full and final settlement of any sum due to the Plaintiff. The 2nd agreement is denied by the Defendant.

5. The Plaintiff argues in this appeal, in essence, that the Defendant's allegations are unbelievable. The evidence said to be in support of this argument comes from the following documents:

(1) the denial of the 2nd agreement is unbelievable because of exhibit "SWM-7" which is a document signed by the Defendant's supervisor, Chan Kwong Yuen, on 3 August 1999;

(2) the Defendant's own document dated 5 August 1999 (exhibit "SWM-8" which the Plaintiff agrees at the appeal hearing is related to the document at (1) above) shows that the Defendant acknowledged $186,100 is due to the Plaintiff. The Plaintiff deposed that this sum was related to the 2nd agreement: see paragraph 21 of the 2nd affirmation of Szeto Wai Man dated 19 October 2000;

(3) a comparison of the wage records related to the 1st agreement (exhibit "SWM-1") and those related to the 2nd agreement (exhibit "SWM-7") shows that the amounts acknowledged by the Defendant are quite different. This shows that the wage records covered different kinds of work, namely, work under the 1st agreement and work under the 2nd agreement;

(4) exhibit "SWM-3" shows that the employer, the Housing Society, only requires 20% of the contractors' plasterers to be qualified. This casts doubt on the Defendant's allegation that 100% of the plasterers should be qualified.

6. The Plaintiff also points out that there is a complete lack of particulars and documents in support of the Defendant's allegations. The part payment of $100,000.00 in November 1999 (so the Plaintiff says) also casts doubt on the Defendant's case that it has suffered loss which supposedly would exceed the Plaintiff's claim (more than $500,000.00 compared to the Plaintiff's claim of $459,400.00 before the part payment is taken into account).

7. I agree that there is a general lack of particulars in the Defendant's evidence, especially as regards the alleged delay. Mr Payne for the Defendant levied a number of criticisms against the documents exhibited by the Plaintiff. However, they are not supported by evidence adduced by the Defendant. In fact, there has been a complete lack of response from the Defendant after the Plaintiff has produced these supportive documents in his reply affirmations. Mr Payne also submits that the contents of the documents dated 3 August 1999 and 5 August 1999 (exhibited as "SWM-7" and "SWM-8") either completely or partially overlap with those of the disputed invoices set out in his "Summary of 'Man Days' Invoices". I do not accept this submission because the document on which the hand-writing of Carol Lam (the Defendant's staff) appears (exhibit "SWM-8") shows that different reference numbers were given by her to the various items (and corresponding amounts) appearing therein. They therefore could not have been referring to the same subject matter.

8. In view of the above, and bearing in mind the well-known test for determining O. 14 application set out in the Court of Appeal decisions (which need not be recited again here), I find that the defence put forward by the Defendant is unbelievable.

9. Having said that, I note that the document dated 5 August 1999 (which is relied upon by the Plaintiff in this appeal) states that the sum due under the 2nd agreement is $186,100.00 and not $195,000.00 as the Plaintiff claims in paragraph 6 of the Statement of Claim. Leave to defend ought to be given for the Defendant to defend the claim relating to $8,900.00 ($195,000.00 - $186,100.00). Taking into account the whole circumstances of this case, leave to defend ought to be conditional upon payment of that sum into court. I shall hear the parties as to the time for doing so and as to other directions (if any). Subject to that, the appeal is allowed and partial final judgment in the sum of $350,500.00 ($359,400.00 - $8,900.00) is entered in the Plaintiff's favour against the Defendant.