TANG SIU t/a HUNG KWONG & CO. v. STAR CENTURY TECHNOLOGY LTD.

HCA 1376/1996

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1376 OF 1996

____________

____________

_______________

J U D G M E N T

_______________

1. The plaintiff claims against the defendant the sum of HK$396,480.00, being the balance for the price of work done and materials supplied in the construction of the Hua Hsia Building at No. 66 Gloucester Road, Wanchai, Hong Kong between December 1994 and March 1995. The total amount for the work done and materials supplied as stated in the final invoice issued by the plaintiff was HK$1,101,974.50. The balance outstanding after taking into account the part payment of HK$440,000.00 was HK$661,974.50. It is the plaintiff's case that by a subsequent agreement of the parties in October 1995, they had agreed to reduce the amount invoiced from HK$1,101,974.50 to HK$836,480.00. Hence, after deducting the part payment of HK$440,000.00, the defendant should pay the plaintiff the amount of HK$396,480.00 as claimed.

2. The defendant, a body corporate, was initially represented by solicitors. These solicitors obtained leave to cease to act a month before the trial date. The defendant has not sought leave for it to be represented by one of its directors and it has not taken part in the trial.

3. The defendant has not disputed that work was carried out by the plaintiff pursuant to an agreement made between the parties in late 1994 and early 1995 and that such agreement was made partly orally and partly contained or evidenced in writing. No issue was raised as to the quality of the work done and materials supplied. What was raised in the Defence and in the witness statement served by the defendant was that the defendant had disputed the prices of various items of work given in the four quotations submitted by the plaintiff, the defendant had also disputed the amounts for various items of work in the four invoices issued by the plaintiff, so that there was no agreement between the parties as to the prices for various items of work done or, at any rate, not in the amounts as invoiced by the plaintiff. Further, in respect of the variation works carried out by the plaintiff, the defendant has alleged that the parties had agreed that the unit rates for such works were to be agreed later by the parties and that no agreement was reached. It was denied that the parties had reached an agreement subsequently to reduce the contract sum to HK$836,480.00.

4. The above allegations are all denied by the plaintiff. The plaintiff has obtained an expert report in July 1996 from a firm of surveyors who provided an assessment as to the work done and an opinion as to the reasonable value for such work. The purpose of this report is to demonstrate that the amount charged by the plaintiff was at a fair commercial rate at the time and that the plaintiff should be entitled to a reasonable remuneration as found by the surveyor in case the court should hold that there was no agreement between the parties regarding the prices of certain items of work. The defendant has not provided any expert report in this respect pursuant to the directions of the court in June 2000.

5. The evidence adduced by the plaintiff may be summarised as follows. The plaintiff's son, Mr Tang Kin Hung, was the person in charge of the project in question. In November 1994, he had a meeting with the defendant's director, Mr Sam Yim, during which Mr Yim gave him a copy of a document headed "Addendum No. 1" for the plaintiff to give a quotation on the items of metal work requested. As no detailed drawings or plans were given to Mr Tang, he could only give preliminary quotations for some of the items. The figures thus quoted by Mr Tang were accepted by Mr Yim.

6. Shortly after the initial meeting, the defendant provided drawings and plans for some of the items mentioned in Addendum No. 1 to the plaintiff on various occasions. As the defendant was pressed for time and to expedite matters, the plaintiff was requested to start work on those items for which the prices had been agreed. Accordingly, the plaintiff commenced work on or about 28 December 1994 and carried on discussions with the defendant as to the details of the work to be carried out and submitted further quotations to the plaintiff as and when further information and drawings were provided by the defendant. It was in those circumstances that the plaintiff sent quotations to the defendant on 13 January 1995, 16 February 1995 and 12 March 1995. In each instance, there was agreement by the defendant of the quotation before the plaintiff started work on the items covered by such quotation.

7. From time to time, the plaintiff issued interim invoices to the defendant for the work done and received payment in part. Interim invoices were issued on 16 January 1995, 16 February 1995 and 7 March 1995 and, as stated earlier, a total of HK$440,000.00 was received from the defendant.

8. During the progress of the work, Mr Yim and the project manager of the defendant, Mr Mok Wan Mo, had given oral instructions to Mr Tang to carry out alterations on the work done and additional works. For these items, Mr Tang did not submit written quotations but he had provided to the defendant verbal estimates. These estimates were agreed to by the defendant before the plaintiff started to carry out the variation work.

9. According to Mr Tang, there was nothing unusual about this method of carrying out work without a written quotation because the parties had dealings with each other before and Mr Yim had been in business with the senior Mr Tang, the plaintiff herein, in running another company which had since been dormant.

10. Upon completion of the works in March 1995, the final invoice dated 27 March 1995 was issued to the defendant. The outstanding balance of HK$661,974.50 was not settled for several months. No complaint though was raised by the defendant regarding the final invoice. Eventually, Mr Tang went to the defendant's office on or about 16 October 1995 to chase for payment. There, he was given a copy of the final invoice with various markings made by the defendant and the effect of that was to reduce the balance on that invoice from HK$661,974.50 to HK$5,236.00. Mr Tang did not accept the proposed reduction. The parties negotiated and the defendant came up with another proposal to reduce the balance to HK$22,482.00. This was also rejected by Mr Tang. As Mr Tang was anxious to obtain payment from the defendant, he agreed with some reluctance to accept a reduction for some items of the project and he marked on a copy of the invoice what the reductions were. The total amount after reduction as proposed was HK$836,480.00 leaving a balance outstanding of HK$396,480.00. The defendant agreed to present this figure with its own accounts to the main contractor for calculation and payment.

11. As no payment was received from the defendant notwithstanding the agreement to reduce the contract sum, the plaintiff issued a writ against the defendant in February 1996.

12. As the defendant has not taken part in this trial, there is no evidence to rebut the evidence given in the witness statement of Mr Tang which has been ordered to stand as evidence in chief at the trial. I accept the above evidence and find in favour of the plaintiff that the work done and materials supplied as stated in the final invoice dated 27 March 1995 were the subject of an agreement between the parties. I further find that the agreement was varied subsequently in October 1995 whereby the total amount as invoiced was reduced and that the plaintiff is entitled to payment in the sum of HK$396,480.00 as claimed.

13. I therefore give judgment to the plaintiff in the sum of HK$396,480.00 with interest thereon at the rate of 12% per annum from the date of the writ being 1 February 1996 until judgment and at the prevailing judgment rate from the date of judgment until full payment. I also order the defendant to pay the plaintiff's costs of this action, to be taxed if not agreed.