NG CHEUK HANG v. WAMS DESIGN LTD

DCCJ 171/2018

[2020] HKDC 800

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 171 OF 2018

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JUDGMENT

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1.  This is a contractual dispute regarding decoration work. The plaintiff is one of the co-owners of the flat in question (namely, Room C, 15^th Floor, Tower 15A, Laguna Verde, Hung Hom, Kowloon) (‘the Flat”) and the defendant was the company engaged in the interior decoration of the Flat.

Background

2.  The plaintiff approached the defendant sometime in late 2016 with a view for interior decoration of the Flat. Around October 2016, there was a meeting between the parties with an inspection of the Flat conducted by the defendant. The plaintiff paid HK$40,000 as a refundable proposal fee.

3.  There were subsequent meetings and email correspondence when various conceptual design was developed, and then the contracting agreement was signed on 15 December 2016 (“the Quotation”). There were subsequent revisions of the Quotation but there is no dispute that the final version was fully paid at HK$1.76M.

4.  At some point around January 2017, the plaintiff went with Ms. Karen Mak (or Mak Mei Yuk, the project director of the defendant) (“Madam Mak”) to visit a shop called Patata Kitchen Limited (“Patata”) when certain matters (including regarding the use of Corian) were discussed. There was substantial dispute about what had been said but I will deal with this later.

5.  The work began on 13 February 2017. The plaintiff and his family moved out of the Flat into a rental place at around the same time.

6.  From time to time, any variations or update of the design like new purchases would be dealt with by the defendant issuing “variation orders” with price quotations for the plaintiff to sign. There was no dispute that Variation Orders 1 to 23 were all paid for (being part of the total sum paid).

7.  There was a meeting on or around 2 May 2017. The plaintiff expressed concern with the progress. Both parties agreed that 10 July 2017 would be the deadline for completion. Madam Mak further wrote an email to state that (as translated into English):

“According to what was said in today’s meeting, we give notice that our company will be responsible for accommodation fees in July if it is due to delay caused by our company.”

8.  It is not in dispute that the parties later agreed to a further extension for completion until 15 September 2017.

9.  The defendant altogether paid HK$95,000 to the plaintiff as accommodation fees (or rather, reimbursement of the plaintiff’s rent) and HK$5,050 to the management office as “extra working-days fee” (at HK$100 per day charged by the management office for any days beyond the allowed 90 days of renovation work).

10.  After the handover on around 15 September 2017, the defendant released a “residential handover” letter dated 19 September 2017 to the plaintiff (“Completion Letter”) which, inter alia, stated:

“WAMS warrants all labour and material furnished and work performed…in accordance with the scope of work outlined in the contract documents, for a period of one (1) year from the date of handover on 15 September 2017 and expires on 14 September 2018 will be free from defects due to defective materials or workmanship.

Please provide defect list to us within seven days. Should any defects develop during the warranty period. WAMS will be provided the opportunity to have one of its representatives assess any damage identified to be caused by WAMS employees, contractor and / or material installed by WAMS due to improper material, workmanship, or arrangement, the same, including adjacent work displaced, shall be made good by WAMS at no expenses to the Owner.”

11.  After completion, the plaintiff’s wife raised various complaints to Madam Mak, regarding various defects in particular regarding the Corian installation. According to Madam Mak, she had offered to attend the Flat for inspection and possible remedial work but the plaintiff’s wife asked for HK$5,000 for each day of attendance. Madam Mak thought this was unreasonable so no inspection or remedial work was done.

12.  The defendant issued a “outstanding payment statement” for the sum of HK$66,925 on 21 September 2017 (p.1529 of Trial Bundle G).

13.  The plaintiff has instructed a surveyor as early as 19 September 2017, 4 days after the completion. On 9 October 2017, the plaintiff’s solicitors have written to the defendant with reference to the “defect list” in the Completion Letter and stated that:

“…such defects are too many and cannot be quantified and / or qualify without engaging an independent surveyor. We are instructed that our client has already engaged Hong Kong Survey Limited to perform an independent checking…at the costs of HK$20,000. We are instructed that such costs shall be borne by your company as all the defects are caused by your company.

Due to the fact that the amount of our client’s claim will definitely be more than the purported outstanding payment of HK$66,925.00…we are instructed that our client will not make any payment…as such payment will have been set off by our client’s claim.”

14.  In the same letter, the plaintiff’s solicitors also raised various complaints about the Corian installations, and also that the defendant has still failed to deliver the two “Porro”

15.  The defendant did not reply.

16.  On 4 December 2017, the plaintiff’s solicitors wrote again. This time, they gave a list of defects and claimed a total of HK$175,287.66 plus the HK$20,000 surveyor’s fee, but for the sum to be set off by the HK$66,925.00. The letter also sought the defendant’s confirmation within 7 days whether they would deliver and install the “Porro” furniture and for a warranty certificate from DuPont for the Corian.

17.  It is not in dispute that the “Porro” cabinets have still not been delivered.

18.  The defendant has further issued another 3 Variation Orders (“VO24”, “VO25” and “VO26”) around or after completion. These were disputed by the plaintiff.

19.  The plaintiff took out the current action on 12 January 2018.

20.  The plaintiff claims for:

a)     Overcharging (paragraph 15(a) of the Statement of Claim);

b)    Qualities etc. concerning the Corian installations (and misrepresentations of such) (Paragraphs 15(c), 15(d), 16 and 17 of the Statement of Claim);

c)     Failure to deliver the “Porro” cabinets (Paragraph (e) of the Statement of Claim);

d)    Failure to install metal gratings at certain drains (Paragraph 15(b) of the Statement of Claim); and

e)     Damages for distress etc.

21.  The defendant counter-claims for:

a)   The refund of the plaintiff’s accommodation fee of HK$95,000 and extra working-days fee to the management office of HK$5,050 which were paid by the defendant under coercion; and

b)  Outstanding bills

22.  I will discuss each of these claims and counter-claims individually.

The plaintiff’s claim

Overcharging

23.  The parties have instructed their own surveyor experts and they conducted a counting and measurements of various items installed in the decoration work. These are listed under paragraph 5.1(a) on page 8 of the Joint Expert Report (Page 196 of Trial Bundle B) are not in dispute.

24.  The defendant does not dispute these items but claimed that these were not “overcharging” as the Quotation signed were always for “budget estimation” only (as stated under clause 3 of the Quotation), and “the final quantities should be subject to final measurements” (paragraph 57 of the witness statement of Madam Mak, p.182 of Trial Bundle A). It was her case that she was “prevented” (by the demand of having to pay HK$5,000 per day as stated in paragraph 11 above) from re-entering the Flat after completion to perform the final measurements.

25.  The plaintiff’s expert, Mr. Samuel Wong, conceded under cross-examination, that there was an error in his calculation regarding the size of the wooden flooring. As such, the sum of “overcharging” is now agreed at HK$81,970 which is the sum I would allow.

26.  I will not allow the claim of HK$20,000 being the surveyor fees of the first surveyor instructed by the plaintiff. In my view, this was entirely premature and the plaintiff should have sought any remedial work to be done under warranty first. Proceeding with instructing an expert unilaterally without allowing any opportunity for the defendant to inspect or address any complaints and then demand the reimbursement of such expert fees was not only oppressive, but was clearly detrimental to the chance of an early and amicable settlement of the matter.

Complaints regarding Corian installations

27.  The plaintiff’s case is that during the visit to Patata in around January 2017, he has shown Madam Mak a photograph which Madam Mak identified as “Corian”. Madam Mak further told him that “Corian” installations could be made without visible seams. He then instructed Madam Mak to use Corian to construct:

i) The kitchen (including cabinet panels, kitchen sink and countertop);

ii) Master bathroom sink, countertop and wall panels; and

iii) Guest bathroom sink, countertop and wall panels.

28.  The plaintiff claimed that he saw a sample of Corian panel with a seamless curved upright in Patata and told both Madam Mak and a staff of Patata called Michelle that he wanted this.

29.  It was also the plaintiff’s case that, on that occasion, he also instructed Madam Mak that the material used must be original Corian from DuPont and the installations must be seamless “so that they could serve the purpose of hygienic use and maintenance”. (Paragraph 9 of the plaintiff’s witness statement, p.73 of Trial Bundle A).

30.  The plaintiff told the court that he did not take a photograph of the sample at the time but he returned to Patata in September 2017 and took a photograph of the same sample, which is produced on p.1597 of Trial Bundle G.

31.  However, I seriously doubt the accuracy of these events.

32.  Firstly, I accept the evidence from Madam Mak that the photograph on p.1597 showed an “anti-splash back panel” design for sink counter-tops. This was, according to Madam Mak, a somewhat “old-fashioned” design not in line with the defendant’s style. If the plaintiff had really showed this sample to Madam Mak and said he wanted this, Madam Mak would have taken notice and informed the plaintiff that this would not fit with the defendant’s design style.

33.  Further, both Madam Mak and the defendant’s expert, Mr. Patrick Lau (“Mr. Lau”), agreed that using this curved surface for the joining between the vertical wall panel and the counter-top would present a problem of “收唔到口” (which I take to mean “cannot make the surfaces match or meet”) in places where, for example, the wall panel turns 90 degrees as shown in photograph 3 of p.1180, Trial Bundle E. The same photograph would also illustrate another problem: if this curved surface was used at the junction of the wall panel, the counter-top and the window, the curved surface would encroach on the glass of the window. The same problem would be present whenever the Corian installations join a surface made of other materials (e.g. the stainless steel backings). I accept this.

34.  Clearly, there would be many practical as well as design problems (not to mention being aesthetically incomparable) if the plaintiff had proposed this “anti-splash” curved design for the junction between the counter-top and the wall panel. As such, I would reasonably expect that Madam Mak would be very much concerned and would have immediately recommended against this.

35.  The Patata design plan (p.649, Trial Bundle C) also shows that the junction between the Corian wall panel and the Corian counter-top was at an angle 90 degrees and not at a curve. These design plans have been sent to the plaintiff to be approved and signed off.

36.  It is also clear that the plaintiff was not aware that Patata was a kitchen cabinet maker (using a modular system) but the defendant was in charge of the design. So it would perhaps be conceivable that the plaintiff might have only talked to Michelle, the Patata staff, about that curve design.

37.  As for the dispute regarding the “seamless” nature of Corian, Madam Mak admitted that she had told the plaintiff about this nature of Corian, but she said this was during the visit to Patata when the idea was for the plaintiff to have a feel for the kitchen design and material used.

38.  I accept that being “seamless” would not mean that there would be no joint in the Corian installations: the design would not have allowed one “monolithic” block of Corian forming the whole kitchen wall, counter-top and sink. As Madam Mak stated, even the length of the countertop would not have allowed it to be constructed in one piece as it would not be able to fit inside the lift. The type of joint used would also be subjected to other practical considerations like leaving open panels for access to the toilet system for maintenance purposes, or the need to allow for vibration (e.g. against a window or any mechanism) or heat expansion. The construction method was that various components were taken up to the Flat to be cut and then fitted by using proper hard adhesive or soft silicon sealant.

39.  As an experienced designer, I cannot see why Madam Mak would have, as the plaintiff appear to infer, made any misrepresentation in any attempt to “over-sell” Corian. Indeed, there is no evidence that she has any reasons or motive to do so: the undisputed evidence before the court is that the plaintiff has proposed the use of Corian very much right from the beginning.

40.  I am satisfied that the Corian installations were of reasonable and acceptable quality (as agreed by Mr. Samuel Wong, the plaintiff’s expert, “Mr. Wong”, and Mr. Lau). I also accept that proper and acceptable Corian joining methods were used but if the plaintiff so wished, further work including polishing could make some joints look more “seamless” or, in other words, making the inevitable joints look less visible. The plaintiff has also failed to produce any evidence to support the allegation that there were have any cleaning or hygienic problems for the Corian installations.

41.  It would appear to me that the plaintiff might have some unrealistic expectations regarding Corian and this misunderstanding could have compounded the mistrust after completion.

42.  This mistrust was a great pity because Madam Mak was ready to do any “warranty” work after completion which might have resolved the situation early, but clearly the demand from the plaintiff’s wife that the defendant has to pay the plaintiff HK$5,000 for each day of work was oppressive and totally unreasonable.

43.  The plaintiff’s misunderstanding of the role of Patata also compounded the mistrust when he received the letter from Patata stating that they did not construct the Corian installations. This would have led him to suspect that the Corian were not “DuPont originals”. I accept Madam Mak’s explanation that Patata was only a kitchen cabinet constructor so in any case it has to “subcontract” an authorized Corian contractor to help with the construction.

44.  There is no basis for any complaints that the Corian was not DuPont originals: the letter dated 12 February 2018 from the sole dealer of DuPont Corian, Speed Top (Hong Kong) Limited (p.1558 Trial Bundle G) has settled the matter beyond dispute. There is, therefore, no issue that the plaintiff could obtain any DuPont certificate or warranty on the Corian if such are provided by DuPont. I see no reason why this allegation should be pursued by the plaintiff beyond this time.

45.  I also see nothing sinister about Madam Mak deciding to instruct Natural Art Engineering Company (“Natural Art”), an authorized DuPont Corian contractor, to be in charge of constructing all the Corian installations in the whole Flat (instead of letting Patata instructing its own contractor with the remaining Corian done by Natural Art). I accept Madam Mak’s evidence of the advantage of having all the Corian done by the same contractor, but the mistrust and hostilities between the parties meant that there was no opportunity for such clarifications to be communicated.

46.  I would therefore not allow any claim for damages under this.

Failure to deliver the “Porro” cabinets

47.  There is no dispute on this: the plaintiff has paid but the defendant has not delivered the “Porro” cabinets.

48.  However, I would accept the defendant’s explanation that any delay in ordering was not their fault but was due to the loss of brand dealership by the shop so the defendant needed to order the cabinets via a “grey” importer.

49.  I also accept that “variation order” concerning the “Porro” cabinets (“VO10”, P.1335, Trial Bundle F) dated 31 May 2017 clearly stated:

“Order Lead Time 4.5 – 5 months”

50.  This would put the delivery time at mid-October to early November. Therefore, there is no justification why the plaintiff’s solicitors should complain about the “failure to deliver” on 9 October 2017.

51.  However, at the time of the solicitor’s second letter on 4 December 2017, the cabinets should have arrived and the defendant should have informed them so. If it was the defendant’s position that the cabinets have been delivered and it was willing to complete the installation work (but was prevented to enter the Flat by the plaintiff) (paragraph 23(3) of the Defence, p.34 of Trial Bundle A), it should have informed the plaintiff that the cabinets have arrived.

52.  If the defendant has done so but the plaintiff still refused to take delivery, the defendant could justify a counter-claim for any loss and charging the handling fees as an off-set of this claim

53.  Madam Mak was rather vague about the cabinets: when asked by the court, she only admitted that the cabinets were available for delivery “at that time”. It must be assumed that the defendant has gotten rid of them now. As the defendant made no counter-claim for any loss in the ordering of the “Porro” cabinets, the court would also assume that its has either managed to cancel, return or sold them without incurring any loss.

54.  As such, I think the whole purchase price, that is, HK$132,825 should be refunded.

Missing metal drain grating (and other defects)

55.  I accept that the drain grating would have been there before the renovation work and therefore should be replaced afterwards. I agree with Mr. Wong that the remedial work should be HK$1,600.

56.  The experts also agreed that there were defective wall tiles and although this was not pleaded, the defendant agreed to be bounded by the assessment and pay HK$14,495 for this.

57.  As for the alleged defects of exposed electrical wires for the blind and leaking drain, these were not pleaded and not agreed between the experts. I will therefore not allow such claims.

Damages for distress etc.

58.  The plaintiff is claiming HK$100,000 for “distress, inconvenience, loss of enjoyment and amenity / or diminution in amenity of the Flat”.

59.  The plaintiff has failed to produce any evidence for any distress etc. that he suffered, or any loss of enjoyment and amenity etc. from the Flat.

60.  It is also the plaintiff’s case that he agreed for an extension of completion until 15 September 2017 on the condition that the defendant paid for the accommodation fees. The renovation was completed on 15 September and the defendant did pay for the accommodation.

61.  I therefore see no basis for this claim.

The defendant’s counter-claim

Refund / delay

62.  The issue is which party was responsible for the delay.

63.  The plaintiff’s claim was that he instructed Madam Mak on Corian installation in the kitchen, master bathroom and guest bathroom during the first Patata visit in around January 2017 (see paragraph 27 above). It was his case that the defendant “kept forgetting”.

64.  As discussed above, I seriously doubt the accuracy on what is described by the plaintiff.

65.  VO1 dated 13 February 2017 (which enclosed the quotation from Patata) has no reference to Corian sinks or wall panels for the Master and Guest Bathroom. When asked, the plaintiff said he did not check it carefully but had only looked at the price.

66.  The variation order for the Master and Guest bathroom sinks (VO6, p.1283 of Trial Bundle F) was dated 31 March 2017. If it was true (as the plaintiff claimed) that the defendant had forgotten his instructions, the plaintiff must have discovered this between 13 February and 31 March. If the plaintiff has actually given all the Corian orders at the beginning and has discovered that the defendant has forgotten some orders, it would be surprising that VO6 only concerned the order for two sinks. One would expect the plaintiff would double-check that the defendant has not forgotten again.

67.  In fact, the variation order for Corian wall panels for the kitchen, master bathroom, guest bathroom as well as Corian surrounding the master bath only appeared in VO12 dated 2 June 2017 (p.1339 of Trial Bundle F).

68.  This is also supported by the WhatsApp messages disclosed by the plaintiff during the trial which showed that even by 21 February 2017, there was still discussion as to the design of the master bathroom sink and its material.

69.  Madam Mak explained that the earlier design (pp.1631 and 1632 Trial Bundle G) was the sink at the master bathroom would be a freestanding “column” sink. However, the plaintiff wanted a ledge for him to place things. Madam Mak had been looking for a suitable ceramic one but none was found, so it was decided to design and custom-build one out of Corian.

70.  As such, the evidence showed that the plaintiff did not instruct the defendant to do all the Corian installations during that Patata visit. Rather, I accept the defendant’s case that the plaintiff ordered further Corian installations at different times later on.

71.  The defendant also mentioned the plaintiff’s decision to install a 3M water distillation unit also contributed to the delay.

72.  However, this was the first time Madam Mak raised this and, as pointed out during cross-examination, this was not a reason of delay she told the plaintiff at that time.

73.  Further, it was clear that the defendant was aware of the 90 days’ limit imposed by the management office for renovation work right at the beginning. The defendant has quoted 100 working days for the job, and by any calculation, the period form 13 February to 15 September would have exceeded this substantially.

74.  Also, the WhatsApp message regarding the design of the Corian sink was dated 21 February 2017, but the defendant had until 31 March 2017 issued the variation order for the sinks. When asked, Madam Mak admitted that the delay was caused by the fact that she was busy.

75.   More telling is that, if the defendant has already written on 2 May 2017 to give notice that it“will be responsible for accommodation fees in July if it is due to delay caused by our company” and then did pay for the accommodation fees until 15 September 2017, it would be unconvincing to now argue that, in fact, the defendant has all along felt that the delay was not caused by itself but was coerced to pay under pressure.

76.  In all, I think the defendant was responsible, at least by a larger extent, for the delay but this has already been fairly and adequately addressed by the defendant paying the plaintiff’s accommodation fees and the fees charged by the management office. I would not allow the defendant’s counter-claim for re-imbursement of such.

Outstanding bills

77.  The court is asked, in effect, by the plaintiff to interpret the contract and, whenever assisted by the experts’ report if possible, to conduct a detailed audit on the renovation work to look for any elements of “overcharging”. As such, it is only fair that the court will do the same for the defendant for any elements of “undercharging”, which effectively is this head of the defendant’s counterclaim.

78.  The defendant is claiming for the external plates of sockets and switches (listed in VO24, P.1591 of Trial Bundle G). Electrical sockets are listed in the Quotation under Paragraph 6 which stated, for example, (as I translate) “6.1 provide and install…socket box”.

79.  The defendant’s case is that this is the metal electrical socket box and the installation costs of this would include installing the electrical wiring (and including making the groove and providing the plastic tubing for the wires to run) to the metal socket box.

80.  Madam Mak explained that the plastic socket cover (which provided the actual socket for the plug) is not included because the design would need approval from the client and the price can be as much as HK$1,200 each. She had therefore sent a socket cover catalogue to the plaintiff so he could choose. The discrepancy between the number of socket covers listed in VO24 and the Quotation is because some sockets were located in hidden places so the socket covers could be cheap and that the defendant was willing to provide them free of charge.

81.  The plaintiff disputed this by referring to another item under paragraph 6 of the Quotation which stated (as I translate): “6.9 provide and install on-off switch socket box (exclude socket cover)” and argued that, since socket cover was specifically excluded under this item, for other items when no such exclusion was specified, the socket covers should be interpreted as being included.

82.  I do not agree.

83.  Under the “Remarks” of the Quotation, it was clearly stated “Items not quoted are excluded”. If the parties’ intention was otherwise, it would have instead stated “Items are included unless stated specifically to be excluded”. 

84.  Although VO24 sought for HK$17,105, the expert Mr. Lau has measured the actual quantity during inspection and assessed the value as HK$17,941. I would allow this claim.

85.  As for the water outlet stopper VO25 (p.1592 of Trial Bundle G), I would allow HK$300 as this was also not covered in the Quotation.

86.  I would also allow HK$3,370 for installations of various ironmongeries in the Flat (Items 1-3 of VO26, p.1593 of Trial Bundle G) as assessed by Mr. Lau. These items are also not covered in the Quotation.

87.  There is much dispute regarding Item 4 of VO26 which concerned the modification of a kitchen cabinet. There was a triangular “deadspace” inside the kitchen cabinet made by Patata and a modification was made to the drawer that made use of this space. There is no dispute that this modification was made by the defendant after the installation.

88.  The plaintiff’s case was that he had instructed Madam Mak and the staff at Patata to design the drawer to make use of this “deadspace” at that same visit at Patata but the defendant has again forgotten about it.

89.  I would think this unlikely as no detailed design plans would have been drawn up at that early stage. More importantly, the drawings prepared by Patata in June 2017 (p.646 of Trial Bundle C), which were sent to the plaintiff for approval, did not contain this requirement.

90.  I think it more likely, as Madam Mak stated, that this “deadspace” was discovered after installation and the plaintiff instructed the defendant to make such modifications. I would therefore allow HK$4,500 for this.

91.  As for Items 5 and 6 concerning the installation of a wooden panel over a gap between the wall and window in the children room, it was not disputed that this was on instruction by the plaintiff. This was not in the Quotation so I would allow HK$4,500 for it. As for the subsequent dismantling and re-installation of the same for a brief water-leak inspection by the management office, I found that this should not take much time or labour so there should not be a charge.

92.  The remaining items on VO24 concerned the false ceiling and the lightings within. I am of the view that these charges are not appropriate.

93.  I accept the plaintiff’s evidence that the defendant has sent the 3D drawings (showing the design of the false ceiling including its lightings) to the plaintiff via email at around late November 2016 (pp.644 and 655-1 of Trial Bundle C), and that various hand-drawn design drawings (pp.645, 653, 654, 656, 657, 658 to 661 of Trial Bundle C) were shown to the plaintiff during a meeting in early December 2016 (and subsequently sent to him).

94.  I have perused the designs of the false ceiling and lightings in these drawings and found that these are substantially identical when compared to the final designs as photographed in the Flat. As such, the plaintiff must have approved this design at the time he signed the Quotation. The defendant’s attempt now to tease out various individual structures in the false ceiling and to charge separately for them is an inappropriate attempt to “over-bill” to bolster the counterclaim. This could not have reflected the intention of the parties at the time the Quotation was signed.

Conclusion

95.  I would therefore allow the Plaintiff claim as follows:

HK$(81,970 + 132,852 + 1,600 + 14,495) = HK$230,917

96.  I would also allow the defendant’s counter-claim as follows:

HK$(17,940 + 300 + 3,370 + 4,500 + 4,500) = HK$30,610

97.  As for order for costs, I have stated above my concern with the behavior of both parties: the overtly oppressive nature of the plaintiff and the defendant’s inappropriate withholding of furniture and over-billing in the counter-claim. I am of the view that more reasonable and amicable behavior from both parties could have clarify any misunderstandings and resolved this matter early without incurring all the legal costs of going to trial. Further, certain issues could be agreed between the experts and the parties in order to narrow down the issues in dispute and shorten the trial. The legal costs incurred in a 5-day trial (not to mention the production of voluminous trial documents) for this case (especially with regard to the quantum involved) is clearly disproportionate.

98.  As such, I will give an order nisi that no order for costs be given for this action.