POWERTECHNIC LTD v. THE INCORPORATED OWNERS OF MONTE VISTA

DCCJ 874 & 878/2019 (Consolidated)

[2023] HKDC 750

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 874 & 878 OF 2019

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JUDGMENT

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A.  Introduction

1.  The plaintiff, Powertechnic Limited (“PL”) commenced these proceedings based on a written contract for the provision of services for an energy saving scheme for the defendant, the incorporated owners of a residential building at No 9 Sha On Street, Ma On Shan, Shatin, New Territories (the “Residential Premises”).

2.  PL is the named contractor and the defendant is the named customer under the said contract known as the Energy Sharing Scheme Contract no PG3041-EMC-C-0108 with a customer account number PG3041, executed on 1 April 2015 (the “1^st Contract”). There is another identical written contract which named PL as the contractor and the defendant as the customer with the same contract number and customer account number albeit dated 1 June 2015 (the “2^nd Contract”). For all intents and purposes, the 1^st and 2^nd Contracts have identical terms and appendices save that the 2^nd Contract is dated 1 June 2015 (collectively, the “Contract”).

3.  According to the Contract, the minimum contract period is 36 months and the defendant had to pay the contractor a monthly sum of HK$68,936.29 during the said minimum contract period.

4.  In short, PL is claiming against the defendant for the sum of HK$2,068,088.70 (the “Sum”) together with contractual interest. The Sum is the remaining 30 instalments (ie HK$68,936.29 x 30 months) which PL said the defendant had failed to pay under the Contract.

5.  The defendant disputes that PL is the counterparty under the Contract. Rather, it is said that all along the defendant had only dealt with another company known as Powertechnic (Hong Kong) Limited (“PHKL”). The defendant only executed the Contract as a result of a mistake as to identity and the same is void or not binding on the defendant. There is thus a counterclaim for the total sum of HK$413,617.74 being the first 6 monthly instalments (ie HK$68,936.29 x 6) paid under the Contract to PL.

6.  I should mention that the original trial of these proceedings commenced on 7 June 2022. As a result of the filing of new evidence by PL (with leave granted by the original trial judge), the original trial was adjourned to be heard by way of a trial de novo. [1]

7.  The trial de novo was heard before me from 27 March 2023 to 31 March 2023.

B.  The defendant’s application to adduce new documents

8.  By summons returnable on the first day of trial (the “Summons”), the defendant applied for leave to adduce and rely on certain new or additional documents as well as a supplemental witness statement of Mr Kwok Hon Chiu (“Mr Kwok”).

9.  According to Mr Lam ie Counsel for the defendant, these documents were the documents submitted at the stage of tender. The defendant wished to rely on these documents to verify it was PHKL who submitted the tender and it is said that nothing really turned on these documents.

10.  Having considered counsel’s submissions and the documents, I dismissed the Summons with costs to be dealt with at the end of the trial. The brief reasons are as follows.

11.  First, the application is very late. When the original trial was adjourned last year, the defendant was given leave to file and serve supplemental witness statements in response to the issues stated in PL’s supplemental witness statements. There is no good nor credible explanation as to why the documents were not disclosed earlier. In fact, as Ms Tjia ie Counsel for PL relevantly pointed out, there is no explanation as to when these documents were actually uncovered. Absent such explanation, the application may be refused on the ground of delay alone: Hong Yip Holdings (Hong Kong) Limited (In Compulsory Liquidation) v Cellmark China Limited (In Voluntary Liquidation) & Anor.[2]

12.  Second, the burden is on the applicant to provide the court and the other side with full and accurate information as to the provenance and the maker of the document, the relevance of the document to the issues before the court.[3] Again, there was no such information available to the court.

13.  Third, I am unable to see the relevance or materiality of these documents. As Mr Lam accepted, nothing really turned on the documents. The fact that it was PHKL who submitted the tender is not seriously disputed.

C.  Material factual background and parties’ respective case

14.  The following background facts are not seriously disputed.

15.  On or about 29 October 2012, the defendant invited open tenders for energy saving scheme in relation to the lightning system of the Residential Premises. An express term of the tender is that the tendered contract cannot be transferred, assigned or sub-contracted without written approval from the defendant.

16.  PHKL submitted a tender. At that time, Mr Mark Chon Yang, Bernard (“Mr Mark”) was a majority shareholder and director of PHKL.

17.  On 28 July 2014, the defendant issued a letter appointing PHKL to provide the energy saving scheme to the Residential Premises. PHKL acknowledged receipt and accepted the appointment.

18.  In the meantime, PL was incorporated on 12 June 2014. 60% of PL was held by Mr Che Hong Wan (“Mr Che”) through his corporate vehicle ie Good King Holdings Limited. The remaining 40% was held by Mr Mark through his corporate vehicle ie Powertechnic Group (Holdings) Limited (“PGHL”).

19.  It is PL’s case that Mr Mark approached Mr Che with a view to setting up a joint venture business in energy sharing schemes. On 21 May 2014, they reached an agreement to set up PL as such a joint venture company whereby Mr Mark would take charge of the technology and operation whilst Mr Che would provide funding for the same. It was further agreed that as regard the energy saving scheme to be provided to the Residential Premises, PL would be the company to enter into a contract with the defendant. Accordingly, Mr Mark or his staff including a Mr KK Lau had continued to deal with the defendant in relation to the contractual and operational details of the energy saving scheme at the Residential Premises.

20.  On or about 1 April 2015, PL as contractor and the defendant as customer executed the 1^st Contract. There is a further written contract executed by them on 1 June 2015 ie the 2^nd Contract.

21.  There is no dispute that the Contract had been performed. For the months from June to September 2015, the defendant made payments by cheques to PL. Upon several demands, payment for the 5^th and 6^th instalments (ie October and November 2015) were also paid by cheque (albeit with delay) to PL. The cheque was presented for payment on 27 June 2016.

22.  Thereafter, the defendant did not make further payments to PL. Instead, the defendant made payments for December 2015 to October 2016 (ie the 7^th to 17^th instalments) to PHKL based on instructions on invoices. This is so notwithstanding PL had issued a number of reminders to the defendant setting out the outstanding amounts and demanding payments to be made to PL, not PHKL. PHKL was not authorised to receive such payments for and on behalf of PL and these payments had never been passed onto PL.

23.  In December 2016, upon learning from the defendant that it might have made payments to Mr Mark and/or PHKL, PL asked the defendant to clarify the exact amount paid to them. The defendant did not answer that and thereafter Mr Mark could not be found. As it transpires, Mr Mark had been declared bankrupt in HCB 5696/2020. PL also reported the matter to the police.

24.  The defendant had not made payments for the remaining instalments at all. It is the defendant’s case that in view of the internal dispute between PL and PHKL and with a view to avoiding double payment, the defendant stopped making further payment pending resolution of the present dispute. In this respect, the defendant offered to make the relevant remaining payments to a law firm to stakehold the same.

25.  The contractual period under the Contract has now expired. There is and was no complaint on the part of the defendant relating to the issue of performance or provision of the equipment or services under the Contract.

26.  Against the aforesaid background, PL claims for the Sum being the balance of the contract sum under the Contract. PL also has an alternative claim for the same sum based on quantum meruit, for goods and services delivered from December 2015 to May 2018.

27.  On the other hand, it is the defendant’s case that the contractual relationship had all along been one between the defendant and PHKL. The defendant only signed on the 1^st and 2^nd Contracts under the mistaken belief that the contracting party was PHKL. The defendant therefore has a counterclaim for the first 6 instalments paid to PL.

D.  Relevant issues

28.  As mentioned, there is no dispute that the Contract had been fully performed. The defendant is purely disputing that it was PL who performed the contractual obligations as contractor. Ms Tjia and Mr Lam agreed that the issue of performance is only relevant to PL’s alternative claim based on quantum meruit.

29.  The parties agreed the key issues are:-

(1)  Whether PL is the contracting party under the Contract;

(2)  Whether the defendant entered into the Contract under a mistaken belief that the counterparty was PHKL, not PL;

(3)  If the mistaken belief is established, whether PL is entitled to enforce the Contract and claim for the Sum;

(4)  In the alternative to (3), whether PL is nevertheless entitled to claim against the defendant on quantum meruit on the basis that it had performed its contractual obligations, and if so, what should be the proper amount to be claimed;

(5)  Whether PL is liable to return the sum of HK$413,617.74 previously paid by the defendant to PL.

E.  The Viva Voce evidence

30.  The approach for the assessment of the credibility of witnesses is trite:-

(1)  Contemporaneous written documents and documents which came into existence before the problems in question emerged are of the greatest importance in assessing credibility.

(2)  In deciding whether to accept a witness’s account, importance should also be attached to the inherent likelihood or unlikelihood of an event having happened, or the apparent logic of events.

(3)  In determining a witness’s credibility, it is also important to have regard to the consistency of the witness’s evidence with undisputed or indisputable evidence, and the internal consistency of the witness’s evidence, which type of consistency is often tested by a comparison between the witness’s oral testimony and his or her witness statement.

See: Hui Cheung Fai v Daiwa Development Limited & Ors.[4]

E.1  The evidence of PL’s witnesses

31.  Both Mr Che and a Mr Dicky Yau (“Mr Yau”) gave evidence in respect of PL’s case.

32.  Mr Che is an indirect shareholder of PL. His evidence mainly relates to his agreed venture with Mr Mark leading to the incorporation of PL. Mr Che’s evidence is that Mr March approached him in early 2014 and represented to Mr Che that his company would soon be awarded with a contract for energy saving scheme for the defendant but he did not have sufficient funding and low costs supply of goods to perform the contract. Mr Che agreed to provide funding and low costs LED lights and they agreed that PL would be the company to enter into such a contract with the defendant. Given the costs involved, PL had taken out loans from Mr Che’s company ie Sparkle Well Finance Co Ltd[5] and it had procured supply of LED lights and equipment from his other companies[6].

33.  As accepted by Mr Lam, Mr Che is by and large a credible witness. Whilst Mr Che’s evidence is more focused on the high-level issues, I am of the view that insofar as it is relevant to the key issues in dispute, his evidence is reliable and I accept the same. It is common ground that Mr Che’s role is more of an investor. Mr Che frankly accepted that Mr. Mark was responsible to negotiate and liaise with the defendant. It is therefore hardly surprising that Mr Che is not familiar or involved with the details of the submission of tender or the execution of the Contract notwithstanding the important issues such as price and payment terms would have to be reported to him and he had to confirm the same. Mr Che stated upfront that he did not know nor concerned himself with the progress of negotiations with the defendant which was a matter handled by Mr Mark and all that he cared was the result ie the Contract was executed in the name of PL. This is consistent with the fact that Mr Mark had provided him with a number of draft contracts[7] before the Contract was finalized and executed. Whilst he did not keep all of the draft contracts, he is adamant that the contractor’s name was always PL as appeared on all these drafts.

34.  Mr Yau is a staff of another company of Mr Che. He was the one who assisted Mr Che in the handling of matters in relation to the Contract. This included following up on the defendant’s non-payments after the initial 4 instalments of the contract sum.

35.  Mr Yau was heavily cross-examined on the differences between the quantities and voltage of the LED lights purchased by the PL as set out in the invoices and that as stated under the Contract[8]. In this respect, Mr Yau was able to give a credible explanation. First, he explained that the relevant invoice[9] should be read together with the delivery note[10]. The latter of which refers to also 7W LED lights. Second, he also explained that items 1 and 3 of the Contract ie “LGX-TL-600-7W-SMD” and “LGX-TL-600-7W-SMD-EM”[11] were in fact referring to the same model of LED lights and their quantities added up to the figure rather close to the quantities of LED lights purchased by PL as set out in items 1 to 3 of the relevant invoice[12]. The difference is about 110 but I agree with Ms Tjia that this per se is far from establishing that the invoices were not related to the performance of the Contract. In particular, all these invoices had a unique reference number starting with “PG3041” appearing on them. This is the customer account number of the Contract. Therefore, insofar as it is relevant to the key issues in dispute, I also find Mr Yau’s evidence to be reliable and I accept the same.

E.2  The evidence of the defendant’s witnesses

36.  In respect of the defendant’s case, a Mr Wong Lo Tak (“Mr Wong”) and Mr Kwok gave evidence at the trial.

37.  Mr Wong is the Assistant Property Manager of Citybase Property Management Limited (“Citybase”) ie the property manager of the Residential Estate. At the material time, he was merely a senior property officer of Citybase, with limited personal involvement in the energy saving scheme project. Under cross-examination, Mr Wong had to accept that most of the factual matters set out in his witness statements did not come from his personal or first-hand knowledge and some of which[13] were even factually incorrect. In short, Mr Wong simply could give any useful or reliable evidence in relation to the crucial matters pertinent to the key issues in dispute.

38.  Mr Kwok is and was a committee member of the 1^st, 2^nd and 4^th Management Committee of the defendant. However, he was not a member of the 3^rd Management Committee between mid-2015 to mid 2017 ie when the material events took place. He has no personal or first-hand knowledge as to the matters discussed or made by the 3^rd Management Committee as well as the material events which go to the heart of the present dispute. As he only provided a 1-page witness statement which seeks to adopt Mr Wong’s witness statement, his evidence is unhelpful and cannot assist the court.

F.  Analysis of The Relevant Issues

F.1  Whether PL is the Contracting Party under the Contract

39.  It is well-established that when the contract is reduced to a writing as in the present case, the identification of the parties to the agreement is a question of the construction of the putative contract. If an individual is unequivocally identified by the description in the writing, that precludes any finding that the party to the agreement is anyone other than the person so described. In particular, oral or other extrinsic evidence is not admissible to contradict the document: Shogun Finance Ltd v Hudson[14].

40.  There can be no room for dispute that PL is the contracting party under the Contract. Both the 1^st and 2^nd Contracts in the present case clearly identified PL as the contractor with its chop. There can be no ambiguity whatsoever.

41.  In seeking to persuade me otherwise, Mr Lam advanced the following propositions which must be rejected.

42.  First, Mr Lam made the point that in construing the Contract, this court should not just look at the 4-page documents[15] for both the 1^st and 2^nd Contract had an appendix of running up to 87 pages. The same included the tender document submitted by PHKL, some correspondence exchanged in the name of PHKL and Citybase, some reports and PAR light schedule confirmations which appeared to show the progress of installation.

43.  Second, Mr Lam further suggested that a purchase order issued by Citybase to PHKL dated 26 May 2015 and accepted by PHKL (the “PO”)[16], ie which post-dated the 1^st Contract and is not included as part of the appendix is either part of the Contract or the entirety of the Contract together with its appendices is actually the appendix to the PO as the Contract bears the PO No MV/TPO/2015/0008 on its top right hand corner.

44.  On a proper construction of the 1^st and 2^nd Contract, I agree that the 4-page documents are respectively the stand-alone putative contract(s). I am not satisfied that the appendices or the PO have been incorporated as part of the 1^st and/or the 2^nd Contract by way of contractual provisions or otherwise.

45.  As pointed out by Ms. Tjia, apart from the tender document and some correspondences, the PAR light schedule confirmations and the PO actually post-dated the 1^st Contract and therefore could not have formed part of the Contract which has an entire agreement clause[17].

46.  Likewise, there is no basis to suggest the Contract together with the so-called appendices is actually the appendix to the PO. The total amount of the Contract and that of the PO as well as their payment terms are different. The fact that the PO No MV/TPO/2015/0008 appeared on the top right hand corner of the 1^st Contract and its appendices is neither here nor there. This reference must have been selectively typed or included on the Contract after its execution. Indeed, the first page of the 2^nd Contract[18] and some of the pages in its so-called appendix do not bear this same reference. None of the defendant’s witnesses have any personal knowledge or can speak to how the so-called appendix and the PO came about.

F.2  Whether the defendant entered into the Contract under a mistaken belief that the counterparty was PHKL

47.  Mr Lam relied on the relevant dicta in AXHT Company Limtied v Freeway Finance Company Ltd[19] and submitted that I should still make appropriate use of the so-called appendices and the PO as relevant extrinsic evidence to ascertain with whom the defendant intended to contract. It is said that I should come to the view that there was no consensus ad idem with respect to the Contract with PL and the same is void.

48.  Even having regard to the extrinsic evidence, I have no hesitation to come to the view that the defence of no consensus ad idem must fail on the established or indisputable facts of this case. Based on the evidence of this very case, I am not even satisfied that there was a unilateral mistake of identity on the part of the defendant.

49.  First, the defendant is not relying on any fraud or misrepresentation. There is no basis for the defendant to suggest that the “mistaken belief” that it was dealing with PHKL was deliberately caused by PL or PHKL. No one is seriously suggesting PL or PHKL was the party who drafted the Contract. Whilst PL’s name would most probably have been filled in by Mr Mark or KK Lau, I do not accept any suggestion that the 1^st and 2^nd Contracts were provided by these individuals in the sense that the same were prepared or drafted by them. This is simply inconsistent with what is stated in the letter dated 28 July 2014[20]. It is stated clearly that the Contract, in duplicate, was enclosed for signing and returning to Citybase for confirmation of the appointment.

50.  Against this background, the 1^st Contract with PL being clearly identified as the contractor was executed on 1 April 2015. The 2^nd Contract with PL again being clearly identified as the contractor was executed on 1 June 2015.

51.  Insofar as there is any suggestion that the defendant could have made the so-called “mistake” twice, the same must be rejected. It is Mr Wong’s own evidence that the defendant or Citybase should have a proper system of keeping records of all documents which should be scanned and saved in the system. He also accepted that Citybase was one of the largest management company in Hong Kong with many years of experience as well as their own legal team. The undisputed evidence is that Citybase had to followed the strict procedures for verifying the contents and payments of a contract involving a sum of over HK$2 million by a number of staff. It is difficult to imagine how would it be possible for Citybase (or its lawyers) or the defendant not to verify the contents of the 1^st Contract as well as the 2^nd Contract, including the name of the contractor, before executing the same.

52.  Second, the so-called mistake on the part of the defendant is flatly contradicted by the following facts or contemporaneous documents.

53.  According to a letter dated 19 February 2016[21] issued to and produced by the defendant in these proceedings, since 1 April 2015, because of internal restructuring, the project under the Contract had been operated by PL. It is further stated that this was related to Citybase by email and consent had been obtained from Citybase and the defendant. As such, payments from June to November 2015 had been made to PL accordingly. At all material times, the defendant had never expressed any disagreement to this letter nor suggested the contents of which were inaccurate. It is again difficult to imagine if the defendant did dispute this or had genuinely believed PHKL was the contracting party, the defendant would have stayed silent and refrained from rebutting the same. The irresistible inference must be that the relevant contents of this letter must be true and the defendant had approved to execute and did execute the Contract with PL instead of PHKL.

54.  The defendant voluntarily paid the 5^th and 6^th instalments by cheque issued on 4 January 2016 and presented on 27 June 2016[22]. This was paid after PL had issued demand letters to the defendant on 31 December 2015[23] and 13 January 2016[24]. As accepted by Mr Wong under cross-examination, the same was not paid under the threat of legal action. Insofar as Mr Wong stated in his witness statement that the defendant never received such demand letters, I do not accept that this is the case. Mr Wong could not explain why the defendant and/or Citybase had never responded to the telephone calls and chasers by PL and he could not come up with any plausible explanations as to why the defendant did not receive such demand letters.

55.  As a matter of fact, the defendant had only started paying PHKL instead of PL as instructed by Mr Mark in the letter dated 19 February 2016[25] referred to above.

56.  Since 2 September 2016[26], PL’s solicitors issued demand letters for payments under the Contract on a monthly basis. Rather than responding to these letters, Chris Yuen of Citybase emailed Mr Mark[27] referring to these demand letters and asked for follow up action instead. In the meantime, the defendant continued to make payment to PHKL until December 2016 when it was suddenly said that payment would be withheld until the conflict is to be resolved[28]. The first formal reply from the solicitors acting for Citybase only came on 16 December 2016[29]. This was the first time Citybase (or the defendant) sought to deny that there was any contractual relationship between PL and the defendant. Again, Mr Wong is unable to explain why Chris Yuen or the defendant did not previously reply to the demand letters.

57.  Notwithstanding the defendant did suggest it would commence third-party proceedings against PHKL if the defendant is claimed by PL under the Contract[30], the defendant never commenced such third-party proceedings. Mr Wong was unable to provide an explanation. The fact that the defendant suddenly made various payments under the Contract to PHKL notwithstanding it was well aware that PL was chasing after the payments but is now contend not to issue third party proceedings against PHKL is again inconsistent with its own assertion of “mistake”.

58.  Third, in seeking to persuade me otherwise, Mr Lam also relied on the following matters which I do not consider relevant. More importantly, they simply do not assist the defendant’s case on mistaken identity or no consensus ad idem.

59.  Mr. Lam relied heavily on the fact that PHKL was the party submitting the tender, which is a legally required process before an owners’ corporation could enter into any contract for procurement of services or goods with a contract sum exceeding HK$200,000 under section 20A(2) of the Building Management Ordinance Cap 344 (the “BMO”).

60.  However, Mr Lam confirmed that he is not running a case based on illegality or want of authority on the part of the defendant to execute the Contract. He is also not asking the Court to make an order that the Contract is void or voidable by reason of section 20A(7) of the BMO. In any event, none of such propositions have been pleaded. That being the case, I am unable to see how section 20A(2) of the BMO can assist the defendant at all.

61.  Likewise, the fact that there is a non-assignment clause in the tender document and the defendant previously did not allow another company known as 綠色城市節能有限公司[31] to take up the Contract in the place of PHKL also do not assist the defendant. Simply because the defendant did not previously allow another company to take up the Contract back in February to March 2014 does not mean the defendant did not agree to PL taking up the Contract. I have already mentioned that the letter dated 19 February 2016[32] pointed to consent for PL to take up the Contract on the part of the defendant. There was no reply from the defendant seeking to dispute the same. Further, the defendant has not provided any relevant minutes from the Management Committee to contradict the position stated in the said letter.

62.  It follows that the non-assignment clause is irrelevant. PL is not even relying on any suggestion that the Contract was assigned to it.

63.  Fourth, the above finding of facts would have been sufficient for resolving the issue of mistaken identity or no consensus ad idem in favour of PL. In deference to Mr Lam’s effort, I will briefly deal with the following documents or extrinsic evidence.

64.  Insofar as the PO[33] is concerned, I have already dealt with the same referred to above. There is no or insufficient basis for me to come to a concluded view that the PO was in fact referring to the Contract.

65.  As for the letter dated 28 July 2014[34] which is said to have appointed PHKL to provide the Energy Saving Plan, the same is expressly stated to be “subject to contract”.

66.  More importantly, where Mr Lam repeatedly made reference to the letter dated 28 July 2014, the defendant has not produced the Contract in duplicate referred to in that very letter and there is no explanation for the same. In particular, it is Mr Wong’s evidence that Citybase should have a proper system of storing important documents like contracts.

67.  Likewise, the letter dated 20 August 2014[35] issued by PHKL to Citybase, which again pre-dated the 1^st Contract and the 2^nd Contract with the entire agreement clause, does not add anything further.

68.  On the other hand, I also have regard to the fact that some previous draft contracts[36] were provided by Mr Mark to Mr Che. All of which clearly stated and identified PL as the contractor.

69.  Accordingly, I hold that PL is the contracting party under the Contract. As I am not satisfied that the defendant entered into the Contract under the mistaken belief that the counterparty was PHKL, PL must be entitled to enforce the Contract and claim for the Sum together with interest.

F.3  Whether PL is entitled to claim On Quantum Meruit

70.  It is not necessary for me to deal with PL’s alternative case on quantum meruit.

71.  If and insofar as it is necessary, I will only briefly deal with the same and conclude that PL is entitled to such an alternative claim.

72.  First, Mr. Lam indicated during closing submissions that he is no longer taking any pleading points. Indeed, if the facts were sufficient, it would not matter that there is no pleading of some particular category of restitutionary claim: Ng Po Yu & Anor v Lam Kai On.[37] Whilst the drafting (for which Ms Tjia is not responsible) could be improved, the necessary facts in support of the alternative claim can be identified from the Statement of Claim.

73.  Second, there is no dispute that the defendant had received the fruit of the Contract with no complaint. That being the case, the defendant had been enriched. In addition to the 8,095 units of new LED lights and the installation and maintenance costs thereof, the defendant had also been enriched by a significant saving in its electricity fees to-date. This is accepted by the defendant’s witness ie Mr Wong.

74.  Third, the enrichment was gained at PL’s expenses. For the avoidance of doubt, I accept PL’s evidence on the issue of performance. As set out above, the so-called discrepancies between the quantities and description of the equipment set out in the relevant invoices and the Contract had been explained by Mr Yau and I accept his explanation. The pure fact that the quantities do not tally 100% per se does not detract from the claim that the invoices were placed for the purpose of performing the Contract.

75.  Fourth, the enrichment at PL’s expenses was unjust whether by way of mistake or failure of consideration. I do not accept Mr Lam’s submission that PL’s provision of the equipment and services should be considered a unilateral act that was entirely of its own conception or that PL had taken the risk of being mistaken. In particular, PL’s name was clearly identified in the Contract as the contractor. I also accept Mr Che’s evidence which is consistent with the draft contracts provided to him, that PL’s name had appeared in all previous draft contracts so provided. The defendant also paid the first 6 instalments of the contract sum to PL without any complaint. Even having received the 19 February 2016 letter, the defendant was content to receive the equipment and/or services with no complaint and did not immediately respond to PL’s demand letters or chasers that it was not the contractor.

76.  Fifth, for a quantum meruit claim, the sum payable to a contractor should be the fair commercial rate for the work done in the circumstances: Chitty on Contracts, Hong Kong Specific Contracts (6^th ed) at §8-191. Where the terms of the Contract including the stipulated fees were resulted from a deliberate process of tendering and negotiations in the market, I am satisfied that the contract sum or instalment payments should reflect the fair or market commercial rate for the goods and services provided to the defendant on the facts of this case.

F.4  Whether PL is liable to return the sum of HK$413,617.74

77.  There is thus no basis for the defendant to counterclaim for the return of the sum of HK$413,617.74.

78.  The defendant can hardly complain that it is unjust for PL to receive the said sum when it is beyond dispute that the defendant had received the fruit of the Contract. If and insofar as it is relevant, I should add that at all material times, PHKL had never sought to ask the defendant to pay or repay the sum of HK$413,617.74 to PHKL. Even the letter dated 9 December 2016 from a Mr Mok Che Fai acting on behalf of PHKL[38] only suggested that the Contract is void because the staff who execute the same was not authorised to act as a representative and asked the defendant to enter into a new contract.

G.  Conclusion

79.  For the above reasons, I make the following orders:-

(1)  The defendant do pay the plaintiff ie PL the sum of HK$2,068,088.70 together with interest on the outstanding instalment payments at the contractual rate of 2.5% per month from their respective due dates until the date of judgment and thereafter at judgment rate until payment.

(2)  The defendant’s counterclaim against the plaintiff ie PL be dismissed.

(3)  There be a cost order nisi that the defendant shall pay the plaintiff ie PL’s costs of this action, including the costs of the Summons filed herein on 9 March 2023 and all costs reserved, if any, to be taxed if not agreed with certificate for counsel. The costs order nisi shall become absolute in the absence of any application to vary the same within 14 days of this Judgment

80.  It remains for me to thank counsel for their assistance.