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DCCJ 3426/2019
[2024] HKDC 1182
IN THE DISTRICT COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
CIVIL ACTION NO 3426 OF 2019
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BETWEEN
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LUI KWONG SHING（呂光勝）trading as
WAI SING ENGINEERING COMPANY |
Plaintiff |
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and
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PINE WOOD (F.E.) INTERNATIONAL LIMITED |
Defendant |
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| Before: |
Deputy District Judge Matthew Ho in Court |
| Dates of Hearing: |
14 to 16 and 30 November 2023 |
| Date of Further Submissions from Defendant: |
12 June 2024 |
| Date of Further Submissions from Plaintiff: |
25 June 2024 |
| Date of Judgment: |
18 July 2024 |
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JUDGMENT
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INTRODUCTION
1. This is a trial of an action for outstanding payment under a fitting project at a residential construction site in Tung Chung Town Lot No 37 (“Site”).
2. It is common ground that the Plaintiff was a sub-contractor of the Defendant to provide installation service of timber flooring and skirting to some towers of building on the Site (“Service”).
3. The sub-contracting of the Service is governed by a written contract entered into on 17 October 2013 (“1st Contract”) but that does not form the principal matter of the Plaintiff’s claim. Instead, the Plaintiff’s claim arose out of the following contract and agreement:-
(a) A written contract in relation to the 1st Contract dated 30 September 2015 (“2nd Contract”), under which the Defendant agreed to pay HK$550,000 to the Plaintiff upon satisfaction of all 3 stated Conditions (to be further elaborated below) (“Conditions”) by the latter; and
(b) Various oral agreements allegedly made between January 2014 and June 2016 for additional and/or variation orders placed by the Defendant for flooring works to be performed in the Site (“VOs”) for a total sum of HK$655,190.12 (“Oral Agreements”).
4. The Plaintiff’s pleaded case is straight forward. He claims that he has satisfied all Conditions and completed all the VOs and is therefore entitled to be paid in full under the 2nd Contract and Oral Agreements. Giving credit to payments already made by the Defendant, he claims the following outstanding sums:-
(a) HK$300,000 under the 2nd Contract; and
(b) HK$580,640.12 under the Oral Agreements.
5. The Defendant denies the Plaintiff’s claim and further counterclaims rectification costs resulting from various defective works performed by the Plaintiff under the 1st and 2nd Contracts.
BACKGROUND
6. Unless otherwise stated, the following facts are either undisputed or beyond dispute by the parties as they are supported by contemporaneous documents:-
(1) Chun Yip Construction Co Ltd (“Chun Yip”) was the main contractor for the supply and installation of timber flooring and skirting at the Site.
(2) In mid-2013, Chun Yip sub-contracted the said works to the Defendant. Among these works were the supply and installation of timber flooring and skirting for 4 towers of building at the Site[1] (“Flooring Work”).
(3) By the 1st Contract (which was backdated to 19 September 2013), the Defendant sub-contracted the installation of Flooring Work (“Installation Work”) to the Plaintiff at HK$3,636,742.50 (“1st Contract Price”), while the flooring and skirting installed would be supplied by the Defendant. A set of supplemental contract terms (補充合約條款) (“SC Terms”) was also incorporated with the 1st Contract.
(4) According to the payment terms of the 1st Contract: (a) 10% of the 1st Contract Price (ie HK$363,674.25) would be retained by the Defendant as retention money (“Retention Money”); (b) half of the Retention Money would be released to the Plaintiff upon completion of remedial works, while the remaining half would be released upon payment being made by the owner of the Site (“Owner”).[2]
(5) As stipulated under the 1st Contract, the Installation Work was originally intended to commence in August 2013 but was delayed.
(6) According to the Plaintiff, after having inspected a unit in Tower 5 on 14 August 2015, Chun Yip became dissatisfied with the quality of the flooring and skirting supplied by the Defendant. The Installation Work was suspended in the afternoon on the same day.
(7) The aforesaid event has led to a product verification inspection conducted at the manufacturing plant from which the Defendant sourced the flooring on 25 August 2015. The said inspection was attended by representatives of Chun Yip and the Defendant.[3] Pursuant to the inspection, a Product Verification Record (臨廠驗證記錄) (“PV Record”) was produced.
(8) By a letter dated 24 September 2015 (which the Plaintiff received on 25 September 2015), the Defendant requested the Plaintiff to increase the manpower at the Site by two stages (ie to 16 workers before 25 and 26 September 2015 and then to 24 workers before 28 September 2015).
(9) By a letter dated 30 September 2015, the Plaintiff protested against the Defendant’s request for being unreasonable. The Plaintiff also explained the circumstances of underemployment and pointed out that it was not due to his fault.
(10) On the same day, the Plaintiff and Defendant entered into the 2nd Contract, under which it was agreed that the Plaintiff would be paid HK$550,000 if all of the following Conditions were met:-[4]
(a) The Plaintiff should engage not less than 24 workers[5] on the Installation Work starting from 5 October 2015（於2015年10月5日開始加師傅至24人以上）(“1st Condition”);
(b) The Plaintiff should complete the Installation Work up to Zone 7 on or before 15 October 2015（於2015年10月15日或之前完成到ZONE 7）(“2nd Condition”); and
(c) The Plaintiff should complete 95% of the Installation Work on or before 25 October 2015 （於2015年10月25日或之前完成9成半以上工程）(“3rd Condition”).
(11) By a letter dated 3 October 2015 (which was purportedly received by the Plaintiff on 12 October 2015), the Defendant complained to the Plaintiff about the latter’s failure to increase the manpower and further informed the Plaintiff that it would hire workers on behalf of the Plaintiff to assist the performance of Installation Work（本司代聘人手予以協助）.
(12) By a letter dated 12 October 2015, the Plaintiff complained that the Defendant had failed to supply sufficient materials for its due performance of the 2nd Contract.
(13) On about 7 November 2015, the Plaintiff and his workers vacated from the Site with their tools (as the Installation Work was allegedly completed).
(14) According to the Plaintiff, the Defendant has paid HK$3,453,778 (about 95% of the 1st Contract Price) to the Plaintiff in total up to 25 January 2016. The balance of the 1st Contract Price (less a minor deduction agreed between the parties) was retained by the Defendant.
(15) By a letter dated 8 June 2016, the Plaintiff informed the Defendant that it had duly completed the Installation Work before 25 October 2015 and demanded payment of the outstanding sum of HK$550,000 under the 2nd Contract before 20 June 2016.
(16) By a letter dated 14 June 2016, the Defendant remarked that there was a discrepancy between the Plaintiff’s and Chun Yip’s records regarding the completion date of the Installation Work, and suggested holding a tripartite meeting to resolve the discrepancy. The Defendant also requested proof of completion of the Installation Work from the Plaintiff.
(17) By a letter dated 17 June 2016, the Plaintiff referred to his previous letter of 12 October 2015 and put on record that the Defendant only delivered the materials to the Site on 27 October 2015.
(18) On 11 July 2016, the Defendant released to the Plaintiff the balance of the Retention Money in the sum of HK$182,964.50 (“1st Contract Balance”). On the same day, the Plaintiff signed on a cheque request form issued by the Defendant containing a copied image of the cheque issued by the Defendant in respect of the 1st Contract Balance with the following printed words (“1st Undertaking”):-
“我司偉勝工程公司簽收確認收妥青木（遠東）國際有限公司東涌工程所有合約費用。青木為了解決我司燃眉之急，所以提早釋放保固金，我司不會再為東涌合約工程作任何費用追討。有關合約外工程，我司會配合青木共同追討大判晉業建築有限公司，待晉業建築有限公司發放給青木才申請額外工程款項。
＊ 55萬額外工程款項，青木會支付25萬圓，餘款30萬圓，需待大判晉業支付。若餘款30萬額外工程款項，不獲晉業批款，青木會支付10萬圓，偉勝工程公司會墊支20萬圓。”
(19) On 5 September 2016, the Defendant paid HK$250,000 to the Plaintiff. On the same day, the Defendant issued another cheque request form with a copied image of the cheque issued together with the following printed words (“2nd Undertaking”) but the same was not countersigned by the Plaintiff:-
“我司偉勝工程公司簽收確認收妥青木（遠東）國際有限公司東涌工程額外工程款項25萬，我司不會再為東涌合約工程作任何費用追討。”
(20) On about 6 April 2017, the Plaintiff and the Defendant’s representative (ie Mr Tso) attended a unit at Tower 3 for inspection. By a letter dated 30 May 2017, the Plaintiff commented that the noise caused by the flooring was due to moisture but not the Plaintiff’s workmanship.
(21) On 12 June 2017, the Plaintiff and the Defendant entered into a separate contract in relation to a development project in Discovery Bay (“DB Agreement”).
(22) By a letter dated 11 September 2017, the Plaintiff cancelled the DB Agreement and demanded all outstanding payments for the Service rendered from the Defendant. Without receiving any payment, the Plaintiff commenced the present action on 3 July 2019.
THE PLAINTIFF’S CASE
7. The Plaintiff’s case is that he has fulfilled all the Conditions by 22 October 2015. This is notwithstanding the fact that:-
(1) In about early October 2015, the Plaintiff has anticipated a shortage of flooring and skirting materials and, by the letter dated 12 October 2015, forewarned the Defendant that he might not be able to fulfill the 2nd Contract if materials were not supplied in a timely fashion; and
(2) All the materials were completely used up on 22 October 2015. The new flooring and skirting materials did not arrive at the Site until 27 October and 2 November 2015 respectively.
8. It is also the Plaintiff’s pleaded case that the 1st and 2nd Contracts were duly completed on 7 December 2015. The Plaintiff’s evidence, however, is that the Installation Work was actually completed on a much earlier date, ie 7 November 2015.[6] Apart from some minor defects which the Plaintiff has rectified at his own costs, the Plaintiff has never received any complaints about his workmanship until 28 January 2019. The Plaintiff denies having any workmanship issue but pleads that any defect could be due to manufacturing quality or other external factors (eg soaking after installation or damage caused by other workers).
9. As for the Oral Agreements, it is the Plaintiff’s case that the VOs were placed between January 2014 and June 2016 and the same were satisfactorily completed by June 2016.
10. Further, the Plaintiff denies that the 1st and/or 2nd Undertakings have varied the 2nd Contract and/or the Oral Agreements as:-
(1) They were not supported by any consideration;
(2) The Plaintiff signed on the 1st Undertaking under the inducement and/or duress by Mr Wong (on behalf of the Defendant); and
(3) The Plaintiff has not been shown the cheque request form bearing the 2nd Undertaking when he collected the cheque from the Defendant.
THE DEFENDANT’S CASE
11. The Defendant does not specify in its pleadings whether the Plaintiff has fulfilled (or failed to fulfill) any of the Conditions under the 2nd Contract. Instead, the Defendant claims that the Plaintiff has not satisfactorily performed the 2nd Contract because of various defects in the Installation Work which fell short of the standard required by the Defendant and Chun Yip (“Defective Works”), more particularly:-
(1) Some flooring installed were uneven;
(2) The grout lines between some boards were uneven and/or too large; and
(3) Some flooring and skirting were damaged and/or defectively installed.
12. The Defendant further relies on the 1st and 2nd Undertakings and claims that, even if the Plaintiff has fulfilled all the Conditions, the Plaintiff’s claim under the 2nd Contract has been fully settled pursuant to the 1st and 2nd Undertakings upon the following events:-
(1) Chun Yip has refused to approve and pay any of the sum of HK$300,000 under the 1st Undertaking; and
(2) The payment of HK$250,000 by the Defendant on 5 September 2016.
13. As for the remaining sum of HK$100,000 payable by the Defendant under the 1st Undertaking (upon Chun Yip’s refusal to approve and pay the HK$300,000), it is the Defendant’s case that:-
(1) The payment obligation has ceased pursuant to the 2nd Undertaking;
(2) Alternatively, it should be set-off by the Counterclaim.
14. In respect of the Oral Agreements, the Defendant’s case is that, apart from 5 VOs orally placed with the Plaintiff between January 2014 and February 2016 in the total sum of HK$51,300 which have all been fully settled, the VOs are requests to the Plaintiff to overhaul and/or re-do the Defective Works, to which the Plaintiff was responsible under the 1st Contract. The Defendant also relies on the following arguments:-
(1) The Oral Agreements are invalid and not binding as they were not reduced in writing as required under paragraph (h) of the Remark section of the 1st Contract;
(2) The Plaintiff has adopted a wrongful basis in calculating the prices of some of the invoices and as such the Plaintiff should not be entitled to the full sum under the Oral Agreements.
15. On the Counterclaim, the Defendant claims a total sum of HK$1,493,920.44 being the costs directly and indirectly incurred in rectifying the Defective Works caused by the Plaintiff, respectively being:-
(1) HK$994,625 for costs of workers engaged by the Defendant;
(2) HK$499,295.44 for costs of workers engaged by Chun Yip (who deducted the said sum from the sum payable to the Defendant).
ISSUES
16. The issues as framed in the pleadings are therefore as follow:-
(1) In relation to the 2nd Contract: (i) whether all the Conditions were fulfilled by the Plaintiff; (ii) if so, whether the 2nd Contract has been varied by the 1st and/or 2nd Undertakings;
(2) In relation to the Oral Agreements: (i) whether the Oral Agreements are valid and enforceable; (ii) if so, whether the works thereunder (apart from the 5 VOs settled by the Defendant) are within the scope of the 1st Contract or are VOs; (iii) if they are valid and enforceable, whether the Plaintiff ought to be entitled to the full sum of HK$580,640.12;
(3) In relation to the Counterclaim: (i) whether the Defective Works (if any) were caused by the Plaintiff; (ii) if so, whether the Defendant can show that payment of the claimed sums were caused by the Defective Works for which the Plaintiff ought to be held responsible.
WITNESSES
17. The Plaintiff gave evidence at trial. At the beginning of the trial, the Plaintiff also sought extension of time for the production of, inter alia, a supplemental witness statement of the Plaintiff filed pursuant to an Order made by the Deputy Judge on 6 October 2023 (“P’s SWS”). The Defendant objected to the time extension on the ground that paragraph 6 of P’s SWS contained inadmissible evidence. Having heard counsel’s submissions, I ordered that P’s SWS be admitted on a de bene esse basis. I will deal with the admissibility of the relevant part of P’s SWS in the latter part of this Judgment.
18. The Plaintiff also subpoenaed Mr Ng Tai On (“Mr Ng”) of Chun Yip at trial, but the purpose of his attendance was limited to production of documents pursuant to a subpoena duces tecum. The documents produced relate to the Counterclaim.
19. The Defendant called Mr Wong to give evidence at trial. The Defendant also relied on two affirmations made by Ms Yip Wing Sze (“Ms Yip”), an account clerk under its employment. It was agreed that Ms Yip’s affirmations would be adduced without her attendance.
2ND CONTRACT
Whether 1st Condition fulfilled
20. Under the 1st Condition, the Plaintiff was required to engage not less than 24 workers on the Installation Work starting from 5 October 2015.
21. The Plaintiff relies heavily on the WhatsApp records produced by the Defendant which shows that, on various dates between 5 October and 7 November 2015, the Plaintiff has reported and/or the Defendant’s staff have verified the number of workers at the Site carrying out Installation Work. Although the records do not contain all the daily head-count results during the relevant period, they show that reports on number of workers were made by the Plaintiff between 5 and 11 October 2015 and the number has never fallen below 26 during that period.
22. Most importantly, the WhatsApp records also show that the Defendant has, out of its own initiative, instructed its staff to perform head-count in order to verify what the Plaintiff had reported. Whilst there are occasions in which the Defendant’s counting has fallen below 24 because no full verification has been done in respect of all 4 Towers, in none of those head-counts has it been confirmed that the total number of workers engaged by the Plaintiff has fallen below 24 after performing full verification on all 4 Towers; quite to the contrary, these head-counts confirm that the number of workers performing Installation Work at Towers 1, 2, 3 and 5 on the following dates are above 24:-
(1) 5 October 2015 (25 workers);
(2) 8 October 2015 (26 workers);
(3) 9 October 2015 (25 workers);
(4) 12 October 2015 (28 workers);
(5) 14 October 2015 (25 workers);
(6) 29 October 2015 (25 workers).
23. The results of the Defendant’s head-counts must be read in the context of the following background:-
(1) The head-counting was not a novel measure adopted after the 2nd Contract was entered into. The WhatsApp records show that head-counting of similar nature has been performed by the Defendant’s staff consistently since June 2015. Throughout the period (and until 5 October 2015), the number of Plaintiff’s workers was constantly found to be markedly below 24;
(2) The consistent lack of manpower has resulted in the Defendant requesting the Plaintiff to increase the same through two stages (ie before 25 and 28 September 2015) on about 24 September 2015,[7] which then led to the subsequent negotiations and the entering into of the 2nd Contract;
(3) Soon after the entering into of the 2nd Contract, Mr Tso has alerted other staff of the Defendant to keep a close eye on the number of workers as reported by the Plaintiff to ensure that he was in compliance with the 1st Condition;[8]
(4) Notwithstanding that the effective date of the 1st Condition has not arrived, the Defendant has on 3 October 2015 issued a letter to the Plaintiff making further complaint about the latter’s failure to increase the manpower.
24. Given the above background, one would have thought that if the Defendant were to find out that the Plaintiff had failed to provide sufficient workers on a particular date after 5 October 2015, the Defendant should have no hesitation to point out the same either through WhatsApp group or formal correspondence. The absence of such warning from the Defendant is very telling of the fact that the Plaintiff has satisfied the 1st Condition by providing sufficient workers since 5 October 2015.
25. Of equal significance is that despite the constant verifications by the Defendant, it has never declared itself no longer bound by the 2nd Contract by reason of the Plaintiff’s breach of the 1st Condition. In fact, the Defendant has never pleaded the Plaintiff’s non-fulfillment of the 1st Condition as a ground of the Plaintiff’s breach of the 2nd Contract. The only ground relied upon by the Defendant is the Defective Works.
26. The Defendant, on the other hand, relies on Chun Yip’s records of workers going in and out of the Site (“In-And-Out Records”). These records were presumably generated through the clocking system set up by Chun Yip at the Site. According to Mr Wong, the In-And-Out Records showed that there were only 15 days between 5 and 31 October 2015 in which the Plaintiff had provided sufficient number of workers at the Site (having excluded the Defendant’s own workers).
27. Unlike the Defendant’s verification results, the In-And-Out Records were not prepared for the specific purpose of verifying the number of workers provided by the Plaintiff on the Site. This is apparent from Wong’s evidence that the In-And-Out Records were gathered on a voluntary basis, ie by the incoming and out-going workers checking in and out through their access cards against the clocking system. In my view, the In-And-Out Records must be understood on the above basis when the question of weight to be placed on these records falls to be considered.
28. As a matter of fact, the voluntary feature of the clocking system has exposed the unreliability of the In-And-Out Records when it comes to showing the precise number of workers provided by the Plaintiff on a particular day. For instance, the In-And-Out Records only show 22 workers attending the Site on 5 October 2015 (among which only 12 were the Plaintiff’s workers), when at the same time the Defendant’s staff verified that, simply among Towers 1, 2, 3 and 5, there were already 25 workers performing Installation Work. Similar situations also occurred on 8, 9, 12 and 14 October 2015. In the circumstances, the most probable inference that I can draw is that there was often a fraction of workers who did not or failed to perform the clocking procedure, whether due to inconvenience (as acknowledged by Wong to be a possible cause) or malfunctioning of the clocking system (as supported by WhatsApp records), which may possibly render the In-And-Out Records unreliable for under-counting the number of workers attending.
29. For these reasons, I give no weight to the In-And-Out Records insofar they show that the number of workers engaged by the Plaintiff has fallen below 24 on a particular day.
30. Having said that (and by reason of my analysis above), the In-And-Out Records were unlikely to have over-counted the number of workers attending. Therefore, I would give weight to the In-And-Out Records insofar they show that the number of workers engaged by the Plaintiff on the following dates was 24 or above (in which no contrary evidence has been adduced):-
(1) 13 October 2015;
(2) 15 to 17 October 2015;
(3) 19 and 20 October 2015;
(4) 22 to 24 October 2015;
(5) 26 to 31 October 2015.
31. The general picture of workers’ attendance since 5 October 2015 as depicted by the WhatsApp records and the In-And-Out Records above are largely consistent with the Plaintiff’s evidence, who was blatantly aware of the importance of satisfying the 1st Condition as a pre-condition of receiving the HK$550,000 under the 2nd Contract, and for that reason he had drastically increased the manpower by increasing the daily wages of the workers in order to ensure that the 1st Condition could be met.
32. On the other hand, Mr Wong’s evidence is inconsistent with and contradicted by the attendance history as shown by the WhatsApp messages and In-And-Out Records. In particular:-
(1) Mr Wong claimed under his oral evidence that at most the Plaintiff had only fulfilled the 1st Condition by bringing sufficient workers to the Site for one to two days. This is starkly contradicted by my findings above, which show that the Plaintiff should have provided sufficient manpower to meet the 1st Condition for at least 20 days since 5 October 2015. I find that Mr Wong has exaggerated the Defendant’s case.
(2) As to why the Defendant made no protest to the Plaintiff’s breach of the 1st Condition, Mr Wong claimed under his oral evidence that the Defendant had adopted a tolerant attitude and was willing to give second chances to the Plaintiff repeatedly. I find Mr Wong’s evidence to be inconsistent with the Defendant’s stringent attitude displayed in the WhatsApp records and correspondence made shortly before the 1st Condition had become operative.
33. For the above reasons, I prefer the Plaintiff’s evidence over that of Mr Wong insofar when there is conflict. I give full weight to the Plaintiff’s account on the number of workers on 6, 7, 10 and 11 November 2015 (where there were no or no full verification by the Defendant), and I also find on a balance of probabilities that the Plaintiff has provided sufficient manpower to perform the Installation Work in order to satisfy the 1st Condition.
34. I find that the Plaintiff has fulfilled the 1st Condition.
Whether 2nd Condition fulfilled
35. Under the 2nd Condition, the Plaintiff should complete the Installation Work up to Zone 7 on or before 15 October 2015.
36. In its Closing Submissions, the Defendant conceded (in my view rightly so) that it would not dispute that the 2nd Condition had been satisfied. In any event, the Plaintiff’s fulfillment of the 2nd Condition has been proven by the Confirmation Notices issued by the Defendant.
37. I find that the Plaintiff has fulfilled the 2nd Condition.
Whether 3rd Condition fulfilled
38. Under the 3rd Condition, the Plaintiff should complete 95% of the Installation Work on or before 25 October 2015.
39. In his Closing Submissions, the Plaintiff rested his case by acknowledging that there was a delay in compliance with the 3rd Condition, but submitted that the delay was caused by the Defendant who failed to provide sufficient and timely supply of materials. The Plaintiff’s counsel referred to Keating on Construction Contracts (11th ed), §8-013 and submitted that in such case the Plaintiff would only be obliged to complete the Installation Work within a reasonable time and consequently the deadline of 25 October 2015 should be enlarged. I shall call the Plaintiff’s case above the “Prevention Case”.
40. Notwithstanding the Plaintiff’s argument on the Prevention Case, it is necessary to look at the Plaintiff’s pleaded case. In relation to the 2nd Contract:-
(1) The Plaintiff acknowledged as an express term of the 3rd Condition that 95% of the Installation Work should be completed on or before 25 October 2015;[9]
(2) Despite acknowledging the aforesaid express term of the 3rd Condition, it is not the Plaintiff’s pleaded case that the deadline has been enlarged or the terms of the 3rd Condition varied. The Plaintiff simply pleads that all the Conditions have been satisfactorily performed.[10]
41. The Plaintiff’s pleaded case is also echoed by his evidence in his first witness statement, in which he mentioned:-
(1) All the flooring and skirting materials had become out of stock on 22 October 2015. While new materials would respectively be delivered to the Site on 27 October and 2 November, the work progress by then had already fulfilled the 3 Conditions under the 2nd Contract;[11]
(2) The Plaintiff has complied with all the Conditions on time, but the Defendant did not honour its obligations under the 2nd Contract after the Plaintiff’s completion of the Installation Work.[12]
42. There was no mention in the Plaintiff’s first witness statement that there was any delay obstructing him from complying with the 3rd Condition, or that the delay was caused by the act of prevention from the Defendant. The Plaintiff’s evidence was simply that the 3rd Condition had been complied with.
43. In my view, the Prevention Case now advanced by the Plaintiff is tantamount to an acknowledgment that he has failed to comply with the 3rd Condition by completing 95% of the Installation Work on or before 25 October 2015. Indeed, the delay was also confirmed by the Confirmation Notices which stated that all floorboard installations were only completed on 31 October 2015. The installation of skirting was completed at an even later date. In other words, the evidence adduced and the case advanced by the Plaintiff do not support his pleaded case.
44. The above would be sufficient to dispose of the entire issue – that the Plaintiff has failed to prove his pleaded case that the 3rd Condition had been fulfilled by the completion of 95% of the Installation Work on or before 25 October 2015.
45. I do not need to make any finding on whether the delay was caused by the act of the Defendant as it is not an issue of the proceedings. The Prevention Case only arose from the Plaintiff’s oral evidence at trial. It is trite that it is the pleadings which define the issues in a trial and dictate the course of proceedings both before and at trial. Where witnesses are involved, it will be the pleaded issues which define the scope of the evidence, and not the other way round. It will not be acceptable for un-pleaded issues to be raised out of the evidence which is to be or has been adduced: Kwok Chin Wing v 21 Holdings Ltd (2013) 16 HKCFAR 663, §21.
46. For the sake of completeness, even if the Prevention Case was a permissible issue at trial, I would still have found that the Plaintiff had failed to establish it for the following reasons:-
(1) The Prevention Case is inherently inconsistent with the Plaintiff’s pleaded case and evidence under his witness statement. In fact, evidence relating to the Prevention Case did not arise until the Plaintiff was put under cross-examination;
(2) The Prevention Case is inherently incredible for being only one of the few different versions of the Plaintiff’s evidence during cross-examination, in which he mentioned: (a) that the Defendant had agreed to pay even if the 3rd Condition was not fulfilled; (b) that he had completed the Installation Work on 22 October 2015; and (c) that he would have finished 95% of the Installation Work on time if sufficient materials were provided;
(3) The Prevention Case is inconsistent with contemporaneous documents. For instance, in his letter of 8 June 2016, the Plaintiff simply stated that he had fulfilled all the Conditions, without mentioning that compliance of the 3rd Condition had been delayed due to the Defendant’s failure to supply materials on time or the Defendant’s promise to pay even if the Conditions were not fulfilled. It was only after the letter of 14 June 2016 (where the Defendant pointed out the discrepancy on completion dates between those reported by the Plaintiff and Chun Yip) that the Plaintiff raised the issue of delay on the supply of materials in his letter of 17 June 2016. The same issue was also not brought up in the tripartite meeting among the Plaintiff, the Defendant and Chun Yip on 13 May 2016.
47. I find that the Plaintiff has failed to satisfy the 3rd Condition.
Plaintiff’s Undertakings
48. It is undisputed that, upon non-compliance of the 3rd Condition by the Plaintiff, the Defendant’s payment obligation under the 2nd Contract will be relieved. This is so notwithstanding that the Defendant has made a payment of HK$250,000 to the Plaintiff on 9 September 2016 and reached an arrangement with the Plaintiff as to how the remaining HK$300,000 should become payable under the 1st Undertaking.
49. Since the Defendant’s payment obligation under the 2nd Contract does not arise, it is unnecessary for me to determine whether the said obligation has been varied or replaced by the 1st and/or the 2nd Undertakings.
50. In any event, even if I am wrong in holding that the Plaintiff is not entitled to payment under the 2nd Contract, I would still have held that the Plaintiff would not be entitled to payment under the 2nd Contract by reason of the 1st Undertaking.
51. First, the Plaintiff’s case under the Amended Reply and Defence to Counterclaim (“ARDCC”) is that he signed the 1st Undertaking in reliance upon Wong’s representation that: (i) Chun Yip had agreed to contribute HK$300,000 towards the sum of HK$550,000, although the same had not yet been received from Chun Yip; (ii) the Plaintiff was requested to help the Defendant in demanding Chun Yip for payment, to wait for Chun Yip’s payment and to accept less if Chun Yip eventually failed to contribute (“Representation”). In this regard:-
(1) I do not see how the Representation deviates from the material terms of the 1st Undertaking. It is precisely the term under the 1st Undertaking that the Plaintiff would have to accept less (ie HK$100,000) if Chun Yip failed to contribute. Hence, even if I find in favour of the Plaintiff that the Representation was made by Mr Wong and the same was relied upon by the Plaintiff, I still fail to see how the Plaintiff has been wrongfully induced into signing the 1st Undertaking;
(2) The Plaintiff seems to suggest a different version of Representation in his witness statement, in which he said that Mr Wong had promised him that he would definitely be able to recover payment from Chun Yip.[13] In my view, not only is this version incredible for being inconsistent with the Plaintiff’s own pleaded case, but it is also inherently improbable – if the Defendant was so sure that payment would be recovered from Chun Yip, why would the parties expressly agree to cater for a scenario where Chun Yip would fail to contribute and the Plaintiff would have to accept less? By agreeing to accept less under the 1st Undertaking, it must be the Plaintiff’s belief that there was a real chance that Chun Yip would refuse to contribute;
(3) In paragraph 9(c)(v) of the ARDCC, the Plaintiff referred to a threat by Mr Wong that the Defendant would not release the balance of the Retention Money until receiving HK$300,000 from Chun Yip if the Plaintiff refused to sign the 1st Undertaking. This statement was not pleaded as part of the ‘Representation’ and the Plaintiff did not specify the legal consequence of the alleged threat. In my view, the Plaintiff should not be allowed to contend a legal consequence which has not been pleaded: Mui So Bing v Wan Chi Shing & Ors [2019] HKCA 1341, §23.3;
(4) For the above reasons, if I have to, I would reject the Plaintiff’s contention that there was no meeting of minds under the 1st Undertaking.
52. Second, the “early release” of the balance of the Retention Money constituted adequate consideration for the 1st Undertaking. Under the 1st Contract, the balance of Retention Money would only be payable upon payment being made by the Owner. The Plaintiff argued that there was not any evidence showing when would that happen, but that is of little relevance because it was acknowledged under the 1st Undertaking that it was an “early release” (提早釋放保固金). It is hardly disputable that by making an early release, the Defendant has conferred to the Plaintiff a practical benefit which the latter would not be entitled to under the 1st Contract: Chitty on Contracts (35th ed), 4-014.
53. Third, it is the Plaintiff’s contention that there was no reason for him to accede to the 1st Undertaking by giving up his entitlement of the HK$550,000 under the 2nd Contract. I do not think this is the effect of the 1st Undertaking. In my view, by signing the 1st Undertaking, the Plaintiff was only forgoing his claim for unpaid sum under the 1st Contract (where there is no evidence that there was any apart from the balance of the Retention Money, which would be payable upon signing of the 1st Undertaking). As to his purported entitlement under the 2nd Contract, the Plaintiff did not forgo any part of it but merely put HK$300,000 conditional upon contribution by Chun Yip, while on the other hand he would be able to obtain the early release of the balance of Retention Money. I find that the signing of the 1st Undertaking a commercial decision by the Plaintiff only.
54. As for the 2nd Undertaking, unlike the 1st Undertaking it was not countersigned by the Plaintiff. I see no credible reason as to why it was not done so given that the statement therein was allegedly confirmed by the Plaintiff when he collected the cheque of HK$250,000 on 5 September 2016. I will therefore find, has it been necessary, that the 2nd Undertaking itself does not have the effect of precluding the Plaintiff from recovering under the 2nd Contract. However, my finding above seems unnecessary as Wong has confirmed in Court that the 2nd Undertaking was not meant to change anything about the 1st Undertaking.
Conclusion
55. In the circumstances, I find that the Plaintiff has failed to establish his claim under the 2nd Contract. The Plaintiff’s claim for the outstanding sum of HK$300,000 under the 2nd Contract shall therefore fail.
ORAL AGREEMENTS
Whether Oral Agreements Enforceable
56. As a preliminary point, the Defendant argues that the Oral Agreements are invalid for being in contravention of Remark (h) of the 1st Contract, which stipulates that no additional orders should be confirmed orally. The relevant provision reads:-
“所有後加或額外工程需待雙方以書面同意後方可作實，不能以口頭協議作實。”
57. The Plaintiff disputes the Defendant’s reading and further refers to Clauses 14 and 17 of the SC Terms, which essentially envisage that the Plaintiff must promptly arrange sufficient workers to commence any additional works without delay upon being notified by the Defendant of those works. The Plaintiff is also not entitled to hold off the relevant work pending approval of written quotations, otherwise he would run the risk of being penalized for any loss incurred. The relevant parts read:-
“14) 於總工程未完成前各類後做、補做、後加或臨時增加之一切瑣碎工作 … 在本公司負責人員通知之後，承判人或公司需派足人手進行所述之有關工作，不得藉詞拖延及推搪。若遇有上述情況時，本公司有權派人代為完成。因此而引致之一切費用及損失，概由承判人或公司負責賠償。
…
17) 在等候本公司批核報價單之期間，承判人或公司必須依照圖則及本公司指示做妥該等額外工程，不得藉詞報價單未批而拒絕施工或拖延時間，若因此而令工程之進度受阻，本公司有權另派他人完成該項工程，一切支出由承判人或公司負責。”
58. The Plaintiff submits that, when Remark (h) is read in conjunction with Clauses 14 and 17 of the SC Terms, it is plainly intended that any prior oral agreement entered into between parties can be binding and enforceable.
59. I agree with the Plaintiff’s submissions. When considering the 1st Contract in its entirety and the background behind which it was entered into, the purpose of the 1st Contract must be to ensure that the works therein could be proceeded with as quickly and efficiently as possible, so that Chun Yip (with the facilitation of the Defendant) would be able to return a fully furnished Site to the Owner before the project completion date. In this regard, so long as a quotation (or in the form of an invoice) is submitted to the Defendant for approval, Remark (h) should be read as allowing any prior oral agreement reached to be binding and enforceable, for otherwise it would defeat the purpose of the 1st Contract and must be rejected: Chitty on Contracts (34th ed), §15-080 and Jumbo King Ltd v Faithful Properties Ltd & Ors (1999) 2 HKCFAR 279, 296D-I.
60. As I observe hereinbelow, the Oral Agreements are supported by invoices which have been submitted to the Defendant for approval. For this reason, I hold that the Oral Agreements would not become invalid under Remark (h) of the 1st Contract.
Scope of Work under Oral Agreements
61. I shall then consider whether the works under the Oral Agreements are within the scope of the 1st Contract (as contended by the Defendant) or VOs (as contended by the Plaintiff). It is my understanding that the Plaintiff does not take issue that he had the duty to overhaul or re-do any defective work to the satisfaction of, inter alia, the Defendant under Clause 1 of the SC Terms if those works fell within the scope of the 1st Contract.
62. The Plaintiff’s case is that the VOs were performed pursuant to the oral instructions given by the Defendant which were later recorded in writing by the Plaintiff under 22 invoices (工程單) (“Invoices”). Pursuant to the Court’s order,[14] the Plaintiff has set out the particulars of the Oral Agreements and the 22 Invoices under a “Table of Alleged Oral Agreements” (“Plaintiff’s Table”).
63. The Defendant’s pleaded case is that, save for the 5 VOs placed between January 2014 and February 2016 (“Admitted VOs”) in the total amount of HK$51,300 (which the Defendant has duly settled), all others VOs which the Plaintiff claims to fall within the scope of the Oral Agreements were remedial works performed in respect of the Defective Works.[15]
64. Having considered the parties’ evidence, I prefer the Plaintiff’s evidence over that of Mr Wong and find that the works stipulated in the Plaintiff’s Table are, on balance of probabilities, VOs instead of remedial works performed under the 1st Contract (subject to my observation below). Here are my reasons.
65. First, the Plaintiff’s evidence that the 22 Invoices were submitted to and followed up by Mr Tso or other Defendant’s staff is generally consistent with documentary evidence. This is corroborated by the fact that most of these 22 Invoices contain hand-written remarks that they were specifically addressed to Mr Tso or another staff nicknamed ‘Kit Gor’ (“Kit”) and with two of them being addressed to Mr Wong.[16]
66. Further, the Plaintiff’s evidence that the scope and actual completion of the works under the 22 Invoices have been verified by Mr Tso (in particular his evidence that he had on multiple occasions cross-checked the outstanding payments with Mr Tso) is also largely consistent with the WhatsApp records, which show that Mr Tso did meet with the Plaintiff in November 2022 to cross-check all additional orders. Support of the Plaintiff’s evidence can also be found from the fact that no issue about the scope of the works under the Oral Agreements has been raised until August 2019 when the Defence and Counterclaim was filed.
67. On the other hand, I do not prefer Mr Wong’s evidence regarding his reason why the Plaintiff should not be paid for the Oral Agreements for the following reasons:-
(1) It is Mr Wong’s firm conclusion in his witness statement that apart from the works performed under the Admitted VOs, all other VOs under the Oral Agreements are remedial works conducted pursuant to the 1st Contract. His conclusion was challenged when he admitted under cross-examination that Items 16 and 17 of the Plaintiff’s Table concerned were not remedial works under the 1st Contract but were works arising out of flooding for which Chun Yip should be responsible, and the invoices remained outstanding. Apart from Items 16 and 17, there are other items under the Plaintiff’s Table concerning works arising out of flooding, eg Items 4 and 18. These items are unlikely to fall within the scope of the 1st Contract;
(2) Upon further cross-examination, Mr Wong’s position has shifted in that he no longer relied on the scope of work as a ground to refuse payment under the Oral Agreements, but instead relied on the ground that the scope and completion of those works were unascertained as he did not have the means to do so. Mr Wong claimed that apart from the Admitted VOs, he had never seen the rest of the 22 Invoices until they were served on the Defendant in this action. In my view, this change in position is undeniably drastic;
(3) In any event, it has been demonstrated under cross-examination that Mr Wong had very little personal knowledge as to how the 22 Invoices were dealt with. According to Mr Wong, these 22 Invoices were likely to be followed up by Mr Tso and Kit, who had left their employment. Mr Wong further admitted that he did not contact them to make inquiries about the 22 Invoices although he had the means to contact them. In my view, if the reason for not paying the 22 Invoices was because of Mr Wong’s inability to ascertain the scope and completion of the works therein, it would be most reasonable for him to make enquiries with Mr Tso and Kit. In this regard, no explanation has been offered by Mr Wong as to why he did not do so;
(4) Given my observations above, the Defendant’s reason for not paying for the works under the Oral Agreements smacks an afterthought and ought to be rejected.
68. Further, given my observation above that Mr Wong had little knowledge about the 22 Invoices, which according to Mr Wong were likely to be followed up by Mr Tso and/or Kit, it behests to ask why they were not called upon to give evidence at trial upon a prima facie case being made out by the Plaintiff. In this regard, I find that there is no plausible explanation from the Defendant at all – Mr Wong’s answer was simply that he did not contact them to make enquiries despite having the means to do so. In the premises, the Court is entitled to draw an inference that even if evidence from Mr Tso and Kit were to be adduced, they would not be able to displace the Plaintiff’s case: Hu Lan v David Golden [2023] HKCFI 873, §§83-84.
69. From a general perspective, the scope of the Installation Work has been set out under the 1st Contract by way of the job description. It is clear that the scope of work under the 1st Contract is very narrow. Whilst Items 4, 16, 17 and 18 under the Plaintiff’s Table clearly concern works arising from flooding and are out of the scope of the 1st Contract, the remaining items in the Plaintiff’s Table are also apparently outside the scope of the 1st Contract.
70. Last but not least, as observed above, the 22 Invoices have been received by the Defendant and the same is evidenced by a table provided by the Defendant and the various WhatsApp records. Despite this, no complaints or protests have been made by the Defendant until the filing of the Defence and Counterclaim. In my view, this is inherently implausible if the Defendant genuinely took the view that the scope of the 22 Invoices fell within the 1st Contract.
71. In the circumstances, I hold that the works performed by the Plaintiff under the Oral Agreements (evidenced by the 22 Invoices) are VOs which the Defendant is responsible to pay, subject to the claim under Item 13 (ie outstanding payment under the 2nd Contract) which I have held that the Defendant should not be liable.
Whether Works under the VOs Performed by Plaintiff
72. Under the pleadings, the Defendant claimed that the Plaintiff had failed to carry out the works under the Oral Agreements.
73. It is my findings above that the actual completion of the works under the 22 Invoices were verified and cross-checked by Mr Tso. Further, as stated above, the Court is entitled to draw an inference from the absence of evidence from Mr Tso that his evidence would not be able displace such findings even if it were to be adduced at trial.
74. For this reason, I find that the Plaintiff has proven that the works under the VOs were performed by the Plaintiff.
Whether Plaintiff’s claim precluded by 1st Undertaking
75. The Defendant’s counsel sought to rely on the 1st Undertaking to argue that the Plaintiff should not be entitled to payment under the Oral Agreements.[17] I have already stated the terms and effect of the 1st Undertaking above. In gist, the 1st Undertaking stipulates that any sums payable on account of the VOs shall only be paid if Chun Yip settled those sums to the Defendant.[18]
76. Notwithstanding the above, it has not been pleaded by the Defendant under the ADCC that the Plaintiff’s claim under the Oral Agreements would be precluded by the 1st Undertaking. For similar reasons which I adopted above in holding that the Plaintiff had failed to fulfill the 3rd Condition, I hold that this defence is not available to the Defendant.
Calculation of Remunerations
77. The Plaintiff claims that the total amount of sum payable for the works under the Oral Agreements is HK$655,190.12 (without taking into account Invoice 0745 which relates to the payment under the 2nd Contract). The Plaintiff relies on the sums stated under the Invoices.
78. The Defendant disagrees with the sums stated under the Invoices. Instead, it relies on Clause 14 of the SC Terms for the following propositions:-
(1) The unit prices stated in the 1st Contract should be adopted in calculating the remuneration of the VOs;[19]
(2) The fees for any work done that can be measured (eg flooring work) could not be calculated by number of workers.[20]
79. In my view, if Clause 14 of the SC Terms is to be adopted in calculating the amount payment under the VOs, the Court would not be able to come up with any figure since there is no evidence as to the exact measurements or dimension of the various VOs completed by the Plaintiff.
80. The question is, should Clause 14 of the SC Terms be applicable to the VOs? In my view, the answer is ‘no’:-
(1) First, as I have stated above, I prefer the evidence of the Plaintiff over that of Mr Wong when considering whether the works under the Oral Agreements were VOs or remedial works under the 1st Contract. I shall adopt the same reasoning (as I see no reason not to) and find that the contents of the Invoices have been agreed by the Defendant’s representatives;
(2) Second, many of the Invoices were addressed to Mr Tso and Kit. Since neither of them has been called to give evidence and I find that no plausible explanation has been given as to they were not so called, an inference can be drawn that even if they were called to give evidence, their evidence would not displace the Plaintiff’s case that the contents of the Invoices have been agreed upon by them;
(3) Third, if the prices under the Invoices were agreed between the parties, it would appear that Clause 14 of the SC Terms would have no application, either because Clause 14 was catering for situation where the parties had no prior agreement on the prices of the VOs or the parties’ agreement would have the effect of waiving the applicability of Clause 14. My reasoning also seems to be echoed by Clause 16, which states:-
“如額外工程完全不同於原合約之工程項目者，則承判人或公司須盡快向本公司報價及提供支持數據，以便本公司批核合理之新價，但須在本公司同意下，方可以新價計算”
(4) In my view, Clause 16 of the SC Terms allows parties to adopt an agreed price for works outside the scope of the 1st Contract. Since I have found that the works under the Oral Agreements are VOs, Clause 16 is applicable to allow the parties calculating payment under the Oral Agreements by way of the prices agreed.
81. In any event, the Court has the power to award reasonable remuneration to the Plaintiff for works performed in advance of a binding contract of which the parties have indicated to each other that they are negotiating towards: Goff & Jones, The Law of Unjust Enrichment (9th ed), §16-04. Given that the prices under the Invoices were a product of arms’ length negotiations between the Plaintiff and the Defendant’s representatives, I would also find that they should represent the fair commercial rate for the work done in the circumstances: Powertechnic Ltd v IO of Monte Vista [2023] HKDC 750, §§72-76.
82. By reason of the above, I find the total amount payable for the works under the Oral Agreements to be HK$655,190.12 (without taking into account Invoice 0745 which relates to the payment under the 2nd Contract).
Amount deductible from the Remunerations
83. According to the Plaintiff’s Table, a total amount of HK$74,550 has been paid by the Defendant in partial satisfaction of the works under the Oral Agreements (excluding the HK$250,000 paid pursuant to the 2nd Contract).
84. The Defendant does not dispute the above but further contends that an additional amount of HK$51,300 has been paid pursuant to the Admitted VOs and should be deducted from the payments to the Plaintiff. The breakdown provided by the Defendant is as follow:-
(1) HK$6,300 paid on 5 May 2014;
(2) HK$2,250 paid on 3 July 2014;
(3) HK$26,550 paid on 14 July 2014;
(4) HK$5,400 paid on 11 August 2014;
(5) HK$10,800 paid on 16 June 2015.
85. Both the Plaintiff and Defendant have referred to various receipts issued by the former in support of their respective cases on payments. From these receipts, it appears that the sums of HK$6,300 and HK$2,250 have already been accounted for by the Plaintiff. I will therefore exclude them from my consideration of the Defendant’s case.
86. As for the sum of HK$26,550:-
(1) In support of the payment of this sum, the Defendant referred to, inter alia, a cheque request form issued on 14 July 2014, under which HK$2,250 was applied to settle Invoice 02458.[21] According to the contemporaneous handwriting on Invoice 02458, I find that this sum has been fully accounted for by the Plaintiff;
(2) As for the remaining sum of HK$24,300, Wong’s evidence in his witness statement is that such sum was to settle purchase order PO14-2199 issued by the Defendant on 15 April 2014, but by the Defendant’s late contention[22] the Court was asked to disregard this amount as it overlapped with the payment made for VOs performed in or after July 2014 for the sums of HK$5,850 and HK$20,700. Given Mr Wong’s evidence that the purchase orders from the Defendant tended to postdate its oral instructions, it is unlikely that the relevant purchase order was issued in respect of the VOs performed in or after July 2014 as contended by the Defendant. I therefore reject the Defendant’s contention;
(3) Despite my finding above, I am not persuaded by the Plaintiff that there was no specific appropriation of the said sum of HK$24,300 by the Defendant. First, the Defendant’s stance is that I should disregard Wong’s evidence that the sum of HK$24,300 was applied to settle purchase order PO14-2199, but that does not mean that Mr Wong’s evidence has been retracted or does not exist. Second, by the description of the VOs under the purchase order PO14-2199, I find that the VOs specified thereunder correspond precisely to those under Invoice 02463[23] both in terms of the nature and quantity of the VOs. For this reason, and given Mr Wong’s evidence under his witness statement, I find that the sum of HK$24,300 was specifically paid in satisfaction of the debt due under Invoice 02463. The Defendant’s intention that he intended at the time of payment to appropriate the said sum to the debt due under Invoice 02463 can be collected from the issuing of the purchase order (about 2 weeks after the issuing of the Invoice) and the subsequent payment in satisfaction of the said purchase order. In any event, it is not essential for the Defendant to expressly specify which debt or account it intended the payment to be applied to at the time of payment: Chitty on Contracts (32nd ed), Vol 1, §§21-062 to 21-064. For this reason, the sum of HK$24,300 should be deductible from the remunerations payable to the Plaintiff.
87. Regarding the sum of HK$5,400 (which was allegedly paid pursuant to a cheque in the sum of HK$28,467), unlike other payments, no receipt has been produced to show that the sum had been received by the Plaintiff. Further, the Defendant only relies upon a cheque request form issued on 11 August 2014 in support of its case that the sum was appropriated to satisfy Invoice 02473.[24] Nevertheless, the cheque request form is admittedly an internal document of the Defendant and there is no evidence that such appropriation of debt has been communicated to the Plaintiff, whether explicitly or impliedly. Indeed, it was admitted by Ms Yip, the account clerk of the Defendant who was tasked with the preparation of the cheque request forms, that she was only concerned with the payee’s name, amount payable and name of the construction site when she prepared those forms. In the absence of a specific appropriation by the debtor the creditor may appropriate payments on account to whatever debts it pleases: Keating on Construction Contracts (11th ed), §4-089. In the premises, I find that the Defendant has failed to prove that this sum has been paid hence deductible from the amount payable to the Plaintiff.
88. As for the amount of HK$10,800, the Defendant relies on a cheque request form issued on 16 June 2015 to show that it was paid in satisfaction of Invoice 0776.[25] For the same reason stated above, I am not satisfied that the Defendant is entitled to deduct the same from the amount payable to the Plaintiff.
Other Sums deductible from the Remunerations
89. In its supplemental closing submissions, the Defendant also seeks to argue that further sums in the total amount of HK$32,922 should be deducted from the remunerations payable to the Plaintiff.
90. With respect, this further deduction was not pleaded in the ADCC as the amount deductible from the sum payable to the Plaintiff under the Oral Agreements. I will therefore disallow this case being advanced by the Defendant.
Total amount payable under Oral Agreements
91. In the circumstances, I find that the total amount of outstanding remunerations payable to the Plaintiff under the Oral Agreements should be HK$556,340.12 (HK$655,190.12 – HK$74,550 – HK$24,300).
COUNTERCLAIM
Defendant’s Counterclaim
92. The Defendant’s counterclaim is for rectification costs in respect of the Defective Works incurred:-
(1) For direct rectification costs, the Defendant claims HK$994,625 being costs of workers engaged by the Defendant;
(2) For indirect rectification costs, the Defendant claims HK$499,295.44 being sum deducted by Chun Yip from the contract sum payable to the Defendant for engaging contractor.
93. The Defendant relies on Clauses 2, 3, 4, 11 and 14 of the SC Terms to the effect that the Plaintiff should indemnify it for all costs, expenses and damages incurred or occasioned by the engagement of workers due to the Defective Works.
Defective Works
94. The first issue to be determined is whether there were Defective Works and, if so, whether they were caused by the Plaintiff.
95. Under ADCC, the Defendant’s complaint on the Defective Works was that:-
(1) Some of the wooden floors installed by the Plaintiff were uneven;
(2) The grout lines in between some of the wooden boards were found to be uneven and/or too large; and
(3) Some flooring and skirting boards were found to be damaged and/or defectively installed.
96. Pursuant to the Court’s direction on 4 September 2023, the Defective Works are particularized by the Defendant in a “Table of the alleged Defects and Remedial Works” setting out, inter alia, when and where the defects were found as well as description of those defects found in Towers 1, 2, 3 and 5 (“Defective Works Table”).
97. There can be no doubt that the burden of proving the above lies squarely on the Defendant. In this regard, the Defendant does not call any expert evidence but places heavy reliance on a table titled “Defect Job Tracking Module” (“Defect Job Tracking Module”), which contains, with respect to each of the defects, the following information:-
(1) A coloured floor plan purportedly with indicator showing the location of the defect(s) in that particular unit;
(2) Short description by words as to the location and nature of the defect; and
(3) Thumbnail photo(s) purportedly showing the relevant area of the unit where the defect was found and (in most cases) indicator(s) purportedly indicating the location of the defect(s) in the photo(s).
98. In spite of the rather voluminous Defect Job Tracking Module, I fail to see how it shows the existence of the Defective Works and, most importantly, that they (if ever existed) were caused or contributed to by the Plaintiff:-
(1) All the photos in the Defect Job Tracking Module are of thumbnail sizes and low resolution.[26] I must say that these photos barely show any legible evidence of Defective Works despite with the aid of subsequent indicators. In many photos, the indicators can merely highlight some dot(s) or patch(es) of colour pigments. One simply cannot conclude, on balance of probabilities, whether these photos indicate the existence of the Defective Works or other objects (eg dirt, debris or shade), or whether the existence of these colour pigments was simply due to quality of the photos. It would be an even more impossible task to infer from these photos that the Defective Works (if they can show any) were contributed to or caused by the Plaintiff;
(2) Notwithstanding the poor quality of the photos in the Defect Job Tracking Module, the Defendant has failed to produce any factual or expert witness to further explain how the images related to the verbal description of the defects stated in the corresponding module and, in each particular case, on what ground was the alleged defect said to be caused or contributed to by the Plaintiff;
(3) As to how the Defect Job Tracking Module was prepared, although it seems that the same should have been prepared pursuant to an inspection at the Site, there is no evidence as to how and by whom such inspection was conducted (hence any chance to verify if the descriptions in the Defect Job Tracking Module are true and accurate). Mr Wong also confirmed that the Defect Job Tracking Module was not created by the Defendant, nor did he know whether it was prepared by Chun Yip. There is therefore no evidence as to who conducted the said inspection, and what was the standard applied by the person who screened out the alleged ‘defects’ for inclusion into the Defect Job Tracking Module;
(4) Further, despite it is the Defendant’s case that the Plaintiff has been asked to rectify the defects, there is no evidence that the Defect Job Tracking Module, which should be the best item to demonstrate to the Plaintiff the Defective Works to be rectified, has been provided or explained to the Plaintiff.
99. In his witness statement, Mr Wong has stated in general terms various categories of Defective Works found from the Installation Work provided by the Plaintiff. I do not intend to attach much weight to his evidence:-
(1) Wong’s evidence in this regard was purportedly made as a general comment based on the Defect Job Tracking Module.[27] As observed above, Mr Wong had no idea as to how this document was prepared. In my view, his comments were merely built upon the contents of the Defect Job Tracking Module but not from his personal knowledge. Given my findings regarding the quality of the Defect Job Tracking Module above, I see no reason why his generic observation can remedy the quality issue of the Defect Job Tracking Module;
(2) His evidence relating to the sound caused by the flooring and the grout lines between flooring was solely or partly based on his personal speculation. There is no evidence that his speculation has been verified by any test or inspection. As to his evidence relating to other defects of the Installation Work, it is apparent that the same was based on the contents of the Defect Job Tracking Module which I found unable to demonstrate the defects and (if so) their causes.
100. In fact, contrary to the Defendant’s case, it appears that Mr Tso has in a message sent on 17 June 2016 confirmed that the Plaintiff had no outstanding rectification works（其師傅無VO手尾留底）.[28] Although the Defendant pointed to other evidence including Mr Tso’s dissatisfaction with the Plaintiff shortly after the said message（佢個人係唔係有問題，開始同佢開波）and his remark that there might be deduction for further rectification works（再有地板Defect（手工上）可先叫何誠代做，同時會拍照待日後向地板扣數）, they are merely evidence of Mr Tso’s distrust against the Plaintiff and probably existence of prior defects from the Installation Work, but not evidence of any outstanding Defective Works left by the Plaintiff.
101. Furthermore, there seems to be no dispute that by 25 January 2016 the Plaintiff has already been paid about 95% of the money under the 1st Contract (including the 5% of the Retention Money which the Defendant was entitled to retain until the Plaintiff had completed the remedial works). There is no reason why the Defendant would not insist on its contractual right to retain that 5% of Retention Money if the Plaintiff had left the Defective Works at the Site un-remedied.
102. In its closing submissions, the Defendant seems to adopt an eliminative approach by suggesting that since a protective layer must be put onto the flooring after its installation, it is unlikely that the damage to the flooring and skirting would have been caused after installation, and by an eliminative approach – the damage must be a result of the defective Installation Work. I am not persuaded by this argument. There are several reasons why this approach is not preferable in the present case:-
(1) According to Mr Wong, the Defendant has been monitoring the quality of the Installation Work since the end of 2013. There is no good reason as to why the Defendant could not rely on direct evidence to demonstrate the existence and cause of the Defective Works. The absence of direct evidence in the present case may well be indicative that the Defective Works (if any) were not caused by the Plaintiff;
(2) Further, it is Mr Wong’s evidence under cross-examination that the protective layer would not cover the skirting. Any defects on the skirting should therefore be readily observable by the Defendant’s staff even when protective layer was applied. For this reason, I find the very basis of the eliminative approach questionable;
(3) The above is highlighted by the fact that the Defendant made no complaint about the Defective Works until the commencement of this action. The only relevant complaint about noise from the flooring was raised by an owner of a unit at Tower 3 (instead of the Defendant) in May 2017, of which liability was swiftly denied by the Plaintiff and there is no evidence that the Plaintiff has been pursued on the said issue after his denial;
(4) In any event, the eliminative approach does not give any assistance to my observation above that there is insufficient evidence to show the existence of the Defective Works.
103. In these proceedings, the Defendant has also produced tables prepared by Ms Yip after the completion of construction works stating the amount which should be segregated and borne by the Plaintiff. In my view, those tables only show the amount of rectification costs allegedly borne by the Defendant. Insofar as it is claimed that these tables show the cause of the Defective Works was the Plaintiff, the same must be self-serving.
104. In any event, it must be curious to note that the particulars of the Defective Works were not raised with the Plaintiff until the filing of the Defence and Counterclaim in August 2019. By the Defendant’s own case, the Defective Works were not only discovered by fully remedied by March 2018. One would have thought that if the Defendant was conscious about the nature of the Defective Works and that they were caused by the Plaintiff, the same should have been raised at a much early stage. The delay in raising those particulars is again indicative of the fact that they were not caused by the Plaintiff.
105. For the above reasons, I find that the Defendant has failed to show, on a balance of probabilities, that the Defective Works (if there were any) were caused by the Plaintiff.
106. Since the Defendant has failed to show that the Defective Works (if any) were caused by the Plaintiff, it is unnecessary for me to decide whether the Plaintiff would be liable to indemnify the Defendant’s direct and indirect rectification costs under Clauses 2, 3, 4, 11 and/or 14 of the SC Terms; nor would I have to resolve whether the Plaintiff was in breach of section 5 of the Supply of Services (Implied Terms) Ordinance (Cap 457) and/or the implied term referred to in paragraph 45 of the Defendant’s Closing Submissions, of which none of them has been pleaded in the ADCC.
Alternative Cause of Defects
107. Notwithstanding my findings above, it may also be obligatory for me to resolve an issue brought upon by the Plaintiff in which he suggested that the Defective Works (if any) were or might have been caused by other alternative cause(s), as considerable effort has been made by both parties in making submissions thereto.
108. The issue first arose from a newly added paragraph 6(h) of the ARDCC filed shortly before the trial, to which the Defendant did not object. Under the said paragraph, the Plaintiff pleaded, inter alia, that certain defects on the flooring and skirting (ie wrapping, bulging, contracting, buckling, cracking, black spots, stains and/or mould) were due to moisture retained during manufacturing and/or soaking after installation.
109. What has become contentious is that, in paragraph 6 of P’s SWS, the Plaintiff suggested that improper humidity control during manufacturing process could be a cause of the defects pleaded above. As stated in the earlier part of this judgment, admissibility of this paragraph was objected to by the Defendant on the ground that it was opinion evidence and, at the beginning of the trial, I ordered that the relevant part to be admitted on a de bene esse basis.
110. Two issues have arisen from the alternative cause of defects suggested by the Plaintiff, namely:-
(1) Whether paragraph 6 of P’s SWS is admissible; and
(2) If so, how should the Court apply the relevant evidence?
111. Before answering the above questions, it is relevant to first set out the legal principle applicable to the situation where a party alleges that the cause of defects is due to the problem of the other party and in response the other party (ie the opposing party) contends that the problems are not attributable to him. It has been held in Maxking Concrete Co Ltd v China Civil-Road & Bridge Joint Venture HCCT 2/2003 (8 May 2007, Recorder Paul Shieh SC, unreported), §§74-77 that:-
(1) Strictly speaking, there is no burden on the opposing party to suggest or prove the real cause or reason for the problems;
(2) Where, in the course of addressing the claimant’s expert evidence on the cause of defects, the opposing party has suggested some alternative causes, it is not for that opposing party to prove such alternative causes;
(3) However, as soon as that opposing party can point to evidence that there is scope for the alternative causes (which is causative of the problems), then, as part and parcel of the burden to prove his case, the claimant would have to show, on a balance of probabilities, that there is no such alternative cause or that such alternative cause is not causative of the defects;
(4) This is not to require the claimant to eliminate all sorts of fanciful possibilities under the sun. One needs some evidence from the opposing party to raise an issue first. In technical terms, the opposing party has the evidential burden, but once that is discharged, the legal burden of eliminating that is on the claimant;
(5) In terms of what evidence is needed from the opposing party, one does not need a direct eye-witness testimony, which is only one of the possible types of evidence which may be used to raise an issue. One is entitled to rely on legitimate inferences which can be drawn from objectively observable facts and common sense.
112. In my view, the above principle is applicable to the present case. Therefore, in raising the alternative cause(s) of the Defective Works:-
(1) There is strictly speaking no burden on the Plaintiff to suggest or prove that the real cause of the Defective Works was moisture or other cause(s) such as defective manufacturing. In suggesting that they were/could be alternative causes, it is not for the Plaintiff to prove these alternative causes;
(2) However, the Plaintiff can point to or rely on legitimate inferences which can be drawn from objectively observable facts and common sense to show that there is scope for the alternative cause(s);
(3) As soon as that happens, the Defendant should, as part and parcel of its burden to prove its case, show that there is no such alternative cause(s) or that such cause(s) is not causative of the Defective Works.
113. Given my findings above that the Defendant has failed to show that the Defective Works (if any) were caused by the Plaintiff and the observation of the Court in Maxking Concrete Co Ltd, it is unnecessary for me to deal with the admissibility of the aforesaid evidence from the Plaintiff and how it should be applied. However, for the purpose of completeness, I will deal with the matter hereinbelow.
114. In my view, paragraph 6 of P’s SWS is admissible for the following reasons:-
(1) It is pertinent to note that the Plaintiff’s evidence is paragraph 6 of P’s SWS is measured. Despite the Plaintiff’s firm position under the ARDCC that the Defective Works were caused by moisture and/or defective manufacturing, the Plaintiff’s evidence does not come to any real cause of the defects and merely suggests that improper humidity control during manufacturing might have caused (可能引致) the similar defects now claimed by the Defendant;
(2) The aforesaid difference is material when the issue of admissibility comes to be considered, as the same is relevant to the degree and cogency of the relevant experience or knowledge required. Whilst a high degree of expertise will be expected if the Plaintiff is to comment on the real cause of the Defective Works (in such case, the Plaintiff will have comment on the feature of a specific type of flooring towards moisture, possibly with the aid of tests and/or authorities), a relatively lower standard of knowledge or experience will be sufficient if the Plaintiff only tried to suggest a possible cause of the defects (in such case, by way of his general experience from dealing with timber flooring). In my view, given the unchallenged evidence that the Plaintiff has commenced his business of flooring installation, maintenance and repair since 1992, a legitimate inference can be drawn that the Plaintiff should have the required experience or knowledge based on his many years of experience in installing, maintaining and repairing different kinds of timber flooring;
(3) The Plaintiff’s opinion regarding humidity control is apparently not without basis. For instance, the Plaintiff has mentioned in his letter of 30 May 2017 that the noise issue on the flooring was relevant to moisture; it also appears from the PV Record that moisture content is a specific area where testing and inspection would be conducted, and Mr Wong also reckoned during cross-examination that proper humidity control was important to maintenance of the flooring;[29]
(4) Indeed, the fact that the Plaintiff is a factual witness in this case does not necessarily preclude him from giving opinion through his knowledge or experience. It has been held in Multiplex Constructions (UK) Ltd v Cleveland Bridge UK Ltd (No 6) [2008] EWHC 2220 (TCC) that a factual witness, who possesses considerable knowledge and experience on a relevant matter, is allowed to proffer statements of opinion related to his knowledge and based on his own experience. This principle, which is widely known as the Multiplex principle, is now applicable outside the field of construction: MG Charter Ltd v Beijing Caissa International Travel Service Co Ltd [2019] HKCFI 2800, §§7-14.
115. In the premises, I find that paragraph 6 of P’s SWS is admissible for the purpose of proving the Plaintiff’s statements therein. Further, by adducing paragraph 6 of P’s SWS, the Plaintiff has discharged his evidential burden under Maxking Concrete Co Ltd by pointing to the alternative cause, namely, improper moisture control as a possible cause of the defects (if there were any).
116. The next question is whether the Defendant can show that there is no such alternative cause or that such alternative cause was not causative of the defects. In this regard, I found that the Defendant has discharged its legal burden in showing that the improper moisture control was not an alternative cause. I give specific weight to the following evidence:-
(1) According to the PV Record, the flooring materials were ascertained to be up to standard, including the humidity/moisture content. On the other hand, there is no evidence supporting that the timber flooring supplied by the Defendant was defective, or there was any retention of moisture occurring during the manufacturing process;
(2) During his cross-examination, Mr Wong confirmed that the flooring material used at the Site was of “2nd generation” and less prone to warping due to humidity. His evidence was not challenged by the Plaintiff;
(3) The Plaintiff’s evidence in paragraph 6 of P’s SWS is only in relation to his general knowledge on possible defects caused by moisture. His evidence is also not directed at the specific timber flooring used at the Site (ie the “2nd generation” flooring).
117. In his closing submissions, the Plaintiff also suggested other possible alternative causes of defects by reference to conversation records, including inexperienced workers, status of concrete slab, mice problem and issue from sourcing through other manufacturers. It suffices to say that these causes are neither pleaded nor mentioned in the Plaintiff’s witness statements, nor were they specifically put to Mr Wong during cross-examination. For this reason, I find that, insofar as these purported causes are concerned, the evidential burden stated under Maxking Concrete Co Ltd has not been sufficiently discharged by the Plaintiff, and it does not lie upon the Defendant to spot them out from the conversation records and ‘eliminate’ them.
Causation of Damage
118. For completeness sake, I would also find that the Defendant has failed to show that the Defective Works are the cause of the damage suffered.
119. Regarding the Defendant’s counterclaim of HK$994,625:-
(1) The Defendant’s claim under this head is based on a table complied by Ms Yip (supported by cheque request forms) setting out the breakdown of wages paid to each worker engaged. This table was produced in Mr Wong’s witness statement but Mr Wong admittedly had little knowledge about how this table was compiled. This table was prima facie unreliable as it includes considerable amount of invoices for work done on “timber doors” (which is obviously outside the scope of the 1st Contract) and unspecified work;
(2) About 3 months after the aforesaid table was referred to by Mr Wong in his supplemental witness statement, Ms Yip filed an affirmation admitting that the payment details in the cheque request forms attached might be inaccurate or incorrect. She further referred to another table prepared by her setting out the rectification costs incurred by the Defendant and stated that all items specified in those tables were mostly deductions at the expense of the Plaintiff. In my view, this explanation is unbelievable. In Ms Yip’s affirmation, it was said that the cheque request forms were prepared to “keep accounting record in respect of that particular construction as a whole” and that the tables were prepared after completion of construction works for the purpose of “segregating the labour costs incurred on timber doors, timber panels and wooden floors and boards respectively”. If that was the case, it would be astonishing that the cheque request forms could be done in such a callous way, such that a number of works responsible by other sub-contractors were mistakenly put into the Plaintiff’s account. This does not sound reasonably plausible given the purpose for which the cheque request forms and tables were prepared. For this reason, I reject Ms Yip’s evidence in this respect. I find that the particulars of the cheque request forms represent the nature of the works stated therein, and on this basis the earlier table provided by the Defendant in support of the claim under this head is inaccurate and unreliable;
(3) Further, it is Ms Yip’s evidence that the cheque request forms were incorrect or inaccurate as they have not been verified with the foremen at the Site. This is tantamount to suggesting that the cheque request forms could not be referred to in support of the items in the earlier table because to do so one would run the risk of including unverified items at the Plaintiff’s expense. If that is the case, the reliability of the table would have to clinch upon the truthfulness of Ms Yip’s evidence that the items therein have been cross-checked with the foremen’s records, which remains a bare assertion as the foremen’s records were never produced for having been allegedly misplaced. I reject Ms Yip’s account. Her evidence in this respect is a bare assertion and contrary to the particulars in the cheque request forms;
(4) During the hearing, Mr Wong has tried to explain the discrepancy by saying that some door workers had worked on timber doors due to insufficiency of flooring workers and that was why some cheque request forms contained particulars about works on timber doors. I reject Mr Wong’s explanation. Despite the discrepancy was apparent on the face of the documents provided by the Defendant, no attempt has been made by Mr Wong to explain this in his witness statements and the explanation was only given during cross-examination when the discrepancy issue was expressly put to him.
120. In the premises, I find that the Defendant has failed to discharge its burden in showing that the said costs of reinstatement were caused by the Defective Works.
121. Regarding the Defendant’s counterclaim of HK$499,295.44 which was deducted by Chun Yip from the sum originally payable to the Defendant for the Flooring Work:-
(1) The Defendant’s claim is based on a draft account of flooring work (工程結算) issued by Chun Yip on 27 March 2018. Breakdown of the draft account was disclosed by Chun Yip pursuant to a subpoena duces tecum. According to Mr Wong, the original sum sought be deducted by Chun Yip was over HK$800,000, and the current sum was arrived at through negotiations with Chun Yip in 2017, during which each issue Chun Yip rectified and the reason for rectification were respectively identified and ascertained;
(2) I refuse to accept the draft account as evidence of the sum claimed under this head. Despite Mr Wong’s evidence that the sum was arrived at through a scrutinized negotiation with Chun Yip, there is not the slightest evidence in his statement mentioning anything about the negotiation process or how the final deduction sum came about. The Defendant also saw fit not to call the relevant personnel from Chun Yip to testify as to how each item of the works were verified during the negotiation. In the absence of any evidence about the process of negotiation, the settled deduction sum smacks a product of a black box operation;
(3) My criticism of Mr Wong’s evidence was not made out of vacuum. During cross-examination, it has been demonstrated that Mr Wong was unable to explain why works in relation to a unit at Tower 9 (which is obviously outside the scope of the 1st Contract) were included amongst the deduction. When being pressed, Mr Wong admitted that he did not know if the breakdown was accurate or if the item actually related to the Plaintiff. Mr Wong was also admittedly ignorant as to the basis on which Chun Yip apportioned 15% of contra-charge, among which 10% related to the flooring, for the Defendant, when he was presented with the table purportedly issued by Chun Yip in August 2016. All in all, the veracity of Mr Wong’s evidence that each rectification item has been identified and ascertained is very much questionable;
(4) Regarding the evidence of what rectification works were purportedly performed by New Fu Hing (the sub-contractor engaged by Chun Yip), the job details and instructions issued by Chun Yip are non-specific. There is no evidence showing sufficient details to associate the rectification costs with the Defective Works allegedly caused by the Plaintiff. This would be crucial as the defects must be an ‘effective’ cause of the loss: Chitty on Contracts (35th ed), §§30-075, 30-085.
122. Finally, one should not lose sight of the fact that, before the filing of the Defence and Counterclaim on 16 August 2019, the Defendant did not raise with the Plaintiff about the claims herein. This is particularly unusual as the two sums now claimed by the Defendant have respectively been incurred and finalized at much earlier stages:-
(1) The Defendant’s rectification expenditure of HK$994,625 was allegedly incurred between September 2015 and July 2016;
(2) The deductions by Chun Yip of HK$499,295.44 were allegedly finalized by 27 March 2018.
123. Again, a reasonable inference which can be drawn from the above is that the Plaintiff has left with no outstanding Defective Works which require rectification.
124. I find that the Defendant has failed to show that the said deduction from Chun Yip was caused by the Defective Works.
125. In the circumstances, the Defendant’s counterclaims should be dismissed.
DISPOSAL
126. In the premises, I would order that:-
(1) Judgment be entered in favour of the Plaintiff in his claim against the Defendant in the sum of HK$556,340.12; and
(2) The Defendant’s counterclaim be dismissed.
127. There shall be interest on the Plaintiff’s claim at HSBC’s best lending rate from the date of the issue of the writ to date of this judgment, and thereafter at judgment rate until payment.
128. I would also make an order nisi that 50% of the costs of the action and costs of the counterclaim be the Plaintiff to be taxed if not agreed. Unless either party applies to vary the same, such order shall become absolute after 21 days from today.
129. Lastly, it remains for me to thank counsel for their assistance.
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( Matthew Ho ) |
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Deputy District Judge |
Ms Jacquelyn Ng, instructed by Cheung, Chan & Chung, for the Plaintiff
Mr Tony Ko and Ms Michelle Lin, instructed by V Hau & Chow, for the Defendant
[1] Namely, Towers 1, 2, 3 and 5.
[2] “付款要求：
1) …
2) 我司會於糧款中扣除10%保固金，5%於完成執漏後支付，5%於業主發放後支付”
[3] For the Defendant, the inspection was attended by its General Manager Mr Jim Wong (“Mr Wong”) and its Assistant Project Manager Mr Morris Tso (“Mr Tso”).
[4] The 2nd Contract was embodied in a purchase order (no.PO15-2471) issued by the Defendant to the Plaintiff on 30 September 2015.
[5] The Plaintiff’s pleaded case of “not less than 24 workers” appears not to be an accurate reflection of its original Chinese meaning of “24人以上”. However, since the Plaintiff’s pleaded case is admitted by the Defendant in the Amended Defence and Counterclaim (“ADCC”), I shall take the Plaintiff’s pleaded case to be the parties’ agreed case.
[6] In his Closing Submissions, the Plaintiff further relies on the 4 confirmation notices issued by the Defendant (“Confirmation Notices”) to show that Installation Work of the flooring was completed on an even earlier date, ie 31 October 2015.
[7] In the said letter, the Defendant further warned the Plaintiff of the adverse consequence he had to face if he failed to increase the manpower（本司鄭重聲明，日後如因貴司人手不足而導致工程未能於下月25日之前完成，一切過期罰款及後果將由偉勝工程一力承擔）.
[8] The relevant message reads “1-5座管工同事請留意：由10月2日開始，地板師傅人數將會全部由地板呂負責，請每日盡早核實其人手之真偽，（每座最少4人共24人）目標為25/10前4柱完成地板工程，故此請於這段時間內，無論地板進度，人手分配，質量都要全力追擊地板呂以配合完工期限 …”
[9] Paragraph 4(iii) of the Amended Statement of Claim (“ASOC”).
[10] Paragraph 5 of the ASOC pleaded that “The Plaintiff has satisfactorily performed all obligations under the 2nd Contract”; paragraph 6(c) of the ARCC further pleaded that “the Plaintiff has fulfilled the 3 express terms under the 2nd Contract by 22nd October 2015”.
[11] “直至2015年10月22日，所有地板及地腳線原材料已沒有存貨，補充貨源需分別等待至10月27日及11月2日才能運送到地盤，而當時的工程進度已達到9月30日的協議的三項要求” (paragraph 11)
[12] “我司如期達到9月30日的協議中的3條條款，於但工程完成後被告人卻沒有履行該項9月30日的協議的條款 …” (paragraph 12)
[13] “他並說錢必定會收到，之後會全數繳清”
[14] Order of Deputy District Judge David Chan dated 4 September 2023.
[15] Paragraph 7 of the ADCC and paragraph 35 of Wong’s 1st witness statement. Also see: paragraph 10.1 of the Defendant’s Opening Submissions.
[16] Among the 22 Invoices, the Plaintiff would invariably use ‘摩利仕’ or ‘摩利是’ to denote Mr Tso, ‘黃英勤先生’ to denote Mr Wong and ‘傑佬’ or ‘傑哥’ to denote Kit.
[17] See: Paragraphs 39 to 41 of the Defendant’s Closing Submissions.
[18] The relevant paragraph of the 1st Undertaking stated, “有關合約外工程，我司會配合青木共同追討大判晉業建築有限公司，待晉業建築有限公司發放給青木才申請額外工程款項”
[19] “於總工程未完成前各類後做、補做、後加或臨時增加之一切瑣碎工作，承判人或公司須按時派人完成及按照合約單價計算。”
[20] “凡可量度之工程，均不得以代工計算。”
[21] Item 2 of the Plaintiff’s Table
[22] Paragraph 7 of the Defendant’s Supplemental Closing Submissions.
[23] Item 3 of the Plaintiff’s Table
[24] Item 4 of the Plaintiff’s Table
[25] Item 6 of the Plaintiff’s Table
[26] Most of the photos in the Defect Job Tracking Module are of 1.5 cm x 2.5 cm or 1.5 cm x 0.9 cm only. Although the parties have helpfully prepared electronic copy of the trial bundles and as a result the photos can be enlarged when viewed by a computer, the resolution of these photos further decreases upon the enlargement of their sizes.
[27] See: paragraph 16 of Wong’s first witness statement, in which he said “就偉勝在該工程的質素問題，詳見被告人的文件清單的項目13 (ie Defect List Tracking Module)”
[28] The whole message reads “16/6/17 20:33 - Morris: 星期一開始，呂光勝會停地板代工人手，其師傅無VO手尾留底。再有地板Defect（手工上）可先叫何誠代做，同時會拍照待日後向地板扣數”
[29] Although Wong qualified his evidence by saying that the flooring used in the Site were of “2nd generation” and less prone to be affected by humidity.
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