NG SHING NAM t/a ARTLAND DECORATION CO. v. BESTREPS INTERNATIONAL LTD.

HCA 5229/1998

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 5229 OF 1998

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J U D G M E N T

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1. The Plaintiff is a decoration contractor. In June 1997 he provided a quotation to Mr Samuel Wong of the Defendant company in respect of decoration work to be carried out at two adjoining flats belong to the Defendant in Pictorial Garden, Shatin which were to be amalgamated to form one large flat. As a result the Plaintiff was engaged to carry out the work specified in the quotation and additional work at Mr Wong's request.

2. This claim is for the balance of the amount which the Plaintiff claims he is owed under his invoice dated 31 December 1997 in respect of such work. The invoice is in the total sum of $1,284,354. There is no dispute that sums totalling $1,100,000 have been paid by the Defendant, leaving a balance of $184,352 which the Plaintiff claims in this action (subject to a deduction of $14,800 which Mr Ling has conceded on behalf of the Plaintiff to which I shall refer later).

3. The defence of the Defendant is simply that after being presented with this invoice by the Plaintiff in person on 26 January 1998, Mr Wong of the Defendant discussed with him a number of alleged inadequacies and/or inaccuracies in the invoice (which are set out in para. 6 of the defence) as a result of which the Defendant agreed to pay and the Plaintiff agreed to accept a cheque of $400,000 (which forms part of the $1,100,000 to which I referred earlier) in full and final settlement of the Defendant's liability. Mr Wong maintained that this agreement was reduced into writing and signed by the Plaintiff in his office that day on a photocopy of the cheque (Exh. P1).

4. The Defendant counterclaims for the sum of $16,420 in respect of items which it maintains the Plaintiff promised to deliver under the terms of the compromise, but failed to do so.

5. The Plaintiff maintains that there was no such compromise agreement. Although he agrees that he attended the office of Mr Wong with an employee on 26 January 1998 and the subject of the invoice, which he said he had delivered to Mr Wong earlier that month, arose, Mr Wong had not gone through the invoice with him but had simply said that it was too expensive. Mr Wong had then attempted to obtain a discount on the amount of the invoice. The Plaintiff had declined. He stressed that he had to pay his workers as it was just before Chinese New Year and that if Mr Wong was not satisfied with any particular item in the invoice he should point it out. Mr Wong had not done so. Mr Wong had arranged for the Plaintiff to be given a cheque for $400,000 and the Plaintiff had said that in so far of the balance was concerned if there was anything Mr Wong wished to raise with him they could talk about it later.

6. The Plaintiff agreed that he signed beneath a photocopy of the cheque but maintained that at the time he did so, the two typed lines above and the typed words beneath his signature were not there.

7. He agreed that he promised to deliver 2 bedside tables and 2 headboards (which form part of the subject matter of the counterclaim) after Chinese New Year. He did not do so because when he telephoned the Defendant after Chinese New Year to discuss the payment of the balance of the invoice with Mr Wong of the Defendant, Mr Wong had told him that he had already cleared the debt and invited the Plaintiff to sue him.

8. It has been argued on behalf of the Plaintiff that even if the court were to find that the Plaintiff did agree to accept $400,000 in full and final settlement of his claim on 26 January 1998, that agreement was not binding as it was without consideration and fell within the rule set out in Pinnel's case (1602 5 Co. Rep. 117a).

9. In this trial there was only one witness for the Plaintiff, Mr Ng Shing Nam himself and only one witness for the Defendant, Mr Samuel Wong.

10. The resolution of the issues in this trial therefore turned on the court's assessment of the credibility of these two men.

11. I had no hesitation in preferring the evidence of the Plaintiff to that of Mr Wong.

12. The Plaintiff impressed me as a frank and reliable witness. He readily conceded but there were some inaccuracies in the invoice he submitted to Mr Wong which arose from the fact that his wife typed out the invoice. She had relied upon the quotation in specifying the items of work done in a number of instances when, as a result of subsequent changes authorised by Mr Wong, variations had been made and different work had been performed. The Plaintiff went through each of the items complained of by the Defendant in para. 6 of its Defence. He conceded that items 27, 30 and 32 had not been delivered for the reasons I have referred to earlier. I found that he gave a convincing explanation for the charges specified against each of the items of work even though on its face in some instances the invoice might have been misleading in describing the actual work done.

13. I accepted his evidence that the invoice (Exh. P3) had been delivered to Mr Wong well before the meeting on 26 January 1998. The invoice itself was dated 31 December 1997 and there would have been no reason for the Plaintiff to delay delivering it to Mr Wong until 26 January 1998.

14. I also found the Plaintiff a far more credible witness than Mr Wong as to what occurred at the meeting on 26 January 1998.

15. I did not find Mr Wong an impressive witness. His evidence was confused and evasive.

16. He initially suggested that the discounts on the invoice he had sought to obtain at the meeting on 26 January 1998 were based on some sort of calculation he had made arising from errors in the invoice but when pressed to explain how he had made such a calculation in specific instances, he appeared incapable of giving an explanation. He admitted that he had made no written calculations. This evidence lent strength to the Plaintiff's suggestion that Mr Wong was attempting to obtain an arbitrary discount on the invoice price without reference to a shortcomings in the invoice. It was apparent from the evidence that he was accustomed to demand discounts from the Plaintiff in respect of previous work performed.

17. Mr Wong claimed that he had gone through each of the complained of items with the Plaintiff at the meeting. He claimed that in respect of most if not all of the items the Plaintiff had said nothing when the shortcomings on the invoice were pointed out to him. Having seen and heard the Plaintiff and his explanations for the items on the invoice, I do not believe he would have remained silent if these matters had been pointed out to him. I am satisfied that he would have given explanations for the charges he was making. This reinforces my view that the Plaintiff's version of this meeting is the more probable.

18. I found Mr Wong's own version of how certain work came to be performed unreliable particularly, for instance, the circumstances in which the walls of the living room were painted rather than wallpapered.

19. I found the Plaintiff's account of how the page bearing a photocopy of the cheque for $400,000 (Exh. P1) came to be signed to be more credible than that of Mr Wong.

20. The Plaintiff said that he had signed the photocopy simply to acknowledge that he had received the cheque and there had been no words typed on it when he signed it. That is consistent with his signature on another photocopy (Exh. P2) in respect of an earlier payment under the same contract.

21. Examination of the document (Exh. P1) lends some support to the Plaintiff's version that the typed words were not added until later (though I must stress I would not have acted on this alone). On the photocopy the first line of words above the signature are typed over the bottom of the image of the cheque. One would perhaps not have expected that to be done if those words had been typed there before the signature was appended. Moreover, it seems a remarkable coincidence that the description of the signatory typed under the signature should be "Ng Shing Nam t/a Artland Decoration Co." which corresponds to the title of this action.

22. The evidence of Mr Wong as to who decided the wording above the signature was somewhat contradictory. In evidence in chief he suggested that although it was typed by him, they were the Plaintiff's words although the Plaintiff had expressed them in Chinese. In cross-examination he retreated from this by saying that they did not represent the Plaintiff's words but simply what was agreed between them.

23. I found it curious on the account of Mr Wong that since both men were present and it was apparent that the Plaintiff did not speak English that Mr Wong should type out the words in English.

24. I also found it curious, if Mr Wong's account was true and his daughter knew about the document as he alleged, that Mr Wong's daughter should not refer to this document in writing in her reply dated 25 March 1998 to the Plaintiff's solicitors particularly when she maintained that the Plaintiff had "repeatedly confirmed to us verbally that the payment was settled".

25. I am satisfied that there was no agreement on 26 January 1998 that the cheque for $400,000 was in full and final settlement of the Plaintiff's invoice.

26. No issue as to the applicability of the rule in Pinnel's case therefore arises.

27. Mr Ling has conceded that the Plaintiff no longer seeks to claim for the 2 bedside cabinets and the 2 bedboards which he had not yet delivered. I therefore deduct the agreed sum of $14,800 to represent these items from the sum of $184,352 claimed.

28. I accept the Plaintiff's evidence that the other amounts claimed are properly due from the Defendant for the reasons he gave in evidence. In particular I accepted the Plaintiff's evidence despite the reference to 6 pieces of marble in the invoice, the 5 pieces he provided were greater in area than the 6 pieces for which he had quoted.

29. The Plaintiff is therefore entitled to judgment on the claim in the sum of $169,552.

30. The Defendant counterclaims for the cost of 2 bedside tables, 2 bedboards and one piece of marble in a total sum of $16,420 which the Plaintiff failed to deliver. As I mentioned above, I am satisfied that there was no shortfall in the delivery of marble by the Plaintiff. While the Plaintiff accepted that the bedside tables and headboards were not delivered, it follows from my findings that they were not paid for. The Defendant therefore cannot counterclaim for their cost. I therefore dismiss the Defendant's counterclaim. Accordingly, I give judgment for the Plaintiff in the sum of $169,552 plus interest thereon at 11% from the date of issue of writ until today and thereafter the judgment rate until payment.

31. I dismiss the Defendant's counterclaim.

32. I order that the Plaintiff's costs of the claim and counterclaim be taxed and paid by the Defendant.