Eternity Contracting & Engineering Co Ltd v. The Jardine Engineering Corporation, Ltd
Read the full judgment text of CACV 236/2016 on BabelCite. This 高等法院上訴法庭 judgment was delivered on 21 August 2017 before Hon Lam VP, Cheung JA, Yuen JA.
Contract Law — Construction Contract Dispute — Conditional Contract — Instruction to Sub-contractor (ITS) and Work Order — Whether ITS Binding Absent Work Order — Contractual Liability — Control of Exemption Clauses Ordinance — Evidence and Credibility — Assessment of Fabrication and Exaggeration — Appeal Against Findings of Fact and Law. The plaintiff claimed payment of over HK$4 million for labour and materials supplied under an on-site works agreement based on ITS and invoices. The defendant denied contract enforceability without a Work Order as required by the ITS terms. The trial judge held the ITS was a conditional contract not binding absent a Work Order and further found the plaintiff’s evidence unreliable, exaggerated, and fabricated, rejecting the claim altogether. On appeal, plaintiff challenged the conditional contract finding, use of terms implying fraud, failure to assess alternative quantum based on defendant’s version, and alleged errors in factual findings. The Court of Appeal affirmed the trial judge’s ruling, holding the ITS conditional contract analysis was sound in context; strong descriptors of exaggeration or fabrication were justified due to credibility issues; the absence of alternative pleaded claims precluded quantum assessment; and the factual findings were not plainly wrong considering the comprehensive evidential evaluation. Appeal dismissed with costs.
Legal issues: Whether the ITS constituted a conditional contract and effect of non-issuance of Work Order · Whether the Judge erred in finding plaintiff’s claim was exaggerated, fabricated or dishonest without specific pleading · Whether the judge should have made an alternative quantum assessment on the defendant’s version · Whether the judge was plainly wrong on key factual findings regarding work performed and document reliability
Outcome: Appeal dismissed with costs to defendant
Cited by 2 cases
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CACV 236/2016 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF APPEAL CIVIL APPEAL NO. 236 OF 2016 (ON APPEAL FROM HCCT NO. 33 OF 2007) ________________________ BETWEEN
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________________________ J U D G M E N T ________________________ Hon Lam VP : 1.I agree with the judgment of Cheung JA and for those reasons the appeal is dismissed with costs. Hon Cheung JA : I. The appeal 2.Louis Chan J dismissed the plaintiff’s claim for $4,372,180.80 which was pleaded by the plaintiff as ‘the balance due from the defendant to the plaintiff for work done and materials supplied by the plaintiff, at the defendant’s request pursuant to [an] agreement’. The plaintiff now appeals. II. The background 3.1The defendant was a sub‑contractor of Jardine-China Overseas Joint Venture (‘JCO’) in respect of plumbing and drainage (‘P&D’) works. JCO was an electrical and mechanical (‘E&M’) sub‑contractor of the Main Contractor NECSO-China State-Hip Hing Joint Venture (‘the Main Contractor’) in respect of the KCRC East Rail Extensions Contracts. 3.2The agreement between the plaintiff and the defendant was pleaded by the plaintiff as follows :
3.3The particulars of 15 invoices/quotations relied upon by the plaintiff are as follows :
3.4The plaintiff pleaded that the claim of $4,372,180.80 is made up of $4,630,350.80 less $258,170.00. Details of the latter sum are pleaded as follows :
3.5The defendant denied that there was any contractual relationship between the parties. It admitted that it had issued the Instruction to Sub-contractor (‘ITS’) to the plaintiff, but pleaded that the ITS expressly stated that no money was payable unless a Work Order was issued by the defendant and no Work Order was issued to the plaintiff. The defendant denied that the ITS created any contractual relationship between the parties or created any obligation on the part of the defendant to pay the plaintiff. The defendant admitted that it had issued a letter dated 6 December 2004 to the plaintiff because the plaintiff had failed to pay wages to its workers at HK$258,170 which the defendant had paid on its behalf. The letter was to claim from the plaintiff the said sum of HK$258,170. 3.6The defendant’s case is that the plaintiff first asked the defendant to pay for the plaintiff’s supply of labour to the KCRC contracts by a letter dated 23 June 2005. This letter was only received by the defendant by fax on 12 August 2005. The 15 invoices claimed by the plaintiff in this action only first came to the defendant’s attention in mid-August 2005. The defendant had never received these invoices when the works were being allegedly carried out by the plaintiff’s workers. The defendant’s records did not show that the plaintiff was on the defendant’s lists of approved or preferred supplier or sub‑contractor. There was no prior approval from a branch manager for the defendant to enter into a subcontract with the plaintiff. There was no application made to the finance department for a subcontract to be entered into with the plaintiff pursuant to the Quality Policy. There was also no record evidencing the internal consideration of the plaintiff as a sub‑contractor of the defendant for the P&D works. 3.7The defendant further pleaded that, in the event there was a contract between the plaintiff and defendant, the plaintiff is put to strict proof as to the work done and materials supplied to the defendant. 3.8As is apparent from the judgment below, counsel for the defendant in his closing submission changed the defendant’s position on the absence of a contractual relationship. The case that was then put forward was that the ITS could only be a contingent contract subject to the issuance of a Work Order, which never happened. III. The decision 4.1The Judge found that there was a conditional contract between the parties. This is the Judge’s decision :
4.2Notwithstanding his view that there was no contractual relationship between the parties, the Judge nonetheless went into the merits of the plaintiff’s claim and decided against the plaintiff. He held that :
4.3The reasons relied upon by the Judge to dismiss the plaintiff’s claim can be summarised as follows : 1) Work without payment 1.1) It was odd that the plaintiff could have provided workers to work for the defendant for 15 months from September 2003 to November 2004 without being paid by the defendant at all and it did not even send the defendant a demand letter until months after its workers had allegedly completed the work and left the sites. It was even stranger that despite its claim of financial difficulties, it continued to pay its own workers but was unable to produce any banking or accounting document including audited reports to show the source of funding and the use of such funds to pay the workers. This was so despite repeated requests by the defendant’s solicitors for specific discovery of such documents. 2) Low profit margin 2.1) The plaintiff’s case is that it had supplied the workers through its labour leader or sub-contractor Mr Chan Kam Kui. It paid Mr Chan HK$680 per man-day and charged the defendant HK$700 per man-day. It had paid Mr Chan a total sum of HK$4,289,440 and invoiced the defendant a total of HK$4,415,600 for the labour supplied. Its profit out of this sub-contract for supply of labour is HK$126,160. If this is truthful (that it had incurred HK$4,415,600 for a profit of HK$126,160 or less than 2.9%) and without issuing a simple demand letter, then it is really contrary to business sense. 3) Mr Leung, unsatisfactory witness for the plaintiff 3.1) One of the plaintiff’s main witnesses was Mr K F Leung, the former Project Manager of the Building Services Contracting Department of Jardine M & E Contracting Limited (‘JME’), a subsidiary of the defendant from 2003 to February 2004. After the defendant decided to wind down JME, the defendant assisted those in charge of JME to form Winice Corporation Ltd (‘Winice’) to take over the management of the projects then managed by JME. The P&D works was one of the projects. Mr Leung was one of the shareholders of Winice. There was later a dispute between the defendant and Winice and the defendant was unable to gain access to the documents relating to subcontracts until 26 November 2016 when the parties settled their dispute and Winice returned documents relating to the P & D works to the defendant. The 15 invoices from the plaintiff were found in the documents returned by Winice, but they were not stamped and not accompanied by any Purchase Order or Order Issue Checklist which were documents required for confirming a subcontract order. 3.2) Mr Leung’s evidence is that he had on behalf of the defendant issued the ITS to the plaintiff and instructed the plaintiff to supply labour to carry out the P&D works according to the Main Contractor’s programme at the sites. He understood that the ITS was a formal instruction by the defendant to the plaintiff. The ITS was based on a standard form of the defendant. He was aware of the clause stating that ‘This ITS Must be confirmed by a WORK ORDER. Under no circumstances shall any money be paid without issue of a WO.’ He knew that the defendant had an internal policy that a Work Order was required before any money could be paid to a sub‑contractor. He had no authority to change the terms on the standard form. 3.3) He had also drafted a Work Order to the plaintiff for approval and/or execution by the defendant’s senior management. But he had not received any reply or explanation from the senior management regarding its non‑issuance. He said in oral evidence that he had in fact drafted two draft Work Orders. He drafted the first one about three months after the plaintiff’s commencement of works. He drafted the second two to three months after the first one. But no work order was issued pursuant to the two drafts. 3.4) He knew that his senior, the defendant’s project director Mr K S Yeung had on behalf of the defendant orally agreed with the plaintiff that the wages were HK$700 per man‑day. 3.5) After the ITS was given to the plaintiff, the plaintiff’s workers followed the instructions and drawings provided by his team, including himself and his subordinate Mr David Wong, the site supervisor of the defendant, to carry out the P&D works. The attendance of the plaintiff’s workers on the sites on each day was recorded on daily records prepared by the plaintiff. He had instructed Mr David Wong to check the workers who had attended the sites against the daily records bearing their signatures. If Mr Wong could not see any worker at the sites or if any worker had only worked for a short duration, then he would cross out the worker’s name from the daily record. He thus believed that the daily records represented the actual number of man-days provided by the plaintiff. After checking the daily records, Mr David Wong would summarize them on a monthly basis and produce the summary tables. The number of workers provided by the plaintiff at the sites on each day can thus be found in the daily records signed by the plaintiff’s workers and submitted by the plaintiff to the defendant and in the summary tables prepared by Mr David Wong. 3.6) After the plaintiff had submitted the daily records to the defendant, the defendant had in turn submitted them to JCO which had in turn submitted them to the Main Contractor of the project. This was to ensure that the defendant had engaged enough workers on the sites as required by the KCRC contracts. The Main Contractor and JCO also had to ensure that wages had been paid to the workers. The defendant thus kept all the workers’ attendance records and wages payment records for submission to JCO. 3.7) Mr Leung said that after Mr David Wong had checked the daily records of a preceding month, the plaintiff would submit its invoice for payment of the man-days supplied and material costs paid by it in the preceding month. He confirmed that during the construction period he had received one invoice each month from the plaintiff recording the number of man‑days supplied and material costs paid in the preceding month. 3.8) Mr Leung also confirmed in both his witness statement and oral evidence that he and Mr David Wong had checked and confirmed the accuracy of the invoices, especially on the number of man-days. He then passed the same to the defendant every month. After the defendant had completed the P&D works in or about November 2004, he had personally verified that the number of man-days claimed by the plaintiff in all the invoices did match the daily records. He then drafted a Work Order to cover all the sums claimed by the plaintiff and submitted it to his senior Mr K S Yeung for processing of payment to the plaintiff. However, for unknown reasons, no one approved his draft. As a result, no money was paid to the plaintiff. 3.9) The Judge was clearly not impressed by Mr Leung’s evidence. The Judge held that :
3.10) I had already referred to the plaintiff’s case that it supplied the workers through its labour leader or sub‑contractor Mr Chan Kam Kui. Mr Leung’s evidence was that he had received the original claims for payment from the plaintiff’s labour leader Mr Chan Kam Kui for the same months and for the same work but at a rate of HK$680 per man-day instead of HK$700 per man‑day. However, he said that he just ignored these claims by Mr Chan. The Judge commented on this that :
4) Unsatisfactory supporting documents 4.1) The plaintiff was unable to provide a satisfactory answer why the payment-related documents did not show that they had been verified. The Judge held that :
5) Unsatisfactory evidence of Mr Chung 5.1) Mr Chung Tak Leung was a director of the plaintiff and was the other witness for the plaintiff. The Judge held that ‘His evidence on the whole sounds incredible and unreasonable’. Specifically his evidence on the acknowledgement by its workers of receipt of wages paid by the plaintiff was problematic. This is what the Judge held :
6) The JEMIS system 6.1) Mr Leung agreed that he was supposed to input the amount provided in the plaintiff’s invoices in a computer system, the JEMIS system. However, by September 2004 when, on the plaintiff's case, the plaintiff had already sent the defendant invoices for HK$4 million, Mr Leung still had not inputted any of the sums in the invoices into JEMIS. His only explanation is that he ‘did not remember why there was such a big failure.’ 6.2) The Judge commented that Mr Leung’s explanation is not credible :
6.3) Mr Leung prepared two draft contract booking forms dated 16 February and 13 April 2005 and produced them in evidence. They included the sum of HK$4,630,180.80 in respect of the workers which the plaintiff contends that it had supplied. However, Mr Leung again confirmed that in all probability he had not submitted them to the defendant’s head office. 7) No wage acknowledgement sent to the defendant 7.1) It is the plaintiff’s case that all the attendance records and wage acknowledgements had been sent to the defendant which had in turn sent the same to JCO. The reason being that the Main Contractor and JCO had to ensure that the defendant had engaged enough workers on the sites as required by the KCRC contracts and had paid the workers. However, Mr Leung eventually accepted that he had not sent the wage acknowledgements to the defendant (T5/146/10-147/20). 8) The plaintiff’s attendance record is not accurate 8.1) Having considered the attendance record of the labourers at the site prepared by the Main Contractor and the plaintiff, the inconsistency contained in these records and Mr Leung’s acceptance that in all probabilities the Main Contractor’s records were more accurate, the Judge held that :
9) THE PLAINTIFF’S CLAIM FOR LABOUR IS EXAGGERATED 9.1) The defendant had previously engaged two other sub‑contractors to carry out the P&D works, namely, Honour Wealth and Waybo before the plaintiff appeared on the scene. Honour Wealth had provided 457 man-days to carry out the concealed pipe works. Waybo had provided about 2,570 man-days for HK$1.8 million at the rate of HK$700 per man-day. The defendant had also paid HK$450,375 to Waybo’s labourers for their works from 16 June 2003 to 16 August 2003. That amounted to 643.4 man-days at the same rate. The total is about 3,671 man-days. That is supposedly for the whole of the original scope of the P&D works. 9.2) On the other hand, the plaintiff’s claim is for: HK$4,415,600 (labour supply) + HK$214,750.80 (materials) – HK$258,170 (wages paid by the defendant) = HK$4,372,180.80. The sum of HK$4,415,600 is for 6,308 man‑days at HK$700 per day. 9.3) The Judge agreed with Mr Niehorster for the defendant that :
9.4) The exaggeration can further be tested by reference to JCO’s estimate (contained in its letter dated 19 March 2004 to JEC) of 492 man-days in order to complete all the works from mid March 2004 onwards. This is what the Judge held :
9.5) The Judge referred to another ‘example of absurdity’, namely, the provision of workers at the Wu Kai Sha station for the month of May 2004. The plaintiff’s Daily Worker Records recorded 5.8 times more man-days than as required by the estimate of JCO (T5/99/9–T5/101/20). 9.6) The Judge found this exaggeration was not supported by the plaintiff’s claim that the additional manpower was required to carry out the variation work. 10) Claim for costs material 10.1) The Judge held that the plaintiff’s claim for the costs of material was not a contractual claim but a claim for reimbursements as the plaintiff’s case was that it had purchased the materials on behalf of the defendant and was seeking reimbursements. The real problem that the plaintiff had with this claim is that the invoices/receipts were addressed to parties other than the plaintiff and the plaintiff has supplied no evidence to show that it had paid for the materials either directly or by paying these parties. Since this particular claim is in the nature of reimbursement of expenses, the Judge held that the plaintiff has to prove that it has already paid the suppliers before it can be entitled to the reimbursements. IV. Grounds of appeal 5.The plaintiff relied on four grounds of appeal :
V. My view 1) Ground one 6.1The relevant clause of the ITS is as follows :
6.2Mr Solomon Lam for the plaintiff argued that by definition, an agreement is conditional if its operation depends on an event which is not certain to occur. Given the background facts, the issue of a work order by the defendant was not an event which was not certain to occur. He submitted that the ITS ought to have been regarded as an agreement subject to execution of formal document, so that the Court should find the ITS is an enforceable agreement between the parties, namely, a separate preliminary contract had come into existence at an earlier stage when the plaintiff began to render the services as requested; or the wordings of the clause are meaningless or can be severed. Alternatively, the ITS is to be treated as similar to a letter of intent which can also be binding. 6.3He further submitted that even if the ITS was a conditional contract, the issuance of Work Orders ought to have been regarded as a ‘promissory condition’. Taking into account the wordings of the clause and the background facts as a whole, the defendant should be seen as having promised to issue a Work Order later. When the defendant did not issue any Work Order, it was a breach of contract and the plaintiff was entitled to damages. 6.4Mr Lam submitted even if the issuance of a Work Order was a ‘contingent condition’, the Judge ought to have considered that the defendant owed secondary obligations in not preventing the issuance of the Work Order and in reasonably and diligently bringing about the issuance of the Work Order on the part of the defendant. When the defendant was in breach of such secondary obligations by not issuing a Work Order, it shall be treated as if the Work Order had been issued and the defendant shall be liable for the principal obligation i.e. obligation to pay, or is liable for damages. 6.5Alternatively, Mr Lam submitted that the clause is in effect an exemption clause which falls within the definition under section 5 of Control of Exemption Clauses Ordinance (Cap 71) (‘CECO’) as it excludes or limits the defendant’s liability to pay. The ITS is the defendant’s standard form, so that the clause is caught by section 8 of CECO and is subject to the reasonableness test. It is wholly unreasonable for the defendant to rely on the clause to refuse payment to the plaintiff when labour and materials had been supplied to the defendant. Therefore, the Judge was wrong in law in holding that the CECO is irrelevant. 6.6In my view, it is unfortunate that the argument on conditional contract was only raised by the defendant at its closing submission. The issue of conditional contract is a matter that should have been specifically pleaded so that the plaintiff would have a chance to properly respond to it. It is not clear whether the arguments of Mr Lam had been raised before the Judge. The Judge had certainly not dealt with any of the arguments now raised by Mr Lam other than the issue of CECO. This is not satisfactory. However, in my view, in the context of this case, it is not necessary to go into the issue of conditional contract at all because the Judge had actually gone into the merits of the plaintiff’s claim on the alternative basis that there was a contractual relationship between the parties. Hence the issue of conditional contract raised by Mr Lam under the first ground is really an academic one. This extends to the argument on the CECO as well. 6.7Mr Lam, however, further submitted that, if the first ground of appeal is accepted, since the Judge had accepted that the plaintiff’s workers had worked on the site (which was not challenged by either party), the Court ought to treat the plaintiff as having successfully proved its case on liability and the remaining dispute between the parties is merely concerned with the quantum of the work done by the plaintiff. 6.8In my view this is a simplistic way of looking at the matter and is incorrect. The mere existence of the plaintiff’s workers on the sites does not even begin to prove that it should succeed on liability. The crux of the dispute in this case is whether the plaintiff had indeed performed all the work as it had alleged. With this controversy which clearly needed to be resolved (as the Judge had done in the present case), I do not see how it can be realistically argued that the plaintiff had established liability by the mere proof of the presence of workers on the sites and the Judge should then only be concerned with the assessment of damages only. 6.9The defendant has filed a respondent’s notice contending that the Judge erred in law in finding that a conditional contract existed between the parties and ought to have held that there was no contract relationship between the parties. This, however, was not pursued on appeal. In any event it is not necessary for me to deal with this point. 2) Ground two 6.10Mr Lam submitted that the defendant did not plead that there was exaggeration, fabrication nor dishonesty in its defence and counsel for the defendant expressly stated at trial that the defendant was not advancing a case of fraud. It was also not the defendant’s case that the daily worker records produced by the plaintiff were fake or that the whole claim was a bogus one. 6.11Mr Lam submitted that when the Judge found the plaintiff’s claim was ‘exaggerated’, ‘fabricated’ and ‘dishonest’, he inevitability fell into a finding of ‘fraud’ which was plainly not open to him because fraud was not pleaded nor put to the plaintiff. 6.12He submitted that the Judge was wrong in finding the plaintiff’s claim was exaggerated, fabricated and dishonest. Even if the Judge did not accept the amount of labour claimed by the plaintiff and accepted JCO’s estimation, it is nevertheless an assessment on reasonableness of labour required and the plaintiff’s claimed amount cannot be said to be ‘exaggerated’. 6.13In my view this is a point without substance. While the Judge did use words like ‘exaggeration, fabrication or dishonesty’ in paragraphs 196 and 197 of the judgment, reading the judgment as a whole, the Judge had not decided the case on the basis of an unpleaded case of fraud. He certainly had not adopted any wrong test or burden of proof in assessing the evidence. It is the plaintiff’s case that it was entitled to $4,372,180.80 (and no alternative claim was put forward); that the work (and material) it had carried out were contained in the invoices which were provided to the defendant each month; the attendances of the workers were properly documented in the summary tables of daily attendance of workers and in the daily records; the wages paid by the plaintiff to the workers were acknowledged by the workers in the wage acknowledgement and that it had paid for materials on the plaintiff’s behalf. However, after a careful analysis of the evidence, the Judge found that the plaintiff failed to establish its claim, not just by a few dollars and cents or a small percentage, but rather the whole of its case. In such circumstances the Judge was clearly entitled to use strong words to express his dissatisfaction with the way the plaintiff’s case was presented. He cannot be faulted. In any event, the use of such words must be put in the proper contexts. I have already referred to paragraphs 196 and 197 of the judgment. These are the only two places where such words were used. As pointed out by Mr Pennicott SC and Mr Niehorster for the defendant, the use of adjectives like ‘incredible’, ‘unbelievable’, ‘unreliable’, ‘extraordinary’, ‘dubious’ and ‘unreasonable’ in the context of the evidence of the plaintiff’s factual witnesses are far more prevalent. The use of these adjectives and the findings made consequent upon them was the result of the detailed analysis of the plaintiff’s claim. 3) Ground three 6.14Mr Lam submitted even if the Judge found that the plaintiff could not prove its entitlement to the claimed amount, he ought to proceed with his own assessment based on the evidence he had accepted, namely, the defendant’s version. He submitted that the Judge did indeed carry out his own assessment in his subsequent decision on costs. Based on that, Mr Lam submitted by adopting 60 weeks from 18 September 2003 to 16 November 2004, one can arrive at a benefit obtained by the defendant in the sum of HK$700 x 8 labours x 6 days x 60 weeks = HK$2,016,000 (i.e. 2,880 man-days). Taking into account the sum of HK$258,170 paid by the defendant in the labour dispute for and on behalf of the plaintiff, the plaintiff was entitled to at least HK$2,016,000 – HK$258,170 = HK$1,757,830 for labour cost. A sum of HK$214,750.80 should also be added in respect of the plaintiff’s claim for material costs plus interest. 6.15In my view this point is misconceived. As pointed out earlier, the only claim put forward by the plaintiff is for the sum of $4,372,180,80. There is no alternative claim at all, like quantum meruit or unjust enrichment or for damages to be assessed. As a matter of fact, the plaintiff had sought leave to plead a quantum meruit claim not in its statement of claim but in its reply which was refused by the Judge and the plaintiff had not made any attempt thereafter to plead such a cause of action in its statement of claim. 6.16In terms of finality of litigation, the Court proceeds on the principle that a reasoned judgment contains all the determination of the disputes between the parties. While the Judge in this case had expressed in the decision on costs some other views on the case, it does not mean that his earlier reasoned judgment must somehow be read subject to his later expressed views. This is not how the Court operates. In any event, the later views were only said in the context of costs and has no bearing on the earlier determination on liability. 4) Ground four 6.17Despite the wide ranging challenges contained in the amended notice of appeal, Mr Lam in his written submission confined himself to three matters. First the Judge was obviously wrong in misunderstanding the evidence of the defendant’s internal records, namely, the JME meeting minutes and the contract booking form as only relevant to the knowledge of the defendant on the existence of invoices but not the extent of the plaintiff’s work done. Mr Lam referred to the knowledge of the defendant about the expected loss of the P&D works in the JME meetings and submitted that the defendant could not have calculated the loss without information concerning the plaintiff’s labour costs. Second, the defendant’s own variation claim of $3.7 million on top of the original contract sum submitted to JCO supports the view that a lot of work had been done by the defendant through the plaintiff’s labours. Mr Lam argued that the Judge rejected the plaintiff’s argument by taking into account JCO’s assessment on these variations and the fact that there was no arbitration or litigation between the defendant and JCO. He submitted that the Judge had failed to consider JCO and the defendant was in the same group of companies with conflict of interests. Thirdly, Mr Lam submitted that the defendant had allowed the sum of HK$218,565 as the plaintiff’s sundries and materials on 21 September 2004, when the plaintiff’s claimed amount was HK$190,569 and the Judge ought not to disallow the plaintiff’s claim on material costs. 6.18This is a challenge by the plaintiff on findings of fact by the Judge. The principle is well established that the appellant must show that the trial judge was plainly wrong on the finding of fact before the appellate court would interfere with the finding. In my view the plaintiff has failed to overcome this high threshold in this appeal. Quite apart from the benefit of observing and hearing the evidence directly, what the Judge had actually done in this case is to assess the inherent probability of the plaintiff’s case by considering, among other things, the following: the unsatisfactory nature of the documents relied upon by the plaintiff in support of its case; the objective evidence of the plaintiff’s inaction during the 15 months when it said it had performed its work, presented the documents for payment and yet not received any payment from the defendant; testing the accuracy of the plaintiff’s claim by reference to JCO’s own documents; testing the accuracy of the plaintiff’s claim by reference to the work that had already been completed before the plaintiff came into the scene and also by reference to the work that the plaintiff came to do after March 2004. The first two matters now relied upon by the plaintiff had already been considered by the Judge and rejected. The plaintiff simply failed to show that the Judge was plainly wrong in that regard. In respect of the third matter, I also cannot see the link between the previous payment by the defendant for material and the defendant’s current claim for payment. 6.19At the trial, the plaintiff had submitted that whether Mr Leung had passed the invoices to the defendant’s head office and whether the defendant’s representatives had checked them were the defendant’s internal matters. It does not change the fact that the plaintiff had supplied labour and materials to the defendant. 6.20The Judge addressed this argument by saying that :
6.21The plaintiff had not pleaded in the Court below that Winice, the project manager, was the agent of the defendant. This particular decision of the Judge is not the subject matter of appeal. In any event, I agree with the Judge’s view. As I had mentioned earlier, the plaintiff first asked the defendant to pay for the plaintiff’s supply of labour by a letter dated 23 June 2005. This letter was only received by the defendant by fax on 12 August 2005. The 15 invoices claimed by the plaintiff in this action first came to the defendant’s attention in mid‑August 2005. The defendant had never received these invoices when the works were being allegedly carried out by the plaintiff’s workers. The defendant’s records failed to show that the plaintiff was on the defendant’s lists of approved or preferred supplier or sub‑contractor. This cast a huge doubt whether the documents relied upon by the plaintiff were contemporaneous documents. 6.22Mr Lam had also submitted that even if this Court is not minded to disturb the Judge’s findings on exaggeration, fabrication and dishonesty, the proper way to address this is to reduce the plaintiff’s costs entitlement after giving judgment to the plaintiff, or reduce interests if time has been wasted. I disagree. The Judge had considered these matters in his decision on costs. I see no ground to disturb the costs order imposed by the Judge. VI. Conclusion 7.Accordingly I would dismiss the appeal with costs to the defendant. I do not consider that this appeal requires attendance by two counsel and therefore would not grant certificate for two counsel. Hon Yuen JA : 8.I agree with the judgment of Cheung JA.
Mr Solomon Lam, instructed by KCL & Partners, for the Plaintiff Mr Ian Pennicott SC and Mr James Niehorster, instructed by Holman Fenwick Willan, for the Defendant |