Aggressive Construction Co Ltd v. Wai Kin Construction Ltd

HCCT 30/2013

[2018] HKCFI 744

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTRUCTION AND ARBITRATION PROCEEDINGS

NO 30 OF 2013

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Before:  Hon Mimmie Chan J in Court

Dates of Hearing:  14-16, 19-21 & 23 March 2018

Date of Judgment:  11 April 2018

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J U D G M E N T

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Background

1.In March 2012, the plaintiff (“Aggressive”) was appointed by Grandwood Investments Limited (“Employer”) as one of the contractors to undertake work at the development in Kweilin Street and Yee Kuk Street (“Project”). Aggressive was appointed to undertake the carcass construction work (“Construction Work”) at the site of the development (“Site”).  An associated company of the Employer, CK Construction Management Ltd (“CK”), was appointed as the Employer’s representative in respect of all the works undertaken in the Project, with CK assuming the role of a main contractor, coordinating the works of all contractors engaged for the development of the Project.

2.By an agreement in Chinese which was signed on 13 March 2012 (“Agreement”), Aggressive subcontracted the timber formwork (木模板工程) (“Contract Work”) of the Construction Work to the defendant (“WK”).

3.It is not disputed that the Site was divided into Site A and Site B.  2 residential buildings were to be erected on Site A, namely Tower 1 (“T1”) and Tower 2 (“T2”), which were respectively 31 storied and 32 storied, with a main roof and top roof.  T1 and T2 share a common podium, with a basement.  There is a transfer plate on top of the podium on which T1 and T2 were to be erected.  The work on the podium on Site A was divided into 2 stages. Part of it was to be constructed first (the Front Cast Portion (“FCP”), followed by the construction of the transfer plate, and then the construction of T1 and T2 on top.  After that, the remaining part of the podium was to be constructed (the Late Cast Portion (“LCP”)).  The LCP is further divided into 2 parts in the work arrangement and sequence.  A small portion called the Upfront Portion (“UP”) was to be constructed before the rest of the LCP was to be built.

4.One residential building was to be constructed on Site B, namely Tower 3 (“T3”), which has 24 storeys with a main roof and top roof.  A transfer plate was also to be built over the podium to support T3.  The work on the podium in Site B was also divided into 2 stages: the FCP and the LCP.

5.On Aggressive’s case, WK was required under the Agreement to perform all the timber formwork of the Project, and this included the construction of the timber formwork for the podiums in Site A and Site B, the transfer plates, and the typical floors of T3 up to and including the main roof and top roof.  WK was not required to do the timber formwork for the typical floors of T1 and T2 because aluminum formwork, instead of timber formwork, was to be used in the construction of these 2 towers, and the aluminum formwork was to be carried out by other contractors.

6.Dispute arose between Aggressive and WK in the course of the execution of the Contract Work for the Project.  Aggressive claims that in breach of the Agreement, WK consistently failed to provide sufficient workforce to carry out the Contract Work, suspended parts of the Contract Work at different times, and made threats to abandon or discontinue the Contract Work unless the price under the Agreement was revised.  Aggressive claims that by doing so, WK had evinced an intention no longer to be bound by the Agreement, and by a letter dated 26 July 2013 from its solicitors, Aggressive accepted the repudiatory breach of the Agreement by WK and terminated the Agreement.  By proceedings instituted in August 2013, Aggressive claims from WK damages for breach of contract and for a declaration that the Agreement had been duly and validly terminated.

7.WK denies that it was in breach of the Agreement, or that Aggressive was entitled to terminate the Agreement.  It claims that it was Aggressive which had prevented WK from undertaking and continuing the Contract Work under the Agreement.  By way of counterclaim, WK seeks payment from Aggressive of $2,415,779.90, being the value of the Contract Work it had completed under the Agreement up to 23 July 2013, a further sum of $400,000 as the bonus which WK claims Aggressive had agreed to pay to it, and other damages sustained as a result of Aggressive’s wrongful termination of the Agreement by evicting WK from the Site.

WK’s breach as alleged by Aggressive

8.The complaint made by Aggressive, as pleaded in paragraph 14 of the Statement of Claim (“SOC”), is that WK had: repeatedly failed to provide a sufficient workforce for the Contract Work, causing delay to works at the Site; failed to send workers to commence work on the LCP at Site A on 17 June 2013; informed Aggressive, by letters dated 22 June 2013 and 25 June 2013 respectively, that due to rising labour and material costs, WK would not be undertaking the Contract Work on the main roof to the top roof, and the LCP of Site A and Site B; refused to send workers to Site A to commence work on the LCP; suspended the Contract Work at the LCP on Site A; sent workers to the Site on 22 July 2013 and 24 July 2013 to cause nuisance and to obstruct other workers at the Site; and made unwarranted threats and demands for payment against Aggressive and its employees.

9.According to Aggressive, such conduct on the part of WK constituted breach of the express and implied terms of the Agreement, which entitled Aggressive to terminate the Agreement. 

Whether there was suspension of work and/or failure to follow instructions

10.The Agreement expressly provides, under “Project Term” (工程工期), that WK should follow the period and work program set out in the contract between Aggressive and the Employer (“Principal Contract”), and coordinate, without protest, to comply and accord with the progress requirements of, and as amended from time to time by, Aggressive’s site management due to actual working conditions (“Contract Term Provision”). 

11.The Agreement further states that the price of the Contract Work is $16,869,595.50 (“Contract Price”), on actual re-measurement basis.  It provides (under “Fluctuation in Materials and Labour”) that the Contract Price is inclusive of fluctuation in the price of all labour, materials and machinery required for the Contract Work, and that WK is required to provide additional nightwork or overtime work to meet the actual requirements of the Site (“Costs Fluctuation Provision”).

12.Under the Agreement, WK is required to confirm that the unit rates of the Agreement comply with the requirements of the Principal Contract between Aggressive and the Employer.  The Agreement also provides that WK is taken to have understood and agreed to the provisions of the Principal Contract, and further states that WK bears the responsibilities assumed by Aggressive under the Principal Contract for the Contract Work stipulated in the Agreement.  The contents of the Principal Contract, the relevant drawings and the specifications of work are stated to be open to WK’s review at Aggressive’s offices.

13.Clause 5 of the Terms of Subcontract Work states that when Aggressive issues any instruction including any written instruction/works order relating to the Contract Work, WK must comply with and execute the same, irrespective of the size or quantity of the work involved, and whether the instruction increases or reduces the item or quantity of the Contract Work.

14.Clause 6 of the Terms of Subcontract Work requires WK to co-ordinate with the progress of work.  Under clause 6.1, WK is required to commence work within the agreed time, and in the absence of any agreed time, then within 3 days upon receipt of notice in writing issued by Aggressive, and WK must consistently carry out the Contract Work in accordance with Aggressive’s instructions.

15.Clause 6.2 of the “Terms of Subcontract Work” (分判工程合約條款) of the Agreement provides that WK should complete, or complete in stages, the Contract Work within the work period stipulated in the Agreement.  It further provides that during the work period, WK must execute work in coordination with the progress of the Project, in stages or by sections or by additional nightwork at its own cost.

16.Under clause 6.3, if progress of the Contract Work is obstructed or hindered, WK is required to notify Aggressive immediately and by written notice of the cause of the obstruction or hindrance, and to take the initiative of finding a solution until both parties reach consensus, and WK is otherwise to be responsible for all delay caused to the Project.

17.Clause 23 of the Terms of Subcontract Work provides as follows:

“In any one of the following situations, the contractor (ie Aggressive) has the right to terminate the work subject to this subcontract, and/or to implement the provisions below:

23.1 Any one of the following faults/situation of the sub-contractor:

23.1.1 Stoppage of work without cause before the completion of the subcontracted work.

23.1.2 Inability to execute the subcontracted work persistently or delay in work.

…

23.1.6 Inability to perform the contract or failure to comply with the reasonable requests of the contractor or breach of the relevant law, provisions, procedure, requirements, measures etc.”

18.Clause 23.4 of the Terms of Subcontract Work states:

“If the engagement of the sub-contractor is terminated in accordance with clauses 23.1 or 23.2 or 23.3, the sub-contractor shall be regarded as being in breach of the subcontract. The contractor is only required to pay for the unpaid value of the work actually and correctly completed (measured in accordance with clause 8 of the Terms of Subcontract work), and the value of materials which have been delivered to the site for the subcontract work, the property in which has passed to the employer. The contractor has the right to deduct any loss and expense caused by the termination of the subcontract. Upon receipt of the contractor’s notice of termination, the sub-contractor, agent, its foreman and all its employees shall immediately leave the site, and may not return to the site without the prior consent of the contractor. The contractor has the right to possess all materials, machinery and items delivered to the site by the contractor for the execution or maintenance of the subcontract work, and has the discretion to sell all or part of such materials, machinery and items, and use the proceeds to offset any amount due from the subcontractor.”

19.Clause 26 provides that the price of the contract includes the risks of fluctuation in the price of all workmen, materials and machinery required for the project work, and neither party can use this to seek adjustments in the unit price.

20.In addition to the express provisions of the Agreement, Aggressive claims that the Agreement is subject to implied terms, that WK as the subcontractor must not delay or obstruct the Contract Work and other construction works at the Site of the Project, and must not act so as to threaten to delay or obstruct the Contract Work and other construction works.

21.Having considered the evidence and testimony of the witnesses called for Aggressive, and of Mr Cheung Wai Chung (“Cheung”) of WK, and importantly, the contemporaneous documents being the correspondence, site memos and photographs produced in evidence, I am satisfied that there was breach on WK’s part of its contractual obligations under the Agreement.

22.It is WK’s express contractual obligation under clauses 5, 6.1 and 6.2 of the Terms of Subcontract Work to proceed with and to consistently execute the Contract Work when instructed to do so by Aggressive, and in coordination with the work sequence and program dictated by Aggressive and/or CK on behalf of the Employer.

23.It is not disputed by Cheung that in early June 2013, Aggressive’s Project Manager (“Tam”) had discussed with WK the work program for the construction of the LCP of Site A, and informed him that the timetable for that was very tight, and that work on the UP and LCP for Site A should commence as soon as possible.  According to Tam, Cheung had agreed to commence work on the UP on 17 June 2013, but on the day, no workers were sent by WK to start work, nor to do any work on the subsequent days.  When Aggressive inquired with WK’s representative on the Site (“Law”), Law said that he was awaiting instructions from Cheung.

24.On 22 June 2013, WK issued a letter to Aggressive (“22/6 Letter”). In the 22/6 Letter, WK stated that since its undertaking of the Agreement, WK had faced several rises in the cost of labour, from a daily wage of $1,100 to $1,500, and that the cost of materials had inflated by 30%.  WK referred to restrictions in the working conditions and difficulties in the execution of work, leading to alleged wastage of manpower and materials, and pointed out that since the Contract Price could not sustain reasonable expenditure, the Subcontract was a financial loss.  WK pointed out in the 22/6 Letter that it would endeavor to complete the Contract Work, but stated at the end that as the Contract Price was far below the current market price, and WK was sustaining serious losses, it believed that it would not have the capacity to bear the loss of undertaking the timber formwork for the main roof for the development (“相信已無能力再承判天面釘板而帶來更大的損失”).  At the conclusion of the 22/6 Letter, WK stated that it would not participate in the work arrangements for the timber formwork on the main roof, and requested Aggressive to make alternative arrangements at the earliest (“本公司將不會參與天面釘板施工安排，請貴公司盡早作出另外安排”).

25.On 25 June 2013, WK issued a further letter to Aggressive (“25/6 Letter”).  It was in a similar tone as that of the 22/6 Letter, referring to its financial losses due to delay in commencement of work and escalating costs of labour and materials.  In the 25/6 Letter, WK stated that it no longer had the capacity to undertake the timber formwork for the LCP at the Contract Price (“我司已無能力再以目前合約單價承判後造位置的釘板”), and asked Aggressive to make better arrangements.

26.When inquiries were made by Aggressive’s representatives with Law on the Site, Law confirmed that Cheung had instructed that WK would not carry out the work on the main roof and the LCP on both Site A and Site B.

27.Cheung’s excuse for not commencing or continuing the Contract Work when instructed by Aggressive to do so was that commencement of the Contract Work under the Agreement had been delayed beyond the time envisaged for the execution of the work, when the tender was submitted.  This led to increase in costs, as well as disruption or inconvenience in WK’s arrangements for workers.  However, it is clear that by reason of the Contract Term Provision in the Agreement, any delay in commencement of the Contract Work under the Agreement is not a ground for WK not to commence or execute the Contract Work in accordance with the instructions and work program dictated by Aggressive and CK, or not to coordinate their work with Aggressive’s.

28.By the 22/6 Letter and the 25/6 Letter, WK had clearly stated that it was unable, and would not, further undertake the timber formwork on the main roof and at the LCP, which work indisputably form part, and fall within the scope, of the Contract Work.  The rise in labour costs and costs of materials, and the fact that WK was sustaining financial loss under the Agreement, were not valid causes for WK’s refusal to undertake the work in question.  The Costs Provision of the Agreement and clause 26 of the Terms of Subcontract Work make that clear and beyond dispute.

29.WK referred to difficulties in its execution of work by reason of the alleged confinements in the workspace provided.  Aggressive’s witnesses deny that the alleged confinements existed.  In any event, as Counsel for Aggressive highlighted, it was for WK (under clause 6.3 of the Terms of Subcontract Work) to notify Aggressive in writing if there were indeed hindrances in their execution of the Contract Work for any reason, and WK had the contractual duty to find solutions and seek consensus from Aggressive.  WK never served any proper notice of any alleged difficulties it had encountered – whether they be limited work space, or unavailability of access.  On Aggressive’s case, all the alleged difficulties were mere excuses for WK not to commence or undertake work as instructed by Aggressive and/or CK, in view of the Agreement being a financial loss without increases in the Contract Price.  In his testimony, Cheung also admitted that it was all a question of money, whether the Contract Work could be executed despite the alleged difficulties.

30.Cheung denied that the 22/6 Letter contained any indication that WK would not undertake the timber formwork on the main roof.  He sought to explain in his evidence that he had only meant that WK would not be undertaking the timber formwork for the top residential floor of T1 and T2 (namely the 41^st floor and 42^nd floor respectively).  According to Cheung, the top residential floors for T1 and T2 were never part of the Contract Work under the Agreement, but Tam had in April 2013 asked Cheung if WK would be interested to undertake that additional work.  On Cheung’s case, he had meant by the 22/6 Letter that WK would not be undertaking the timber formwork for these top floors (directly under the main roof of T1 and T2).

31.In my judgment, the above evidence of Cheung is simply incredible, as being totally contrary to the clear statement made in the 22/6 Letter.  The specific reference made was to the “main roof” “天面”, and not to the top floors beneath the main roof.  The evidence was simply tailored in an attempt to evade Aggressive’s claim in these proceedings, that WK had refused to carry out the Contract Work, or had used the claim of stopping work on the main roof as a guised threat for adjustments to the Contract Price.

32.Cheung is illiterate, but on the evidence, he is a self-made man of experience, with some reputation in the timber work industry.  He is clearly a man of action rather than of written words.  I accept his evidence that he focused on face-to-face discussions, and left the correspondence to his staff, since he could not even read Chinese.  Yet, some of the letters sent in the name of WK bore Cheung’s seal, and these include the 22/6 Letter and the 25/6 Letter.  Cheung admits that they were sent on his instructions.  The contents of the 22/6 Letter and 25/6 Letter must have been read to him and otherwise understood by him.  Aggressive cannot be blamed for taking the contents of the 22/6 Letter and 25/6 Letter as they read: as referring to work on the main roof, which clearly fell within the scope of the Agreement (and is covered in the items and breakdown of work for the Contract Price), rather than work on the top floors below the main roof, which do not.

33.On 28 June 2013, Aggressive issued 2 letters, instructing WK to arrange for work to be carried out on the main roof in accordance with the Agreement and according to actual work progress.

34.At a meeting on 2 July 2013, which was attended (inter alia) by Tam and Cheung, Cheung referred to his serious loss in the Project of over $2 million. Cheung further stated at the meeting that WK would not carry out the work on the LCP and on the main roof, and would abandon the Contract Work, unless Aggressive would agree to increase the unit rate in the Contract Price from $225 to $325, which was an increase of approximately 44%, and equivalent to an increase of approximately $1.8 million in the Contract Price.  Tam’s evidence is that he agreed, at the meeting, to refer the matter to the senior management of Aggressive for consideration, and Cheung agreed to commence work immediately on the UP, pending a reply from Aggressive.

35.On 3 July 2013, Tam issued a site memo to WK, asking WK to arrange for the necessary manpower to commence work at the UP immediately.  The memo stated the fact that since the end of June 2013, no workers had commenced work at various areas.  On 4 July 2013, 3 workers commenced work on the UP of the LCP at Site A (when work should have commenced on 17 June 2013), but 2 days thereafter, on 6 July 2013, the work was suspended again.  A site memo issued by Tam dated 6 July 2013 recorded this fact.  Tam called Cheung about the suspension of work and asked for work to resume, but according to Tam, Cheung demanded a reply from Aggressive to WK’s request for increase of unit rates first.  A site memo from Tam dated 8 July 2013 records the fact that WK had not arranged for workers to carry out the Contract Work, and that work had stopped. A request was made for workers to be sent by WK, to coordinate with the progress of Aggressive’s work.

36.Subsequent to that, there were discussions and meetings when Aggressive and WK discussed and negotiated on the payment of additional amounts of $600,000 to $800,000 to WK, for WK to complete the Contract Work.  On 10 July 2013, some work resumed on the UP, but was suspended again on 11 July 2013 when consensus could not be reached on the additional payment.  A memo was issued by Aggressive on 12 July 2013, recording that the Contract Work had stopped on 11 July 2013 and had not resumed.  Aggressive notified WK that if work did not resume within 3 days, Aggressive would arrange for other workers to complete WK’s Contract Work.

37.In reply, WK issued a letter under Cheung’s seal on 15 July 2013, referring to the difficulty of finding workers due to the rising labour costs, hot weather and difficulties in the execution of work, and stating that there was a need to increase workers’ wages to attract manpower.

38.On 15 July 2013, Aggressive issued a “1^st Warning” in writing in respect of WK’s suspension of work.  The letter referred to the fact that work had not resumed on 13 July 2013, that this constituted a serious breach of the Agreement, and notified WK that if workers could not be arranged to resume work within 2 days, Aggressive would make arrangements for WK’s Contract Work to be completed by others.  This was followed by a “2^nd Warning” issued on 16 July 2013.  The letter recorded the fact that the suspended Contract Work had not resumed, and that Aggressive would arrange for completion of the Contract Work by other workers unless WK arranged for sufficient workers to work within the next day to make up for the delay in progress.

39.Cheung claimed that workers had been deployed to the Site from 3 July 2013 to 11 July 2013.  This was so stated in WK’s letter to Aggressive, dated 16 July 2013.  In that letter, WK claimed that work was only carried out up to 11 July 2013, because of the rising legal costs, the hot weather and the difficulty in finding sufficient workers at WK’s price.

40.Aggressive issued a “3^rd Warning” on 17 July 2013.  This stated that although WK had sent workers to the Site on 4 July 2013, work was suspended from 6 to 9 July, that WK’s workers had left the Site since 12 July 2013, and that work had not resumed on 16 July 2013.  Aggressive repeated its demand for the Contract Work to resume on 18 July 2013, failing which Aggressive would arrange for other workers to complete WK’s Contract Work.

41.WK claims that there were workers at the Site on 11, 12 and 13 July 2013, that 20 July 2013 was a holiday for timber workers (although not a statutory holiday), but there is no dispute that no other work was carried out by WK’s workers before 23 July 2013.

42.Cheung denies that WK had the contractual duty to carry out and act in accordance with the instructions of Aggressive and the Employer.  He claims that WK is only obliged to follow these instructions if they are reasonable, and that WK is not bound to carry out the Contract Work in accordance with Aggressive’s instructions and to follow the sequence or program of works dictated by Aggressive and/or the Employer, if it would not be economical, or unnecessary in his opinion, to do so.  There is no basis for such claims.

43.It is the duty of WK, under clause 4 of the Specification of Work, to complete the Contract Work in accordance with the instructions of Aggressive and CK, to plan for its work in accordance with the program of the Principal Contract and to complete its work to the satisfaction of the Employer and Aggressive.  Clause 10 of the Specification of Work also requires WK to execute the Contract Work in accordance with the requests or instructions of the Employer and Aggressive.  There is no provision requiring such instructions to be reasonable, although one of the grounds for Aggressive’s termination of the Agreement under clause 23.1.6 is WK’s failure to comply with the reasonable requests of Aggressive.  If any of Aggressive’s instructions was unreasonable, and WK failed to comply, it is arguable that there may not be any right on Aggressive’s part to terminate the Agreement, but that is not to say that there is necessarily no breach by WK. 

44.It is also WK’s duty under clause 9 of the Specification of Work to plan its work in accordance with the main work progress under the Principal Contract, and to execute the Contract Work in co-ordination with Aggressive and in accordance with its sequence of work, arrangements and progress, including arranging for sufficient manpower and materials to complete the Contract Work within the time specified.  Under clause 5 of the Terms of Subcontract Work, these instructions have to be followed, irrespective of the quantity of the work, and whether the instructions involve additional work or reduction in work.

45.WK denies that there was suspension of work as recorded by Aggressive, claiming that notwithstanding the complaints made by Aggressive of insufficient manpower, WK had sent workers to the Site to carry out work on different days. In this regard, suspension of work in July 2013 is evidenced not only by the site memos and letters of “warning” issued by Aggressive, but also the independent and contemporaneous report of the resident engineer, dated 22 July 2013 (“Engineer Report”).  The Engineer Report states, under “area of concerns”:

“The progress of the formwork for 1/F podium of Tower 1 and the nearby water tanks have been left unattended for more than a week and there is no sign of resuming work. Though it may not fall onto the critical path, yet it will soon affect the whole progress.”

46.The contemporaneous and, in the case of the Engineer Report, independent evidence all support Aggressive’s complaint that WK had repeatedly suspended the Contract Work and repeatedly failed to work in accordance with the instructions and orders of Aggressive.  This was in breach of WK’s contractual obligations under clauses 6.1 and 6.2 of the Terms of Subcontract Work of the Agreement, and clauses 4, 9 and 10 of the Specification of Work. 

47.Under clause 23 of the Terms of Subcontract Work, Aggressive was entitled to terminate the Agreement and the Contract Work in the event of either WK’s failure to complete or suspension of work without cause, or its failure to carry out the Contract Work consistently.  WK’s repeated suspension of work and repeated failure to carry out the Contract Work in accordance with Aggressive’s instructions between 17 June 2013 and 18 July 2013 constitute events which fall within clause 23.1.1 and/or 23.1.2 of the Terms of Subcontract Work, so as to entitle Aggressive to exercise its right of termination of the Agreement.  I find nothing in the evidence to show that any of Aggressive’s instructions were unreasonable. 

48.By the time of closing submissions, Counsel for WK did not argue that there was no suspension of work or failure to coordinate with Aggressive’s work program, and in accordance with Aggressive’s instructions.  Counsel only argued that any breach before 18 July 2013 had been waived by Aggressive and cannot be relied upon as a ground to terminate the Agreement, and that when Aggressive’s solicitors wrote to WK on 18 July 2013, to demand WK to complete the Contract Work and to resume work, the Agreement had been affirmed by Aggressive.  As waiver and affirmation of contract was never pleaded in the defence and counterclaim, this argument was not permitted, and was not pursued.

Whether WK was ready to resume work but was obstructed by Aggressive

49.Counsel for WK emphasized that even if there was any breach on WK’s part, Aggressive only purported to terminate the Agreement on 26 July 2013, when Aggressive’s solicitors sent the letter of termination by email at 5:51 pm on that day.  On WK’s case, it had already, by then, indicated to Aggressive that it would perform the Agreement, that it was in a position to resume the Contract Work claimed to be outstanding, and that it would be sending its workers and materials to the Site for the Contract Work.  WK relies on its letters dated 23 July 2013, 25 July 2013 and 26 July 2013 (“Resumption Letters”). 

50.By its letter dated 23 July 2013, WK notified Tam of Aggressive that it would continue to send its workers to carry out work at the Site the following day, in accordance with Aggressive’s requests.  On WK’s case, 7 workers were indeed sent to the Site on 24 July 2013, but they were denied access.

51.On 25 July 2013, WK wrote to Aggressive again, complaining of the unjustified removal of its worker Wong Cheung Yau (“Wong”) from the Site on 23 July 2013, and of 7 workers’ inability to enter the Site on 24 July 2013. It stated in the letter that WK was ready to send workers to the Site, and would await instructions from Aggressive.

52.On 26 July 2013, WK wrote to Aggressive, notifying Aggressive that it would be making arrangements for 20 to 30 workers to carry out work at the Site, and for a truck to send materials to the Site, on the following day (27 July 2013).  By the letter, WK requested Aggressive to make arrangements for the storage of the materials and for the workers to carry out work at the Site. Law of WK also telephoned Tam and Chung of Aggressive on 26 July 2013, informing them that WK would be sending 2 trucks of formwork materials and 40 to 50 workers to the Site for work. 

53.On WK’s case, Aggressive refused to make the arrangements requested by WK for its workers to continue work.  Relying on Stoczina Gdanska v Latvian Shipping Co & Ors [2002] EWCA Civ 889, Counsel argued that since Aggressive had failed to accept any alleged repudiation on WK’s part before 26 July 2013, the Agreement remained alive and WK was entitled to seek resumption of performance of the Agreement, as it sought to do on 23, 25 and 26 July 2013. Counsel argued that it was Aggressive which was in breach of contract by preventing WK from commencing or resuming work under the Agreement.

54.According to Aggressive, WK did not have any genuine intention to carry out the Contract Work in accordance with the Agreement, as it purported to claim in the Resumption Letters.  Counsel argued that these letters have to be read against the background of the factual events before and after the Resumption Letters were sent, taking into consideration the history of WK’s performance under the Agreement. 

55.Emphasis was made on behalf of Aggressive that since commencement of the Contract Work under the Agreement, WK had consistently shown reluctance to perform the Agreement, and had persistently asked for the Contract Price to be revised to take into account the labour costs which had sharply risen since the acceptance of WK’s tender for the Contract Work.  Cheung admits in his testimony that, as recorded in many of WK’s letters to Aggressive, WK was not able to secure sufficient workers to work at the Site at wages allowed by the Contract Price, and that the inflation of costs had made the Agreement a financial loss for WK, such that the more work WK carried out under the Agreement, the greater financial loss it sustained.  That was the reason for WK’s inability and reluctance to send workers to carry out the Contract Work at the Site when instructed by Aggressive to do so, and why WK stated in its letters that it would not be able to undertake the Contract Work for firstly the main roof (by its letter of 22 June 2013) and secondly the LCP (by its letter of 25 June 2013).  Even before that, WK had as early as in the last quarter of 2012 requested not to complete the timber formwork for the 5^th to 31^st floors of T3, in order to ease its financial and labour costs burden (which request was not acceded to by Aggressive).

56.To avoid further loss and damage in the event of WK abandoning work under the Agreement, Aggressive agreed in December 2012 to pay an incentive bonus to WK, in the sum of $500,000, so that WK would continue to complete all the Contract Work under and in accordance with the Agreement.  There is now dispute in these proceedings as to when the incentive bonus was payable.

57.On Aggressive’s evidence, WK had been persistently delaying its work since April 2013, as insufficient manpower was provided for the Contract Work on the Site.  The on-and-off suspension of work and the repeated intimations of not carrying out the Contract Work is further evidenced by the correspondence in June 2013, including the 22/6 Letter and the 25/6 Letter.  In the 22/6 Letter, WK stated its clear intention, that it would not be undertaking work on the main roof, which included the erection of a utilities room (which has a top roof of its own) on the main roof, and at the same time asked Aggressive to make “alternative arrangements” for such work.  In the 25/6 Letter, WK likewise asked Aggressive to make better arrangements of its own, since WK could not undertake the timber formwork of the LCP “at the current Price”.

58.Following the issue of the 22/6 and 25/6 Letters, at a meeting on 2 July 2013, Cheung of WK again indicated to Tam and other representatives of Aggressive that WK would not be carrying out the LCP and work on the main roof unless there was an increase of unit rates from $225 to $325, and that WK would abandon the work after completing the residential floors of Tower 3.  Work was suspended on 6 July 2013 in the absence of a reply from Aggressive on the request for increase in unit rates.  Cheung does not dispute that there were meetings held with Aggressive in early July 2013, and that there were discussions on a payment of a further bonus to WK to continue the Contract Work, on the basis of a revision of the unit rate of $225. On Cheung’s case, WK would continue with the Contract Work if WK was paid $800,000.

59.The events of a meeting held with Cheung on 11 July 2013 were recorded in a letter dated 27 July 2013 from Tam.  At the meeting, Cheung had again referred to the market rate and the serious financial burden and losses sustained by WK.  Tam set out in the letter of 27 July 2013 the 2 alternative proposals made by Cheung: that either the Contract Price be increased to $300 as the unit rate for the remaining Contract Work; or the remaining Contract Work be carried out by other contractors appointed by Aggressive, with the retention money being deducted as compensation for Aggressive’s losses.  Aggressive stated in the letter that neither proposal was acceptable, as they do not comply with the Agreement, and that WK should continue the execution of the Contract Work in accordance with the Agreement.

60.After WK’s repeated suspension of work and the issue of 3 warning letters by Aggressive on 15, 16 and 17 July 2013, Aggressive’s employees and representatives on the Site had continued to urge Law of WK to resume work on 18 July and 19 July 2013, but in vain.  Cheung claims that he informed Tam on 18 or 19 July 2013, that in response to the earlier indications made by Aggressive in its letters, WK had no objection for Aggressive to arrange other workers to assist with the Contract Work, if Aggressive considered that more workers were required.

61.Cheung claims that 20 July 2013 was Lo Ban’s birthday and a holiday for timber workers.  He maintained that Tam had agreed to his insistence on the holiday.  21 July 2013 was a Sunday, so no work had to be done.  There is dispute between Aggressive and WK as to whether, on 22 July 2013, there were WK workers who were doing the work Aggressive had been pressing them to do at the Site.  WK claims that there were 2 workers who had entered the Site.  However, even on Cheung’s evidence, no work was performed on 23 July 2013, either because the work had already been completed, or otherwise, could not be proceeded with before the completion of re-inforcement and concreting works by other contractors of Aggressive.

62.On the evidence, one Ms Ng of WK (“Ng”), who was one of WK’s quantity surveyors, went to Aggressive’s office at the Site on 22 July 2013 with WK’s application for payment in respect of the Contract Work completed by WK.  There is a dispute between Aggressive and WK as to the events of the meeting.  Cheung claims that on 21 July 2013, Tam had informed him by telephone that Aggressive was agreeable to WK’s proposal: that the remaining Contract Work was to be completed by another contractor, and that the retention money under the Agreement would be forfeited by Aggressive.  According to Cheung, he had informed and had agreed with Tam, that the value of the Contract Work which had been completed by WK would be agreed and settled, and that was why Ng went to see Tam on 22 July 2013 with WK’s application for payment.  Cheung claims that Tam had asked for an agreement to be signed to record the terms of settlement.  When Cheung was informed by Ng that Aggressive would not be making any payment on WK’s application, he telephoned Tam in the afternoon of 22 July 2013, to inform him that due to the absence of agreement on payment for WK’s completed works, WK would not agree to the remaining Contract Work being taken over by another contractor.

63.According to Tam, there was no agreement or discussion with Cheung before 22 July 2013 for payment to be made to WK.  On Aggressive’s case, when Ng went to its site office on 22 July 2013, she submitted a payment application for $3.3 million, claiming that it was the payment due to WK under the Agreement, which sum included the return of the retention money to WK.  On Tam’s evidence, Ng threatened him at the meeting, by saying that such outstanding sum had to be paid before WK would allow Aggressive to engage other contractors to complete the Contract Work in place of WK.  Tam claims that he also received a telephone call from Cheung in the afternoon that day, when Cheung told him that WK would not continue with the Work, that Aggressive must pay the outstanding sum to WK, as otherwise WK would not allow Aggressive to engage any other contractor to proceed with and complete the Contract Work.  According to Aggressive, these demands made by Ng and Tam were unwarranted threats, since Aggressive had already settled WK’s payment for work carried out up to 31 May 2013, and there was no payment due.

64.On WK’s case, Aggressive obstructed its work under the Agreement and wrongfully prevented Wong from working at the Site on 23 July 2013.  Wong was a workman in his 70s, who had regularly been sent by WK to do the Contract Work at the Site.  According to Aggressive’s witnesses at the Site on the day in question, Aggressive’s Site Agent, Chung Siu Wah (“Chung”), whose job it was to co-ordinate the work of the different contractors at the Site, brought timber formwork contractors to the Site to inspect the timber formwork there which they were to take over (and as indicated in Aggressive’s warning letters). According to the evidence of Chung, Tam and Carman Lau (“Carman”) who was the Security Manager of Aggressive, Wong obstructed and disturbed other workers who were working at the Site on 23 July 2013.  According to Chung, when Wong saw him bringing in contractors to the Site, he said to Chung roughly that as WK’s Agreement had not been resolved with Aggressive, Chung could not bring other timber formwork workers to the Site.  According to Carman, Wong claimed that he had not been paid his wages, and shouted in a loud voice to other workers, telling them to leave.  When Carman tried to calm Wong and to persuade him to bring any labour dispute he may have to the Labour Department for resolution, Wong wielded a hammer in front of Carman.  He also used the hammer to hit the metal pipes piled up near him, making a loud noise.  The police had to be called as a result, to remove Wong from the Site.

65.Apart from Cheung’s denials as to Wong’s actions (and Cheung was not at the Site at the relevant time on 23 July 2013), no evidence was called to refute the evidence of Aggressive’s witnesses.  Wong was not called.  On the available evidence, I find that Aggressive had good cause to remove Wong from the Site on 23 July 2013.

66.On 23 July 2013, following the incident with Wong, Aggressive issued a letter to WK (“Replacement Notice”), complaining of WK’s suspension of work notwithstanding Aggressive’s written warnings, and recording the 23 July incident of Wong obstructing other workers at the Site.  By the same letter, Aggressive notified WK that it had already made arrangements for other workers to execute the works which had been suspended by WK, and reserved all its remedies.  The Replacement Notice was sent by hand and by email to WK on 23 July 2013.  It was at the same time accompanied or followed up by a letter of the same date from Aggressive’s solicitors, by which WK were warned to desist from further interfering with the continuation of the Contract Work and the operation of the Site.

67.On 23 July 2013, WK issued its letter, notifying Aggressive that WK would continue to send workers to the Site, “as requested”.  The following day, 7 workers were sent by WK to the Site.  Aggressive emphasized that this was done without prior arrangements being made with Aggressive, for Aggressive to coordinate with WK and with other necessary contractors in liaison for the execution of WK’s Contract Work, and the work of other contractors associated with the timber formwork: such as steel reinforcement workers and concrete workers who were required to do their respective work contemporaneously or consecutively at the relevant locations of the Site.  According to the evidence of Chung, before WK could bring in a number of workers to carry out work, it was necessary to first inform Chung so that he could make the necessary coordination and arrangements.  Chung emphasized that WK had not liaised with Aggressive for the necessary arrangements and coordination to be planned, prior to notifying Aggressive on 23 July 2013 and sending the 7 workers on 24 July 2013, and prior to notifying Aggressive on 26 July 2013 that they would be sending 20 to 30 workers the next day.

68.On Aggressive’s evidence, 7 workers (including Wong) appeared at the entrance to the Site on 24 July 2013, in the company of Law and Ng of WK.  WK claimed that they were not permitted to enter.  According to Aggressive, the workers from WK gathered at the entrance to the Site, some sat down on the ground, and they caused obstruction and nuisance to other workers who had to enter the Site for work.  The workers left after the police was involved.

69.WK wrote to Aggressive on 25 July 2013, recording the ejection of Wong from the Site on 23 July and the fact that 7 workers were refused entry to the Site on 24 July.  WK stated in the letter that it was awaiting instructions from Aggressive.

70.In the evening of 25 July 2013, Cheung telephoned Carman.  According to Carman, Cheung asked for Aggressive’s immediate payment of $800,000, and said words to the effect that if such payment was made, WK’s “people” would not go to the Site, and he could guarantee that nothing would happen, but if the payment was not made, no timber formwork workers of other contractors would be allowed to commence their work at the Site, and Cheung would not be able to guarantee that Aggressive’s workers would be able to work safely at the Site.  That was seen by Aggressive as a threat.

71.Cheung denies that he had made the threats at all during the telephone conversation.  He claims in his witness statement that he only proposed to Carman that WK would accept a payment of $800,000 as settlement of all disputes under the Agreement, and that if that was acceptable to Aggressive, WK would not arrange for any more workers to go to the Site.

72.Aggressive’s evidence is that on 26 July 2013, breaking up work commenced at the vehicular access road leading to the LCP and the storage area of Site A, and that this was in accordance with the progress of work planned.  By the nature of the breaking up work, no other work could be carried out and delivery of construction materials could not be made to that area while the breaking up work was in progress.  According to Aggressive, WK had been informed and was aware of the timing for the breaking up work.  Yet, WK issued the 26 July 2013 letter, purporting to inform Aggressive that it would be making arrangements for 20 to 30 workers and for a truck of construction materials to be sent to the Site for carrying out the outstanding work at Site A on 27 July 2013, without prior agreement or liaison with Aggressive’s staff on site. Law also telephoned Tam and Cheung on 26 July 2013, claiming that WK would be sending 2 trucks of materials and 40 to 50 workers to work at the Site.  Law was informed that the trucks could not even enter, as break up work would be in progress.

73.Viewed in the history of WK’s performance under the Agreement since June 2013, and what had transpired on 23 July and 24 July 2013, when tension had already increased with the disturbance and obstruction caused by WK’s workers, including in particular the demands made by WK for immediate payment of the sum of $3.3 million, and later, for payment of $800,000 to guarantee the safety of workers at the Site and the discontinuance of further disturbance, I accept the submissions made on behalf of Aggressive, that the Resumption Notices cannot reasonably and objectively be regarded as WK’s expression of a genuine intention to continue the Contract Work, and to abide by the terms of the Agreement as having binding effect on WK.  On Aggressive’s evidence, it cannot be objectively believed, and neither Chung nor Tam believed, that WK would in fact be able to send workers and materials to the Site as it alleged in the Resumption Notices.  This is particularly so bearing in mind that Aggressive had received different and contradictory messages, from Law on the telephone on 26 July 2013, and by WK’s letter of 26 July 2013, as to the number of trucks and workmen who were allegedly going to the Site on 27 July 2013.  The Resumption Notices were in fact considered by Aggressive as WK’s threats to cause further disturbance and obstruction at the Site, unless WK’s demands for payment and settlement of WK’s claims were met by Aggressive.

74.On the evidence, bearing in mind WK’s history of repeated and consistent failures to act in accordance with Aggressive’s instructions to work, and their inability to consistently maintain a sufficient and constant workforce, I do not accept the Resumption Notices as demonstration of WK’s intention to consistently act in accordance with Aggressive’s instructions, and to consistently perform its duties under the Agreement.  For WK to send to the Site a team as large as 20 to 30, or 40 to 50, workers and truckloads of materials would require proper coordination with Aggressive’s staff on site, before WK’s Contract Work can be executed, and for workers of other contractors to be organized to carry out work in association with the timber formwork.  For WK to notify Aggressive, one day before, of its alleged plan to do so, at a time (as Aggressive highlighted) when WK had been notified that breaking up work would be carried out at the vehicular access to the relevant location of the work, is by itself a breach of WK’s obligations under clause 9 of the Specification of Work, rather than a genuine expression of its intention to continue and abide by the terms of the Agreement.

Conclusion on breach

75.To conclude, I find that WK was in breach of its obligations under the Agreement, in failing to carry out the Contract Work consistently, in suspending work without cause, and in failing to comply with the reasonable instructions and requirements of Aggressive and the Agreement, such that Aggressive was entitled to terminate the Agreement under clause 23 by its letter of 26 July 2013.  I reject WK’s claim that Aggressive had wrongfully prevented its workers from carrying out the Contract Work at the Site, on 23 July and 24 July 2013, as it alleges.

76.WK claims that the Agreement was subject to implied terms: firstly, that Aggressive should give reasonable and sufficient opportunity and time to WK to rectify its defaults, before Aggressive exercises its right to terminate under clause 23; and secondly, that Aggressive should give reasonable and sufficient prior written notice to WK before it exercises its right to terminate the Agreement under clause 23.

77.It is trite, that for a term to be implied, it must be necessary to give business efficacy to the contract, that it must be obvious, and significantly, the implied term must not contradict any express term of the contract (AG of Belize v Belize Telecom Ltd [2009] 1 WLR 1988 (PC)). 

78.Clause 23 clearly sets out the events which trigger Aggressive’s right to terminate the Agreement.  Clause 23.1 refers to “faults” (or mistakes) (“錯失”) of WK, including suspension of work without cause, refusal to comply with instructions or rules concerning site safety, breach of contract, breach of the law, etc.  It makes no reference to the need to serve any form of notice.  By contrast, clause 23.2 requires Aggressive to serve written notice of termination in the event of the insolvency, winding up, restructuring and cessation of business of WK.  Clause 23.3 also requires Aggressive to serve written notice of termination, in the event of WK’s status as a qualified contractor being cancelled.  Read as a whole, clause 23 makes a clear distinction between events which call for a written notice of termination, and those which do not.  It would contradict the clear language and defeat the purpose of clause 23, to imply a term which requires the service of a written notice for the events covered by clause 23.1. In my view, the implied terms requiring prior notice are unnecessary, not obvious and contradict the terms of clause 23.

79.There is no suggestion or evidence to support the claim that clause 23.1 cannot be effective on its own, without the implication of the need to serve prior notice of termination or notice to remedy breaches.

80.In any event, Aggressive had issued letters of warning, site memos and verbal reminders to WK in July 2013 (including the 3 warning letters on 15, 16 and 17 July 2013), requiring WK to resume work and to send sufficient workers to resume the Contract Work, before the notice of termination was issued on 26 July 2013.  Even if there was any implied term as contended by WK, sufficient notices and opportunities had been given to WK before the termination on 26 July 2013.

81.Further, I am satisfied on the evidence that the constant and repeated breaches of WK, which are complained of by Aggressive, are sufficiently serious and fundamental so as to constitute repudiatory breaches which would entitle Aggressive to terminate the Agreement at common law.  The claims made by WK in the 22/6 Letter and the 25/6 Letter, that it would not undertake the timber formwork for the main roof and for the LCP, at the Contract Price stipulated in the Agreement are serious breaches.  From 22 June 2013 to 26 July 2013, there were negotiations and attempts made by Aggressive to consider the alternative proposals made by WK for its continuation of the Contract Work.  It was reasonable for Aggressive to do so, and when it became clear that matters could not be resolved (as evidenced by the events of 22, 24 and 25 July 2013 and the threats made), Aggressive issued the letter of acceptance of WK’s repudiation and of termination of the Agreement.

Damages for breach

82.By the time of closing submissions, the parties had managed to agree on various issues relating to the claim on quantum, should liability be established.  The value of the Contract Work completed by WK, and for which payment is to be allowed for WK, has also been agreed and is reflected in the amounts submitted to the Court.  This judgment will only deal with the remaining issues on quantum which are in dispute.

The bonus payment

83.It is not disputed that agreement was made between the parties in December 2012 for a payment of $500,000 to be made to WK.  According to Aggressive, this was an ex gratia payment, as an incentive bonus to induce WK to complete the Contract Work under the Agreement, after all the complaints made by Cheung as to WK’s inability to secure sufficient workers in view of the Contract Price and of its financial losses.  According to WK, the “bonus payment” was to compensate WK for delay and additional work as a result of defects in some parts of the work.  The more material dispute between the parties is that according to Tam and Mr Ip (“Ip”), the Project Director of Aggressive who attended the December meeting with Cheung, although there was agreementreached for payment of the incentive bonus, there had been no mention made and no agreement on when the incentive bonus was to be paid, save that it was offered for WK to complete all the remaining Contract Work.  According to Cheung, however, it had been agreed in December 2012 that the bonus incentive was to be paid to WK “in one go once it completed the timber formwork construction for all the transfer plates of Towers 1-3”.

84.It is not in dispute that of the sum of $500,000, an amount of $100,000 was paid in March 2013.  I agree that since it is WK which seeks payment, by way of counterclaim in the proceedings, of the unpaid balance of $400,000, it is for WK to prove that the balance is due and payable by virtue of the agreement reached in December 2012.

85.According to Tam’s evidence, in about January 2013, he was informed by Aggressive’s quantity surveyor that WK had asked when the incentive bonus was to be paid.  Tam consulted Ip, since there was no discussion at the December meeting on the time of payment.  Ip informed Tam that the incentive bonus would be released in 3 stages: (1) $100,000 would be released upon the completion of the construction of the transfer plates of T1, T2 and T3 and upon WK achieving a work rate of completion of the construction of one storey of Tower 3 of Site B in every 5 days (“the 5 day cycle”); (2) $200,000 would be released upon the completion of the construction of the top roofs of T1, T2 and T3; and (3) the balance of $200,000 would be released upon the completion of all the Contract Work by WK in accordance with the Agreement.  On Tam’s evidence, he duly informed Law, WK’s site representative, of this.

86.On about 7 January 2013, and before the construction of the transfer plate of Site B was completed, WK submitted an interim payment application (“IP 5”) for payment of $400,000 of the incentive bonus.  Tam said that Aggressive was astonished to have received the application, since it was not in accordance with the timeframe stipulated by Ip, and the application was rejected by Aggressive.  Even on WK’s evidence, the transfer plates were only completed in February 2013, and Cheung was not able to explain why $400,000 was included in IP 5 in January 2013, when on his case, the incentive bonus was payable “in one go”, and on completion of all the transfer plates.  The payment of $100,000 was made by Aggressive, and accepted by WK, in March 2013 when (according to Aggressive’s evidence) the transfer plates were completed and the 5-day cycle was achieved.  The fact that WK applied for payment of $250,000, instead of $400,000, in WK’s subsequent interim applications made from May 2013 to July 2013, could not be explained by Cheung in cross-examination.  He claims it might have been a mistake made by WK’s quantity surveyor, but no evidence was called from the quantity surveyor.

87.The evidence does not support WK’s assertion, that the incentive bonus of $500,000 was agreed to be paid in one go.  I prefer the evidence from Tam and Ip as to the agreement made in December 2012, and the time and conditions of payment imposed by Ip.  As there is no evidence that the top roofs of T1, T2 and T3, and all the Contract Work under the Agreement, had been completed by WK, I reject WK’s claim for payment of the balance of $400,000 of the incentive bonus.

Additional costs incurred by Aggressive for completion of the Contract Work

88.The value of the Contract Work left by WK and which had to be completed by other contractors engaged by Aggressive has been measured by Aggressive’s expert in accordance with the Agreement, and assessed.  Upon Aggressive’s lawful termination of the Agreement on the basis of WK’s breach, the damages awarded to Aggressive are allowed at $4,672,157.91.

Value of remedial works carried out by other contractors

89.Aggressive’s claim is that the Contract Work carried out by WK under the Agreement was defective or faulty, and Aggressive had to engage other contractors to carry out remedial works in order to rectify the defects, thereby incurring costs which it seeks to recover from WK.  The allegation of defects and the remedial works required to be carried out as a result is denied by WK.

90.There is no expert evidence on the defects alleged by Aggressive, since the parties never sought leave from the court to adduce expert evidence on the standard of the work carried out by WK and the defects claimed by Aggressive.  Apart from the bare assertion by Tam that the expenses incurred were necessitated by remedial works carried out to rectify the defects alleged, there are no particulars and no evidence of the existence and extent of the defects, how the Contract Work failed to comply with the specifications of the Agreement and/or the requirements of Aggressive or the Employer.

91.Accordingly, I reject as unsubstantiated Aggressive’s claim for the costs of remedial works incurred as a result of WK’s breach.

Claims made by the Employer and its sub-contractors

92.Aggressive claims for a sum of $1,850,000, being the costs claimed by contractors as a result of additional work these contractors had to carry out, as a result of the delay and incomplete work of WK.  Aggressive relies on the documents produced which show the claims made by 3 contractors, and the amounts credited to the contractors after agreement was made between Aggressive and the respective contractors.

93.I accept the submissions made on behalf of Aggressive, that the Statement of Claim includes adequate pleadings for (under paragraph 16 (1)) costs and expenses of having to employ substitute contractors at short notice and at higher rates to complete the unfinished works of WK; and (under paragraph 16 (2)) loss and expenses which Aggressive had to bear as a result of WK’s breach of the Agreement.  WK never sought further and better particulars of or additional discovery relating to the claims, and in the witness statement of Tam served in December 2014, he included the claims of the subcontractors, quantified then in the sum of $2.4 million, and reduced at trial to $1.85 million.

94.If WK claims that the amounts agreed with the subcontractors and paid to them by Aggressive were unreasonable, this has to be pleaded and evidence should be produced as to what WK claims to be the reasonable market rate on which payment should, on its case, be based.  In the absence of such pleading and evidence, I allow the sum of $1.85 million sought.

95.All other amounts are agreed, and are allowed as Aggressive’s damages.

Orders

96.I accept the claims made by Aggressive of WK’s breach of the Agreement, and its claim that the Agreement had been terminated on 26 July 2013.  I allow Aggressive’s claims in the action for damages, in the sums allowed in the preceding paragraphs and otherwise as agreed.

97.WK’s counterclaim is dismissed.

98.The costs order nisi is that the costs of the action and of the counterclaim are to be paid by WK to Aggressive.

Mr Simon Chiu, instructed by To, Lam & Co, for the plaintiff

Mr Ivan Cheung Tai Yau, instructed by Wong & Lawyers, for the defendant