Lo Tim v. Hang Lee Construction Co and Another

CACV000004/1973

IN THE SUPREME COURT OF HONG KONG

(APPELLATE JURISDICTION)

CIVIL APPEAL NO. 4 OF 1973

(On appeal from O.J. 551 OF 1972)

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Coram: Huggins & McMullin, JJ.

Date of Judgment: 11th May 1973.

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JUDGMENT

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Huggins, J.:

1. This action should not have gone to trial without further elucidation of the issues to be decided. The so-called "Statement of Claim" was in truth nothing more than a simple indorsement on the writ - and an inadequate indorsement at that. It appears that the appellant plaintiff purported to serve an amended Statement of Claim without leave before the trial and, as I understand it, leave so to amend was given ex post facto by the learned judge at the trial. It now appears that the Appellant sought to set up two causes of action, breach of a contractual obligation to pay for work which he had undertaken to do for the Respondents and detinue of two planing machines. Although the "Statement of Claim" suggested otherwise the Appellant was never engaged by the Respondents as their servant (although at one point in his judgment the learned judge said there is abundant documentary evidence put in by the [Appellant] himself to show that he received his wages"), the Respondent never asked the Appellant to pay wages on their behalf and there was never any occupation of land belonging to the Appellant which might have given rise to a claim for mesne profits. The Respondents counterclaimed for damages in respect of the completion of the work which the Appellant had undertaken to do. No defence to the counterclaim was delivered.

2. It was admitted on the pleadings that there was a written contract entered into between the Appellant and the Respondents, under which the Appellant undertook to construct wooden forms for reinforced concrete works. The contract produced was in fact between the Appellant and the first Respondent, but it has been conceded by counsel for the Respondents that on the pleadings the learned judge was wrong to say that "the second [Respondent] really does not come into the picture at all. They have taken no part in these proceedings" they were represented by counsel throughout. It is further conceded that if the Appellant were to succeed upon the substance of his appeal judgment should be entered against both Respondents.

3. What happened was that, before the Appellants had completed the work contracted for, the Respondents repudiated the contract and the main issue in the case was whether they were entitled so to do. Their contention was that the Appellant himself was in breach of the contract and that the Respondents were given power to terminate it because after due notice he had failed to send a proper and sufficient work force to the site to carry out the construction work. The Appellant maintained that he had at all times a sufficient number of workers available but that he was prevented from doing the work because necessary preparatory work, which was the responsibility of the Respondents, had not been done.

4. The learned judge entered judgment for the Respondents on the claim and for the first Respondent on the counterclaim. Unfortunately, because the pleadings did not define the issues, he made no express finding whether the Plaintiff did fail to supply sufficient workers. What he said was:

"On June 10th 1971 the first defendant acting under the contract of November 1st of the previous year took back the work from the plaintiff. This was done by means of a letter which stated that there had been delay due to the lack of workmen on the sites, that frequent warnings of this had been given, and that no improvement in the situation had resulted. And it was for those reasons that the first defendant intended to carry out the work contracted to be done by the plaintiff themselves. The plaintiff left the site soon afterwards."

This no doubt is a correct statement of what happened but the question which was not answered was whether the letter was correct when it said that there had been delay due to lack of workmen on the sites, that frequent warnings of this had been given, and that no improvement in the situation had resulted". The learned judge did not refer to the evidence on this matter, in particular to the schedules of workers attending to work for the Appellant and the schedule of workers attending to do the preparatory work. The learned judge in his judgment confined himself to considering in isolation the heads of damage which the Appellant, who was not professionally represented, had set out. It was not pointed out to the Appellant that the evidence which he adduced would amply support a claim in damages for breach of the contract relied upon but not the case which he had particularised. It was abundantly clear that in his ignorance the Appellant was saying that since he had been put to expense in relation to the contract and had himself performed work in its execution he was entitled to sue for his out of pocket expenses on the basis that he had made the payments at the request of the Respondents and on the basis that he had been employed by them as their servant. No doubt all that he meant to do was to quantify his damage. The Respondents' Defence suggests that they fully appreciated that.

5. No-one is more willing than I to hold a party to his pleadings where he has had professional advice and where his pleading is such that an opponent who has acted upon the strength of it would be prejudiced, but, subject to what I say hereafter, I cannot believe it is just that this Appellant should have failed without having the fundamental issue in the case decided when it clearly arose on the pleadings as a whole. The reasoning of the learned judge under each head of damage set out in the writ cannot be faulted, but that merely indicates that the writ was badly drafted.

6. In my view it was essential that the judge should make a clear, express finding whether the Appellant was in breach of contract. This he failed to do both in relation to the claim and in relation to the counterclaim.

7. Again but for what I shall say hereafter I would have thought the proper course was to send the case back for retrial. Nevertheless the matter has so been argued before us that this issue no longer has the same significance. It is pointed out first that even assuming a wrongful repudiation by the Respondents the Appellant could not have recovered more than the total contract price since the remainder of the work was apparently done at the same prices. On the figures produced before the judge by the Respondents that came to $149,461.41. There was further evidence that the Respondents have in fact paid $151,145.80, a fact admitted on the appeal by the Appellant. That being so the Appellant can prove no loss. That disposes of the appeal against the judgment on the claim for damages for breach of contract. On the evidence we cannot say that the learned judge was wrong to dismiss the claim in detinue since he was not satisfied that the machines belonged to the Plaintiff.

8. The Respondents counterclaim in respect of the alleged over-payment, which was originally said to be $44,366.39. On the appeal counsel for the Respondents has stated that his clients are prepared to have the judgment which was entered in their favour on the counterclaim reduced to the difference between the first two figures which I have cited, i.e. $1,684.39. The Appellant now, before us, contends that the contract price was in truth far in excess of the $149,461.41 deposed to by the Respondents, but he did not challenge that evidence in croes-examination and gave no contrary evidence before the judge. He has complained bitterly that documents were not made available to him before the trial and that he was unable to check what the correct figure should be. What happened was that an order for mutual discovery was made and upon the Respondents default the Appellant took out a summons for judgment in default. That summons was eventually adjourned sine die and the Appellant applied to have the case set down for trial without having obtained the documents which he wished to see. It is a matter for regret that at the trial the Defendants were allowed to put in a large bundle of documents, many of them in the Chinese language and unsupported by translations. Moreover, we have experienced difficulty and wasted much time because the clerk in the court of trial failed properly to mark the exhibits which were admitted in evidence by the learned judge. This was a serious dereliction of duty on his part. The Appellant obviously feels that he was prejudiced by the manner in which the documents were put before the court but it must be observed that he did not ask for an adjournment. It is perhaps not surprising that in the absence of any reference to the relevant documents in the learned judge's judgment the Appellant feels that not only was he unable to do justice to his case in argument but that the learned judge has not given a proper consideration to those documents. It must, however, be said that never before the hearing in this Court was it suggested that the Respondents' evidence as to the amount or work under the contract was completely wrong, and even a party unrepresented by counsel might have been expected to raise some objection if the quantities were so greatly inaccurate as the Appellant now alleges in this Court. He has admitted to us that he is still not in a position to show the correct quantities and has suggested that he be given time to ascertain the quantities from the architect's drawings. I think it is too late to allow fresh evidence of that nature at this stage. In my view we have, in the circumstances, no alternative but to accept the quantities proved by the Respondents, for their evidence on this was accepted by the judge.

9. We are therefore in the position that the Respondents are in effect prepared to concede for the purposes of this appeal that the Appellant was not in breach of contract, that they were in breach of contract and that the Appellant was entitled to the full contract price. They therefore claim only the excess of what they have paid over and above the contract price, namely $1,684.39. I am not persuaded that there can be any defence to that claim.

10. I would therefore allow the appeal but instead of ordering a re-trial would substitute on the counterclaim a judgment in favour of the Respondents in the sum of $1,684.39. Subject to anything that may be said I think there should be no order as to costs.

11th May 1973.

Representation: