Fruit Design and Build Ltd v. Leung Kwok Pong also known as Adam Leung

HCA 915/2019
and HCA 334/2020

[2021] HKCFI 3391

(Heard together)

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 915 OF 2019

________________________

________________________

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 334 OF 2020

________________________

________________________

(Head together)

Before:  Master Jonathan Wong in Chambers (Open to public)

Date of Hearing:  22 January 2021, 8 February 2021

Date of Decision: 18 November 2021

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DECISION

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1.   Introduction

1.1The defendant in both actions was the registered owner of New Kowloon Inland Lot No 825 (“Land”).^[1]  The Land was assigned to the defendant in or around March 2016.  At that time, a house was erected on the Land. 

1.2The plaintiff in these proceedings is a registered general building contractor within the meaning of the Buildings Ordinance Cap 123.  It is common ground that the defendant engaged the plaintiff to redevelop the Land which entailed the demolition of the old house and the erection of a new structure. 

1.3The initial agreement made between the parties was contained in the plaintiff’s quotation dated 30 September 2016, which was countersigned by the defendant on 30 November 2016 (“1^st Agreement”).  Under the 1^st Agreement, the plaintiff was to design and construct a new superstructure on the Land and to carry out the E&M (electrical and mechanical) and external works stated therein at HK$32,500,000.  The foundation works are priced as part of the contract sum as a provisional item and to be carried out by the defendant’s direct contractor, Pak Wing Construction Co Ltd (“Pak Wing”).  The 1^st Agreement also provides for two optional items (namely (1) supply and installation of a lift and (2) glass balustrade at roof floor and balcony) which do not form part of the contract sum. 

1.4Thereafter in March 2018, the defendant instructed the plaintiff, and the plaintiff agreed, to carry out additional works (“Additional Works”).  The scope of the Additional Works is set out in an undated quotation submitted by the plaintiff and countersigned by the defendant on or about 12 March 2018 (“2^nd Agreement”).  The 2^nd Agreement priced the Additional Works at HK$20,924,940. 

1.5The construction works on the Land came to a halt in late 2018 or early 2019, before the completion of the foundation works.  It is the plaintiff’s case that Pak Wing had suspended the foundation works as the defendant was not honouring his payment obligations. 

1.6HCA 915 of 2019 (“2019 Action”) was commenced by the plaintiff in March 2019 to recover outstanding progress payments under the Agreements.  The progress payments were made by way of the plaintiff’s Interim Payment Applications (“IPAs”).  During the currency of the Agreements, the plaintiff issued 16 IPAs.  The defendant has settled IPA Nos 1 to 7, in the total sum of HK$9,003,000.  The 2019 Action was commenced to recover the outstanding sums due under the unpaid IPA Nos 8 to 16, in the total sum of HK$9,218,000.  At the time of commencement of the 2019 Action, the Agreements were still extant. 

1.7On 20 January 2020, the defendant entered into a binding agreement to sell the Land and engaged Messrs Hon & Co (“Garnishee”) to represent him in the transaction.  The sale and purchase of the Land was completed on 28 April 2020 and yielded net proceeds in the sum of HK$2,367,901.79 (“Net Proceeds”).  It is the plaintiff’s case that the defendant’s disposal of the Land and his persistent failure to make payment evinced an intention to be no longer bound by the Agreements, which repudiation was accepted by the plaintiff commencing HCA 334 of 2020 (“2020 Action”) on 17 March 2020.  In the 2020 Action, the plaintiff seeks to recover loss and damage represented by (1) value of the works under the 1^st Agreement carried out after IPA No 16, (2) value of the Additional Works, (3) loss of profit and (4) release of retention.  

1.8The defendant failed to give notice of intention to defend in both the 2019 Action and the 2020 Action.  The plaintiff obtained a final judgment in both actions in June 2020, and based on the final judgments, obtained garnishee orders nisi in August 2020. 

1.9As explained by the Garnishee, the Net Proceeds were not released to the defendant because there was an extant Mareva injunction against the defendant obtained by another plaintiff in HCA 315 of 2020.  As a result of the injunction, the Garnishees’s costs and disbursements in the total sum of HK$181,921 for the sale and purchase of the Land are yet to be deducted from the Net Proceeds.

1.10The Garnishee has also informed the court, by letters dated 14 October 2020 and 15 January 2021, that it does not object to the plaintiff’s application to have the garnishee orders nisi made absolute. 

1.11By summonses filed on 9 October 2020, the defendant applied to set aside the final judgments and to discharge the garnishee orders nisi.  

1.12On 19 October 2020, Master SH Lee ordered that the defendant’s summonses and the hearing of the garnishee orders to show cause be heard together.  At the hearing of these applications before this court, the plaintiff and the defendant appeared respectively by Ms Joyce Leung and Mr Tommy Cheung, both of counsel. 

2.   The issues

2.1The parties have proceeded on the basis that the defendant’s challenge to the garnishee orders nisi stands or falls with his application to set aside the final judgments. 

2.2Mr Cheung accepted that the writs in both actions were validly served.  From the initial skeleton submissions lodged by the parties, the debate was therefore focussed on whether the defendant’s defence in both actions satisfied the requisite merit threshold for setting aside a regular default judgment, namely a defence which carried a real prospect of success. 

2.3However, a further issue arose at the original hearing on 22 January 2021, namely whether the plaintiff’s claims in both actions were claims for liquidated demands such that final judgments may be granted under RHC Order 13, rule 1.  As a result, a further hearing took place on 8 February 2021 for the parties to make further submissions on the issue. 

2.4At the hearing on 8 February 2021, Ms Leung accepted that at least part of the plaintiff’s claims in the 2020 Action were for unliquidated damages, and for “practical purpose” she no longer defended the final judgment obtained in the 2020 Action.  Ms Leung however submitted that whilst the final judgment in the 2020 Action ought to be set aside, I should replace it with an interlocutory judgment with damages to be assessed. 

2.5As regards the 2019 Action, the parties disagreed on whether the plaintiff’s claim in the 2019 Actions was a liquidated demand.   

2.6Depending on whether the final judgment in the 2019 Action was regular, the parties further disagreed on whether the defendant had demonstrated a meritorious defence (if the judgment was regular) and whether conditions ought to be imposed (if the judgment was irregular). 

2.7Before addressing the issues identified at the preceding two paragraphs, I should first deal with two preliminary matters. The first is whether I should allow the plaintiff’s summon belatedly taken out on 3 February 2021 for leave to amend its Statement of Claim to include a claim for quantum meruit (“Amendment Application”) as part of its argument that the claim made in the 2019 Action is a liquidated demand.  This is precipitated by Ms Leung’s position that there are a number of authorities which suggest that a claim for quantum meruit should be treated as liquidated.  The second is whether there are any duplications in respect of the final judgments obtained in the two actions. 

2.8There are a number of difficulties with the Amendment Application. 

(1)  First, the 2019 Action was commenced by a generally-indorsed writ.  The only cause of action pleaded in the writ is one for the amounts due under IPA Nos 8 to 16.  The Amendment Application seeks to add a claim for quantum meruit to the Statement of Claim, without applying for a corresponding amendment to the writ.  As stated at Hong Kong Civil Procedure 2022 Note 20/1/5, under RHC Order 18, rule 15 a plaintiff may, in his statement of claim, ask for relief not mentioned in his writ, provided it is relief to which he is entitled by virtue of any cause of action that is mentioned in his writ.  However, the plaintiff is not entitled to add a claim on a new and totally different cause of action except by leave, and if leave be given, the writ strictly should be amended. 

(2)  Secondly, the authorities cited by Mr Cheung, in particular Mann v Paterson Constructions Pty Ltd (2019) 93 ALJR 1164 §19, support the proposition that where a party has enforceable contractual rights to money that has become due under a contract, there is no room for a right in that party to elect to claim a reasonable remuneration unconstrained by the contract between the parties: see also Hong Kong Civil Procedure 2022 Note 18/15/8 for the proposition that a plaintiff cannot, without amending the writ, add in his statement of claim a new cause of action in respect of which one of the facts in support is inconsistent with the cause of action mentioned in the writ. 

(3)  Thirdly, although Ms Leung referred to Hong Kong Civil Procedure 2022 Note 20/8/14A for the proposition that the court has jurisdiction to entertain an amendment application even after, as here, judgment has been granted, it must be emphasized that that passage also states that the court would require an exceptional case before acceding to an application of such a nature.  As Ms Leung accepted, the Amendment Application was precipitated by a loophole created by the plaintiff’s own oversight.^[2] It does not appear to me that the foregoing gives rise to an exceptional case. 

2.9For the above reasons, I disallow the Amendment Application. 

2.10The second preliminary issue relates to the duplication of claims in the 2019 Action and the 2020 Action.  In order to put this issue in its proper perspective, and for ease of understanding, I annex to this Decision the plaintiff’s quotation countersigned by the defendant on 30 November 2016 which formed the 1^st Agreement (Annex A), the plaintiff’s undated quotation countersigned by the defendant on 12 March 2018 which formed the 2^nd Agreement (Annex B) and IPA No 16 dated 21 February 2019 (Annex C). 

2.11IPA No 16, under the heading “Variation Works”, claims for provision of temporary ceiling for BD inspection in the sum of HK$251,000 and reconstruction of new concrete fence wall and fencing (completion of fence wall demolition) in the sum of HK$211,314, being 15% progress payment of the price of that item in the sum of HK$1,408,760.  They correspond to Items 1.0 and 3.0 of the 2^nd Agreement.  In other words, part of the Additional Works were claimed in the IPAs in the 2019 Action. In the 2020 Action, the claim made at Statement of Claim §18(7)(c) is for the gross value of the Additional (Variation) Works in the sum of HK$1,344,864, which is comprised of the foregoing two sums and 25% of Item 6 of the 2^nd Agreement (supply and install precast façade system),^[3] namely [25% x HK$3,530,200 =] HK$882,550.^[4]  It is therefore plain that there are duplications in the claims made in the two actions. 

2.12Final judgments in the 2019 Action and the 2020 Action were granted respectively on 1 and 17 June 2020.  The final judgment in the 2020 Action therefore includes claims for which judgment was already granted in the 2019 Action. 

2.13The duplication is relevant in two respects. 

2.14First, in relation to the 2020 Action, as the plaintiff no longer defends the final judgment in the 2020 Action, the duplication provides an additional reason for finding that 2020 Action may be said to be irregular. 

2.15Secondly, in relation to the 2019 Action, the manner in which Item 3.0 of the 2^nd Agreement is pursued may render the 2019 Action irregular.  As noted above, IPA No 16 claims 15% progress payment in relation to Item 3.0 of the 2^nd Agreement.  However, the payment terms in the 1^st Agreement and the 2^nd Agreement are different.  Whilst the 1^st Agreement allows progress payments, the 2^nd Agreement does not.  Under the 2^nd Agreement, the payment term is 30% to be paid as deposit, 30% to be paid upon arrival of material and 40% to be paid upon completion.  There is no contractual entitlement to be paid 15% for Item 3.0 of the 2^nd Agreement upon completion of fence wall demolition.  As such, the final judgment in the 2019 Action, which is a claim made pursuant to the terms of the Agreements, is irregular as the amount entered was for too much: Hong Kong Civil Procedure 2022 Note 13/9/7.^[5] 

2.16Although I am of the view that final judgment in the 2019 Action is irregular for the reason stated in the preceding paragraph, Tian Yao (Xiamen) Property Development Co Ltd v Right Margin Ltd [2016] 2 HKLRD 175 §§25-26 is an authority for the proposition that it does not follow from a finding of irregularity that a default judgment must be set aside in toto. Instead, RHC Order 13, rule 9, confers a power to the court to set aside or vary a default judgment on such terms as it thinks just.  This is the approach that I will adopt in deciding what is the appropriate order to make after my determination of the other issues in these applications. 

3.   Terms of the Agreements

The 1^st Agreement

3.1The 1^st Agreement sets out the plaintiff’s scope of work by reference to seven general headings: (1) Design and Consultancy, (2) Preliminary, (3) Demolition and Site Clearance, (4) Foundation, (5) Superstructure and Builder’s Works, (6) E&M Works and (7) External Works and priced them at HK$32,500,000.  As noted earlier, the 1^st Agreement also provides for two Optional Items which do not form part of the contract sum. 

3.2The general headings each contains a further breakdown.  For example, under Design and Consultancy (which is priced at HK$4,000,000), the said sum is broken down into ten items.  The majority of the sub-items are priced as an item without further breakdown,^[6] but a few sub-items are priced by unit rates.^[7]

3.3The payment terms under the 1^st Agreement are as follows:

(1)  5% payment within 7 days upon signing of the quotation;

(2)  5% payment within 7 days upon submission of General Building Plan to Building Department and planning application to Planning Department;^[8]

(3)  Monthly progress payment with 5% retention (“Progress Payment Clause”);

(4)  5% retention will be released after acknowledgement of BA 13 issued by Building Department.

3.4The 1^st Agreement does not make further provisions as to how the Progress Payment Clause is to operate.  Unlike more elaborated construction contracts, it does not, for example, make provision for an independent certifier to issue certificates in relation to the plaintiff’s payment applications.  The 1^st Agreement also does not provide any milestones against which progress is to be measured. 

The 2^nd Agreement

3.5Similar to the 1^st Agreement, the Additional Works are in many instances priced as an item with no further breakdown, but some sub-items are priced by unit rates.^[9] 

3.6As noted above, the 2^nd Agreement contains payment terms different from those of the 1^st Agreement, namely 30% to be paid as deposit, 30% to be paid upon arrival of material and 40% to be paid upon completion.  There is no stated deadline before which the deposit has to be paid and there is no express provision as to whether the deposit has to be paid in relation to all or individual items of the Additional Works. 

4.   Nature of the claim made in the 2019 Action

4.1As I have disallowed the Amendment Application to include a claim for quantum meruit, I shall focus on whether the plaintiff’s contractual claim for outstanding sums due under IPA Nos 8-16 is a liquidated demand. 

4.2Hong Kong Civil Procedure 2022 Note 6/2/4 provides as follows:

“A liquidated demand is in the nature of a debt, ie a specific sum of money due and payable under or by virtue of a contract. Its amount must either be already ascertained or capable of being ascertained as a mere matter of arithmetic. If the ascertainment of a sum of money, even though it be specified or named as a definite figure, requires investigation beyond mere calculation, then the sum is not a ‘debt of liquidated demand’ but constitutes damages (see Bright Islands Corp v Chao [2002] 2 HKLRD 97 (CA))”

4.3Whilst the foregoing principle is trite, it has been acknowledged in the authorities that its application is not straightforward: Bright Islands §82 and Revenue and Customs Commissioners v Maxwell [2011] Bus LR 707 §57. 

4.4At Bright Islands §§38 and 60, the Court of Appeal approved the following propositions set out in the then edition of Fletcher – The Law of Insolvency: 

“The decisive hallmark of a liquidated claim is that the process of quantification is already complete, and there is an absence of any element of ‘penalty’ to be imposed over and above the actual loss sustained. Thus, claims in tort are of their very nature unliquidated until judgment has actually been given, or until a binding settlement has been concluded between the parties, because until then the process of quantification of damages remains unfinished, albeit the plaintiff may furnish an indication of a sum of damages which he believes to be appropriate. Claims in contract, on the other hand, are generally liquidated in nature at all stages, but if the sum included an element which is held to be ‘penal’, this will render the claim an unliquidated one. Likewise if the true quantum of loss directly and naturally resulting from a breach of contract or a breach of covenant cannot be immediately and definitely established, the claim must be considered as unliquidated for the time being.” (emphasis added)

4.5In Tian Yao, Barma JA said:

“19. With respect, I disagree. It is clear from Mr Hung’s description of the steps needed to work out the amount of the excess sale proceeds that all that is involved is a series of arithmetical operations, based on a formula specified in the contract. True it is that some of the inputs may need to be supplied, and may even be the subject of dispute (as is the case here in relation to the number of apartments sold), but that does not alter the nature of the claim from liquidated to unliquidated.

20. That this is so is, I think, clear from a number of authorities, including Onway Engineering Ltd v Shun Wing Construction & Engineering Co Ltd (unreported, HCA 88/2008, [2008] HKEC 1942, DHCJ Carlson, at paragraphs 23-24); Lee Kwok Wing v Chung Chuen Hei [2014] 4 HKLRD 917 (per DHCJ Lisa Wong SC, at paragraphs 66 to 76); and Re The Grande Holdings Ltd (unreported, CACV 40/2015, 24 November 2015, per Cheung JA at paragraphs 6.1 to 6.19). In each of these cases, the fact that further information was required in order to establish the amount of the debt or liquidated demand, and that there might be some dispute as to what the position actually was, or indeed that the calculations required under the contract to ascertain the amount might be complicated, did not make the claim in question an unliquidated one. What was important was that once the inputs were known, the amount due was ascertainable by a process of calculation specified by the parties in their contract, without the need for further agreement from the parties, or assessment by the court by reference to general legal principles, thus going beyond what was provided for by the contract.” (emphasis added)

4.6Mr Cheung emphasized that the Progress Payment Clause did not provide a contractual formula or contractual machinery to ascertain the plaintiff’s entitlement.  As may be seen from IPA No 16, the percentages of work done claimed by the plaintiff are invariably in round figures and are suggestive they are the plaintiff’s own estimates rather than premised on any contractual formula or machinery. 

4.7With some hesitation, I disagree with Mr Cheung.  It seems to me that whether the plaintiff’s claim in the 2009 Action is or is not a claim for liquidated demand depends on the construction of the Progress Payment Clause. 

4.8There may be a number of different types of entitlement to stage payments.  As identified at Hudson’s Building and Engineering Contracts, 14^th Ed §3-068, a contract may provide for (1) stage payments or milestone of stipulated sums on completion of various defined stages or the work, or (2) regular periodical payments based on interim valuation of work done to date. 

4.9On its proper interpretation, the Progress Payment Clause is, in my view, a provision falling within the description of the latter category.  The clause confers a monthly entitlement and the reference to 5% retention clearly relates to the prices of the individual items which make up the contract sum.  Whilst it is true that unlike more elaborate construction contracts, the parties here did not put in place a certification system administered by an independent certifier (for example, an architect), the evidence clearly shows that the defendant had all along agreed that the plaintiff was to carry out the interim valuation.  Once the progress has been ascertained, the calculation of the plaintiff’s entitlement for progress payment may be ascertained by reference of the price of the individual items making up the contract sum. 

4.10Whilst it is open to the defendant to disagree with the plaintiff’s valuation, as it has done in these applications, Cheung JA at Re Grande Holdings [2016] 1 HKLRD 435 §6.5^[10] emphasized that one should not confuse ascertainment with unchallengeability. 

4.11As stated in Tian Yao (cited above), the identification of the inputs for components, in the present case the progress of the works, may be complicated and subject to challenge, but once identified, the application of the contractual mechanism does not involve any further assessment by the court. 

4.12Mr Cheung stressed that the assessment of progress involves an assessment of reasonableness.  However, it has been held in China State Foundation Engineering Limited v Gold Brilliant Investment Limited [2021] HKCFI 309 that, in the context of a claim for extension of time application under a construction contract, an assessment made pursuant to the terms of a contract which involves the exercise of a judgment, even if disputable or not final, does not render the consequential claim for damages for delay an unliquidated claim.  The adjudication by the court on the correctness of that contractual exercise of judgment is not the type of “assessment” which would render the such claim unliquidated: China State §§15-22.

4.13For the above reasons, I am of the view that the claim made in the 2019 Action is a claim for liquidated demand and final judgment may be granted pursuant to RHC Order 13, rule 1. 

5.   Merits of the defence in the 2019 Action

5.1At the time when the construction works on the Land were halted in late 2018 or early 2019, the foundation works had not been completed.  No claim is therefore made in IPA No 16 in respect of Superstructure and Builder’s Works, E&M Works and External Works. 

5.2The defendant relies on the affirmation of Mr Lee Po Lun Timothy (“Mr Lee”).^[11] Mr Lee was engaged by the defendant at the end of 2018 to provide opinions on the progress and quality of the construction works carried out on the Land.  It is Mr Lee’s evidence that he disagrees with the progress assessed by the plaintiff in IPA No 16 respect of Items 1.1, 1.2, 1.5, 2.4, 4.1, 4.2 and 4.3 under the 1^st Agreement and Item 1 under the 2^nd Agreement. 

5.3Ms Leung invited me to view Mr Lee’s evidence with circumspection.  She pointed out that the defendant did not make any contemporaneous complaints.  IPA No 16 was issued on 21 February 2019.  Even after the 2019 Action was commenced in March 2019, the defendant had issued a cheque in the sum of HK$4,000,000 in October 2019 as partial settlement of the then outstanding sum although the cheque was subsequently dishonoured. 

5.4However, the contemporaneous photographs taken by the plaintiff and the defendant show that the plaintiff’s assessment of progress made in IPA No 16 is problematic.  The photographs taken by the plaintiff on 20 December 2018^[12] and the defendant on an unidentified date^[13] clearly show that the ELS (Excavation Lateral Support) had not be removed.  Yet, in IPA No 16, for Item 4.2 (Install, maintain and removal of ELS), the plaintiff had assessed it as being 100% complete.  I note that the plaintiff does not contend that the ELS has been removed: Mr Ng’s 2^nd Affirmation in the 2019 Action §21.  The progress of the foundation works assessed by the plaintiff (Items 4.1 to 4.3) would obviously have a knock-on effect on the plaintiff’s assessment of Design and Consultancy (Items 1.1 and 1.2^[14]) and project management and supervision (Item 2.4). 

5.5However, I am of the view that Mr Lee’s challenge to Item 1 of the 2^nd Agreement, which provides for Provision of Temporary Ceiling for BD inspection, is of no substance.  It is Mr Lee’s evidence that no temporary ceiling was constructed on site.  However, Item 1 of the 2^nd Agreement first appeared in IPA No 4 issued in March 2018.  The defendant had already settled IPA No 4 in full.  It appears clear that the temporary ceiling had been erected and then removed following inspections by the BD. 

5.6Taking into account all of Mr Lee’s objections, the sum due under IPAs is reduced to HK$3,475,000.  I will adjust the said sum by adding back Item 1 of the 2^nd Agreement ($251,000) and deducting the sum of HK$211,314 for the reasons set out at §§2.11 and 2.15 above.  I therefore find that the defendant has failed to demonstrate that it has a defence in respect of [HK$3,475,000 + HK$251,000 – HK$211,314 =] HK$3,514,686 of the plaintiff’s claim in the 2019 Action. 

5.7As stated at Hong Kong Civil Procedure 2022 Note 13/9/17, a default judgment may be set aside as to part only and allowed to stand as to the rest.  Where, on an application to set aside a regular judgment, the court finds that there is no defence to part of the claim but an arguable defence on the balance, the proper course is for the court, to vary the default judgment to reduce it to the amount not in dispute, rather than to substitute a fresh judgment which would deprive the plaintiff of interest on the undisputed sum between the date of the default judgment and the date of the substituted judgment. 

5.8Taking into account the above, and the matters I have stated at paragraph 2.16 above, I am of the view that the final judgment in the 2019 Action should be varied to the extent that the judgment sum be reduced to HK$3,514,686. 

6.   Conclusion and orders

6.1Given that the final judgment in the 2019 Action is only partially set aside, I do not consider appropriate to impose any further conditions for the setting aside of the 2020 Judgment (given that Ms Leung only sought a condition of payment into court in the sum of HK$4,000,000 in total for both actions in the event that both final judgments are set aside). However, as I understand Mr Cheung’s submissions, the defendant only challenges the quantum of the claims made in the 2020 Action, and in these circumstances, I will therefore accede to Ms Leung’s invitation that the final judgment in the 2020 Action be replaced with an interlocutory judgment with damages to be assessed. 

6.2However, it follows that the garnishee order nisi in the 2020 Action must be discharged. 

6.3The Garnishee by its letter dated 14 October 2020 has confirmed that it will not raise the issue of its legal costs and disbursements arising from handling the sale of the Land. 

6.4For the above reasons, I make the following orders. 

6.5I dismiss the Amendment Application and make an order nisi that the costs of and occasioned by the Amendment Application be to the defendant. 

6.6In respect of the 2019 Action, I order that:

(1)  the final judgment dated 1 June 2020 be varied such that the judgment sum be reduced to HK$3,514,686;

(2)  the application to discharge the garnishee order nisi made by Master Winnie Tsui on 17 August be dismissed;

(3)  the garnishee order nisi be made absolute.

6.7In respect of the 2020 Action, I order that:

(1)  the final judgment dated 17 June 2020 be set aside;

(2)  interlocutory judgment with damages to be assessed be entered;

(3)  the garnishee order nisi made by Master Winnie Tsui on 17 August 2020 be discharged.

6.8As for costs, I make the following nisi orders. 

6.9In respect of the 2019 Action, I order that the defendant do pay to the plaintiff 60% of the costs of and occasioned by its summons filed on 9 October 2020 (including costs reserved) with a certificate for counsel and the costs of the plaintiff and the Garnishee in the garnishee proceedings. This is to reflect that the defendant was successful to a measurable extent in reducing the judgment sum. 

6.10In respect of the 2020 Action, I order that the plaintiff do pay to the defendant the costs of and occasioned by the defendant’s summons filed on 9 October 2020 (including costs reserved) with a certificate for counsel and the costs of the defendant and the Garnishee in the garnishee proceedings.  This is to reflect the irregularity of the final judgment obtained by the plaintiff in the 2020 Action. 

6.11Except for the costs of the Garnishee, the costs order made in the preceding two paragraphs are to be set off against each other. 

6.12All costs are to be summarily assessed.  The Garnishee has already lodged its statement of costs.  As regards the plaintiff and the defendant, they are to lodge and serve their respective statements of costs within 7 days of this Decision and the other party do lodge and serve their comments within 7 days thereafter.  For avoidance of doubt, the plaintiff and the defendant do also provide their comments on the Garnishee’s statement of costs at the same time. 

6.13I thank both counsel for their helpful assistance. 

Ms Joyce Leung, instructed by K M Lai & Li, for the Plaintiff

Mr Tommy Cheung, instructed by Hui & Lam LLP, for the Defendant

The Garnishee, attendance was excused

Appendix A

Appendix B

Appendix C