Chinney Shun Cheong Building Services Engineering Ltd (Formerly Known As Chinney E & M (Maintenance) Ltd) v. Jim Chi Wing and Others
Read the full judgment text of HCA 824/2020 on BabelCite. This High Court CFI judgment was delivered on 13 September 2022.
1. This is the assessment of damages in respect of an interlocutory judgment entered in favour of the Plaintiff on 29 September 2020. It was ordered that the Defendants are to pay the Plaintiff damages to be assessed with costs to be taxed.
Cited by 2 cases · Cites 1 case
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HCA 824/2020 [2022] HKCFI 2711 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE ACTION NO 824 OF 2020 ________________________ BETWEEN
________________________ Before: Master Elizabeth Cheung in Court Date of Hearing: 24 August 2022 Date of Decision: 13 September 2022 ________________________ J U D G M E N T ________________________ Introduction 1.This is the assessment of damages in respect of an interlocutory judgment entered in favour of the Plaintiff on 29 September 2020. It was ordered that the Defendants are to pay the Plaintiff damages to be assessed with costs to be taxed. 2.The Plaintiff has produced the 5th Affirmation of Lam Chan Neng dated 18 August 2022 proving service of all necessary documents on the Defendants. Despite the Plaintiff’s service of the documents for the assessment of damages hearing, the Defendants did not appear and the hearing took place in the Defendants’ absence. 3.The Plaintiff seeks to recover the following sums:-
Plaintiff’s witness 4.The Plaintiff called one witness to give oral testimony, Mr Yue Man Wai (“Mr Yue”). Mr Yue tendered two witness statements to explain the damages suffered by the Plaintiff and to produce the documents evidencing the Plaintiff’s claim. Mr Yue is employed by the Plaintiff as a quantity surveying manager. He is a registered professional surveyor (quantity surveyor) in Hong Kong. He has been working in the construction industry in Hong Kong for more than 33 years. 5.Mr Yue spoke to matters within his knowledge or which he could verify to be true and his evidence was consistent with the documentary evidence of the Plaintiff. I accept Mr Yue’s evidence. 6.The Plaintiff has also filed the expert report of Mr Chang Yat Chun (“Mr Chang”) on quantum dated 24 January 2022. Pursuant to the Order of Master D To dated 17 May 2022, the expert report is adduced as evidence without calling Mr Chang. Mr Chang’s report relates only to the rectification works, described below. The Facts 7.The Plaintiff was at all material times a provider of electrical and mechanical engineering services. 8.The Defendants were partners carrying on the business as a subcontractor of electrical engineering works. 9.The Defendants were engaged by the Plaintiff pursuant to two written agreements dated 25 July 2016:-
10.Pursuant to the written agreements, the Defendants had performed works in relation to the Kai Tak Sub-Contract and the EHC Sub-Contract, however, in repudiatory breach of the two sub-contracts, on or about 22 November 2018, the Defendants failed and/or refused to carry out further works under the contracts and then left and abandoned the Kai Tak Site and the EHC Site with all their tools and equipment. The repudiatory breach was accepted by the Plaintiff by letter to the Defendants dated 23 November 2018. 11.In respect of the Kai Tak Sub-Contract:-
12.The sums claimed by the Plaintiff in respect of the Kai Tak Sub-Contract is calculated as follows:-
13.In respect of the EHC Sub-Contract:-
14.The sums claimed by the Plaintiff in respect of the Kai Tak Sub-Contract is calculated as follows:-
Legal Principles 15.Mr Lam, counsel for the Plaintiff, relies on, inter alia, the following principles:-
Discussion 16.In the course of Mr Yue’s oral testimony:-
17.In support of the Plaintiff’s claim for damages, in essence, the Plaintiff’s claim for the Plaintiff’s actually incurred cost of completing the electrical installation works at the Kai Tak Site and the EHC Site less the contract sums.[2] The Plaintiff’s contentions can be summarized as follows:-
Interim Payments 18.Mr Yue explained to the Court, using the underlying documents relating to the 1st and 24th interim payments for the Kai Tak Site for illustration purposes, that in respect of the interim payments for both the Kai Tak Site and the EHC Site, the Defendants would first submit an Invoice seeking interim payment. Upon receipt of the same, the Plaintiff’s staff would consider whether what was being asked for by way of interim payment was reasonable, and whether it correctly calculated the 5% retention monies as was permitted under the respective contracts. If the Plaintiff was satisfied that it was reasonable to make the interim payment, it would issue a “Sub-Contractor Payment Application” to approve the requested payment. This document would set out the total amount of the contract sum, the Defendants’ invoiced amount, the calculation of the retention money and state the amount approved as interim payment. Mr Yue showed the Court a document entitled “Payment and Direct Debit Report” setting out the amount approved for the said interim payment application and the corresponding cheque issued to the Defendants for settlement of the interim payment. 19.Mr Yue confirmed to the Court that the Plaintiff adopted the same mode of approving the interim payment applications made by the Defendants for the two sites and cheques were issued in the same way. 20.I am satisfied that the interim payments were made to the Defendants from time to time as set out in the Statement of Claim in respect of both the Kai Tak Site and the EHC Site. Advanced/Direct Payments 21.Mr Yue showed me the documents recording the advance payments made to the Defendants. First, the Defendants will issue an Invoice containing a request for advance payments. If approved, the Plaintiff would issue a “Sub-Contractor Payment Application” setting out the amount sought and the amount approved/certified. Thereafter, the payment made would be recorded in a “Remittance/Payment Advice” together with a cheque for the amount applied for. I am satisfied as to the amount claimed for the advance payment for both the Kai Tak Site and the EHC Site. 22.As for direct payments to the Defendants’ workers, the genesis for this payment was that when the Defendants abandoned the two sites, workers that had been hired by the Defendants remained on the site and had been owed outstanding wages for works performed on the site. The Plaintiff therefore made payments to the workers for salaries. Mr Yue explained to the Court that based on records maintained at the entrance / exit of the respective sites, the amounts that were due and owing to the workers were paid to the workers, to include wages and MPF payments. Mr Yue’s evidence is that he personally checked the Plaintiff’s debit note setting out the names of the workers paid with the cheque and autopay records to ensure that all figures tallied up. Mr Yue told the Court that he could confirm that all the workers hired by the Defendants who were owed wages / MPF payments were paid by the Plaintiff otherwise the Plaintiff would have received complaints from the Labour Department for non-payment, but no such complaint were ever received. 23.I am satisfied on the evidence that the direct payments to workers were made for both the Kai Tak Site and the EHC Site. Rectification Works 24.Mr Yue explained that upon the Defendants leaving the works unfinished, the Plaintiff had to employ Intelligence on or about 24.12.2018 to complete the outstanding works not completed by the Defendants or to rectify the works that had been done but which had defects for the two sites. 25.Based on the materials including the contracts with Intelligence, I am satisfied that Intelligence had been engaged to perform the rectification works for the Kai Tak Site and the EHC Site. 26.The Plaintiff’s expert Mr Chang has assessed the amount for the respective rectification works to be higher than the Plaintiff’s actual claim based on the sums it had actually paid. The Plaintiff confirms that it only seeks the sums actually incurred by it. Contra Charges 27.Mr Yue testified that due to breaches of relevant safety rules by the Defendants’ workers prior to 22 November 2018 Shui On fined the Plaintiff and the Plaintiff claims HK$11,541 as contra charges against the Defendants. 28.The Kai Tak Sub-Contract contains “Construction Site Safety Rules and Guidelines” in relation to Illegal Workers at Schedule 1 and the obligation is on the Defendants to ensure that the workers comply with all rules. It is provided in the Kai Tak Sub-Contract that if the Plaintiff becomes liable for any penalty by reason of the Defendants’ breach of the rules, the Defendants are to reimburse the Plaintiff for the same. 29.This head is supported by documents entitled “Subcontractor Debit Form” issued by Shui On from time to time, setting out the fine, a narrative report of the incident and photographic evidence of the breaches. 30.The amount claimed in the SOC §10 for Contra Charges was HK$14,541 but at the hearing the Plaintiff confirmed that there was a sum of HK$3,000 that had already been deducted and therefore the net amount for Contra Charges should be HK$11,541 after adjustment. This has already been set out at Mr Yue’s Witness Statement at §12. 31.I am satisfied on the evidence that that the Contra Charges were issued against the Plaintiff and constituted damages suffered by the Plaintiff. Damages and interest 32.Damages are therefore assessed at HK$13,806,813.73 (HK$9,741,090.52 + HK$4,065,723.21). 33.The Plaintiff asks for interest at judgment rate from the date of the interlocutory judgment (29 September 2020) until payment, and I so order. Costs 34.Given the outcome of this hearing and the action, the Plaintiff is entitled to costs of the hearing for the assessment of damages with certificate for counsel, and to the costs of the action. 35.At the hearing, Mr Lam submitted a statement of costs of the action including the hearing for assessment of damages (the only change to the statement being to add in one hour for the solicitor for attending the hearing). I agree that it is appropriate for me to summarily assess the matter. 36.Costs are assessed at HK$950,000.
Mr Solomon Lam, instructed by Henry Yu & Associates, for the Plaintiff The Defendants were not represented and did not appear |
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