Redland Precast Concrete Products (China) Ltd v. Permasteelisa Hong Kong Ltd
Read the full judgment text of CACV 422/2020 on BabelCite. This 高等法院上訴法庭 judgment was delivered on 10 November 2023 before Hon Kwan VP, Barma JA, G Lam JA.
Contract law — Formation of contract — Pre-bid agreement — Tendering process — Whether binding subcontract between plaintiff and defendant existed — No binding agreement found as communications and conduct equivocal, no unequivocal evidence of contract — Confidentiality agreement excluded contractual obligation — Plaintiff’s extensive work found to be preparatory and part of defendant’s Tender Analysis. Quantum meruit — Work done in anticipation of contract — Whether payment on quantum meruit allowed absent concluded contract — No payment awarded, work held to be preparatory without expectation of binding contract — Plaintiff bore risk of non-payment. Appeal against trial judge’s dismissal of claims dismissed. Plaintiff ordered to pay defendant’s costs with certificate for two counsel.
Legal issues: Existence of Pre-bid Agreement · Whether conduct of the parties after award of Main Contract to HC indicated existence of binding Sub-subcontract · Quantum meruit claim for work done
Outcome: Plaintiff's appeal dismissed in entirety.
Cited by 5 cases · Cites 8 cases
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CACV 422/2020, [2023] HKCA 1278 On appeal from [2020] HKCFI 1820 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF APPEAL CIVIL APPEAL NO 422 OF 2020 (ON APPEAL FROM HCCT NO 35 OF 2018) ________________________
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________________________ J U D G M E N T ________________________ Hon Kwan VP: 1.This is the plaintiff’s appeal against the judgment of Mimmie Chan J on 6 August 2020 (“Judgment”)[1]. The plaintiff, Redland Precast Concrete Products (China) Limited, alleged it had a contract with the defendant, Permasteelisa Hong Kong Limited[2], by which the defendant appointed the plaintiff its subcontractor for works to be carried out on the M+ Museum project (“Project”), and claimed damages for breach of contract, alternatively, in the event there was no contract, for a reasonable sum for work done on the basis of quantum meruit. The judge found in favour of the defendant there was no contract as alleged and dismissed the claim for damages. She also dismissed the alternative claim on quantum meruit, holding that there was no basis that the plaintiff should be paid on quantum meruit. Background and respective pleaded case of the parties 2.The relevant background taken from the Judgment and the pleadings may be stated as follows. 3.On 26 September 2015, the West Kowloon Cultural District Authority (“Employer”) awarded the main contract for the Project to Hsin Chong Construction Company Limited (“HC”). By HC’s letter of acceptance dated 22 October 2015 (“Letter of Acceptance”), HC appointed the defendant the subcontractor for the design, supply, fabrication and installation of the curtain wall, skylight, precast ceramic façade system, and the LED lighting and associated works (“Subcontract Works”). HC and the defendant signed a formal subcontract dated 18 April 2016 (“Subcontract”). 4.On the plaintiff’s case, an agreement was made between the plaintiff and the defendant for the plaintiff to carry out part of the Subcontract Works, identified as the design, supply and delivery of precast concrete façades (“Sub-subcontract Works”), which were to be integrated with the curtain wall forming part of the exterior façade system of the Subcontract Works to a tower and podium of the Project. The plaintiff claimed it had agreed to undertake the Works at the price of $79,432,305. 5.According to the case pleaded in §§3 and 4 of the amended statement of claim (“SOC”), the alleged agreement was concluded in this manner:
6.The plaintiff pleaded in §5 of the SOC that the price agreed for the Sub-subcontract was $79,432,305, subject to the adjustments set out in email exchanges between HC and the defendant in October 2015, and that the unit rates of the Sub-subcontract Works in Quotation 1 were also to be adjusted as set out in the email exchanges aforesaid. 7.It was pleaded that the defendant repudiated the Sub-subcontract by its letter to the plaintiff on 8 June 2016 and its email of 11 June 2016, by reason of which the plaintiff claimed:
8.The defendant denied the existence of the Pre-bid Agreement or the Sub-subcontract. According to the amended defence,
The Judgment 9.After a trial which lasted seven days, the judge dismissed the plaintiff’s action. 10.There was no dispute in the court below (and on appeal) about the law on the relevant principles for inferring a contract from the conduct of the parties and from the existence or issuance of the documents relied on by the plaintiff as evidence of the Pre-bid Agreement. The dispute was about the application of the principles in the present case. 11.The applicable principles[8] may be stated as follows:
12.The judge held as follows in the Judgment:
This appeal 13.Mr Edward Chan, SC, who appeared for the plaintiff on appeal[13] but not below, advanced seven grounds of appeal in the amended notice of appeal. He grouped them under three broad grounds:
14.Mr Chan does not seek to challenge the findings of primary fact of the judge. He seeks to dispute the proper inference to be drawn from the primary facts. 15.Mr Ambrose Ho, SC, who appeared for the defendant on appeal[14], submitted that the plaintiff would need to surmount two fundamental hurdles to succeed on appeal. 16.First, the plaintiff’s attacks on the Judgment are directed at the judge’s findings of fact and analysis of the evidence. For the appeal court to interfere with the judge’s findings, the plaintiff would need to identify errors of law or demonstrate that the factual findings are “plainly wrong”. It would not assist the plaintiff by seeking to effectively re-run its arguments advanced at the trial. I would add that the appellate process is not designed to give an appellant another chance of repeating his arguments in the hope that the appeal court might be persuaded to accept the account of facts he advanced unsuccessfully below. Duplication of the trial judge’s role on appeal is a disproportionate use of the limited resources of the appeal court and will seldom lead to a different result. It has to be borne in mind that the trial court is the primary tribunal for the assessment of the evidence and making the relevant findings of fact, and that in our litigation system, the trial at first instance is the “main event” and not a “tryout on the road”[15]. 17.Second, the plaintiff’s primary case rests on the existence of a binding agreement to be inferred from the conduct of the parties. The evidence relied upon by the plaintiff is equivocal at best and falls short of satisfying the threshold of being “unequivocally referable” to the agreement contended for. 18.Mr Ho further submitted that when examining excerpts of the evidence without “a panoramic vista of the evidence as a whole”, the appeal court sees only “a selected series of stills, rather than the complete film”. And it must be borne in mind that the weight of the evidence is a matter for the trial judge[16]. 19.I do not understand Mr Chan to have disputed the relevant principles governing the approach of the appeal court in reversing the trial judge’s findings of fact and analysis of the evidence. I would add this regarding the challenge of inferences drawn by the trial judge. 20.The appeal court exercises similar restraint in respect of findings of secondary fact drawn from findings of primary fact. Where a judge draws inferences from findings of primary fact which have been dependent on his assessment of the credibility or reliability of witnesses, who have given oral evidence, and of the weight to be attached to their evidence, an appeal court may have to be similarly cautious in its approach to his findings of such secondary fact and his evaluation of the evidence as a whole. The “plainly wrong” test is applicable unless the finding of fact is based purely on inferences, or otherwise has nothing to do with the witnesses’ demeanour or the trial judge’s having received the evidence at first hand[17]. “Plainly wrong” in the context of an appeal against a finding of fact directs the appeal court to consider whether it was permissible for the trial judge to make the findings of fact which he did in the face of the evidence as a whole, and the appellant is required to identify a mistake in the judge’s evaluation of the evidence that is sufficiently material to undermine his conclusions[18]. 21.Where the inference of the trial judge was made not on primary fact (as discussed above) but was based on an evaluation of facts which involved the assessment of a number of factors weighed against each other, this is often a matter of degree upon which different judges can legitimately differ. Such cases may be closely analogous to the exercise of a discretion and appeal courts would approach them in a similar way and would not interfere unless satisfied that the judge’s conclusion lay outside the bounds within which reasonable disagreement is possible[19]. 22.I turn to consider each of the grounds of appeal advanced in the amended notice of appeal. Ground 1 – the June Emails and 25/6 Letter (a) 23 June Email 23.On 23 June 2015 at 10:33 hours, the defendant sent this email to the plaintiff:
24.In the plaintiff’s reply to the defendant by email at 10:59 hours on the same day, the plaintiff informed the defendant there would not be any changes on the previous quotation and expected to receive a pre-bid agreement from the defendant[20]. 25.The judge found the 23 June Email equivocal and does not show the conclusion of any agreement between the plaintiff and the defendant[21]. Mr Chan submitted that the judge failed to give sufficient weight to the background facts leading to the 23 June Email and had failed to understand properly the content of this email. 26.Regarding the background, he sought to highlight these events prior to the 23 June Email:
27.Mr Chan submitted that viewed objectively, the above matters should lead one to conclude there had been consensus among the plaintiff, the defendant and HC that they would jointly tender for the Project. While the defendant and HC were finalizing the terms for the HC/Defendant Pre-bid Agreement, there would simply be no reason for the defendant or HC to discuss any pre-bid agreement with the plaintiff had it not been intended by the plaintiff and the defendant that the plaintiff would be part of the team for the Project. 28.As regards the content of the 23 June Email, he submitted that the judge made these errors in finding against the existence of the Pre-bid Agreement:
29.The matters highlighted by Mr Chan as relevant background facts leading to the 23 June Email have all been mentioned in the Judgment (for relevant parts of the Judgment see the footnote to each of those matters highlighted by Mr Chan) and apparently considered by the judge. Mr Chan was seeking to re-run arguments raised by the plaintiff before the judge. This is not a proper use of the appellate process. Besides, the weight to be attached to such evidence is a matter for the trial judge and the complaint of insufficient weight is not a proper basis for appellate intervention. 30.As for the contention that the judge failed to understand properly the content of the 23 June Email, the term “team up” is not a term of art or an expression of defined meaning when used in a particular context. It cannot be said that the judge is plainly wrong in regarding the term as general and vague. It can readily be envisaged that the parties may team up in different ways to work on the Project. As pointed out by Mr Ho, in the defendant’s email to HC on 5 June 2015 at 13:11 hours, the defendant used this term loosely in connection with different types of agreements. 31.The judge cannot be fairly criticised for holding that this term “does not invariably have the meaning that the Plaintiff contends”, namely, that should the defendant be awarded the Subcontract Works, it should sublet the Sub-subcontract Works to the plaintiff. As noted by the judge, the plaintiff was told in the 23 June Email that some of the main contractors were not agreeable to the inclusion of the plaintiff’s precast concrete works in the defendant’s package tender for the exterior façade works. 32.Furthermore, there was no mention of the terms of the proposal for “team up” in 23 June Email[33]. Mr Ho made a valid point that this is consistent with the content of this email in that the defendant had only just received the draft HC/Defendant Pre-bid Agreement from HC and was in the process of reviewing the draft and at the same time “working for” a pre-bid agreement with the plaintiff. 33.In respect of the contention that there was a chain of sub-contracting directed by HC, the judge did not make any such finding and Mr Chan has not referred to any evidence to show that HC had insisted on the defendant to enter into a pre-bid agreement with the plaintiff. HC could have contracted with the plaintiff directly as the plaintiff had submitted Quotation 1 to HC as well and not just to the defendant. There is no provision in the HC/Defendant Pre-bid Agreement imposing an obligation on the defendant to engage any particular subcontractor for any part of the Subcontract Works. Clause 7.4 of that agreement merely provided that neither party shall have the right to assign or in any way transfer any part of its rights or obligations under the agreement without the prior written consent of the other party. Furthermore, there is no evidence of any discussion between the plaintiff and the defendant on the terms of the alleged back-to-back pre-bid agreement arrangements. The alleged representation of HC to the plaintiff in late May or early June 2015 that if the plaintiff was successful in its tender, the plaintiff would become a subcontractor of the defendant, and the defendant would in turn be a subcontractor of HC was made in the absence of the defendant and could not have been binding on the defendant. Nor is it the plaintiff’s pleaded case that its pre-bid agreement with the defendant was back-to-back to and on identical terms as the pre-bid agreement between the defendant and HC[34]. 34.Regarding the inclusion of the plaintiff’s quotation in the defendant’s best offer and final best offer to HC, this does not avail the plaintiff as there is no evidence of any discussion and agreement between the plaintiff and the defendant on the important term of the price for the plaintiff’s work, particularly when the defendant’s quotation to HC was subject to a significant global discount, which the defendant had not consulted or informed the plaintiff with regard to the works covered by the plaintiff’s quotation[35]. 35.The judge was right in holding that the 23 June Email did not express any commitment to the inclusion of the plaintiff’s precast concrete panel works in the defendant’s contractual arrangement with any main contractor including HC[36]. The plaintiff has not identified any error made by the judge that is sufficiently material to undermine her conclusions here. (b) 25 June Emails and 25/6 Letter 36.The Employer’s conditions of tendering for the Main Contract[37] required a tender to include the name of one key domestic subcontractor for each key domestic subcontract, as well as confirmation by the named key domestic subcontractor indicating its agreement to carry out the part of the work in question. The relevant part of the conditions of tendering read:
37.The conditions of tendering further specified that after the award of the contract, the tenderer “shall enter into” a subcontract with the respective key domestic subcontractors[38]. 38.The actual tender submitted by HC to the Employer was however not adduced in evidence, as the defendant was not in possession or power of HC’s tender documents to make discovery of this document[39]. The judge was not able to ascertain whether it was the name of the defendant or the plaintiff that had been inserted in respect of the “Selected Key Domestic Sub-contractor” for the “Precast Concrete Façade Panel Fabrication”. 39.What was known was that following the defendant’s submission of the final best offer to HC, HC requested the defendant and each of its suppliers to provide a letter (“Letter of Intent”) as required by the conditions of tendering mentioned above[40]. On 25 June 2015 at 08:16 hours, the defendant sent the plaintiff an email asking the plaintiff to issue a Letter of Intent to HC as per the draft enclosed, to confirm its willingness “to act as the Key Domestic Sub-contractor of [HC] for the provision of Precast Concrete Façade Panel Fabrication to the captioned tender if the Contract is awarded to [HC]”. The plaintiff complied with the request and issued a Letter of Intent to HC. 40.At 13:29 hours on the same day, the defendant sent the plaintiff another email requesting the plaintiff to issue a Letter of Intent to the defendant instead as revised. The plaintiff duly complied and issued a Letter of Intent to the defendant – the 25/6 Letter – which read as follows:
41.The judge noted that there is no evidence as to which version of the plaintiff’s Letter of Intent was used in HC’s tender to the Employer.[41] Having reviewed the June Emails, she held that the subsequent issue by the plaintiff of the 25/6 Letter cannot be said to be conduct which is “unequivocally referable” to the Pre-bid Agreement and the Sub-subcontract claimed by the plaintiff[42]. Even if the name of the plaintiff had been included in the name of the selected key domestic subcontractor or supplier in HC’s tendering document, it was only HC’s agreement and commitment to the Employer that HC would enter into a subcontract with the named domestic subcontractor or supplier and after the award of the Main Contract, HC would not change the key domestic subcontractor or supplier without proper justification. The 25/6 Letter only committed the plaintiff to act as the key domestic supplier for the provision of Precast Concrete Façade Panel Fabrication, there is no unequivocal agreement expressed by the defendant that it would enter into a contract with the plaintiff if the defendant was awarded the Subcontract[43]. 42.Mr Chan submitted that the judge had taken into account an irrelevant consideration that there is no evidence which version of the plaintiff’s Letter of Intent was used in HC’s tender to the Employer. He contended that it defies common sense for the defendant to request the plaintiff to issue a Letter of Intent if the parties had not intended the plaintiff “to join the tendering for such works”. The plaintiffs’ confirmation to undertake the provision of Precast Concrete Façade Panel Fabrication was not merely for the purpose of HC’s tendering exercise but also showed the chain of contractual relationship if HC should be awarded the Main Contract. 43.There is no basis to impugn the judge’s reasoning. As analysed earlier, there was no chain of sub-contracting directed by HC. As for the expression “to join the tendering for such works”, if the connotation is merely to be included in the tender to be submitted to the Employer, this does not unequivocally refer to the existence of the Pre-bid Agreement. 44.The contention that it defies common sense to request the plaintiff to issue a Letter of Intent if there was no intention for the plaintiff “to join the tendering for such works” does not square with the judge’s findings. The judge found it was obviously in the plaintiff’s interest to sign the 25/6 Letter, in order to be included in the tender to be submitted to the Employer, even if there was no Pre-bid Agreement concluded between the plaintiff and the defendant. The judge further found that the request for the 25/6 Letter is consistent with the request for and provision of information which falls within the “Confidential Information” defined in clause 1 of the Confidentiality Agreement (relating to the strategy for tendering for the Main Contract) for achieving the “Objective” set out in recital C to the Confidentiality Agreement (the exploration of the possibility of involving the plaintiff as a proposed specialist subcontractor of the defendant in the tender for the Project)[44]. It has not been shown that the judge’s findings are in error, let alone plainly wrong. Ground 2 – no discussion on terms of the Pre-bid Agreement 45.This ground seeks to impugn the finding in §51 of the Judgment that as there was no evidence of any discussion between the plaintiff and the defendant on the terms of the alleged back-to-back pre-bid agreement arrangements, there was no pre-bid agreement between the plaintiff and the defendant. 46.Mr Chan submitted that the finding of no discussion on the terms should in fact support the plaintiff’s case there was a pre-bid agreement between the plaintiff and the defendant. He referred again to the 23 June Email which mentioned that the defendant was “working for pre-bid agreement for [the Plaintiff] to team up with [HC, the defendant & plaintiff] together”. He pointed out that the draft HC/Defendant Pre-bid Agreement was attached, and this was plainly for the plaintiff’s comments. Further, the plaintiff had entered into the Confidentiality Agreement with the defendant, and the same arrangement of a confidentiality agreement was adopted as between the defendant and HC, see clause 7.3 of the HC/Defendant Pre-bid Agreement. 47.Mr Chan repeated his contention on the chain of sub-contracting directed by HC and argued that the judge ought to have appreciated that the Pre-bid Agreement could only be premised upon the HC/Defendant Pre-bid Agreement, and thus “the Pre-bid Agreement should be part of the back to back sub-contracting arrangement to the effect that it was a repeat (mutatis mutandis) of [the HC/Defendant Pre-bid Agreement]”. The HC/Defendant Pre-bid Agreement “expressly provided for the type of subcontract to be entered upon for the subcontract work between the Defendant and HC should the latter be awarded with the main contract; and hence, likewise, by virtue of the pre-bid agreement between the Plaintiff and the Defendant, the same type of sub-subcontract would be entered upon for the sub-subcontract work between the Plaintiff and the Defendant”. By this process of reasoning, he argued that “this obviates any need for specific discussion or negotiation of the terms of the agreement” between the plaintiff and the defendant[45]. 48.Lastly, he prayed in aid the proposition that an agreement is not incomplete merely because it calls for some further agreement and that the parties’ later failure to agree on outstanding matters may vitiate the contract only if it makes it unworkable or void for uncertainty. 49.I have tried to make sense of this argument, which is apparently founded on the assumed existence of the Pre-bid Agreement, being the very question the court has to decide. For the reasons given earlier in the discussion of Ground 1, the June Emails and the 25/6 Letter do not support the existence of the Pre-bid Agreement or the Sub-subcontract, nor do these documents support the contention that the terms of the Pre-bid Agreement assumed to be in existence would be a “repeat (mutatis mutandis)” of the terms of the HC/Defendant Pre-bid Agreement. As mentioned earlier, it is not even the plaintiff’s pleaded case that the Pre-bid Agreement was back-to-back to and on identical terms as the HC/Defendant Pre-bid Agreement. 50.I am not persuaded that this is a valid ground of appeal. Ground 3 – lack of agreement on the term of price 51.This ground seeks to challenge the findings in §§55 and 56 of the Judgment that there was no concluded Pre-bid Agreement because of the lack of agreement on the important term of the price for the plaintiff’s work. It is submitted that the judge was wrong to take into account that the defendant’s quotation to HC was subject to a significant global discount, and that she should have appreciated there could be other financial considerations or pricing strategy between the defendant and HC for tendering. There is no evidence that the plaintiff’s quotation was not accepted or would not be accepted by the defendant or HC. The HC/Defendant Pre-bid Agreement provided in clause 1.2 that “The Parties shall at all times act in good faith with each other in relation to the submission of the Tender”, therefore by the same token the defendant should act in good faith in the negotiation of price (including the final best offer of the plaintiff) with HC. The contention that the terms of the Pre-bid Agreement were to be the same as the HC/Defendant Pre-bid Agreement is repeated. 52.I agree with Mr Ho the judge was clearly entitled to take into account that the defendant’s quotation to HC was subject to a significant global discount. On 24 June 2015, the defendant’s final best offer to HC submitted the day before was reduced by $29,000,000. HC’s Letter of Acceptance issued to the defendant on 22 October 2015 appointing the defendant its subcontractor for the Subcontractor Works recorded the defendant’s offer of a further discount of $5,000,000. The judge found that the defendant had not informed or consulted the plaintiff with regard to the works covered by the plaintiff’s quotation in view of the discount. There is no challenge to this finding. 53.The terms of the HC/Defendant Pre-bid Agreement do not assist the plaintiff, for the reasons discussed in Ground 2. And as there was no agreement on the important term of the price for the plaintiff’s work, the proposition invoked by Mr Chan on the failure to agree on outstanding matters would not avail the plaintiff. The judge was right to hold that there was no concluded agreement in the circumstances. Ground 4 – Confidentiality Agreement 54.It is contended under this ground that the judge wrongly took into account the Confidentiality Agreement which is irrelevant in deciding whether the plaintiff had established the agreement sued upon. Moreover, the judge erred in her interpretation of the Confidentiality Agreement. Mr Chan’s submissions are along these lines. 55.First, he drew attention to clause 6 which provided as follows:
56.He contended that by virtue of clause 6, by the defendant’s submission of the Main Contract Tender at the latest[48], the Confidentiality Agreement ceased to have effect, save for the duty to continue to keep certain information confidential. On the true construction of clause 8[49], it merely prevents the exchange and provision of information under the Confidentiality Agreement during the validity of the agreement from itself giving rise to any contractual obligation. Clause 8 does not prevent what took place before and after the termination of the Confidentiality Agreement taken together from giving rise to a contract or other enforceable obligation. 57.Second, he submitted that the latter part of clause 8 merely stated that the Confidentiality Agreement itself does not give rise to any obligation on the defendant to enter into any agreement with the plaintiff and no further. He pointed to the confidentiality agreement between the defendant and HC dated 22 May 2015, and submitted that the Confidentiality Agreement between the plaintiff and the defendant dated 10 June 2015 is “no more than a back to back arrangement in the course of tendering for the Project”. The Confidentiality Agreement concerned just the obligations and liabilities of the parties in respect of the confidentiality of the information passed and exchanged between the parties[50]. It would be way too wide to construe this agreement as having the effect of excluding or negating any binding agreement reached or to be reached between the parties. 58.It is pleaded in the SOC that the Pre-bid Agreement was contained in or evidenced by the 4 Documents and the Confidentiality Agreement was among them. The judge therefore considered the Confidentiality Agreement. It was also the only agreement executed by the plaintiff and the defendant. The contention raised in ground (4) of the amended notice of appeal that the Confidentiality Agreement is irrelevant in deciding whether the plaintiff had established the agreement sued upon is contrary to the plaintiff’s pleaded case. 59.The judge held that the terms of the agreement are clear. By recital C, the parties acknowledged they were engaged in discussions and negotiations whereby they were mutually exploring and evaluating the appropriateness and possibility of the plaintiff’s involvement as the proposed specialist subcontractor of the defendant in the tender for the Main Contract of the Project. They further acknowledged and agreed by clause 8 that the provision and exchange of information under the agreement would not commit or bind either party to any present or future contractual relationship, and that the defendant had no obligation under the agreement to enter into any contractual arrangement with the plaintiff, including but not limited to any pre-bid agreement for engaging the plaintiff as the defendant’s specialist subcontractor[51]. 60.The judge held that with the express provisions of the Confidentiality Agreement, it requires very convincing and unequivocal evidence for the court to accept that notwithstanding the parties’ acknowledgment in the Confidentiality Agreement, they had indeed entered into and concluded the Pre-bid Agreement[52]. 61.I do not think her approach can be faulted. 62.As for the contention that the judge had erred in her interpretation of the provisions of the Confidentiality Agreement, this is of little significance. A similar argument was made by the plaintiff before the judge that the agreement does not preclude the parties from subsequently concluding an oral binding agreement, or from entering into an agreement by their conduct, for the plaintiff’s execution of the Sub-subcontract Works. The judge rejected this argument for two reasons. First, there is no pleading of an oral agreement between the plaintiff and the defendant, and the evidence of the plaintiff’s witness that there was an oral agreement or understanding of a Pre-bid Agreement is not the plaintiff’s pleaded case[53]. Second, as for the conclusion of an agreement by the parties’ conduct, the court will not imply a contract lightly in the absence of conduct which is unequivocally referable to the contract sought to be inferred[54]. I will deal with the plaintiff’s contentions on conduct when I come to Ground 5. I agree with Mr Ho the fact that the defendant and HC entered into a similar confidentiality agreement is irrelevant. As noted by the judge, it is by itself simply an agreement between the defendant and HC, on its own terms and conditions, and makes no provision for any commitment by the defendant or the plaintiff to enter into a subcontract[55]. 63.The interpretation put forward by Mr Chan is not germane to the judge’s holdings and there is no error in her decision. Ground 5 – parties’ conduct after award of Main Contract to HC 64.I am prepared to assume, differently from the judge[56], that the plaintiff has pleaded in §4(c) of the SOC the Sub-subcontract was contained in or evidenced by its performing and/or carrying out the works, as a subcontractor to the defendant, as envisaged by or otherwise within the scope of the Sub-subcontract after the Subcontract was awarded by HC to the defendant, up to the date of the repudiation by the defendant. The judge held that even if such a generous reading of §4(c) is warranted, the plaintiff’s execution of the works as particularised in that paragraph is insufficient to justify a finding that the Sub-subcontract or Pre-bid Agreement can be inferred or implied from such conduct. 65.On the totality of the evidence, the judge held that the parties’ conduct after the award of the Main Contract to HC in September 2015 and the award of the Subcontract to the defendant in October 2015 is not unequivocally referable to the existence of a Pre-bid Agreement or a binding Sub-subcontract between the plaintiff and the defendant. She found that the submission of the plaintiff’s 4th quotation (“Quotation 4”) for $79,822,596 on 8 January 2016 with express reference to the defendant’s “Request for Quotation” (“RFQ”) issued on 30 December 2015, the submission of the Manufacturing Quality Plan (“MQP”) on 4 December 2015 for the supply and delivery of precast façade and expressly stated to be for “tender”, the meetings held between the plaintiff and the defendant, and the plaintiff’s submission of technical details and samples, are equally consistent with the Tender Analysis being conducted by the defendant on the plaintiff’s capabilities and suitability as a possible subcontractor for the Sub-subcontract Works[57]. 66.Mr Chan sought to challenge the findings of fact and inference made by the judge. The main theme is that on a proper analysis of the evidence, the substantial work done by the plaintiff could not be justified “solely for [the defendant’s] Tender Analysis”[58]. His contentions are along these lines. 67.First, the plaintiff relies on three MQPs submitted by the plaintiff to the defendant on 4 December 2015, April 2016 and May 2016. In the introduction section of these MQPs, there was a statement which read: “[The plaintiff] has been contracted to supply and delivery of Precast Façade for the captioned project.” This statement is no doubt an express reference to the Sub-subcontract. The MQPs were submitted to the consultant of the project (M+ Consultancy JV; “MJV”) through the defendant and this was an acknowledgment by the defendant of the plaintiff’s status and a representation to HC of the plaintiff’s status. In MJV’s “Response to Contractor’s Submission Form” dated 10 January 2016, MJV commented on the MQP of the plaintiff submitted in December 2015:
68.Mr Chan made the point that the above further signified the plaintiff’s role to be “a supplier” and one of the “key team members”. Further, it is wrong for the judge to place “overwhelming emphasis” on the fact that the MQP submitted in December 2015 was stated to be for “tender”[60], when this was not repeated in the subsequent MQPs submitted in April and May 2016. Emphasis should be given to the substance of the body of the MQPs. 69.Second, with regard to the inspections of the Casting Yard, the judge failed to give “sufficient weight” that such inspections (which included representatives of the defendant, HC and MJV) were further recognition of the plaintiff’s role as a subcontractor for precast concrete works. In the executive summary of the MJV Façade Inspection Report No 1 for the inspection on 28 January 2016, it was stated that the visit to the plaintiff’s production facility was to “review the progress of development for the precast units with integrated terracotta tile and associated glaze by MJV”. This signified that by January 2016, it was at the development stage, contrary to the defendant’s assertion that the parties were still at the stage of Tender Analysis. 70.Third, the judge “failed to appreciate the importance of” the meetings and workshops for discussion on technical and design issues. Among others, the workshop scheduled on 4 May 2016 was “with [the plaintiff] to review the current M+ Façade Design and interface between the Façade and Precast” and part of the agenda was for the plaintiff to present the following: “proposed precast intent to meet the current requirements; review of required precast tolerances and analysis and management on how to improve; proposed shop drawing submission packages to meet MJV and BD requirements; proposed process for Terracotta Tile and Precast Fabrication and design constraints”[61]. It would be against common sense and commercial sense and a complete waste of time and money to have the plaintiff attend and contribute to discussions on technical and complicated matters if they were merely for the defendant to explain to the plaintiff the amended design developed by the defendant which was to combine the defendant’s curtain wall works with the precast concrete works (“Developed Design Intent”)[62]. Furthermore, the other candidate considered for the Sub-subcontract, Shenzhen Hailong Construction Products Co., Ltd (“HL”), was not invited to attend the workshops or meetings arranged by MJV[63]. 71.Fourth, the judge “overlooked” the significant amount of work done by the plaintiff on the preparation of design drawings. There were discussions on the fabrication tolerance of the Precast Ceramic Façade Panel between the plaintiff and the defendant in April and May 2016. Various shop drawings and design drawings had been prepared and/or reviewed by the plaintiff, requiring substantial input and effort. All these could only point to the existence of the Sub-subcontract between the plaintiff and the defendant. It would be a complete waste of time, effort and money to allow the plaintiff to put substantial effort on the design drawings solely for the defendant’s Tender Analysis. 72.It is irrelevant for the judge to emphasise that the defendant had re-engineered a Developed Design Intent different from the drawings approved by the Buildings Department[64], when there was no finding of the extent or re-engineering or that the plaintiff’s work done was inconsistent with and/or contradictory to the Developed Design Intent. 73.Fifth, the judge “failed to give sufficient weight” that the provision of mock-up or sample and the Free Sample could only be done unless the plaintiff had already been a subcontractor of the defendant. She also “failed to appreciate” that when insufficient material was provided for production of the Free Sample, the plaintiff had ordered material from its own supplier[65]. 74.Sixth, the judge “failed to appreciate” that in the correspondence inter partes or documents, the defendant had referred to the plaintiff as “the precast supplier”, “our Precast specialist”[66]. The defendant would not have done so had the plaintiff not been designated as the sub-subcontractor for the Precast Concrete Works. 75.Seventh, it must be highlighted that the single joint expert of quantum estimated the reasonable value of the plaintiff’s work done at $4,879,523[67]. It is “highly impossible” for a reasonable person to appreciate that one would have incurred such substantial sum solely for the purpose of Tender Analysis. 76.Eighth, the defendant included in the draft letter of intent dated 24 March 2016 this provision (“Payment Condition”):
77.The Payment Condition was deleted in the draft letter of intent returned by the plaintiff with its alterations on 31 March 2016 and its revised alterations on 12 April 2016. Contrary to the judge’s view that the deletion of the Payment Condition signified there was no agreement between the plaintiff and the defendant on compensation or remuneration for any work or service which was required of the plaintiff[68], this “can only signify and strengthen” the plaintiff’s stance that there had already been an agreement between the plaintiff and the defendant in place. 78.Ninth, the judge found it significant that in the RFQ inviting the plaintiff on 30 December 2015 to submit its most competitive quotation for the Sub-subcontract Works, it was expressly stated that the quotation was “to assist in the evaluation” of the plaintiff’s bid[69]. The judge was wrong to place “heavy weight” on such wordings as wordings in the RFQ can only be regarded as a self-serving statement. 79.I do not accept the plaintiff’s submissions. 80.As mentioned above, this ground of appeal is to challenge the judge’s findings of fact and inference. The appellate process is not designed to give the plaintiff another opportunity of repeating its arguments below in the hope that the appeal court may be persuaded to come to a different view on the findings of fact and inference to be drawn. In the contentions as summarised, heavy reliance was placed on the witness statement of Mr Liu. Mr Chan prefaced his arguments with phrases like the judge “failed to give sufficient weight to”, or “failed to appreciate” or “overlooked the significance of” certain matters, or that the judge was wrong to place “overwhelming emphasis” or “heavy weight” on others. The appropriate weight that should be given to a particular piece of evidence is always a matter for the trial judge. 81.The judge made a thorough analysis of the evidence adduced and explained in some detail in §§66 to 104 of the Judgment how she concluded, on the pleadings and the totality of the evidence, that the parties’ conduct from September 2015 to June 2016 when the defendant finally decided to appoint HL as the Sub-subcontractor is not unequivocally referable to the existence of a Pre-bid Agreement or a binding Sub-subcontract between the plaintiff and the defendant. The contention that the parties could not have conducted themselves in the way they did had the plaintiff not been designated the Sub-subcontractor is missing the point. The hurdle of “unequivocal” reference has not been surmounted when the acts are “equally consistent with the process of due diligence and Tender Analysis being undertaken”[70]. 82.The judge accepted the evidence of Mr Turnbull as set out in §§70 to 73, 83 to 89, 102 of the Judgment as “credible and inherently probable”, namely, that the defendant had to conduct enhanced due diligence on the engineering and design abilities of the candidates in view of the technicality and complexity of the Sub-subcontract Works involved and the defendant did not have prior experience of working with the plaintiff. Mr Chan has not sought to engage, properly or at all, those parts of the judge’s findings. The “plainly wrong” test is applicable for the appeal court to overturn the findings and inferences of the judge, as it cannot be said that the findings of secondary fact are based purely on inferences or otherwise has nothing to do with the witnesses’ demeanour or the judge having received the evidence at first hand. He has not identified any mistake in the judge’s analysis of the evidence sufficiently material to undermine her conclusions. And insofar as the inferences drawn were based on the assessment of factors weighed against each other, it has not been shown that the judge’s conclusions lay outside the bounds within which reasonable disagreement is possible. 83.Mr Ho highlighted a significant episode in late December 2015/early January 2016 showing there was disagreement between the plaintiff and the defendant whether there existed a Pre-bid Agreement between them[71]. 84.On 29 December 2015, the plaintiff wrote to the defendant stating that such a binding agreement existed between them and that it had come to its knowledge the defendant was inviting tenders/quotations for the Sub-subcontract Works. The plaintiff asserted that it would constitute a blatant breach of contract in the event the defendant was to give the works to another company and it would take every necessary and appropriate action to protect its interest including legal action. 85.In the defendant’s reply by letter dated 6 January 2016, the defendant “totally [disagreed]” with the allegation that it had signed a Pre-bid Agreement with the plaintiff and referred to the Confidentiality Agreement, which was “no binding commitment from [the defendant] to [the plaintiff]”. Clause 8 of that agreement was quoted, and this provided that the defendant would have no obligation thereunder to enter into any contractual arrangement with the plaintiff including any pre-bid agreement. The defendant further stated that it would take into account the plaintiff’s knowledge on the Project during its tender analysis and ensure that its tender procedure was “fair to all tenders”. 86.Hence, by the letter dated 6 January 2016, the plaintiff must have known that the defendant did not consider itself bound by any alleged Pre-bid Agreement with the plaintiff. This knowledge of the plaintiff brings into play the principle that there will be no contract if the party seeking to rely on the contract knows that the other party has no intention to contract with him or does not in fact intend to be bound thereby. The judge correctly took into account this knowledge of the plaintiff[72]. 87.With full knowledge of the defendant’s stance, the plaintiff continued to participate in the Tender Analysis. In its letter of 8 January 2016 for the submission of Quotation 4, the plaintiff referred to the defendant’s “tender invitation dated 30 December 2015” (ie the RFQ), by which the plaintiff was required “to submit a quotation in support of [the plaintiff’s] offer to assist in the evaluation of [the plaintiff’s] bid”. As further noted by the judge[73], even in the plaintiff’s email dated 26 February 2016, the plaintiff stated that it would update the MQP “once [the defendant] have awarded the supply contract to [the plaintiff]”, showing its awareness that there was no Sub-subcontract awarded to it. I agree with Mr Ho that all the steps taken by the plaintiff after receipt of the letter dated 6 January 2016 should be considered in light of the plaintiff’s knowledge that the defendant did not consider itself bound by any Pre-bid Agreement alleged by the plaintiff. 88.The reliance Mr Chan placed on various statements in the response of MJV to the three MQPs is misplaced. They were made by MJV, not by the defendant. The perception of MJV as regards the sub-subcontracting arrangements is not binding on the defendant and is not relevant. Similarly, the statements in the MJV Façade Inspection Reports were the statements of MJV. 89.As for the defendant’s references to the plaintiff as “the precast supplier” and “our Precast specialist” in the defendant’s emails to the plaintiff, this has been considered by the judge. She found it conceivable that positive comments would have been made as the plaintiff was at one stage the “forerunner” (or front runner) in the bid for the Sub-subcontract and did not regard this as unequivocal evidence proving that the plaintiff had been awarded the Sub-subcontract contended for[74]. 90.Regarding the time, amount and expenses of the work done for six months until early June 2016 repeatedly emphasised by Mr Chan, the judge took the view that on the totality of the evidence, the time and attention taken for the defendant to undergo and complete its Tender Analysis can be appreciated[75]. She found on the evidence that the plaintiff would have acted as it did, even if there was no contract as contended, having regard to the fact that the plaintiff had by then familiarised itself with the tender documents and drawings, that involvement as a sub-subcontractor or supplier in the Project was lucrative, that it would defy commercial and common sense for the plaintiff to stonewall any request for information or samples unless there was concluded the Pre-bid Agreement or Sub-subcontract, and that the direct costs incurred for the six-month period were modest and amounted to less than $70,000 a month[76]. The judge’s conclusion based on her assessment of the evidence and weighing of factors cannot be said to fall outside the bounds within which reasonable disagreement is possible. 91.It cannot be right that the deletion of the Payment Condition would have signified and strengthened the plaintiff’s case there had already been an agreement between the plaintiff and the defendant in place, as contended by Mr Chan. I agree with Mr Ho the negotiations between them in March and April 2016 on the terms of the contractual documents contradict the plaintiff’s case there already existed a binding agreement, as the judge has found[77]. 92.On 16 March 2016, the defendant sent a draft letter of intent to the plaintiff and requested the plaintiff to countersign and return for the defendant’s record. The draft letter stated that both parties should use all reasonable endeavours to reach agreement and enter into a formal subcontract by 30 April 2016. Apart from the Payment Condition, the appointment of the plaintiff as the defendant’s subcontractor was stated to be subject to two prerequisites: the client’s approval of the plaintiff as the contractor for the Sub-subcontract Works; and the defendant’s approval of the Free Sample to be provided by the plaintiff as per the purchase order issued by the defendant on 18 February 2016. The plaintiff reverted with comments on the draft letter on 22 March 2016 deleting the Payment Condition and the two prerequisites. 93.On 24 March 2016, the defendant sent the plaintiff another draft of the letter of intent reinstating the Payment Condition and the two prerequisites. Following a meeting with the defendant on 30 March to discuss the letter of intent, the plaintiff responded the next day again deleting the Payment Condition and the two prerequisites. On 12 April 2016, the plaintiff sent the defendant new comments on the draft letter, retaining in large part the two prerequisites and deleting only the Payment Condition. In its email to the defendant on 14 April, the plaintiff pointed out that the revised draft has “lesser comments than the previous one”, expressing the hope that it would be “more acceptable” to the defendant. 94.On 27 April 2016, the plaintiff provided its comments to the defendant on the draft purchase agreement sent by the defendant for the supply, design, fabrication and assembly of precast concrete panels and precast members. 95.It is not disputed that the terms of the letter of intent for the Sub-subcontract were not agreed, and no purchase agreement or Sub-subcontract was signed by the plaintiff[78]. As Mr Turnbull has testified, at the end of the Tender Analysis, the defendant had doubts as to the plaintiff’s abilities to fulfil the requirements relating to the design of the precast concrete works and the plaintiff’s design and engineering capability to manage such works, and decided in June 2016 to appoint HL as the Sub-subcontractor, and the appointment was made after HC approved the recommendation[79]. 96.There being no merit in the any of the above grounds of appeal seeking to overturn the finding there was no Pre-bid Agreement and no Sub-subcontract between the plaintiff and the defendant, the plaintiff’s challenge against the dismissal of its primary claim for damages for breach of contract of over $31 million must fail. This leaves the challenge against the dismissal of its alternative claim for quantum meruit for the work done up to June 2016, to which I now turn. Grounds 5A and 6 – quantum meruit 97.The judge made these findings of fact in §107 of the Judgment:
98.The judge went on to hold that the circumstances and facts of the present case are distinguishable from those in the cases relied upon by the plaintiff to support its claim for payment on quantum meruit. As stated in Goff & Jones on Unjust Enrichment (10th ed) at §16-04 under the heading of “Expedited Performance”:
99.On the other side of the line are cases “where the claimant’s activity consists not in performance of the anticipated contract but in preparations necessary for a hoped-for contract”, such that “any benefits transferred by that activity are normally conferred at the claimant’s risk”. This is dealt with in §16-06 of Goff & Jones on Unjust Enrichment under the heading of “Preparatory Work”, giving as examples MSM Consulting Ltd v United Republic of Tanzania [2009] EWHC 121 (QB) and Regalian Properties Plc v London Docklands Development Corp [1995] 1 WLR 212. 100.The judge also quoted from Keating on Construction Contracts, the relevant paragraph (§4-034) in the current edition (11th ed) read as follows:
101.The judge reasoned that although there was no express reservation in this case of the parties’ negotiations being “subject to contract”, the terms of the Confidentiality Agreement made it clear that they were not committed to any present or future contractual relationship, and there was no obligation on the defendant’s part to enter into any agreement with the plaintiff. The work performed by the plaintiff in 2016 was undertaken after it had been invited to submit its quotation to assist in the defendant’s evaluation of its bid, and it can hardly be said that both parties confidently expected at the time that a formal contract was bound to eventuate. The judge regarded it as significant the Payment Condition in the draft letter of intent was deleted by the plaintiff on 12 April 2016, and hence “the Defendant cannot be taken to have understood that any services carried out by the Plaintiff would have to be remunerated in any way”. In the circumstances, she found “there was no implied agreement that the work carried out by the Plaintiff should be paid on quantum meruit or any other basis”[81]. 102.The judge has used the language in the older authorities of an implied agreement or promise to pay reasonable remuneration[82]. The modern approach, as stated by Christopher Clarke J in MSM Consulting Ltd at §171(a), is to determine “whether or not the circumstances are such that the law should, as a matter of justice, impose upon the defendant an obligation to make payment of an amount which he deserved to be paid”. Keating on Construction Contracts explained this further at §4-032:
103.See also Shanghai Tongji at §67. 104.It has been recognised that it is difficult, if not impossible, to formulate a clear principle which satisfactorily governs the different factual situations which may arise for a claim in restitution in this context. Nicholas Strauss, QC, sitting as a deputy High Court judge in Countrywide Communications Ltd v ICL Pathway Ltd & Anr [2000] CLC 324, mentioned a number of considerations identified in the authorities that the court will take into account and emphasised the need for flexibility as to the weight to be given to the factors in each case. The relevant part of his judgment, which was cited with approval in MSM Consulting Ltd at §170, read as follows:
105.In addition, these propositions formulated by Christopher Clarke J in MSM Consulting Ltd at §171(b) to (e) are also of assistance:
106.In seeking to overturn the dismissal of the claim for quantum meruit, Mr Chan sought to challenge the judge’s findings of fact. He contended that she should have found that the facts and evidence are “equally if not more consistent with” the plaintiff’s argument that the work carried out by the plaintiff, which was valued by the single joint expert of quantum at $4,879,523, was “requested by the defendant in contemplation of the Sub-subcontract or for [the defendant’s] own benefit in its own subcontract with HC”, and that the principle and approach in the line of cases distinguished by the judge (an example being British Steel Corp v Cleveland Bridge and Engineering Co Ltd) should be applicable. His arguments ran as follows:
107.In his oral submissions, Mr Chan raised a new ground not covered by the amended notice of appeal. He contended that the work done by the plaintiff was at the specific request of the defendant to enable the latter to use the plaintiff’s work to meet the requirements of HC and that the defendant did make use of the plaintiff’s work for its own purpose, thus conferring a benefit on the defendant and taking this outside the normal work which a contractor performs gratuitously in the tendering process, citing Keating on Construction Contracts at §§2-006 to 2-008. 108.To make good his contention, he referred the court to various documents in the appeal bundles[89]. Thus, the plaintiff was asked to prepare power point presentation for a meeting that it was required to attend with HC in July 2015. The defendant passed on HC’s post tender query to the plaintiff for the plaintiff to respond. The defendant’s tender to HC had incorporated the plaintiff’s quotation. Particular reliance was placed on the MJV’s “Response to Contractor’s Submission Form” dated 10 January 2016, in which MJV commented on the MQP of the plaintiff submitted in December 2015. Mr Chan also drew attention to Mr Liu’s witness statement dealing with the provision of the Free Sample, the tower façade prototype fabricated by the plaintiff for the inspection and comments of MJV, and the allowable fabrication tolerances[90]. 109.Mr Chan argued it could be inferred that a benefit was conferred on the defendant if the work done was at its specific request. He contended the fact that the defendant was awarded the Sub-contract meant that the defendant had made use of work done by the plaintiff and that the plaintiff’s work was of benefit to the defendant. He emphasized there is no evidence the work done by the plaintiff was useless. 110.Mr Chan’s contention that the present case should fall within the line of cases distinguished by the judge – where the parties have indicated to each other they are negotiating towards a binding contract and one party commences performance in advance of that binding contract – must be rejected. This is contrary to the findings of fact and inferences in §§107, 111 and 112 of the Judgment. The judge specifically found in §107 that the work carried out by the plaintiff and for which payment is claimed “was for the purpose of the Tender Analysis and due diligence carried out by the Defendant” and “was not requested by the Defendant in contemplation of the Sub-subcontract being executed, nor in anticipation of the execution of the Sub-subcontract”. The judge further found in §§111 and 112 that the terms of the Confidentiality Agreement made clear the parties were not committed to any present or future contractual relationship, that it cannot be said both had confidently expected at the time a formal contract was bound to eventuate, and that the plaintiff performed the work in 2016 after it had been invited to submit its quotation to assist in the defendant’s evaluation of its bid. 111.There is no basis to interfere with the judge’s findings of fact and inferences when it has not been shown that the findings are plainly wrong or that the inferences lay outside the bounds within which reasonable disagreement is possible. 112.Further, as rightly submitted by Mr Ho, it is not sufficient to show that the facts and evidence are “equally if not more consistent with” the plaintiff’s argument that the work it carried out was “requested by the defendant in contemplation of the Sub-subcontract or for [the defendant’s] own benefit in its own subcontract with HC”. Nor is it sufficient to show that work was done by the plaintiff at the defendant’s request, when it was not by way of accelerated performance of an anticipated contract but was done for the purpose of putting the plaintiff in a position to obtain and then perform the hoped-for Sub-subcontract. 113.In light of the above findings and inferences, it is not open to contend that this is a situation of expedited performance when one party requested the other to commence contract work in the confident expectation of both that a formal contract would materialise. Rather, the case falls on the other side of the line when preparatory work was done pursuant to an invitation to treat in a tendering process. As explained by Bingham LJ in Blackpool and Fylde Aero Club Ltd v Blackpool Borough Council [1990] 1 WLR 1195 at 1202:
114.In the latter kind of situation, any benefit transferred by the activity of the tenderer in preparation for a hoped-for contract is normally conferred at the tenderer’s risk. In ordinary circumstances, there is no implication that the tenderer will be paid for this work even though the costs of tendering may be considerable. The tenderer’s hope is that the costs will be met out of the profits of contracts in the successful tenders[91]. 115.The deletion of the Payment Condition in the drafts of the letter of intent does not take the present case out of the normal situation. In respect of the maximum sum of HK$5 million for all proven and reasonable direct and documented costs incurred by the plaintiff that the defendant was willing to pay (which may be increased by the defendant at its sole discretion), it was argued that this is a cogent pointer that the work performed by the plaintiff must be of value and benefit was conferred on the defendant. It does not appear that this was gone into at the trial and the judge made no finding and expressed no views on this. I have reservations whether it is appropriate to draw such an inference on appeal, bearing in mind there is the evidence of Mr Turnbull[92] that the Payment Condition is a standard term of the defendant adopted from its in-house template, and that the standard cap amount of HK$5 million is not project-specific. He explained that this was done “with a view to reimbursing potential sub-contractors for their reasonable time costs incurred after the issuance of the [letter of intent] in the event that formal sub-contracts are not signed.” (emphasis supplied) 116.More importantly, it is apparent from the above evidence of Mr Turnbull and the wording of the Payment Condition that the defendant made an offer to the plaintiff to pay all of its proven and reasonable direct and documented costs incurred, up to a maximum of HK$5 million, which may be increased at the defendant’s sole discretion, in the event that they did not enter into a formal Sub-subcontract by 30 April 2016 or such later date as may be agreed in writing between them. By deleting the Payment Condition, the plaintiff made clear it did not accept this offer in the draft letter of intent and hence no letter of intent was issued by the defendant. The plaintiff asserted it did so owing to its belief that the Payment Condition was “contrary to the Defendant-Plaintiff Pre Bid Agreement”. It is beside the point that this belief was ill founded. On an objective analysis, in rejecting the defendant’s offer, the plaintiff chose to take the risk that the work performed in the tendering process might go unrecompensed if no Sub-subcontract was entered into. 117.The circumstance that the Sub-subcontract did not materialise could not be said to involve any ‘fault’ on the part of the defendant[93] or to be outside the scope of the risk undertaken by the plaintiff as the outset as borne out by the Confidentiality Agreement. There is nothing to indicate that the defendant had behaved unconscionably in declining to pay the plaintiff its reasonable costs in performing the works for the Tender Analysis. 118.The new point raised by Mr Chan that the work performed by the plaintiff was outside the normal tendering process in that work was done at the defendant’s specific request to meet the requirements of HC and the defendant did make use of such work and benefit was thereby conferred on the plaintiff was not raised in the grounds of appeal in the amended notice of appeal. I do not agree with Mr Chan (who referred to §7 of SOC which contained the opening words “By reason of the aforesaid” and thereby imported §4(c)) that this was properly pleaded in SOC. As this fact-sensitive matter had not been pleaded, the evidence led in the trial did not address this expressly and specifically. It did not appear from the written opening and closing submissions of the parties that this point has been dealt with and the judge certainly made no findings on this. 119.It would not be right in the circumstances to allow Mr Chan to raise this new point on appeal. Conclusion 120.For the above reasons, I would dismiss the plaintiff’s appeal in the entirety. I would make an order nisi that the plaintiff is to pay the defendant’s costs of this appeal, with a certificate for two counsel. Hon Barma JA: 121.I agree with the judgment of Kwan VP. Hon G Lam JA: 122.I agree with the judgment of Kwan VP.
Mr Edward Chan SC and Ms Queenie W S Ng, instructed by K H Lam & Co, for the Plaintiff (Appellant) Mr Ambrose Ho SC and Mr Jeff Chan, instructed by Ince & Co, for the Defendant (Respondent) [2] The defendant was amalgamated with Joseph Gartner & Co (HK) Limited and another company on 21 December 2015; references to the defendant herein shall include Joseph Gartner & Co (HK) Limited prior to the amalgamation. [3] SOC, §4(c) [4] Particularised in SOC, §4(c)(1) to (6) [5] Amended answer to further and better particulars of the SOC filed on 14 April 2020, §1 [6] Amended answer to further and better particulars of the SOC, §2 [7] Amended answer to further and better particulars of the SOC, §3 [8] Shanghai Tongji Science & Technology Industrial Co Ltd v Casil Clearing Ltd (2004) 7 HKCFAR 79 at §§36 to 46; Tiger Venture Funding Ltd v Faithful Good Ltd & Ors, HCA 933/2014, 8 October 2014, Chow J, at §§31 to 37; Honour State Ltd v Gorgeous Textile Co Ltd [2022] HKCA 472 at §19; Chitty on Contracts (34th ed), vol 1, §4-208 [9] Judgment, §§42 to 65 [10] Judgment, §§66 to 105 [11] British Steel Corp v Cleveland Bridge and Engineering Co Ltd [1984] 1 All ER 504 at 511B to D [12] Judgment, §§106 to 114 [13] With Ms Queenie W S Ng [14] With Mr Jeff Chan [15] Honour State Ltd v Gorgeous Textile Co Ltd at §24 [16] Cheung Yuk Ying Engracia v MacGregor Isabella [2023] 3 HKLRD 164 at §§28, 40 [17] China Gold Finance Ltd v CIL Holdings Ltd & Ors, CACV 11/2015, 27 November 2015, at §22, citing: Beacon Insurance Co Ltd v Maharaj Bookstore Ltd [2014] UKPC 21 at §17; Pang Ketian Sally v Tam Yuk Hung Annie, CACV 147/2013, 25 April 2014, at §§26 to 32; Ageas Insurance Co Ltd v Lam Hau Wah Inneo, CACV 65/2014, 9 January 2015, at §§29 to 30. See also ZJW v SY [2017] HKFLR 612 at §§27 to 32, 34. [18] Beacon Insurance Co Ltd v Maharaj Bookstore Ltd at §12 [19] ZJW v SY, at §§33, 34, citing Assicurazioni Generali SpA v Arab Insurance Group (BSC) [2003] 1 WLR 577 at §16; FAGE UK Ltd v Chobani UK Ltd [2014] EWCA Civ 5 at §114. [20] Judgment, §33 [21] Judgment, §§48, 53 [22] Judgment, §16 [23] Judgment, §17 [24] Judgment, §21 [25] Judgment, §22 [26] Judgment, §39 [27] Judgment, §54 [28] Judgment, §23 [29] Judgment, §30 [30] Judgment, §§39, 40 [31] Judgment, §35 [32] Judgment, §48 [33] Judgment, §§48, 51 [34] Judgment, §§51, 52, 53 [35] Judgment, §§55, 56 [36] Judgment, §48 [37] Conditions of Tendering Appendix CT.K [38] Judgment, §59 [39] Judgment, §60 [40] Judgment, §36 [41] Judgment, §49 [42] Judgment, §57 [43] Judgment, §61 [44] Judgment, §§62, 63 [45] Plaintiff’s skeleton submissions on appeal, §19; amended notice of appeal, ground (2) [46] The Objective as provided in paragraph C of the Recitals was “The assessment and evaluation of the appropriateness of the said proposed involvement of [the plaintiff] in the Project” “as a proposed specialist sub-contractor of [the defendant] in the Main Contract Tender for the further development of the Conforming Design and the installation of the Curtain Wall and Precast Ceramic Façade System”. [47] “Main Contract Tender” was defined in paragraph A of the Recitals as the tender to be submitted by the defendant at the invitation of the Main Contractor. [48] This would be 11 June 2015, the date of the defendant’s best offer to HC, the day after the Confidentiality Agreement was made. On Mr Chan’s contention, the Confidentiality Agreement ceased to have effect after just one day. Mr Ho submitted that the later event in this instance should be the termination of the parties’ discussion for the Objective. I am inclined to agree with Mr Ho. [49] The relevant parts of clause 8 provided: “Both Parties acknowledge and agree that the exchange and provision of information under this Agreement shall not commit or bind either Party to any present or future contractual relationship … Specifically, [the defendant] has no obligation under this Agreement to enter into any contractual arrangement with [the Plaintiff] including but not limited to any pre-bid arrangement for engaging [the Plaintiff] as [the Defendant’s] domestic specialist sub-contractor …”. [50] See clause 7.3 of the HC/Defendant Pre-bid Agreement. [51] Judgment, §42 [52] Judgment, §44 [53] Judgment, §46 [54] Judgment, §47 [55] Judgment, §64 [56] Judgment, §67 [57] Judgment, §90 [58] Plaintiff’s skeleton submissions on appeal, §§35, 39 [59] Subsequent MQPs submitted in April and May 2016 contained a further statement in the introduction section which read: “[The plaintiff] has also involved in the design role of the precast façade and production shop-drawing preparation.” [60] Judgment, §74 [61] Email dated 29 April 2016 from Andrew Turnbull (“Mr Turnbull”) of the defendant to, among others, Alan Tai and Eric Liu (“Mr Liu”) of the plaintiff. [62] This was the evidence of Mr Turnbull which was accepted by the judge; Judgment, §§85, 87. [63] Evidence of Mr Turnbull in cross-examination, the transcript of which was not provided on appeal. [64] Judgment, §84 [65] Witness statement of Mr Liu dated 8 January 2019, §§72 to 76 [66] Email dated 29 April 2016 from Mr Turnbull to Lik Lam of the plaintiff; email dated 13 May 2016 from Mr Turnbull to Alan Tai; email dated 19 May 2016 from Mr Turnbull to Alan Tai [67] Made up of direct cost at $754,096 (comprising Pre-bid work at $189,214, Free Sample work at $87,262, and Preparation work at $477,620), overhead at $3,681,834 and profit at 10%. [68] Judgment, §§103, 113 [69] Judgment, §89. The RFQ read: “You are required to submit a quotation in support of your offer to assist in the evaluation of your bid. …” [70] Judgment, §§90, 97 [71] Judgment, §§77, 78 [72] Judgment, §111 [73] Judgment, §112 [74] Judgment, §98 [75] Judgment, §86 [76] Judgment, §91 [77] Judgment, §§99 to 101 [78] Judgment, §99 [79] Judgment, §102 [80] [1995] 1 WLR 212 at 224H, 225C, 230C, 231A to C [81] Judgment, §§111 to 114 [82] See for example William Lacey (Hounslow) Ltd v Davis [1957] 1 WLR 932 at 934 to 935, but note that Barry J may have used the word “implied” in the sense of “imposed”. [83] In Coleman Engineering Co v North American Aviation 420P 2d 713 at 729: “in fact the performance of services has conferred no benefit on the person requesting them, and it is pure fiction to base restitution on a benefit conferred”. [84] Brewer Street Investments Ltd v Barclays Woollen Co Ltd [1954] 1 QB 428 [85] Regalian Properties Plc at 231A [86] Jennings and Chapman Ltd v Woodman Matthews & Co [1952] 2 TLR 406 [87] Witness statement of Mr Liu dated 8 January 2019, §59, in which he stated that the deletion was made as the Payment Condition was contrary to the Pre-bid Agreement. [88] Goff & Jones on Unjust Enrichment at §16-05. The principle of free acceptance is stated in §17-03 of the same work as: “[A defendant] will be held to have benefited from the services rendered if he, as a reasonable man, should have known that the claimant who rendered the services expected to be paid for them, and yet did not take a reasonable opportunity open to him to reject the proffered services. Moreover, in such a case, he cannot deny that he has been unjustly enriched.” [89] Email exchanges and correspondence between the plaintiff and the defendant: 5 June 2015 at 14:40 hours; 23 June 2015 at 10:33 hours; 25 June 2015 (Letters of Intent); 26 June 2015 (submitting quotation); 23 July 2015 at 08:05 hours; 29 July 2015 at 08:15 hours and 17:14 hours; 29 December 2015; RFQ dated 30 December 2015; 4 January 2016 at 9:19 hours; 6 January 2016; 8 January 2016 (submitting quotation pursuant to RFQ); 11 January 2016 at 14:29 hours; 8 April 2016 at 17:46 hours, 12 April 2016 at 08:52 hours, 29 April 2016 at 11:31 hours, 6 May 2016 at 17:25 hours, 13 May 2016 at 14:20 hours (all on allowable fabrication tolerances). [90] Witness statement of Mr Liu dated 8 January 2019, §§69 to 78, 102 to 106, 112, 130 to 138. [91] Keating on Construction Contracts, §2-006 [92] Witness statement of Mr Turnbull dated 8 January 2019, §65 [93] See evidence of Mr Turnbull summarised in §102 of the Judgment. | ||||||||||||||||||||||||||||||||||||||||
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