Yu Guo Qiang v. Li Chun Pui
Read the full judgment text of DCCJ 3979/2021 on BabelCite. This District Court judgment was delivered on 21 June 2024.
1. The Plaintiff and the Defendant are both engaged in the business of construction-related works and this dispute arose from some fire engineering works in a construction site. During the trial, both the Plaintiff and the Defendant testified, and they each called one other witness to support their case (Mr Yuen Ho Ming for the Plaintiff and Mr Li Chun Hung for the Defendant). At the end of the trial, I reserved judgment, which I now hand down.
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DCCJ 3979/2021 [2024] HKDC 1006 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CIVIL ACTION NO. 3979 OF 2021 --------------------------- BETWEEN
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------------------- JUDGMENT ------------------- INTRODUCTION 1.The Plaintiff and the Defendant are both engaged in the business of construction-related works and this dispute arose from some fire engineering works in a construction site. During the trial, both the Plaintiff and the Defendant testified, and they each called one other witness to support their case (Mr Yuen Ho Ming for the Plaintiff and Mr Li Chun Hung for the Defendant). At the end of the trial, I reserved judgment, which I now hand down. BACKGROUND 2.The Plaintiff as a sole proprietor carries on the business of provision of fire engineering and plumbing works. As shown in the business registration certificate, the Plaintiff began trading under the business name of “野馬福清工程公司” since 1 August 2019. 3.The Defendant, also as a sole proprietor, carries on the business of construction works and he began trading under the business name of “里程工程” since 25 April 2014. 4.The Defendant was the contractor in relation to the construction works in No. 12 Chun Yat Street, Tseung Kwan O Industrial Estate, Tseung Kwan O, Hong Kong (“Construction Site”). In or around early July 2019, by way of an oral agreement, the Defendant sub-contracted the fire engineering works on the 15th floor of the Construction Site to the Plaintiff (“1st Oral Agreement”). Pursuant to the 1st Oral Agreement, the Defendant would pay the Plaintiff a sum of HK$290,000, and the scope of work was set out in a written floor plan. Works in addition to those set out in the floor plan would be charged separately. 5.Not long after the 1st Oral Agreement, the Defendant by way of an oral agreement also sub-contracted the fire engineering works on the 16th and 17th floors of the Construction Site to the Plaintiff, and the parties agreed that the fees payable to the Plaintiff would be calculated at a later stage (“2nd Oral Agreement”). 6.While not pleaded by either party, it is common ground that at around the same time, the Defendant also orally sub-contracted the fire engineering works in Hang Seng Bank Headquarters Building in Central to the Plaintiff, and the fees would be calculated at a later stage (“Central Project”). 7.Since 15 July 2019, the Plaintiff started works in the Construction Site pursuant to the 1st Oral Agreement and 2nd Oral Agreement with his own tools (“Tools”) and workmen. His team carried out works there until late August 2019, and worked for another three days there from 16 to 18 September 2019. While the works on the 16th and 17th floors were completed, the Plaintiff did not finish the works on the 15th floor for reasons which the Defendant did not agree and which require determination in this trial. 8.Between August and October 2019, the Defendant made three payments in the total sum of HK$380,000 to the Plaintiff: HK$130,000 on 6 or 7 August 2019, HK$130,000 on 2 or 3 September 2019, and HK$120,000 on or around 5 October 2019. 9.The Plaintiff claims that in mid-November 2019, when he went back to the Construction Site, he found that his Tools left on the 15th floor of the Construction Site had disappeared. Having tried to locate those Tools but to no avail, he made a report to the police on 2 December 2019. The police carried out investigation in the Construction Site on the same day. ISSUES IN DISPUTE 10.The Plaintiff made no claims regarding the 1st Oral Agreement and the Central Project. 11.In relation to the works under the 2nd Oral Agreement, the Plaintiff claims that he and the Defendant had a phone conversation on 1 August 2019, during which the Defendant agreed that he would pay the Plaintiff at least HK$70,000. The Plaintiff contends that the works completed on the 16th and 17th floors are worth HK$80,000, and that the Defendant has not paid anything to him for the 2nd Oral Agreement. He therefore claims damages in the sum of HK$80,000 or a sum as determined by this Court. 12.The Defendant says that of the HK$380,000 paid to the Plaintiff, HK$260,000 was for the 1st Oral Agreement and HK$120,000 was for the Central Project. He suggests that the works completed on the 16th and 17th floors are worth only HK$25,000. Further, as the Plaintiff completed only half of the required works on the 15th floor, the sum payable to the Plaintiff under the 1st Oral Agreement should only be HK$145,000 (ie HK$290,000 x 50%). Having allegedly made an overpayment of HK$115,000 under the 1st Oral Agreement, and taking into account the sum of HK$25,000 payable under the 2nd Oral Agreement, he counter-claims a sum of HK$90,000 (ie HK$115,000 – HK$25,000). 13.The Plaintiff also claims that it was the Defendant who took away his Tools and refused to return them to him. On his case, the Tools are worth HK$201,916.40 and he claims damages for conversion. Relatedly, he says that due to the loss of the Tools, he could not undertake fire engineering work projects, and he claims loss of profits in the tune of HK500,000. 14.In light of the disputes as set out above, I consider that there are the following main issues for me to determine:-
15.It can be readily seen that the disputes are largely factual. As such, the following principles regarding resolving factual disputes and assessing a party’s credibility are relevant:-
ISSUE 1 : THE THREE PAYMENTS 16.The Plaintiff’s evidence is that the sum of HK$130,000 received on 6 or 7 August 2019 and the sum of HK$130,000 received on 2 or 3 September 2019 were not solely for settling the payments for the works in the Construction Site. Rather, around HK$100,000 of the monies was used to pay for his workmen for the Central Project. The third sum of HK$120,000 was for settling the remaining fees of the Central Project. 17.In this connection, the Plaintiff relied on his WhatsApp messages to the Defendant on 1 and 18 August 2019, where he reported to the Defendant the number of man-days incurred for the works in the Construction Site and for the Central Project. The Defendant made the first two payments to him in response to his reports for both projects, so the two payments were made to settle the fees for both projects. 18.The Defendant’s pleaded case is that of the first two payments, HK$235,000 was paid pursuant to the 1st Oral Agreement and HK$25,000 was paid pursuant to the 2nd Oral Agreement. The third payment of HK$120,000 was paid solely for the Central Project. However, during cross examination, the Defendant said that the first two payments of HK$260,000 were entirely for the 1st Oral Agreement. Lest he might have confused himself, I clarified with him and he maintained the same answer. 19.I have not lost sight of the fact that on 4 December 2019, the Defendant messaged the Plaintiff saying that he had paid HK$260,000 to the Plaintiff, and HK$25,000 should be counted towards the 2nd Oral Agreement. Viewed in the right context, in this message, the Defendant was not saying that when he made the first two payments, he intended at that time that HK$25,000 would be used to pay for the sum due under the 2nd Oral Agreement. Rather, on 4 December 2019, the Defendant was complaining that the Plaintiff did not finish the works on the 15th floor, so by paying HK$260,000 to the Plaintiff he already overpaid the Plaintiff for the 1st Oral Agreement. He therefore said of the overpayment, HK$25,000 should be used to settle the fees for the works done on the 16th and 17th floors. 20.I accept the Defendant’s version given in cross examination to be true. The Defendant’s message dated 4 December 2019 clearly stated that the HK$260,000 was for the works on the Construction Site (although there was ambiguity whether it covered only the works on the 15th floor); it made no mention of the Central Project. Indeed, in his Re-Amended Reply and Defence to Counterclaim, the Plaintiff accepted that the sum of HK$260,000 was paid for the works in the Construction Site, and he did not mention anything about the Central Project. Whether the Plaintiff applied part of the HK$260,000 to pay for his workers for the Central Project is an internal matter for him. 21.As for the third payment of HK$120,000, I accept the Defendant’s evidence that it was for the entire worth of the Central Project. As a matter of fact, when the Defendant got the contract for the Central Project from the main contractor Tenable Fire Engineering Limited, the contract sum was precisely HK$120,000. It is inherently likely that the Defendant would at most pay HK$120,000 to the Plaintiff for sub-contracting the Central Project to him. The fact that neither party pleaded the Central Project and the third payment of HK$120,000 is also highly suggestive that they are independent from the works in the Construction Site and the fees payable for such works. 22.I therefore find that the Defendant made the first two payments in the sum of HK$260,000 to pay for the works under the 1st Oral Agreement. The Defendant made the third payment of HK$120,000 to settle the fees payable for the Central Project. ISSUE 2 : 2nd ORAL AGREEMENT 23.It is pertinent to note that when the parties reached the 2nd Oral Agreement, the agreed term was that the fees payable would be calculated at a later stage. Thus, the Plaintiff’s claim that on 1 August 2019 the Defendant agreed to pay HK$70,000 to him is either a variation of or a supplement to the 2nd Oral Agreement, but this important fact was not pleaded in the Statement of Claim; it only surfaced in the Re-Amended Reply and the sum of HK$75,000 was initially pleaded before it was amended to become HK$70,000. 24.The Plaintiff is now essentially relying on the Defendant’s representation and/or agreement to at least pay him HK$70,000 for the 2nd Oral Agreement, which is different from the term of the 2nd Oral Agreement as pleaded in the Statement of Claim. I do not think it is open to the Plaintiff to rely on this alleged varied / supplemental term when he has not pleaded it in the Statement of Claim. In this regard, it is well established that a plaintiff cannot put forward in his reply a new cause of action: Hong Kong Civil Procedure 2024 Vol.1 at §18/3/2. 25.Putting the pleading point aside, I do not think this alleged varied / supplemental term is borne out by the evidence. On 1 August 2019, the Plaintiff sent numerous WhatsApp messages to the Defendant, and in one message, the Plaintiff specifically said the works above the 15th floor (ie 16th and 17th floors) were more difficult and time-consuming. Still, he did not say anything in the messages about the agreed minimum fee of HK$70,000, which would have been quite extraordinary if the Plaintiff and the Defendant had agreed on a minimum fee of HK$70,000 on 1 August 2019. 26.The figure of HK$70,000 was mentioned in the WhatsApp messages for the first time only on 5 October 2019. Still the Plaintiff did not say this was the agreed minimum; he was merely requesting HK$70,000 for the works completed on the 16th and 17th floors. Most importantly, when the Defendant said he would pay HK$25,000 to the Plaintiff for works done on the 16th and 17th floors, while the Plaintiff did threaten to take the matter to the Labour Department, he did not refer to the allegedly agreed minimum. 27.During cross examination, the Plaintiff’s witness Mr Yuen did say he heard from another workman that the works for the 16th and 17th floors should be worth around HK$60,000 to HK$70,000. But this has nothing to do with whether the Defendant represented to or agreed with the Plaintiff that he would pay the Plaintiff at least HK$70,000, and Mr Yuen did admit that he never heard anything about an agreed minimum fee of HK$70,000. 28.In any event, it is not clear how an agreed minimum fee of HK$70,000 can assist the Plaintiff in claiming HK$80,000. The Plaintiff has adduced no evidence to support his claim that the works done on the 16th and 17th floors were worth HK$70,000 or HK$80,000. In fact, he has adduced no objective evidence on how much those works were worth. 29.On the contrary, when the Defendant proposed that the works on the 16th and 17th floors were worth HK$25,000 on 4 December 2019, he referred to the actual length and size of the pipes installed, as well as the actual number of sprinklers installed. The methodology of calculating the worth of the works based on the number and size of the pipes and sprinklers was not really challenged. 30.As such, I find that the works done on the 16th and 17th floors by the Plaintiff were worth HK$25,000. Since the Defendant himself admitted in cross examination that he had not made any payment to the Plaintiff for those works, I hold that the Defendant is liable to pay HK$25,000 to the Plaintiff under the 2nd Oral Agreement. ISSUE 3 : 1st ORAL AGREEMENT 31.Even though the Defendant has only paid HK$260,000 to the Plaintiff for the works done under the 1st Oral Agreement (in fact on the Plaintiff’s case he received even less than that, and he has carried out works outside of the agreed scope), the Plaintiff makes no claim in respect of the 1st Oral Agreement. 32.The Defendant claims that the Plaintiff has only completed 50% of the works on the 15th floor, so he should only be paid half of the agreed fee, ie HK$145,000. Having already paid HK$260,000 to the Plaintiff, the Defendant argues that there is an overpayment of HK$115,000. Offsetting the HK$25,000 due to the Plaintiff under the 2nd Oral Agreement, the Defendant claims against the Plaintiff for HK$90,000. 33.There is no clear legal basis for the Defendant to make this claim. The term of the 1st Oral Agreement, as pleaded in the Statement of Claim and as admitted in the Re-Amended Defence, is simply that “the fees payable for the work undertaken on the 15th floor of the Construction Site … would be HK$290,000.” There is no express term or implied term pleaded to the effect that the Plaintiff can only charge for the actual work done. 34.Even assuming there is an implied term to that effect, I do not think the Defendant has discharged his burden in proving that only 50% of the works under the 1st Oral Agreement were completed by the Plaintiff. The Defendant has adduced no evidence on what the Plaintiff has done on the 15th floor, and no evidence on what the Plaintiff has failed to do. 35.Rather, the Defendant resorts to what I may say a reverse logical deduction. He says that after the Plaintiff ceased working on the 15th floor, he engaged another sub-contractor to finish the unfinished works at a cost of HK$132,100. He therefore deduces that the Plaintiff only completed half of the agreed works. However, there is no evidence from the Defendant as to what works were performed by the new sub-contractor, and whether those works should have been done by the Plaintiff under the 1st Oral Agreement. 36.The Plaintiff and his witness Mr. Yuen estimated that around 80% to 85% of the works under the 1st Oral Agreement were completed by the Plaintiff. Under cross examination, they accepted that there is no objective standard against which they made their estimation. Be that as it may, the burden rests with the Defendant to prove his claim, and I am not satisfied that he has discharged that burden. 37.For the sake of completeness, I shall also resolve the parties’ differing versions as to why the Plaintiff did not complete the works on the 15th floor. The Plaintiff alleges that by late August 2019, he and his team could not continue with the works on the 15th floor pending the completion of the flooring works there. So they had to suspend their work and wait for the Defendant’s instructions to go back to the Construction Site. This is denied by the Defendant. 38.I am inclined to find for the Plaintiff on this issue. The Defendant’s younger brother, Mr Li Chun Hung, helped the Defendant in supervising the works in the Construction Site. In his witness statement, Mr Li deposed that in light of the environment of the Construction Site, the Plaintiff and his workmen would have to suspend work when necessary. In particular, if other workers had to install flooring there or carry out other works, the Plaintiff and his team would have to cease installing the fire sprinkling system. Mr Li sought to elaborate during cross examination by saying that if flooring was being carried out in one section of 15th floor, the Plaintiff could continue with his work on other sections. However, he did not say that in September 2019, there actually were sections on the 15th floor where the Plaintiff could continue with their work. 39.I also note the WhatsApp conversations between the Plaintiff on the one hand and the Defendant and his brother on the other hand. If the Plaintiff’s absence from the Construction Site had been for no good reason, the Defendant and his brother would have been expected to make queries with the Plaintiff and to demand the Plaintiff to resume his work. Yet, I see no such queries or demands from the Defendant and his brother in the WhatsApp communications throughout September 2019. The Defendant’s saying that he and/or his subordinates did make phone calls to the Plaintiff at the relevant time is flimsy and I do not accept it; it is unbelievable that the Defendant would not make his demands through WhatsApp or other written means given the seriousness of the matter. By the end of October 2019, it is clear that the relationship between the Plaintiff and the Defendant has gone south and the Plaintiff was not asked to resume work on the 15th floor. 40.One should also bear in mind that the Defendant made the second payment of HK$130,000 to the Plaintiff on 2 or 3 September 2019. With that payment made there was no incentive for the Plaintiff to suddenly choose to abort the work on the 15th floor in September 2019. 41.Given my finding that it was not the Plaintiff’s fault for not completing the works on the 15th floor, and that the Plaintiff has not been asked to go back to the Construction Site to finish the works there, I would dismiss the Defendant’s claim for overpayment, even if there was a legal basis for him to launch this claim and even if he could prove there was indeed an overpayment. ISSUE 4 : CONVERSION 42.The Plaintiff relies on the tortious cause of action of conversion in seeking damages for the loss of his Tools and for the associated loss of profits. 43.It is trite that conversion is an act of wilful interference, without lawful justification, with any chattel in a manner inconsistent with the right of another, whereby that other is deprived of the use and possession of it. Two elements are combined in such interference: (1) a dealing with the chattel in a manner inconsistent with the right of the person entitled to it, and (2) an intention in so doing to deny that person’s right or to assert a right which is in fact inconsistent with such right: Man’s (Asia) Development Ltd v Fung Chi Kin (unrep, HCA 1279/2013, 24 March 2017) at §34. 44.Conversion is a tort of strict liability. The intention of a defendant in relation to the plaintiff is of no significance. The plaintiff does not have to prove dishonesty and the defendant’s honest and reasonable belief, if any, that he was entitled to exercise a possessory right over the subject matter of conversion is also irrelevant: Arboit (Liquidator) v Hu Yan [2017] 5 HKLRD 768 at §§21 & 43. 45.The Plaintiff claims that he brought the Tools to the Construction Site, and the Tools comprised the following items (the purchase price of the items is supported by receipts):-
46.The Plaintiff’s evidence is that he visited the Construction Site on 17 November 2019 and he found that the Tools had been taken away. He immediately made enquiries with another supervisor in the Construction Site, a Mr Lee Kam Yin (“Mr KY Lee”) who worked for the Defendant. Nevertheless, between 17 November 2019 and 1 December 2019, Mr KY Lee gave no constructive reply. 47.Eventually, on 2 December 2019, the Plaintiff reported the matter to the police. A police officer attended the Construction Site on the same day and took a statement from the Plaintiff. 48.On the same night when the investigation was still ongoing, a security guard there informed the Plaintiff and the police officer that at 7pm on 30 October 2019, he was on duty at the gate of the Construction Site. Three vehicles were leaving the Construction Site and he had to record the vehicle numbers and the goods being transported away, and he marked them on a gate pass. He asked the drivers to take out the goods from the vehicles so that he could take photos of them. Mr KY Lee also signed on the gate pass. 49.The security guard showed the gate pass to the Plaintiff and the police officer, and the Plaintiff did see Mr KY Lee’s signature there. The Plaintiff said as he was not sure if the incident mentioned by the security guard had anything to do with his loss of the Tools, he did not request a copy of the gate pass and did not take a photo of it. The police officer made a call to Mr KY Lee, who said that on 30 October 2019, the three vehicles transported away some tools stored on the 9th floor of the Construction Site, and those tools belonged to another contractor. 50.On 3 December 2019, the Plaintiff communicated with the security guard through WhatsApp. The security guard sent four photos of the tools transported away on 30 October 2019 to the Plaintiff, and the Plaintiff responded by saying that the tools were his. Then the security guard sent the Plaintiff another three photos depicting the three vehicles, which bore the registration numbers UJ 4160, PE 3283 and SZ 562 respectively. I shall refer to the three vehicles by their registration numbers. 51.Upon his investigation the Plaintiff found that the registered owner of UJ 4160 is the Defendant. The registered owner of the other two vehicles is Hornway Engineering Limited (“Hornway”), and the Plaintiff does not know the shareholders and directors of Hornway. 52.The Plaintiff thus alleges that it was the Defendant and/or his employees or agents who took away the Tools. He claims conversion against the Defendant, who denies the allegation. 53.Before I analyse the parties’ respective case, I have to first deal with the admissibility of certain hearsay evidence. While the Defendant has not clearly identified which pieces of hearsay evidence he is objecting, I understand from the submissions of Mr Mark Leung, counsel for the Defendant, that the Defendant objects to the alleged oral disclosure made by the security guard to the Plaintiff on 2 December 2019, and the photos sent by the security guard through WhatsApp on 3 December 2019. The gate pass itself has not been produced as evidence, and the Plaintiff gave direct evidence that he saw Mr KY Lee’s signature on the gate pass. 54.In this connection, section 47(1) of the Evidence Ordinance (Cap. 8) provides as follows:-
55.It has been recognized that the law on admitting hearsay evidence in civil proceedings, as embodied in the current section 47 of the Evidence Ordinance, has been relaxed in the most generous way. The burden is on the party seeking exclusion of hearsay evidence to justify his position: Alcohol Countermeasure Systems (HK) Limited v Li Chi Kong Peter [2019] HKCFI 2892 at §11. 56.Section 49(2) of the Evidence Ordinance sets out a list of factors which the court may have regard to in estimating the weight to be given to hearsay evidence, and it is by now well established that in determining the admissibility of hearsay evidence, it is also relevant to go through that list: Ko Nga Chun v Companhia De Desenvol Vimento Wui San Limitada [2018] HKCFI 1134 at §15. 57.The list set out in section 49(2) includes the following factors:-
58.The Plaintiff has produced his WhatsApp messages with the security guard. There was some correspondence between them in December 2019, but when the Plaintiff sent a message on 16 July 2021 asking the security guard to provide corroborative evidence for this action, there was no reply from the security guard. When the Plaintiff tried to reach the security guard again through WhatsApp on 27 January 2023 by two messages, the second message did not reach him and it appears that the security guard has already blocked the Plaintiff. The Plaintiff also says his solicitors made a phone call to the security guard earlier on 19 January 2023, and the security guard said he was unwilling to be a witness for the Plaintiff. Given that the security guard is a total stranger in this case and given his clear indication not to be a witness, I think it is not reasonable or practicable to demand the Plaintiff to produce him as a witness. 59.The alleged statement of the security guard was made on 2 December 2019, and the photos were sent by him on 3 December 2019. These took place largely contemporaneously with the occurrence or existence of the matters stated, ie what happened on 30 October 2019. 60.The oral statements made by the security guard as retold by the Plaintiff were not multiple hearsay. As to the photos, the Plaintiff has given some confusing evidence. At one stage he said the security guard told him he took the photos, but he also said the security guard told him to thank another female security guard who took the photos. I will proceed on the basis that the photos involve double hearsay. Having said that, Mr Leung for the Defendant fairly disavowed any suggestion that the photos as sent through WhatsApp were fake or self-engineered. 61.The security guard is independent and has no motive to conceal or misrepresent matters. There is no suggestion that he made his statements in collaboration with others or for a purpose other than telling the Plaintiff what he knew. 62.On the other hand, the Plaintiff as the alleged victim would have the incentive to conceal or misrepresent what the security guard told him. Nevertheless, I agree with the observation of Mr Kin Lau, counsel for the Plaintiff, that the Plaintiff appears to be a simple-minded person. It is unlikely that he would or could make up a story involving a security guard and a police officer. If he had wanted to conceal or misrepresent matters, he could have easily said the security guard positively told him and the police officer on 2 December 2019 that Mr KY Lee took away the Plaintiff’s tools on 30 October 2019. 63.Considering the Plaintiff’s effort in asking the security guard to be a witness, it cannot be said that the Plaintiff was attempting to prevent proper evaluation of the weight of the hearsay evidence. 64.Finally, as I will analyze below, the hearsay evidence is consistent with the other evidence adduced by the Plaintiff and even those adduced by the Defendant, in the sense that it is common ground that Mr KY Lee did transport some tools out of the Construction Site on 30 October 2019. 65.Having considered the aforesaid matters, and also taking into account the fact that the Defendant could have asked Mr KY Lee, who would have direct knowledge as to whether he signed on the gate pass and whether he transported any of the Plaintiff’s tools out of the Construction Site, to give evidence on his behalf, I determine the hearsay evidence to be admissible. As to the weight attached to such evidence, I will also have regard to the aforesaid matters, and bear in mind that the Defendant has been deprived of the opportunity to cross examine the security guard. 66.I will now proceed to analyze the parties’ case. It should be noted that the Plaintiff’s pleaded case is that the “Defendant and/or his employees and/or agents wrongfully took the Tools and transported them out of the Construction Site by using three vehicles with the car registration plates PE 3283, SZ 562 and UJ 4160”. The Plaintiff is making a direct allegation that the Defendant himself or the Defendant through his employees or agents took away the Tools; he is not saying that the Defendant was negligent in letting other contractors mistakenly take away the Tools, or that his employees removed the Tools without the Defendant’s knowledge. Thus, the Defendant’s defence that the Plaintiff is contributorily negligent in not safekeeping his Tools or that the Defendant is not vicariously liable for his employees’ acts is irrelevant. 67.Given the Plaintiff’s pleaded case, it is for him to prove that (1) he is entitled to the Tools; (2) on 30 October 2019, Mr KY Lee removed tools from the Construction Site with the three vehicles; (3) the tools removed are the Tools belonging to the Plaintiff; and (4) the Defendant was involved in the act. Matter (1) is uncontroversial, as the Plaintiff has positively said he purchased those Tools, and he has produced the receipts. As can be seen in the photos taken by the security guard, assuming those are the chattels taken away, those tools bore the trade name of the Plaintiff’s sole proprietorship. 68.Matter (2) is also undisputed. According to the Plaintiff, on 2 December 2019, Mr KY Lee did say that on 30 October 2019 the three vehicles transported away some tools of another contractor stored on the 9th floor of the Construction Site. This is corroborated by the Defendant’s own evidence during the trial. 69.As to matters (3) and (4), I find that the tools removed from the Construction Site on 30 October 2019 are the Plaintiff’s Tools, and it was the Defendant who caused those tools to be taken away. 70.The hearsay evidence, in particular the photos taken by the security guard, shows that the tools that were being removed from the Construction Site were the Plaintiff’s tools. The Defendant could have easily refuted this by calling Mr KY Lee as a witness, as he was the Defendant’s subordinate at the material time and the key person in the incident. At trial, the Defendant said he had lost the contact number of Mr KY Lee for about half a year, but this could not explain why he did not ask Mr KY Lee earlier to be a witness. In this connection, I would draw an adverse inference against the Defendant that Mr KY Lee’s evidence would not have helped the Defendant in rebutting the security guard’s hearsay evidence: see South China Securities Ltd v Lam Kwen Yuen [2012] 5 HKLRD 524 at §7. 71.As a matter of fact, after seeing that his tools had disappeared, the Plaintiff enquired with Mr KY Lee as to the whereabouts of his tools. They exchanged messages on WhatsApp on 17-20, 24, 27, 29 and 30 November 2019, but Mr KY Lee gave no positive or constructive reply. On 5 May 2021, the Plaintiff specifically asked if Mr KY Lee signed the gate pass. On 23 May 2021, the Plaintiff accused Mr KY Lee of having lied about taking away tools stored on the 9th floor of the Construction Site, and said he knew the Defendant was behind the act. Mr KY Lee did not respond to those messages of the Plaintiff sent in May 2021. 72.I also have regard to the circumstantial evidence. By mid-October 2019, the relationship between the Plaintiff and the Defendant has obviously turned sour because of disputes over the fees payable to the Plaintiff. On 26 October 2019, the Defendant sent a message to the Plaintiff telling the Plaintiff not to speak to him again (“你以後唔好再同我講任何野”). The Plaintiff immediately replied that he would take it as if he had never known the Defendant (“就當我從來沒認識過你”). After a few minutes, the Plaintiff then asked how he could transport away his tools, and said he would regard himself as having paid to learn a lesson (“最後的一件事 ~ 地盤的工具怎麼運走? 花錢買教訓!”). The Defendant did not reply until 5 November 2019, and in that reply he said he did not know where the Plaintiff’s tools went. The above conversation illustrates the worsening relationship between the parties, and that the Plaintiff specifically reminded the Defendant that his tools were still in the Construction Site. The Defendant suspiciously did not respond to the Plaintiff’s request to transport away his tools for some 10 days, and that was almost a week after the incident on 30 October 2019. 73.More strikingly, in the contemporaneous correspondence between the parties, the Defendant has not denied having taken away the Plaintiff’s tools:-
74.The Plaintiff’s accusations against the Defendant are serious and criminal in nature. The Defendant would have been expected to anxiously deny them if he had not been responsible for the Plaintiff’s loss of tools. The Defendant has not denied the accusations even once during those contemporaneous correspondence. In this regard, I am entitled to take into account his decision not to make any denials: see Canara Bank v Grace on Limited [2022] HKCFI 3525 at §§93-97. 75.While having denied the Plaintiff’s claim in his Re-Amended Defence, the Defendant has curiously not denied having taken away the Plaintiff’s tools in his two witness statements; his brother’s two witness statements are also silent on this subject. In his first witness statement, the Defendant simply put the Plaintiff to proof (“被告人希望原告人提出真實證據”). In his second witness statement, he said during the construction works, he would use different vehicles to transport tools and materials, but he did not say he had not taken away the Plaintiff’s tools. Mr Leung, counsel for the Defendant, fairly accepted that the Defendant has not made any positive denials in his witness statements. If the Defendant had not caused the Plaintiff’s tools to be taken away, he would have been expected to say so in his witness statements. 76.The final piece of evidence showing the Defendant’s involvement in the act of conversion is his ability to exercise control of the three vehicles. He is the registered owner of UJ 4160, and during cross examination the Defendant said there were several car keys, but it was him who would decide how that vehicle was to be deployed. As to the other two vehicles (ie PE 3283 and SZ 562), during cross examination the Defendant admitted he rented them from Hornway at the material time. While the Defendant might not himself be driving any of the three vehicles on 30 October 2019, it was him who was responsible for deploying them on that day. 77.For the sake of completeness, I should mention that at the trial, it was at one point put to the Plaintiff that he already asked his worker to remove his tools, as evidenced in their WhatsApp messages in September 2019. The Plaintiff clarified that those messages related to the removal of tools for the Central Project. Mr Leung for the Defendant sensibly did not pursue this point in his closing submissions. 78.In sum, having considered the Plaintiff’s own evidence, the security guard’s hearsay evidence, the circumstantial evidence, the Defendant’s decision not to call Mr KY Lee as a witness, and the Defendant’s decision not to deny the accusations in the contemporaneous correspondence and his witness statements, I am satisfied that the Defendant has committed the tort of conversion in respect of the Plaintiff’s tools. 79.The Defendant drew this Court’s attention to the proposition that a simple asportation of a chattel without any intention of making any further use of it is not sufficient to establish a conversion: Fouldes v Willoughby [1841] 151 ER 1153 at 1155. I do not think this proposition assists the Defendant at all, as the Defendant’s act amounts to much more than a “simple asportation” of the Plaintiff’s Tools. Faced with the dispute with the Plaintiff over the fees payable, the Defendant arranged three vehicles to transport away the Tools and refused to account to the Plaintiff. 80.Next, I have to determine which of the Plaintiff’s Tools as listed in the above table were actually in the Construction Site at the material time and were actually taken away by the Defendant. The Plaintiff’s case was that all the Tools were taken away by the Defendant, but during cross examination:-
81.What can be positively identified in the photos taken by the security guard include an electric screwdriver, a threading machine, a fan, a water pipe holing machine, a pipe cutter and a laser level, corresponding to items (2), (28), (33), (37), (45) and (46) in the above table. That said, it can be seen from the photos that there were other items inside the tool boxes. 82.In light of what can be seen from the photos, the Plaintiff’s clear evidence that he brought the Tools to the Construction Site, and that the Defendant only challenged the existence of a few items, namely items (22), (23), (24), (69) and (72), I shall find that the Defendant wrongfully took away the Tools, with the exception of the five challenged items. 83.Mr Lau, counsel for the Plaintiff, accepted that the purchase price of the tools did not necessarily reflect the market value of the tools of their comparable state. He invited this Court to take a broad brush approach in assessing the quantum of damages by applying a discount for depreciation. I agree that when it has been proved that the Plaintiff has suffered substantial loss but the assessment of the loss is hampered by unsatisfactory evidence, I am entitled to take a broad brush approach: Man’s (Asia) Development Ltd v Fung Chi Kin (supra) at §49. 84.The purchase price of the Tools, minus those of the five challenged items, is HK$193,916.40. I think a 20% discount for depreciation would be appropriate, given that the Tools were relatively recently purchased in 2018 and 2019. I therefore award damages in the sum of HK$155,133.12 for the conversion claim. 85.The Plaintiff also claims loss of profit as a result of the loss of his Tools in the sum of HK$500,000. I accept that in theory such a head of loss is recoverable (see Tort Law and Practice in Hong Kong (3rd Ed) at §7.119), but I am not satisfied that in this case the Plaintiff has adduced sufficient evidence to prove his loss, and I would dismiss that claim accordingly. I have considered the following matters:-
CONCLUSION 86.For the aforesaid reasons, I rule in favour of the Plaintiff in respect of his claim for the fees payable under the 2nd Oral Agreement (in the sum of HK$25,000) and his claim for damages for the tort of conversion (in the sum of HK$155,133.12). I dismiss the Defendant’s counter-claim for overpayment. I make the following orders:-
87.Costs should follow the event. The Plaintiff is largely the successful party. Taking into account the fact that I have not awarded the Plaintiff the full quantum claimed by him in respect of the 2nd Oral Agreement and the conversion claim, in particular the fact that I have not awarded any damages for loss of profit, I make an order nisi that the Defendant do pay the Plaintiff’s 90% of the costs of the action (and all costs reserved) on party and party basis, to be taxed if not agreed, with certificate for counsel.
Mr Kin Lau, instructed by Haldanes, for the Plaintiff Mr Mark Leung and Ms Larissa Wong, instructed by B Mak & Co, for the Defendant | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cases cited in this judgment