Dimensions Contracting Co. (A Firm) v. Giant Rise Ltd.

DCCJ008323/2001

DCCJ8323/2001

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 8323 OF 2001

Coram: Deputy Judge M C Jenkins

Date of Judgment: 29 August 2002

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J U D G M E N T

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1.This is my judgment in this matter. The plaintiff's claim is for the sum of $223,580.50, being the balance payable in respect of decoration work carried out at the defendant's restaurant premises in Elgin Street, Hong Kong. Included in the amount claimed are what are described as "design fees" of $50,000 and "project fees" of $30,000.

2.The defendant disputes liability, saying that the plaintiff's work was not completed and that what work was done contained defects. The defendant, having paid a total of $410,917, counterclaims for so much of the sum paid that is in excess of the value of the work done.

3.Further, by reason of the defective work, the defendant says that they had to engage another contractor and suffered delay in the proposed opening of the new restaurant. There is thus a further counterclaim for the expenses of the new contractor, as well as for damages arising from the delayed opening of the restaurant.

4.Two witnesses gave evidence for the plaintiff: Miss Kwan Mei-chu, who was a partner in the plaintiff business from May 1999 to March 2000, and Mr Tsui Foo-wing, to whom the plaintiff had subcontracted the entire work.

5.I heard no evidence from the defendant company. Their proposed witness, a Mr Guido Ferrando, left the defendant company some time ago and has not been able to be contacted since.

6.In December 1999, Mr Ferrando contacted a Miss Aileen Keay. Miss Keay was a partner in the plaintiff's partnership and according to Miss Kwan, Mr Ferrando agreed to pay $30,000 to the plaintiff as a project fee and a further $50,000 as a design fee, or a fee for producing drawings relating to the proposed work. It seems though that Miss Kwan was not present during the meeting between Miss Keay and Mr Ferrando. Neither was Miss Keay called as a witness.

7.The plaintiff prepared a quotation for the decoration work of $643,957. This quotation did not refer to the design fees or project fees. The quotation was accepted by the defendant company on 6 January 2000 and work commenced. As I have earlier mentioned, the plaintiff subcontracted the work to Mr Tsoi Foo-wing and he got on with it.

8.The defendant was expected to make payments periodically as the work progressed and it is not in dispute that the defendant has paid a total of $410,917. It seems though that the work did not progress entirely smoothly and on 10 February 2000 the plaintiff put in a revised quotation of $563,094. Mr Tsui, in his evidence, pointed out that variations from the original quoted price are not uncommon because, for example, the variations in the work actually done. In any event, work continued and, according to Mr Tsui, was completed on or about 5 March 2000.

9.On or about 6 March 2000, a Mr Tang, who was a new contractor employed by the defendant to do further decoration work, according to Mr Tsui, signed a document certifying that all the renovation and construction work had been completed in good order in accordance with the quotation and original instructions, subject to three minor matters. Mr Tsui said that two of these were not in fact defects and said that he had agreed or had offered to remedy the third.

10.On the same day, that is 6 March 2000, a final calculation was submitted by the plaintiff to the defendant of the amount said to be due. This amount was based on the amended quotation of 10 February as varied to take account of certain additional works, as well as making certain deductions which had evidently been agreed upon. This gave a sum of $554,498 of which, as I have said, $410,917 had already been paid, leaving a balance due of $143,581, although I note that the statement of claim refers to $143,580.50.

11.It was put to Mr Tsui by Mr Gurung, who was a director of the defendant, that his work contained many defects and, as a result, the defendants had to engage another contractor. Mr Tsui denied this. He said that he had carried out the agreed work properly, although eventually circumstances demanded that there be minor changes in the scheduled work from time to time. If there were changes then he always sought and obtained the consent of a representative of the defendant company, usually Mr Ferrando, and the variations were reflected in the amended quotation. He also said that the only reason for the defendant to engage another contractor was to carry out further work that he, Mr Tsui, had not been engaged to do.

12.I found Mr Tsui to be a straightforward, honest witness and I believed him. In particular, I accept that his work was, with very minor exceptions, in accordance with the requirements of the defendants and that agreed variations from the original instructions have been reflected in the amended quotation of $554,498. It is conceded by the plaintiff in their reply and defence to counterclaim that there were some minor defects in the work, the value of which is assessed at $9,750.

13.Taking into account the sum of $410,917 already paid by the defendant, that leaves a balance due by the defendant of $133,831.

14.Turning now to the claim for the project and design fees, I am not persuaded that this claim is made out. There was no evidence from Miss Keay to whom it is said that Mr Ferrando promised to pay these fees. The fees are not mentioned in any of the documents or correspondence passing between the parties. There is no mention of these alleged fees until their appearance in the statement of claim. Miss Kwan points out that the fees were not included in the various quotations because they were not part of the decoration costs. I understand that but nonetheless I do find it extraordinary that there was no mention of these fees in any of the correspondence that passed between the parties.

15.But quite apart from that in the absence of Miss Keay, there is simply no proper evidence that the defendant ever agreed to pay these fees. Mr Hui, who appeared for the plaintiff, points out that the plaintiff did produce drawings of the project. That may well be correct but it does not persuade me that the defendant had agreed to pay $50,000 for them.

16.I therefore reject the claim of the plaintiff, both for the design fees as well as the project fees. I am satisfied though that the plaintiff has proved its claim for the unpaid balance of the costs of the decoration less the amounts conceded in their reply and defence to counterclaim. There will therefore be judgment for the plaintiff in the sum of $133,831 and the defendant's counterclaim is dismissed.

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