Panasia Films Limited v. Tak Cheong & Company (A Firm)

HCA003882/1973

IN THE SUPREME COURT OF HONG KONG

ORIGINAL JURISDICTION

ACTION NO. 3882 OF 1973

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Coram: Briggs, C.J. ,

Date of Judgment: 3 February 1975

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JUDGMENT

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1. The plaintiff is a company incorporated in Hong Kong and carries on the business inter alia of film distributors. In 1973, they acquired new premises as offices at the junction of Canton Road and Haiphong Road.

2. The defendant is a company also registered in Hong Kong and carries on the business of supplying building materials for interior decorators, as undertaking interior decorating.

3. On October 9th, 1973, the plaintiff employed the defendant to carry out certain work of interior decoration in their new offices. A written contract was entered into to that effect. Attached to this contract were various plans which showed in considerable detail what work was to be done. It is common ground that these plans formed part of the contract. They were drawn up by an interior decorator named Mary Phillips, who was employed by the plaintiff.

4. The agreed contract price was $78, 800. And the "time of completion" was stated to be "within 14 working days should no delay caused by (the) air-conditioning contractor." The approximate date for completion would therefore have been about October 26th.

5. An air-conditioning system was to be installed in the offices but it was not included in the contract made between the plaintiff and defendant. It was recognized that the installation of the system would be undertaken by another company contemporaneously with the work that the defendant was to do under their contract.

6. The defendant commenced work on October 12th, 1973. There were delays, partially at least, due to the installation of the air-conditioning plant as had been anticipated by the parties. Delay occurred also because of some extra work required by the plaintiff which the defendant agreed to do.

7. During the course of the work the plaintiff became dissatisfied with the work of the defendant. On November 6th the defendant agreed to complete the work on or before November 12th with the exception of one very minor item. However, the work was not complete and so on November 13th the plaintiff required completion of the work by November 15th.

8. According to the plaintiff the work was not complete ( - though how much work remained to be done is in dispute - ) on November 23rd when the plaintiff dismissed the defendant.

9. It is not only the delay of which the plaintiff complains. It is alleged that the workmanship was so poor that the plaintiff had to engage another firm of interior decorators to rectify the work done by the defendant. This cost $47,500. The sum is made up of $46,000 payable to the new firm of interior decorators and $1,500 for certain materials.

10. It was a feature of the contract that certain equipment such as light switches, some furniture and carpets which were the property of the plaintiff and were in use in their old offices would be used by the defendant in the scheme of decoration in the new offices. The carpets would have to be re-cut or re-laid and the furniture be painted and re-upholstered. The plaintiff alleges that the carpets were badly cut and were soiled by the defendant's workmen and that some of the carpeting and furniture is missing.

11. The plaintiff required the contruction of two rooms in the premises as a room for the projection of films and adjacent to it, a room to be used as a preview room for films. It was the intention that the preview room should be sound-proof. The only reference to this in the contract is the requirement that the defendant should cover the outside of the windows in that room with plywood. And the inside with panelling. In the plans which form part of the contract, however, it is clear that the preview room should be panelled with acoustic tiles as well as the ceiling. I am satisfied that both parties knew that part of the contract provided for the sound-proofing of the preview room - not necessarily total sound-proofing however.

12. The first point which called for decision is: Was the work of the defendant up to the appropriate standard, i.e. to the standard proper for the offices of a company carrying on the business of the plaintiff?

13. The plaintiffs called one of their directors, Mr. Vajna, who had kept a close watch on the progress of the work since its inception. And one Dexter Yeh, who referred to himself as an "interior designer" and whose firm was employed by the plaintiff to rectify the work of the defendant. Mr. Yeh submitted a report to the plaintiff of what work he considered necessary to bring the decoration up to a correct standard. He said that the painting work was very badly done, the carpets were ill-laid and very dirty, many of the tiles were badly laid and the carpentry work was of poor quality. He was particularly critical of the work done in the preview room. He said he thought that the work had been badly coordinated - and gave as an example that it appeared to him that the carpets had been put down before work on the walls and the painting had been completed.

14. Mr. Yeh said he had long experience as an interior decorator. His evidence was clear and not exaggerated. A detailed bill of the work that his company undertook was exhibited and explained by him in the witness box item by item.

15. I accept Mr. Yeh's evidence that the work done by the defendant was not up to the standard of the contract and I accept that his charges for the work were properly incurred by the plaintiff in rectification of the bad workmanship.

16. Mr. Yeh did certain work on the sound-proofing of the preview room. This was the largest job of work done. Upon inspection he said he found that the work done by the defendant was totally inadequate. The windows should have been sealed but were not. And some of the panes were broken. There should have been sound-proofing material within the window apertures. Mr. Yeh bricked up the windows and properly sound-proofed the room. It is true that the contract does not, as I have already said, mention 'sound-proofing'. And that it does not state that the windows are to be bricked up. But both Mr. Vajna and Mr. Lee agree that it was agreed that part of the contract provided for the sound-proofing of the room, though of course, as Mr. Lee said, there was no guarantee as to the efficiency of the system installed.

17. I have considered whether I should make allowance for the fact that the windows were bricked up. I do not consider that this is necessary. There was evidence that other brick work which was done was not costly by any means. And no point was taken by the defence that a deduction should be made. The method of sound-proofing adopted by the defendant was quite as elaborate as that undertaken by Mr. Yeh though no bricks were used.

18. Mr. Alan Lee gave evidence for the defendant. He was in charge of the work. From Mr. Lee's evidence itself it is evident that the work was not properly co-ordinated and that the premises exhibited a muddle. To a lesser extent, this is borne out by the evidence of Mr. Yeh also. I am quite certain that Mr. Lee's work was hampered by the installation and alteration of the air-conditioning system. But it must be remembered that Mr. Lee knew that this was likely to be a delaying factor when he signed the contract.

19. I do not think it is necessary to go into every little detail of the evidence. There were very many differences between the evidence given by the two parties. It is enough for me to say, on this aspect of the case, i.e. the evidence as to the quality of the work done and on the issues referred to above, that I prefer the evidence given by the plaintiff's witnesses to that given by the defendant's witnesses where there is a conflict. For example, it is obvious that proper care was not taken when the furniture was sprayed so that the floor of the 'Art Room' was left in a messy condition with the tiles soiled by paint. Again, I found that water did leak into the corridor form the 'Dark Room' from which the wash-basins etc. had been removed. I do not believe this was caused by watchmen coming upstairs and drawing water. Furthermore, I accept that the steps leading on to the balcony were not installed before the floor was tiled. This was obviously a wrong procedure. Many of the complaints of the plaintiff would appear to be trivial, but there were many complaints and I think that the evidence clearly shows that the defendant's workmanship was not up to the contract standard.

20. It follows from what I have said above that the plaintiff has satisfied me that he has suffered damages.

21. The question now is, how much? The plaintiff claims $81,740. This is made up of the cost of the completion and rectification, namely Mr. Dexter Yeh's account and various other items. This sum must be reduced by the sum of $20,576 as set out in paragraph 9 of the Statement of Claim. During the course of the trial, the plaintiff admitted they were liable for certain items claimed by the defendant in their defence and counterclaim. These are $1,130 for certain electrical work and locks; $1,220 for certain additional work done by the defendant. This reduces the total sum claimed by the plaintiff to $58,614.

22. Part of the plaintiff's claim is for $18,000 being the loss of the use of the offices from November 13th onwards. I think he is entitled to this since the defendant had not completed the contract by the new and substituted date of completion. This also applies to the other sums claimed by the plaintiff in paragraph 8(b) of the Statement of Claim. It was agreed by counsel for the plaintiff that the sum of $18,000 should be reduced to $16,900, i.e. should be reduced by $1,100. This makes the total claimed to $57,714.

23. In his counterclaim the defendant claims payment for various sums for work executed by him at the request of the plaintiff and extraneous to the work stipulated in the original contract. That extra work was contracted for and in some circumstances paid for is common ground. I have already dealt with this. The evidence is not altogether clear but it is agreed that any request for additional work was a matter of discussion between the parties. I accept the evidence of Mr. Vajna on this aspect of the case and I find that all the additional work ordered by the plaintiff was indeed before November 16th, 1973 which was the date of completion finally agreed upon. It is evident that the period between November 16th and November 23rd which was the date on which Mr. Vajna dismissed the defendant was one of increasing exasperation with the state of the contract so far as Mr. Vajna was concerned and not one in which he would increase the liabilities of the defendant towards him.

24. Paragraph (c) of the prayer of the plaintiff claims three items. It was conceded by counsel for the plaintiff in his closing address that items (i) and (ii) of this paragraph should read "two chairs $600". A deduction of $300 must be made. A sum of $10,000 was claimed for the loss of "400 sq. ft. of carpet." It is this claim which has given me the most trouble. The carpet was moved from the old premises of the plaintiff. It had to be cut and placed in certain of the rooms in the new premises. There is a direct conflict of evidence as to its condition. Mr. Vajna said it was in good condition, which was denied by Mr. Lee. Mr. Yeh said that there were old stains on it as well as dirtiness caused by Mr. Lee's workmen.

25. Much more important is the size of the carpet. Mr. Vajna claims $10,000 for the loss of 400 square feet. He said that between 800 and 900 square feet were removed from the old premises and only "about 600 square feet was re-laid in the new premises." His evidence thus reads that 400 square feet were missing.

26. Mr. Lee denied that any large piece of carpet was left over and said that certainly not a piece as large as 400 square feet. He said he had to cut the carpet when taking it up in the old premises and again when re-laying it in the new premises. He also said that he had to discard some which was "rotten" and badly worn.

27. It would have been easy to have given evidence of the size of the carpets. But this was not done. Mr. Vajna's evidence was vague and not convincing on this point. I agree with counsel for the plaintiff in his closing address when he said that the figure of 400 square feet could not be justified. In my view the plaintiff has not proved the loss of any carpet and this item of damages must be deducted from the sum claimed. This makes the sum of $47,414.

28. In his counterclaim the defendant makes an allowance of $3,940 in favour of the plaintiff. This is as a result of his admission that the contract work had not been completed by the final date of completion. There was ample evidence of this. This sum must be credited to the plaintiff. The sum claimed therefore now becomes $51,354.

29. The sums claimed by the defendant for payment for extra work will be found in paragraph 16 of the counterclaim. These items form part of a longer list which was delivered to the plaintiff on November 27th, 1973. (See exhibit P. 1(22) ).

30. The first is a new piece of carpet which became necessary according to the defendant when the position of the wall between the preview and projection rooms was altered. I accept the evidence of the defendant here and will allow the modest sum claimed, $250.

31. The next is the sum of $2,550 for what is called a 'preview room panel'. Mr. Vajna at first said that he did not know about this. But in cross-examination he admitted that this was part of an alteration to the sound-proofing of the preview room. He said he had agreed to the insertion of aluminium tinfoil panel under the wall panels which covered the windows in that room. Mr. Lee's evidence corroborated this. I will therefore allow this sum.

32. The next item, (iii), refers to extra work in the projection room. It appears from the plans which form part of the contract that this item was included in the contract and was not extra work. This also applies to the next item (item iv).

33. I am satisfied from the evidence that the next item (item v) was extra work. The sliding doors were a solution to the sound-proofing problem and were agreed to by the plaintiff. I will allow this sum - $260.

34. Similarly, I am satisfied that item (vi) "Material only for timber strips delivered to the site" is recoverable as being extra work. Mr. Vajna admitted that the timber had been delivered and partially laid as a result of a discussion with the defendant. The timber was required to surround the carpeting in the conference room, $720 must be allowed in favour of the defendant.

35. The sum to be awarded to the plaintiff must be reduced by $3,780: which makes a total of $47,574.

36. There are only two other matters. In paragraph 4 of the defence and counterclaim, the defendant claims $1,800 because of delays to the work done by the installation of the air-conditioning plant. I do not think that this claim is valid. The plaintiff extended the time for completion in order to compensate for this.

37. There remains the claim of the defendant for the repainting of the wall because of the dirt caused to it by the alteration made to the air-conditioning work. Mr. Vajna was not asked about this but Mr. Lee said that he had sent in an invoice for this amount. This was never produced. It is for comment that Mr. Mok, a witness called for the defence, said that he charged the defendant only $2,000 and not $3,000 as was claimed by the defendant. Be that as it may, the painting of the premises was a specific item of the contract. There was no evidence before me that the plaintiff ordered this work to be done as extra work over and above the contract and I do not think that the claim is valid.

38. There will therefore be judgment for the plaintiff for $47,574. I will hear counsel as to costs.

Representation:

M. Bunting (Lennox Bywater & Co.) for Plaintiff

H. Y. Leung (Hastings & Co.) for Defendant.