Collections Interior Ltd. v. Flexiwall Engineering Co. Ltd.
Read the full judgment text of HCCT 64/1996 on BabelCite. This 高等法院原訟法庭 judgment was delivered on 8 January 1998 before the Hon Mr Justice Findlay.
Contract Law — Preliminary issues — Liability under alleged written agreements — Interim payment pending trial — Admitted payments and accounting. The plaintiff COLLECTIONS INTERIOR LIMITED and defendant FLEXIWALL ENGINEERING COMPANY LIMITED were parties to agreements in September and November 1994 concerning payments for services. The defendant sought a preliminary trial to determine liability under these agreements or alternatively quantum meruit, and an interim payment. The plaintiff agreed to trial on liability under the agreements but opposed quantum meruit and the interim payment order. The court held that there was no basis for a quantum meruit preliminary trial since the defendant's claim was solely contractual. The court ordered a trial on the preliminary issue of liability under the alleged agreements, to narrow the issues to amount payable, if any. The plaintiff had admitted having received sums on behalf of the defendant, substantiated by a statement of account. The court ordered that, if liability were found, the plaintiff must pay an interim amount of HK$1,469,968.82, reflecting undisputed funds after accounting for an alleged loan from the plaintiff. Costs of the application were ordered to be costs in the cause.
Legal issues: Preliminary issue on liability under alleged agreements · Interim payment pending trial outcome
Outcome: Order for trial of preliminary issue on liability under alleged agreements; conditional interim payment ordered; costs in cause.
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HCCT000064/1996 1996, No. CON 64 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE
Coram: the Hon Mr Justice Findlay, in Chambers Date of hearing: 7 January 1998 Date of handing down of judgment: 8 January 1998 ___________ JUDGMENT ___________ 1. I have before me a summons issued by the defendant on 8 December 1997 in which it seeks the following orders -
2. Mr Finley does not oppose an order that there be a trial of a preliminary issue, but says that this should be only of that stated in paragraph 1(i). He opposes an order in terms of paragraph 3.. He argues that the plaintiff has not admitted that this amount is due. 3. The defendant filed and served an affirmation by Mr Leung in support of its application. In this affirmation, Mr Leung explains why there should be a trial on a preliminary issue of liability under the agreements alleged, but does not mention the matter of quantum meruit. Indeed, the defendant's counterclaim is based on these agreements, and there is no alternative claim based on quantum meruit. I am not satisfied that there should be a trial of a preliminary issue based on quantum meruit. Accordingly, I order that there be a trial of the preliminary issue of whether or not the plaintiff is liable to the defendant under the alleged agreements of 19 September 1994 and/or 23 September 1994 and the Term Contract dated 17 November 1994 so that, after this trial, the only issue between the parties will be what amount, if any, is due by the one party to the other. I also order that this issue be set down for trial on an early date, with two days reserved. 4. In his affirmation, Mr Leung says, in a statement of account dated 5 August 1996, prepared for the defendant by the plaintiff, the plaintiff admitted that it had already received from the client the sum of $10,975,932.70, of which $4,522,005.95 had been paid through the original sub-contractor to the defendant and $2,447,158.93 had been paid by the plaintiff to the defendant, leaving a balance of $4,006,767.82 still outstanding and due. In its counterclaim, the defendant makes the same allegation. In its defence to the counterclaim, the plaintiff says only that the defendant "is put to strict proof" of this allegation. The plaintiff has filed no evidence in response to that of the defendant. 5. The account is dated 5 August 1996, is said to be "Flexiwall Engineering's Account", and was sent by the plaintiff to the defendant by fax on 5 June 1996. There can be no doubt that, on the plaintiff's own admission and without any explanation of this admission, the plaintiff has received the sums stated by Mr Leung in payments of sums due to the defendant. 6. The figures given by Mr Leung differ from those in the summons because the calculation in the summons is based on invoices to the original sub-contractor and the plaintiff, rather than payments received by the plaintiff for the defendant. The correct basis must be on the money received by the plaintiff because the invoice amount may be disputed. However, the figures stated by Mr Leung fail to take into account the amount alleged by the plaintiff to be a loan by the plaintiff to the defendant in the plaintiff's pleadings and in the account. Taking this alleged loan of $2,536,799 from the sums admittedly received by the plaintiff for the defendant, we are left with an undisputed balance of $1,469,968.82. 7. I see no reason why this undisputed sum of $1,469,968.82 should not be paid as an interim payment if the preliminary issue is decided in favour of the defendant. Accordingly, I order that, in the event that the plaintiff is found to be liable to the defendant after the trial of the preliminary issue, the plaintiff do pay the sum of $1,469,968.82 to the defendant as an interim payment within 7 days. 8. The costs of this application shall be costs in the cause of the preliminary issue. Representation: Mr Stephen Finley of Messrs Finley & Co, for the plaintiff. Mr Anthony Leung of Messrs Siao, Wen & Leung, for the defendant.
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