Kin Cheong Electrical Engineering Co v. The Tak Ming Co Ltd

HCA000816/1967

IN THE SUPREME COURT OF HONG KONG

ORIGINAL JURISDICTION

ACTION NO.816 OF 1967

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Coram: Mills-Owens J.

Date of Judgment: 1 October 1968

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JUDGMENT

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1. In this case, on the conclusion of the hearing on the 23rd September 1968, I gave judgment for the plaintiffs both on the claim and counterclaim, and now give reasons therefor.

2. The plaintiffs are a firm carrying on the business of electrical contractors and the dispute arose out of two contracts entered into between them and the defendant company. The contracts related to electrical installations required at a new 16-storey building, the Tak Ming Building, acquired by the defendant company and intended to be opened by the company as a school.

3. The two contracts suffered from lack of technical drawings and specifications; virtually the only item specified was a "German made 1,000 Amp. main switch" (in the first contract (Ex.A)). The first contract was a lump sum contract, providing in terms for "one, whole, piece of work $12,260" for "installing electrical fittings at Main Switch Room of Tak Ming Building". The plaintiffs were paid $5,000 on account on this contract and claimed $7,260 being the balance of the contract sum.

4. The second contract (Ex.B) was in effect a statement of the price to be paid to the plaintiffs for individual items, but of a general nature; they can best be described by reproducing some of the items; thus, for example, -

"48" fluorescent tube, whole set (wiring positions) at $36 per tube.

5. There was no lump sum expressed to be payable under this contract. Obviously payment due depended on the amount and nature of the work done and materials supplied. Payment was provided for as follows -

6. Under this second contract (Ex.B) the plaintiffs had been paid a sum of $57,000 and claimed further sums of $32,031.60 and $3,620 as representing the balance due to them for work done and material supplied under that contract. The reason why the balance was specified in these two amounts was that invoices had been presented to the defendant company for $32,031.60 whereas the work for which $3,620 was claimed was performed after those invoices were delivered.

7. As I have said, no drawings and no specifications were incorporated in these contracts, and there was no architect or other supervisor employed by the defendant company. In dealing with the electricity authority (the China Light & Power Co. Ltd.) the plaintiffs, as contractors seeking the approval of the authority, did however prepare a diagramatic sketch of the wiring and equipment proposed for the main switch room under the contract Ex.A. But there was no evidence that this sketch was incorporated into the contract Ex.A, as between the parties themselves. The sketch shows a 500 Amp. main switch, not a 1,000 Amp. as called for by the contract Ex.A and it was a 500 Amp. switch that the plaintiffs installed. This formed the main burden of the defence in respect of the claim made by the plaintiffs under that contract.

8. The obligations generally of contractors such as the plaintiffs are to do a proper and workmanlike job, with adequate materials, that is to say materials of reasonable quality and fitness for the purpose for which they are intended. (See Francis v. Cockrell ⁽¹⁾ and G.H. Myers & Co. v. Brent Cross Service Co. ⁽²⁾). No doubt, in the absence of specifications or drawings, proper workmanship would require an element of design - in the sense that the contractor must provide an effective installation; and the defendant company was entitled to rely on the plaintiffs' skill as professional electrical contractors (Hudson (9th Edition) p.217).

9. The defence took every possible stand and had an air, at times, of improvisation. Thus the defence put the plaintiffs to strict proof that all the work and materials for which they claimed had been done and supplied; there was no detailed schedule of allegedly omitted items of work or material. With respect to the contract for the main switch room (Ex.A), the China Light & Power Co. Ltd. accepted the diagramatic sketch prepared for its approval by the plaintiffs, and passed the completed work. As I have said, the sketch included a 500 Amp. main switch and that is what was installed. Admittedly that was not in accordance with the contract, which called for a 1,000 Amp. switch. On this basis the defendant company sought to say that the contract was not completed and that, being an entire contract, no payment was due thereunder for any part of the work done and materials supplied. Although the defendant company did not seek to recover the $5,000 already paid, it sought to deny liability for the balance of the contract price, viz. $7,260. The defence was, in my view, entirely without merit and misconceived. I would accept that this contract (Ex.A) was an entire contract under which, in accordance with authority (see Appleby and another v. Myers⁽³⁾ and Sumpter v. Hedges⁽⁴⁾) payment depended on complete performance. But a distinction is to be drawn between a partial misfeasance and a partial non-feasance. A contractor, under an entire contract, is entitled to recover if he has substantially performed the contract (see Hondel v. Steel⁽⁵⁾ and the decision of the Divisional Court in H. Dakin & Co. Ltd. v. Lee⁽⁶⁾). Here the only allegation of substance against the plaintiffs was that a 500 Amp. switch was installed instead of a 1,000 Amp. switch. But the China Light & Power Co. Ltd. fully accepted the installation; indeed, according to Mr. Noronha, the Company's officer who gave evidence, the Company would not have approved a 1,000 Amp. switch. The 'loading' shown on the application for a supply of electricity made to the Company was in the region of 600 amperes and, Mr. Noronha said, it is not the practice to pass a switch of higher amperage than that warranted by the application and the intended loading thereby disclosed; a 500 Amp. switch, he said, was adequate. He added that he knew of no school where a 1,000 Amp. load had been provided for, except one particular school where air-conditioners had been installed. When Mr. Cheng of the defendant company came to give evidence he seized on this to say that he had had in mind the possible future installation of air-conditioners in his school. I have no doubt that this was an after-thought inspired by what Mr. Noronha had said. In any event if the defendant company does at any time in the future decide to instal air-conditioners there is apparently no obstacle to its doing so; the main switch can be changed or adaped to a higher amperage. There is no evidence that in any other respect the existing installation will be inadequate. Obviously, if additional outlets are required there will have to be additional wiring. It will be for the defendant company to decide what it requires and to pay for it. The defendant company was, as I found, entitled to a deduction in respect of the lesser cost of the 500 Amp. switch, as compared with the cost of a 1,000 Amp. switch, and that is all. On the evidence such deduction was to be in the sum of $900, thereby reducing the claim on the contract Ex.A from $7,260 to $6,360.

10. In respect of the second contract (Ex.B) also, the defence was put up that the plaintiffs had not performed the whole of the work required, namely the provision of a complete installation for the school. But it was abundantly clear that the defendant company had stopped the work and called in another contractor. In doing so the defendant company had apparently acted on the advice of a teacher at the school, who had apparently criticised the plaintiffs' work, but he was not called to give evidence. The defendant company appeared also to have acted on a statement said to have been made by a workman (also not called as a witness) engaged in installing the lifts who had said, according to Mr. Cheng, that the wiring was not heavy enough for the lifts. Mr. Cheng stopped the work and arranged for a report by a firm of consultants, Messrs. Roger Preston. Unfortura tely these consultants were, apparently, not informed that the diagramatic sketch for the main switch room was not a contract drawing. Unfortunately also, no representative of these consultants was called to give evidence. Their report (Ex.H) was admitted as an agreed document expressly on the basis that the plaintiffs did not admit the truth or validity of its contents. In these circum-stances its value was strictly limited, that is to say to such admissions as could be obtained on cross-examination thereon. At one stage the parties had agreed to a joint inspection with Messrs. Roger Preston; it is unfortunate that the arrangement fell through. That it did fall through, in my view, was entirely owing to the fact that by the time the joint inspection was due the defendant company had committed itself to another contractor, to the knowledge of the plaintiffs. So far, therefore, as the plaintiffs were concerned there was no longer any purpose to be served by such an inspection, although they might have been wiser to seek agreement on items of alleged omission or commission. The defendant company called its second contractor as a witness to say what work he had done and been paid for. Initially the defence appeared to have been inclined merely to produce his account through the witness Mr. Cheng. My distinct impression was that the decision to call the second contractor as a witness was due entirely to my interjection to the effect - 'What proof could that be that the plaintiffs had not performed the work for which they claim payment'. However that may be, nothing in the evidence of this second contractor, in my view, threw doubt upon the plaintiffs' claim. The defence sought to counterclaim for the whole price of their contract with the second contractor. This was pointed out at the very commencement of the trial to be a doubtful claim; that at the most the claim should be for the extra expense, if any, that the defendant company had incurred in bringing in a second contractor; nevertheless the counterclaim was persisted in, until in his closing address counsel for the defendant company unreservedly abandoned it. Had the counterclaim been properly framed the matters really in dispute would have been made apparent and the trial considerably shortened.

11. In respect of the second contract Ex.B, also, it was argued for the defence that it was an entire contract under which no payment whatsoever became due unless the whole work was completed. That was an impossible argument. The quantity of the work of each type was not stated; thus, for example, it was left uncertain how many power sockets, how many lighting sockets or switches, how many sub-main switches, were to be installed. No doubt this was deliberate, and quite proper, so that the defendant company could from time to time decide what it required, but in such a case it must follow that the contract was not an entire contract; an entire contract pre-supposes work the ambit of which is predetermined and on the completion of which a precise or ascertainable sum becomes payable.

12. In one respect only, in my view, did the plaintiffs fail to come up to the strict proof demanded by the defence in respect of the second contract Ex.B. That was in regard to the item of $3,620 concerning which the evidence for the plaintiffs was of work done and material supplied in an estimated amount of $3,000. I accepted that estimate. Otherwise, in my judgment, accepting that the onus of proof rested entirely on the plaintiffs, their claim was proved beyond doubt and the defence wholly discredited. Accordingly, I gave judgment for the plaintiffs in the sum of $41,391.60 (being the aggregate of the sums of $6,360, $32,031.60 and $3,000) with costs, and dismissed the counterclaim with costs.

1st October, 1968.

Representation:

Ching (H.H. Lau & Co.) for Plaintiff.

Martin Lee (Kho & Lo) for Defendant.

(1) (1870) L.R.5 Q.B.501, 503 per Kechy C.B.

(2) (1934) 1 K.B. 46.

(3) (1867) L.R. 2 C.P. 651.

(4) (1898) 1 Q.B. 673.

(5) (1841) 8 M. & W. 858, 870-1.

(6) (1916) 1 K.B. 566.