HK Scafform Suppliers Ltd v. Polygon Contracting Ltd

DCCJ147/2004

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 147 OF 2004

Coram:   H H Judge H C Wong in Court 

Dates of Hearing:  6 August 2004, 9 August 2004 

Date of Judgment:  9 August 2004

J U D G M E N T

1.The plaintiff claims against the defendant for payment of hiring/rental charges in the amount of $201,879.13 and compensation for damage to and loss to the scaffoldings in the sum of $413,135.80 with interest.

2.The plaintiff is and was a supplier of steel scaffoldings and mobile work platforms to construction site.  The defendant is and was a contractor of Sino Land Limited (hereinafter referred to as “Sino Land”) for internal painting work at the Sino Land’s building site at Siu Sai Wan (hereinafter referred to as “the said site”).

3.On 15 June 2001, the plaintiff entered into a contract to supply steel scaffoldings and mobile work platforms at the said site with a Sino Land subcontractor, Hong Kong Teakwood Works Limited (hereinafter referred to as “Hong Kong Teakwood”).  The plaintiff duly delivered 38 sets of mobile work platforms to the said site (this can be seen from Exhibit P1).

4.On or about 27 June 2001, the plaintiff was informed that Hong Kong Teakwood will be withdrawing from the Sino Land subcontract work.  At the request of Sino Land, a meeting was held at the office of Sino Land between the representatives from Sino Land, Hong Kong Teakwood, the plaintiff and the defendant.  The purpose of the meeting was to discuss the arrangements for the handing over of the work by the Hong Kong Teakwood to the defendant at the said site.  The meeting was held on 28 June 2001.

5.At the said meeting the plaintiff’s Mr Kam agreed to transfer the 38 sets of scaffoldings and mobile work platforms rented and supplied by the plaintiff to Hong Kong Teakwood at the said site to the defendant.  The defendant’s representative also orally agreed to take over the steel mobile work platforms and scaffoldings that Hong Kong Teakwood had rented from the plaintiff.

6.On 29 June 2001, the plaintiff’s Mr Kam faxed to the defendant a contract in the form of a quotation of the scaffoldings and mobile work platforms hiring charges or rental charges.  Subsequently the plaintiff and defendant discussed the terms of the hire on the telephone.  The defendant sent to the plaintiff an approved quotation on or about 10 July 2001.  The document sent by fax by the defendant to the plaintiff can be seen from pages 53 to 55 of the agreed bundle.  The plaintiff bases its claim on these documents and subsequent invoices sent to the defendant.

The Dispute

7.The approved quotation on pages 53 to 55 of the bundle bore the signature of the defendant’s representative.  It is believed that the signature belongs to Mr Alex Ng as he was the person named to have sent the faxed approved quotation.  The returned quotation showed amendments made by the defendant’s representative on page 54 and on 55.  Both pages bore Mr Ng’s signature on the inventory list of the scaffolding and platforms hired and the costs of damage, loss or repair.

8.On page 54 a similar signature to page 55 on behalf of the defendant appeared on the body of the faxed quotation with the endorsement “as agreed with Felix Kam, “月租先付1/2 $25,650”.  There is an illegible signature and the date of 10 July 2001.  On the previous page, page 53, is the document headed “Approved quotation”.  Going back to page 54, the amendments on the returned quotation by the plaintiff, included the deletion under “Remarks: (1) Transport charge; and (3)(ii) the payment of $200,000 by a cheque deposit, to be returned upon the return of all rented materials,” or words to that effect.  It is further recorded on the returned quotation the remarks that I have just read out, “as agreed with Felix Kam, ‘yuet jo sin fu’, one over two, $25,650”.

9.According to Mr Kam, the plaintiff’s witness, the aforesaid was unilaterally endorsed on the quotation returned by the defendant.  Upon discussions on the telephone, the plaintiff informed the defendant that there would be no delivery transport charges as the 38 sets of equipments were already delivered to the site.  The plaintiff would, however, charge removal transport charges at the same rate specified in the quotation and the plaintiff agreed to continue to hold the Hong Kong Teakwood cheque of $200,000 as deposit for the rental.  The plaintiff further agreed to accept a half month’s rental in advance instead of one month’s rental.  However, other than the half month rental paid in advance of $25,650, the defendant failed to pay any further rental charges in spite of having received numerous invoices and demands for rental from the plaintiff.

10.The plaintiff, upon being informed and at the request of the defendant, sent its lorries to collect the returned platforms at the said site on four different occasions, and these were 17 August 2001, 23 August 2001, 26 October 2001 and 12 November 2001, these can be seen on pages 60, 61, 68 and 71, the ‘collection notes’.  On each of these occasions a collection note was issued and signed by the defendant’s site representative.  The collection notes also recorded the items collected and items that were damaged and requiring repair.

11.In spite of repeated demands the defendant failed to pay the hiring charges and the loss and damage to equipments.  According to Mr Kam, the majority of the equipment, out of the 38 sets of the work mobile platforms, only about a third were returned.

The Defence

12.The defendant failed to call any witnesses at the trial.  It is the defendant’s pleaded case that the defendant was merely a paying agent of Silver Link Investment Company Limited which is a subsidiary of Sino Land.  In his final submission, Mr Lau, counsel for the defendant, submitted that the defendant was merely a paying agent of Silver Link and the plaintiff should have gone after Silver Link for the payment of the rent.  Mr Lau referred both to the defendant’s letter dated 22 November 2001 to the plaintiff and a letter to Silver Link of the same date (these can be seen at pages 73 to 77 of the bundle).

13.Further, it is Mr Lau’s contention that the plaintiffs failed to supply a breakdown of the 12 November 2001 items of loss and damage of $437,762 and therefore the defendant claims that it is not liable to the plaintiff.

Findings

14.So far as the breakdown of the items of loss and damage is concerned, the plaintiff did supply to the defendant on 12 November 2001 a list of unreturned items, listing out the price of each item (this can be seen on page 72 of the bundle of documents).  Had the defendant required further particulars of the loss and damage, it should have made a request for further and better particulars well before the trial and this was not done either before the trial or at the trial.

15.Consequently, it is not something that the defendant could not have obtained and since the defendant failed to do so, it is now too late for the defendant to claim in its final submission the plaintiff failed to particularise the items of loss and damaged equipment.

16.As to the issue taken by the defendant in its defence, that the defendant was only the paying agent of Silver Link, the quotation delivered by the plaintiff to the defendant was sent together with an inventory list of the equipment rented (this can be seen on page 55 with the quotation on page 54 of the bundle).  These were addressed to and faxed to the defendant, they were returned by fax to the plaintiff by the defendant together with a document which is headed “Approved Quotation” (this can be seen on page 53 of the documents).

17.The document “Approved Quotation” is dated 7 July 2001.  It was purportedly signed by the engineering department on 7 July 2001.  It was countersigned by the executive director on 9 July, by the managing director on 10 July (this can be seen at the bottom of the page).  The same signature that appeared under “engineering department” on 7 July also appeared under the “QS department” column, and a similar signature to these two appeared on the face of the quotation on page 54 under the endorsement “as agreed with Felix Kam, “月租先付½ $25,650”, signed and dated 10 July 2001.

18.According to the evidence of Mr Kam, one Mr Ng Heung‑leung was the defendant’s representative at the meeting on 28 June 2001.  He presumably is the same person who replied to Mr Kam’s quotation on 10 July 2001, Mr Alex Ng; the same Alex Ng who had signed as the project manager on a letter to Silver Link Investment Limited on 10 July 2001 on page 56 of the bundle.  In this letter on page 56, Mr Ng wrote as the project manager of Polygon Construction Limited (the defendant).  He confirmed the agreement reached at a meeting on 28 June 2001 with Mr K M Chan of Silver Link Investment and Mr Andy Hung of Hong Kong Teakwood, and it is recorded by Mr Ng the following:

“(1)Hong Kong Teakwood will transfer the existing 38 sets of working platforms to Polygon on 28 June 2001.  Polygon will take over and start to pay the hire rate from 28 June 2001.

(2)  All the costs paid by Polygon plus 15% will be charged against Silver Link for covering the cost of working platform, overhead and management.

(3)  The deposit already paid by Hong Kong Teakwood will remain on Hong Kong Scaffold up to the return of all platforms.

Should you have any query, please feel free to contact the undersigned.”

And it is signed “For and on behalf of Polygon Contracting Limited, Alex Ng, Project Manager”.

19.This letter showed clearly that the defendant had agreed to take over the rental of the 38 sets of moving platforms from Hong Kong Teakwood and assumed the responsibility of paying the rental or hiring charges.  Nothing in this letter mentioned the defendant was acting as the paying agent for Silver Link, whatever the term “paying agent” meant or may mean.

20.The page 73 and 76 letters were self-serving letters.  The defendant failed to call any witnesses or evidence to prove the truth of the contents of these letters, or call any witnesses in support of the defence of either the defendant being the paying agent of Silver Link or show that the contract between the plaintiff and the defendant was signed on behalf of Silver Link.  There simply is no support for the defendant’s defence; there was no evidence called and the documents failed to support the defence’s case.

21.It is clear that the contract was between the plaintiff and the defendant, even in the correspondence between the defendant and Silver Link Investment.  The defendant clearly accepted the responsibility of the hiring of the 38 sets of working platforms and assumed the responsibility of paying the rental charges for these 38 sets of moving platforms.  Even if Mr Lau’s contention in his final submission is true, Silver Link should have been joined as a third party in this action.  Of course no third party was joined and there was no suggestion that Silver Link would be sued by the defendant.  In any event, this has nothing to do with the present case.  The present case is very clear.

22.I am satisfied that the plaintiff has proved on the balance of probability that the defendant has contracted with the plaintiff to take over the hiring of the 38 sets of working platforms from Hong Kong Teakwood as from 28 June 2001.  Therefore, the claim against the defendant is proved and I give judgment as prayed in the Statement of Claim to the plaintiff with interest from the date of 1 December 2001 at half judgment rate to the date of judgment and thereafter at full judgment rate until full payment.

23.Costs to follow the event.  Therefore, the defendant shall pay to the plaintiff the costs of this action, to be taxed if not agreed with certificate for counsel.

Present:  Mr Wong Fat-kui, instructed by Messrs Philip Ng & Wong, for the Plaintiff

Mr Lau Woon-sun, instructed by Messrs Kong & Tang, for the Defendant