High-point Rendel (Hong Kong) Ltd v. Wishing Star Ltd
Read the full judgment text of DCCJ 206/2004 on BabelCite. This District Court judgment.
1. This is the Plaintiff’s application for summary judgment on its claim. Alternatively, the Plaintiff applies for interim payment in the sum of $750,000.
Cited by 1 case · Cites 1 case
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DCCJ206/2004 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CIVIL ACTION NO. 206 OF 2004 -------------------- BETWEEN
-------------------- Coram : Deputy Judge J. Ko in Chambers Date of Hearing : 11th July 2005 Date of Handing Down Decision : 12th August 2005 -------------------- Decision -------------------- 1.This is the Plaintiff’s application for summary judgment on its claim. Alternatively, the Plaintiff applies for interim payment in the sum of $750,000. Background 2.The Plaintiff is a company providing consultancy services to parties involved in construction projects. The Defendant is a company carrying on construction business. 3.By an agreement made between the Defendant and one JTC Corporation (hereinafter called “JTC”), the Defendant agreed to design, supply, deliver and install curtain walling and cladding systems, canopies and roof trellises in a construction project in the Republic of Singapore (hereinafter called “the JTC Contract”). It is common ground that JTC had acted wrongfully and in breach of the JTC Contract in terminating the JTC Contract in September 2002. Consequently, the Defendant commenced legal proceeding in Singapore against JTC (hereinafter called “the Singapore Proceeding”). 4.By an agreement dated 6th September 2003 made between the Plaintiff and the Defendant (hereinafter called “the Agreement”), the Plaintiff agreed to provide professional services as an expert to the Defendant. The Plaintiff’s case 5.The Plaintiff’s case is simple enough. Pursuant to the Agreement, the Plaintiff submitted its expert witness report in the Singapore Proceeding on 15th October 2003 and issued 2 invoices dated 2nd October and 3rd November 2003 respectively for services rendered under the Agreement. 6.Despite repeated demands, the Defendant has failed to settle the said invoices, totaling $897,863.80. There is also a claim for interest based on the terms of the Agreement. The defences put forward by the Defendant 7.According to the Defence and Counterclaim filed, the Defendant pleaded the following defence:
8.Another line of defence is alleged in the affirmation of Ms. Carol Wen filed in opposition to the Plaintiff’s summary judgment application. Ms. Wen was the one who entered into the Agreement for and on behalf of the Defendant. According to her understanding at the time of the Agreement, “the ballpark fee would not be more than $150,000” (hereinafter called “the 3rd Allegation”). 9.The Defendant has also adduced an expert report dated 21st March 2005 prepared by Mr. D.J. Dixon (hereinafter called “the Dixon Report”) in opposition to the Plaintiff’s application for summary judgment. In the Dixon Report, the Defendant put forward the following defences in addition to the above defences:
10.Lastly, the Defendant’s counsel submits at the hearing that the Defendant should be allowed to challenge the quantum of the Plaintiff’s claim. This, he argues, constitute “some other reason for trial” (hereinafter called “the 6th Allegation”). Plaintiff’s preliminary objection to the Dixon Report 11.The Plaintiff took objection to the Defendant’s reliance on the Dixon Report. The Plaintiff’s solicitor submits at the hearing that whether the amount charged by the Plaintiff is excessive or not involves calculations by means of the formulae provided in clauses 6.1 and 6.2 of the Agreement. As the calculation involves simple arithmetic and no technical issue is involved, the court should not require the assistance of an expert. Relying on Ko Chi Keung v. Lee Ping Yan Andrew [2001] 2 HKC 63, the Plaintiff solicitor has invited me to rule that the Dixon Report is inadmissible. 12.The Defendant’s counsel submits that the Defendant should be permitted to take issue with the amount claimed. He argues that unlike taxation of solicitors’ bills, the court is not in a position to assess the reasonableness of the Plaintiff’s fees by simply looking at the Expert Witness Report and the hours allegedly spent because the Expert Witness Report is of a technical nature. The assistance of expert is therefore indispensable in assessing the reasonableness of the fees the Plaintiff proposed to charge. 13.In my view, it is quite unnecessary to rule on the admissibility of the Dixon Report for present purposes and it would also be inappropriate now to preempt the Plaintiff from adducing expert evidence if this case goes further. 14.The Dixon Report is adduced for the purpose of opposing the Plaintiff’s application for summary judgment. The Plaintiff’s solicitor has quite correctly observed that some of the comments made in the Dixon Report (such as, comments concerning the construction of some terms of the Agreement and comments on the affidavit filed by the Plaintiff in support of its present application) are nothing more than arguments made on the Defendant’s behalf to resist summary judgment and cannot be regarded as expert evidence. Even if I were to rule the Dixon Report inadmissible as expert evidence, I would still have to consider its content as submissions in the context of the Plaintiff’s application for summary judgment. 15.In Ko Chi Keung v. Lee Ping Yan Andrew [2001] 2 HKC 63, the defendant appealed against an order of the master granting leave to the parties to adduce expert evidence at trial. The defendant argued that the learned master had erred in making the said order because no relevant (and admissible) expert evidence was involved. 16.In his decision, Chung J. considered the decision of the English Court of Appeal in Woodford and Ackroyd v. Burgess [2000] CP Report 79 and concluded that:
17.So, the learned judge held that there was jurisdiction to determine the relevance (and therefore admissibility) of the expert evidence and that the issues raised were sufficiently clear and obvious for the discretion to be exercised in determining the question. The learned judge observed in that case that it was unnecessary for any expert to give evidence on the 2 matters contended by the plaintiff and set aside the master’s order and dismissed the plaintiff’s application for leave to adduce expert evidence at trial. 18.Returning to the present case, it is not at all clear at this stage whether the scope of the Dixon Report coincide with the scope of expert evidence contemplated by the Defendant’s counsel in his submission. The Dixon Report is apparently prepared for the purpose of the summary judgment application and Mr. Dixon has specifically stated in the preamble that the report will be supplemented by a further and more detailed analysis should the case go further. Unlike the case of Ko Chi Keung v. Lee Ping Yan Andrew, parties have understandably not addressed me fully on the desirability and relevance of expert evidence. All in all, I am not persuaded that the relevance (or irrelevance) of the Plaintiff’s expert evidence is sufficiently clear and obvious at this stage for a decision and I decline to exercise my discretion to rule on the question of whether the Defendant may adduce expert evidence at trial. 19.I shall now turn to the defences alleged by the Defendant. The 1st Allegation 20.In paragraph 7(g) of the Defence, the Defendant pleads that the Plaintiff submitted its expert witness report without first obtaining the approval of the Defendant and refused to act in accordance with the advice of the Defendant’s legal representative in the Singapore Proceeding. 21.The Defendant has filed no evidence in support of its allegation that the Plaintiff has submitted its report without first obtaining the approval of the Defendant. 22.On the contrary, the Plaintiff has adduced documentary evidence to confirm that:
23.All these are not disputed by the Defendant. 24.The Defendant has also filed no evidence in support of its allegation that the Plaintiff has refused to act in accordance with the advice of the Defendant’s legal representative in Singapore. 25.The Defendant’s counsel has quite sensibly not pressed on with this line of defence at the hearing. In the premises, I have no difficulty to conclude that the 1st Allegation is unbelievable. The 2nd Allegation 26.In paragraph 7(h) of the Defence, the Defendant pleads that subsequent to the submission of the Expert Witness Report in the Singapore Proceeding, a consultant of the Plaintiff (Miss Amanda Yeo) advised the Defendant that the Plaintiff’s assessment in the expert witness report should be S$4,925,274.89 instead of S$1,857,904.16 and the Plaintiff has refused and failed to take remedial action in amending or revising its expert witness report. 27.The Defendant’s counsel clarifies at the hearing that he is relying solely on an email dated 31st December 2003 from the secretary of Ms. Amanda Yeo of the Plaintiff to Ms. Carol Wen of the Defendant for this line of defence. 28.According to the Plaintiff, the said email dated 31st December 2003 contained information previously provided by Ms. Yeo to Ms. Wen on 13th September 2003. The information was resent on 31st December 2003 by Ms. Yeo’s secretary at Ms. Wen’s request. In other words, the information contained in the said email was dated long before the submission of the expert witness report. All these are not disputed by the Defendant. 29.In the premises, I have no difficulty to conclude that the 2nd Allegation is also unbelievable. The 3rd Allegation 30.In her affidavit filed in opposition to the Plaintiff’s claim, Ms. Wen deposed that she had in her mind that the ballpark fee would not be more than $150,000 when she signed the Agreement for and on behalf of the Defendant. 31.Ms. Wen’s understanding is clearly inconsistent with an email sent by Mr. Shuttleworth to her on 3rd September 2003 (i.e. before the Agreement), in which the Plaintiff stated that:
32.Further, by the time Ms. Wen signed the Agreement (i.e. 30th September 2003), the Defendant had been provided with time sheets by the Plaintiff for work done up to 28th September 2003. It would not be difficult for her to notice from those time sheets that the Plaintiff had already incurred cost in the order of $600,000. 33.In the premises, I also find the 3rd Allegation unbelievable. The 4th Allegation 34.The Defendant’s counsel submits at the hearing that the Defendant is relying on the Dixon Report for its allegation that the Plaintiff was negligent in preparing and submitting its expert witness report and the Defendant will apply to amend its Defence and Counterclaim in due course. 35.It is the Defendant’s case that the Plaintiff has omitted to include 2 major items of expenditure in the Plaintiff’s assessment in the expert witness report. These items are a sum of S$53,081.68 for the purchase of electrostatic guns and a sum of S$1,105,701.46 for the purchase of fluorocarbon line, totaling S$1,158,783.14. They relate to the abortive costs of the Defendant arising out of the termination of the JTC Contract. Mr. Dixon opines that the omission is a fundamental error on the part of the Plaintiff and has seriously reduced the potential for recovery of costs by the Defendant in the Singapore Proceeding. He further expresses that had he been engaged by the Defendant to prepare the expert witness export, he would certainly have included those 2 items as “abortive costs”. 36.Mr. Dixon’s opinion is premised upon his understanding that the scope of the services to be provided by the Plaintiff under the Agreement included substantiating the costs legitimately incurred by the Defendant in the execution of the construction project contemplated in the JTC Contract, whether they have been pleaded in the Singapore Proceeding or not. This is at variance with the Plaintiff’s understanding of the Agreement. 37.According to the Plaintiff, the 2 items have in fact been identified in an appendix to the Expert Witness Report. Mr. Shuttleworth explains in his affidavit that those 2 items have not been included in his final assessment of abortive costs because they do not fall within any one of the heads of claim particularized in Appendix A to the Statement of Claim in the Singapore Proceeding. In other words, it is the Plaintiff’s case that insofar as abortive costs are concerned, the Plaintiff is only obliged under the Agreement to assess those costs which fall within the heads of claim pleaded by the Defendant in the Singapore Proceeding. 38.Thus, what is really in dispute between the parties here is the precise scope of the services to be provided by the Plaintiff under the Agreement. This is a question of construction of the Agreement. 39.Section 2.0 of the Agreement outlined the scope of services to be provided by the Plaintiff in the following terms:
40.Section 3.0 of the Agreement then set out the extent of services in more details:
41.It is clear from Section 3.3 that the Plaintiff has agreed, inter alia, to prepare a detailed independent report on quantum in respect of the Defendant’s claim “as deemed necessary for the Hearing and specified by the [Defendant] in writing to [Plaintiff].” One can gather from the Agreement that “Hearing” should refer to the Singapore Proceeding. 42.Two emails pre-dating the Agreement setting out the “brief scope of [the Plaintiff’s] services” have been noted in Section 1.3 of and included as appendix to the Agreement. 43.The first email is an email dated 28th August 2003 from the Defendant’s legal representative in the Singapore Proceeding to the Plaintiff. The email provided that:
44.The second email is an email dated 2nd September 2003 from the Defendant’s legal representative in the Singapore Proceeding to the Plaintiff. The relevant part of this email provided that:
45.Paragraph 16 of the Defendant’s Statement of Claim in the Singapore Proceeding provided that:
46.The preamble in Appendix A to the Statement of Claim in the Singapore Proceeding provided as follows:
47.Defendant’s counsel submits that the emails have been incorporated into and form part of the Agreement. The Plaintiff’s solicitor however argues that the emails do not form part of the Agreement although they constitute part of the circumstances surrounding the making of the Agreement to which the court should refer to in construing the Agreement. In my view, whether the 2 emails have been incorporated into the Agreement is beside the point. What is clear from the aforesaid emails and the pleading is that the Defendant has certainly deemed necessary and specified in writing that the Plaintiff should report on the abortive costs already pleaded in the Defendant’s Statement of Claim in the Singapore Proceeding. 48.But how about those abortive costs not yet been pleaded in the Defendant’s Statement of Claim in the Singapore Proceeding? Other than the aforesaid emails and pleading, there is no evidence that the Defendant has deemed it necessary and specified in writing for the Plaintiff to report on any other “quantum issues”. 49.Is it now open for the Defendant to argue that by reason of the preamble in the particulars provided under paragraph 16 of and Appendix A to the Statement of Claim in the Singapore Proceeding, the Plaintiff is nevertheless obliged to report on the unpleaded abortive costs? In the circumstances of this case, I think the answer must be a resounding no. 50.As I have mentioned above in relation to the 1st Allegation, the Plaintiff submitted the first draft of its report to the Defendant’s legal representative in the Singapore Proceeding for comment on 9th October 2003. The Plaintiff further submitted a revised draft to the Defendant and the Defendant’s legal representative for comment on 10th October 2003. The Plaintiff then submitted a third revised draft to the Defendant for comment on 11th and 12th October 2003. Finally, the Plaintiff sent the final version of its report to the Defendant’s legal representative on 15th October 2003 for filing in the Singapore Proceeding. 51.In my view, it is unbelievable that the Defendant and its legal representative in the Singapore Proceeding had, on the one hand, deemed it necessary for the Plaintiff to report on the unpleaded abortive costs but, on the other hand, failed to raise the matter to the Plaintiff when the Plaintiff submitted its draft reports for their comment. What’s more, the Plaintiff has in fact identified those 2 items which Mr. Dixon now says the Plaintiff has omitted in Appendix 16 to the Plaintiff’s expert witness report. So the Defendant and its legal representative in the Singapore Proceeding had in fact been alerted to the existence of such items. If the Defendant had deemed it necessary for the Plaintiff to include them in its final assessment, it would have been easy for the Defendant or its legal representative to raise it with the Plaintiff. 52.By reason of the above, I am of the view that the 4th Allegation is unbelievable. The 5th and 6th Allegations 53.The 5th and 6th Allegations both concern with the quantification of the Plaintiff’s claim. 54.One of the conclusions of the Dixon Report is that the charges levied by the Plaintiff were not in accordance with the Agreement and that the same has been escalated considerably. Mr. Dixon seems to rely on the following matters in support of his conclusion:
53. Section 3.5 of the Agreement (set out above) indeed provided that Mr. Shuttleworth would be assisted by “either a Managing Consultant, Senior Consultant or Consultant as deemed necessary and agreed by the Defendant” from time to time. 54. The time sheets produced by the Plaintiff show that Mr. Shuttleworth was in fact assisted by a Management Consultant (Mr. Lee Guat Moi) and a Senior Consultant (Mr. Chris Chia) and a Consultant (Ms. Amanda Yeo) on 7th, 14th and 28th September 2003. Mr. Shuttleworth was also assisted by a Senior Consultant (Mr. Chris Chia) and a Consultant (Ms. Amanda Yeo) on 5th, 12th and 19th October 2003. 55.These timesheets have been provided to the Defendant. It would have been very easy for the Defendant to notice from the timesheets that Mr. Shuttleworth had been assisted by more than one staff. However, the Defendant did not raise timely complaint in this regard. In fact this line of defence was only raised in the Dixon Report but not previously by the Defendant. In the premises, I am of the view that this line of defence is really incredible. 56.Regarding Mr. Bell’s charges, I note that the Defendant has apparently approved Mr. Nigel’s involvement through the email dated 5th September 2003 from the Defendant’s legal representative in the Singapore Proceeding and an email dated 6th September 2003 from the Defendant’s Singapore office. This, together with the fact that the Defendant has not raised timely complaint, lead me to conclude that this line of defence is incredible. 57.There is no merit in Mr. Dixon’s argument that one can work out the total fee of $150,000 to $180,000 from the advance payment of $45,000. To start with, the Agreement provided for time charge basis as opposed to a lump sum fee. Secondly, each case must depend on its own fact and Mr. Dixon’s opinion on the practice of the industry is neither here nor there insofar as this particular case is concerned. 58.The main thrust of the Defendant’s case is on its 6th Allegation. The Defendant’s counsel argues that there is presently no basis for the Defendant to challenge the quantum claimed as they were calculated on time charge basis. 59.I agree that the Defendant should be allowed an opportunity to challenge the reasonableness of the work done by the Plaintiff. The timesheets only provide very general description of the nature of work done. For example, in the timesheet of Mr. Shuttleworth for the week ending on 28th September 2003, it was said that Mr. Shuttleworth had worked 8.5 hours on 22nd September 2003 and 17 hours on 23rd September 2003 respectively on “working on expert report documentation” and “discussions with Nicholas Wong and Ron Brinkman”. Apart from these timesheets, there is no evidence to substantiate the work done. 60.However, the Defendant’s case in this regard must be viewed in its proper context. It is not the Defendant’s case that the services provided by the Plaintiff in terms of the expert witness report is worthless and that the Plaintiff is not entitled to any payment at all. In fact, the Defendant’s counsel has fairly conceded at the hearing that notwithstanding the Defendant’s challenge on the reasonableness of the charges, the Defendant would eventually have to pay reasonable charge for the services provided by the Plaintiff. 61.In the premises, I am satisfied that the Defendant should be granted conditional leave to defend the Plaintiff’s claim herein. Having regard to all the circumstances of this case and the nature of the challenge, I consider that the Defendant should pay $500,000 into court as the condition for it to defend this action. Conclusion on Plaintiff’s summary judgment application 62.By reason of the above, I order that unless the Defendant pays $500,000 into court within 14 days from the date of handing down of the decision, the Plaintiff may enter final judgment against the Defendant for the amount claimed in the Amended Statement of Claim with interest thereon at judgment rate from the date of the writ until payment and costs of the action including this summons to be taxed if not agreed. 63.If the Defendant pays the said sum of $500,000 into court, the Defendant may defend the action and the costs of and occasioned by this summons shall be in the cause of this action. It would then be up to parties to consider whether they would adopt the automatic directions set out in Order 23A of the Rules of the DistrictCourt or agreed to or apply for further directions. Plaintiff’s alternative application for interim payment 64.Given my above ruling, it is not necessary for me to consider the Plaintiff’s alternative application for interim payment. However, I should mention briefly the Plaintiff’s alternative application in case I am wrong in my above analysis and that the Defendant should be given unconditional leave to defence. 65.The relationship between applications for interim payment and applications for summary judgment is still unsettled. The position has been summarized by Suffiad J. in paragraph 22 of his judgment in Wong Sau Kam and Yeung Kong, the Administrators of the estate of Yeung Yi Kee, deceased v. Shum Yuk Fong, HCPI 798/1998. 66.Unfortunately, the parties in this case have not addressed me fully in this regard. The Plaintiff seems content to rely principally on its application for summary judgment. Similarly, the Defendant is happy to rely on its above defences. In the premises, it would be inappropriate for me even to attempt to solve this conundrum without full argument. 67.Given the conflicting views in the authorities, the safer course would be to go back to the basics. Order 29, rule 12 provides that:
68.It is not the Defendant’s case that the Plaintiff is not entitled to any payment for its services rendered under the Agreement. Indeed, counsel for the Defendant has conceded that notwithstanding the challenge on the reasonableness of the charges, the Defendant would eventually have to pay the Plaintiff a reasonahe obtain judgment against the defendant for a substantial sum of money if the action proceeded to trial. The Defendant has not substantiated its alleged set-off and counterclaim in this case. In the circumstances of this case and having regard to the alleged set-off and counterclaim, I consider that a just amount of interim payment would be $500,000. 69.Therefore, even if I am wrong on my above analysis in relation to summary judgment and that the Defendant should be granted unconditional leave to defence, I would have ordered the Defendant to make an interim payment of $500,000 into court pursuant to Order 29, rule 12.
Mr. Francis Ip of Messrs. Ho & Ip for the Plaintiff. Mr. Victor Dawes instructed by Messrs. Cheung & Yip for the Defendant. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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