Skk (Hong Kong) Co Ltd v. Cheong Shing Repair & Maintenance Ltd
Read the full judgment text of DCCJ 4734/2003 on BabelCite. This District Court judgment.
1. The government awarded certain repair and maintenance contracts at various locations to Wing Hong Contractors Limited (“Wing Hong”) in 2001. Wing Hong, in turn, sub-contracted part ofthe works including painting works to the Defendant. It is common ground that the Plaintiff was the only supplier of the paint approved by the government for such works.
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DCCJ 4734/2003 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CIVIL ACTION NO. 4734 OF 2003 -------------------- BETWEEN
-------------------- Coram: Deputy District Judge J. Ko in Court Dates of Hearing: 31st October, 1st – 3rd November and 1st – 2nd December 2005 Date of Plaintiff’s Written Reply: 9th December 2005 Date of Handing Down Judgment: 11th February 2006 _________________ J U D G M E N T ________________ 1.The government awarded certain repair and maintenance contracts at various locations to Wing Hong Contractors Limited (“Wing Hong”) in 2001. Wing Hong, in turn, sub-contracted part ofthe works including painting works to the Defendant. It is common ground that the Plaintiff was the only supplier of the paint approved by the government for such works. 2.The Plaintiff claims against the Defendant in this action for the sum of $518,066.17 being the balance of price of paint sold and delivered to the Defendant. According to the Plaintiff, full particulars of its claim have been set out in the statement of account dated 8th August 2003 (“August Account”) and the relevant invoices which have been tendered to the Defendant. 3.The Defendant denies liability to pay. According to the Defendant, there were indeed several agreements between the Plaintiff and the Defendant for the supply of paint and the Plaintiff was obliged under the terms of each agreement to deliver the paint to a designated site and to a designated authorized person. The Plaintiff has failed to deliver the paint at all, let alone delivering them to the designated authorized person at the designated site. The Defendant therefore counterclaims for the return of the deposit paid to the Plaintiff under the agreements between the parties in the sum of $187,374.33. 4.The Plaintiff denies that it was obliged under the terms of the agreements between the parties to deliver the paint to any designated site or any designated authorized person. 5.The main issues in this case are therefore:
6.The Plaintiff has called 3 witnesses at trial:
7.The Defendant relies on the testimony of:
Defendant’s challenge to the overall validity of the Plaintiff’s claim 8.Defence counsel attempts to challenge the overall validity of the Plaintiff’s claim in his closing submission. He observes from paragraph 3 of the Statement of Claim that the Plaintiff’s claim is founded on August Account and submits that the Plaintiff has failed to prove its case for the following reasons:
Is Defence counsel’s challenge to the overall validity of the Plaintiff’s claim justified? (a) Lack of evidence as to what August Account is? 9.According to paragraph 3 of the Statement of Claim [A4], the particulars of the Plaintiff’s claim are contained in:
10.A copy of August Account has been produced at [C104]. The total balance of August Account comes to $518,066.17, which is the amount of the Plaintiff’s claim herein. All the 17 documents (comprising 14 invoices, 2 deposit invoices and a credit note)included in August Account have also been produced at [B70-86]. The authenticity of all these documents have never been challenged at trial. 11.In fact the Defendant has also made references in its pleading to 14 out of the aforesaid 17 documents included in August Account. In paragraph 9 of the Defence and Counterclaim [A9], it is pleaded that:
12.It is clear from the Defendant’s case at trial that the reference to “SKIVC-02-0365(C)” in its pleading is a typographical error and the correct reference should have been “SKIVC-03-0365(C)”. 13.Concerning those 14 documents included in August Account which the Defendant has specifically referred to in its own pleading, it is simply not open to the Defendant now to contend that it does not know what they are. 14.Regarding the remaining 3 documents, namely, CN-03-006(C), DI-03-181(C) and SKIVC-03-1056(C):
15.In the premises, there is really no merit in the Defendant’s complaint of lack of evidence on what August Account is. (b) Inconsistency between August Account, July Account and June Account? 16.Defence counsel has also contrasted August Account [C104] with July Account [C102] and June Account [C98] and submits that:
(b1) Inconsistency between August Account and July Account? 17.Both August Account [C104] and July Account [C102] have been produced. One can readily see from these statements that they record the same 17 invoices, credit note and deposit invoices and produce the same total balance of $518,066.17 (i.e. the amount of the Plaintiff’s claim). 18.There are, however, 2 differences between August Account and July Account, namely, the amount recorded against deposit invoice DI-03-181(C) and invoice SKIVC-03-1228(C) respectively.
(b2) Has SC-03-040(C)-R been pleaded? 19.It is true that PW1 has referred to sales contract no. “SC-03-040(C)-R” in his affirmation [B4]. PW1 was not cross-examined on this alleged discrepancy at trial. 20.Plaintiff’s counsel submits that this is more likely than not to be a typographical error and the correct reference should have been “SC-03-0340(C)-R” for the following reasons:
21.I accept, for the above reasons, that there is a typographical error in PW1’s reference to sales contract “SC-03-040(C)-R” in his affirmation and the correct reference should be “SC-03-0340(C)-R”. 22.The 2 invoices issued under SC-03-0340(C)-R have been included in August Account [C104]. As such, sales contract SC-03-0340(C)-R is coveredby the particulars pleaded under paragraph 3 of the Statement of Claim [A4]. (b3) Has SC-03-0649(C) been pleaded? 23.PW1’s reference to sales contract no. SC-03-0649(C) in his affirmation [B4] was made against invoice no. SKIVC-03-1056(C). This invoice has in fact been included in August Account [C104] and so has been included in the particulars under paragraph 3 of the Statement of Claim [A4]. (c) Inconsistency between July Account and June Account? 24.In his closing submission, Defence counsel points out that invoice no. DI-03-051 has been included in June Account [C98] but not in July Account [C102]. The Plaintiff’s witnesses have not been cross-examined on this aspect at trial and have not been afforded an opportunity to explain. 25.In any event, I accept the Plaintiff’s counsel submission that the sum of $37,186 in settlement of DI-03-051 [C75] was the deposit for sales contract SC-03-0169(C)-R. This payment has been recorded in invoices SKIVC-03-0365(C) [C61] and SKIVC-03-0508(C) [C63] and included in July Account. The Plaintiff has merely adopted different ways of presentation in June Account and July Account and there is no inconsistency between the 2 statements. 26.For the above reasons, there is really no merit in Defence counsel’s challenge to the overall validity of the Plaintiff’s case. Whether the Plaintiff was obliged to deliver the paint to any designated site and to any designated authorized person? 27.It is the Defendant’s case that the Plaintiff was obliged under each agreement between the parties to deliver the paint to a “designated authorized person” and at a “designated site” (see paragraph 4 of the Defence and Counterclaim [A8]). 28.According to DW1, the information provided under “location for delivery/work” (送貨/工程地點) in the Defendant’s requisition forms is the “designated site” and the information provided under “site contact person” (地盤聯絡人) is the “designated authorized person” to which and to whom the Plaintiff had to deliver the paint. The Defendant’s case at trial is that the requisition form and the corresponding sales contract together form the agreement in respect of each transaction. 29.It is clear from the evidence that a practice had evolved from the course of dealings between the parties for the making of the agreement in respect of each transaction.
30.In respect of each transaction,the sales contract was the only document signed by both parties. Information concerning “location for delivery/work” and “site contact person” in the requisition form was invariably omitted in the corresponding sales contract drafted by the Plaintiff. Although the requisition form number was sometimes quoted in the sales contract (e.g. SC-03-0343(C) [C35], SC-03-0791(C) [C39], SC-03-0924(C) [C40] and SC-03-0990(C) [C41]), mere reference to the requisition form number would not be sufficient to incorporate the terms of the requisition form into the sales contract. The Defendant elected to accept the terms of the sales contracts without reference to “location for delivery/work” and “site contact person” mentioned in the corresponding requisition forms. There is simply nothing in the sales contracts indicating an intention to incorporate the terms of the requisition form into the corresponding sales contract. 31.In any event, the requisition forms only provided general information regarding “location for delivery/work” and “site contact person”. There was nothing in the requisition forms to oblige the Plaintiff to deliver the paint to the “location for delivery/work” and nowhere else or to no one other than the “site contact person”. 32.In fact, the evidence in this case suggests that the parties could not have intended to incorporate the terms of the requisition form into the corresponding sales contract. 33.First, the Defendant hadonly described the required paint very briefly in the requisition form for some transactions. It was then for the Plaintiff to specify in the corresponding sales contract full particulars respecting the type and quantity of paint for the Defendant to confirm. The transactions under SC-02-1958(C), SC-03-0169(C), SC-03-0343(C), SC-03-0734(S) and SC-03-0924(C) in Disputed Paint are examples. 34.Secondly, the person actually accepting the goods for the Defendant might not be the “site contact person” named in the relevant requisition form. For example, requisition form no. CSR-002 [B176] under SC-02-1001(C)-R named “張生” as the “site contact person” but the paint was apparently accepted by “黃志偉” [B181]. It is common ground that this transaction has been successfully completed. 35.Thirdly, the Defendant had accepted goods at a location other than the “location for delivery/work” specified in the requisition form. DW3 has confirmed that for some sales contracts involving works on Lantau Island, the Plaintiff had been asked to deliver the paint to a government depot at Siu Ho Wan (小濠灣政府維修倉) (“SHW Depot”) instead of the “location for delivery/work” specified in the requisition form. For example, the “location for delivery/work” specified in requisition form no. 036 [B208] was Mui Wo Pier (梅窩碼頭) but the paint was apparently delivered to Siu Ho Wan (小濠灣) [B207]. It is common ground that this transaction has been successfully completed. 36.There is also no dispute that the Plaintiff had in fact liaised with the Defendant before each delivery to make specific arrangement for the delivery. This would not be necessary if the parties had all along intended the Plaintiff to deliver only to the “site contact person” at the “location for delivery/work” specified in the requisition form. 37.For the above reasons, I do not accept the Defendant’s case that the Plaintiff was obliged under the terms of the agreements to deliver the paint to the “site contact person” at the “location for delivery/work” specified in the requisition forms. Instead, the evidence has revealed and I so find that the parties would only make specific delivery arrangement prior to each delivery. Whether the Plaintiff has delivered Disputed Paint to the Defendant? 38.Let me now turn to the central dispute in this case:Whether the Plaintiff has delivered Disputed Paint to the Defendant? 39.It is the Plaintiff’s case that all Disputed Paint has been delivered to the Defendant. The Defendant, however, contends that Disputed Paint has not been delivered at all. 40.It is common ground that all the works covered by Disputed Paint have in fact been completed by the Defendant through its sub-contractor DW2. Given the fact that the Plaintiff was the sole supplier of the paint for such works, the fact of completion is telltale of full delivery. It is the Defendant’s case that DW2 has made use of surplus paint left over from other projects to complete the works covered by Disputed Paint. 41.Having considered all the evidence, I have come to the firm view that the Plaintiff’s case is to be preferred. I shall explain my reasoning under the following headings:
(a) Oral testimony 42.The Plaintiff’s case is supported by the testimony of the Plaintiff’s witnesses. 43.PW1 is the sales manager of the Plaintiff. He confirms that the Plaintiff has, through Luen Fat, delivered all Disputed Paint to the Defendant and each delivery is evidenced by the respective delivery order. He further confirms that delivery under sales contract SC-03-0917(C)-R [C42] was withheld given the Defendant’s failure to settle the outstanding balance. The deposit paid under SC-03-0917(C)-R in the sum of $6,937.50 [C73], however, has been taken into account in ascertaining the present claim of the Plaintiff. 44.PW2 is the shipping manager of the Plaintiff whose duties include arranging for delivery of goods. She confirms that she was personally involved in arranging for deliveries of Disputed Paint. On the day before each delivery, she would call DW1 to confirm the contact person, the location and the approximate time to contact for the delivery. She would then contact the person nominated by DW1 to confirm that there would indeed be someone to accept delivery at the nominated location on the following day. 45.PW2 would then issue a “delivery order” to Luen Fat. In particular, she would note down in the delivery order under the column entitled “Remarks” the name and telephone number of the contact person(s) nominated by DW1 for the delivery. She observes that sometimes DW1 would nominate someone other than the “site contact person” named in the relevant requisition form. 46.PW2 says that the Plaintiff would require the delivery orders to be signed by the person accepting the goods as confirmation and evidence of delivery and acceptance. Luen Fat would return signed delivery orders to the Plaintiff after the goods have been delivered. 47.PW3 is the sole proprietor of Luen Fat. According to him, Luen Fat has been providing delivery services to the Plaintiff since 1990. He confirms that Luen Fat had received from the Plaintiff the delivery orders in respect of Disputed Paint and Luen Fat had delivered thepaint to the Defendant. 48.PW3 says that he had personally called the contact person named in the delivery order before each delivery to confirm the delivery arrangement. In respect of SKK-3466 [C43] and SKK-2167 [C50], he was asked by the person named on the delivery order to contact another person to arrange for the delivery. In respect of deliveries made to SHW Depot under SKK-1561 [C46], SKK-1684 [C49], SKK-2167 [C50] and SKK-2420 [C55], PW3’s calls were invariably answered by a lady who instructed Luen Fat to deliver the goods to her at SHW Depot. 49.There are altogether 13 delivery orders relating to Disputed Paint. PW3 personally made all the deliveries except those under SKK-2167 [C50], SKK-2217 [C52] and SKK-2288 [C53], which were made by his staff Mr. Wong Hong-Kok (“Wong”) according to his instruction. 50.According to PW3, in respect of those deliveries to SHW Depot, Luen Fat had been instructed by those accepting delivery for the Defendant in previous successful deliveries to deliver the goods directly to an office inside SHW Depot. Therefore, the goods under SKK-1561 [C46], SKK-1684 [C49], SKK-2167 [C50] and SKK-2420 [C55] were all delivered to the office inside SHW Depot and accepted by a lady who signed on the delivery orders. In respect of all other deliveries, the goods had been delivered to the location stated in the delivery orders. 51.Both DW1 and DW3 have confirmed that the Plaintiff had indeed liaised with the Defendant to make delivery arrangement before each delivery. 52.The documentary evidence, namely, the delivery orders alsosupport the Plaintiff’s witnesses’ testimony. I shall deal with the Defendant’s challenge to these delivery orders below. 53.Despite the effort of the Defence counsel, the credibility of all Plaintiff’s witnesses has not been undermined. 54.On the other hand, the oral testimony of DW2 and DW3 is inconsistent with the Defendant’s case of non-delivery of Disputed Paint. 55.In his affirmation filed herein [B231-232], DW3 has deposed to the fact that he has personally contacted all the “site contact person” named on the requisition forms to confirm that Disputed Paint (including those ordered under sales contracts SC-02-1958(C), SC-03-0169(C) and SC-03-0340(C)-R) have not been delivered at all. Nevertheless, he complains in court about the piece-meal manner (i.e. “斷截禾虫” in DW3’s words) in which the Plaintiff delivered the paint under sales contracts SC-02-1958(C), SC-03-0169(C) and SC-03-0340(C)-R. Both contentions cannot be true and this tends to undermine his credibility. 56.Indeed, DW2, who is the sub-contractor of the Defendant for the works covered by Disputed Paint, also confirms under cross-examination that he had been provided with paints at some worksite for his work requiring Disputed Paint. Since the Plaintiff was the only supplier of the paint in question, the fact that the required paint was available at the worksite is inconsistent with the Defendant’s case that Disputed Paint had not been delivered at all. (b) Delivery orders 57.The Plaintiff’s case is also supported by the delivery orders produced [C43-56]. 58.The Defendant has challenged the authenticity of each delivery order. In his written closing submission, Defence counsel summarizes his criticisms on the delivery orders as follows:
59.As I understand him, Defence counsel is complaining in (1) above that the signatory of the delivery orders for Disputed Paint is neither the “site contact person” named on the corresponding requisition forms nor the contact person named on the corresponding delivery orders. 60.To start with, it is noted that the signatory ofsome delivery orders for Disputed Paint may be the “site contact person” named on the corresponding requisition formsand/or the contact person named on the corresponding delivery orders:
61.It is PW2’s testimony that DW1 would sometimes nominate someone other than the “site contact person” named in the requisition form for PW2 to make arrangement for delivery. Similarly, PW3 has also explained that sometimes when he called the contact person named in the delivery order at the telephone number provided therein, he was asked to deliver the goods to some other person. This explains why the person receiving the goods (according to the signature appearing on the delivery order) may be different from the contact person named in the corresponding delivery order or the “site contact person” named in the corresponding requisition form. The explanation given by PW2 and PW3 are both logical and reasonable. Their evidence has not been shaken during cross-examination. I accept their explanations. 62.Furthermore, I have already noted from other undisputed transactions that the person actually accepting the goods for the Defendant might not be the “site contact person” named in the requisition form. 63.The Plaintiff has also observed that the signatory of the delivery orders for Disputed Paint might have accepted delivery for the Defendant in other completed and undisputed transactions.
64.Defence counsel has objected to the Plaintiff making references to signatures in other documentation in his closing submission. He submits that the Plaintiff should not be allowed to rely on estoppel or waiver, as the same has never been pleaded. 65.The Plaintiff is not relying on estoppel or waiver in this case. Rather, the Plaintiff is inviting the court to look at the documentary evidence and make observations therefrom. In fact, the Defendant is asking the court to do the same in terms of its complaint in (1) above. This is so notwithstanding that neither party has adduced expert evidence from handwriting experts to compare the signatures. 66.The Defendant must have all along appreciated the Plaintiff’s case that the signatory on certain delivery orders for Disputed Paint might have accepted delivery for the Defendant in other undisputed transactions (see paragraph 5 of DW3’s supplemental witness statement [B231]). Be that as it may, the Defendant has elected not to call the “site contact persons” named in the requisition forms to confirm non-delivery. The failure on the part of the Defendant to call these witnesses deprives the Plaintiff of the opportunity to cross-examine them on the alleged non-delivery. 67.In my view, the court is quite entitled to look at the documentary evidence and make observations therefrom in order to consider both Defence counsel’s complaint in (1) above as well as the Plaintiff’s case that the signatory appearing on the delivery orders for Disputed Paint might have accepted delivery for the Defendant in other undisputed transactions. If I am wrong in making the above observations concerning the signatures on various documents, both Defence counsel’s above complaint and the Plaintiff’s case in this regard will have to be disregarded. This will not affect my overall assessment of this case. 68.As regards Defence counsel’s complaint (2) above, it is not surprising that the Plaintiff does not know the identity of the person who actually received the goods for the Defendant given the fact that the Plaintiff has instructed Luen Fat to deliver the goods (as opposed to delivering them itself). 69.As regards Defence counsel’s complaint (3) above, given the limited role of Luen Fat, being merely the delivery agent, and given the limited information provided on the delivery orders, it is not surprising that PW3 does not know the identity of the Defendant. 70.DW2 has informed PW2 regarding the name of the contact person to contact to arrange for delivery. PW2 passed on such information to Luen Fat by means of the delivery orders. Luen Fat contacted the contact person and delivered the goods in accordance with the instructions given. Luen Fat was under no obligation to do more, such as to question the identity of or the position held by the person accepting the goods. This provides a satisfactory answer to Defence complaint (4) above. 71.The fact that the Plaintiff might have issued deposit invoices under DI-03-181(C) [C72] and DI-03-195(C) [C73] to the credit of the Defendant is neither here nor there. This is particular so as the Defendant is not disputing the payments. 72.In relation to Defence counsel’s complaint (6) above, all debit notes have in fact been produced at [C105-116] and [C120]. 73.All in all, I am not convinced that the Defendant has succeeded in casting doubt on the authenticity of these delivery orders. (c) Defendant’s case on surplus paint 74.It is common ground that the Defendant has completed all the works covered by Disputed Paint and such works have been approved by the government. Given the alleged non-delivery of Disputed Paint, how was this possible? 75.It is the Defendant’s case that there had been paint (also purchased from the Plaintiff) left over from other works and the Defendant utilized the surplus paint to complete the works to the satisfaction of the government. 76.DW2 was the sub-contractor of the Defendant for painting works. Under the sub-contract between the Defendant and DW2, the Defendant would provide paint for DW2 to complete the works. According to DW2, a substantial amount of paint had been left unused after he had finished his works. He did not inform the Defendant about the surplus paint but had instead stowed them awayatstorage place at various locations. On a number of occasions between December 2002 and June 2003, he was not provided with paint for his works. He simply utilized the surplus paint to complete the works concerned without complaining to the Defendant. 77.The Defendant has also produced several tables at [B143-149] and [D3-10] setting out full particulars of the surplus paint which DW2 had used to complete the works covered by Disputed Paint. 78.Having considered all the evidence carefully, I am not satisfied even on the balance of probabilities of the Defendant’s case on surplus paint. Let me explain my reasoning from the following perspectives:
(a) Global view of the Defendant’s case of surplus paint 79.To start with, the surplus paint allegedly used by the Defendant consisted of some 1,589 cans/sets of paint (according to the Defendant’s tables). They must be worth about the same as Disputed Paint (i.e. the Plaintiff’s claim of $518,066.17). 80.DW2 says that the Defendant had a foreman at each site to direct his work. I find it quite amazing that DW2, a sub-contractor of the Defendant, could have saved up so much paint and to such a value without the knowledge of the Defendant in those circumstances. 81.Secondly, there were a total of 1,589 cans/sets of paint in the Defendant’s tables of surplus paint. Storage of this amount of paint would be a huge problem. DW2 has not been able to give a satisfactory account of how and where he stored these paints. 82.Thirdly, DW2 says he simply decided on his own volition to utilize his stock of surplus paint whenever he could not find at the worksite the paint provided for his work. I find this highly suspicious. It was the Defendant’s responsibility to provide paint for DW2’s work and DW2 was admittedly not involved in the ordering of paint. Without reference to the Defendant, DW2 would not know whether there had been a non-delivery of the paint required for his work or merely a delay in delivery. DW2 is not alleging that he has a store at every worksite to store the surplus paint. How could DW2 decide how much of which type(s) of surplus paint he should deliver from his store(s) to the worksite in question? This is all the more so as it is also DW2’s evidence that he might not have the correct colour and needed to use more surplus paint of other colours to calibrate the required colour! 83.Fourthly, DW3 says he became aware in early 2003 of the problem concerning delivery under sales contract SC-02-1958(C). According to him, the accounting staff of the Defendant would systematically draw cheques for payment upon receiving invoices from the Defendant’s suppliers (including the Plaintiff). As he was responsible for the Plaintiff’s contracts, it was up to him to decide whether to release payment to the Plaintiff. In order to decide whether to release payment, he would contact the “site contact person” named on the requisition forms to check if the paint had been delivered. In those circumstances, he should be abreast with the problem of non-delivery of Disputed Paint all along. I find it strange that the Defendant would continue to order paint from the Plaintiff, especially when there is no documentary evidence of any complaint made by the Defendant to the Plaintiff. (b) Defendant’s tables of surplus paint 84.The circumstances of the preparation of the tables produced by the Defendant are highly suspicious. 85.First, DW2 has deposed to in his affirmation filed herein on 29th March 2004 the fact that the tables were “prepared by [him] based on [his] stock-taking of the quantity of each type of paint” [B138]. However, DW2 has tried to distance himself from these tables at trial when he says that he has only supplied information concerning the type and the quantity of surplus paint at each store to DW3 and it was DW3 who compiled those tables. 86.DW2 has repeatedly confirmed under cross-examination that he has only supplied information concerning the type and the quantity of surplus paint at each store to DW3. Bearing in mind that DW2 had not previously informed the Defendant about the existence of surplus paint, it would not be possible for DW3 to determine from the information supplied by DW2 from which contract the surplus paint originated as per the tables. Defence counsel must have realized this discrepancy when he repeatedly asked DW2 during re-examination and eventually elicited from DW2 that DW2 had also supplied information concerning the timing of his returning the surplus paint to his store (i.e. “回倉時間” in DW2’s words) to DW3. DW2 has been thoroughly cross-examined by Plaintiff’s counsel and he consistently confirmed that he had only supplied information concerning the type and quantity of surplus paint to DW3. DW2 even demonstrated with reference to the table regarding Compo Urethane at [D3] that he had only supplied the quantities stated therein to DW3. This change of heart on the part of DW2 at the eleventh hour has cast doubt on his testimony. 87.Secondly, the first version of the table concerning “Fussolon – Primer, Mid Coat & 30%” [B147] produced in DW2’s affirmation contained a glaring mistake. It is common ground that the paint under sales contract SC-03-0917(C) has not been delivered but the table suggested that 5 cans of “Fussolon Mid-Coat” and 5 cans of “Fussolon 30%” had been delivered under that sales contract. This mistake was promptly pointed out by the Plaintiff in PW1’s affirmation in reply [B154-155]. In reply, DW2 simply produced a revised version of the table in his witness statement [D10] without offering any explanation. In court, DW3 suggests that the initial mistake was due to clerical error in typing out the table. This is simply incredible having regard to the nature of the mistake! (c) Surplus paint able to complete the work covered by Disputed Paints? 88.According to the Defendant, the surplus paint was sufficient to complete the works covered by Disputed Paint in terms of: (i) quantity; (ii) type of paint; and (iii) colour. Could this be possible? (c1) Quantity 89.In terms of quantity, DW2 has admitted that the quantity for the following types of paint in the surplus paint is less than the quantity of the same type paint in Disputed Paint. In other words, there was prima facie insufficient paint for the following types of paint from the surplus paint to cover the works covered by Disputed Paint.
90.The Defendant attempts to answer this by alleging that:
By reason of the above, says the Defendant, DW2 was able to complete the painting work by means of the surplus paint although the volume of surplus paint may be less than Disputed Paint for certain types of paint. 91.If it were such a commonly known fact that the Plaintiff’s paint can cover 30% more in terms of area, it would not have been necessary for DW2 to over-estimate the order in the first place. This is all the more so as the reason offered by DW2 for over-estimating the paint required was merely to enable him to touch up or repaint surfaces subsequently damaged by other contractors or by dirty palm-prints. (c2) No “Gloss” Compo Urethane? 92.It is common ground that there are 2 types of Compo Urethane paint – “Matt” and “Gloss”. “Matt” paint dries with a dull finish whereas “Gloss” paint dries with shiny finish. 93.The Compo Urethane allegedly left over in surplus should all be “Matt” paint (see [D3] and [D11-17]). However, the Defendant had apparently ordered a total of 40 cans of “Gloss” Compo Urethane under SC-03-0340(C)-R [C34] in Disputed Paint. How was it possible for the Defendant to complete the work requiring the “Gloss” paint ordered under SC-03-0340(C)-R when it only had surplus “Matt” paint in stock? 94.DW3 attempts to answer the above query by alleging that painting workers can generally produce a shiny finish with “Matt” paint. I find this unconvincing. First, DW3 is admittedly not a painting worker himself. Secondly, if painting workers can generally paint shiny finish out of “Matt” paint, there would not be any need to order “Gloss” paint in the first place! (c3) No “ES” Mirac Sealer? 95.It is common ground that there are 2 types of Mirac Sealer – “W” and “ES”. “W” refers to water-soluble paint whilst “ES” refers to non-water soluble paint. 96.The Mirac Sealer allegedly left over in surplus should all be “W” paint (see [D6] and [D11-17]). However, the Defendant had apparently ordered a total of 35 cans of “ES” Mirac Sealer under SC-03-0791(C) [C39] and SC-03-0924(C) [C40] in Disputed Paint. How was it possible for the Defendant to complete the work requiring the “ES” paint ordered under SC-03-0791(C) and SC-03-0924(C) when it only had “W” paint in surplus? 97.DW3 attempts to answer the above by alleging that painting workers would generally not need to use “ES” paint after removing the old surface (“鏟底”). I also find this unconvincing. First, DW3 is admittedly not a painting worker himself. Secondly, why did the Defendant order “ES” paint in the first place if that would not be required? (c4) Colour 98.It is common ground that each type of paint carries a unique colour reference (e.g. “Pantone 428U”, “BS20C40”, “A72-70L” and “SR-163”). DW2 has admitted that the Plaintiff has never supplied the following colours to the Defendant:
The Defendant has apparently ordered these colours under SC-03-0169(C)-R [C33], SC-03-0791(C) [C39], SC-03-0340(C)-R [C34] and SC-03-0734(S) [C37] in the Disputed Paint. How was it possible for the Defendant to complete the work requiring these colours? 99.DW2 attempts to deal with this in his evidence. DW2 describes himself as a painting master who has been in the business for more than 10 years. In his witness statement [B237-238], he alleged that every painting master should know the basic technique of colour calibration. He said that there were “colour concentrates” for each product of the Plaintiff and a painting master could easily calibrate whatever colour required by means of these “colour concentrates”. He also confirmed that he had red, yellow, black, green and deep blue “colour concentrates” of the Plaintiff’s products and he could make whatever colour required for his work out of them. 100.DW2’s testimony in court is not consistent with his witness statement. To start with, he now alleges that he used the paint previously supplied by the Plaintiff (as opposed to “colour concentrates”) to calibrate the colours required to complete the works covered by Disputed Paint. Secondly, he now alleges that he could only calibrate “basic colours” from the paint previously provided by the Plaintiff (as opposed to any colour). There is nothing to confirm that the missing colours (i.e. Pantone 428U, BS20C40, A72-70L and SR-163) are “basic colours”. 101.Furthermore, DW2 admits that one generally needs more quantity of original material to calibrate a required quantity of the required colour. Bearing in mind that there was already a shortage of New LT-Clean and Fussolon Mid-Coat paint in the surplus paint to start with, it is unlikely that DW2 would have sufficient material to calibrate the required colour for these 2 types of paint. Conclusion 102.All in all and for the above reasons, I accept the testimony of all Plaintiff’s witnesses and find that the Plaintiff has delivered Disputed Paint to the Defendant in accordance with the agreements between them through Luen Fat. 103.There should be judgment in favour of the Plaintiff and against the Defendant in the sum of $518,066.17. The Defendant’s counterclaim is dismissed. 104.There is no reason why costs should not follow the event. I make a costs order nisi that the costs of the action (including the costs of the Defendant’s 2 unsuccessful applications during the trial for leave to appeal) and the costs of defending the counterclaim be to the Plaintiff, to be taxed if not agreed.
Mr. Michael Chai instructed by Messrs. Peter Lau & Co. for the Plaintiff. Mr. Stephen Fong instructed by Messrs. Anthony Kwan & Co. for the Defendant. |
Cases cited in this judgment
Further hearings and rulings under DCCJ 4734/2003