Tung Kee Garden Horticulture Ltd v. Sunlight Construction Co Ltd

DCCJ 1886/2004

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 1886 OF 2004

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BETWEEN

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Coram:  H.H. Judge Chow

Dates of Hearing:  23^rd, 24^th March and 13^th April, 2006

Date of written submission:  9^th May, 2006

Date of handing down Judgment:  27^th June, 2006

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J U D G M E N T

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1.The Plaintiff is a company carrying on horticulture and garden business.  The Defendant is a company carrying on construction business.  At all material times the Defendant was the contractor under a Government Contract No. SSG312 (“the Government Contract”) to carry out construction works (“the Project”) at Hong Ling Road, Park Phase II at Kwun Tong, Kowloon (“the Construction Site”). By a contract in writing dated 23.3.1999 entered into between the Plaintiff and the Defendant (“the 1^st Contract”), the Plaintiff agreed to carry out various Soft Landscaping Works.  By a contract in writing dated 18.9.1999 (but executed on 2.10.1999) entered into between the Plaintiff and the Defendant (“the 2^nd Contract”), the Plaintiff agreed to carry out Rock Feature works at the Construction Site.

2.In respect of the 2 contracts completion was handed over to the Architectural Services Department on 29.3.2000.

3.The Plaintiff’s claim is for the amount of $170,456.76 particularized as follows:-

Contracts	Amount payable	Amount paid	Outstanding amount
1st Contract	$1,091,317.04	$966,317.04	$125,456.76
2nd Contract	$1,819,360.00	$1,774,360.00	($125,000.00)
			$45,000.00

4.The Defendant contends that the Plaintiff was in breach of the 2 contracts, and such breach caused the Defendant to be in breach of the Government Contract in that the Project was completed late on 31.3.2000 and not on or before 12.3.2000, the Completion Date extended by the Government under the Government Contract, thereby causing the Defendant to pay to the Government liquidated damages of $218,500.  The Defendant therefore counterclaims against the Plaintiff for this sum of $218,500.

5.At paragraph 8 of the Defence, the Defendant avers that “At all material times, the Plaintiff was aware of the Completion Date under the Government Contract.  In breach of the 1^st Contract, the Plaintiff completed the Soft Landscaping Works and the additional landscaping works on 29^th March 2000.  In breach of the 2^nd Contract, the Plaintiff completed the Rock Feature Works and the additional rock feature works on 29^th March 2000.”  Thus the defence was that the Plaintiff completed the works under the 2 contracts on 29.3.2000, beyond the Completion Date of 12.3.2000.  The Defendant does not dispute that the Plaintiff finished all the works under the 1^st and the 2^nd Contracts.  It only contends that the Plaintiff completed the works on 29.3.2000 and that constitutes a breach of the 2 contracts.  In this respect, the issue is: did the Plaintiff complete the works on 29.3.2000?  The burden is on the Defendant to prove that this is the case.  The Plaintiff denies that it has caused any delay in the completion of the project.

6.On 24.3.2000, the Defendant sent a letter, asking every sub-contractor to make the site ready for formal “handover” to the Government on 29.3.2000.  The letter reads:-

“The property owner, the Architectural Services Department and the Architect Office have arranged to inspect and collect the site next Wednesday (29/3/2000), all the contractors must complete all their works including: cleaning away all the tools and materials by next Tuesday (28/3/2000).

All the contractors are urged to cooperate fully and to increase their manpower and pay more efforts to finish the works in the remaining few days.  Hope that all the departments will smoothly collect the site on (28/3/2000).”

This letter, addressed to every sub-contractor, is not proof that the Plaintiff’s works were completed on 24.3.2000.

7.From time to time a site meeting was held in respect of the work progress under the Government Contract.  Site Meeting 14 was held on 10.3. 2000.  At paragraph 8.2 of the minutes of meeting it is recorded: “SL had carried out some other operations that had damaged the completed rockery works.  SL were requested to carry out replacement.”  This record shows that the Plaintiff completed the rockery works before 10.3.2000.  This corroborates the Plaintiff’s evidence that it has not any delay in the works done under the 1^st Contract and the 2^nd Contract.  The Defendant has the burden to prove that the Plaintiff completed the work on 29.3.2000.  It has simply failed to do so.  I find that the Plaintiff did finish the work some time before 10.3.2000, although the site was handed over to the Government on 29.3.2000.  Therefore the Plaintiff was not in breach of the 2 contracts in question.  The counterclaim is hence dismissed.

8.Since the Plaintiff finished all the works under the 2 contracts, it is entitled to the payment for such works.  Under paragraph 10 of the Defence, the Defendant alleges that only $108,331.56 and $45,000.00 remain outstanding under the 1^st Contract and the 2^nd Contract respectively.  Under paragraphs 8 and 13 of the Statement of Claim the Plaintiff pleads that the balance outstanding is $125,456.76.  This figure was not challenged in the cross-examination of PW1, Mr. Lo Man Wai, a director of the Plaintiff, and in the evidence-in-chief for the Defence.  PW1 testified that the Plaintiff invoiced the Defendant on 3.4.2003 for the amount of $170,456.76 as claimed in the Writ, being the retention monies held by the Defendant under the 1^st Contract and the 2^nd Contract.  He spoke to Mr. Choy Yue Fai, a director of the Defendant, about the outstanding amount on a number of occasions and the reason given by Mr. Choy for not settling the outstanding amount on those occasions was that the Defendant was in financial difficulties.  Mr Choy never mentioned any delay on the part of the Plaintiff.  But the defendant alleges delay on the part of the Plaintiff.  But this has not been proved at the trial.  The defence is not credible and I reject it.  The said allegation is simply an excuse for not making payment.  I accept the evidence of PW1.  I find that $170,000.00 is the outstanding amount not yet paid to the Plaintiff.

9.I order that the Defendant do pay to the Plaintiff, within 14 days from today, the sum of $170,000.00, with interests thereon, at judgment rate, from 3.4.2003, until satisfaction.

Costs

10.I make an order nisi, to be made absolute in 14 days’ time, that the Defendant to bear costs of this action, to be taxed, if not agreed, with Certificate for Counsel.

The Plaintiff        :       represented by Mr. Maurice Tracy, instructed by M/S Lam Pui King & Co., Solicitors.

The Defendant    :       represented by Miss Vivian Ho, instructed by M/S Hampton, Winter & Glynn, Solicitors.