Sincere Air-conditioning Co Ltd v. A.S. Watson Group (HK) Ltd t/a Fortress

HCCT 53/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTRUCTION & ARBITRATION PROCEEDINGS

NO. 53 OF 2006

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BETWEEN

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Before: Hon Reyes J in Chambers

Date of Hearing: 3 July 2007

Date of Judgment: 3 July 2007

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J U D G M E N T

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1.In 2002 Fortress engaged Sincere to install air-conditioners (which Fortress supplied) at a Tin Shui Wai site. 

2.Sincere completed its installation work in 2004.  By these proceedings, it claims a balance of $2.8 million for such work which it says Fortress has failed to pay.  Fortress denies liability and instead alleges a set-off and counterclaim of some $1.5 million.  Sincere now seeks summary judgment on its claim.

3.I do not believe that this is an appropriate case for summary judgment.

4.A major component of Sincere’s claim is payment for additional or variation work.  Sincere says that the work was orally authorised by Fortress.  Sincere claims a net sum of $1.7 million in relation to this extra work.  In the alternative, Sincere seeks a quantum meruit. 

5.But Fortress denies that it authorised the alleged additional work.  Fortress relies on a contractual provision requiring variations to be in writing.  In any event, Fortress queries whether certain work was carried out at all.  Further, to the extent that additional work was carried out, Fortress disputes the amount charged by Sincere for the same.

6.I do not think that I can decide between the various contentions on this issue of additional work based on affidavit evidence alone, without the benefit of cross-examination.

7.A second important issue between the parties is whether Fortress is entitled to set-off contra-charges of about $1.5 million.

8.Sincere says that many alleged contra-charges involve work for which the Employer itself, Fortress or Fortress’ sub-contractors (other than Sincere) were responsible.  For instance, in relation to the Employer, Sincere contends that changes to some of Sincere’s work were prompted not by defects (as Fortress suggests) but by changes in design initiated by the Employer.  In other cases (such as rubbish removal), Sincere is only prepared to accept liability for a significantly smaller amount than what Fortress claims.

9.I do not think that this dispute on contra-charges can be settled by reference to affidavit evidence alone.

10.There is an issue whether Fortress has paid Sincere $80,600.  This is a minor matter, relative to the two disputes just mentioned.  But in my view this issue also cannot be resolved without live evidence at trial.

11.If Fortress is right about the disputes just mentioned, it could conceivably have a counterclaim which would more than offset Sincere’s claim.

12.Accordingly, the situation here is not a plain and obvious case for summary judgment without trial.  Sincere’s application is thus dismissed.  I shall now hear counsel on costs and consequential orders.

Mrs Dora Chan, instructed by Messrs PT Yeung & Tang, for the Plaintiff

Ms Gekko Lan, instructed by Messrs Henry HC Wong & Co., for the Defendant