China Brilliant Ltd v. Kable Engineering Ltd and Others

HCA 2373/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2373 OF 2008

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BETWEEN

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Before: Hon Chung J in Court

Dates of Hearing: 14 to 17 and 22 February 2011

Date of Handing Down Judgment: 8 March 2011

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J U D G M E N T

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INTRODUCTION

1.The plaintiff commenced this action in November 2007 claiming various items of wasted costs.  The claim arose in the manner summarized below.

RELEVANT BACKGROUND

2.The plaintiff purchased two residential houses in Siu Lam, Tuen Mun in May 2006 (“the Houses”).  The Houses are right next to each other.  After the purchase, the plaintiff wanted to renovate them and in November 2006 engaged the 3^rd Defendant (“Elevation Partners”) to design the interior of the Houses.

3.After they discussed the matter, it was agreed that certain structural changes need to be made to the Houses.  In gist, the major changes were (i) the covering up of the skylight area with concrete slabs, and (ii) the removal of a portion of the structural wall separating the Houses.

4.Because of the need to make the said changes, Elevation Partners opined that someone with professional background was required.  Elevation Partners later introduced a director of the 2^nd defendant (“VTECS”) to the plaintiff.  A plan showing the structural changes to be made to the Houses was prepared by VTECS by the end of April 2007.

5.VTECS introduced the plaintiff to the 1^st defendant (“Kable”), a building contractor.  In May 2007, Kable was engaged to carry out the work in accordance with the said plan.

6.Work commenced at the Houses in June 2007. Kable wrote to the plaintiff in September 2007 to inform that the work had been completed.

THE PLAINTIFF’S CASE

7.In short, the plaintiff’s case is that all defendants breached their respective contracts.

8.In relation to Kable, the breach was:-

(a)   it carried out work when the plan/design was defective or unsafe;

(b)   it failed to warn the plaintiff the plan/design was defective or unsafe;

(c)   defective quality of work.

9.In relation to VTECS, it failed to:-

(1)   advise the plaintiff the plan/design involved work for which prior approval has to be obtained from the Building Authority (“BD”);

(2)   provide a plan/design which was structurally safe;

(3)   submit the plan/design to BD for approval to be given for work to be carried out;

(4)   supervise the work of Kable.

10.In relation to Elevation Partners, it was a failure to report to the plaintiff that there were discrepancies between the plan/design of VTECS and the work carried out by Kable.

11.Wasted costs were incurred as a result of the plaintiff’s compliance with the Building Department’s order for the structural changes to be removed and for the Houses to be reinstated.  The wasted costs items are:-

(a)   payment made to Kable totalling about $460,000 (witness statement of Mr Lam (“Lam”)) or $280,000 (the plaintiff’s voluntary particulars);

(b)   payment made to VTECS of about $35,000 (witness statement of Lam) or $30,000 (the plaintiff’s voluntary particulars);

(c)   payment made to Elevation Partners of about $320,000 (witness statement of Lam) or $319,200 (the plaintiff’s voluntary particulars);

(d)   reinstatement costs of about $300,000 (witness statement of Lam) or $235,500 (the plaintiff’s voluntary particulars);

(e)   loss of use of the Houses of about $100,000 per month for a period of 16 months (July 2007 to October 2008 both inclusive); that is, a total loss of $1.6 million (witness statement of Lam) or $92,000 per month for a period of 12 months (September 2007 to October 2008); that is, a total loss of $1,104,000 (the plaintiff’s voluntary particulars) (the plaintiff placed the amount at $1.4 million in its written opening submission).

THE DEFENCE CASE

12.The defendants deny they have breached their contracts and counterclaim for payments due thereunder from the plaintiff.

13.Kable asserts that it has performed the work in accordance with the plan/design provided by VTECS.  Further, any defects in the quality of its work were minor and could have been rectified if it had been given the opportunity to do so.  Finally, it was not part of Kable’s contract to warn or advise the plaintiff regarding VTECS’s plan/design, or obtaining BD approval.

14.VTECS claims its plan/design is structurally safe.  It has already advised the plaintiff the need to obtain the prior approval of BD before work commenced but the plaintiff decided to handle that matter itself.  It did not supervise the work of Kable because the plaintiff never obtained BD approval as the plaintiff indicated earlier.

15.Elevation Partners contends it was only an interior designer.  It was not part of its contract with the plaintiff to be involved in the design or work relating to structural changes.  Thus, it was under no contractual obligation to report matters concerning that aspect.

16.All 3 defendants counterclaim for sums payable under their respective contracts:-

(1)   Kable counterclaims for $175,448 (reduced to $172,192 at trial) being the outstanding balance of the contract price;

(2)   VTECS counterclaims for $25,000 being its outstanding service fees;

(3)   Elevation Partners counterclaims for $136,800 being 30% of the agreed charges under the contract.

WITNESSES’ CREDIBILITY/RELIABILITY

17.Four factual witnesses have been called by the parties: Lam for the plaintiff, Mr Leung (“Leung”) for Kable, Mr Tsui (“Tsui”) for VTECS and Mr Wong (“Wong”) for Elevation Partners.

(a)  Lam

18.I do not accept Lam to be an honest or reliable witness.

19.The main points of Lam’s testimony are as follows.  He knew practically nothing about structural changes.  When he met Tsui during the initial stage, Tsui said the work involved might not need approval from BD.  In any event, Tsui said he (or VTECS) would ensure the work would be carried out properly and lawfully.

20.A major item of the plaintiff’s complaints is the erection of 3 vertical steel posts.  The earliest time when Lam knew about the addition of the steel posts to the Houses was when he met Leung, Tsui and Wong at the Houses on 14 August 2007.  He was shocked and practically jumped up when he saw the posts, which looked at 3 joss sticks, were already erected at the side of the Houses facing the sea.

21.Although he never approved the addition of the 3 posts and found them unsightly, he tried to settle the matter amicably but the attempt was unsuccessful.  Consequently, he instructed lawyers to commence legal action against the defendants.

22.BD discovered the work was carried out without its prior approval and asked that the changes already made be removed and the Houses be restored to their original state.  The reinstatement work was carried out and in October 2008 BD certified the relevant statutes were complied with after the reinstatement.

23.Lam’s assertion that VTECS was responsible for submitting its plan/design to BD for approval is inconsistent with the testimony of Leung, Tsui and Wong.  As stated below, I find Leung and Wong to be truthful and reliable witnesses.  According to Wong, Lam decided not to obtain BD’s prior approval because the approval process would take a long time to complete.  In so deciding, Lam was already made aware of the risk that BD could order the structural change to be removed.

24.Lam’s claim that he only knew of the addition of 3 steel posts in mid-August 2007 and he never agreed to the same is contradicted by the following:-

(a)   by 2007, Lam has been a seasoned (and apparently successful) businessman for about 30 years.  Further, by late-July or early August 2007, Lam has engaged a Mr Lee (“Lee”) to help him examine the charges of Kable and/or the renovation work.  Lee appears to be well versed in this kind of matter because he described his company as the project manager (for the reinstatement work) in an invoice dated 30 September 2007;

(b)   revised quotations were sent to the plaintiff on 25 July and 6 August 2007.  These quotations included the costs for erecting the 3 steel posts.  Lam’s explanation that the item was overlooked by him was a lame excuse;

(c)   Kable sent to the plaintiff 2 letters respectively dated 16 August and 27 August 2007 to record the parties’ meetings on 15 August and 25 August 2007.  The 3 steel posts were mentioned therein.  They were undisputed by the plaintiff in correspondence.  Further, the plaintiff also did not dispute it paid $50,000 to Kable at the end of the meeting on 25 August 2007;

(d)   the plaintiff instructed solicitors to write to Kable (dated 11 September, 14 September and 12 October 2007) when Kable pressed for payment.  The letters only stated that the plaintiff was waiting for VTECS’s certificate of completion; the addition of the 3 steel posts was not mentioned in any of the letters;

(e)   Lee was present effectively as the plaintiff’s representative at the site meeting held on 17 July 2007 (see para. 40(6) below for details).

In relation to the above, it should be noted the plaintiff was in effect Lam’s corporate vehicle and very much his alter ego.

(b)  Leung

25.By and large, I find Leung to be an honest witness.

26.The plaintiff levies various criticisms against his testimony.  First, it is said Leung’s qualification and background show that he was more than a mere construction worker (and so he ought to be more knowledgeable and proactive than he testified).  While that may be correct, the fact remains the terms of the contract between the plaintiff and Kable expressly stated that Kable was to work according to the drawings provided.

27.Secondly, the plaintiff emphasizes the discrepancy between the revised plan of VTECS and the 3 steel posts actually erected by Kable as evidence which casts doubt on Leung’s testimony that Kable faithfully followed VTECS’s design.  I believe Leung’s testimony that the actual location of the 3 steel posts accorded with the verbal instruction given by VTECS.  Further, I accept Kable’s submission that such location was necessary because all concerned agreed that the architectural fins had to be retained.  The retention of the architectural fins made it impossible (or at least impracticable) for the 3 posts to be erected at the location indicated in VTECS’s revised plan.  In this connection, I note that it is also the plaintiff’s own case VTECS revised plan was not a contemporaneous document, but was produced for the purpose of this action.

28.Leung testified in effect:-

(1)   up to about mid-August 2007, the parties’ relationship was still amicable;

(2)   at the meeting held on 25 August 2007, the parties were able to agree to the prices for additional work (see Kable’s letters dated 27 August 2007 to the plaintiff).  A letter sent by the plaintiff’s solicitors on 11 September 2007 implied that an agreement has been reached (the agreement was later denied in the letter dated 14 September 2007);

(3)   but the parties’ relationship deteriorated at the said meeting because Lam said that he was not satisfied with VTECS’s work and asked VTECS to bear part of the additional costs ($20,000) but VTECS refused to do so;

(4)   although there were defects in the quality of Kable’s work, such defects were minor and commonly found in such work.  It was a widely accepted practice in the construction work for an opportunity to be given to the contractor to rectify such defects.  The defects in question required about one day’s time to rectify;

(5)   the structural work was performed in accordance with the verbal instruction of VTECS;

(6)   the plaintiff knew of the need to obtain BD’s prior approval from the beginning but ignored it and decided to instruct Kable to proceed with the work nonetheless.

(c)  Tsui

29.I do not find Tsui to be an entirely candid witness. There are signs he was trying to minimize his (and VTECS’s) role in relation to the structural changes.

30.A summary of his case (and testimony) is this: the letter dated 2 April 2007 was conditional upon the plaintiff having obtained BD approval for commencing the work for structural changes (the relevant term thereof has been quoted at para. 66 below).  The reference to “supervisions” in that letter has to be read in that light; namely, VTECS would provide supervision work after BD approval has been given.  Since the plaintiff did not obtain BD approval, VTECS’s role never went beyond that of a consultant structural engineer whose scope of work was limited to providing an adequate design.

31.I regard the above to be an attempt to down play VTECS’s true role in the work in view that:-

(a)   VTECS’s letter dated 2 April 2007 never stated that its work (including supervision work) was conditional;

(b)   all the factual witnesses (Lam, Leung and Wong) testified that, since June 2007, Tsui was present at site meetings and attended the site to advise on how to progress with the work.  Structural work already commenced in June 2007;

(c)   a revised plan was compiled by VTECS (this is disputed by Lam and Leung).  According to VTECS, this was compiled in July 2007.

32.I also have reservations about VTECS’s case that the actual location of the 3 steel posts erected by Kable has departed from VTECS’s revised design.  I rather find that verbal instruction has been given by VTECS for those posts to be erected outside the Houses’ architectural fins; at the very least, the posts were so erected with VTECS’s agreement.

33.However, I accept his testimony to the effect in about March 2007 he already discussed the need for BD approval with Lam and Lam claimed in effect the plaintiff would take care of that matter itself.  In so concluding, I have taken into account the testimony of Leung and Wong to similar (though not exactly the same) effect.

(d)  Wong

34.I accept Wong to be an honest and reliable witness.

35.The plaintiff’s main complaint in this action concerns the structural changes made to the Houses. Wong was merely an interior designer and was not responsible for the design or the actual work.  Likewise, the fees charged by his company, Elevation Partners, have nothing to do with that either.  The fact someone like VTECS has to be engaged for the project shows that Wong (or Elevation Partners) has nothing to do with the structural changes in the Houses.  There is no financial incentive for Wong to be untruthful or inaccurate when testifying.

36.In its closing submission, the plaintiff argued:-

“P would venture to suggest that [Elevation Partners] is an [interested] party … and there was [every] reason for [Wong] to protect his friend Tsui brought into all these by him” (para. 37 thereof).

37.The plaintiff has not clarified what it means by “an interested party”.  There is no evidence (or basis) suggesting somehow Elevation Partners’ interest (especially financial interest) was related to that of VTECS.

38.The argument that Tsui was “brought into” the dispute between the plaintiff and VTECS by Wong is again vague and incomprehensible.  Apart from introducing Tsui to Lam (because Wong’s interior design might require structural changes to be made to the Houses), Wong has no other role to play in relation to VTECS’s design.  Similarly, Wong never participated in the discussion between Tsui and Lam regarding obtaining BD’s approval for the structural changes.  Wong was not Kable’s main contractor either.  In fact, the plaintiff entered into separate and independent contracts with Kable and VTECS; Elevation Partners’ contract with the plaintiff expressly excluded (among other things) structural work.

39.For the above reasons, I disagree with the plaintiff’s said argument.

40.Wong testified that:-

(1)   he told Lam in mid-November 2006 a structural engineer had to be engaged to perform structural work (or make changes) because that was not part of the contract with Elevation Partners;

(2)   VTECS had advised Lam that the structural design and work would require prior approval from BD and a structural building contractor had to be engaged to carry out such work;

(3)   VTECS also advised Lam that BD would require some time to give its approval and this might cause a delay to the renovation work.  If no approval was given by BD, BD could order or direct the change to be removed later;

(4)   Lam decided not to obtain BD approval and instructed VTECS to proceed with the work;

(5)   Lee was engaged by Lam to supervise, and to advise on, the renovation work;

(6)   at a site meeting held on 17 July 2007 (where Lam, Lee, Leung, Tsui and Wong were present), both Leung and Tsui tried to ask Lam to stay because they wanted to explain the need to erect 3 steel posts to him.  Lam insisted on leaving because of his other engagement and asked Leung and Tsui to explain the matter to Lee and Lee would report to Lam later.  After Leung and Tsui explained to Lee, Lee said he would report to the plaintiff;

(7)   at a site meeting held on 25 August 2007 (where Lam, Lee, Leung, Tsui and Wong attended), Lam agreed to the erection of the 3 steel posts and asked VTECS to bear $20,000 and he would bear $30,000 of the costs.  Lam thought that VTECS committed a mistake in its structural design;

(8)   Kable later demanded payment from the plaintiff and threatened to commence an action to do so;

(9)   VTECS told Wong it would report the unauthorized work to BD if VTECS received any letter from the plaintiff’s lawyers.

FINDINGS : WERE THE DEFENDANTS IN BREACH OF CONTRACT?

41.Several pleaded matters are no longer pursued by the plaintiff:-

(a)   an implied contractual duty to coordinate on the part of each defendant;

(b)   Kable was not a building contractor registered with BD;

(c)   Kable failed to return a rolling gate originally installed at the Houses.

42.Further, the plaintiff pleads that Elevation Partners has a contractual duty to:-

(1)   liaise with Kable and VTECS with regard to a viable design;

(2)   report to the plaintiff with regard discrepancies between VTECS’s design and Kable’s actual work.

Of the two pleaded duties, at trial, the plaintiff accepted that only the duty to report discrepancies (sub-para. (2) above) need to be considered.

(a)  Kable

43.Because I have rejected Lam’s testimony, and parts of Tsui’s testimony, and accepted Leung’s testimony, I find that Kable has carried out its work in accordance with VTECS’s design.

44.In relation to the defects in the quality of its work, I accept Kable’s explanation that they were minor and easy to rectify if it had been given a reasonable opportunity to do so.  It is not alleged that such an opportunity has been given to Kable, or that Kable failed to rectify even when it has been given such an opportunity.  I also prefer the opinions of the defence experts to those of the plaintiff’s experts (see also para. 47 below) in relation to the structural safety of Kable’s work.

45.For the above reasons, I do not find Kable to have been in repudiatory breach of its contract with the plaintiff.

(b)  VTECS

46.As stated above, I reject Lam’s testimony, and the part of Tsui’s testimony which claimed that VTECS’s role was purely consultative and actual work was conditional upon the plaintiff having obtained BD approval.

47.In relation to VTECS’s design, I prefer the opinions of VTECS’s experts to those of the plaintiff’s experts because:-

(a)   the opinions of VTECS’s structural engineering expert are supported by (among other things) detailed calculations while those of the plaintiff’s experts are not;

(b)   the plaintiff’s experts did not show the independence required of an expert.  They gave opinions over matters which fall outside their area of expertise (such as whether there is a trade practice for the scope of work of a registered structural engineer); such opinions were also shown to be inaccurate;

48.The criticisms levied against VTECS’s designs can be classified as those pertaining to:-

(1)   the safety of the structures themselves;

(2)   other matters such as instructions concerning demolition work, other detailed work instructions and the like.

It is accepted that the plaintiff’s case is premised on the former and not the latter.

49.By reason of the above, I find that VTECS’s design was structurally safe and viable.  There has not been any breach of contract over that aspect.

50.I already found that Kable has not committed any repudiatory breach of its contract.  It follows that any allegation that VTECS has breached its contractual duty to supervise Kable’s work must have to be based on the defective work of Kable.

51.As regards this aspect, two matters are relevant:-

(a)   because Kable has not been given a reasonable opportunity to rectify the defects, it is unknown if VTECS’s failure to detect (or at least to report) those defects was a repudiatory breach;

(b)   as will be discussed below, the loss claimed by the plaintiff was not caused by VTECS’s breach of its contractual duty to supervise.

(c)  Elevation Partners

52.As summarized above, the plaintiff alleges Elevation Partners has a contractual duty to report to the plaintiff that there were discrepancies between the plan/design of VTECS and the work carried out by Kable.

53.The argument put forth in the plaintiff’s written closing submission in support of the above allegation is not readily comprehensible.  It is said Elevation Partners was “pivotal” among the parties, and Elevation Partners was the party which forwarded the quotations of the other defendants to the plaintiff.  While the last‑mentioned matter may be factually correct, the plaintiff has not explained how a contractual duty to report should arise out of that.

54.The plaintiff also mentions that it was Elevation Partners’ interior decoration design which created the need for structural change to be made to the Houses.  But how that can be said to bring about an alleged duty to report is again not explained or readily understandable.

55.The evidence shows separate contracts have been entered into by the plaintiff with each defendant.  There is no valid basis to support any suggestion that Elevation Partners was in effect a project manager. In fact, the general tenure of the evidence is that the plaintiff or his representatives (such as Lee) was present at the meetings and/or was briefed directly by Kable and VTECS.  Para. 38 above is repeated.  For these reasons, there is no substance in the contention that Elevation Partners should bear a duty to report discrepancies.

FINDINGS : IS THE PLAINTIFF LIABLE?

56.The plaintiff raised the issue of illegality of contract in its written closing submission.  The issue was however not pleaded, nor was it mentioned in the plaintiff’s written opening submission.

57.The defence objects to the issue being raised at such late stage.

58.Chitty on Contracts (2008) 30^th Ed. says:-

“Where a contract is ex facie illegal, the court will not enforce it, whether the illegality is pleaded or not; secondly, where the contract is not ex facie illegal, evidence of extraneous circumstances tending to show that it has an illegal object should not be admitted unless the circumstances relied on are pleaded; thirdly, where unpleaded facts, which, taken by themselves, show an illegal object, have been put in evidence (because, perhaps, no objection was raised or because they were adduced for some other purpose), the court should not act on them unless it is satisfied that the whole of the relevant circumstances are before it; but fourthly, where the court is satisfied that all the relevant facts are before it and it can clearly see from them that the contract had an illegal object, it may not enforce the contract, whether the facts were pleaded or not” (emphasis supplied) (Vol. 1, para. 16-205).

59.Because the contracts are not ex facie illegal (that is, this is not the first case mentioned in Chitty), and, even at the time of the closing submissions, the plaintiff has decided not to plead illegality (that is, this is not the second case mentioned in Chitty), or the facts tending to show the same (that is, this is not the second case mentioned in Chitty), the plaintiff can only rely on illegality where the court is satisfied that all the relevant facts are before it (that is, the third case mentioned in Chitty).

60.Contracts to effect structural changes are generally not illegal ab initio, or illegal per se.  Thus, normally such contracts are illegal in the manner in which they are performed (such as effecting structural changes without obtaining prior BD approval).  It is unknown if all the circumstance are already before the court.  The plaintiff has not so argued in its written closing submission.  The defence has not been properly alerted to it and did not specifically deal with it by way of pleadings and/or evidence.

61.For these reasons, I do not consider it appropriate to permit the plaintiff to rely on circumstances tending to show illegality.

(a)  Kable

62.The counterclaim pleads a total sum of $175,448 ($70,000 being the original price and $105,448 being the price for additional work).  Kable accepts in its written closing submission that the sum properly due should be $172,192 (with reasons given).

63.In its written closing submission, the plaintiff argues that, of the said $175,448, a total sum of $123,256 ($70,000 being the original price and $53,256 being the price of the 3 steel posts) should be disallowed.

64.I agree with Kable that the plaintiff has not put forth in its written submission any reason to justify the said argument. In view of the above findings of fact, there is no basis in support of the same.

65.Accordingly, I accept Kable’s proposed sum.

(b)  VTECS

66.The relevant terms of the contract were:-

“We propose a lump sum fee of $60,000 for the structural design required arising from the changes of the floor layout including the front yard. Our fees include supervisions on site to check that works are carried out according to our designs”.

67.The above document was dated 2 April 2007.  In an invoice dated 23 October 2007, VTECS divided the said sum into two: $55,000 as structural design fee and $5,000 as supervision fee.  After taking into account a payment of $30,000, the outstanding sum in the invoice was $25,000, which means VTECS is giving up the claim for supervision fee.  This is the sum counterclaimed at trial.

68.The plaintiff contends that the contract was an “entire contract” requiring complete performance: Chitty, Vol. 1, para. 21-027. A party who only performed part of the entire obligation can normally recover nothing: Chitty, Vol. 1, para. 21-030, text to n. 171.  The court has no power to apportion the consideration for such a contract: Chitty, Vol. 1, para. 21-030, text to n. 172.

69.Whether a contract is an “entire contract” will depend on its construction in the light of all the circumstances at the time of the contract: Chitty, Vol. 1, para. 21-037, text to n. 216.  In the present context, the relevant circumstances would be those in April 2007.  The terms of the invoice dated 23 October 2007 are irrelevant for that purpose.

70.In view of the terms of the April 2007 document, I consider the parties to have entered into an “entire contract”.

71.It is accepted by VTECS no supervision work has been undertaken.  VTECS argues that the plaintiff has prevented it from carrying out such work by failing to obtain prior BD approval (see also Chitty, Vol. 1, para. 21-036).  But such argument has to rest on a finding that the contract was conditional upon prior BD approval having been obtained.  No such condition can be found as a matter of construction.  Tsui’s testimony to such effect has been rejected above.

72.By reason of the above matters, I find that VTECS has not been able to establish its counterclaim.

(c)  Elevation Partners

73.No reasoned argument has been advanced by the plaintiff regarding the amount counterclaimed by Elevation Partners ($136,800, being 30% of the total contract price for completing the third stage of the contract).

74.Accordingly, the amount counterclaimed should be awarded to Elevation Partners.

CONCLUSION

75.I already concluded that the defendants were not in repudiatory breach of their respective contracts with the plaintiff.

76.Further, I agree with Kable that:-

(1)   there must be a causal connection between the defendants’ breach of contract and the plaintiff’s loss: Chitty, Vol. 1, para. 26-032, text to n. 185.  The plaintiff may recover damages for a loss only where the breach of contract was the “effective” or “dominant” cause of that loss: Chitty, Vol. 1, para. 26-032, text to n. 186;

(2)   the loss claimed herein arose from the need to reinstate the Houses because BD ordered the plaintiff to do so. Because of the finding that it was the plaintiff’s obligation to obtain prior BD approval (which it has failed to obtain), such loss was not caused by any breach of contract on the defendants’ (especially Kable’s) part.

Thus, even if any of the defendants should somehow be in repudiatory breach of other aspects of their contracts, the plaintiff has not established that it has thereby suffered loss and damage.

77.Further, in relation to the alleged loss of use of the Houses (para. 11(e) above), the plaintiff’s evidence was in gist that the Houses were for the use of its own director (and his family) after the renovation.  There is thus no valid basis to claim the rental loss of the Houses.

78.The plaintiff’s claim against the defendants is dismissed.

79.Judgment is entered against the plaintiff:-

(a)   in favour of Kable in the sum of $172,192;

(b)   in favour of Elevation Partners in the sum of $136,800.

The counterclaim of VTECS is dismissed.

OTHER MATTERS

80.The plaintiff also seeks the relief of contribution or indemnity against the defendants.  By reason of the findings made above, I do not consider there is any valid basis to grant such relief.

COSTS ORDER NISI

81.There is no apparent reason to depart from the usual rule that costs should follow the event.  There will accordingly be a costs order nisi pursuant to Ord 42 r 5B(6) as follows.

82.The plaintiff is to pay to:-

(1)   Kable;

(2)   Elevation Partners,

the costs of the action (including any reserved costs) to be taxed if not agreed.

83.There be no order as to costs between the plaintiff and VTECS.

Mr B.K. Ho, instructed by Messrs Li, Wong, Lam & W.I. Cheung, for the Plaintiff

Mr Colin Wong, instructed by Messrs Leo Cheng & Co, for the 1^st Defendant

Ms Elizabeth Cheung, instructed by Messrs Szeto Virginia & Co, for the 2^nd Defendant

Mr Marin Wong, instructed by Messrs Kenneth C.C. Man & Co, for the 3^rd Defendant