Planters & Co Ltd v. Intrafor Hong Kong Ltd

HCA 902/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 902 OF 2005

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BETWEEN

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Before: Deputy High Court Judge Au-Yeung in Court

Date of Hearing: 13 April 2011

Date of Handing Down Judgment: 14 April 2011

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JUDGMENT

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1.This is an appeal against Master Ho’s order granting leave to the plaintiff to adduce expert evidence on geotechnical issues and use of drilling systems.

The Background

2.The plaintiff supplier sues the defendant (building contractor) for the contract price of goods sold and delivered.  The goods in question were 3 sets of overburden drilling system (comprising an industrial drill bit, a guide device and 3 wing bits), spare parts and 2 V-18 DTH hammers.  They were for the purpose of carrying out pre-bored H-pile work for the International Exhibition Centre project at the Chek Lap Kok Airport (“the stated purpose”).

3.According to the defendant, the goods were defective:

(i) All the 3 guide devices broke within one week when being used in the drilling of normal ground of not more than 30 metres deep, rendering the overburden drilling systems idle.  As a result, 5 replacement guide devices had to be employed with the same consequences.  The plaintiff’s Korean supplier admitted that the early failure of the guide devices was due to the heat-treat problem in the manufacturing process.

(ii) The DTH hammers failed to work from time to time and had to be repaired frequently, thereby causing delays in the construction process.

(iii) The out-casting of one of the DTH hammers was found to have cracked and could not work anymore.

(iv) Another DTH hammer also failed to work because the bushing and the bit retainer of the hammer and the Rotex pilot bit were found to have broken.  

4.The defendant says that the abnormal damage to the hammer bushings and the Rotex pilot bits were caused by the plaintiff’s sub-standard and/or inconsistent size or dimension of the chuck of the hammer and/or faulty design of the bushings of the plaintiff’s DTH hammers.  The goods were not suitable for the purpose for which it was sold and were not of merchantable quality.

5.The defendant claims that at the time of making of the sale and purchase agreement it has made known to the plaintiff that the goods were bought for the stated purpose. It also claims (in its witness statement) that the salesman of the plaintiff was well aware of the stated purpose and since he had studied the drill hole records supplied by the defendant, he was fully aware of the type of machinery required by the defendant.

6.The plaintiff denies being provided with the drill hole records and asserts that technical issues were not discussed at the meeting before the purchase.  It avers that the defendant had not placed any reliance on the plaintiff’s skill and judgment in choosing or purchasing the goods as the defendant has had extensive experience and expertise as a soil and piling specialist whereas the plaintiff was only a trader.

7.It is also the plaintiff’s case that the goods had not been used in a proper manner: the system that was designed for drilling through softer ground was used for drilling through boulders and exceptionally hard ground without switching over to button bits when boulders were encountered.  In addition, the V-18 hammer had been used with drill bits of different makers which did not match the dimension of the shank of V18 DTH hammer, thereby causing damage.   Breaking of the guide devices was not related to heat treatment in the manufacturing process.  Cracks of the guide devices were developed from wear and tear and were replaceable parts.

8.Upon the plaintiff’s application, Master Ho ordered that evidence of geotechnical/technical drilling system experts be adduced at the trial on the following issues:

(i) on the soil condition of the subject construction site (on the basis of the drill hole records disclosed in the present proceedings); and

(ii) on drill bits and drilling systems and the appropriate drilling procedure that  should have been adopted in view of the soil condition of the subject site.

Principles for Granting Leave to Adduce Expert Evidence

9.The principles for granting leave to adduce expert evidence are summarized in Wong Hoi Fung v. American International Assurance Co (Bermuda) Ltd & another [2002] 3 HKLRD 507.

“11. Where the proposed expert evidence is plainly inadmissible or irrelevant, the court ought to exercise its discretion to refuse the admission of such evidence. But where the court cannot form a clear view on the relevance of the proposed expert evidence or where it considers that the proposed evidence is clearly relevant, then it should grant leave for the evidence to be adduced at the trial: Ko Chi Keung v. Lee Ping Yan at p.833 and Lee Kin Yee & others v. Lee Wing Kim & another at p.15

12. In deciding whether certain proposed expert evidence should be received, the relevant test has been stated to be a two-stage one. Firstly, the evidence has to be admissible as ‘expert evidence’ for the purposes of s.58 of the Evidence Ordinance (Cap.8). Secondly, the evidence must be relevant, in the sense that it is helpful to the court in arriving at its decision on one or more of the issues to be resolved.

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14. Generally speaking, it is within the function of experts to explain words and terms of science or art appearing on documents which the court has to construe: Hong Kong Civil Procedure 2002, Vol.1, p.579 para.38/4/2.”

Analyses

10.The centre of dispute is whether the defects arose as a result of faulty design or misuse of the guide devices.

11.The defendant maintains that it had used the guide devices on “normal ground”.  The nature of the ground to which the guide devices were applied is in issue.  Mr Wong, counsel for the plaintiff, points out that what is “normal” (or “common ground”) and hard soil have specified meaning in the geotechnical field.  The drill hole records do not appear to be such as can be read without expert assistance.  For the proper adjudication of each party’s case, I agree with the plaintiff that it will be useful for an expert to assist in the interpretation of the defendant’s drill hole records and the ground condition.

12.The other issue is whether or not there had been improper use of the guide device as referred to in paragraph 7 above.  It is equally useful for expert evidence to be adduced as to the function of the drill bits, the drilling systems and how they should have been used.

13.Mr Lau, counsel for the defendant, submits that the real issues turn on: (a) whether the defendant did rely on the plaintiff and whether it was reasonable to do so in choosing the most appropriate drilling equipment such that section 16(3) of the Sale of Goods Ordinance was not applicable;  (b) and if so, whether the plaintiff was in breach of the implied condition of section 16(3) in that the goods supplied to the defendant did not reasonably fit the stated purpose.

14.I remain to be convinced by the defendant that they had pleaded reliance on the plaintiff over the choice of the goods.  If they have so pleased, at least the following matters have to be proved by the defendant:

(i) That the drill hole records, properly understood, described the subject ground as “normal ground”. 

(ii) That the guide devices supplied by the plaintiff were suitable for “normal ground”; and

(iii) That the ground in question was actually “normal ground” (and hence the drill hole records have correctly described the subject ground to the plaintiff).

15.Once these are known, the Court can go on to ascertain whether the guide devices in question were suitable for that type of ground and whether the goods had been properly used. I cannot see how it can be said that the expert evidence to be adduced under Master Ho’s order is plainly irrelevant.

Conclusion

16.The appeal is dismissed.

17.I make an order nisi that costs of the appeal should be to the plaintiff.  There shall be summary assessment of costs on the papers on 6 May 2011 at 9:30 am.  No attendance is required.  The plaintiff shall file and serve its statement of costs by 28 April 2011.  The defendant shall file and serve its grounds in opposition by 5 May 2011.

18.I thank counsel for their assistance.

Mr. Samuel Wong instructed by Messrs Sit, Fung, Kwong & Shum for the plaintiff  

Mr. Roland Lau instructed by Messrs Kong & Chang for the defendant