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Dai Tim Keung v. Ho Wing Keung [2023] HKDC 577; DCCJ 5016/2018

14 Jul 2023

This case concerns a dispute arising out of a contract of renovation work between the plaintiff, an occupier of the Property and the defendant, a contractor in the business of renovation and decoration works.

Matthew represented a renovation contractor defendant in a 7-day trial. The plaintiff in this case is an occupier of a 3-story luxury village house in Tai Po. The plaintiff entered into an agreement with the defendant for carrying out various renovation works and interior design works in the house. The plaintiff in this action claims that the works completed by the defendant was defective and outstanding and the defendant had been in serious delay in completion, the plaintiff therefore claims that the defendant was in repudiatory breach of contract. The claims by the plaintiff covers costs of rectification works and loss of rental.

Among others, the grounds relied upon by the plaintiff in his repudiation claim are (i) the agreed date of completion was 30 April 2018 and there was no possibility that the defendant could have completed the works by that time; (ii) the defendant refused to provide (updated) quotations for works or additional works.

The defendant denies, in particular, it is the defendant’s case: (i) there had not been any agreement on completion date, such that the defendant was obliged to complete the works within a reasonable time; the defendant also avers that the progress of works was prolonged due to the plaintiff’s instruction to change of design on certain works; (ii) the defendant was unable to provide any (updated) quotations for works or additional works as the plaintiff had not yet made up his mind on the design of works, despite there had been various changes on the design of works as instructed by him.

Meanwhile, the defendant also counterclaims against the plaintiff for outstanding payment for work done (on contract-rate and on quantum merit basis).

The parties called expert evidence on both issues of liability and quantum and experts were tendered for cross-examination.

The defendant successfully defends the plaintiff’s claim after trial. In particular, the Court finds that:

(i) The agreed completion date (if any) was on the condition upon finalisation of the design drawings for the works/additional works;

(ii) The Court accepts the explanation from the defendant that it was unreasonable and, indeed, not practicable to seek any quotation on individual items when the design had not been finalised; it is self-evident that the plaintiff’s request was impractical, if not totally impossible and in any case a complete waste of time and effort for the defendant.

Thus, the Court held that the plaintiff could not reasonably base the grounds of repudiation on delay of progress of renovation work and / or failure to provide quotations on the part of the defendant.

As for the defendant’s counterclaim, the Court has the following remarks on assessment of reasonable sum for work done:

“50. As for the assessment of a reasonable sum of work done, there are no rigid guidelines “although it is clear that the contractor should be paid a fair commercial rate for work done in all the relevant circumstances.” (Chitty on Contracts 34 th Ed. Vol II paragraph 39-179, page 705)

51. As the basis of his counterclaim, the defendant submitted the First Schedule and the Second Schedule listing each item in the renovation work and listing the value of the item if 100% completed and the value of the work actually completed.

52. Mr. Wong (for the plaintiff) argued that this breakdown was unsubstantiated and arbitrary, and further that the defendant had not adduced any evidence on actual labour and material costs. In his closing submission, Mr. Wong made it out as if this was almost fatal to the claim for quantum meruit.

53. I am of the view that this cannot be the only way for the court to assess the valuation of work done in a fair and reasonable way. What constitutes a “fair” and “reasonable” valuation must be applied by the court on a case by case manner, and circumstances of the case such as complexity of the work, value of the contract, size and organisation of the parties involved, practicality, time and cost proportionality must be factors taken into consideration.

54. This was a simple renovation agreement of a sum of HK$600,000 (plus some other addition and variation work) involving a single property with the defendant who appeared to be a “one-man band” contractor. Under the circumstances, I cannot accept that failure to provide any evidence of labour, material costs or market rate must mean that the court should deem that the work done was only of “nominal” value, or that the court could not look at the actual evidence of work done, hear the evidence from all parties and their experts, including any disputes as to the basis and methodology of the experts’ opinion, and to apply a certain degree of logic and common sense in order to assess a fair and reasonable valuation.

The Counterclaim by the defendant is therefore allowed.

The full judgement is available here.

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