LEGEND INTERIORS LTD v. LONG TIME RESOURCE LTD AND ANOTHER

bjbj CACV000015/1989 IN THE COURT OF APPEAL 1989, No. 15 (Civil) BETWEEN LEGEND INTERIORS LIMITED Plaintiff/ Appeallant LONG TIME RESOURCE LIMITED 1st Defendant/ 1st Respondent KARAOKE LOUNGE & ENTERTAINMENT 2nd Defendant/ CLUB (a firm) 2nd Respondent _________ Coram: Hon. Cons, V.-P., Clough & Power, JJ.A. Date of hearing: 1st March, 1989. Date of delivery of judgment: 1st Mach, 1989. _______________ J U D G M E N T _______________ Cons, V.-P.: The Plaintiff in these proceedings is an interior decorator. On the 20th October last year the Plaintiff issued a writ against the two Defendants alleging non payment of moneys due to it. Its claim was put in two parts. The first was upon a principal contract, agreed on the 10th May, for renovation work for an inclusive figure of $320,000. The balance of that figure which remains unpaid is $128,000. The second aspect of the Plaintiff's claim alleges various individual verbal contracts for further works subsequent to those covered by the principal contract, to a total of $37,600, none of which has yet been paid. On the 18th November, a Mr. Chan, who is a director of the Plaintiff, made an affirmation, presumably in support of an Order 14 summons, verifying the claims and stating his belief that the Defendants had no defence. On the 28th November a Mr. Leung, who is a director of the 1st Defendant, which trades as the 2nd Defendant, made an affirmation in reply, exhibiting thereto a Draft Defence and Counterclaim. With all respect to whoever was responsible the Defence is not the happiest of documents and counsel may well reconsider whether it effectively sets out, or sets out as clearly as it should, the issues on which the Defendants, seek to rely. The two affirmations were considered by. Master Perrior on the 5th December. He gave unconditional leave to defend and ordered that the Defence be filed within 7 days, which it was. On the 9th January Mayo J. dismissed the Plaintiff's appeal against the Master's order. We have today to consider a further appeal from that dismissal, which both sides have thought sufficiently important to justify the retention of leading counsel. Mr. Eddis, for the Plaintiff, has strongly urged us to make orders at least for partial payment or to make the leave conditional. The crucial aspect of this case, however, as it seems to me, is that the principal claim is upon what we might conveniently call "a lump sum contract", or at least it is certainly arguable to be on a contract of that nature. In that circumstance it is well established that a plaintiff can only recover if it has substantially performed the contract. Whether it has done so or not is a question of fact. If the defendant can raise matters which arguably negate that fact, then the defendant is entitled to leave to defend. Having regard to the words in which the judge below phrased his brief reasons for decision, I have some doubt whether he fully appreciated that the Defendants here were putting their case in that way, although Mr. Tang, who appears for the Defendants today, but not then, understands that the submission before the judge was essentially centred on the allegation that the work had not been fully completed. What was argued before the Master we do not know. Mr. Eddis, by means of a detailed analysis of the papers in the case, has sought to persuade us that the Defendants' allegations are unsustainable, and therefore frivolous and made mala fides. Apart from the fact that an analysis of that kind must be subject to the defence suggestion that oral terms were also part of the principal contract a suggestion which in itself raises a dispute of fact-counsel's comments seem to me to do no more than show that there are matters which will require investigation. To that extent I would certainly agree. But in my view that investigation cannot be suitably carried out upon affidavit. It will require viva voce evidence and cross-examination. The question then remains whether what the defendants have put forward is sufficient arguably to negate substantial performance. The counterclaim, which may or may not comprise all the Defendants' complaints, gives some indication of the monetary extent of what is alleged, i.e. $47,990, That is approximately 15% of the whole price of the principal contract. For myself I am not prepared to accept that as being de minimis, and on than ground alone I find sufficient justification for unconditional leave to defend. I would therefore dismiss the appeal. (D. Cons) Vice-President Clough, J.A.: There are cases in which summary judgment can properly be given for a substantial part of a building contractor's claim on the basis that such part is indisputably due under a contract which is not a lump sum or entire contract. But for the reasons which have been given by my Lord the Vice-President, I entirely agree that this is not such a case and this appeal should be dismissed. (P.G. Clough) Justice of Appeal Power, J.A.: I also agree, for the reasons given by my Lord the Vice-President, that this appeal should be dismissed. (N.P. Power) Justice of Appeal Representation: Francis Eddis, Q.C. & Jackson Poon (M/s Cheung, Chan, Chung & Fong) for Plaintiff/Appellant Robert Tang, Q.C. & Dixon Tang (M/s Yip & Co.) for 1st-2nd Defendants/Respondents PAGE - PAGE - &`#$ &`#$ %53z& HCA000015/1989 Normal.dot Judiciary Hong Kong SAR Microsoft Word 9.0 Judiciary Hong Kong SAR ytgs HCA000015/1989 Title Microsoft Word Document MSWordDoc Word.Document.8 HCA000015/1989 Normal.dot Judiciary Hong Kong SAR Microsoft Word 9.0 Judiciary Hong Kong SAR HCA000015/1989 Title Judiciary Hong Kong