British Orient Ltd v Kason Engineering And Construction Co Ltd

IN THE SUPREME COURT OF HONG KONG

APPELLATE JURISDICTION

CIVIL APPEAL NO. 12 OF 1968

(On Appeal from O.J. Action No.1606 of 1967)

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JUDGMENT

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1. This is an appeal against the decision of a judge in chambers whereby he allowed the plaintiff's application for summary judgment and entered judgment accordingly. The Statement of Claim sought the recovery of $61,985.63 as "being the balance found to be due from the defendant to the plaintiff on accounts stated between them in a document signed by the defendant and dated the 19th September 1967"; alternatively, the plaintiff claimed against the defendant for "monies due and owing by the defendant to the plaintiff for goods sold and delivered by the plaintiff to the defendant, particulars whereof have been rendered to the defendant by the plaintiff.". In so framing the claim plaintiff's counsel followed the precedents recommended in Bullen & Leake's Precedents of Pleadings (11th Ed. pages 73 et seq.).

2. The judge in the court below having heard the parties, dealt with the matter very briefly. His decision reads:

The defendant when before the judge had sought to dispute the claim on the grounds that although the defendant admitted that, under two contracts made between it and the plaintiff, which had contracted under its earlier name of Sino-British Company Limited, the plaintiff had, as sub-contractor, done work for the defendant in respect of asphalting and tiling at the Kwun Tong Police Station and there was money due from the defendant to the plaintiff under that contract, the plaintiff had not fully carried out the contracts in accordance with their terms and the defendant was entitled, as a result, to set off certain sums because of defective work and delay in completion of the work. In an affirmation by Mr. Yeh Tso Lin on behalf of the defendant, he said:

3. The affidavit in support of the plaintiff's application for summary judgment contested the validity of these contentions mainly on the ground that the defendant had agreed the accounts proffered by the plaintiff, which showed a balance in favour of the plaintiff. Particular reliance was placed on a document showing a figure of $141,994.00 as being due to the plaintiff on the final invoice and a series of payments made by the defendant for the reduction of that amount, and ending with an item of $61,985.63, being the balance due to the plaintiff, which appears at the foot of the account together with a confirmation signed for the defendant and by the said Mr. Yeh Tso Lin. Furthermore the affidavit indicated that, for a considerable period prior to the filing of the claim, no mention whatever had been made by the defendant of anything in the nature of a set-off or counterclaim against this amount although, from certain letters put before the court below, it appeared that, as long ago as 1965, the defendant had raised queries as to delay by the sub-contractors in commencing work and as to the quality of the work done and had indicated that the defendant would hold the plaintiff responsible for any consequential damages which might accrue to the defendant in respect of these matters: a claim which had, at the time, been repudiated by the plaintiff.

4. From the documents before the court below it appeared that there was delay in the completion of the main contract between the defendant and the Government, which resulted in the defendant's having to pay to the Government a sum of approximately $14,000. It also appeared that the defendant paid approximately $5,600 to repair or do again certain work which had been done defectively.

5. When the judge said that the defendant only raised the matters mentioned by it solely for the purpose of delay, he presumably took the view that the defendant was not acting bona fide in raising these matters. It is not entirely clear from his judgment whether he intended to give judgment for the plaintiff on its primary claim based on an account stated or on the alternative basis of a claim for goods sold and delivered but presumably it was for the primary claim and we need not concern ourselves with the point that the plaintiff, in suing for goods sold and delivered, was apparently departing from the true basis of its contract which was primarily for work to be done.

6. In support of an argument that the plaintiff was entitled to judgment on the account stated, counsel for the plaintiff directed our attention to the case of Siqueira v. Noronha⁽¹⁾ which refers to the distinction between two kinds of account stated, one of which may be regarded as a mere acknowledgement of a debt not amounting to a promise - an acknowledgement from which the existence of a debt may be inferred although its existence may be rebutted by showing that no real debt exists, and another form of account stated where there is a binding promise which precludes any re-opening of the transactions in question. Some point might possibly have arisen as to whether the account stated, relied on in the present case,...