ABLE ENGINEERING COMPANY LTD v. PO HING (HING YIP) ENGINEERING CO LTD

HCA 1037/2022

[2024] HKCFI 3492

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1037 OF 2022

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J U D G M E N T

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The application

1.  This is the hearing of the Defendant’s appeal from the order of summary judgment granted by Master YW Hew (“the Master”) on 3 July 2024.

2.  The evidence filed on the summary judgment application is:

a.  The Affirmation of Yau Kwok Fai dated 14 March 2024 on behalf of the Plaintiff (“Yau 1”) ;

b.  the 2^nd Affirmation of Man Kong Keung dated 17 May 2024 on behalf of the Defendant (“Man 2”) ;

c.  the 2^nd Affirmation of Yau Kwok Fai dated 12 June 2024 on behalf of the Plaintiff (“Yau 2”).

3.  I have the advantage of written reasons of the Master. However, counsel informed me that the arguments were put somewhat differently below in terms of statutory interpretation, and the interpretation point is central.

Undisputed Factual Background

4.  A joint venture between the Plaintiff, namely Able Engineering Company Limited (“Able Engineering”), and Build King Construction Limited was the main contractor for the development of Cingleot Premium Logistic Centre at Kwo Lo Wan, Hong Kong International Airport (“the Development”). Able Contractors Limited (“Able Contractors”) was a sub-contractor of Able Engineering. The Defendant, (“Po Hing”) was in turn a sub-contractor of Able Contractors for the rebar fixing of the Development.

5.  Po Hing did not pay its workers’ wages in relation to the Development between December 2021 and January 2022. Po Hing’s unpaid workers claimed payment from the superior contractors pursuant to s.43C of the EO.

6.  Able Engineering paid HK$25 million to Able Contractors on 4 January 2022.

7.  From 18 January 2022, Ringtone Limited (“Ringtone”) became the employer of the relevant workers, and Ringtone was a subcontractor of Able Contractors.

8.  Able Contractors paid the outstanding wages of most of the workers on 17 January and 21 February 2022, and 2 workers were paid by Ringtone, who was reimbursed by Able Contractors by way of set off.

9.  By its Amended Statement of Claim, Able Engineering sought repayment of HK$17,607,186.45 from Po Hing. By the time of the hearing before the Master, it was accepted that one payment by Ringtone to a worker was not the responsibility of Po Hing and that amount was deducted from the judgment sum.

Summary judgment: legal principles

10.  The principles for granting summary judgment pursuant to Order 14 of the Rules of the High Court, Cap 4A (“RHC”) are not disputed.

11.  The statement of claim must be good and complete in itself; any defect or omission cannot be corrected or supplemented by the affidavit: see Tan Khay Chuen and Anor. v Ko Ping Shun Benson (CACV 238/2015, 8/7/2016, unrep.) at §§23-25.

12.  Once the plaintiff is able to show a prima facie case, the defendant bears the burden of showing that there are triable issues: see Cloudy Rosy Ventures Ltd v Sun Shaofeng[2024] HKCA 250 at §31.

13.  The defendant’s affidavit must condescend upon particulars and should, as far as possible, deal specifically with the plaintiff’s claim and affidavit, and state clearly and concisely what the defence is, and what facts are relied on to support it: Hong Kong Civil Procedure 2025 at §14/4/4.

14.  In Toy Major Trading Co Ltd v Hang Shun Plastic Toys Ltd [2007] 3 HKLRD 345, Ma CJHC (as he then was) held at §12 that to convince the court there exists a triable issue, “the defendant is expected to show a fair probability or reasonable grounds that a bona fide defence exists.”

15.  Where a defendant can satisfy the court there are circumstances that ought to be investigated, unconditional leave to defend ought to be granted: Cloudy Rosy Ventures (supra.) at §32.

16.  An appeal from a Master under RHC O. 58 is a rehearing: Hong Kong Civil Procedure 2025 at §58/1/2.

The Issues Raised on Appeal

17.  The Pleading Issue: Po Hing argues that the pleaded case is inadequate to justify judgment, and cannot be rescued by affidavit evidence.

18.  The Factual Issue: Po Hing claims that there is a triable issue as to who in fact paid the outstanding wages to Po Hing’s employees.

19.  The Right to Sue Issue: Po Hing claims that Able Engineering does not have a right to sue under ss. 43C and 43F of the Employment Ordinance (Cap. 57) (“the EO”).

20.  There is an overlap between these issues, and I consider it to be most helpful to examine the legislative scheme first.

The relevant EO provisions

21.  I must consider the legislative framework which governs Able Engineering’s claim against Po Hing.

22.  In the context of unpaid wages by an employer subcontractor, section 43C(1) of the EO provides for the joint and several liability of the principal contractor, and any superior sub-contractors to the employer sub-contractor in respect of the unpaid wages. Counsel for Able Engineering, Mr Lin, referred to this as “the Liability Provision”:-

“(1) Subject to this Part, if any wages become due to an employee who is employed by a sub-contractor on any work which the sub-contractor has contracted to perform, and such wages are not paid within the period specified in section 23, 24 or 25, as the case may be, such wages shall be payable to the employee—

(a) where the sub-contractor has contracted with the principal contractor, by the principal contractor; and

(b) where the sub-contractor has contracted with a superior sub-contractor, by the principal contractor and every superior sub-contractor to the sub-contractor, jointly and severally.” (emphasis added)

23.  Section 43D provides for an unpaid employee of an employer sub-contractor to serve a notice on the principal contractor, who in turn must serve a copy of that notice on every superior subcontractor to the employer subcontractor of which he is aware.

24.  Section 43F of the EO (which Mr Lin has called “the Recovery Provision”) provides that:-

“(1) If a principal contractor or superior sub-contractor pays to an employee any wages under section 43C, the wages so paid shall be a debt due by the employer of that employee to the principal contractor or superior sub-contractor, as the case may be.

(2) Any principal contractor or superior sub-contractor who pays to an employee any wages under section 43C may either—

(a) claim contribution from every superior sub-contractor to the employee’s employer or from the principal contractor and every other such superior sub-contractor as the case may be; or

(b) deduct by way of set-off the amount paid by him from any sum due or which may become due—

(i) to any sub-contractor to whom he has sub-contracted all or any part of work that he contracted to perform being work upon which the employee was employed, and

(ii) in respect of the work that he has sub-contracted.

(3) For the purposes of this section any amount –

(a) paid by a principal contractor or a superior sub-contractor by way of contribution under subsection (2)(a), or

(b) deducted by a principal contractor or a superior sub-contractor from any sum due by him by way of set-off under subsection (2)(b),

shall be deemed to be payment by the principal contractor or superior sub-contractor who has paid the amount by way of contribution or by the superior sub-contractor who has suffered a deduction from any sum due to him by way of set-off to an employee of wages under section 43C.” (emphasis added)

The parties referred to s.43F(3) as “the Deeming Provision”.

25.  Under s.43C, any superior contractor to the employer becomes liable for unpaid wages when served with a s.43D notice.

26.  Under s.43F(1), any superior contractor to the employer who makes direct payment of the wages is owed a debt by the employer.

27.  Under s.43F(3), any relevant contribution under (2)(a) or any relevant set-off under (2)(b) is deemed to be payment of wages under s.43C. By virtue of s.43F(1), the relevant superior contractor is owed a debt by the employer.

28.  The central issue of interpretation in this case is the nature of the contribution required by s.43F(2)(a) to trigger the Deeming Provision.

29.  Mr Tam on behalf of Po Hing submitted that s.43F(2)(a) applies only to a contribution sought by a superior contractor to the employer after that superior contractor had made payment of the outstanding wages. I note from the Master’s Reasons below that this argument was initially made before the Master (see paragraphs 6, 17) but was apparently conceded during argument (see paragraph 17). Nevertheless, the point is really the crux of the appeal now. I have regard to the Master’s views at paragraphs 9-16, with which I largely agree, but I provide my own views as follows.

30.  As a matter of natural language, I do not read s.43F(2)(a) as applying only to a contribution sought by a superior contractor after that superior contractor had made payment of the outstanding wages. It seems to me to be broad enough language to cover a prior contribution.

31.  The purpose of these statutory provisions seems to me to be to ensure:

a.  that workers are protected and are entitled to claim payment from any contractor up the chain from their non-paying employer;

b.  that all superior contractors to the employer bear equal responsibility to ensure that payment is made; and

c.  that, at the end of the day, the primary burden of payment rests on the employer, who becomes indebted to any superior contractor who has made payment.

32.  I am unable to see any reason why, having regard to these purposes, a contractor who funds the payment of wages in advance but does not actually directly pay the wages should be in any worse position than a contractor who provides funds to the direct payer after the payment. It may be that a prior contribution is required in order to enable the paying superior contractor to make payment of the wages.

33.  Mr Tam submits that the legislature cannot have intended that a contributor should make payment without knowing what the paying contractor would pay and must have intended some form of request identifying the amount for the contributor to pay. He submits that within the contractor-subcontractor relationship, there may be a complicated account with many different mutual debts, so that a general payment without an individual request would not necessarily be referable to a wages payment and would not be “commercially logical”. Mr Tam asks rhetorically what would happen if a principal contractor pays funds a year earlier, before the unpaid wages issue even arises, then the subcontractor pays the wages, can the principal contractor say that he contributed? Mr Tam says this would create an uncertainty that the legislature cannot have intended.

34.  Mr Tam further submits that ss.43F(2) and (3) would not be required if anyone who pays can sue the employer.

35.  I am unable to accept those submissions.

36.  Mr Lin points out that ss.43F(2) and (3) not only provide for a contributor to step into the shoes of the direct payer as creditor of the employer to the extent of the contribution, but also provides the same for a person who has suffered a deduction by way of set-off from the sums owed to him in respect of relevant work. He further submits that a deduction by way of set-off is a unilateral act which takes account of the prior mutual dealings between the direct payer and the subcontractor. I see no reason why there would be a legislative intention for prior dealings to be relevant for the purposes of set-off, but not for the purposes of contribution. Indeed, even if a prior payment was made by one contractor to another for a purpose other than the payment of wages, and then a joint and several liability subsequently arose under s.43C to pay outstanding wages, I see no reason why the contractors should not agree to treat such prior payment as a contribution.

37.  Clearly, whether or not a prior payment is made for the purposes of contributing to a wages payment, or whether the relevant contractors agree that a prior payment should be treated as such a contribution, is a matter of fact.

The Pleading Issue

38.  Able Engineering’s pleaded case is at §§7-9 of the Amended Statement of Claim (“ASOC”):-

“(7) Since around December 2021 and January 2022, [Po Hing] had failed to pay its and/or its sub-contractors’ employees wages in relation to the Development and notices of such outstanding wages had been given to [Able Engineering] on divers dates during the said period of time.

(8) In compliance with Section 43C, [Able Engineering] had settled the outstanding wages to numerous employees of [Po Hing] and/or [Po Hing]’s sub-contractors amounting to the total sum of HKD 17,620,386.45 (the “Sum”) between around December 2021 and January 2022.

(9) According to Section 43F(1), the Sum is a debt due by [Po Hing] to [Able Engineering].”

39.  Po Hing argues that the claim pleaded is that Able Engineering made “direct payment”, that factually such plea is not correct, and the Court can only consider whether the pleaded case is established, without reference to an alternative case put in the affidavit evidence.

40.  I of course accept that the Court can only decide whether Able Engineering has established a prima facie case in respect of the pleaded claim.

41.  I also accept that Able Engineering has not pleaded the detail of the arrangements which have been set out in affidavit evidence as to the direct payment of the wages by Able Contractors and/or Ringtone, and the prior payment by Able Engineering to Able Contractors.

42.  However, it seems to me that the pleas of (1) settlement by Able Engineering of the outstanding wages under s.43C, and (2) Po Hing’s liability under s.43F(1), are adequate to cover the situation. It is Able Engineering’s case that the outstanding wages were settled; Able Engineering’s prior payment was, as matter of law, a contribution pursuant to s.43F(2)(a); that contribution is deemed by s.43F(3), as a matter of law, to be payment of the wages. The material facts were pleaded, the particulars and points of law were not pleaded. Peripherally, I note that Po Hing did not seek any particulars of the pleaded claim, and that the detailed facts as to payments are not disputed.

43.  I do not accept that there is a material deficiency in the ASOC.

The Factual Issue

44.  Po Hing by Mr Tam submits that there is a factual issue as to whether Able Engineering paid the workers.

45.  I note that the original Defence filed ran a counterclaim based on oral representations as to an ability on Po Hing’s part to claim overtime rates of pay from Able Engineering. Indeed, most of Yau 1 was concerned with responding to the pleaded defence as to such counterclaim. By the time of the hearing before the Master, Po Hing sought to amend its defence according to the draft exhibited to Man 2 to delete the entirety of the counterclaim, and plead simply:

“3C Paragraphs 8 to 11 is denied:-

(i) It is specifically denied that [Able Engineering] had settled any “outstanding wages”, whether as alleged or at all. It is averred that the payment of any “outstanding wages”, whether as alleged or at all, if found, were made by one [Able Contractors] and one [Ringtone]; and

(ii) It is specifically denied that the Sum is a debt due by [Po Hing] to [Able Engineering] under Section 43F(1) and that [Po Hing] has failed and/or refused to pay the Sum or any part thereof to [Able Engineering]. It is averred that [Able Engineering] has no right to rely on Section 43F to sue [Po Hing], whether as pleaded or at all.

3D For the abovesaid, and it is averred that [Able Engineering] is not entitled to any relief, whether as pleaded or at all.

3E Further and/or alternatively, even if contrary to the abovesaid that [Able Engineering] is found to have paid anything to any of [Po Hing]’s employee, whether as alleged or at all, it is not admitted that the Sum represents “outstanding wages”, whether as alleged in paragraph 8 or at all. [Able Engineering] is put to strict proof especially that the Sum paid is wages that was due to [Po Hing]’s employee within Section 43C.”

46.  It may be seen that the only positive case sought to be pleaded by Po Hing was that the outstanding wages had been paid by Able Contractors and Ringtone.

47.  Man 2 only gave the following relevant evidence:

“5 … I am advised and believe that [Able Engineering] has no right to sue [Po Hing], whether as alleged or at all. I am also advised and verily believe that, insofar as any “outstanding wage” is concerned, if there had been any payment made to [Po Hing]’s employee, they are either made by [Able Contractors] or [Ringtone].”

48.  Yau 1 paragraph 31(d) avers that:

“On 4 January 2022, Able Engineering advanced to Able Contractors a sum of HK$25 million, which included reimbursement of Able Contractors’ said payment of the wages of the workers employed by Po Hing.”

49.  Yau 1 provided payment records in relation to the 4 January 2022 payment, and the later payments by Able Contractors to the workers.

50.  Man 2, filed in response, contained no positive case to challenge Yau 1’s evidence that Able Engineering had contributed the full amount paid in discharge of the outstanding wages.

51.  Mr Tam suggests that there is doubt over the facts. He relies on the language used in Yau 1 paragraph 31 as to Able Contractors having “initially advanced” the sum for the wages, with Able Engineering giving “reimbursement” to Able Contractors. However, Mr Tam points out, Able Engineering relies on a payment made to Able Contractors before Able Contractors paid the workers. Mr Tam submits that there is a need for factual investigation warranting trial.

52.  However, I note that Yau 1, in the same paragraph 31, also exhibits the payment records. These records have founded the undisputed factual matrix (as set out above) that Able Engineering made payment to Able Contractors first, and Able Contractors made payment to the workers. The most that can be said is that Mr Yau has used inaccurate language in the body of Yau 1 but is clearly not misleading anyone by such language where the exhibited payment records lead to the position that no one is in any doubt as to the payer or payee or date of all relevant payments.

53.  There is no triable issue as to the identity of the payer, or payee, or dates of relevant payments to the workers, or payment by Able Engineering to Able Contractors.

54.  The only available evidence is to the effect that the sum paid by Able Contractors to make the wage payments to the workers (and in respect of two employees, through Ringtone) was borne and paid by Able Engineering.

The Right to Sue Issue

55.  Having regard to my views stated above on the meaning of “contribution” for the purposes of s.43F(2)(a), and the uncontested evidence that Able Engineering paid HK$25 million on 4 January 2024 in respect of the wages, I find that Able Engineering made a contribution under s.43F(2)(a) to the payment of the outstanding wages owed by Po Hing to its workers.

56.  It is then a matter of law:

a.  to apply s.43F(3) to reach the conclusion that Able Engineering is deemed to have made the payment of the outstanding wages; and

b.  to apply s.43F(1) to reach the conclusion that Po Hing is indebted to Able Engineering for the amount of outstanding wages paid.

57.  It follows that Able Engineering has a right to sue Po Hing for the debt.

Order

58.  Accordingly, I dismiss the appeal. As submitted by counsel, should this be the outcome, costs follow the event. The Defendant is to pay the Plaintiff’s costs of the appeal, with certificate for one counsel, to be taxed if not agreed.

Mr Kenny Lin and Mr Jason Kung, instructed by Simon C.W. Yung & Co., for the Plaintiff

Mr Oscar Tam, instructed by Wong & Lawyers, for the Defendant

HCA 1037/2022
HCA 1212/2022
(heard together)

[2023] HKCFI 2733

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1037 OF 2022

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AND

ACTION NO 1212 OF 2022

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REASONS FOR DECISION

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1.  The Defendant in HCA 1212 of 2022 (“HCA 1212”) (“Man”) first applied by his summons of 2 February 2023 (“Summons”) for HCA 1212 to be consolidated with another action, HCA 1037 of 2022 (“HCA 1037”). HCA 1212 was commenced by Able Contractors Limited (“AC”) against Man as the guarantor for the due payment of a sum of $57,670,000 claimed to have been advanced by AC to a company, Po Hing (Hing Yip) Engineering Co Limited (“PH”) of which Man was a director.

2.  HCA 1037, on the other hand, was an action commenced by Able Engineering Company Limited (“AE”) against PH, for repayment of a sum of $13,985,160.50 claimed to have been paid by AE as wages to employees of PH or its sub-contractors of a project for the development of a logistics centre at Kwo Lo Wan (“Project”). AE claims that it made the payment pursuant to section 43C of the Employment Ordinance (“Ordinance”) and that it is entitled under section 43F(1) to look to PH, as the employer of the workers, for repayment of the sum as a debt due.

3.  Since the Summons sought consolidation of HCA 1212 with HCA 1037 involving totally different parties in an action separate to HCA 1212, this Court directed Man to at least serve the Summons on the parties to HCA 1037, together with the evidence which had been filed with the Summons, in order to ascertain their stance on his application.

4.  A summons was thereafter issued by PH, the defendant in HCA 1037, for the same relief of consolidation.  Both summonses seek in the alternative an order that the actions be heard together, or one after the other.

5.  The summonses were opposed by the plaintiffs in both actions, which are represented by different solicitors.

6.  At the end of the hearing of the contested application for consolidation, the summonses were dismissed, with costs. The following sets out the reasons for my decision.

7.  As Counsel for AE pointed out bluntly, the applications for consolidation were made on the basis of a misconception on the part of Man and PH that the two sets of proceedings were brought by the one and same entity. Hence, Man and PH claimed in their evidence filed in support of the consolidation applications that there was abuse of process, that two actions were commenced by “the same plaintiff”, instructing two solicitors’ firms, on an identical set of facts, in order to vex the defendants.

8.  There has been no admission on the part of Man and PH (referred to hereinafter jointly as “Defendants”) that there had been any misunderstanding on their part, but whatever the reason for the application, it suffices to say that no basis whatsoever has been shown for any consolidation.

9.  It is clear beyond peradventure that the two plaintiffs in HCA 1212 and HCA 1037 are separate and distinct legal entities. This is notwithstanding their common directors and corporate secretary, as emphasized by the Defendants, and despite the fact that they are “related companies” as both are wholly owned subsidiaries of the same company.

10.  In the submissions made by Counsel for the Defendants for the hearing on 11 October 2023, the only arguments pursued for the consolidation were that the claims for relief made by AC and AE arise out of the same transaction or series of transactions, namely alleged payment of wages to PH or its employees in the Project; that there are common questions of fact and/or law; and substantial overlap of facts and evidence necessary for determination of liability in both proceedings.

11.  Before any order for consolidation or manner of hearing of the trials of the actions is made, the underlying objectives set out in Order 1A RHC must be borne in mind. These include considerations of cost effectiveness of any practice and procedure, the need to deal with cases expeditiously, and promoting procedural economy in the conduct of proceedings.

12.  Upon review of the current state of the pleadings as filed in HCA 1037 and HCA 1212, there is no basis to claim that the actions are related, and that it would be either cost effective or procedurally economical for them to be tried together. To the contrary, a consolidation would mean undue delay and unnecessary complication of the pleadings and evidence for the actions.

13.  The simple claim made by AE in HCA 1037 is that it had made payment of wages under the Ordinance to employees of PH, a subcontractor in the Project, and that it has a statutory right and claim to repayment from PH. AE claims in HCA 1037 that it was, together with one Build King Construction Ltd, one of the partners of an unincorporated joint venture, which joint venture was the contractor of the main works of the Project.

14.  In its Defence to HCA 1037, PH does not deny that it was a subcontractor of the Project, and alleges that AE was a “general contractor” of the Project. In its Defence, PH made specific reference to a contract dated 15 September 2020 with a reference number 10719/4104P193 (“Subcontract”). In essence, the claim made by PH is that it had agreed with the project manager that the overtime wages paid to its workers would be reflected in the final accounts for the Project, and that it is entitled to an outstanding payment of HK$54,673,400.99 for works done on the Project, and to set-off such amount from any sum claimed by AE against it.

15.  In the Reply filed by AE in HCA 1037, AE denies that it was the general contractor under the Subcontract, and further denies that PH has any basis to set-off the sum it claims from AE. AE also denies in its Reply that the alleged representations made to PH with regard to the payment of overtime wages to be reflected in the final accounts of its Subcontract had been made for and on behalf of AE.

16.  In HCA 1212, AC claims that it had entered into a subcontract with PH which was dated 15 September 2020, for PH to carry out rebar fixing works for the Project.  On AC’s pleaded case, it had agreed to make advance payments to PH, for wages of PH’s employees under the Project, and that Man had signed written Guarantees in respect of PH’s due repayment of the advances. A total sum of HK $57,670,000 was paid by AC by way of these advances, which were unpaid by PH and for which Man is liable under the Guarantees.

17.  In HCA 1212, Man admits to the subcontract pleaded in paragraph 3 of the Statement of Claim, as being made between PH and AC.  Man identified the subcontract by the same reference number of 10719/4104P193, ie the Subcontract. He claims that PH has a claim for work done in the Project, which is the subject matter of a counterclaim in HCA 1037. Man pleads in HCA 1212 that he is entitled to rely on the defence of set-off made by PH.

18.  On the pleadings filed in HCA 1212, it is clear that if there is any claim by PH for payment in respect of work done under the pleaded Subcontract, such claim and set-off can only be made by PH against AC.

19.  When questioned by the Court at the hearing on 11 October 2023, Counsel for the Defendants admitted and confirmed that the one and relevant Subcontract entered into by PH was that which was made with AC.

20.  Both Counsel for AC and Counsel for AE highlighted the fact that there is no privity of contract at all between PH and AE.

21.  On behalf of AE, Counsel further pointed out that under the Ordinance, the principal contractor and any superior subcontractor is liable, jointly and severally, for payment of the wages of an employee for the work which the principal contractor or superior subcontractor was engaged to carry out. Accordingly, there may not be a direct contract between the principal contractor, or a superior subcontractor, and the actual employer of the worker in question whose wages were paid.

22.  At the trial of HCA 1037, AE is only required to prove that it had made payment of the wages to the workers in question, and if this can be established, it is entitled under section 43F of the Ordinance to recover same from the employer of the workers. If PH can successfully establish by way of defence that no payment of wages had been made by AE or that the wages were not received by its workers, then AE has no cause of action and its claim must be dismissed. There is no reason for the trial to be complicated or delayed by any alleged claims relating to the work carried out by PH as the employer of the workers for the Project, and whether any payment is due to PH from AC, the party admitted to be PH’s counterparty to the Subcontract. There can be no question of any set-off against AE, a totally separate legal entity, in respect of payments for work done under the Subcontract. Any claim of contribution or indemnity as may be available under the Ordinance is a matter between AC and AE. 

23.  The only commonality which Counsel for the Defendants could identify for the two actions is that the agreements relied upon by AE and AC arose from the same or related transactions, as they both relate to work carried out on the Project, related to similar companies and the claims are similar in nature.

24.  As explained above, the claims made and the agreements relied upon by AE and AC are not similar in nature. AE’s claim is based on its payment of wages under the Ordinance and its right to claim reimbursement from PH as the employer of the workers. PH’s counterclaim/set-off, which Man seeks to raise in respect of his liability to AC under the Guarantee relates to PH’s claims for payment under the Subcontract for works carried out by PH.

25.  There is no good basis for the Defendants to assert that the two separate actions relating to the separate contracts with different parties on work done in the same construction project should be tried together. There may be numerous contracts made for myriad works carried out by different contractors in a large scale construction project.  The mere assertion that the actions relate to the same project and may arise out of the same or connected series of facts in respect of the project, or that there may be common witnesses to be called, cannot by itself justify consolidation of the trials. Otherwise, trials on large-scale construction work projects (which are commonplace in Hong Kong) would be totally unmanageable.

26.  At the hearing, Counsel for the Defendants sought to contend that the claims made by AE in HCA 1037 are related to those made by AC in HCA 1212, because AE had somehow assumed liability for the amounts due to PH under the Subcontract, or as shown in the final accounts of the Subcontract between PH and AC. However, this has never been PH’s pleaded case in its Defence filed in HCA 1037, and the Court cannot order consolidation upon the speculation of some connected claim and evidence.

27.  For all the above reasons, the application for consolidation and for the trials to be heard by the same judge one after the other is dismissed, with costs to be paid by the Defendants, with certificate for counsel.

Mr Kenny Lin and Mr Jason Kung, instructed by Simon CW Yung & Co, for the plaintiff in HCA 1037/2022

Mr Vincent Lung and Ms Nicole Chui, instructed by Ince & Co, for the plaintiff in HCA 1212/2022

Mr Simon So and Mr Enoch Fong, instructed by Lim & Lok, for the defendant in both HCA 1037/2022 and HCA 1212/2022