DCCJ 5928/2019

[2024] HKDC 1258

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 5928 OF 2019

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BETWEEN

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JUDGMENT

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1. This is a dispute in contract concerning the installation of an Enterprise Resource Planning system (“ERP”).

2. The plaintiff is a supplier of various electronic components and devices in Mainland China and Hong Kong. The defendant is an ERP software company.

Background

3. The ERP system, as far as the court understands, is an integral computer system for the entire running of a business. The ERP centralised the data of all the transactions of that business from purchasing from suppliers, inventory management, sales, accounting, client information etc..

4. Mr. Yeung Chi Shing (“Daniel”), the sole shareholder and one of the directors of the plaintiff, came to know Mr. Wong Shing Hung Lewis (“Lewis”), a director and Principal Consultant of the defendant, through Ms. Sophie Cheng (“Sophie”), who is the wife of Lewis and an old schoolmate of Daniel. Sophie also worked in the defendant company. Lewis has discussed with Daniel about the ERP system that the defendant has developed for a customer called “Dragon Technology Distribution Pte. Limited” (“Dragon”) whose business nature was similar to the plaintiff’s.

5. At around September 2016 and August 2017, representatives from the defendant had contacted and held several meetings to discuss, amongst others, the plaintiff’s requirements and held demonstrations of the Dragon ERP system using the plaintiff’s test data.

6. The parties signed the contract for provision of the ERP system on 16 August 2017 at the costs of HK$900,000 (“the Contract”, Trial Bundle C1 page 18-21). The plaintiff paid the requisite down-payment of HK$450,000 on 30 August 2017 (Trial Bundle C1 page 69). The plaintiff also provided a “Workflow Table and Requirement List” to the Defendant on 29 August 2017.

7. The defendant installed a trial program on a notebook provided by the plaintiff on 26 September 2017.

8. The plaintiff purchased the required hardware server from Skytex Consultant Limited (which was a IT consultant company providing IT support to the plaintiff when needed) which was set up on 20 March 2018.

9. The defendant installed the Microsoft SQL licenses and the ERP on the new servers on 23 March 2018.

10. It is not disputed that the defendant did not finish or complete the ERP system and the plaintiff did not make any further payments under the Contract. The crux of the case is whether the defendant’s refusal to complete the contract is justifiable under the contract.

11. The plaintiff’s case was that Item 7 of the Contract (which concerned “implementation and tailor enhancements” of the ERP etc.) would be “all inclusive” in the Contract.