Renovation company fined, director escapes jail in a first for Hong Kong

Firm convicted of commercial malpractice after inflating initial quote for flat renovation for customs officer more than four times

PUBLISHED : Tuesday, 04 July, 2017, 7:13pm
UPDATED : Tuesday, 04 July, 2017, 10:37pm

A renovation company convicted of unfair trade practices in the first case of its kind in Hong Kong was fined HK$30,000, while its director escaped a jail term. He was instead ordered to perform 240 hours of community service.

The head of the Consumer Council said she could understand if people thought the punishment was a bit light.

Lam Pui-chuen and his firm, Senior Design Associates, used hidden costs to inflate a bill more than four times, when they were engaged to refurbish a customs officer’s home in Ma On Chan in 2014.

The officer ended up facing a bill for HK$790,000. He was initially told the work would cost HK$175,189.

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Sentencing Lam and his company on Tuesday, Sha Tin Court magistrate Colin Wong Sze-cheung called the case serious due to the large amount of money involved.

“The defendant used an ambiguous selling method, which caused a huge risk on the part of the customer,” he added.

However, the magistrate noted that the defendants’ work was not substandard, nor did they try to alter figures on the bills, even though they might not have been completely forthcoming with the customer about all the costs incurred.

Wong also took into account the economic loss Lam and his company suffered since the case was widely reported in the media.

He therefore let Lam walk free and fined the company HK$30,000 compared to a maximum fine of HK$100,000. Lam could have been jailed for two years.

The 50-year-old director and his firm were each convicted in June for commercial malpractice through misleading omissions.

It was the first time the offence had been used to prosecute a renovation company since the amended Trade Descriptions Ordinance came into effect in July 2013. The amended law requires traders to provide consumers with sufficient product information for them to make informed decisions.

The court heard earlier that the customs officer was told each electric switch would cost HK$690, but he did not realise his 800 sq ft flat would need 108 of them.

The officer testified earlier that he felt compelled to commit to the renovation, although he felt the charges were unreasonable.

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In February 2015, he filed a complaint with the Consumer Council, which directed him to the Customs and Excise Department. By then he had already paid HK$500,000.

Consumer Council chief executive Gilly Wong Fung-han said: “I respect the court’s decision. But I can understand that people would feel the punishment was a bit light.”

The consumer watchdog received 298 complaints about decoration and renovation last year, up 12.8 per cent from 264 in the previous year.

“I hope that this case, no matter how heavy or light the sentence is, will deter malpractice. After all, a company has been prosecuted,” she said.

A customs spokesman urged customers to be vigilant in hiring renovation services.

“Before renovation, consumers should pay attention to every item and the total amount of payment in the quotation. A clear and comprehensive contract should be signed between the consumer and trader,” he said.