Read the full judgment text of HCCT 3/2010 and HCCT 57/2009 on BabelCite. This 高等法院原訟法庭 judgment was delivered on 16 May 2016 before Hon L Chan J.
Construction contract dispute involving determination under clause 25(1)(c) for failure to rectify safety defects in temporary works at a hotel site. Plaintiff, HONG KONG (SAR) HOTEL LIMITED, lawfully determined the defendant's contract for persistent safety non-compliance despite architect's notices and Buildings Department complaints. The court held that 'defective work' includes temporary safety-related works, and that a notice under clause 25(1)(c) can require rectification, not merely removal. The defendant's failure materially affected the Works, justifying contract determination. The court rejected arguments that the notional final account was a condition precedent to damages recovery and affirmed the validity of liquidated damages for delay with the contractor only entitled to limited extensions of time due to failure to comply with strict notice requirements. The plaintiff's damages were assessed at over HK$10 million after offsetting amounts payable to the defendant. The defendant's counterclaim for wrongful termination was dismissed. Costs awarded to the plaintiff. The judgment comprehensively analyzed contractual obligations, statutory duties under the Building Ordinance, coordination failures, quantum of damages including management costs and lost profits, and contract law principles such as the prevention principle and the reasonableness of employer's determination.
Legal issues: Interpretation of clause 25(1)(c) regarding temporary works · Meaning of 'remove' defective works in clause 25(1)(c) · Whether the 'Works' were materially affected by non-compliance · Whether the notice of determination was unreasonable or vexatious · Whether the notional final account is a condition precedent to recover damages under clause 25(3)(d) · Application of the prevention principle to extension of time condition precedent
Outcome: The contract was lawfully determined by the plaintiff. Defendant ordered to pay plaintiff HK$10,014,177.50 in damages. Defendant’s counterclaim dismissed. No injunction pursued in the first action. Costs ordered in favour of the plaintiff to be taxed.
Cites 3 cases