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 — contract for building hotel awarded to defendant with stipulated completion date extended — defendant failed to rectify safety irregularities affecting site safety despite notices from architect and Buildings Department — plaintiff purported to determine contract under clause 25(1)(c) for refusal or neglect to comply — defendant disputed lawfulness of termination asserting four grounds: meaning of 'defective work', whether notice to 'remove' could include 'rectify', whether Works were materially affected, and whether determination was reasonable — court held clause 25(1)(c) applied to temporary works including safety installations — notice validly required rectification — defendant's persistent neglect materially affected Works — determination notice was not unreasonable or vexatious — termination lawful. Quantum of damages under clause 25(3)(d) calculated considering plaintiff's post-determination management costs, replacement contract costs, liquidated damages for delay, and loss of profit from hotel delayed opening. Defendant’s counterclaim for wrongful termination dismissed due to lawful determination. Extensive contractual interpretation and evidentiary analysis on parties’ obligations, extensions of time, and damages including detailed consideration of defective works, expert reports, statutory duties, and contractual terms. Final damages awarded: HK$10,014,177.50 to plaintiff. Costs to plaintiff. Judgment dated 16 May 2016 by Hon L Chan J in High Court, Court of First Instance.
Legal issues: Whether the four conditions for determination under clause 25(1)(c) are satisfied · Interpretation of 'defective work' and whether it includes temporary works · Whether 'remove' in clause 25(1)(c) includes 'rectify' defective works · Whether the Works were materially affected by defendant’s default · Whether the determination notice was reasonable and non-vexatious · Whether the architect's certificate of expense and loss is a condition precedent to claim under clause 25(3)(d) · Quantum of damages payable to plaintiff under clause 25(3)(d) · Defendant's liability for defective works and rectification costs · Extension of time and liquidated damages · Loss of profits to plaintiff due to delayed hotel opening · Defendant’s counterclaim for loss on wrongful termination
Outcome: The plaintiff’s determination of the contract was lawful; the defendant ordered to pay plaintiff HK$10,014,177.50; counterclaim dismissed; no injunction ordered; costs to plaintiff to be taxed.
Cites 3 cases