Read the full judgment text of HCCT 29/2017 on BabelCite. This 高等法院原訟法庭 judgment was delivered on 6 December 2017 before Hon Chow J.
Construction law — Performance Bond — Conditional (double) bond — Injunction — Breach of contract — Defects liability period — Stone panel falling incident — Whether the Bond is on demand or conditional — Nature of the Bond held to be conditional requiring proof of breach and damages — Locus standi of the contractor to restrain payment under the Bond — Court held Unistress has locus standi to seek injunction as Bond is not independent of underlying contract — Serious issue to be tried shown regarding extent of breach and reasonableness of rectification works and costs — Balance of convenience favors continuation of injunction to restrain payment — Business harm and damage to reputation to contractor if payment allowed prematurely — Top Dollars’ remedy by damages adequate if injunction wrongly granted — Order made to continue injunction pending trial with costs in the cause. This decision clarifies the legal characterization of performance bonds in Hong Kong construction contracts and the ability of principal contractors to seek interlocutory relief against calls under such bonds.
Legal issues: Nature of the Bond · Unistress’ Locus Standi to Restrain Payment under the Bond · Serious Issue to be Tried · Balance of Convenience
Outcome: Injunction against Top Dollars restraining payment under the Bond continued until trial or further order of the court.