Read the full judgment text of HCCT 63/2017 on BabelCite. This 高等法院原訟法庭 judgment was delivered on 29 June 2020 before Hon Mimmie Chan J.
Construction contracts — Direct Payment Agreement — Whether direct contract existed between building owner and nominated sub-contractor — Scope of Sub-Contract and Main Contract — Exclusion clauses for omitted works and prolongation costs — Interpretation of contract terms and precedence of special provisions over general conditions — Valuation and agreement on final account — Burden of proof on claimant for entitlement to additional sums. The Plaintiff Contractor claimed outstanding balance and damages under a claimed Direct Payment Agreement with the Defendant Owner for curtain wall renovation work at 80 Gloucester Road, Hong Kong. The Owner, acting as Employer and contract administrator, denied any direct contract or final agreed account with the Contractor, allegedly only being a nominated sub-contractor to the main contractor HF. The court examined the contemporaneous correspondence, contracts, and pleadings and held the following: The Direct Payment Agreement existed as a tripartite supplemental arrangement requiring main contractor HF's consent for payments, without modifying the Sub-Contractual rights and liabilities otherwise; the Contractor was bound by and limited to claims permitted under the Sub-Contract; clause 10.05 of the Specification Preliminaries excluded all monetary claims for omissions including site management, design costs, and loss of profit; claims for aborted design costs were denied as the design changes were within contract scope or caused by the Contractor's own errors; prolongation claims were excluded by amended clause 28 of General Conditions as the Contractor was limited to extension of time only; and no agreed, binding final account was concluded due to lack of HF's agreement and continuing disputes. The court dismissed all claims by the Contractor and allowed the Owner's counterclaim for overpayment, with costs and interest.
Legal issues: Terms and existence of the Direct Payment Agreement · Contractor’s entitlement to payment under Sub-Contract terms · Condition precedent of HF’s consent to payments under the Direct Payment Agreement · Claims for omitted works and related costs under the Sub-Contract · Contractor’s claims for aborted design costs · Claim for prolongation costs due to delay in site handover · Whether the Agreed Final Account constitutes binding settlement
Outcome: The Contractor’s claims were dismissed. The Owner’s counterclaim for overpayment of $1,509,313.17 was allowed with interest and costs.
Cites 2 cases