Read the full judgment text of HCCT103/1999 on BabelCite. This 高等法院原訟法庭 judgment was delivered on 29 November 2000 before Hon Burrell J.
Construction contract — Contract bond — Surety liability — Whether architect's certificate a condition precedent to surety's liability under bond — Contract clause 25(3)(d) — Whether advance release of retention monies discharges surety — Arbitration — Stay of court proceedings pending arbitration between plaintiff and third party — Arbitration dormant due to insolvency and security for costs order — Refusal of stay — Legal questions under Order 14A — Surety's unconditional liability confirmed despite absence of certificate and release of retention monies without consent. The plaintiff, Hong Kong Housing Authority, sued defendant Bank of China Group Insurance Company Ltd as surety under a bond relating to a building contract with Hing Lee Construction Ltd, now in liquidation. The court refused a stay pending arbitration with Hing Lee, citing stalled arbitration and injustice to plaintiff. Two questions under Order 14A were posed: (1) whether an architect's certificate was a precondition to surety liability, and (2) whether release of retention monies without surety consent discharged surety liability. The Court held that the surety's liability was not conditional on the architect's certificate, referring to authority in Nene Housing Society Ltd v National Westminster Bank Ltd. Further, the release of retention monies pursuant to contract did not discharge the surety, considering the bond's waiver clauses and precedents including Bank of India v Transcontinental. Costs of applications were awarded to the plaintiff.
Legal issues: Stay of proceedings pending arbitration · Whether Architect's certificate is a precondition to surety's liability · Effect of advance release of retention monies without surety consent
Outcome: Stay application refused; both Order 14A questions answered in the negative; costs awarded to plaintiff
Cites 1 case