Read the full judgment text of HCCT104/1999 on BabelCite. This 高等法院原訟法庭 judgment was delivered on 23 March 2000 before Hon Burrell J.
Construction and Arbitration Proceedings — Performance Bond — Liability under unconditional on-demand bond — Interpretation of bond expiry clause relating to certificate of practical completion — Validity of contractor termination notice — Conclusive evidence provision effect — The plaintiff contracted with Hing Lee Construction to build a housing development secured by a performance bond from the defendant. Hing Lee was terminated for default, and the plaintiff engaged a new contractor for completion. Defendant argued bond expired on practical completion certificate issued to new contractor and alleged termination notice was late. The court held the bond remained effective because the certificate related only to the new contract, not the bonded contract with Hing Lee. The termination notice, although dated after the nominal period, was valid because defaults were ongoing and the bond's conclusive evidence clause established default and damages conclusively. The court found no defence and granted summary judgment in favour of the plaintiff for the bond amount plus interest and costs, with a certificate for two counsel.
Legal issues: Expiry of the bond under Practical Completion certificate · Validity of the Notice of Determination under the main contract · Requirement of contract determination to trigger bond liability
Outcome: Summary judgment granted to plaintiff for HK$32,460,000 plus interest and costs
Cited by 1 case