Read the full judgment text of HCCT58/1999 on BabelCite. This 高等法院原訟法庭 judgment was delivered on 23 June 2000 before Hon Burrell J.
Construction Contract — Delay and Breach — Performance Bond — Extension of Time — Role and impartiality of Architect — Time at large — Liquidated Damages — Execution of Bond — Company Seal Execution — Indemnity — The plaintiff claimed against a performance bond executed by the defendant to secure the 1st Third Party contractor's performance of a building contract. The defendant denied liability arguing no breach by the contractor. The contract provided detailed provisions for delays and extensions of time with the Architect empowered to grant extensions. Wai Bo failed to complete works on time, facing financial difficulties and producing delayed design submissions. The architect certificates on delay were mostly upheld, though the court granted an extension of time beyond the architect's certificate. The plaintiff validly terminated Wai Bo's employment for failure to proceed regularly and diligently. No repudiatory breach by plaintiff found. Liquidated damages were awarded on the basis of the extended completion date, exceeding the Bond value. The defendant's execution of the Bond was challenged due to non-compliance with company seal formalities. The court found the Bond binding and validly executed by authorized persons under company articles and Companies Ordinance. Third Parties’ counter-guarantees were also valid. Defendant entitled to indemnity from Third Parties for judgment sum and costs. Judgment entered for plaintiff against defendant for bond sum plus interest and costs. Defendant indemnified by Third Parties.
Legal issues: Implied terms in the contract · Breach of contract due to delay · Effect of Wai Bo’s failure to give notice of delay · Whether time became at large · Determination of 1st Third Party employment under clause 25 · Wrongful repudiation claim by Wai Bo · Calculation of damages and liquidated damages · Validity of the Bond and counter-guarantees · Entitlement of defendant to indemnity from Third Parties
Outcome: Judgment for the Plaintiff; Bond value awarded with interest and costs; Defendant entitled to indemnity from Third Parties.