Read the full judgment text of HCCT000110/1998 on BabelCite. This 高等法院原訟法庭 judgment was delivered on 24 September 1999 before The Hon Mr Justice Findlay, in Chambers.
Contract law — Interim payment under Order 29 — Subcontractor claim — Cross-claims and set-offs — Overpayment dispute — Summary judgment against plaintiff by third party — Duty to pass payments to subcontractor — Genuine arguability test — Court finds some cross-claims genuinely arguable but majority of plaintiff’s claim undisputed — Defendant not entitled to set off amount owed to subcontractor — Interim payment of part sum ordered. Wai Shun Construction Company Limited subcontracted construction from Gammon Construction Limited under a contract with Hong Kong Housing Authority. Wai Shun claimed over $6 million under the subcontract; Gammon counterclaimed for alleged overpayment, non-payment to Shun Cheong Electrical Engineering Company, and other deductions. Shun Cheong had obtained summary judgment against Wai Shun. The defendant asserted entitlement to set-off but failed to show contractual basis for amounts owed to Shun Cheong. The court applied the Shanning International Ltd test to assess genuine arguability of cross-claims. It was held that while overpayment and additional claims were arguable, the Shun Cheong amount could not be set off. The court ordered an interim payment of $3 million to Wai Shun and granted costs against the defendant.
Legal issues: Whether the defendant has a genuinely arguable cross-claim in respect of the alleged overpayment · Whether the defendant can set off the amount due to Shun Cheong against the plaintiff's claim · Whether the unpleaded third amount of $302,684.92 constitutes a genuinely arguable cross-claim
Outcome: Interim payment of $3 million ordered to be paid to the plaintiff; defendant ordered to pay plaintiff's costs of the application.