Read the full judgment text of HCCT 81/2001 on BabelCite. This High Court CFI judgment was delivered on 10 January 2003 before Ma J.
Civil procedure – summary judgment – construction contracts – nominated subcontractor – letter of intent – whether triable issues exist – plaintiff claimed balance of $1,166,100 for lift installation work at a commercial development at 7-11 Li Yuen Street East, Central – defendant was the employer under the development – letter of intent dated 8 June 1998 from defendant's agent LCT Associates Limited accepted plaintiff's tender for nominated subcontract with contract sum of $3,780,000 – clause 9 envisaged plaintiff would be nominated to the main contractor and required entry into subcontract with main contractor – clause 12 required performance bond – clause 14 stated letter of intent together with listed correspondences shall constitute binding contract between plaintiff and employer until formal agreement prepared and executed with main contractor – main contractor Free Form Construction Company Limited appointed and written contract between defendant and Free Form dated 12 January 1999 – first issue whether subcontract existed between plaintiff and Free Form – court held triable issue existed based on performance bond dated 24 August 1998, warranty dated 5 August 1998, extensive correspondence, and payment claims – second issue how clause 14 affects position if subcontract existed – court held triable issue on true construction considering clauses 9 and 12 and commercial context, referring to Stent Foundations v Carillion for the importance of looking at whole contract and factual matrix – third issue whether estoppel by convention arose – court held should go to trial as facts may show common assumption communicated between parties – estoppel by convention arises when parties act on agreed assumption as to facts or law – requirement that mistaken assumption be common and communicated – application for summary judgment refused – defendant given unconditional leave to defend – costs of plaintiff's application to be costs in the cause (order nisi)
Legal issues: Whether a subcontract existed between the plaintiff and Free Form · Effect of clause 14 of the Letter on the defendant's liability · Whether an estoppel by convention arose
Outcome: Summary judgment refused; defendant given unconditional leave to defend the action
Cites 2 cases