Read the full judgment text of HCCT000042A/1997 on BabelCite. This HIGH COURT OF HONG KONG COURT OF FIRST INSTANCE judgment was delivered on 15 December 1997 before The Hon Mr Justice Findlay, in Chambers.
Contract Dispute — Subcontractor Liabilities — Default Judgment — Setting Aside — Real Prospect of Success Test — Loan Repayment Agreement — Interest Charges — Waiver Deed — Counterclaim Preclusion. Leader Civil Engineering Corporation Limited entered into a government contract for storm water drains and subcontracted full works to Well-Pro Engineering Limited. Leader obtained default judgment for various sums including loans advanced, loss and damage for incomplete works, and maintenance failures. Well-Pro applied to set aside the judgment. The court considered whether Well-Pro had a real prospect of success in defending claims. It held Well-Pro had a real prospect in disputing part of the loan repayment claim based on an oral and written agreement to repay by deductions, and found certain interest claims excessive and subject to variation. Well-Pro had no real prospect of success on claims for quantified and unquantified damages for incomplete works and maintenance, given Leader’s evidence and Well-Pro’s lack of counter-evidence. A clear waiver deed signed by Well-Pro precluded Well-Pro from pursuing a counterclaim for amounts over the contract price as a defence. The court exercised its jurisdiction to set aside the judgment only in respect of the loan sum of $9,059,883.12 and ordered Well-Pro to file a defence. Costs of the application were reserved with a preliminary order that parties bear their own costs.
Legal issues: Whether Well-Pro has a real prospect of success in defending the loan and repayment claim · Whether Well-Pro has a real prospect of success defending the quantified loss and damage claim · Whether Well-Pro has a real prospect of success defending the unquantified loss and damage claim for maintenance work · Whether Well-Pro can rely on a counterclaim for payment over contract price
Outcome: Set aside default judgment only in respect of the sum of $9,059,883.12; Well-Pro ordered to file a defence within 14 days. Other claims judgment maintained.