Read the full judgment text of HCCT 76/2001 on BabelCite. This 高等法院原訟法庭 judgment was delivered on 5 May 2004 before Hon Reyes J.
Contract and construction law — Subcontract for automatic fire alarm system works and tenants' fitting-out works — Payment dispute — Allegation of 'back-to-back' or 'pay when paid' term — Guarantee by second defendant for first defendant's obligations — Interpretation of contractual documents including Purchase Order, Addendum, Final Accounts, and Guarantee — Whether back-to-back payment term existed — Whether outstanding balances due — Whether oral agreement to waive part payment — Whether interest at 2% monthly rate chargeable — Whether Guarantee covers variations and tenants' works — Court rejects alleged back-to-back payment term due to lack of evidence and non-acceptance of counter-offer — Expert evidence on quantum rejected for methodological flaws — Court prefers certified Final Accounts less payments made to fix outstanding amounts: HK$2,456,790 for AFA works and HK$50,159.25 for tenants' works — Oral waiver unproved and rejected — No contractual entitlement to 2% monthly interest; interest awarded at 2% above best lending rate pursuant to common practice from writ date — Mansion held liable under Guarantee for all outstanding amounts owed by Kin Ming to Honeywell — Judgment entered for Honeywell accordingly with costs, except for expert evidence costs reserved for taxation if not agreed.
Legal issues: Back-to-back payment term · Principal amount outstanding for AFA system works · Principal amount outstanding for tenants' works · Interest on outstanding amounts · Construction and effect of the Guarantee
Outcome: Judgment in favour of Honeywell against Kin Ming and Mansion for outstanding sums in respect of AFA and tenants' works; interest awarded at 2% above Hong Kong dollar best lending rate from writ date until judgment and judgment rate thereafter.
Cited by 4 cases