Read the full judgment text of HCCT000016/1990 on BabelCite. This HIGH COURT judgment was delivered on 23 December 1991 before The Hon. Mr. Justice Kaplan.
Contract law — Sub-contract termination — Wrongful repudiation — Delay and defects — Construction contract — Damages for work done, loss of profits and interest — Waiver of termination rights — Contractual obligations and interpretations — Evidence credibility — Contemporaneous documents — Use of accounting data — Sub-contract obligations distinct from main contract — Temporary defects remedied and not constituting breach — Late amendment to pleadings refused — Costs. This case concerned a sub-contract between Eu Asia Engineering Ltd and Wing Hong Contractors Ltd for concreting and steel formwork at Tsui Ping Estate Phase 7. Eu Asia brought a claim for unpaid work and damages for wrongful repudiation after their access to the site was blocked by Wing Hong on 6 May 1989. Wing Hong counterclaimed alleging Eu Asia's breach of contract, delay, and poor workmanship. The court considered whether Eu Asia breached the contractual progress terms including achieving a nine-day cycle per floor, obligations to coordinate with main contract progress, and whether there was any suspension of work prior to termination. The court found no valid failure or delay by Eu Asia that would justify termination, no suspension of work, and found Wing Hong’s evidence concerning performance issues unconvincing. Regarding defects such as honeycombing and bulging, the court held these were temporary and common in construction, fully remedy-able, and not grounds for termination. The court emphasized the contractual limit on termination for undue delay and sub-standard work, recognizing the need for realistic construction tolerances. On damages, the court quantified the value of work done after adjusting for reasonable deductions, awarded interest, and calculated loss of profits by applying gross profit less attributable overhead costs and deducting work done, then discounting to account for contingencies. Wing Hong’s counterclaim was dismissed due to insufficient evidence and procedural issues including a refused application to amend counterclaims late in trial. The court ordered payment to Eu Asia of principal sums with interest and costs on a nisi basis.
Legal issues: Whether Eu Asia failed to complete one whole storey within 9 working days · Whether Eu Asia breached obligation to carry out work according to progress under the main contract · Whether Eu Asia suspended work on 4th and 5th May 1989 · Whether Wing Hong was entitled to terminate for sub-standard work or defects such as honeycombing and bulging · Whether Wing Hong wrongfully repudiated the contract on 6th May 1989 · Quantum of damages for value of work done · Quantum of damages for loss of profits · Wing Hong’s counterclaim for damages
Outcome: Eu Asia's claim allowed for damages for wrongful termination; Wing Hong's counterclaim dismissed.
Cited by 19 cases