Read the full judgment text of HCCT 56/2006 and HCCT 3/2007 on BabelCite. This 高等法院原訟法庭 judgment was delivered on 30 June 2011 before Hon Reyes J.
Contracts — Termination — Sub-Contract for Border Clearance Systems — Breach and repudiation — Economic duress — Payment disputes and letter of credit — Use of programmed tokens to disable system as leverage — Assessment of damages following termination — Intellectual property rights in customised software — Copyright infringement claim — Defamation claim — Pleadings and fair comment. ATAL contracted with Immigration Department to provide Automated Passenger and Vehicle Clearance Systems and subcontracted 10% of works to Stratech. Disputes arose including the use by Stratech of programmable tokens capable of shutting down the AVRS to pressure ATAL for payment, which was found to constitute repudiatory conduct justifying termination. Court determined that AMS and KMS software were Custom Programs requiring source code delivery, while AVRS was Contractor Supplied Software subject to irrevocable non-exclusive licence. Stratech’s copyright infringement claim failed due to lack of evidence and vesting of rights in Government. Defamation claims by Stratech failed for defective pleadings; Mr. Poon was entitled to fair comment defence. Damages assessed in favour of ATAL at approximately $8.72 million. Substantial costs awarded to ATAL but reduced from full recovery due to ATAL’s own defamation claim strike out. Application for security for costs dismissed in related appeal. Judgment delivered 30 June 2011 by Hon Reyes J in the High Court Court of First Instance.
Legal issues: Termination entitlement due to token threat · Assessment of ATAL's damages for termination · Entitlement to remove tokens from AVRS · Damages for AVRS replacement and standby costs · Classification and delivery of source codes for software · Damages for replacement of AMS and KMS · Meaning of 'acceptance' for payment under Main Contract · Whether ATAL’s advance payments were valid · Stratech’s obligation to perform despite ATAL’s breach · Assessment of damages for temporary CCTV systems · Entitlement to payment for variation works · Stratech’s copyright infringement claim · Defamation claim by Stratech against Mr. Poon
Outcome: Judgment for ATAL granting damages of approximately $8,720,000 with interest. ATAL entitled to 95% costs of consolidated actions; Mr. Poon awarded costs against Stratech. Defamation claims by both parties failed.
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