Read the full judgment text of HCCT 32/2013 on BabelCite. This 高等法院原訟法庭 judgment was delivered on 24 July 2014 before Master S Lo.
Construction contract dispute — plaintiff CRESTDREAM LIMITED retained defendant POTTER INTERIOR DESIGN LIMITED to carry out fitting-out works for a fixed sum HK$3.3 million with specified completion dates; delay and repudiation arose when defendant abandoned works; plaintiff instructed quantity surveyor and third-party contractors to assess works and complete reinstatement ordered by Buildings Department due to unauthorized structural alterations. Core legal issues addressed included: (1) recoverability of damages for cost of reinstatement commissioned by plaintiff after defendant's abandonment, which was allowed based on established principles and expert report; (2) entitlement to liquidated damages accruing post-contract termination, decided in favour of plaintiff relying on construction contract authorities and reasoning against absolving defendant of delay liability upon termination; (3) validity of liquidated damages clause as genuine pre-estimate rather than penalty, accepted following authorities and contract formula analysis. The court assessed damages totaling HK$2,904,588 inclusive of cost of reinstatement, overpaid amount, and liquidated damages for delay; interest was awarded; and costs were summarily assessed at HK$230,000 to plaintiff subject to order nisi. Defendant did not appear at assessment hearing.
Legal issues: Recoverability of damages for cost of reinstatement work by a third party · Claim for liquidated damages after termination of contract · Validity of liquidated damages clause as genuine pre-estimate of loss
Outcome: Damages awarded to plaintiff totalling HK$2,904,588 with interest; costs awarded to plaintiff summarily assessed at HK$230,000 subject to order nisi.
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