YEE HING ELECTRICITY & WATERING CONSTRUCTION CO LTD v. NG HOK TAI t/a SUCCESS ELECTRIC ENGINEER

YEE HING ELECTRICITY & WATERING CONSTRUCTION CO LTD v. NG HOK TAI t/a SUCCESS ELECTRIC ENGINEER

Court found that parties had agreed a pay-if-paid term such that P was only entitled to payment to the extent D had been paid by Consort; awarded P proportionate sums based on interim payments received by D (112,000 then additional 10,000) and held there was no agreement authorising D to deduct material costs or to pay Success on P's behalf; found D breached Clause 15.6(c) by failing to give required written notification and that P had substantially performed; awarded judgment to P for $45,588.2 with interest and dismissed D's counterclaim; fixed reasonable period for D to pay P as within 10 days of D receiving payment from Consort where no specific timing agreed.

Citation
YEE HING ELECTRICITY & WATERING CONSTRUCTION CO LTD v. NG HOK TAI t/a SUCCESS ELECTRIC ENGINEER
Parties
Sub Sub Subcontractor / Plaintiff: Plaintiff (P); Sub Subcontractor / Defendant: Defendant (D); Subcontractor to Main Contractor (consort): Consort Engineering Co. Ltd; Main Contractor: Chun Wo Construction Co. Ltd; Supplier / Creditor: Success Electrical Supply Co. Ltd
Court
District Court
Jurisdiction
Hong Kong
Judgment Date
22 June 2006
Case Number
DCCJ4609/2004
Procedural Posture
Construction Subcontract Payment Dispute / District Court Judgment (trial)
Outcome
Judgment for Plaintiff in part; counterclaim dismissed
Legal Topics
Pay If Paid Clause, Set Off and Deduction, Implied Terms, Payment Certification, Subcontracting, Contractual Notice Requirements, Costs
Source Language
EN
Contract Construction Commercial Law Debt Recovery Civil Procedure Pay If Paid Clause Set Off and Deduction Implied Terms +4 more

Case Brief

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Parties

Plaintiff (P)

Sub Sub Subcontractor / Plaintiff

Defendant (D)

Sub Subcontractor / Defendant

Consort Engineering Co. Ltd

Subcontractor to Main Contractor (consort)

Chun Wo Construction Co. Ltd

Main Contractor

Success Electrical Supply Co. Ltd

Supplier / Creditor

Procedural Posture

Construction Subcontract Payment Dispute / District Court Judgment (trial)

Legal Issues

  1. 1 Whether parties agreed a pay-if-paid term and its effect on timing of payment to P
  2. 2 If no precise payment time was agreed, what is a reasonable time for payment after D is paid by Consort
  3. 3 Whether D was entitled to deduct and pay Success on behalf of P (set-off/deduction for materials)

Ratio Decidendi

Court found that parties had agreed a pay-if-paid term such that P was only entitled to payment to the extent D had been paid by Consort; awarded P proportionate sums based on interim payments received by D (112,000 then additional 10,000) and held there was no agreement authorising D to deduct material costs or to pay Success on P's behalf; found D breached Clause 15.6(c) by failing to give required written notification and that P had substantially performed; awarded judgment to P for $45,588.2 with interest and dismissed D's counterclaim; fixed reasonable period for D to pay P as within 10 days of D receiving payment from Consort where no specific timing agreed.

Court Disposition

Judgment for Plaintiff in part; counterclaim dismissed

Orders

  • Judgment for Plaintiff for HKD 45,588.2 with interest from date of writ
  • Dismissal of Defendant's counterclaim