FALCON BUILDING MATERIALS CO LTD v. FINE VIEW ENGINEERING LTD

FALCON BUILDING MATERIALS CO LTD v. FINE VIEW ENGINEERING LTD

The Three Provisions were construed as regulating the timing of payment, not as conditions precedent extinguishing the subcontractor's right to payment; the natural and ordinary meaning required Defendant to pay the 80% balance only after receiving final payment from EMSD and within 45 days of satisfying T&C and EMSD's written acceptance. The TCR dated 26 April 2006 did not amount to EMSD's written acceptance and completion (required documentation remained outstanding) and the Plaintiff failed to prove the Defendant prevented EMSD's payment mechanism. Claim dismissed.

Citation
FALCON BUILDING MATERIALS CO LTD v. FINE VIEW ENGINEERING LTD
Parties
Plaintiff Sub Contractor: Falcon; Defendant Main Contractor: Fine View
Court
District Court
Jurisdiction
Hong Kong
Judgment Date
3 January 2007
Case Number
DCCJ5663/2006
Procedural Posture
Contract Claim (construction/sub Contract) / Trial Judgment
Outcome
Claim dismissed
Legal Topics
Pay If Paid Clause, Back to Back Contract, Prevention Principle, Acceptance of Works, Testing and Commissioning, Defect Liability, Payment Terms
Source Language
EN
Contract Law Construction Law Commercial Law Pay If Paid Clause Back to Back Contract Prevention Principle Acceptance of Works Testing and Commissioning +2 more

Case Brief

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Parties

Falcon

Plaintiff Sub Contractor

Fine View

Defendant Main Contractor

Procedural Posture

Contract Claim (construction/sub Contract) / Trial Judgment

Legal Issues

  1. 1 Whether the Original Balance was due and payable at the date of writ
  2. 2 Whether the Three Provisions constituted conditions precedent (a pay-if-paid clause) to Defendant's liability to pay
  3. 3 Whether the TCR amounted to written acceptance by EMSD

Ratio Decidendi

The Three Provisions were construed as regulating the timing of payment, not as conditions precedent extinguishing the subcontractor's right to payment; the natural and ordinary meaning required Defendant to pay the 80% balance only after receiving final payment from EMSD and within 45 days of satisfying T&C and EMSD's written acceptance. The TCR dated 26 April 2006 did not amount to EMSD's written acceptance and completion (required documentation remained outstanding) and the Plaintiff failed to prove the Defendant prevented EMSD's payment mechanism. Claim dismissed.

Court Disposition

Claim dismissed

Orders

  • Plaintiff's claim dismissed
  • Costs nisi ordered: Plaintiff to pay Defendant's costs of the action (including reserved costs and costs of the morning of first day of trial) to be taxed if not agreed with certificate for counsel