Hong Kong Case Law: Decisions & Judgments

Topic

Demand bond

Legal area

Court

16 Jul 2015

ASIA INSURANCE CO, LTD v. WARM HOME CONSTRUCTION CO LTD AND OTHERS

Citation

ASIA INSURANCE CO, LTD v. WARM HOME CONSTRUCTION CO LTD AND OTHERS
Court

Court of First Instance
Case number

HCA1116/2014

The judge found the defendant's challenge to the demand letter lacked merit because two authorised signatures were present and confirmed by the Employer; Clause 3 of the Indemnity Agreement unequivocally bound the indemnitor to accept payments made purportedly in accordance with the bond without inquiry; the defendant therefore had no real prospect of success and the default judgment should not be set aside.
3 Feb 2000

AIRPORT AUTHORITY HONG KONG v. AMERICAN HOME ASSURANCE CO.

Citation

AIRPORT AUTHORITY HONG KONG v. AMERICAN HOME ASSURANCE CO.
Court

Court of First Instance
Case number

HCA17807/1999

Clause 2 is to be construed as creating an unconditional on‑demand obligation: 'or conditions' means payment is required without conditions or proof of default or damages. The plaintiff's demand letter, stating the bonded sum and linking it to the subcontractor's default, met the bond's requirements. Alleged affidavit defects did not constitute 'other reasons' under Order 14 r3 to refuse summary judgment. Summary judgment for the plaintiff is therefore appropriate for the bonded sum claimed.
20 Sept 1999

NISHIMATSU CONSTRUCTION CO. LTD. v. AMERICAN HOME ASSURANCE CO.

Citation

NISHIMATSU CONSTRUCTION CO. LTD. v. AMERICAN HOME ASSURANCE CO.
Court

Court of First Instance
Case number

HCA10416/1999

Clause 2 of the bond, which required payment upon a written demand 'without proof of the said default or conditions', only required a written statement that the subcontractor was in default and identification of an amount not exceeding the bonded sum; the 2 June 1999 demand satisfied those requirements and therefore triggered the bondsman's liability, entitling the plaintiff to summary judgment.
11 Nov 1998

AMERICAN HOME ASSURANCE CO. v. JAMES STAINLESS STEEL LTD.

Citation

AMERICAN HOME ASSURANCE CO. v. JAMES STAINLESS STEEL LTD.
Court

Court of First Instance
Case number

HCA11833/1994

The court held the Defendant liable to indemnify the Plaintiff because the Defendant had (i) effectively agreed to provide the Corporate Indemnity (by concession, acceptance of quotation, admission in correspondence and oral agreement through its agent) and (ii) the Surety Bond was properly construed as an unconditional demand bond payable on written demand and not conditional on proof of the subcontractor's default, so the Plaintiff's payment under the bond was recoverable from the Defendant.
23 Dec 1987

TINS\' INDUSTRIAL CO LTD v. KONO INSURANCE LTD

Citation

TINS\' INDUSTRIAL CO LTD v. KONO INSURANCE LTD
Court

Court of Appeal
Case number

CACV136/1987

The bond before the court was a conditional (double) bond requiring the claimant to prove breach by the contractor and resulting damages; the trial judge was wrong to treat it as an on‑demand bond and to grant summary judgment under Order 14 where disputed facts existed (notably conflicting instructions of 26 November and whether repudiation was by contractor or developer); appeal allowed and defendant given unconditional leave to defend.

Hong Kong Case Law

ASIA INSURANCE CO, LTD v. WARM HOME CONSTRUCTION CO LTD AND OTHERS

AIRPORT AUTHORITY HONG KONG v. AMERICAN HOME ASSURANCE CO.

NISHIMATSU CONSTRUCTION CO. LTD. v. AMERICAN HOME ASSURANCE CO.

AMERICAN HOME ASSURANCE CO. v. JAMES STAINLESS STEEL LTD.

TINS\' INDUSTRIAL CO LTD v. KONO INSURANCE LTD