Hong Kong Case Law: Decisions & Judgments

Topic

Pay-when-paid clause

Legal area

Court

13 Jun 2025

SZE FUNG ENGINEERING LTD v. TREVI CONSTRUCTION COMPANY LTD

Citation

[2025] HKCA 532
Court

Court of Appeal
Case number

CACV82/2023

Trevi's application to vary the costs order nisi was dismissed because the appeal succeeded on core construction and implied term issues in favour of SF, the exception to the usual costs rule was not engaged, the pre-trial Calderbank offer was not relied upon below and could have been revived by Trevi, and the matters were not sufficiently complex to justify two counsel; consequently the costs order nisi became absolute and Trevi must pay SF's costs of the appeal.
28 Mar 2025

SZE FUNG ENGINEERING LTD v. TREVI CONSTRUCTION COMPANY LTD

Citation

[2025] HKCA 278
Court

Court of Appeal
Case number

CACV82/2023

Item 18 is ambiguous but on proper construction governs the timing of payment only and does not impose a condition precedent making SF's entitlement dependent on Trevi being paid; an implied term is to be implied that Trevi will assess and pay SF for works duly done in a timely manner and pay a reasonable price; consequentially the trial court's pay-when-paid construction was erroneous, the judgment below is set aside and the disputed variation and loss of profits claims are remitted for re-determination.
25 Oct 2024

CHOI KEI LTD v. DAVID DECORATION LTD

Citation

[2024] HKDC 1737
Court

District Court
Case number

DCCJ3882/2021

The Acceptance Letter and contemporaneous quotations and dealings did not contain clear or unambiguous words creating a condition precedent or pay-when-paid term; the parties agreed prices for additional works (including at the 23 October 2019 site meeting); there was insufficient pleading or evidence of any customary ‘payment on account’ practice and no pleaded counterclaim for alleged contra-charges — accordingly Defendant's defences failed and judgment was entered for Plaintiff for HK$2,624,155.55 with interest and costs.
25 Jan 2024

WING KEI STRUCTURAL METALWORKS COMPANY LTD v. WAH FAI CONSTRUCTION AND ENGINEERING COMPANY LTD

Citation

[2024] HKCFI 255
Court

Court of First Instance
Case number

HCCW128/2022

Clause 11 did not constitute a clear condition precedent or pay-when-paid clause and therefore did not defeat the Petitioner's entitlement to the Debt; the Company failed to demonstrate any bona fide dispute on substantial grounds or any substantiated cross-claim or set-off exceeding the Debt; the new evidence sought to be adduced did not satisfy the Ladd v Marshall criteria and was inadmissible; accordingly the Company's summons was dismissed and a winding up order was made against the Company.
17 Feb 2023

SZE FUNG ENGINEERING LTD v. TREVI CONSTRUCTION CO LTD

Citation

[2023] HKCFI 419
Court

Court of First Instance
Case number

HCCT51/2019

Item 18 of the Quotation was unambiguous and established a back-to-back/pay-when-paid term: SF's entitlement to payment was conditional on Trevi receiving payment from Leighton/CLP and Trevi would release payment to SF within three days of receipt. Clause 18 of the Subcontract was not incorporated by reference. Consequently SF is not entitled to payment for works, variations or other claims unless Leighton certified and paid those amounts to Trevi; most of SF's claims were therefore dismissed except agreed items and amounts allowed by the court.
7 Jan 2016

KIM HUNG CONSTRUCTION & ENGINEERING CO LTD v. STANDARD REFRIGERATION & ENGINEERING CO LTD

Citation

KIM HUNG CONSTRUCTION & ENGINEERING CO LTD v. STANDARD REFRIGERATION & ENGINEERING CO LTD
Court

Court of Appeal
Case number

CACV90/2015

The tentative possession dates in SP 6.02 and related documents were provisional and not contractual dates; the arbitrator erred in law by treating them as contractual and by relying on pleaded/factual admissions as admissions of contractual breach, and accordingly the interim award on the delay claim was set aside and the appeal dismissed.
17 Apr 2015

HONOR ENGINEERING LTD v. HING FAT MACHINERY & ELECTRICAL ENGINEERING CO LTD

Citation

HONOR ENGINEERING LTD v. HING FAT MACHINERY & ELECTRICAL ENGINEERING CO LTD
Court

District Court
Case number

DCCJ3397/2012

The PO was binding because defendant permitted use of its company chop and letterhead creating apparent authority and estoppel; REC's contemporaneous assessment of VO at $214,143.04 was adopted as reasonable, plaintiff entitled to 90% of VO value plus original PO sum less payments, pay-when-paid clause was inapplicable, resulting in judgment for plaintiff of $439,228.74 with interest.
11 Feb 2015

LUEN FAT ENGINEERING AND CONSTRUCTION COMPANY (A FIRM) v. HUNG YIP (HK) ENGINEERING COMPANY LTD

Citation

LUEN FAT ENGINEERING AND CONSTRUCTION COMPANY (A FIRM) v. HUNG YIP (HK) ENGINEERING COMPANY LTD
Court

Court of First Instance
Case number

HCA79/2008

The court found on the balance of evidence that no pay‑when‑paid term was agreed; the parties met in late April 1999 and the contemporaneous letters and payment conduct establish a special payment term of payment within 45 days after receipt of the application which prevailed over any general back‑to‑back reference. Accordingly Hung Yip was liable to pay the outstanding sum claimed by Luen Fat, and the defendant's alternate arguments concerning certification as a condition precedent and reliance on pay‑when‑paid failed.
28 Jun 2013

HUA NING INDUSTRIES LTD v. BEST LEADER ENGINEERING LTD

Citation

HUA NING INDUSTRIES LTD v. BEST LEADER ENGINEERING LTD<br>
Court

Court of First Instance
Case number

HCA1801/2008

The court rejected defendants' implied term and assignment defences, accepted plaintiffs' evidence that no valuable equipment was removed and that the auction was conducted fairly, found no evidence of prejudice to guarantors or diminution of security value and denied amendment raising new cheque defences; judgment entered for Hua Ning for $28,537,236 and for Mr Chan against Mr Sze and Best Leader for $3,569,551.23 with specified interest and costs orders.
28 Jun 2013

CHAN KA MING v. SZE KUNG YEE AND ANOTHER

Citation

CHAN KA MING v. SZE KUNG YEE AND ANOTHER
Court

Court of First Instance
Case number

HCA215/2009

The court found no implied pay-when-paid term in the Cooperation Agreement or Rental Agreements because the criteria for implication were not met; there was no effective assignment of rental debts; Mr Chan did not remove valuable assets and the auction was conducted openly by an independent auctioneer so no prejudice to guarantors was proved; absent expert valuation evidence the defence that guarantors were discharged failed; consequently judgment was entered for Hua Ning for rental arrears and for Mr Chan against Mr Sze and Best Leader for the adjusted loan amount plus interest and costs.