SPORTS TECHNOLOGY (ASIA) LTD v. CLARIDGE HOUSE LTD

DCcJ1478/2004

 IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 1478 OF 2004

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REASONS FOR DECISION

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1. The Plaintiff  sought  to enter final judgment against the Defendant  by Summons for summary judgment under Order 14.  The Plaintiff averred  that  the Defence filed by the Defendant disclosed no arguable defence and therefore they should have judgment together with interest and cost. Having heard lengthy arguments from both sides, I found for the Defendant that there were serious triable issues in this case and that the Defendant’s Defence was real or bona fide,  I therefore dismissed the Plaintiff Summons and ordered costs be to the Defendant, with Certificate for Counsel, to be taxed if not agreed.  I now give  reasons for my decision..

2. It was common ground between the Plaintiff and the Defendant that the final balance of 20% of the contract price for the supply and installation of a synthetic football pitch was payable on completion of the project. The dispute was whether the project had been completed and therefore the Plaintiff was entitled to be paid the final instalment of 20% of the contract price.

3. The Plaintiff said when the football pitch was installed and the owner of the pitch (Lingnam University) began using it and even hired it out for use by others, the installation had been completed and the Plaintiff was entitled to payment  of  the 20% balance of contract price.

4. The Defendant contended that installation was not completed until a practical completion certificate from the architect was obtained and that there were defects in the installation which required rectification before installation was complete.

5. The Plaintiff contended that the requirement of an architect completion certificate was not part of the contract and that they had obtained a FIFA Recommended Licensing Certificate for the pitch.  It was also contended that any defect complained of should have been a matter for a counterclaim for rectification  (which the Defendant had not taken out) in this action. It was further argued that if the Defendant ‘s contention that there was an implied term incorporated into  the contract (B.P. Refinery (Westernport) Pty Limited  v.  President and Councillors and Ratepayers of Shire of Hastings (1978)  16  ALJR 363 (PC))  that a completion certificate from an architect was required for completion,  the Defendant had waived this requirement when they accepted the work (Hoenig  v.  Issacs (1952) 2 ALL ER 176).

6. The Defendant contended that the FIFA certificate had nothing to do with the contract, it was freely done by the Plaintiff for the Defendant and did not show that installation had been complete. The defects listed out by the Defendant also included  colour inconsistency which had not been dealt with by the Plaintiff. The Defendant said the Purchase Order was not the only express terms of the contract, and even if it was, it was appropriate and necessary to allow an implied term for the requirement of an architect certificate to be incorporated  into the contract for the reasons stated in the case of  B.P. Refinery (Westernport) Pty Ltd.  V.  President, Councillors and Ratepayers of the Shire of Hastings (1978) ALJR  363 PC, viz.

(a)	it was reasonable and equitable in the circumstances;
(b)	it is necessary to business efficacy;
(c)	it is obvious that the term should be incorporated;
(d)	the term is clear;  &
(e)	the term does not contradict any express term of the contract.

The Defendant also contended that the Hoenig   v.  Issacs case was not applicable to the present situation.

7. The case rested on what was meant by completion in the contract between the Plaintiff and the Defendant, whether by express or implied terms. The intention of the parties on this when they entered into the contract was not entirely clear. There was a draft contract made after the signing of the purchase order which was not signed by the Plaintiff but in the course of subsequent correspondence between the Plaintiff and the Defendant, the parties seemed to have made reference to some of the terms therein.  Whether there was an implied term as to the requirement of an architect certificate of completion  and whether the use of the pitch by the university had deemed  the Defendant to have accepted the pitch and waived their right to this implied term were serious triable issues.  The defects on the pitch alleged by the Defendant also needed careful examination as to its nature and seriousness, and that whether these were matters which pertain to the issuing of the architect certificate of completion. The Defendant’s Defence was not frivolous or moonshine, it was a believable Defence.

8. This was not a matter that could  be resolved summarily by way of a mini trial on affidavits. I did not think an Order 14 application was proper in the circumstances. I therefore dismissed  the Plaintiff Summons with order for cost  to the Defendant, with certificate for counsel, to be taxed, if not agreed.