CONSTRUCTION

construction

The local construction industry had performed well in the second quarter of 2012, the main contractor had complete the construction of the total value in real terms amounted to HK$39.2 billion (US$5 billion), representing an increase of 34 percent over the same period in the previous year.  Contractors need to work with different units in order to complete the construction work.  The incident of the strike of Hong Kong International Terminals (HIT) outsourced workers aroused the concern about contracting industry.  It is important to sign an outsourcing contract that determines the responsibilities of the parties, otherwise it will cause unnecessary disputes and litigation brought heavy pressure and burden.  At the meantime, the Government has also monitoring the site safety with regulations and laws.  Contractor needs to be very caution with the laws, because even the slightest mistake will likely be prosecuted, and thus causing the progress delay or even unnecessary losses.

We are familiar and experience in working with clients in the construction industry, our professional team of lawyers have extensive experience in handling legal matters related to the years for the industry's customers to solve all kinds of legal issues, including the Occupiers Liability consulting, draft and review commercial contracts and all kinds of commercial disputes and litigation.  We hold the spirit of customer-oriented professionals provide personal, professional and quality service for our clients to resolve the crisis, so that clients can focus on their business.

List of our client

con abs building       con abs building products       con andermax       con ap kai       con shun lee       con benson       con bh r       con fair rack       con him       con hk gas       con idc       con jetrod       con jets       con kavin       con kb partners       con kpa       con marc       con national concord       con play concept       con poolmate       con regent pioneer       con rnb engineering       con ast group     con waterland      

Brief Case #1

Building Construction / Building Material Supply / Defects / Incorporated Owners / Building Contractor / Warranty / Claim / Product Liability

Case Scenario:

A respectable building material supplier, provided pipes for a renovation project 2 years ago in Hong Kong. Recently, the supplier received a demand from the Management office of the buildings saying that, the pipes installed were not of merchantable quality, in particular that almost all pipes installed were rusted, and therefore requesting for remedial works and compensation. The supplier concerned whether they are liable for the issue.

Advice to Client:

Having reviewed all case related documents provided, including original sales quotation, supply agreement, warranty terms and conditions, record of delivery, and exchange of correspondences between all parties, we found that our client (the Supplier) was only a party to contact with the product distributor. It was the Distributor who contacted with the Building Contractor, whom provide material and installation service to the Building, ie. (Owner). Therefore our client (the Supplier) has no contractual relationship with the Owner, or with the Building Contractor directly. Having said that, our client, does owe a liability to end-user (in this case, the Owner), known as “Product Liability”.

We therefore looked into the terms and conditions of Warranty agreement provided by our client to the Distributor. We also advised our client to conduct an in depth site investigation to find out the real cause of the damages and estimate the costs of replacement. It was our client’s findings that the problem of rust was caused by poor installation workmanship. The installation work was provided by the Building Contractor and we see they should be primarily liability for the damages.

To resolve this dispute, we suggest to take initiative to write to all parties concerned to conduct a join site inspection, such inspection should be conducted by an independent surveyors to find out the real cause of damages, suggested remedial works and procedures and estimate costs of all remedial works. Once this reported is done, argument between parties will be narrow down.

In most construction dispute cases, the Court will place a very high evidential value in such pre-action joint parties inspection report. Therefore, if any party refuse to take part in the joint inspection, they waived their opportunity to be heard before inspection was conducted, to witness how the inspection was conducted, and comment on the final report.

Brief Case #2

Building Construction / Foundation Contract / General Building Contract / Government / Delay / Building Department Approval / Liability for Interim Payment

Case Scenario:

A local manufacturer obtained a leasehold land from government to build a factory. Building consultant and architect were engaged for general building design and foundation work. However, the land structure was found peculiar, despite repeated submission, the structural plan provided by architect failed to obtain final approval from the Buildings Department, hence no green light from BD to commence foundation works despite 2 years lapsed and the project was seriously delay. On one hand, manufacturer received request of interim payment from the building consultant and the architect, on the other hand manufacturer needs to pay penalty to Government as a result of the project delay. The manufacturer concerns their liability to payment to the building consultant and architect.

Advice to Client:

We considered all the documents from client including building agreement with the architect and building consultant, quotations, tender document, action work time frame and all exchange of correspondents between parties.

Should this matter be brought before the Court for a decision, the Court would normally first looking at the original quotation, try to understand what was the project works included in the original scope of works. The Court will then look into the request for payment, say from the building consultant, and cross-read with the quotation signed by all parties (normally in the form of a paginated general building contract). Should issue of dispute is focus in quantity and/or quality, the Court would normally allow the parties to jointly instructed a single expert in the field, such as a building surveyor, to carry out inspection and provide assessment report, in particular to the quantity and quality of works rendered by the service provider (in this case, the building consultant and architect) to the principal (in this case, the manufacturer). The expert report is a very important reference for the trial judge to decide on the issue of liability of payment. Therefore, choice of an expert and instruction to the expert is very important.

Upon completion of preliminary assessment, we advice our client (the manufacturer) had overpaid several items in the contract, ie. some works was yet to be delivered, but client had already paid. Therefore we assists our client to set out the record of work done and services rendered and amount paid and overpaid.

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