Payment Claim (Hong Kong)

A Payment Claim in Hong Kong sets out a party's case and the orders it asks the court or tribunal to make.

Hong Kong is one of the few major construction markets in the Asia-Pacific region without statutory security of payment legislation. Australia’s Building and Construction Industry Security of Payment Acts — enacted in New South Wales (1999), Victoria (2002), and across all other states and territories — establish statutory rights to progress payments, mandatory payment schedules, and rapid statutory adjudication for payment disputes administered by authorised nominating authorities. Singapore’s Building and Construction Industry Security of Payment Act (Cap. 30B) provides a statutory adjudication regime with strict timetables enforced by the Building and Construction Authority (BCA). The United Kingdom’s Housing Grants, Construction and Regeneration Act 1996 (as amended by the Local Democracy, Economic Development and Construction Act 2009) requires payment notices and gives contractors a statutory right to suspend work for non-payment under Section 112. Hong Kong has none of these protections. The Construction Industry Council (CIC) has repeatedly called for a security of payment regime, and the Development Bureau has conducted public consultations, but as of 2026 no legislation has been enacted. Contractors and subcontractors in Hong Kong face greater payment risk than their counterparts in other major common law jurisdictions as a result.

In the absence of statutory protection, Hong Kong contractors depend entirely on the payment provisions in their construction contracts. The HKIA Standard Form of Building Contract — published by the Hong Kong Institute of Architects (HKIA) — provides a monthly interim payment mechanism under which the architect certifies the value of work completed and the employer pays within a specified period. The Government General Conditions of Contract (GCC) governs payment for government construction projects under the Works Bureau. For subcontract work, the HKIA Standard Form of Domestic Subcontract and the HKIA Nominated Subcontract Form provide payment mechanisms mirroring the main contract provisions.

All Hong Kong construction payment claims are expressed in Hong Kong Dollars (HKD). Hong Kong imposes no Goods and Services Tax (GST) or Value Added Tax (VAT), simplifying payment arithmetic compared with Australia or the United Kingdom where tax-inclusive adjustments are routine. Section 20 of the Arbitration Ordinance (Cap. 609) and Section 49 of the High Court Ordinance (Cap. 4) govern interest on unpaid certified amounts, giving the District Court and Court of First Instance power to award interest when employers delay payment beyond the contractual period. Forms-legal.com provides a professionally drafted Hong Kong Payment Claim template covering HKIA Standard Form interim application procedures, variation valuation under the Hong Kong Standard Method of Measurement (HKSMM), and daywork records.

A Payment Claim in Hong Kong should be submitted at each of the payment application dates specified in the construction contract — typically monthly — and at key project milestones including practical completion and final account. The HKIA Standard Form of Building Contract, the Government General Conditions of Contract (GCC) published by the Works Bureau, and FIDIC forms used for Civil Engineering and Development Department (CEDD) and Drainage Services Department projects all provide specific payment application procedures that the contractor must follow to trigger the architect’s or engineer’s certification obligation.

Monthly interim applications during construction: from the commencement of works until the architect issues the practical completion certificate, the contractor submits a monthly interim payment application — typically on the application date specified in the contract appendix or at the end of each calendar month. Each application documents the cumulative value of work properly executed, measured in accordance with the Hong Kong Standard Method of Measurement (HKSMM4) for building works or the Civil Engineering Standard Method of Measurement (CESMM) Hong Kong Edition for civil engineering works. Consistent monthly applications maintain the contractor’s cash flow and create a contemporaneous record — critical evidence if payment disputes proceed to HKIAC arbitration under the Arbitration Ordinance (Cap. 609) or litigation before the Court of First Instance.

Variation applications: when the contract administrator — the architect under the HKIA Standard Form or the engineer under the Government GCC — issues a variation instruction directing additional work, omitting specified work, or changing the execution method, the contractor submits a variation account documenting the cost of the varied work. Variation valuations are based on Bills of Quantities rates, fair rates where Bills of Quantities rates are inapplicable, or daywork rates under the Daywork Schedule in the contract appendix.

Materials on site applications: where the HKIA Standard Form or Government GCC provides for payment for materials delivered to site but not yet incorporated in the works, the contractor submits a materials on site application supported by delivery records, material schedules, and evidence that materials are properly stored, protected, and insured under the contractor’s all-risks policy issued by a Hong Kong Insurance Authority-authorised insurer.

Practical completion application: at practical completion certified by the architect under the HKIA Standard Form, the contractor submits a claim for release of the first moiety of retention — typically 50% of total retention held — and may also include prolongation costs, loss and expense, or other sums accrued during the construction period and subject to a formal claim under the applicable contract clause.

Final account submission: following expiry of the defects liability period and issue of the maintenance certificate, the contractor submits a comprehensive final account covering all measured work, variations, daywork, prolongation, loss and expense, and other contractual adjustments. The quantity surveyor appointed by the employer reviews and agrees the final account — disputes unresolved at final account stage proceed to mediation under the Hong Kong Mediation Ordinance (Cap. 620) or arbitration under the Arbitration Ordinance (Cap. 609) administered by the Hong Kong International Arbitration Centre (HKIAC).

A Hong Kong Payment Claim must be carefully prepared to support the contract administrator’s certification process under the HKIA Standard Form of Building Contract or the Government GCC and to protect the contractor’s legal position if payment is disputed before the District Court, Court of First Instance, or HKIAC arbitration panel.

Claim identification: the project name, site address, contract reference number, and a sequential claim number (e.g. Interim Application No. 7). Sequential numbering enables the contract administrator and employer to track the progression of applications and confirms each is properly addressed in the payment response within the contractual certification period.

Claim period: the specific start and end dates of the measurement period — for monthly applications, typically the first and last day of the calendar month. The cumulative measurement date (the date to which work has been valued) should also be stated to distinguish this application from prior submissions.

Valuation of measured work: the core of the payment claim is the valuation of work properly executed during the claim period, measured in accordance with the Hong Kong Standard Method of Measurement (HKSMM4 — 4th Edition) for building works, or the Civil Engineering Standard Method of Measurement (CESMM) Hong Kong Edition for civil engineering works procured by the Civil Engineering and Development Department (CEDD) or Drainage Services Department. The valuation should be broken down by trade or Bills of Quantities section, cross-referenced to the Schedule of Rates, and supported by measurement sheets and site records countersigned by the clerk of works or resident site staff.

Variation account: a separate schedule of all variation instructions (VIs) issued to date under the relevant contract clause — typically Clause 60 of the HKIA Standard Form — showing the VI reference number, nature of varied work, valuation basis (Bills of Quantities rates, fair rates, daywork under the Daywork Schedule, or agreed lump sum), and amount claimed. Each variation should reference the signed instruction issued by the architect, engineer, or quantity surveyor appointed under the contract.

Daywork account: if daywork has been executed and is separately valued, a daywork account supported by daily daywork sheets countersigned by the contract administrator’s representative on site. Daywork rates are typically set out in the Daywork Schedule in the contract appendix.

Materials on site: if the HKIA Standard Form or GCC provides for payment for unfixed materials delivered to site, a schedule listing materials, quantities, unit rates from the Bills of Quantities or market rates, and delivery records. Materials must be properly stored, protected, and insured under the contractor’s all-risks policy to qualify.

Cumulative valuation summary: a running total showing the cumulative gross certified value to date, enabling the architect or quantity surveyor to verify progression against the contract programme and cost plan prepared by the project quantity surveyor.

Previous payments deduction: a schedule of all previous interim certificates issued by the architect and payments received from the employer, deducted from the cumulative gross valuation to arrive at the gross amount due for the current period.

Retention calculation: retention deducted in accordance with the contract — typically 10% of the gross amount certified up to a specified retention limit, reducing to 5% after practical completion certified under the HKIA Standard Form. The running balance of retention held should be shown separately.

Net amount claimed: the net amount payable — gross amount due for the period less the retention deduction. All amounts in HKD; no GST or VAT applies in Hong Kong. Interest on late payment may be claimed under Section 49 of the High Court Ordinance (Cap. 4) or the specific interest provisions in the contract. The forms-legal.com Payment Claim template for Hong Kong covers all these elements under the Arbitration Ordinance (Cap. 609) framework.