Mariner sues over quality of hotel building

PUBLISHED : Tuesday, 03 February, 2004, 12:00am
UPDATED : Tuesday, 03 February, 2004, 12:00am

Subsidiaries of two prominent developers appeared in court yesterday in a row over the construction of a $1.07 billion hotel in Tsuen Wan.

Mariner International Hotels, a subsidiary of Sino Land, is suing a Hang Lung Group construction company for $321 million, claiming a 1996 agreement for the provision of the hotel was breached.

The Court of First Instance heard that Atlas, a Hang Lung subsidiary, failed to fulfil its end of the agreement when building the hotel, which lacked basic infrastructure.

According to the agreement, a 'functioning, 438-bedroom hotel', ready to open on June 30, 1998, at Yau Kom Tau, Tsuen Wan, was promised, the court heard. Mariner claims Atlas and Hang Lung (formerly known as Hang Lung Development) failed to deliver.

Counsel for Mariner, Ronny Tong Ka-wah SC, said his client was seeking the return of its $321 million deposit and damages of $600,000.

The defendants were counter-claiming for forfeiture of the deposit and unspecified damages, the court heard.

On July 29, 1996, Mr Tong said, the plaintiff was sent an offer for the sale of a 'proposed hotel project'.

Mariner was then told by the defendants to refer to one of their properties, the Grand Plaza Hotel in Kornhill, as a template for the building of a four-star establishment, he said.

Having visited the Grand Plaza, Mariner signed an agreement on December 19, 1996.

A pre-opening team detected problems with the hotel in the first quarter of 1997. Mr Tong said there were a number of deficiencies in the hotel's construction, including poor workmanship, use of substandard materials and no provision for cables and conduits for the hotel's computer system.

Mr Tong also said the reception counter was too low, there was no staff canteen and the back-of-house area was too small.

He said the defendants had embarked on obstructive behaviour, which included barring later inspections. 'The plaintiffs were as ready as could be, the hotel was not.'

The hearing, before Mr Justice Michael Burrell, continues today.