Standard Civil Engineering Co. v. Attorney General
Read the full judgment text of CACV 49/1986 on BabelCite. This Court of Appeal judgment was delivered on 27 June 1986.
1. The Appellant, a Mr. Woo Ping Ching, the sole proprietor of a firm called "The Standard Civil Engineering Co.", is a civil engineer, engaged in civil engineering and construction work in Hong Kong for many years. He is on the Government list of contractors.
|
CACV000049/1986
Arbitration award - enforcement against the Crown - ss. 28 and 32 Arbitration Ordinance - s.21 Crown Proceedings Ordinance. Section 28 of the Arbitration Ordinance, read with s.32, enables an award to be enforced against the Crown, by leave, in the same manner as a judgment. Grech v. Board of Trade (1923) 130 L.T. does not stand in the way. On the facts, the Crown had not shown sufficient grounds for opposing the application.
BETWEEN
---------- Coram: Cons, V.-P., Fuad, J. A. & Clough, J. Date of hearing: 27 June 1986 Date of delivery of judgment: 27 June 1986 ___________ JUDGMENT ___________ Cons, V.-P. : 1. The Appellant, a Mr. Woo Ping Ching, the sole proprietor of a firm called "The Standard Civil Engineering Co.", is a civil engineer, engaged in civil engineering and construction work in Hong Kong for many years. He is on the Government list of contractors. 2. In April 1978 he signed a contract with Government in respect of work at Kai Tak Freight Terminal ("the first contract"). He completed it to Government's satisfaction, but later there was a dispute as to payment. Ultimately, a good while later still, the dispute was settled by arbitration. 3. A long time before that, and even before the dispute had been submitted to arbitration, the Appellant signed another contract with Government ("the second contract") this time with regard to the Hung Hom Stadium Annex. His execution of the second contract was not satisfactory or at least Government took that view and re-entered the building site. This was shortly after the first contract had been submitted to arbitration. 4. The second contract contains provisions as to the financial effect of re-entry. In reliance thereon Government calculated that approximately $1.53 million was due to Government from the Appellant. By Clause 106(2) Government is entitled to deduct monies so due from any monies which the Government might owe to the Plaintiff under the same or any other contract. When the Arbitrator subsequently made an award under the first contract in favour of the Plaintiff, - in the sum of $484,000 -, Government sought to apply the monies due under Clause 106(2) as a set off or form of payment. The Appellant objected. 5. There are two ways in which a successful party to an arbitration can enforce his award. It can either bring an action on the award, to enforce the implied promise to perform, or it may bring proceedings under Section 28 of the Arbitration Ordinance Cap. 341:-
The Appellant chose the latter course and applied to the Court for leave and for judgment to be entered. It was refused by Liu J. who took the view that he had no jurisdiction, although Section 32 of the Arbitration Ordinance, on the face of it, applies Section 28 to the Crown. The Judge relied, as did Professor Glanville Williams in his book published shortly after the Croon Proceedings Act (1), and to some extent the learned editors of Halsbury's statutes (2), upon the case of Grech v. Board of Trade(3) in which Warrington L.J. observed that "It is admitted that the award cannot be directly enforced against the Crown". The reason however appears shortly afterwards in His Lordship's judgment, the proceedings had not been brought by way of petition of Right. That was a procedural hurdle which could not be overcome. I am not persuaded that the judgment can be read in any other way. 6. That was in 1923. Since then the Crown Proceedings Act has been enacted in England and the Crown Proceedings Ordinance Cap. 300 in Hong Kong. Now, by Section 3 of our Ordinance, action may be taken directly against the Crown. As to enforcement, our attention is drawn to Section 21, in particular subsections (1) and (4): -
7. It is suggested that subsection (1) is a sufficient proceedings for a party such as the plaintiff and that Section 28 is thereby impliedly excluded; and that the section is furthermore expressly excluded by subsection (4). 8. For myself I see difficulties in the way of those suggestions. Firstly I have some doubt whether "civil proceedings" includes an arbitration. Civil proceedings are defined in Section 2(2) as including -
I appreciate that the definition is not exhaustive in the sense that it is introduced by the word "includes". But I do not find the inclusion of arbitration in the concept of civil proceedings in Section 21(1) easy to reconcile with the later words "in connection with any arbitration". 9. Secondly subsection (1) only applies to orders "made by any court". It is suggested that this is overcome by the definition of "order" which "includes a judgment, decree, rule, award or declaration". It is said that the context of the Ordinance permits "award" no other reference than to that of an arbitrator. I am not sure that I agree, but even so the operative word of the subsection is "court", and that cannot include an arbitrator. 10. And thirdly, in my judgment subsection (4) does not expressly exclude Section 28 of the Arbitration Ordinance. Leave under that section is not "an execution or an attachment or a process in the nature thereof". It does not in itself enforce payment by the Crown. It is an additional step which has to be taken before the assistance of the Court can be obtained. It is a step that provides the unsuccessful party to an arbitration with a limited opportunity to challenge the validity of an award. Grech(3) is an example of such a challenge. There is no obvious reason why the legislature should think fit to deprive the Crown of a similar opportunity and in my judgment it has not. It seems to me that the wording of Section 21(1) was chosen deliberately with reference to a situation such as we have at the present. With every respect to the learned Judge below his conclusion in this respect was not correct. 11. The Plaintiff is not given an absolute right under Section 28, it is a matter for judicial discretion. At one time judges were discouraged from too free an exercise of that discretion. Warrington L.J. in Grech(3) said "It is well known that that leave is only given in clear cases." But in modern times the boot is on the other foot, and only in unusual circumstances is a refusal likely to be encountered. Lord Denning M.R. has put it thus in Middlemiss v. Hartlepool Corp. (4) -
12. Extraneous matters, such as for example counterclaims, at least as a general rule, ought to be ignored. In Margulies Bros. Ltd. v. Dafnis Thomaides & Co. Ltd.(5) Diplock J. as he then was, said -
His approach was approved by Lord Denning in the case to which I have just referred. 13. The Judge below did not adopt that approach. He seems to have confused the situation with Order 14 proceedings. He spoke of triable issues -
With every respect to him there were no triable issues at that stage. They had already been dealt with by the arbitrator. 14. It may be that cases will arise where a respondent's claim is so strong that the judge ought to refuse an order under Section 28, to grant as it were a stay of execution. In other than arbitration matters the judge may suspend payment by virtue of subsection (3). But in the present case the claim does not seem t o me to be that strong, although counsel is very confident. It all depends upon the correctness of the re-entry under the second contract, a matter which is subject to pending arbitration. In my view leave ought to have been granted and judgment entered in favour of the Plaintiff. I would therefore propose an order to that effect, together with an order that the costs of the arbitration be taxed, to which I understand there is no objection,
(1) "Crown Proceedings", Stevens & Sons Ltd. 1948 at p.34 Fuad, J.A.: 15. I agree that the appeal should be allowed and with the order proposed by my Lord. I will merely add a few observations of my own. It seems to me perfectly plain that the Judge did have jurisdiction to entertain the application made by the contractor under s.28 of the Arbitration Ordinance. This is because s.32 says that Part II of the Ordinance (in which s.28 occurs) applies to an arbitration to which the Crown is a party. 16. With the utmost respect to Mr. Burdett's arguments and to the decision reached by the learned Judge, in my judgment, Grech v. Board of Trade(3) does not stand in the way, for the reasons explained by my Lord. If it did, I would respectfully decline to follow it because to do so would be to do violence to the plain language of the Ordinance. 17. It seems to me that once an application is granted under s.28 or an action succeeds to enforce the award then everything falls into place and the successful plaintiff can proceed under s.21 of the Crown Proceedings Ordinances. He will receive a certificate which will enable him to demand the money from the Accountant General. 18. I was a little surprised to hear a submission from the Crown that s.21 of the Crown proceedings Ordinance was sufficient to enable a person who has obtained an award to get a certificate,. without more, because, as my Lord has pointed out, it would deprive the Crown of the benefit of raising legitimate objections on an application under s.28 of the Arbitration Ordinance, or at the hearing when the award is sought to be enforced by action. 19. I am unable to read the word "court" in subsection (1) of s.21 of the Crown proceedings Ordinance as including an arbitrator. The presence of the word "award" in the definition of "order" in subsection (2) of s.2 of that Ordinance is, to my mind, a very flimsy basis upon which to make the submission that was advanced to us. 20. As regards the merits, so to speak, I agree with all that my Lord has said.
Clough, J.: 21. I also agree with the judgment and reasons delivered by my Lord the President and I would only add one very short observation in respect of Section 21(1) of the Crown Proceedings Ordinance. In concurring with the judgments that have been delivered, holding that an order made on an application under Section 28 of the Arbitration Ordinance is an order made in connection with an arbitration to which the Crown is a party for the purpose of Section 21(1) of the Crown Proceedings Ordinance, I do not, with respect, find it necessary to consider the definition of "civil proceedings" in that Ordinance, because Section 21(1) seems to me to be expressed in disjunctive language segregated by the word "or" and a comma. The provision appears to apply to any order made by the court against the Crown or a government department, firstly in any civil proceedings filed against the Crown or, secondly, is any proceedings such as are in England taken on the Crown side of the Queen's Bench Division of the High Court or, thirdly, in connection with any arbitration to which the Crown is a party. 22. For those additional reasons I concur with the judgments that have just been delivered.
Representation: Mrs. Jill Spruce (M/s H.H. Lau & Co.) for Plaintiff/Appellant Mr. John Burdett & Mr. D.P. Logan, Crown Counsel for Defendant/Respondent |