Shun Shing Construction & Engineering Co. Ltd. v. Builders Federal (HK) Ltd.

HCCT000013/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTRUCTION AND ARBITRATION PROCEEDINGS
NOS.13 AND 14 OF 2001

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HCCT13/2001

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Coram: Hon Burrell J in Chambers

Dates of Hearing: 30 - 31 July 2001

Date of Decision: 19 September 2001

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DECISION

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1.In the summer of 2000, these parties aired their disputes in arbitration proceedings before Mr Nigel Aiken, SC. On 26 October 2000, he published his final award, a 72 page document. A central issue in the arbitration was the period of delay. The architect had certified that practical completion of the main contract works was delayed by 144 days after the extended date for completion. The arbitrator reduced this period, in Builders Federal's favour, to 40 days. Neither side lodged any notice of appeal in relation to the award. However the arbitrator was asked for a clarification of part of his award. Since the clarification both parties seek leave to appeal. To avoid confusion, I will refer to the parties, in this judgment, by their abbreviated names, Shun Shing and Builders Federal because they wear different hats in the arbitration and cross appeals (Builders Federal was the claimant in arbitration, the applicant in HCCT 14 and the respondent in HCCT 13. Shun Shing was the respondent in the arbitration, the respondent in HCCT 14 and the applicant in HCCT 13).

2.Shun Shing was the main contractor constructing a building in Wyndam Street Central. Builders Federal was the nominated sub-contractor of the curtain wall. The employer was Marvel Properties Ltd ("Marvel") and the architects were P & T Architects and Engineers Ltd. The sub-contract was in the Standard Form of First RICS (Hong Kong Branch) sub-contract 1986 Edition. It contained a "pay when paid" provision of clause 11(b).

3.In the arbitration, Builders Federal was challenging the fact that Shun Shing had withheld from Builders Federal a total sum of $9,939,837 - from sums certified by the architect. The relevant interim payment certificates were numbers 16 to 21 inclusive. The employer, Marvel, had withheld $7,400,000 from Shun Shing under I.P.17 and $6,589,076 (the entire sum certified) under I.P.21. Shun Shing had been paid in full under the others, 16, 18, 19 and 20. The architect had certified 144 days delay.

4.Shun Shing's defence in the arbitration was :

(a) they were entitled to deduct liquidated damages (which had been deducted by Marvel) from Builders Federal's interim payments as the architect had certified that Builders Federal's works ought to have been completed on the extended completion date and they were long overdue and

(b) Shun Shing had not received under I.P.s 17 and 21 payment for Builders Federal's work. As their obligation to pay Builders Federal was under clause 11(b) they did not pay because they had not been paid.

5.It is now necessary to see what the arbitrator found in his unappealed award. His final two paragraphs (120 and 121) state :

"120. In total I find Builders Federal responsible for 40 days delay. I find that this was a dominant cause of delay to practical completion. It follows that Shun Shing are entitled to withhold $4 million from sums due to Builders Federal under the interim payment certificates. Shun Shing have in fact deducted $9,939,837 and so it follows that Shun Shing are liable to reimburse Builders Federal $5,939,837. Whether Shun Shing's liability to reimburse Builders Federal has in fact crystallised depends on whether Marvel has paid Shun Shing this sum in respect of Builders Federal's work (because I have held that the Sub-Contract imposes liability to pay only when paid).

121. I do not find Builders Federal responsible for the balance of the delay to practical completion (ie. 104 days). I derive comfort from the fact that as late as October 1999 Shun Shing were blaming Marvel for part of this delay when seeking a further extension of time. It follows that delay caused by Builders Federal is less than a third of the total delay. I find, therefore, that there is no basis to hold Builders Federal liable for Shun Shing's prolongation costs and so I reject the quantum sought in the Counterclaim."

6.Having, earlier in the award, decided what "pay when paid" means under clause 11(b) as follows : (paragraph 28)

"28. The meaning of Clause 11(b) has been considered in 2 Hong Kong cases. In Hong Kong Teakwood Works Ltd. v. Shui On Construction Co. Ltd. [1984] HKLR 253 Hunter J. held that the words 'receipt .... of payment' in Clause 11(b) must be given their natural meaning. In other words the Sub-Contractor's entitlement crystallises when the Main Contractor is paid by the Employer sums referable to the amount certified due for the Sub-Contract work. The Court of Appeal endorsed Hunter J.'s interpretation of Clause 11(b) : Schindler Lifts (Hong Kong) Ltd. v. Shui On Construction Co. Ltd. [1984] 29 BLR 95."

he then, at paragraphs 32 and 35 said :

" HAS MARVEL PAID SHUN SHING SUMS REFERABLE TO BUILDERS FEDERAL'S WORK UNDER CERTIFICATE 16 TO 21

32. All I know is that Marvel deducted a total of HK$13,989,076 as liquidated damages from Certificates 16 to 21 and that Shun Shing has withheld a total of HK$9,939,837 from Builders Federal.

33. The question of fact which I am not in position to determine (but the parties are) is whether Shun Shing received a balance in excess of the liquidated damages deducted by Marvel and, if so, whether that balance is referable to the sums certified as due to Builders Federal.

34. I have found that Builders Federal are liable for 40 days delay. If follows that Shun Shing are entitled to withhold HK$4,000,000 as against liquidated damages. Shun Shing in fact withheld HK$9,939,837. It follows that, on my findings, Shun Shing are liable to pay Builders Federal $5,939,837 on certificates 16 to 21. However, Shun Shing's liability will only have crystallised under Clause 11(b) if Shun Shing have received payment from Marvel of this sum.

35. I propose to leave the parties to work out the mathematics. It will be a simple task to apply my finding that Clause 11(b) imposes a 'pay when paid' obligation on Shun Shing, to the breakdown of sums paid under certificates 16 to 21."

7.In other words, he hoped the parties would be able to agree the quantum of what he described as a "simple task". Unfortunately his optimism was misplaced. The parties could not agree and they sought a clarification of paragraphs 32 - 35. Shun Shing's stance was that they were entitled to appropriate (by applying the general law of appropriation) the sum received from Marvel (just over $4 million on I.P.17, $7.4 million having been withheld by Marvel for liquidated damages) in settlement of sums due to themselves and other nominated sub-contractors as they considered appropriate. Having done that nothing was left for Builders Federal.

8.I now set out how the arbitrator clarified this matter.

"3. The submissions have become complicated. In part this arises from the attempt by Builders Federal to ascribe the $4 million liquidated damages ['L.D.'] to particular certificates. Such an exercise is fraught with difficulty (as indeed is indicated by errors made in the submission of 2nd December 2000) : it is artificial since there is no evidence of what was done, or intended to be done, at the time the certificates were issued : it is unsatisfactory because each party is likely to adopt an analysis which, with hindsight, best suits their argument. The Sub-Contract does not require that L.D. be deducted from a particular payment : LD can be deducted (and often are) from Certificates issued months after the delaying event.

4. I consider the approach which is consistent with the Schedule of Reasons is to treat the $4 million LD as deductable in 2 tranches. The Schedule of Reasons identifies 2 distinct periods of culpable delay by Builders Federal. First, the 30 day overrun at the ground floor to 2nd floor namely from 18th April to 19th May 1997 ['the First Period of delay']. Second, the notional period of 10 days identified as 'Builders Federal General Delay' from 19th May to 8th August 1997 ['the Second Period of delay']. In order to ascribe the liquidated damages deductible from Builders Federal in respect of these 2 periods of delay I consider it logical and fair to attach the deduction to the certificate(s) closest in time to the delaying event(s). In the case of the First Period of delay the closest certificate is No.17. In the case of the Second Period of delay no certificate is obviously referable since the delay, being notional, is representative of many different causes occurring at different times over the whole period. I therefore consider it fair to spread the LD evenly over Certificates 18 to 21 with any balance being carried over to the next Certificate."

He then went to deal with each certificate individually.

9.Under I.P.16 he found that the $700,000 withheld by Shun Shing should not have been and directed them to pay it to Builders Federal.

10.Under I.P.17 he said :

"9. The total under Certificate 17 was $11,413,486.40. Marvel deducted $7,400,000 under the Main Contract as L.D. The issue is whether the balance paid to Shun Shing ($4,013,456.40) is payment for Builders Federal's work or some other work.

10. If it is payment for work other than Builders Federal the 'pay when paid' provisions apply and Shun Shing has no current liability to pay Builders Federal : Shun Shing would not be in 'receipt of payment' for Builders Federal's work [see paragraphs 28 to 34 of the Schedule of Reasons]. Shun Shing argue (by reference to the general law of appropriation of payments to one of several debts) that since Marvel (as debtor) failed to make an appropriation Shun Shing (as creditor) are entitled to do so and that they have decided to appropriate the sum to work other than Builders Federal [see Cory Bros. v. Owners of Turkish Steamship 'Mecca' [1887] AC 286.

11. I do not believe that the general law of appropriation is suitable to the resolution of this dispute. First, unlike the general position, the certifying process in building contracts requires a third party (the Q.S. or Architect) to 'certify' the sums due to the various Sub-Contractors. In that sense an 'appropriation' is made. Second, there is no evidence that Shun Shing in fact made an appropriation at the material time (ie. when the certificate was received). I do not consider it desirable that Shun Shing should seek now, in the course of argument, to make an appropriation.

12. As explained in paragraph 4 above I have decided to deduct the LD for the First Period of delay ($3 million) from Certificate 17. Shun Shing in fact deducted $6,370,803. This amounts to an over deduction of $3,370,803. Marvel paid Shun Shing $4,013,386. I have decided that Shun Shing cannot now rely on the general law of appropriation and treat this payment as due to other contractors. The Certificate ascribes $6,370,803 as due for Builders Federal's work. After deducting LD for the First Period of delay the residual value of Builders Federal's work is $3,370,803. I consider that this sum is payable out of the $4,013,386 received by Shun Shing from Marvel. I direct that Shun Shing is liable to pay Builders Federal $3,370,803 under Certificate 17."

11.He then spread the balance of the liquidated damages ($1 million) over Certificates 18 to 21. In relation to Certificate 21 (where Marvel had paid Shun Shing nothing, it had withheld the entire certified amount) he said :

"CERTIFICATE 21

19. The QS valued Builders Federal's work at $1,632,819. The Architect issued Certificate 21 on 15th October 1997. Marvel withheld the full amount certified ($6,589,076) from Shun Shing.

20. Applying the approach explained in paragraph 4 it is necessary to deduct the portion of LD for the Second Period of delay referable to Certificate 21 ($250,000) plus the balance carried over from Certificates 19 ($42,982) plus the amount carried over from Certificate 20 ($250,000). The total deduction is therefore $542,982. Shun Shing in fact deducted $1,632,819. This amounts to an over deduction of $1,089,837. However I do not consider that this sum is currently payable by Shun Shing to Builders Federal because Shun Shing have not 'received' payment of this sum from Marvel. Builders Federal argue that my interpretation of Clause 11(b) in the Schedule of Reasons permits treating a Main Contractor as having 'received' payment in the situation postulated by the Court of Appeal in the Chung Kiu Development Case at page 781. I consider that that situation has no application where, as here, the Main Contractor (Shun Shing) has received no payment at all under the relevant certificate. Accordingly I direct that Shun Shing has no current liability to pay Builders Federal the balance of their work ($1,089,837) after making the appropriate deduction of LD for the Second Period of delay."

12.The adjusted figures resulted in a finding that Shun Shing were to pay Builders Federal $4,850,000 (sub-divided as follows) :

I.P. Certificate 16	-	$700,000
I.P. Certificate 17	-	$3,370,803
I.P. Certificate 18	-	$779,197
I.P. Certificate 19	-	$0
I.P. Certificate 20	-	$0
I.P. Certificate 21	-	$0

13.Both parties now seek leave to appeal. Shun Shing applied first. Their appeal (HCCT13) was lodged in time. As for Builders Federal's application (HCCT14) Shun Shing say it is out of time and contrary to the Consent Summons of 13 February 2001. They say it is out of time because, in truth, it is an application for leave to appeal against the award, not the clarification. If, in truth, it is such an application, dressed up as an application for leave to appeal the clarification, it is indeed out of time. With the consent of the parties (and because time was running out at the hearing) this decision under HCCT14 is confined to the issue of whether or not it is out of time. If it is, the application will be refused. If it is not, the parties will return to court to argue the merits of Builders Federal's application.

HCCT 13

14.I start with the legal principles to be applied in an application under section 23 of the Arbitration Ordinance, Cap.341.

15.It is well settled that the 'Nema' guidelines apply in Hong Kong by virtue of the judgment of Hunter JA in the In re P.T. Dover Chemical Company case [1990] 2 HKLR 257.

16.In the present application, both counsel agree (as does the court) that this is not a case "at the top of the scale". It is a case lower down the scale where "rather less strict criteria" apply. Mr Hingorani, counsel for Builders Federal, submits that many of the issues are better described as questions of fact rather than law. The law involved however does involve questions of construction. I do not think, however, that because questions of construction are involved one should go straight from the top of the scale down to the bottom. There are two factors which keep this case off the bottom. The first is that the arbitrator was a lawyer. It is not a case where questions of law have been decided by an engineer. Moreover, the lawyer's credentials must be weighed in the balance. Mr Aiken, since 1994, has been a senior counsel in Hong Kong. He has considerable expertise and experience in construction law and arbitration law and practice. Secondly, it has to be asked if the issues on appeal would significantly add to the clarity and certainty of Hong Kong law. Hunter J said the courts can "on occasions" play a useful role in fostering uniformity. Thus, the tenor is that leave is granted only sparingly. The presumption of finality always looms large and applies in every case to a greater or lesser degree. The test is straightforward, clearly stated and stringent. When faced with an application for leave to appeal an arbitrator's award pursuant to section 23 this court looks no further than the P.T. Dover case when deciding the threshold to be reached by the applicant. The important passage is as follows :

" At the top of the scale or spectrum the presumption of finality is strongest in the 'one-off' case or 'one-off' event. Typically this will concern a specially drawn contract giving rise to no point of construction: peculiar or special facts: a question of law 'in which the general market and the commercial fraternity has no interest (it merely affects the rights of the particular parties) per Lord Donaldson, M.R. in The Kelaniya [1989] 1 Lloyd's Rep 30, 32: and a question of law decided by an arbitrator chosen for his legal qualifications and arising in an international context. Then leave should be granted only if the arbitrator is, in Lord Diplock's reformulation in The Antaios p. 206 :

'So obviously wrong as to preclude the possibility that he might be right.'

In the simpler and more homely language of Lord Donaldson in The Kelaniya 32 :

'... there is a strong presumption that they have also accepted him for better or for worse in relation to questions of law. This is not however to say that, even in a one-off case, an arbitrator is to be allowed to cavort about the market carrying a small palm tree and doing what he thinks appropriate by way of settling the dispute. What it does amount to is that the Courts will normally leave him to his own devices and leave the parties to the consequences of their choice. They will only intervene if it can be demonstrated quickly and easily that the arbitrator was plainly wrong.'

At the bottom end of the scale the presumption is weakest where the dispute arises between Hong Kong parties out of a standard form of contract in regular use in Hong Kong; turns upon the construction of that contract in the context of events which are commonplace or likely to recur; and has given rise to a question of law decided by a non-legal arbitrator, e.g. an architect or engineer. This is the classic standard case envisaged by Lord Diplock in The Nema where he said at p. 743D :

'Rather less strict criteria are in my view appropriate where questions of construction of contracts in standard terms are concerned. That there should be as high a degree of legal certainty as it is practical to obtain as to how such terms apply upon the occurrence of events of a kind that it is not unlikely may reproduce themselves in similar transactions between other parties engaged in the same trade, is a public interest that is recognised by the Act particularly in s. 4. So if the decision of the question of construction in the circumstances of the particular case would add significantly to the clarity and certainty of English commercial law it would be proper to give leave.'

I have cited this passage in full because to my mind it shows the true ambit of the phrase 'clarity and certainty'. It is not being used in the general sense of the resolution of some interesting point of law, or of the filling of some lacuna in the books, for the benefit of the public and lawyers generally. I would be minded to regard it as questionable whether leave should ever be given for that purpose. This phrase and 'public benefit' relate I think to a particular class of the public, to those participating in the particular group or trade that uses the common form of contract in question. In those circumstances both the parties and other participants in that trade may have both a present and a future interest in the true construction and effect of the particular clause. The courts can still on occasion play a useful role in fostering uniformity of approach. But this desirable result can only be achieved widely if arbitrators and parties can openly be informed of their colleague's decisions by the parties consenting to the publication of awards with all necessary safeguard as to identity cp Arbitration (Amendment) (No. 2) Ordinance 1989 s. 2E. Even in such circumstances as these leave should only be granted if a strong prima facie case of error is made out."

17.In the Garden Co. v. On Lee General Contractors case [1995] 2 HKC Leonard J at page 95 emphasized the words "quickly and easily", and added :

" By now it should have dawned upon the profession that leave to appeal will be granted only in exceptional cases and clients involved in arbitration should be so advised. If it cannot be demonstrated quickly and easily that the arbitrator is wrong, elaborate arguments are unlikely to succeed."

18.In view of all of the above, in my judgment, in this case, in order to succeed in applying for leave to appeal the clarification, Shun Shing must demonstrate that there is a very strong prima facie case that the arbitrator was wrong on a matter of law. If there is a very strong prima facie case it would be apparent quickly and spotted without difficulty.

19.Because of the above principles the court's approach to this application will be somewhat less analytical and detailed than the lengthy and comprehensive (and I should add, helpful) written and oral submissions made by both counsel.

20.Ms Teresa Cheng SC, for Shun Shing seeks leave to appeal on two questions :

"a. Whether in the absence of any appropriation by the employer, a main contractor is entitled to appropriate payments made by the employer in respect of Architect's Certificates, which included the entitlements of various nominated sub-contractors and of the main contractor. If so, whether such appropriation determine for the purpose of clause 11(b) whether the main contractor has received payment certified as due in respect of the sub-contract works.

b. Whether HK$4,000,000 (to which Shun Shing was found to be entitled from Builders Federal by way of reimbursement under Clause 8(a) of the Standard Form) could be set off by payment not yet due to Builders Federal (by reason of clause 11(b))."

21.It is not agreed between the parties that these are purely questions of law. In my judgment they are neither purely law nor purely fact. The fact that they are questions of mixed law and fact is however another reason why the court should be reluctant to interfere with the learned arbitrator's findings, reasons and calculations.

22.The first question is based on Shun Shing's submission that the general law of appropriation of payments should apply to the payment situation between the main contractor and the nominated sub-contractor. At paragraph 11 of his clarification the arbitrator said : "I do not believe that the general law of appropriation is suitable to the resolution of this dispute."

23.Ms Cheng submits that it is a question of general importance to the construction industry. She argues there is a "dearth of authority dealing with the point". In my view the "dearth" stems from the facts both that it is not of general importance and also that if it were decided it could have the effect of placing an unnecessary fetter on arbitrators which would take away an important degree of flexibility. It is that degree of flexibility which, when used skillfully and competently, as in this case, assists the arbitrator in reaching a just and fair solution to a difficult problem.

24.The arbitrator went on, in paragraph 11, to state his reasons for his statement quoted above. In my view those reasons are tenable. They do not warrant the criticisms mounted by Ms Cheng. In general terms her complaint is that, by not applying the general law of appropriation an arbitrary method has been applied. She summarizes his approach by saying :

"...the Arbitrator firstly reduced from the sum certified (by the Architect) as due to Builders Federal the amount of liquidated damages which he found Shun Shing to be entitled to deduct, and then appropriated the sum received by Shun Shing to satisfy such reduced sum. Only the remaining portion of the sum received was left for appropriation to Shun Shing and other nominated sub-contractors. Such a method in essence gives Builders Federal an arbitrary priority over others to receive payment made by the Employer, when such sum was insufficient to satisfy the certified sums for the main contractor and all the sub-contractors."

25.This may be so, but given my view, as already stated, that an arbitrator's approach need not be robotic, solutions such as the one chosen will sometimes emerge. The solution clearly seeks to do justice to the two parties before him, on the basis of the facts as he had found them to be. Once he decided that the general law of appropriation was not suitable in this case (a decision about which it cannot be said there is a strong prime facie case that it was clearly wrong) then, his solution to the distribution of the payments seems to me to be proper, valid and reasonable.

26.Mr Hingorani for Builders Federal made some valid points in support of the arbitrator's approach. In particular he reminded the court that prior to any of the interim payments 16-21 the architect has issued a certificate of non-completion, on 20 March 1997, against Shun Shing. Without going into the detailed arithmetic the consequence of the non-completion certificate together with the award itself is that Shun Shing was liable to the employer in a sum which exceeded the amount due to them under I.P.17. The application and combined affect of both the payment certificates and the non-completion certificate on the proper sums due to both the main contractor and thereafter to the sub-contractor is the problem which the arbitrators was required to deal with in his clarification. He was not bound and should not be bound by any legal straightjacket when addressing that problem. As argued by Mr Hingorani, the existence and relevance of a prior non-completion certificate is a factor to be taken into account. It enforces the caution against the strict application of the general law of appropriation in this particular case.

27.The arithmetic result of his approach, in relation to certificate 17, which culminated in his decision was that (i) the sum certified as due to Shun Shing was $3,551,684 and that (ii) the sum certified as due to Builders Federal was $6,370,803 and that (iii) the employer was entitled to withhold $4.4 million from Shun Shing under the non-completion certificate and that (iv) of the $4 million liquidated damages for which Builders Federal were liable (which was approximately only 1/3 of the liquidated damages claimed prior to the arbitration) $3 million should be applied to certificate 17. This is the factual result of his proper approach. Similar calculations were done in respect of certificates 18-21 which largely flowed from certificate 17. He fairly and logically (but not equally) apportioned the balance of the liquidated damages sum across the four remaining certificates. His reasons, already cited hitherto, are clearly set out and manifestly reasonable. I state again the words of Lord Donaldson (supra, paragraph 16) :

"There is a strong presumption they have accepted him (the arbitrator) for better or for worse. This is not to say however that even in a one-off case, an arbitrator is to be allowed to cavort about the market place carrying a small palm tree and doing what he thinks appropriate by way of settling the dispute."

This arbitrator's conscientious and thoughtful approach to the dispute clearly puts him at the "better" end of the scale of arbitrators rather than the "worse" end (both of which the parties are presumed to have accepted). Moreover, from a simple reading of his award and clarification it is abundantly clear that the author is very far from "cavorting about the market place carrying a small palm tree".

28.I have consciously refrained from embarking on the detailed analysis in counsel's submissions. Where, to repeat my earlier remark, there is no very strong prima facie case that the arbitrator was wrong on a matter of law which, if he had been , would had been spotted quickly and easily, the court should say so with similar brevity and ease.

HCCT 14

29.In a cross application for leave to appeal Builders Federal submit that the arbitrator's approach should have resulted in an award to them of $5,939,837 and not the $4,850,000 which was in fact awarded. In spite of the fact that two days were set aside for the hearing of HCCT 13 and 14/2001, there was insufficient time to hear counsel's submissions on the merits of HCCT 14. There was time however to hear Ms Cheng's preliminary submission that the application was out of time and therefore should be dismissed. Mr Hingorani replied on this preliminary point only and this decision is limited to that issue.

30.The final award and reasons is dated 26 October 2000. The clarification is dated 11 January 2001. Builders Federal's Notice seeking leave to appeal is dated 16 February. It seeks leave to appeal against both the award and the clarification. Whereas, in HCCT 13/2001 Shun Shing's Notice of Originating Motion, dated the same day, is confined to an appeal against the clarification (which it clearly is). The thrust of Shun Shing's submission in their preliminary "time" point is that, in reality, Builders Federal's appeal is against the award and not the clarification. If so, it is clearly out of time. No applications for an extension of time to appeal have been made by Builders Federal, either prior to or during the application. Builders Federal submits that the need to appeal arises solely out of the clarification and, in reality, it is an application for leave to appeal the clarification only.

31.In paragraphs 26 to 31 of the award, the learned arbitrator made his findings and rulings as to how clause 11(b), the "pay when paid" clause, should be interpreted. Neither party has sought to appeal his interpretation. By paragraphs 32 to 35 he then left it to the parties to apply this interpretation to the known facts and figures and, hopefully, agree quantum. In the event the arbitrator's optimism was misplaced. Further submissions on paragraphs 32 to 35 were called for. On 13 November 2000 the arbitrator wrote to the parties in the following terms :

"The application of 'pay when paid' to the payments made under Certificates 16 to 21

I stated (perhaps optimistically) in the Schedule of Reasons that I hoped that the parties could apply my findings to the sums identified in Certificates 16 to 21. This has not been possible. The debate has generated detailed correspondence which indicates that the question is complex. This was not fully explained to me at the hearing. Of course I will resolve the issue. I propose to give the parties 14 days from today to produce written submissions. Please let my clerk know if this proposal is acceptable.

I do not propose to answer the questions raised in Builders Federal's 1st letter of 10th November 2000. I am satisfied that my Schedule of Reasons deals with the issues identified in argument at the hearing." (emphasis added)

32.This clearly indicates that the clarification issue was confined to the application of his interpretation (paragraphs 32 to 35) and not the interpretation itself (paragraphs 26 to 31). He specifically declined to answer questions on or elaborate upon matters of interpretation.

33.Builders Federal's Notice however seeks an order that their $4.8 million award be increased to $5.9 million (approx.) on three grounds. Those grounds commence as follows :

(a) "erred in law in finding that ... clause 11(b) meant that ...";

(b) "In coming to the above finding ..." (namely his interpretation of clause 11(b)); and

(c) failed to consider the effect of the non-completion notice on what sums Shun Shing had been paid by the employer.

34.All these were issues in the original arbitration and are an attempt to appeal the award. (a) and (b) specifically say so. Such issues as Builders Federal has wanted to ventilate under (c) above have in fact fully been aired in its opposition to Shun Shing's applications in HCCT 13/2001, in which, Builders Federal has been entirely successful.

35.I find HCCT 14/2001 to be an attempt to re-open issues, which were not the subject of appeal, in the award. In fact HCCT 14/2001 serves as a make-weight to Builders Federal's successful opposition to HCCT 13/2001 but, because it is out of time, whilst they preserve their award of $4,850,000 they have lost their opportunity to increase it to $5,939,837.

36.I make a costs order nisi that costs in HCCT 13/2001 be to Builders Federal and costs in HCCT 14/2001 be to Shun Shing.

Representation:

Miss Teresa Cheng, SC, leading Mr David Tsang, instructed by Messrs Kwok & Chu, for the Applicant in HCCT 13/2001 and the Respondent in HCCT 14/2001

Mr Jeevan Hingorani, instructed by Messrs Barlow Lyde & Gilbert, for the Respondent in HCCT 13/2001 and the Applicant in HCCT 14/2001