Fook Kwong Construction Co v. The District Officer Islands

Case No.HCMP 131/1977

Court

High Court CFI

Date08 Feb 1979

Judge—

Case Document

100%Judiciary

HCMP000131/1977

IN THE HIGH COURT	MISCELLANEOUS PROCEEDINGS
	1977 No. 131

IN THE MATTER OF:

The Arbitration Ordinance And in the matter of an Arbitration between Fook Kwong Construction Co. and the District Officer Islands

BETWEEN
	FOOK KWONG CONSTRUCTION COMPANY	Applicant
	AND
	THE DISTRICT OFFICER ISLANDS	Respondent

Coram: Zimmern, J.

Date of Judgment: 8 February 1979

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JUDGMENT

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1. By a contract in writing dated 3rd November, 1975 said to be in standard form the District Officer Islands on behalf of the Government employed the applicant to construct certain works to wit a 5-seater aqua privy at Ngau Au Village, Lantao, for the sum of $42,981.50.

2. The applicant took possession of the site, commenced work and sometime well before completion the Government terminated the contract, regained possession of the site and the applicant disputed the Government's right so to do. In accordance with the contract the dispute was referred to the decision of a single arbitrator.

3. In the Arbitration, pleadings were delivered the applicant contractor being the claimant and the Government the respondent.

4. It is common ground that the Government terminated the contract consequential on the applicant's alleged breach of Clause 19 of the Particular Specification for Construction which reads:

" All concrete shall be mixed in a clean mixer of approved type and of a capacity to take one whole bag of cement per batch without spilling. The time of mixing shall be two minutes or for such other time as instructed by the District Officer."

The applicant did not have a mixer on the site and mixed concrete by hand. It alleged three grounds in support of its claim that the Government's termination was wrongful:

	1.	The clause was not intended to be binding.
	2.	If binding, the Government through the District Officer Islands and his agent had waived its rights to enforce the clause.
	3.	If binding and not waived the breach did not go to the root of the contract.

It asked for damages for wrongful termination.

5. The Government denied the allegations and counterclaimed against the applicant in damages for breach of contract.

6. The Arbitrator heard the evidence of witnesses called by both sides and by his Decision dated 17th January 1977 found for the Government and awarded it damages and costs of the court proceedings and arbitration.

7. The applicant by motion has sought to set aside the award on the grounds:-

	1.	That the arbitrator in his award did not deal with all the matters referred to him.
	2.	That the award was bad on its face because of

a)	an error of law
b)	certain factual conclusions
c)	excessive damages.

The motion was supported by an affirmation of the sole proprietor of the applicant firm exhibiting an order of Yang J. the pleadings before the Arbitrator and his Decision.

8. As to the first ground, counsel submitted that the Arbitrator did not deal with paragraph 8 of the particulars of claim which reads:

" The applicant alternatively claims that even if the said clause was binding not waived and was breached, the breach does not entitle the District Officer Islands to terminate the contract as the breach does not go to the root of the Contract."

9. It is true that paragraph 8 was not specifically mentioned in the Decision but what he stated was this:

"4.

The procedure of terminating the contract taken by the District Officer Islands was correct and in accordance with the Condition of Contract."

Counsel submitted that the Arbitrator was there only dealing with procedure and that submission to me was no more than a bit of utter pedantry. Furthermore the Arbitrator had said the District Officer was correct in insisting on a concrete mixer to be used. This ground fails.

10. As to the second ground I deal with (a) error of law last. The other two sub-grounds can be grouped together. I can see nothing and I have heard nothing which can justify a finding that the Arbitrator's conclusion under (b) and award of damages under (c) were bad on the face of the decision. This leaves the ultimate sub-ground (a). There is undoubtedly an error of law on the face of the decision for the Arbitrator had said:

"Although Mr. Yau had tried to apply for a waiver of this Clause, there had been no Variation Order issued to waive the requirement of using a concrete mixer. In a building contract only by issuing a Variation Order can the Condition of the Contract Agreement be modified. Even if there had been verbal agreement of waiver it must be subsequently confirmed in writing."

11. The Arbitrator had obviously erred in thinking that waiver of one's right to insist on the precise mode of performance fixed by the contract was the same thing as variation of a contract. The former does not require to be in writing but the former under the contract was. His decision leaves one in the dark whether he had in fact applied his mind to the evidence if any on the point or whether he had disregarded the evidence if any because there was no written agreement to waive. The pleadings do not shed any light on what the applicant relied on to constitute waiver. It is just a bare allegation without particulars and reads as follows:

"The Applicant further says that even if the Clause was intended to be binding (which is denied) the District Officer Islands through his agent waived the said clause."

Counsel for the Government did not ask for them. I commented at the hearing that it was quite wrong for the parties to leave the Arbitrator completely in the dark as to the issue before him on this point. I asked counsel for the applicant whether he would supply me with the particulars which he ought to have pleaded in support of his contention of waiver. He was reluctant but did eventually supply them with a copy of a letter written by the District Officer to the applicant dated 4th March, 1976. I have read them but with or without them my conclusion would have been the same. I direct that the Decision be remitted back to the Registrar to consider and find:-

Whether or not the Government by its officers or agents or any of them had specifically represented to the Applicant orally or in writing or by its conduct that it would not enforce the said Clause 19.

12. After the Arbitrator has dealt with this matter his finding will be added to his decision and referred back to the Court.

Representation:

Brian van Buuren (H.H. Lau & Co.) for Applicant.

B. Barlow for Respondent.