Otis Elevator Co (HK) Ltd v. Wide Project Engineering and Construction Co Ltd
Read the full judgment text of on BabelCite. was delivered on 23 May 1984.
1. In this matter the Plaintiff, Otis Elevator Company (HK) Limited, is suing the Defendant, Wide Project Engineering & Construction Company Limited, for reimbursement of the sum of $274,607.49, being the value of 4 lift motors, 4 selectors and control boxes which were destroyed by fire on about the 19th December 1981 at a works site on K.C.T.L. 336, Kwai Chung, New Territories.
|
HCA015214A/1983
__________ Coram: Hon. Power, J. Date of Hearing: 2 May 1984 Date of Delivery of Judgment: 23 May 1984 __________ JUDGMENT __________ 1. In this matter the Plaintiff, Otis Elevator Company (HK) Limited, is suing the Defendant, Wide Project Engineering & Construction Company Limited, for reimbursement of the sum of $274,607.49, being the value of 4 lift motors, 4 selectors and control boxes which were destroyed by fire on about the 19th December 1981 at a works site on K.C.T.L. 336, Kwai Chung, New Territories. 2. The Plaintiff claimed, in paragraph 3 of its Statement of Claim, that, under a "Sub-contract" entered into between it and the Defendant,it was provided, by clause 5(a), that damage by fire would be at the sole risk of the main contractor, i.e. the Defendant. It also pleaded that clause 5(c) the "Sub-contract" provided that the Defendant shall for the benefit of both the Plaintiff and the Defendant at all material times insure for the full value thereof. the "Sub-contract" works and keep them insured against loss by fire. 3. This writ of summons was issued on the 17th December 1983 and was served by leaving it at the Defendant's registered office on 21st December 1983. No notice of intention to defend having been given by the Defendant, a judgment was entered thereon on the 9th January 1984. The Defendant then took out a summons which went before the Master asking that the judgment and the execution issued thereon be set aside and that it be at liberty to defend the action. 4. On 9th April 1984 the Master refused to set aside the judgment and the matter comes before me on appeal from that decision. 5. On 3rd April, prior to the hearing before the Master, the Defendant filed an affidavit by its Managing Director, Mr. Wong Hung Hui. Mr. Wong said that he only became aware of the writ when the Bailiffs of the Court called at his office for the purpose of levying execution. He said that in the latter part of 1983, his wife was under treatment for terminal cancer and that in December of that year he took her to Shanghai for treatment. 6. Mr. Wong gave an explanation as to why he personally did not receive notice of the writ. It is, however, difficult to understand why some member of his office staff would not have received the writ and informed him thereof. I accept that he was in a very distressed condition in December of 1983 and January of 1984. Indeed his wife died on the 14th February 1984. He said that immediately the writ came to his attention, he instructed his solicitors to handle the matter. He also said that one reason why he had put the whole matter from his mind was because he believed that his insurance company was handling it for him. 7. The application was made under 0.13 r.9. The rule reads:-
The notes to that rule cite Lord Atkin in Evans v. Bartlam(1) where he said:.-
The note goes on to state:-
8. There should, of course, be an explanation as to the delay but there is, as the white Practice states at 13/9/6 "no rigid rule that the applicant must satisfy the Court that there is a reasonable explanation why judgment was allowed to go by default, though obviously the reason, if any, for allowing judgment and thereafter applying to set it aside is one of the matters to which the Court will have regard in exercising its discretion." Given either that there is a reasonable explanation or that the Court is satisfied that the circumstances are such that it should grant the relief sought even though there has been no such explanation, it is for the Defendant, where there has been a regular judgment against him, to establish an arguable or triable issue. 9. The explanation in the present case is not a strong one. Indeed I am not satisfied that I could properly characterize it as "a reasonable explanation" however I am satisfied that it is enough to put the Defendant into Court if he can establish an arguable or triable issue. 10. I turn now to consider whether the Defendant has established such an issue. There was no doubt that clause 5(a) of the "Sub-contract'', referred to in the Statement of Claim, provided that the Sub-contract works shall, as regards loss or damage by fire, be at the sole risk of the main contractor. However, Mr. Wong said,. in his affidavit, that the contract between the Plaintiff and the Defendant was made up not only of the "Sub-contract" referred to in the Statement of Claim, but also of a series of 9 other documents. These 10 documents are bound together to form a single sealed bundle which is collectively referred to, on the cover page thereof, as the "Sub-contract" and the "Articles of Agreement made this 13th August 1981 between Wide Project Engineering & Construction Company Limited and Otis Elevator Company (HK) Limited". The "Sub-contract" referred to in the Statement of Claim is Document l in the bundle and is described in the list of "Content", which appears at the second page of the bundle, as "(1) Standard Form of Sub-contract for use where the Sub-contractor is nominated under the standard form of Building Contract for Hong Kong. (1968 Edition). This full set of documents was exhibited as "WHHSA-1" to an affidavit of Mr. Wong filed on the 30th April 1984, after the date of the hearing before the Master. I must stress that "WHHSA-1" does not faithfully reproduce the original document as the words "Sub-contract" and "Articles- of Agreement made etc." which I have set out. above, are printed in white on the original, which was produced at the hearing before me, and do not appear at all on the photostat copy thereof annexed to the affidavit. Having seen the original I am satisfied, that there can be no doubt that the contract between the Parties consists of all the documents set' out in "WHHSA-1". I will refer to this contract hereafter as "the Contract". 11. The document to which the Defendant made particular reference was Document No.7 which the list of "Content" describes as the "Particular Specification for Preliminaries". Let me say immediately that it is no easy task to understand exactly how these documents are meant to interlock. They appear for the most part to be standard form documents which are selected and bound together to meet the requirements of an individual sub-contract. 12. Document No.7 itself bears the heading "Particular Specification of Works required to be done and material used for The Supply and Installation of Lift Sub-Contract for Proposed Industrial Building on K.C.T.L. 336, Kwai Chung, New Territories": Under the sub-heading "Section G2 -Preliminaries" there is a Paragraph"(B) Scope of Work" which reads as follows:-
13. Although the wording in this paragraph is a little difficult to follow there was no argument advanced that this did not mean, as was contended by the Defendant, that conditions in "the Particular Specification" formed part of the Contract and overrode other conditions in the Contract which contradicted or differed from the conditions in "the Particular Specification." 14. It was clearly an issue of fundamental importance to ascertain what document was the Particular Specification" and whether it contained anything which dealt with insurance and so overrode stipulations as to insurance relied on by the Plaintiff appearing in Document 1. The matter was complicated by the fact that Document No.8, in "WHHSA-1," was referred to in the list of 'Content' as the 'Particular Specification for Lift'. There were therefore two "Particular Specifications", one for preliminaries and one for lift. Was Document 7 itself 'the Particular Specification''. referred to in Document 7 or was it Document 9 or was it made up of both documents? 15. If it was Document 8 then there was nothing therein dealing with insurance. However, Document 7 contains in paragraph "(X)'', which is headed "Relevant G.S. Clause (G2-C)", a clause dealing with insurance. Clause (X) is, it is to be noted, headed: "The following G.S. Preliminaries are relevant to this contract, any additional requirements shall be specified hereinafter:-" There is no argument that 'G.S.' stands for "General Specification. The clause dealing with insurance reads as follows:-
16. It was common ground that the goods were destroyed two days after delivery to the site. It is certainly arguable that "the Particular Specification" referred to in Document 7 is Document 7 itself. Support for this contention is given by the use of the words "this Particular Specification'' in Clause B: On the other hand all that Clause (X) purports to be doing is reciting the "relevant" General Specification Preliminaries. If the term as to insurance is a General Specification condition and not a Particular Specification condition it would not override other provisions as to insurance in the Contract. 17. In the General Specification, which is Document 9, under the heading "G2-C3 Insurance" there appears a similar, but rather more intelligible, version of Clause (X) G2-C3 which reads as follows:- .
18. Indeed Clause (X) G2-C3 can only be made sense of if, in the interpretation of it, the above clause is prayed in aid. The argument of Mr. Maxwell Lewis, who appeared for the Plaintiff, was that, even if "the Particular Specification" was Document 7, the provision as to insurance was not a binding part of that document. He argued that all. that paragraph (X) did was to refer to those of the General Specification Preliminaries, Document 9, which were relevant to this contract" and such a reference was not such as would incorporate those provisions as operative and binds parts of Document 7. 19. Mr. Maxwell Lewis went on to argue that even if the clause was incorporated it was not worded so as to impose any obligation on the Sub-contractor to take out any insurance. He contended that all its wording required was that the Sub-contractor include in his tender the amount of the insurance premium. He submitted that there was no requirement upon him to take out such insurance and that the provision in Clause 5(a) of Document 1 that damage by fire was at the sole risk of the Defendant was in no way, affected. I must say that I do not find this argument very persuasive. It seems to me that it can be strongly contended that what was intended was that the Sub-contractor both include the amount of the premium in his tender and take out insurance to cover the specified risks to the goods for a period of two weeks after delivery to the site and that thereafter the risk would be covered by insurance taken out by the contractor. 20. As can be seen there are a number of difficult points of interpretation raised by the defence. It is in my view unarguable that the contract between the parties is contained in all 10 documents that make up "WHHSA-1". It was not argued that stipulations in the Particular Specification" as to insurance would, if they were in contradiction thereof, override the stipulation relied on by the Plaintiff in clause 5 of Document 1. It is arguable that ''the Particular Specification" referred to in Document 7 is Document 7 itself. It is also arguable that Document 7 at Clause (X) G2-C; contains a condition that is an overriding stipulation as to insurance. The Defendant has, therefore, made out an arguable issue and must, I am satisfied, be allowed to defend. The judgment is therefore set aside. I make an order nisi that the Plaintiff pay the Defendant's costs both here and below.
(1) (1937) A.C. 480. Representation: Mr. Cameron Maxwell Lewis instructed by Deacons for Plaintiff. Mr. Alexander Wong instructed by Philip K.H. Wong & Co. for Defendant. |