East Asia Textiles Ltd v. Wing Key Construction Co (A Firm)
Read the full judgment text of HCA 2411/1979 on BabelCite. This High Court CFI judgment was delivered on 12 October 1979.
1. This is an application on the part of the defendant in this action to an order that
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HCA002411/1979
----------------- Coram: Li, J. in Chambers Date of Judgment: 12 October 1979 ----------------- JUDGMENT ----------------- 1. This is an application on the part of the defendant in this action to an order that
2. The facts arising from this application can be summarised as follows. There was at one time a building contract between the plaintiff as an employer and the defendant as the main contractor for certain building work. The building work had been completed by 1978 and the defendant claimed for certain extra payment over and above the contract price. The architect, having duly worked out the extra work and the necessary deduction for defects or for work not required under the original contract and also incorporating the liquidated damage as provided in the building contract for delay, gave a certificate of payment which purported to be the final certificate of payment. The defendant signed the receipts two of which are significant and are exhibited in the plaintiff's affirmation as Exh. SC6 and SC7 to the total sum of $175,000. The first receipt was signed by the defendant as the receipt for $20,000 for occasioned work in Tuen Mun 140. The second receipt for $155,000 was signed by the defendant for the balance of payment for the Tuen Mun site 140. After the receipts had been signed in settlement for 14 days the defendant relented and claimed further payment. On being refused payment, the defendant decided to go to arbitration. The plaintiff declined such a request for arbitration. The defendant, acting under one of the clauses in the building contract, proceeded to ask the Institute of Architects to appoint an arbitrator to have his claim adjudicated by arbitration. The plaintiff in June this year issued a writ to restrain the defendant from proceeding to arbitration and in July the plaintiff issued an inter partes summons for an interim injunction to restrain the defendant from going to arbitration. That was heard on 5th July this year in the absence of the defendant who had been served and failed to appear in chambers. The defendant now comes to this Court for an order that that interim injunction be discharged, that the action by the plaintiff under the writ be stayed and that the arbitration be ordered under section 6 of the Arbitration Ordinance. 3. In support of his application the defendant filed an affirmation to explain why he was absent at the time when the order of interim injunction was made. I shall not refer or repeat in detail his explanation which starts in paragraph 14 to the end of his affirmation. Suffice it to say he blamed a clerk in the Legal Aid Department for misleading him. He said that he was granted legal representation at the hearing of the plaintiff's application for an interim injunction and gave an excuse for his absence from Court. However, there is not a scintilla of evidence from either the clerk of the Legal Aid Department that any legal representation had been assigned to him in respect of the hearing of the summons on the 5th July. I am not satisfied with the explanation for the defendant's own delay in ignoring the summons. I am not disposed, at this stage, particularly, in view of what I have to say, to interfere with the interim order. However, learned counsel for the defendant goes further than that. He referred to section 6 of the Arbitration Ordinance which is equivalent in words to section 4 of the Arbitration Act which provides -
4. Such provisions give a discretion to this Court. One of the conditions precedent is that there must be an arbitration agreement in this case. There is one in Clause 35 of the Building Contract. However, the provision of Clause 35(1) reads as follows -
5. In this case it is alleged by the defendant's counsel that there had been no valid final certificate granted by the architect. The second leg of his argument is that even if such a final certificate had been given it does not debar the defendant from proceeding to arbitration. I shall not refer to the authorities that had been cited to me. Having considered them I come to the conclusion that although there was an arbitration clause, yet the matter is one that has been settled once and for all by virtue of a final certificate of payment which is valid. I cannot concede to the argument by learned counsel for the defendant that the final certificate of payment is not a final certificate simply and only because it has incorporated the liquidated damages that are claimed by the plaintiff for the delay in the work proceedings or for the completion of work. As to the other point that despite the final settlement the defendant may still go to arbitration, I can only say that the receipt as signed by the defendant who says that he had never received the final settlement certificate nor did he receive any letter as to any final settlement, I am, again, not satisfied by his explanation. The documents, exhibited as SC-5 in the plaintiff's affirmation, were all addressed with the original copies to the defendant. The defendant admitted that he accepted the variation order which was dated the same date as the two other documents in Exh. SC-5. He denied having received them until a much later date. By that the defendant implied that there was a deliberate trick or trap played on him by the architect who had no incentive or motive to do so. 6. In my opinion, although there has been an arbitration agreement, the matter had been settled. Whatever claim the defendant might have had been settled by accord and satisfaction. With some stretch of imagination one may say that the subsequent claim or the repentence of the defendant may well be described as arising from the arbitration contract. I do not go to the extent that the defendant's claim to arbitration be dismissed completely off-hand. However, having considered the provisions in section 6 of the Arbitration Ordinance the matter is discretionary. 7. In my opinion, no injustice is done to the defendant if the case in question were to be tried in Court rather than resorting to arbitration; I can list a number of points for so doing. First of all his own non-appearance in the plaintiff's application for an interim injunction was entirely due to his fault and without any valid excuse. Secondly, it is doubtful whether the arbitrator should have jurisdiction. I will not, at this stage, decide this point although I am prepared to grant this in the defendant's favour in saying that probably it is a dispute of a matter in connection with the contract. However, if I refuse the defendant's application to stay the proceedings in court no injustice is done to the defendant because in the action before this court the defendant is at liberty to raise similar objections and have it determined as a preliminary point. If he has any claim in this matter, he can raise it as a matter of a counterclaim. Thirdly, before the court of trial the defendant may be granted legal aid. Before an arbitrator, he has to present the case on his own. Despite his lack of confidence in the courts and his preference to an arbitrator who might be more receptive and more understanding to his claim, the defendant has no absolute right to choose his forum. He suffers no disadvantage because he would be given the services of legal representation. Fourthly, I can see no way how I can deny the plaintiff his costs. Even if I discharge the interim injunction, this summons is necessitated solely because the defendant's inexcusable non-appearance at the hearing on 5th July. For these reasons I will refuse all the applications (paras. 1, 2 and 3) of the defendant's summons. The summons is dismissed and the costs should follow the event. There should be costs to the plaintiff in this summons.
Representation: M. Lee (Philip K.W. Wong) for plaintiff/respondent. P. Mok (Peter C. Wong) for defendant/applicant. |