Hyundai Engineering and Construction Co Ltd v. Vigour Ltd
Read the full judgment text of cacv 128/2004 on BabelCite. This high court of the hong kong special administrative region court of appeal judgment was delivered on 14 February 2006 before Hon Rogers VP, Le Pichon and Yuen JJA.
Civil appeal concerning contractual disputes under building contracts and arbitration proceedings. The Court of Appeal refused leave to appeal under section 22(1)(a) of the Court of Final Appeal Ordinance as no claim for a liquidated sum was made, despite the large amounts involved. Leave under section 22(1)(b) was also refused as the questions raised did not constitute matters of great general or public importance; the agreement under dispute was highly unusual with no precedent and not likely to recur. The court declined to grant a stay of arbitration proceedings, holding that Clause 86 arbitration submission was unaffected and that no irreparable harm justified injunctive relief. A variation of the costs order was likewise refused, the court holding that costs of the initial application were appropriately ordered as costs in the appeal. The defendant's appeal motivations were considered insufficient to alter the costs order. Applications were dismissed and the court reaffirmed prior costs rulings.
Legal issues: Leave to appeal under section 22(1)(a) of Cap.484 · Leave to appeal under section 22(1)(b) of Cap.484 · Stay of arbitration proceedings · Variation of costs order
Outcome: Applications for leave to appeal, stay of arbitration and variation of costs order refused
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cacv 128/2004 in the high court of the hong kong special administrative region court of appeal civil appeal no. 128 of 2004 (on appeal from HCCT NO. 100 of 2003) BETWEEN
Before: Hon Rogers VP, Le Pichon and Yuen JJA in Court Date of Hearing: 14 February 2006 Date of Judgment: 14 February 2006 Date of Handing Down Reasons for Judgment: 20 February 2006 _________________________ REASONS FOR JUDGMENT _________________________ Hon Rogers VP: 1.These were three applications following the judgment of this court given on 25 February 2005. The first application was an application for leave to appeal to the Court of Final Appeal, the second application was for a stay of the arbitration proceedings pending the hearing of any appeal or any further application for leave to appeal and the third was for a variation of the costs order. At the conclusion of the hearing this court refused the various applications with reasons to be given. 2.The background to this case can be gleaned from the judgment of this court and the judgment of the court below. The first ground upon which leave to appeal was sought is that the amount involved exceeds $1 million. The provisions of section 22(1)(a) of the Court of Final Appeal Ordinance, Cap. 484 (“the Ordinance”) have been consistently interpreted as requiring a claim for a liquidated amount of $1 million. As previously indicated in the judgments, the claims and counterclaims under the building contracts are of very substantial amounts which would make the threshold of $1 million irrelevant. Furthermore, the costs of the arbitrations that are at present in train again comfortably exceed any such limit. Nevertheless, there is no claim in this case for a liquidated sum and hence an application on that footing must fail. 3.No doubt with amounts ultimately at stake as substantial as in this case, the court may be more willing to accede to an application under section 22(1)(b) of the Ordinance. Nevertheless, there has to be a matter of great general or public importance involved in the questions. The questions proposed are
4.In summary it should be stated at the outset that the matter in issue on this appeal was the construction of a highly unusual agreement of which there was clearly no precedent and it is most unlikely that its provisions would ever be repeated. 5.The first question was not raised in the form now proposed. The issue had been as to whether the agreement as a whole was enforceable. As framed the question ignores the agreement as presented and is confined to one part of it only. This court construed the agreement differently from the way it had been construed in the court below. That is hardly surprising given the fact that both parties had disagreed with the construction put upon the agreement in that court. That, however, does not give rise to justification for leave to appeal. 6.The second question also seeks to sever part of the agreement from the construction of the agreement as a whole. As such the question posed would be academic. 7.The third question is, again, a matter which was not the subject of the appeal in its form as presented. It is difficult to envisage how the law as to severance could apply to an agreement such as is involved in this case. If and in so far as it is suggested that the wording of the agreement in relation to mediation and discussions can be severed from the rest of the agreement it would simply remain an agreement which was an ouster of the court’s jurisdiction. 8.The application for a stay of the consequence of this court’s judgment could only be effected by the grant of an injunction to prevent the continuation of the arbitrations which are at present on foot. Since this court has upheld the judgment of the court below to the extent that the submission to arbitration under Clause 86 of the Contracts was unaffected by the entry of the parties into the so-termed March Agreement there is no legal basis upon which such an injunction could be granted. Even if there were a legal basis for granting such an injunction, it would not appear that this case was a suitable case for that to happen. The observation that can be made is that, if the arbitrations proceed unnecessarily, costs will be occasioned. Those costs might be very high, even by the standards of heavy litigation, nevertheless, the incurring of those costs would not constitute irreparable damage which would justify the courts prohibiting a party pursuing a remedy which it has found it is entitled to pursue. 9.The matter as to costs was faintly argued on the basis that in the judgment of the court below it had been held that the defendant had repudiated the March Agreement. It was said that this connoted a stigma on the defendant and that the defendant was thus justified in bringing the matter before this court to remove that stigma. Whilst that might be a reason why the defendant was more keen to bring the appeal, it is clear that the parties are locked in litigation and the appeal would have been brought irrespective of the finding of repudiation. This is amply borne out by the fact that the defendant has made a further application for leave to appeal to the Court of Final Appeal notwithstanding there is no finding of repudiation to create such a stigma. 10.In the skeleton argument, the plaintiff raised the question of costs of the application before the judge below on 30 July 2004. Upon examination it was clear that the costs order made by the judge was that the costs of that application should be costs in the appeal. There is accordingly, no need for this court to make any further order. Hon Le Pichon JA: 11.I agree. Hon Yuen JA: 12.I agree.
Mr Michael Thomas SC, instructed by Messrs Masons, for the Plaintiff/Respondent Mr Benjamin Yu SC & Mr Godfrey Lam, instructed by Messrs Woo, Kwan, Lee & Lo, for the Defendant/Applicant |
Further hearings and rulings under cacv 128/2004