Sam Woo Bore Pile Foundation Ltd v. China Overseas Foundation Engineering Ltd
Read the full judgment text of CACV 113/2006 on BabelCite. This court of appeal judgment was delivered on 24 October 2006 before Hon Rogers VP, Le Pichon JA, Chu J.
Contract law — Construction of bills of quantities and subcontract — Marine piling works — Interpretation of extra over payment for toeing-in piles — Whether excess toeing-in length beyond specified 1.50 m minimum attracts additional payment — Whether unit of measurement 'number' or 'linear metre' applicable — Incorporation of Hong Kong Government Standard Method of Measurement for Civil Engineering Works and subsequent addenda — Application of special condition clause 1(j) requiring re-measurement — Court held item 4 of BQs 5 and 10 provides fixed payment per pile regardless of toeing-in depth beyond 1.50 m — Plaintiff’s claim for additional payment rejected as inconsistent with clear contractual terms and measurement units. The Court of Appeal dismissed the appeal and ordered costs to be paid by the appellant. Plaintiff’s application for leave to appeal to the Court of Final Appeal was refused.
Legal issues: Construction of item 4 of bills of quantities 5 and 10
Outcome: Appeal dismissed with costs against plaintiff
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cacv 113/2006 in the high court of the hong kong special administrative region court of appeal civil appeal no. 113 of 2006 (on appeal from HCCT NO. 76 of 1996) ______________________ BETWEEN
Before: Hon Rogers VP, Le Pichon JA and Chu J in Court Date of Hearing: 18 October 2006 Date of Handing Down Judgment: 24 October 2006 ______________________ J U D G M E N T ______________________ Hon Rogers VP: 1.I agree with the judgment of Le Pichon JA. Hon Le Pichon JA: 2.This is an appeal from the order dated 21 February 2006 of Reyes J striking out part of the plaintiff subcontractor’s claim against the defendant contractor for “extra over … for the toeing-in” of marine piles. The claim that was struck out arose out of item 4 of bills of quantities 5 and 10 (“BQs 5 and 10”) which concerned cast-in-situ concrete marine piles for the Sea Channel Expressway Bridge and Railway Bridge respectively which formed part of the Lantau expressway project. The parties entered into the subcontract on 24 June 1994. At the conclusion of the appeal judgment was reserved which we now give. 3.The issue below concerned the true construction of item 4. The defendant had paid the plaintiff $2,304,000 for the toeing-in of the marine piles and if it were right in its construction of item 4, no further amount was due to the plaintiff. On the plaintiff’s construction, a further $7,940,717 remains due. 4.Items 3 and 4 of BQ 5 provided as follows:
Items 3 and 4 of bill of BQ 10 were in similar terms save that the quantities and thus also the total amounts were different. 5.In the case of BQ 5, the tender was for driving 48 pile shafts into the seabed and installing the cast-in-situ concrete piles such that a minimum of 1.50 m of each pile had to be toed-in into the bedrock. It is clear from item 3 that the aggregate length of all 48 piles was estimated to be 1968 m. It is also clear that any excess in the aggregate length would attract additional payment at the rate of $9,900 per m. That is not in issue. 6.It will be noted that there is a significant difference in the rates for installing the vertical pile shaft and the toeing-in of the pile shaft to bedrock. The explanation for this may be found in paragraph 13 of the 2nd affirmation of Lau Chun Ming, a director of the plaintiff:
7.It is common ground that 48 piles were installed pursuant to BQ 5. However, the actual depth of toeing-in as determined by the engineer exceeded 1.50 m in almost every case. The toe-in length of the piles amounted to as much as 11 m in some cases. The plaintiff’s case is that the rate of $36,000 quoted in the tender was for toeing-in the vertical pile shaft into bedrock, but only to a depth of 1.50 m and, as the subcontract was a re-measurement contract, any excess toeing-in length beyond 1.50 m would attract a pro rata additional payment in steps of 0.50 m. 8.Before tendering for the subcontract, all tenderers including the plaintiff were provided with drawing nos. 273/S/5711 and 273/S/5811 respectively. The drawings contained notes the most relevant of which, for present purposes, are notes 6 to 8. In sum, these provided that (a) all piles had to be socketed into bedrock in accordance with the ‘Details of Pile Base’ shown in the drawing; (b) bedrock at founding level not only had to be grade II to III or better but a continuous 5 m rock core satisfying certain specifications had to be obtained; (c) founding levels for piles were to be finalised by the engineer only after ground investigation proof boreholes satisfying (b) above had been excavated; (d) prior to commencing excavation, proof boreholes (to be taken to a depth of at least 10 m below the founding levels) had to be sunk at the centre of each bored cast-in-place pile. The “Details of Pile Base” on the drawings showed that the base itself had to be in “Grade II to III rock or better” with a minimum depth of 1.50 m. It was also stated that the “exact founding level to be determined on site by engineer”. 9.It will be seen that the effect of the notes to the drawings meant that the founding level of each pile could only be determined after the award of the tender because it depended on the actual condition of the relevant part of the seabed where the shaft was to be sunk and that it was for the engineer to determine the appropriate founding level. Moreover it could not be assumed that once bedrock was reached, the founding level and thus the toeing-in length could be determined as being 1.50 m further down. That would depend entirely on the quality of the rock core underneath. Note 6 (summarised in para. 7(b) above) stipulated that:
So quite apart from the terms of item 4 itself, viz. “1.50 m in depth (min.)”, the possibility of the toeing-in having to exceed 1.50 m was therefore readily apparent from the work involved and the parameters spelt out in the drawings. 10.In addition to the drawings, the tenderers were also provided with partially completed BQs 5 and 10. The completed part related to description, quantities and unit. The columns showing the $ rate and the total $ amount were left blank for completion by the tenderers. 11.The judge found in favour of the defendant on the construction of item 4. This appeal 12.In summary, the submissions of Mr Chan SC (who appeared for the plaintiff) were as follows. The subcontract expressly provided that its contents included, inter alia, conditions of contract and appendices to the subcontract. Appendix 3 incorporated, inter alia, section 9 of the Hong Kong Government’s Standard Method of Measurement for Civil Engineering Works (“SMM”) which dealt with piling works. It was therefore an “inseparable” part of the subcontract. That section included the following provisions concerning “cast-in-situ concrete piles”:
It was submitted that paragraph 9.14 (IX) was thus an express provision of the subcontract providing for additional payment for toeing-in into bedrock. Pausing there, it is to be observed that there appears to be some internal inconsistency between paragraph 9.09 (iii) and paragraph 9.14. One is looking at a unit of measurement by reference to “number” and the other by reference to “linear metre”. 13.Mr Chan SC drew the court’s attention to addendum no. 6, said to be of particular relevance to his case. In pertinent part, this addendum read:
14.Mr Chan SC underlined the fact that addendum no. 6, whilst varying (by deletion or substitution as appropriate) certain parts of section 9 of the SMM, had left paragraph 9.14 (IX) intact. As paragraph 9.14 (IX) had not been deleted by addendum no. 6, it was submitted that it must at least be arguable that it had some purpose to serve. It was submitted that at the very least it was an indication that the re-measurement principle applied. 15.As recorded in paragraph 14 of the judgment, it was the plaintiff’s case below and remains its case on appeal that the effect of special condition 1 (j) and paragraph 9.14 was that the extent of toeing-in was to be re-measured on completion and any excess charged in accordance with paragraph 9.14 “in steps of 0.50 m”. Special condition clause 1 (j) reads:
In the court below the judge rejected that submission, explaining that:
16.It is to be noted that the first part of special condition 1 (j) provided for the “quantities set out in the tender” to be re-measured “in accordance with the unit rates set out in the tender”. So the subject matter of any re-measurement is simply “the quantities set out in the tender” and nothing else. As the judge rightly held, the quantities stipulated in item 4 of the tender were numbers (“nr”) of piles. Because there had been no change in the total number of piles driven, any re-measurement pursuant to special condition 1 (j) could not have resulted in any additional payment. I therefore see no basis for not giving effect to the unambiguous terms of special condition 1 (j). 17.Moreover, I do not consider that paragraph 9.14 (IX) to be of any assistance in the construction of item 4 of BQs 5 and 10. The judge observed that it “does not enter into the picture”. Under the terms of special condition 1 (j), the SMM applies “save expressly stated otherwise”. He reasoned that as BQs 5 and 10 were prepared on the basis of a unit rate per pile (not length of pile), that amounted to an express statement that paragraph 9.14 (applicable to amounts payable per unit length) was not intended to apply. As I understand it, Mr Chan SC sought to address this point by submitting that the subcontract itself provided for the method of measurement and “expressly stated otherwise” by making appendix 3 part of the subcontract. There was therefore no need to go outside the subcontract itself, albeit that it would not have made any difference because either route would lead to the same thing, i.e. the provisions of the SMM. 18.This argument appears to be somewhat circular in nature. Be that as it may, I do not consider it to be correct. In addition to the reason given by the judge, there is a further reason. Mr Chan SC appears to have overlooked paragraph 9.09 (iii) of appendix 3. Where that provision applies, it is difficult to see how effect can be given to paragraph 9.14 (IX) at the same time. Under the SMM, or as Mr Chan would have it, by express provision, there is also no doubt that the appropriate unit of measurement for “extra over toeing-in to bedrock” was “number” and not, for example, “linear metre”. Paragraph 9.09 (iii) of the SMM (reproduced in paragraph 12 above) so provides and whilst addendum no. 6 did amend that paragraph by substituting a new provision (reproduced in paragraph 13 above), the unit of measurement remained the same. So whether under the SMM or as varied by addendum no. 6, there can be no doubt that the appropriate unit of measurement for “extra over toeing-in” is by number only. In the face of that clear provision, there is no scope for the application of paragraph 9.14 (IX), particular as almost all its provisions appear to be diametrically opposed to what item 4 of BQs 5 and 10 expressly provides. It is plain that the bulk of the provisions of paragraph 9.14 (IX) can have no application. In those circumstances, it would be highly artificial to say that it is applicable by seeking to give effect to the concluding words only. Even then those words could only be given effect in the context of a term to be implied from the express provisions of item 4 itself. 19.In my view, there is no merit in the plaintiff’s submissions. I would dismiss the appeal with an order nisi that the costs of the appeal be to the defendant. Hon Chu J: 20.I agree and have nothing to add. Hon Rogers VP: 21.There will therefore be an order in terms of paragraph 19 above.
Mr Warren Chan SC & Mr George Hui, instructed by Messrs Wilkinson & Grist, for the Plaintiff/Appellant Mr Peter Clayton SC, instructed by Messrs Ho & Ip, for the Defendant/Respondent Plaintiff's application for leave to appeal to Court of Final Appeal refused by Court of Apepal. Please refer to CACV113/2006 dated 21 March 2007 |
Further hearings and rulings under CACV 113/2006