Chun Wo Construction & Engineering Co Ltd And Others v The Hong Kong Housing Authority

CourtCourt of Appeal (Hong Kong)
Judgement NumberCACV338/2018
Subject MatterCivil Appeal
CACV338/2018 CHUN WO CONSTRUCTION & ENGINEERING CO LTD AND OTHERS v. THE HONG KONG HOUSING AUTHORITY

CACV 338/2018 & CACV 431/2018

(HEARD TOGETHER)

[2019] HKCA 369

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 338 OF 2018

(ON APPEAL FROM HCCT NO. 54 OF 2017)

________________________

IN THE MATTER of the Arbitration Ordinance (Cap. 609)
and
IN THE MATTER of Arbitrations

________________________

BETWEEN
CHUN WO CONSTRUCTION & ENGINEERING CO. LTD 1st Plaintiff (1st Claimant in Arbitrations)
HONG KONG MACAU (ASIA) ENGINEERING CO. LTD 2nd Plaintiff (2nd Claimant in Arbitrations)
NEW HOPES CONSTRUCTION CO. LTD
3rd Plaintiff
(3rd Claimant in Arbitrations)
SING FAT CONSTRUCTION CO. LTD
4th Plaintiff
(5th Claimant in Arbitrations)
SUN ON ENGINEERING CO. LTD 5th Plaintiff
(6th Claimant in Arbitrations)
WECON LTD 6th Plaintiff
(7th Claimant in Arbitrations)
YAU LEE CONSTRUCTION CO. LTD 7th Plaintiff
(8th Claimant in Arbitrations)
and
THE HONG KONG
HOUSING AUTHORITY
Defendant
(Respondent in Arbitrations)

________________________

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 431 OF 2018

(ON APPEAL FROM HCCT NO. 54 OF 2017)

________________________

IN THE MATTER of the Arbitration Ordinance (Cap. 609)
and
IN THE MATTER of Arbitrations

________________________

BETWEEN
CHUN WO CONSTRUCTION & ENGINEERING CO. LTD 1st Plaintiff
(1st Claimant in Arbitrations)
HONG KONG MACAU (ASIA) ENGINEERING CO. LTD
2nd Plaintiff
(2nd Claimant in Arbitrations)
NEW HOPES CONSTRUCTION CO. LTD 3rd Plaintiff
(3rd Claimant in Arbitrations)
SING FAT CONSTRUCTION CO. LTD 4th Plaintiff
(5th Claimant in Arbitrations)
SUN ON ENGINEERING CO. LTD 5th Plaintiff
(6th Claimant in Arbitrations)
WECON LTD 6th Plaintiff
(7th Claimant in Arbitrations)
YAU LEE CONSTRUCTION CO. LTD 7th Plaintiff
(8th Claimant in Arbitrations)
and
THE HONG KONG
HOUSING AUTHORITY
Defendant
(Respondent in Arbitrations)

________________________

(HEARD TOGETHER)


Before: Hon Lam VP, Cheung and Yuen JJA in Court
Date of Hearing: 5 March 2019
Date of Judgment (CACV 431/2018) : 5 March 2019
Date of Judgment (CACV 338/2018) and Reasons for Judgment (CACV 431/2018) : 27 March 2019

________________________

J U D G M E N T

________________________

Hon Lam VP :

1. I respectfully agree with the judgment of Cheung JA and for the reasons he shall give, both appeals are dismissed and a costs order nisi as per [10] in this judgment. For my part, I wish to highlight the futility of CACV 431 of 2018. The subject matter of this appeal concerns the leave granted by the judge under Section 6(5) of Schedule 2 for an appeal to be brought to this Court. Whilst as a matter of jurisdiction in cases other than those brought under the statutory regime of the Arbitration Ordinance (for which different rules apply, see [9.5] and [9.6] below) it is open to this Court to re-visit a leave granted by the judge below (e.g. in a case where this Court dismissed a renewed application for leave on specific ground and revoked leave already granted below on some other grounds, see Chan Lap Kit v Yushun Technology Ltd [2018] 1 HKLRD 192), in most cases it would not be appropriate for an appeal to be brought against such grant of leave. In addition to the requirement of Section 14AA leave as discussed by my Lord at [9.4] below, arguments in an appeal of that nature are most likely to be overlapped with arguments to be canvassed in the appeal which had been brought pursuant to leave granted by the judge in the Court of First Instance. The two appeals are likely to be heard together and no advantage is gained by having the second appeal. In such circumstances, bringing another appeal against the grant of leave to appeal to this court only adds overall costs to the litigation process and rarely serves any good. In most cases, appeals of such nature are in substance satellite litigations which our Civil Justice Reform sought to discourage. Legal practitioners should reflect on the utility of a process before they advise their clients to embark on the same.

Hon Cheung JA :

I. The two appeals

2.1 The arbitrator, Professor Reyes SC, gave an arbitral award in favour of the defendant. The plaintiffs sought leave to appeal on a point of law against the arbitral award from Mimmie Chan J. The Judge refused to grant leave (‘the refusal decision’). The plaintiffs then sought leave from the Judge to appeal against the refusal decision. The Judge granted leave (‘the leave decision’).

2.2 Pursuant to the leave decision, the plaintiffs lodged their notice of appeal (CACV 338 of 2018). In the meantime, the defendant lodged an appeal against the leave decision (CACV 431 of 2018). Both appeals were listed for hearing before us. We dealt with CACV 431 of 2018 first and dismissed it. We reserved our decision in CACV 338 of 2018. I will now first give our decision in CACV 338 of 2018 and then my reasons for judgment in CACV 431 of 2018.

II. The arbitration

1) Background

3.1 The defendant managed various housing estates. It entered into 21 contracts with the plaintiffs by which the plaintiffs were required to carry out maintenance improvement and refurbishment works in the housing estates. From time to time, Work Orders would be issued by the defendant instructing the plaintiffs to carry out specific tasks. The tasks which were the subject matter of the arbitration were Work Orders for the replacement of the sliding window hinges which were used to affix aluminum window sashes to the window frames of the flats in the housing estates (‘the Relevant Works’). These hinges had to be replaced as a result of accidents of window sashes falling onto passing pedestrians. The hinges had become worn and fatigued by usage.

3.2 The four steps in the procedure involved in replacing the window hinges were as follow :

(1) taking down (cutting away) hinges from the transom and sill of the window frame, the securing of the window sash, and the removal of the rivets or screws which attach the legs of the window hinges to the transom and sill of the window frame;

(2) taking down hinges from the window sash, detaching the sliding shoes from the window sash, and clearing away the window hinges;

(3) supplying and fixing hinges to the window sash;

(4) re-fixing the window sash to the window frame, by fixing hinges to the transom and sill of the window frame, drilling new holes into the transom and sill of the window frame, securing the window sash and then re-fixing the sash into the window frame.

3.3 The contracts between the parties contained a Schedule of Rates (‘SOR’). The parties agree that the Work Orders should be valued pursuant to the SOR, but there is disagreement as to which specific rates in the SOR should be used in valuing the work. The plaintiffs consider that they should be valued by SOR Items 10183B, 10183C, 10184B, 10146A and 10147A (‘Rate 1’, ‘Rate 2’, ‘Rate 3’, ‘Rate 4’ and ‘Rate 5’) which are as follows :

Rate 1 : ‘Supply and fix sliding shoes, pivots and friction side arms for projecting casement.’ ($98.36/each)
Rate 2 : ‘Take down and clear away sliding shoes, pivots and friction side arms for projecting casement.’ ($7.61/each)
Rate 3 : ‘Extra over last item for fixing with and including stainless steel rivets and/or stainless steel screws with plastic plugs and/or stainless steel coupler including pointing corroded holes with approved sealant. ($59.68/each)
Rate 4 : ‘Take out and set aside for re-use metal sash, ventilator or door of any size including cutting hinges away from frame.’ ($45.22/each)
Rate 5 : ‘Re-fix only sash, ventilator or door to existing frame including welding or riveting hinges.’ ($81.48/each)

3.4 The defendant considered that only Rates 1, 2 and 3 are applicable. The arbitrator agreed and held that only Rates 1, 2 and 3 are applicable.

2) Contentions of the parties

3.5 As summarised by the Judge, the contentions of the parties are as follows :

‘ 16. The parties’ competing contentions are summarized in paragraphs 14 to 16 of the Award. The Plaintiffs claim that each of the steps undertaken should be valued and paid for. The work required to remove the existing hinges from the transom and sill of the window frame should be valued under Rate 4; the work required to remove the existing sliding shoes and hinges from the top and bottom of the window sash should be valued under Rate 2; the supply of the new sliding shoes and the attachment to the top and bottom of the window sash should be valued under Rates 1 and 3; and the re-fixing of the window sash to the window frame by attaching the new hinges to the transom and sill of the window frame should be valued under Rate 5.

17. The Defendant’s case is that absent any specified method of measurement to the contrary, a rate for a measured item is deemed to cover all work indispensably necessary to complete the item of work to which the rate relates. The Relevant Works are the replacement of existing window hinges for aluminum windows. Tasks relating to the setting aside and re-fixing of the window sash is ancillary to the replacement of the existing window hinges. The Relevant Works do not involve any repairs to window sashes, as opposed to merely supplying and fitting hinges to windows. According to the Defendant, the only relevant...

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