LAM WING MAN, FANNY v. HARBOUR CHEER LIMITED

1997, No.AL 83

IN THE HIGH COURT OF HONG KONG

COURT OF FIRST INSTANCE

ADMINISTRATIVE LAW LIST

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J U D G M E N T

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1. This matter originally came before me as an application for leave to apply for judicial review pursuant to O.53, r.3 of the Rules of the Supreme Court. In the course of the proceedings, the applicant sought to change the nature of the application to an application to appeal an arbitration and to set aside an award pursuant to s.23(2) of the Arbitration Ordinance, Cap.341.

2. Miss Tsui, very fairly in all the circumstances, made no objection to that change and Ms Lam undertakes to file the necessary originating motion and supporting documents to regularise the proceedings pursuant to O.73.

3. Every application pursuant to O.73, r.2 sees to set aside an award under s.23(2) of theArbitration Ordinance shall be to a single judge of the High Court and s.23(2) reads :

"Subject to subsection (3), an appeal shall lie to the court on any question of law arising out of an award made on an arbitration agreement and on the determination of such an appeal the Court may by order -

(a) confirm vary or set aside the award; or

(b) remit the award to the reconsideration of the arbitrator or umpire together with the Court's opinion on the question of law which was the subject of the appeal;

and where the award is remitted under para (b) the arbitrator or umpire shall, unless the order otherwise directs, make his award within three months after the date of the order."

Subsection (3) upon which subsection (2) is conditional says :

"An appeal under this section may be brought by any of the parties to the reference -

(a) with the consent of all the other parties to the reference; or

(b) subject to section 23B, with the leave of the Court."

Section 23B relates to an exclusion agreement between the parties excluding an appeal and is not relevant to this matter.

4. In this matter, Miss Tsui whilst accepting the change of direction of the application by the applicant, does not consent to the appeal. Therefore, this matter can only proceed with my leave.

5. A further difficulty arises in as much as the award made by the arbitrator was handed down on 28^th January 1997 and O.73, r.5 reads :

"An application to the court -

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(b) to set aside an award under s.23(2) of the Act must be made and the summons or notice must be served, within 21 days after the award has been made and published to the parties."

I must therefore be satisfied before leave can be granted under s.23(2) and under O.73 that firstly there are proper reasons for the delay which has been caused and that there is a real prospect of success on the merits of the appeal. If I am satisfied there is good reason, it must be on the basis also that there is a real prospect for success on the merits as a good reason for delay alone would not be sufficient.

6. The award was, as I have said, granted on 28^th January 1997. On 12^th February 1997, application was made by the applicant to the Legal Aid Department for legal aid to contest the award. By a letter dated 17^th June 1997, the decision of the Director of Legal Aid to refuse legal aid was given and on 13^th August 1997, legal aid was refused on appeal by Master Cannon. Then on 2^nd September 1997 application was made for leave for judicial review. In all the circumstances, the delay is unreasonable. The award was granted some eight months prior to the application being made. The delay alone would be sufficient to refuse leave in the circumstances. I will however go on because it is of interest to the applicant that I deal with whether or not there is a real prospect of success on the merits.

7. The applicant raises a number of complaints framed as matter of law in respect of the arbitral award and the first is that there was no privity of contract between the applicant and Harbour Cheer Limited that sought the arbitration. This must be looked at in the light of the assignment by which the applicant purchased the premises which were the subject matter of this dispute. That assignment has been exhibited to me by the applicant and was entered into on 15^th July 1994. In that assignment, the applicant herein, who was the assignee, undertook to be subject to and take the benefit of the Deed of Mutual Covenant covering the premises and to be subject to and to take the benefit of the Management Agreement in respect of the premises. Both the Deed of Mutual Covenant and the Management Agreement having been registered with the Sai Kung District Land Registry. By that undertaking, the applicant accepted an offer by the management company to be subject to the Management Agreement and I hold that as a matter of law, the issue of privity does not arise between the parties.

8. The second ground of appeal in respect of the arbitration award was that the Management Agreement read in conjunction with the Deed of Mutual Covenant did not sufficiently explicitly give the power to the management company to go to arbitration pursuant to clause 17 of the Deed of Mutual Covenant.

9. Section 6 of the Management Agreement reads as follows :

"6. It is hereby agreed and declared that although the Manager has not been made a party to the said Deed of Mutual Covenant the Manager shall be deemed to be a party thereto and it shall have all the rights powers and authorities and shall perform all the duties functions and matters to be performed by the Manager under the said Deed of Mutual Covenant and to enforce the observance and performance of all the terms covenants regulations and provisions to be observed and performed by the Owners for the time being of the Building and the Manager shall be entitled to enforce the said Deed of Mutual Covenant against the parties hereto and the Owners for the time being of the Building and their assigns, successors in title administrators and executors and they shall in all respects treat the Manager as if it were made a party to the said Deed of Mutual Covenant."

Clause 17 of the Deed of Mutual Covenant reads :

"17. All disputes and questions which shall hereafter arise between the parties hereto touching these presents or the construction or adjudication thereof or whether these presents are still subsisting or not or touching any account or calculation to be made hereunder or as to any act deed or omission by any of the parties hereto or as to any other matter in any way relating to these presents or the rights duties or liabilities of any person hereunder shall be referred to a single arbitrator in case the parties agree upon one otherwise to two arbitrators one to be appointed by each party or to their umpire in accordance with and subject to the provisions on Arbitration Ordinance (Cap.34) of the Laws of Hong Kong and the decision of the arbitrator or arbitrators or umpire as the case may be on any of the matters and things aforesaid shall be final and absolutely binding upon all the parties hereto."

10. I am satisfied that the wording of section 6 of the Management Agreement is sufficiently wide to confer upon the manager the power to go to arbitration pursuant to clause 17 of the Deed of Mutual Covenant. It is quite clear that section 6 gives power to the manager to enforce the said Deed of Mutual Covenant against the parties and in respect of such enforcement, the parties should treat the manager as if it were made a party to the said Deed of Mutual Covenant. That coupled with the wording of clause 17 is sufficient to, in my view, enable the management company to take advantage of the arbitration section.

11. There were other matters raised by Ms Lam concerning the matter in which this arbitration arose. She claims pressure placed upon her by the solicitors and she claims having been misled by the Small Claims Tribunal which suggested that a proper method of resolving the dispute was to go to the Lands Tribunal. But none of these matters were raised by her at the arbitration. In fact notwithstanding clear evidence that she was aware of the dates of the arbitration, she decided not to attend the arbitration and raised no issue at that time as to the identity of the arbitrator nor to any of the matters raised before him.

12. I cannot, in all the circumstances, be sure that there is a real prospect of success of the merits of this appeal and the application for leave to appeal is refused. The costs of this application are for the respondent to the appeal.