THE JARDINE ENGINEERING CORPORATION LIMITED v. WHARF PROPERTIES LTD. (formerly HARBOUR CITY LTD.)

Practice and procedure - right of appeal - action on contract containing arbitration clause - applications (i) under 0,14 of R.S.C. to determine whether there was an actionable dispute and (ii) for a stay of the court proceedings in favour of arbitration - orders for unconditional leave to defend and for a stay of the action - an appeal lay against the grant of the stay although by reason of s.14(3)(b) of the Supreme Court Ordinance no appeal lay against an order giving unconditional leave to defend.

BETWEEN

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JUDGMENT

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Sir Alan Huggins, V.-P.:

1. This is an application to strike out an appeal by the Plaintiff on the ground that s.14(3)(b) of the Supreme Court Ordinance provides that no appeal shall lie from an order of the High Court giving unconditional leave to defend.

2. When one turns to the Notice of Appeal, one finds that the order which it is sought to challenge on the appeal was an order that the action be stayed, the ground for the order of stay being that there was an agreement to arbitrate. It is, however, true to say that the order sought on the appeal is not only that the order for a stay be set aside but also that summary judgment be entered. The reason for that was that there was, at the same time as the application for a stay, an application for summary judgment under O.14, and it would appear that the matters were to some extent dealt with together, but the judge himself in his reasoned Judgment says that he considered the O.14 summons first, and that, I think, was correct and, indeed, necessary. The whole point of the O.14 proceedings was to ascertain whether there was a dispute at all which could be referred to arbitration: the arbitrator's jurisdiction rested upon there being a dispute. Of course, in the O.14 proceedings the existence of a dispute was assumed to this extent, that there could be no triable issue unless there was a dispute. The learned judge came to the conclusion that there was a triable issue.

3. It is argued that there is some doubt what order he made, and it is unfortunate that this is not the only occasion on which this court has been asked to hear an application or an appeal without having before it the formal order which it is sought to challenge. It seems to me that what the judge said indicates that he was of opinion not only that was there a triable issue but also that he sought to make an order giving leave to defend. He said, first, "I am therefore going to give the Defendant leave to defend", and on the following page he said "the Defendant gets leave to defend". It is true that subsequently, at the end of his Reasons, what he said was "I refuse the plaintiff the summary judgment it seeks", but I think it is implicit in what he said that he was giving leave to defend - and unconditional leave at that.

4. It is therefore the contention of the Applicant that the whole of the appeal turns upon whether or not there is a right of appeal against that decision giving unconditional leave to defend. Mr. Lane argues that the statute says expressly that there shall be no appeal against such an order.

5. The short answer to the application in my view is that there is an appeal against an order granting a stay. The statute does not say that there shall be no appeal in such a case, but, on the contrary, says that as a general rule there shall be an appeal. It is therefore clear to me, on the form of the Notice of Motion, that the application must fail, but I think also that, it must fail for more reasons than that. It is in effect argued that the substance of the application is to strikeout an appeal against an order granting unconditional leave. There is clearly here a difficulty in the legislation. If we hear an appeal against the stay, an order may have to be made which is inconsistent with the judge's ruling in the O.14 proceedings, but equally, if there had been no O.14 proceedings, it is quite clear there, would be a right of appeal, and in my view the fact that there have been O.14 proceedings is not sufficient to deprive a party of the right to appeal which he would otherwise have.

6. I would therefore dismiss the application to strike out and allow the appeal to proceed.

Fuad, J.A. :

7. I agree. Although the points raised before us are not free from difficulty, I am now satisfied that sufficient ground has not been made out to accede to the application made by Mr. Lane on behalf of the Plaintiff. Undoubtedly a person who institutes proceedings in the High Court and whose action is stayed, has a right to appeal. And so in my judgment it would need very clear language to deprive him of that right. I do not think that the wording of s.14(3)(b) of the Supreme Court Ordinance inevitably leads to the conclusion that where there is an O.14 application which fails and unconditional leave to defend is given, it deprives a plaintiff who complains against an order granting a stay of his right of appeal. It seems to me that there are anomalies - and to these my Lord the Vice-President has drawn attention - but the fact that the issues that a Court would have to determine on an O.14 application and in considering whether or not a stay should be granted (where the only opposition to the stay is based on the contention that there is no dispute that can be referred to arbitration) are the same, is not sufficient to compel the Court to say that the restrictions in s.14(3) of the Ordinance deprive the appellant of the right to appeal to this Court. It may well be that he might have difficulty, if he succeeds on his appeal, in obtaining some of the Orders he seeks, but nevertheless in my view he should be allowed to appeal against the Order granting a stay, whatever the consequences of inconsistent findings at different levels might be.

Kempster, J.A.:

8. As I see the present situation, which is by means free from anomalies, the question as to whether or not a triable issue exists between the parties before this court has finally been determined. However, the related issue as to whether or not there is any dispute capable of being referred to arbitration pursuant to the relevant clauses of a certain agreement made between the parties has not so finally been determined and may be canvassed before us pursuant to s.14(1) of the Supreme Court Ordinance. I accordingly would dismiss the Notice of Motion to strike out the Notice of Appeal dated 18th February, 1985.

6th March 1985