THE ENGLISH SCHOOLS FOUNDATION and Others v. WILLIAM EDWARD BIRD

IN THE COURT OF APPEAL

1997, No.134
(Civil)

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J U D G M E N T

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Mayo, J.A.:

1. This is an appeal from a judgment of Findlay J. who was himself hearing an appeal from the Respondent who I will refer to as Mr. Bird.

2. Mr. Bird was at the relevant time a teacher at King George V School which is a school coming within the purview of the 1st Appellant which I will refer to as the English Schools Foundation. On 20 November 1995 the 2nd Appellant who I will refer to as the Executive Committee terminated Mr. Bird's contract of employment with the school.

3. In accordance with the terms of his conditions of employment, he appealed to the Executive Committee against this decision. His appeal was successful. However, he was not awarded his costs. It was this refusal to award costs which was the subject matter of the appeal to Findlay J. Findlay J. allowed the appeal and rather than remitting the issue back to the Arbitration Board himself made an order that Mr. Bird should be allowed the costs of his appeal. It is this order which is the subject of the appeal now before us.

4. There are two questions which have to be considered on this appeal.

5. The first is whether the appeal which was undertaken came within the ambit of the Arbitration Ordinance, Cap. 341. The second question only arises if the answer to the first is in the affirmative. If it is then did Findlay J. have power to make the order that he did awarding costs to Mr. Bird. A further refinement on this was whether the Judge exercised any discretion reposed in him properly.

Did the appeal come within the ambit of the Arbitration Ordinance.

6. Mr. Bird's employment was governed by a contract with the English Schools Foundation. Some of the terms of the contract were specified in the English Schools Foundation Ordinance, Cap. 1117 and its subsidiary legislation.

7. In particular the conditions of service provided that where the services of a member of the staff were terminated an appeal lay to a specifically constituted Arbitration Board established by the Executive Committee.

8. The fact that the body constituted to hear the appeal is referred to as an "Arbitration Board" is certainly not conclusive of itself to establish that it was an arbitration that was taking place. What is necessary is to have regard to all of the surrounding circumstances.

9. There is helpful guidance on the underlying principles in the 2nd Edition of "The Law and Practice of Commercial Arbitration in England" by Sir Michael Mustill and Stewart Boyd Butterworths [1989] p. 42 onwards.

10. All of the necessary requisites are considered. There must be consensus. Clearly there was. This was established consequential upon Mr. Bird entering into his contract of employment.

11. There was a consensual tribunal by virtue of the establishment of the Arbitration Board in accordance with the regulations (which formed part of the employment contract) together with an expectation of impartiality. There was an enforceable agreement to refer to what amounted to arbitration and there could be no doubt that the issue of the determination of Mr. Bird's employment was a sufficiently formulated dispute.

12. There was also a desire that there should be finality. When consideration is given to all of the attributes referred to in Mustill and Boyd there can be no doubt that what took place was an arbitration which came within the ambit of the Arbitration Ordinance, Cap. 341.

13. In his judgment Findlay J. referred to the evidence which clearly indicated that all parties concerned appeared to be under the impression that it was an arbitration which was taking place and that no one at any stage raised any objection. I agree with the observations made by the Judge and accept that this is a further compelling reason to conclude that it was an arbitration that was taking place.

14. Once it has been established that the procedure referred to in the conditions of service and the English Schools Foundation legislation constituted an arbitration, it is not necessary to consider the various submissions made by Mr. Dykes, S.C. concerning the nature of the regulations made pursuant to the English Schools Foundation Ordinance Cap. 1117 and its subsidiary legislation.

Was Findlay J. right in making the order that he did.

15. Despite having been requested to do so, the Arbitration Board declined to give reasons in its award for not awarding costs to Mr. Bird. However as pointed out by Findlay J., it emerged from correspondence that the reason for this was that the Board accepted legal advice tendered to them by the Appellants to the effect that they had no power to make such an award. This advice was on the basis of the conclusions reached earlier in this judgement incorrect. The Arbitration Board was therefore making a decision on the basis of a mistake of law.

16. In this situation the Judge was clearly entitled to correct the error. He has a power under the Ordinance pursuant to Section 23 to either vary the award or remit it back to the arbitrator. Having regard to the whole history of this litigation and the expenditure of time and costs involved, the Judge decided to make the order he did. There is one matter which needs to be referred to. In giving his reasons Findlay J. said that the only possible order which could have been made for costs was to award costs to Mr. Bird. This need not necessarily have been the case. However in the overall circumstances of the case I do not think that the Judge can be faulted in the manner in which he exercised his discretion. I would accordingly dismiss this appeal. In my view Mr. Bird is entitled to the costs of this appeal.

Le Pichon, J.:

17. I agree.

18. I would add that an appeal process such as that provided by section 9(10) of Cap.1117 is not incompatible with and does not necessarily preclude determination by way of arbitration, no authority to the contrary having been cited. For my part, I would also hold that theArbitration Ordinance applied to the proceedings before the Arbitration Board on the further ground that they constituted a statutory arbitration within section 2J of that Ordinance. I will state my reasons briefly.

19. Mr Dykes, S.C. submitted that those proceedings were not within section 2J. His argument, both novel and interesting, stems from the definition of "subsidiary legislation" to be found in section 3 of the Interpretation and General Clauses Ordinance, Cap.1.

20. Under section 2J theArbitration Ordinance applies to "every arbitration under any other enactment". Definitions of "enactment" and "subsidiary legislation" are to be found in section 3 of Cap. 1:

"'Ordinance' and 'enactment' mean -

(a) any Ordinance enacted by the Governor by and with the advice and consent of the Legislative Council;

(b) any proclamation made by the British Military Administration on or between 1 September 1945 and 1 May 1946; and

(c) any subsidiary legislation made under any such Ordinance or proclamation;

.......

'subsidiary legislation' and 'regulations' mean any proclamation, rule, regulation, order, resolution, notice, rule of court, bylaw or other instrument made under or by virtue of any Ordinance and having legislative effect." (emphasis added)

21. Apart from delegating extensive powers to the Foundation to make regulations relating to its affairs including the composition, internal management, operation, administration and control of the Foundation and its Schools and generally to carry Cap.1117 into effect, section 10 of Cap.1117 expressly provided that such regulations need neither be published nor laid on the table of the Legislative Council. In essence, Mr Dykes S.C.'s submission is that the phrase "having legislative effect" is to be interpreted as meaning and limited to delegated legislation that is subject to the negative vetting procedure laid out in section 34 of Cap.1. Thus, it was submitted, regulations of the Foundation though made in exercise of delegated powers do not have "legislative effect" because of the exemption. Reliance was also placed on the fact that the regulations are not published in the revised edition of the Laws of Hong Kong. As the commissioner is under an obligation to cause the revised edition of every Ordinance (which term embraces "subsidiary legislation") to be published and in the Revised Edition of the Laws Ordinance 1965, the definition of "subsidiary legislation" is identical to that in Cap.1, the fact that the regulations have not been published point to their not being "subsidiary legislation".

22. I can see the force of Mr Dykes S.C.'s submission. Nevertheless, I am not persuaded that it is correct. "Having legislative effect" is nowhere defined. Section 34 itself makes no reference to it. Under that section, regulations made in exercise of delegated powers have to be published and tabled in the absence of any express exemption. Such an exemption may serve to accelerate the process of subsidiary legislation taking effect, but whether delegated legislation needs be laid before the legislative body is a matter of procedure only : see generally Wade and Bradley on Constitutional and Administrative Law, 11^th Ed. 631.

23. Section 10(1) of Cap.1117 unquestionably delegated extensive powers to the Foundation to "legislate" on all matters pertaining to its functions and operations. In my judgment, the fact that there is an express provision which exempts the regulations from having to be published and from the negative vetting procedure of section 34 of Cap.1 does not affect the nature of that power or the character of regulations made pursuant to it. The exemption cannot, on any rational basis, operate by implication to strip regulations made in exercise of delegated powers of "legislative effect" if they would otherwise have that attribute.

Nazareth, V.-P.:

24. I agree with Mayo JA and Le Pichon J.

25. I add only the following with respect to Mr Dykes' subordinate submission relating to the expression "having legislative effect". I am simply not persuaded that the oblique considerations he relies upon, relating to s.34 of the Interpretation and General Clauses Ordinance, Cap. 1 and ss.3 and 8 of the Revised Edition of the Law Ordinance 1965, can displace the effect of the direct and specific regulation-making power in the English Schools Foundation Ordinance, Cap. 1117.

26. The only authority Mr Dykes relied upon in that respect was that part of the judgment of Brett LJ in Dale's case (1881) 6 QBD 378 at 455 and 456. I do not find it necessary to reproduce any part of it for there is nothing I can find that assists his submission. Brett LJ was not addressing the point upon which Mr Dykes focused. The rules and orders there were required to be laid before Parliament and there was no specific exemption as there is here. I am wholly unpersuaded that the regulations made by the Foundation are not subsidiary legislation, a fortiori that they do not have the binding force of law.

27. In the result the appeal is dismissed with an order nisi that Mr Bird is to have his costs of the appeal.