WING BO BUILDING CONSTRUCTION CO LTD v. DISCREET LTD

HCMP 775/2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 775OF 2016

(ON AN INTENDED APPEAL FROM HCA NO 146 of 2015)

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JUDGMENT

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Hon Lam VP (giving the Judgment of the Court):

1.  On 14 January 2016, Deputy High Court Judge Marlene Ng ordered a stay of action pursuant to Section 20 of the Arbitration Ordinance Cap 609. Under that section, a stay is mandatory if the dispute is the subject of an arbitration agreement unless the court finds the agreement null and void, inoperative or incapable of being performed. Further, pursuant to Section 20(8) of the Ordinance, a stay granted under that section cannot be appealed against.

2.  Notwithstanding that, the Plaintiff applied for leave to appeal against that order. Leave was refused by the judge on 18 March 2016. 

3.  The Plaintiff now applies to us for leave to appeal.

4.  The application is opposed by the Defendant.

5.  We have read the skeleton submissions of Mr Chong (together with Mr Ho) in support of the application and the skeleton submissions of Mr Houghton SC in opposition.

6.  The only point taken by Mr Chong is that the judge had no jurisdiction to entertain the matter since it was brought before her by way of an appeal against the decision of a master and the master did not grant leave to appeal.  The master had refused to grant a stay and there had not been any application for leave to appeal before the master.

7.  That argument would have force if the master had jurisdiction to entertain the application.  However, it is plain to us that the master did not have such jurisdiction, see Order 73 Rule 6(1).  It is unfortunate that nobody brought that to the attention of the master at the hearing before him.

8.  We are not impressed by the submission of Mr Chong that such failure to observe Order 73 Rule 6(1) is only a matter of irregularity.  As submitted by Mr Houghton, the jurisdiction of a master is circumscribed.  The decision of the master in the matter is a nullity.

9.  Neither are we impressed by the submission of Mr Chong that if the decision of the master is a nullity, the decision of the judge on appeal from such decision is also a nullity.  The judge had raised the lack of jurisdiction of the master with counsel at the hearing before her and leading counsel for the parties urged the judge to deal with the substantive matter.  The judge acceded to such joint request.  The judge carefully set out what transpired before her at §§31 to 33 of her judgment of 14 January 2016 and §§13 to 23 of her Decision on 18 March 2016 refusing leave.

10.  In light of such joint request and the basis on which the judge dealt with the matter, in our judgment the proper analysis is that the judge was dealing with the summons for stay afresh and parties have waived the irregularity in terms of the manner in which the matter came before the judge by way of appeal as opposed to a fresh application.  We agree with Mr Houghton that in this regard, such irregularity can be waived.

11.  Hence, the judge did have jurisdiction to entertain the application for stay and she had carefully considered the same. The decision of the judge in granting a stay is not a proper subject for an appeal in light of Section 20(8) of the Arbitration Ordinance.

12.  We therefore refuse to grant any leave to appeal.

13.  We are also of the view that the application is totally without merit.  Pursuant to Order 59 Rule 2A(8), we make an order that no party may request this determination to be reconsidered at an oral hearing inter partes.

14.  With respect, the application is clearly hopeless. In light of the judge’s decision in refusing leave (which fully addressed the contentions of the Plaintiff), it should not have been renewed before us.  In line with this court’s policy in refusing leave in hopeless applications, particularly in the context of application for stay in favour of arbitration, we order the Plaintiff to pay the costs of the Defendant on indemnity basis. Having considered the Defendant’s statement of costs, we fixed such costs at $52,630.

15.  Lastly, we direct our clerk to provide a copy of this judgment (which should be read together with the judgments of the judge) to the Registrar as a reminder of the limits in the jurisdiction of a master.