WILLIAM EDW ARD BIRD v. THE ENGLISH SCHOOLS FOUNDATION AND ANOTHER

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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JUDGMENT

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Background

1. The appellant (Mr Bird) is a teacher at King George V School, which is one of the schools for which the first respondent is responsible. On 20 November 1995, the second respondent (the Executive Committee) purported to terminate the employment of the appellant. In these circumstances, Mr Bird had the right to appeal against the Executive Committee's decision. He exercised that right, and he was successful. I imagine Mr Bird was happy with this, but he was not happy with the decision on appeal that there be no order as to costs. He appeals to this court against that decision.

The Issues

2. There were three points argued before me -

The Appeal Process

3. The Conditions of Service and the Law

4. The appellant was employed under a contract that included some conditions of service. These conditions provided that some of the appellant's rights and duties were specified in the English Schools Foundation Ordinance, Chapter 1117 (the Foundation Ordinance), and regulations made under it. The conditions also provided that -

"If the employment of any member of staff is terminated either by the Executive Committee of its own initiative or on the recommendation of the School Council concerned an appeal shall lie to the Foundation in accordance with section 9(10) of the English Schools Foundation Ordinance. Any such appeal will normally be considered by a specially constituted Arbitration Board appointed for the purpose by the Foundation and the decision of such Arbitration Board will be final."

5. The Foundation Ordinance provides that the Foundation shall establish an Executive Committee, which is the executive body of the Foundation. The Foundation and Executive Committee may establish such committees as they think fit, and the Foundation and the Executive Committee may "with or without restrictions or conditions as they think fit, delegate any of their powers and duties to any committee.".

6. Section 9(10) of the Ordinance provides that "An appeal shall lie to the Foundation from any decision of the Executive Committee to terminate the appointment of any member of the staff of a school.".

7. Section 10 of the Ordinance gives the Foundation wide powers to make regulations, and provides that it is not necessary for the regulations to be published or laid on the table of the Legislative Council.

8. The Foundation has made such regulations. Regulation 13 deals with the Arbitration Board. The relevant provisions of this regulation provide -

The Arbitration

9. As I have said, Mr Bird decided to exercise his right of appeal. The Arbitration Board was constituted, went about its business, and handed down its award on 31 December 1996, although it intimated on 30 August 1996 that it had decided the appeal in favour of Mr Bird.

10. Clearly, the Board thought it was an arbitral tribunal as contemplated by the Arbitration Ordinance, Chapter 341; its award, which is framed as a typical arbitrator's award, says as much, referring expressly to the Ordinance. Everything that the Board did and said indicates that it was discharging its function as arbitrators.

11. And it cannot possibly be said by that the parties did not know that they were taking part in an arbitration. On 7 June 1996, the Board issued some directions that were headed "In the matter of the arbitration", gave directions typical of those given in arbitrations, and the members of the Board described themselves as "arbitrators". There is no evidence that anyone suggested that the Board was going about things in the wrong way. The parties continued to co-operate with the Board by making submissions. The only inference to draw from this is that the parties were in agreement that the Board should deal with the matter as an arbitration.

12. The award itself recites that the parties "wished to proceed to arbitration". No one has challenged that statement as not being an accurate statement of the fact.

13. In this case, the Executive Committee had terminated the appellant's employment. The appellant disputed the Committee's right to do so. There were disputes as to which set of conditions governed the procedure to be adopted on termination, and whether the proper procedure was followed. These were disputes that were entirely suitable for resolution by arbitration

14. The make-up of the Board was entirely appropriate for an arbitration.

15. There are, in my view, no factors present that militate against a climate suitable for an arbitration.

16. There was at the time of the arbitration, and is now, no complaint about the composition of the Board, the way it discharged its function or the manner in which it handed down its decision. No complaint, that is, other than one by Mr Bird in relation to the Board's decision to make no order as to costs.

17. So what faces me is that, as a matter of fact, beyond any doubt whatsoever, a straightforward arbitration took place to resolve the dispute between the Executive Committee and Mr Bird.

Was this an Arbitration as contemplated by the Arbitration Ordinance?

18. And yet, in spite of all these appearances, Mr Dykes insists that what the Arbitration Board was doing was not conducting an arbitration contemplated by the Arbitration Ordinance with the result that this court has no jurisdiction to hear an appeal from the Board's decision to make no order as to costs.

19. I hope I do no injustice to the point made by Mr Dykes if I reduce it to these simple terms: The English Schools Foundation Ordinance provides that the remedy given to the appellant is a procedure by way of an "appeal". The Foundation cannot by regulation, and the parties cannot by agreement, substitute some other remedy for this appeal; in particular, they cannot put a procedure by way of an arbitration in place of the procedure by way of an appeal as provided by the Ordinance. In even shorter terms, it must be the argument that the arbitration that undoubtedly took place was unlawful.

20. This argument assumes that a procedure by way of an appeal as contemplated by the Foundation Ordinance is different from, and inconsistent with, a procedure by way of an arbitration.

21. But, I believe, the word "appeal", in the context and without more, carries with it no implication that the legislature contemplated any particular kind of hearing.

22. Where legislation provides for an appeal to a body that has a prescribed set of rules under which to work, it must be assumed that the appeal is to be determined in accordance with those rules. This is not the case here. The Arbitration Board is an ad hoc body with no prescribed rules, beyond those stated in paragraph 13.6 of the regulations, which are, of course, standards that would apply naturally to any kind of hearing.

23. And the "appeal" contemplated by the Ordinance is not an appeal in the sense in which that word is normally used in the law. Usually, there is an appeal when there has been a dispute between parties, a tribunal of first instance has resolved this, and the matter is taken to a higher authority. Here, there has been no earlier dispute between the Executive Committee and Mr Bird that has been determined. The Board is not acting as an appellate body. The Board is the tribunal of first instance.

24. So the legislature has provided for dispute resolution process without stipulating that any particular procedure should be followed in that process

25. That being so, there was no reason in law or common-sense, in my view, why the Foundation should not contemplate that the dispute raised in an "appeal" should not be decided by arbitration, why the Board should not proceed in that way, or why the parties should not agree that the dispute should be settled by this process. The Foundation seems to have anticipated that the Board would proceed by way of arbitration; otherwise, why called the body an Arbitration Board. Arbitration is a accepted and entirely respectable way of settling disputes such as this one. It is commonly used; in particular, it is commonly used to determine disputes between employer and employee.

26. I cannot see, therefore, that what was undoubtedly an arbitration should not be accepted as such, or thought to be contrary to law. It does not matter, of course, whether one says that the arbitration was undertaken on a consensual basis or under the statute; the result is the same. It was an arbitration as contemplated by the Arbitration Ordinance.

27. In the result, I hold that the process by which the dispute between the Executive Committee and Mr Bird was decided was a valid arbitration under the Arbitration Ordinance, and this court has supervisory jurisdiction over it.

Leave to Appeal

28. The first point to be considered here is the deficiency in the application for leave. The notice of originating notice was filed in time, just, but it did not ask for leave; it directly attacked the finding as to costs. It seems to me that this is a technical error that I should readily condone, even without much consideration of the merits, and I do so.

29. The second aspect concerns the merits.

30. The Board gave no reasons in its award for deciding to make no order as to costs. If the Board thought it had the power to award costs, and having decided the appeal in favour of Mr Bird, it might have been thought that costs should naturally follow the event, unless there was some good reason why this usual course should not be followed. No such reason is given. This is in spite of the fact that, on two occasions before the award was made, Mr Bird asked that reasons be given for the award.

31. The Board gave no reasons in the award, but the reason emerges clearly from the correspondence. On 30 August 1996, when the Board communicated that it had decided to allow Mr Bird's appeal, it said that it had accepted the submissions on behalf of the English Schools Foundation in respect of costs.

32. The only submission made by the Foundation in respect of costs was that the Arbitration Ordinance did not apply, and, therefore, the Board had no power to award costs. This must be the submission that the Board accepted.

33. I have held that the Arbitration Ordinance does apply, and, therefore, the Board did have jurisdiction to award costs. Consequently, on my finding, the Board misdirected itself and made an error of law.

34. I suppose that it could be argued that, in strict logic, the misdirection meant that the Board did not consider the question of costs at all, but, in reality, it could not have contemplated awarding costs against Mr Bird, so its error prevented it from awarding costs in Mr Bird's favour.

35. I do not think there is much to be gained by reciting the well-known factors in considering whether leave should be granted in these circumstances. This is not a "one-off" situation; the arbitration concerned a standard contract governing the rights of a considerable number of people; and, in my view, the justice of the matter dictates that leave should be granted. I grant leave to appeal.

36. Having granted leave, it follows that the appeal should be allowed.

What is the Appropriate Order?

37. I have jurisdiction to vary the award, or remit it. Where an arbitration tribunal has a number of options if an award is to be reconsidered, the matter should be remitted to the tribunal. The court should not usurp the functions of the tribunal. But that is not the case here, as I see it. The only conceivable award of costs the tribunal could have made if it had realised that it had jurisdiction to do so would have been to award costs to Mr Bird. It has not been suggested that it would have been appropriate to make any other order. In the circumstances of this case, I am reluctant to see more costs being incurred if this appears not to be necessary. Accordingly, I vary the award so that Mr Bird is awarded his costs of the arbitration.

The Result

38. In the result, I grant leave to appeal, allow the appeal, and vary the award so that Mr Bird has his costs of the arbitration. He should also have his costs of this appeal, and grant these to him.