GRANDEUR ELECTRICAL CO LTD v. CHEUNG KEE FUNG CHEUNG CONSTRUCTION CO LTD

DCCJ6782/2004

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 6782 OF 2004

D E C I S I O N

1.  The defendant applies for leave to appeal against my order of 21 December 2005, lifting the interim stay of these proceedings under the order of 26 July 2005 and awarded costs of the application to the plaintiff.

2.  In my decision of 21 December 2005, I set out my reasons for following the judgment and interpretation of Le Pichon JA in Thorn Security, (Hong Kong) Ltd. v Cheung Kee Fung Construction Company Limited.  [2005] 1 HK 252 and found that under the same clause NS11 of the subcontract between the parties each of the parties had an option to refer disputes under the sub-clause to arbitration or to the courts.

3.  Following Le Pichon JA’s judgment of interpretation of Clause NS11, applying it to the facts in the present case, I found there was no arbitration agreement between the parties.  I have given my reasons for the decision which I shall not repeat here.  

4.  On the facts of the present case, I found the time to opt for arbitration only arises after the contract manager made a decision and, based on my finding and interpretation of Clause NS11, I concluded there was no arbitration agreement between the parties.

5.  The defence counsel, Mr Clayton, disagreed with my decision and my interpretation of the judgment of Le Pichon JA in the Thorn Security case.  Mr Clayton relied on the case of China Merchants Heavy Industry Company Limited v JGC Corporation [2001] 3 HKC 580.  It is a decision of the Court of Appeal.  This authority had not been cited or relied on at the last hearing before me.  Mr Clayton compared, Clause 12 in the contract in China Merchants case and Clause NS11 in the present case.  Clause 11 in the present case is identical to Clause NS11 in the Thorn Security case before the Court of Appeal in Thorn Security.

6.  The hearing on 21 December 2005 was an interlocutory application hearing and today’s application was for leave to appeal a decision made in the interlocutory application.  It is an appeal of a decision made not after a trial where evidence was adduced and heard.

7.  The appeal, if granted leave, will be a revisit of the relevant clause in the subcontract, which is Clause NS11.

8.  The defence now wishes to rely on a fresh authority in its argument.  Mr Clayton submitted that a different approach through another of the Court of Appeal’s judgment should be looked at.

9.  After careful consideration of the two cases cited before me, i.e. the Thorn Security case and the China Merchants case, and the case of Medical Council of Hong Kong v Chow Shui Shek [2000] HKC 428, even though I agree with counsel for the plaintiff, Mr Aiken, and his junior, Mr Khaw, that the Thorn Security interpretation was on the same clause of the subcontract as in  the present case rather than a totally different clause, as the one in China Merchants, I nevertheless consider that the threshold for leave to appeal in an interlocutory application is not a high one so far as the decision  that involves an interpretation of the law is concerned.  For this reason, I cannot say that there is no prospect for the defence to succeed purely on the interpretation of a term of the subcontract.

10.  Therefore, I shall grant leave to the defendant to appeal to the Court of Appeal.

11.  Costs in the cause of the appeal with certificate for two counsel.