WING TAI PILONNER CO. LTD. v. EAGLE STAR INSURANCE CO. LTD.

A2226 of 1991

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINSTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2226 OF 1991

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J U D G M E N T

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Introduction

1. Sometime towards the end of 1988 the Plaintiff commenced its work as a piling sub-contractor at a construction site at Kowloon Marine Lot No. 113 Section RP in Hung Hom, Kowloon ("the Site"). There was an underground electric cable inside the Site and it supplied electricity for the whole Kowloon area.

2. The Plaintiff's work involved the driving of steel H piles into the ground to form the foundation ("the Plaintiff's piling work"). One of the piles was designated as pile "PF 5". The Plaintiff's piling work in relation to this pile was to drive 3 steel H piles known as "H11", "H12" and "H13" respectively into the ground. On 2 December, 1988, the Plaintiff's staff started driving these piles. Steel piles "H11" and "H13" (located at either end of "PF 5") were driven into the ground as planned. However, when "H12" (in the middle of "PF 5") was partly driven into the ground, the electricity supply to Kowloon stopped. When the earth was removed, it was found that the cable was damaged to varying degree by piles "H12" and "H13", with a more substantial damage caused by "H12".

3. The owner of the cable, China Light & Power Co., Ltd. ("CLP") commenced an action against the Plaintiff in 1991 for their loss ("the CLP action"). The CLP action was settled at the end of 1995 when the Plaintiff paid a sum of $2.35 million to CLP.

4. The Defendant was the insurer under an insurance policy taken out by the principal of the Site. The Plaintiff now claims that the Defendant should reimburse it for the sum paid to CLP as well as a sum of $961,144 being the Plaintiff's own costs and expenses incurred in the CLP action. The Defendant defends the claim on the ground that the Plaintiff has breached a warranty in the policy.

5. The Court has been provided with a number of trial bundles and it was agreed by the parties that they can be considered by the Court:-

(a) Bundle of Pleadings ("BP");

(b) Bundle of Documents ("BD");

(c) Bundle of Witness Statements ("B of WS");

(d) Bundle of Witness Statements filed in the CLP action ("B of WS in CLP action");

(e) Bundle of Expert Reports ("B of ER").

6. Further, the parties also agreed that:-

(a) the witness statements in the B of WS and B of WS in CLP action were to stand as the testimony of the respective witnesses;

(b) the documents in BD were admissible and can be considered by the Court but the parties did not admit their contents were necessarily true.

The Issues between the Parties

7. Various issues were raised in the pleadings filed in this action. The parties have very sensibly at the beginning of the trial come to a substantial agreement on the issue relating to liability: the Defendant now defends the claim solely on the ground that the Plaintiff has been in breach of the provisions of Memo 4 of the policy. As to quantum, it is now agreed to be a sum of $2,155,302 together with another sum of $961,144 being the Plaintiff's own costs and expenses incurred in the CLP action.

Memo 4 of the Policy

8. Memo 4 of the policy ("Memo 4") is one of the clauses in Section II (or Section 2 ) of the policy relating to "Third Party Risk". Since Memo 4 is crucial to the determination of this case, I set it out in full below:-

"Memo 4 Warranty Concerning Underground Cables and Pipes

(a) It is agreed and understood that otherwise subject to the terms, exclusions, provisions and conditions contained in the Policy or endorsed thereon, the Insurers shall only indemnify the Insured in respect of loss of or damage to existing underground cables and/or pipes or other underground facilities if, prior to the commencement of the works, the Insured has inquired with the relevant authorities about the exact position of such cables, pipes or other underground facilities.

(b) In the event of utilities plan/drawings indicating the presence of services in the vicinity of the works, the Insured shall proceed to locate such services by hand-digging of trial pits prior to any mechanical excavation.

(c) In the event such services cannot be located by reasonable hand-digging, the Insured shall approach the utility company concerned and seek their assistance in the location failing which the Insurers shall not be responsible for ensuing loss.

(d) The indemnity shall in any case be restricted to the repair costs of such cables, pipes or other underground facilities, any consequential damage being excluded from the cover.".

It should be noted that the divisions "(a)" to "(d)" appearing in italics above ("sub-para. (a)" to "sub-para. (d)" respectively) do not appear in the original clause and were added by counsel and me so as to enable the sub-clauses to be more easily identified in submission as well as in this Judgment.

9. It was common ground between the parties that the Plaintiff had not been in breach of sub-para. (a). Further, the parties agreed that the obligations under sub-para. (b) and (c) were inter-related; thus, it is only necessary to consider whether sub-para. (c) was applicable to and was satisfied by the Plaintiff when the Court concludes that sub-para. (b) applied to the Plaintiff.

10. In trying to ascertain the true meaning and effect of sub-para. (b) and (c), it may be necessary to consider the whole of Memo 4 (including sub-para. (a) and (d)) even though there is no dispute between the parties in relation to sub-para. (a) or (d).

Findings of Fact

11. Although the facts in dispute are very limited, I consider that it is necessary to make the following findings of fact before dealing with the construction of Memo 4 and the Plaintiff's "alternative arguments". These findings are:-

(a) Hsin Yieh was appointed the architect responsible for the construction work of the Site prior to June, 1987 (p. 1, BD);

(b) Tak Cheong was appointed as the demolition sub-contractor of the Site;

(c) by at least June, 1987, Hsin Yieh found out that there was an electric cable inside the Site and discussions were made between Hsin Yieh and CLP regarding the cable and the construction work to be carried out at the Site (pp. 1, 12, 13, 15 and 17, BD);

(d) from about March, 1988 to about October, 1988, in a number of site meetings where respective representatives from Hsin Yieh, CLP and the Plaintiff (as agent for Shun Shing) were present, it was agreed that the unexposed part of the cable should be surveyed by the Plaintiff (pp. 25-6, 28-9, 31-2 and 41, BD). It is however unclear as to whether the survey was to cover the part of the cable in the vicinity of the steel piles "H11" to "H13" (see also pp. 188, 197, 219, 232-3, 292 and 312, BD);

(e) CLP undertook exposing and diverting part of the underground cable in the Site. The actual diversion work was undertaken by Tak Cheong (p. 57, B of WS in CLP action) and was completed by about October, 1988 (p. 157, BD and p. 12, B of WS);

(f) after this part of the cable has been exposed and diverted, the length of the cable in the vicinity of the steel piles "H11" to "H13" which remained unexposed was about 15 meters long and the area which covered the vicinity of these 3 steel piles measured about 90 meters² (15 meters x 6 meters) (these estimates were based on the scale and dimensions given in pp. 67, 217 and 552, BD and p. 157, BD);

(g) the Plaintiff was appointed as a sub-contractor responsible for the piling work of the Site since about August or September, 1988 (having been sub-contracted this work by Shun Shing) (p. 4, B of WS and p. 331, BD);

(h) the Plaintiff's work at the Site was to carry out "displacement piling", that is, to drive steel H piles into the ground in accordance with the drawings provided by the architect;

(i) the Plaintiff commenced work at the Site in about October, 1988 (p. 5, B of WS and P. 327, BD);

(j) by the time when the Plaintiff commenced its work at the Site, a substantial part of the cable in the Site has been exposed as shown in p. 157 of BD;

(k) before 2 December, 1988, the Plaintiff's staff hand-dug one trial pit measuring 1 m x 1 m x 1 m at the site of steel pile "H11". This trial pit was not dug for the purpose of locating the cable but for finding out if the pile(s) would conflict with the foundation of the building nearby or with other obstructions (pp. 47-8, 59 and 72, B of WS in CLP action);

(l) the Plaintiff did not locate the unexposed cable in the vicinity of steel piles "H11" to "H13" whether by way of this trial pit or otherwise (p. 82, B of WS in CLP action);

(m) the Plaintiff did not seek the assistance of CLP to locate the unexposed cable;

(n) the one trial pit dug by the Plaintiff was not reasonable hand-digging as defined by sub-para. (b) or (c);

(o) the expertise of Dr. Rawlinson and his testimony as to:-

(1) the nature of the Plaintiff's piling work, that is, "displacement piling" did not involve any excavation of soil or spoilt but only driving of piles into the ground so that the soil around the pile became displaced and compacted (pp. 3-4, B of ER);

(2) the ordinary meaning of the word "excavation" (as a work process) as generally understood by engineers,

is accepted. Dr. Rawlinson's testimony will be set out further below.

Construction of Memo 4

(A) Is Memo 4 an Exemption Clause?

12. An issue relevant to the construction of Memo 4 is whether it is a condition precedent (as the Defendant contended) or an exemption clause (as the Plaintiff contended). If Memo 4 is a condition precedent, the Defendant argued that it should be given a wide and liberal interpretation. On the other hand, if Memo 4 is an exemption clause, the Plaintiff argued that a narrow and restrictive interpretation should be given.

13. Ms. Pinto submitted that Memo 4 must be treated as a condition precedent because of the express provisions of the policy. These provisions are the opening recital of the policy and General Conditions No. 1 and 2.

14. The opening recital of the policy is as follows:-

"Now this Policy of Insurance witnesseth that subject to the Insured having paid to the Insurers the premium mentioned in the Schedule and subject to the terms, exclusions, provisions and conditions contained herein or endorsed hereon the Insurers will indemnify the Insured in the manner and to the extent hereinafter provided.".

The General Conditions No. 1 and 2 of the policy are as follows:-

"General Conditions

1. The due observance and fulfilment of the terms of this Policy in so far as they related to anything to be done or complied with by the Insured .... shall be a condition precedent to any liability of the Insurers.

2. The Schedule and the Section(s) shall be deemed to be incorporated in and form part of this Policy and the expression "this Policy" wherever used in this contract shall be read as including the Schedule and the Section(s). .... ”.

15. Mr. Bharwaney submitted that whether or not a contractual provision is a condition or an exemption does not depend on the label put onto it by the parties. He submitted that this can only be determined by examining what is the primary obligation imposed by the contract and whether the clause in question has the effect of extinguishing or limiting that primary obligation. In support of this argument, he referred to :-

(a) Kearney v. General Accident Corporation, Ltd. [1968] 2 Ll. L.R. 240;

(b) Photo Productions Ltd. v. Securicor Transport Ltd. [1980] A.C. 827, 850 where Lord Diplock said: " .... An exclusion clause is one which excludes or modifies an obligation, whether primary, general secondary or anticipatory secondary, that would otherwise arise under the contract by implication of law.".

16. Mr. Bharwaney argued that the primary obligation of the Defendant under the policy was to indemnify, among other contractors, the Plaintiff for third party liabilities arising from inter alia the Plaintiff's negligence. Memo 4 was in the nature of an exemption clause in that it seeks to limit or exonerate the Defendant from its liability to indemnify. Mr. Bharwaney argued that his view was further supported by sub-para. (d) having been placed immediately after sub-para. (a) to (c). Sub-para. (d) was clearly a sub-clause seeking to limit the type of loss payable by the Defendant. This shows that sub-para. (a) to (c) were also considered to be a sub-clause designed to limit the Defendant's liability.

17. While I find Mr. Bharwaney's arguments attractive, I do not consider that the Court can totally disregard the parties' intention in having this Memo 4 expressly and clearly set out in the contractual provisions. I must have regard to the other express provisions relied upon by Ms. Pinto, that is, the opening recital and General Conditions No. 1 and 2 of the policy. Reading Memo 4 in light of these other contractual provisions, I conclude that Memo 4 is a condition precedent.

(B) Ordinary Meaning of "Excavation"

18. As stated earlier, it was accepted by the Defendant the Plaintiff had not been in breach of sub-para. (a) of Memo 4 but the Defendant argued that the Plaintiff had been in breach of sub-para. (b). Further, the Defendant contended that as the Plaintiff had breached sub-para. (b), the Plaintiff was also in breach of sub-para. (c) since the Plaintiff neither (1) located the underground cable by reasonable hand-digging, nor (2) approached CLP and sought CLP's assistance in locating the cable.

19. On the other hand, the Plaintiff submitted that the wording of sub-para. (b) is such that it could only apply in very specific situations. The Plaintiff's argument on this point is based primarily on the following wording of sub-para. (b):-

"In the event of utilities plan/drawings indicating the presence of services in the vicinity of the works, the Insured shall proceed to locate such services by hand-digging prior to any mechanical excavation." (underline supplied)

20. The Plaintiff argued that by reason of the above underlined words, this sub-clause is only applicable to any sub-contractor whose works involved "any mechanical excavation". Since the Plaintiff's piling work did not involve any "excavation", sub-para. (b) did not apply to the Plaintiff and therefore the Plaintiff could not be said to have breached it.

21. Mr. Bharwaney submitted that the ordinary meaning of the word "excavation" must be looked at. He put forward 2 possible ordinary meanings; one is its technical meaning as is generally understood by the engineering profession and the other is its ordinary and most popular meaning in ordinary language. He submitted that in the present case, the 2 meanings are however the same.

22. In his testimony, Dr. Rawlinson adopted the meaning given to this word in the extracts of 2 engineering dictionaries as its ordinary technical meaning. These have been produced as exhibit "P1":-

(a) Scott: The Penguin Dictionary of Civil Engineering defines "excavation" as "Digging, breaking and removing soil or rock.";

(b) MacLean & Scott: The Penguin Dictionary of Building defines "excavation" as "The work of digging holes in the ground to reach a foundation for a service or structure.".

23. The New Shorter Oxford English Dictionary, referred to by Mr. Bharwaney, defines "excavation" as "The action or an act of excavating .... " and "excavate" as "Make hollow by removing material from inside; make a hollow or hollows in; esp. to remove material from (the ground) so as to make a hole .... ". I accept this to be the ordinary meaning of the words "excavate" and "excavation" in daily language. For these reasons, I accept Mr. Bharwaney's submissions that the technical meaning of "excavation" is no different from its meaning in ordinary language.

24. As stated above, Dr. Rawlinson testified that the nature of the Plaintiff's piling work, that is, "displacement piling" did not involve any excavation of soil or spoilt but only driving of piles into the ground so that the soil around the pile became displaced and compacted.

25. In view of the aforesaid matters, I am of the view that the Plaintiff's piling work did not involve any "excavation" within its ordinary meaning. I therefore agree with the Plaintiff that sub-para. (b) did not apply to the Plaintiff.

26. I should also mention that Ms. Pinto attempted to argue that Dr. Rawlinson agreed that "excavation" included any kind of work which results in a hole being created in the ground. She referred to his testimony during cross-examination when he agreed with Ms. Pinto that this word could mean a "hole" or "trough" or "pit" whether created by digging or displacement. I rather understand Dr. Rawlinson to be saying the common meaning of the word was that set out in the 2 dictionaries but he would accept that some people may use this word in the way suggested by Ms. Pinto.

(C) Should "Excavation" be given a Wider Meaning?

27. Ms. Pinto's alternative argument was that if I am against her on the ordinary meaning of the word "excavation", it is appropriate to give a wider meaning to the word in this case because:-

(a) not to do so will lead to an unreasonable result. That is, sub-para. (a) applies to all contractors at the Site covered by the policy while sub-para. (b) and (c) do not apply to contractors whose work did not involve any mechanical excavation (even though such works may affect underground cables or pipes). In this connection, she referred me to various passages in a number of textbooks and cases discussing the principles of construing contractual provisions so as to achieve the commercial object of the contract, to enable a fair and sensible application and to avoid an unreasonable result: see, for example, MacGillivray on Insurance Law (1997) 9th ed., para. 11-6 to 11-9;

(b) Memo 4 was a condition precedent and not an exemption clause and therefore should be given a wide and liberal construction;

(c) the phrase "in the vicinity of the works" in sub-para. (b) indicated that that sub-clause was meant to apply to all contractors covered by the policy. The word "works" covers all kinds of construction work to be carried out at the site. If the sub-clause had intended only to cover contractors who undertake "excavation" work, the sub-clause would have used the phrase "in the vicinity of any mechanical excavation".

28. On the other hand, Mr. Bharwaney submitted that the word "excavation" should only be given its ordinary meaning and no more and no less because:-

(a) the court should not lightly depart from the rule that its task is no more than to give effect to the intention of the parties and this is usually achieved by determining the ordinary meaning of the contractual provisions;

(b) the use of the word "works" in an earlier part of sub-para. (b) (that is, "in the vicinity of the works") and the use of the phrase "prior to any mechanical excavation" show that there must be a distinction between "works" (which covers all kinds of construction works) and "excavation" (which must have a different, and narrower meaning);

(c) if sub-para. (b) were intended to apply to all kinds of works, it would have been logical (and consistent) to adopt the phrase "prior to any such works" instead of "prior to any mechanical excavation". The phrase "in the vicinity of the works" had already been used at the beginning of this sub-clause.

In relation to point (a) above, Mr. Bharwaney referred me to a number of cases emphasizing the following remarks of Lord Mustill in Charter Reinsurance v. Fagan [1996] 2 Ll. L.R. 113, 119:-

"This practical rule of thumb [that a particular construction leads to a very unreasonable result must be a relevant consideration] must however have its limits. There comes a point at which the Court should remind itself that the task is to discover what the parties meant from what they have said, and that to force upon the words a meaning which they cannot fairly bear is to substitute for the bargain actually made one which the Court believes could better have been made. This is an illegitimate role for a Court. Particularly in the field of commerce, where the parties need to know what they must do and what they can insist on not doing, it is essential for them to be confident that they can rely on the Court to enforce their contract according to its terms." (italics supplied).

I agree entirely with Mr. Bharwaney's points. It is important to the parties in this case that the Court should respect the terms that they have agreed upon by enforcing "what they have said". Indeed, parties to other contracts also need the certainty and consistency in the law so as to be sure of their respective positions under their contracts.

29. I do not agree with Ms. Pinto's arguments because:-

(a) as observed in numerous cases including the Charter Reinsurance case referred to above, there is a limit to which the Court can disregard express contractual provisions agreed upon by the parties in order to achieve a "fair and sensible application" or "reasonable result";

(b) although I found that Memo 4 was a conditional precedent, there is still a limit to which a Court can extend the meaning of a word in the contract. I have already made a finding on the meaning of the word "excavation" and I consider that no sensible extended meaning can be given to it without violating the language actually used in Memo 4;

(c) the use of the phrase "in the vicinity of the works" does not necessarily mean that sub-para. (b) must apply to all the works undertaken in the vicinity of the underground cable. The operation of sub-para. (b) must still depend upon the latter part of this sub-clause, that is, whether or not the work in question involved "any mechanical excavation". To conclude otherwise would in effect be ignoring the presence of the latter phrase and the use of the word "excavation" as opposed to the word "works".

(D) Meaning of "prior to any mechanical excavation"

30. Ms. Pinto's further argued that the phrase "prior to any mechanical excavation" was only included to provide a point in time for triggering the operation of sub-para. (b). For contractors whose work involved excavation, the hand-digging has to be undertaken before the excavation work. For contractors whose work did not involve excavation, they still had to undertake hand-digging at a reasonable time before they commence their works. The crucial point, according to Ms. Pinto, is that sub-para. (b) applies to all the contractors.

31. I confess I have immense difficulties in understanding this argument which is clearly inconsistent with the express provisions of sub-para. (b) and which requires that the whole phrase "prior to any mechanical excavation" to be ignored. I do not accept this argument.

Conclusion

32. By reason of the aforesaid matters, I am of the view that sub-para. (b) and (c) were not applicable to the Plaintiff. Judgment is therefore entered against the Defendant in favour of the Plaintiff in the sums of $2,155,302 and $961,144.

The Plaintiff's "Alternative Arguments"

33. The Plaintiff's "alternative arguments" are that even if I was against it on the construction of Memo 4:-

(a) Memo 4 has been complied with by other contractors at the Site on behalf of the Plaintiff prior to the Plaintiff's piling work. It was already agreed between Hsin Yieh and CLP that a major part of the cable was to be exposed and diverted. The actual work was undertaken by Tak Cheong and was completed by October, 1988;

(b) alternatively, the Plaintiff did not need to perform any further act to comply with it as it had been overtaken by events which transpired at the Site prior to the commencement of the Plaintiff's piling work. The work undertaken by Tak Cheong resulted in some 80% to 90% of the cable having been exposed and diverted. According to the report of Mr. Adcock, a trial pit which was dug within 5-10 meters of the underground cable would meet the usual requirement. The closest distance between the nearest part of the exposed cable to the site of pile "PF 5" was about 7-8 meters. There was therefore no need for the Plaintiff to dig any trial pit. Further, since some 80% to 90% of the cable has in fact been located on behalf of CLP by exposure, there was no need for the Plaintiff to seek CLP's assistance.

34. As I have already decided in the Plaintiff's favour on the construction of Memo 4, there is strictly no need to deal with these "alternative arguments". However, as this aspect has taken quite some time at the trial, I consider it appropriate for me to decide on the "alternative arguments".

35. Ms. Pinto for the Defendant argued that these "alternative arguments" have no substance. Assuming that there had been substantial performance (which the Defendant did not agree), "substantial performance" of a contractual term could not in law amount to performance of that term. Ms. Pinto argued that no matter what happened regarding the other parts of the underground cable, at the accident site, that is, where steel pile "H12" was driven, the Plaintiff had not located the cable by reasonable hand-digging or sought CLP's assistance to locate it.

36. Although the law recognizes the doctrine of "substantial performance", this doctrine is only applicable where there was a failure to perform an unimportant part of a contractual obligation: see Chitty on Contracts (1994) 27th ed., para. 21-025 to 21-026. Here, I do not consider that the area in the vicinity of the 3 steel piles where the unexposed cable was lay was so unimportant for the purpose of sub-para. (b) as to vitiate the Plaintiff's need to undertake reasonable hand-digging or to ask CLP for assistance.

37. I already found earlier that the Plaintiff had not carried out reasonable hand-digging. Whether the hand-digging of one trial pit was reasonable is not important because the Plaintiff never sought the assistance of CLP (as required by sub-para. (c)). For the sake of completeness, I will set out the reasons why I consider the hand-digging of the Plaintiff was not reasonable:-

(a) there was only one pile to be driven in the vicinity of the unexposed cable, that is, pile "PF 5". The amount of hand-digging which needed to be undertaken was not onerous because all that the Plaintiff should do was at most to dig trial pits at the sites of steel piles "H11" to "H13" to expose the cable thereat;

(b) the Plaintiff should have hand-dug more than one trial pit. This was so even though a major part of the cable had already been exposed;

(c) the one trial pit dug by the Plaintiff did not expose the cable as recommended in para. 4.7 and 4.8 of the report of Mr. Adcock (p. 328-29, BD).

38. The Plaintiff further argued that the reasonableness of the hand-digging had to be decided qua the insurer, and not qua the standard accepted by the engineering profession. I understand what the Plaintiff meant by this argument to be as follows: when the Court decides whether the hand-digging undertaken by the Plaintiff was reasonable, the Court should adopt a much more lenient test, for example, whether the Plaintiff has been reckless in doing so. The Plaintiff argued that otherwise the object of the policy (that is, to indemnify the Plaintiff inter alia for its negligence) would be defeated. I do not agree. I consider that the textbooks and cases cited by Mr. Bharwaney in support were distinguishable because they were only concerned with the principle of not construing a clause in a liberal way so as to defeat the whole purpose of the contract. In this case, the "reasonable hand-digging" was only a mode of locating an underground cable. The policy will not be "defeated" or "rendered illusory" by requiring the Plaintiff to undertake "reasonable" hand-digging as that word is understood in the law of negligence.

39. For the reasons stated above, I agree with Ms. Pinto that if sub-para. (b) and (c) had been applicable to the Plaintiff, the Plaintiff would have been in breach of both these sub-clauses.

Waiver/Estoppel

40. Mr. Bharwaney submitted that even if the Plaintiff had been in breach of sub-para. (c), the Defendant could not rely on this sub-clause because the Defendant failed to rely on this earlier in its letter dated 11 February, 1991 but only relied on an alleged breach of sub-para. (b). He relied on Panchaud Fréres v. Etablissements General Grain [1970] 1 Ll. L.R. 53 for this part of his submissions.

41. Ms. Pinto argued that the law is as set out in Chitty, para. 24-012: "The general rule is well established that, if a party refuses to perform a contract, giving therefor a wrong or inadequate reason or no reason at all, he may yet justify his refusal if there were at the time facts in existence which would have provided a good reason, even if he did not know of them at the time of his refusal. .... However, a party cannot rely on a ground which he did not specify at the time of his refusal to perform 'if the point which was not taken could have been put right'".

42. I consider that the law applicable to this case is those set out in Chitty, para. 24-012. I do not find that the obligations under sub-para. (b) and (c) were ones which "could have been put right" by the Plaintiff. Further, I consider that the Panchaud Fréres case was decided on its particular facts, that is, that it arose out of an appeal from an arbitration award where the fresh point raised on appeal was not raised before the arbitrator. Insofar as it is sought to be relied upon for supporting a wider application, this case was out of line with other cases deciding on this point. I therefore consider that the case relied on by Mr. Bharwaney is distinguishable and do not accept his submissions on this point.

Interest

43. I consider that interest on the judgment sums should be at judgment rate from the date of payment by the Plaintiff to date of Judgment and thereafter also at judgment rate until date of payment.

Costs Order Nisi

44. I consider that this is a case where I should not make a costs order nisi pursuant to R.H.C. Ord. 42 r. 5B(6) for the following reason. The normal rule is that costs should follow the event. There is however a special feature in this case. I decided in favour of the Plaintiff on the non-applicability of sub-para. (b) (and therefore sub-para. (c)) based on the ordinary meaning given to the word "excavation". However, I decided in favour of the Defendant in relation to the Plaintiff's "alternative arguments". There may be arguments as to whether there should be a costs order relating to costs of the issue.