CHINA HARBOUR ENGINEERING CO LTD v. THE SECRETARY FOR JUSTICE OF THE HKSAR

FAMV No. 55 of 2007

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO. 55 OF 2007 (CIVIL)

(ON APPLICATION FOR LEAVE TO APPEAL

FROM CACV NO. 138 OF 2006)

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D E T E R M I N A T I O N

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Chief Justice Li :

1. The applicant’s claim against the respondent, the Government, was for damages for breach of contract arising out of a tender exercise.  Burrell J dismissed the applicant’s claim.  The Court of Appeal dismissed the applicant’s appeal and refused leave to appeal to the Court.

2. The applicant seeks leave under s.22(1)(b) of the Hong Kong Court of Final Appeal Ordinance, Cap 484.  It is contended that leave should be granted on the “or otherwise” ground and alternatively on the ground that the questions involved are of great general or public importance.  Mr Griffiths SC and Mr Wong SC have ably urged everything that could be said in support of  the application. 

3. Taking the latter ground first, the applicant has formulated a number of issues said to be of great general or public importance in its application, namely the conforming issue, the fairness issue, the openness issue and the construction issue.  We agree with Ms Cheng SC for the respondent that these issues in essence turn on the interpretation of Condition 2 of the special conditions of tender (SCT 2). 

4. SCT 2 set out a pricing condition for tenders.  The tender was for four items in a large project.  But only one item and part of another were guaranteed to the successful tenderer.  The rest were excisable.  The rationale of SCT 2 was to ensure that competitive prices were obtained for the guaranteed items.  Only the applicant’s tender met the pricing condition in SCT 2.  The other tenders did not, including the company which was awarded the tender. 

5. SCT 2 provided that failure to price the tender in accordance with the condition therein “may invalidate” the tender.  Both the Judge and the Court of Appeal held that “may” means “may” and confers a discretion on the Government and that it does not mean “must”.  In our view, that conclusion is plainly right.  In any event, the proper interpretation of SCT 2 is a case specific matter and this alone rules out the grant of leave under the “great general or public importance” limb. 

6. In so far as there are issues raised by the applicant which are independent of the proper interpretation of SCT 2 and still remain even on the basis that the interpretation of SCT 2 by both courts below is correct, they are also case specific and do not raise any question of great general or public importance. 

7. An order was made splitting the issues of liability and quantum.  The applicant submits, in support of leave on the “or otherwise” limb, that it is a matter of the utmost probability or even of virtual certainty that the damages ultimately awarded will be in excess of $1 million.  The Court of Appeal rightly said that it would not be appropriate to conduct a “mini trial” as to quantum at this stage and that there is no basis for any conclusion as to the amount of damages involved. Further, the grant of leave under this limb is ultimately a matter of discretion.  In the circumstances of this case, having regard to our view of the plainly correct interpretation of SCT 2, leave would in any event be refused under this limb.

8. Accordingly, the application for leave is dismissed with costs.