TANG WAI KUEN RAYMOND AND ANOTHER v. ASIA LANDSCAPING LTD

HCCT 11/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTRUCTION AND ARBITRATION PROCEEDING

ACTION NO. 11 of 2008

____________

_______________

J U D G M E N T

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I. INTRODUCTION

1.  DARG and Asia Landscaping are parties to a Consultancy Agreement contained in a letter dated 27 February 2006.  The Consultancy Agreement concerns “soft landscape works” for a project at the Venetian Macau.  The Project Employer engaged Asia Landscaping for the works and Asia Landscaping in turn engaged DARG as a consultant.

2.  It was a term of the Consultancy Agreement that DARG was to be paid as follows:-

3.  The sole question in this case is the construction of the expression “variation amount” in the Consultancy Agreement.

4.  The Project covered Zones A, B, C, D and E of the works site.

5.  By Letter of Acceptance dated 30 March 2006 Asia Landscaping was awarded the works in Zones A, B and C.  A Trade Contract between Asia Landscaping and the Employer to that effect was executed on 6 July 2006.  The contract sum was MOP13,671,852.

6.  Subsequently, Asia Landscaping and the Employer entered into 3 Supplemental Agreements (respectively dated 5 December 2006, 9 July 2007 and 30 August 2007).  These Supplemental Agreements enlarged the scope of the original Trade Contract to cover work on Zones D and E.  The Supplemental Agreements were executed pursuant to cl. 21.6(a) of the General Conditions to the Trade Contract.  As a result, the contract sum was increased to MOP30,871,589.

7.  DARG’s contends that the work done on Zones D and E under the Supplemental Agreements constituted a variation of the Trade Contract.  Accordingly, DARG claims that under the Consultancy Agreement it is entitled to a 5% bonus on the increased contract amount which resulted from the inclusion of Zones D and E to scope of work.

8.  Asia Landscaping replies that, although the Employer initially let out works in Zones A, B and C under the Trade Contract, the Project had always encompassed Zones A, B, C, D and E.  Accordingly, the increased scope of the works under the Supplemental Agreements did not constitute a variation within the terms of the Consultancy Agreement.  Asia Landscaping says that the expression “variation amount” in the Consultancy Agreement only refers to the value of variations to the work originally envisaged for Zones A, B, C, D and E.  On that basis, the 5% bonus would only attach to variations to the works in Zones A, B, C, D and E ordered under Construction Managers Instructions (CMI) issued pursuant to cl. 6 of the General Conditions to the Trade Contract.

9.  On DARG’s reading of the Consultancy Agreement, MOP769,029.60 remains due to DARG by way of bonus on “variation amount”.  Asia Landscaping accepts that, if DARG is right, the outstanding quantum is as DARG asserts.  On the other hand, on Asia Landscaping’s reading of the Consultancy Agreement, nothing remains due and owing to DARG from Asia Landscaping.

II.      DISCUSSION

10.  The terms “variation” and “variation amount” are not terms of art which are capable of bearing only one meaning.  While terms generally connote some idea of “change” or “alteration,” different people may use the terms to mean different things.  Mr. Desmond Leung (appearing for DARG) argues the following matters in support of DARG’s construction of the expression “variation amount”.

11.  First, DARG was not involved during the tendering stage of the Project. Consequently, at the time when the Consultancy Agreement was entered into, for all DARG knew, the Project only involved Zones A, B and C.

12.  Mr. Leung points to the evidence on this matter.

13.  Mr. Raymond Tang (DARG’s principal partner) says that he was not involved on Asia Landscaping’s behalf in the tendering process.

14.  Mr. Stan Li (Asia Landscaping’s director) vaguely suggests that tender documents (including materials referring to the Project as inclusive of Zones A, B, C, D and E) were copied to Mr. Tang from time to time to keep him informed.  But (Mr. Leung observes) there is no compelling evidence backing Mr. Li’s suggestion.

15.  In the course of discovery, Mr. Li disclosed some 5 different versions of the set of tender documents which Mr. Li asserts were handed to Mr. Tang prior to execution of the Consultancy Agreement.

16.  But, within these versions, there are (Mr. Leung notes) inconsistencies, such that one cannot be sure that any given alleged bundle of tender documents was actually handed to Mr. Tang.  For instance, there are discrepancies between the table of contents of particular versions and the actual documents said to comprise those versions. The table of contents only list documents relating to Zones A, B and C.  But (if Mr. Li is to be believed) the particular versions nonetheless included documents relating Zones D and E.

17.  Mr. Tang denies that the alleged bundles were handed to him and Mr. Li himself does not claim to have personally handed the same to Mr. Tang.  No one gave evidence on behalf of Asia Landscaping about specifically handing the bundles of tender documents to Mr. Tang.

18.  In any event, Mr. Li himself accepts (Mr. Leung stresses) that Mr. Tang had no significant input into the negotiations between Asia Landscaping and the Employer on the precise work to be done by Asia Landscaping on the Project.

19.  In those circumstances, Mr. Leung submits that the Court cannot conclude that Mr. Tang would have been aware that the consultancy between DARG and Asia Landscaping would encompass Zones A to E.  It is doubtful whether any of the alleged bundles of the tender documents were actually handed to Mr. Tang as Mr. Li says.  The bundles disclosed by Asia Landscaping may (Mr. Leung argues) have only later been cobbled together for whatever reason from tender documents issued at various times before and after the date of the Consultancy Agreement.

20.  Second, immediately after the Consultancy Agreement was concluded, Asia Landscaping received the Employer’s Letter of Acceptance and entered into the Trade Contract. These 2 last documents only refer to Zones A, B and C.  These documents therefore suggest (Mr. Leung argues) that, at around the time when the Consultancy Agreement was concluded, in all likelihood the parties only contemplated that the scope of DARG’s consultancy was limited to Zones 5A, 5B and 5C.

21.  Mr. Leung’s argument is bolstered by reference to 2 documents which Mr. Tang is known to have received from Asia Landscaping immediately before the Consultancy Agreement was executed.  In proposing fees for DARG’s consultancy, Mr. Tang says that he relied on a “Preliminary Soft Landscape Programme of Works” dated 4 November 2005 and on a 15 February 2006 version of the tender documents.  These 2 documents show the scope of works as limited to Zones A, B and C.

22.  Third, Mr. Li’s evidence is that at some unspecified time the Project Construction Manager orally indicated to him that, to avoid delay, the Employer would put Zones A, B and C to tender first and Zones D to E to tender later. Mr. Li could not say just when the Construction Manager so indicated.  Mr. Li’s evidence is thus too vague (Mr. Leung submits) to be relied upon on this point.  But, even if the evidence were reliable, the Construction Manager’s indication must have been given at least some significant time (say, a month or so) before the Employer’s Letter of Acceptance was issued in late March 2006. On that assumption, Mr. Li himself would likely have contemplated the Consultancy Agreement as referring only to Zones A to C.

23.  Fourth, the terms of the Consultancy Agreement were orally discussed and agreed at a meeting on 24 February 2006 between Mr. Tang and Mr. Li at a coffee shop. The agreed terms were later reduced by Mr. Tang into a letter dated 27 February 2006.  This letter was then signed by Mr. Tang and Mr. Li.

24.  At the 24 February meeting, it is Mr. Tang’s evidence that Mr. Li said to him (in translation):-

“Don’t be so calculating by demanding so much money each month. I’d rather increase the bonus. Since the money is coming from others, there will be 5% for amount exceeding $13,000,000”.

25.  Mr. Li denies that he said anything to such effect.

26.  But, if the Court accepts Mr. Tang’s evidence on this point, Mr. Leung submits that the $13 million must refer to the estimated value of the work on Zones A to C.  This would indicate that at the time of negotiating the Consultancy Agreement both parties indeed regarded the relevant consultancy work as involving just Zones A to C. Mr. Leung submits that anything beyond that work (valued at MOP13.6 million odd) would constitute a “variation” for which a 5% bonus would be payable.

27.  Ms. Janine Cheung (appearing for Asia Landscaping) attacks Mr. Leung’s submissions head on.

28.  Ms. Cheung argues that the words “variation amount” in the Consultancy Agreement are ambiguous at best.  The words could plausibly refer either to changes in the scope of work under the Trade Contract made pursuant to cl. 21.6 (as DARG contends) or to changes pursuant to CMIs in the original landscaping work envisaged for the entirety of Zones A to E (as Asia Landscaping contends).

29.  The fact is (Ms. Cheung stresses) that the parties never specifically discussed among themselves what “variation amount” was supposed to cover.  Each assumed that they knew what the words meant, although their understanding of the expression was different.

30.  There was (Ms. Cheung says) no “consensus ad idem”.  It is simply not possible to determine objectively what the parties meant by the reference to “variation amount” in their contract.  The situation is similar to that in Raffles v. Wichelhaus (1864) 2 H & C 906 where it was not possible to determine which ship the parties were referring to when they agreed to buy a cargo of cotton “ex Peerless from Bombay”.  This was because there were 2 ships with the same name Peerless which sailed from Bombay at different times.  In the premises, Ms. Cheung submits that DARG’s claim must fail, since there is a probative burden on DARG to establish its construction of the words “variation amount” in the Consultancy Agreement.

31.  I am not persuaded by Ms. Cheung’s argument.  In my view, if one looks at the matter objectively, it is plain that by “variation amount” the parties most likely had in mind the construction for which DARG contends.

32.  I accept Mr. Tang’s evidence that his involvement in the tendering process was minimal.  That is not really disputed by Mr. Li.

33.  In those circumstances, I find it hard to see how in drafting the Consultancy Agreement, Mr. Tang would be contemplating a 5% bonus on variations to works envisaged in Zones A to E, as opposed to only Zones A to C.  Whatever tender material referring to whatever Zones may have been provided to Mr. Tang previous to February 2006, by the time when he was preparing the Consultancy Agreement Mr. Tang had the 15 February 2006 version of the tender documents. That referred only Zones A to C.

34.  It would accordingly have been natural and reasonable for Mr. Tang to have borne that 15 February document in mind and relied on the same when he was drafting the Consultancy Agreement.  I note in this connection that Mr. Tang prepared a first draft on the Consultancy Agreement around 18 February 2006.

35.  For the sake of completeness, I add that, in light of the discrepancies which Mr. Leung has highlighted, I am far from satisfied that the alleged versions of tender documents referred to by Mr. Li were actually provided to Mr. Tang.  In all likelihood, as Mr. Tang says, Mr. Tang only received the 15 February 2006 version of the tender documents.

36.  Moreover, I accept that Mr. Li told Mr. Tang not to be “greedy” as DARG would be earning a bonus on works over $13 million.  In giving evidence, Mr. Li tended to be vague on details and chronology, so that I am unable to treat his evidence on a particular matter as reliable.

37.  Given such reference to $13 million by Mr. Li, it must have been the case that Mr. Li (like Mr. Tang) was contemplating that the bonus on “variation amount” would bite on work additional to that to be done in Zones A to C (estimated at a little over $13 million).  This evidence is to me a strong indication that Mr. Li was thinking in the same way as Mr. Tang and so there was a “consensus ad idem”.  We are thus miles away from the Raffles v. Wichelhaus situation.

38.  Ms. Cheung says that the reference to $13 million in the remark attributed to Mr. Li is itself ambiguous.  The $13 million could (Ms. Cheung suggests) refer only variations ordered to be done by CMIs issued in relation to Zones A to C.  But I am unable to accept this.  In context, the remark indicates exactly what it says, namely that, for the purposes of DARG’s consultancy there would be a bonus on everything above the approximately $13 million works awarded in relation to Zones A to C.

39.  Ms. Cheung notes that cl. 21.6(a) (unlike cl. 6) does not specifically deal with the valuation of variations to the scope of works.  That may be true.  But, looked at commercially, I do not see why that is an obstacle to two parties agreeing the payment of a bonus on cl. 21.6(a) variations.  Valuation could proceed in a robust and reasonable fashion, by reference to the value of the additional work to be done on Zones D to E. Here the amount claimed by DARG is 5% of the contract sum of the works certified for Zones D and E.

III.     CONCLUSION

40.  DARG succeeds in its claim for MOP796,029.  For present purposes, there is no substantial difference between the Macau pataca and the Hong Kong dollar.  Interest is consequently to run on that amount at 1% over Hong Kong dollar prime from date of Writ (4 February 2008) until today.  Thereafter, interest will run at the judgment rate until payment.

41.  Asia Landscaping decided at trial not to pursue its Counterclaim.  The Counterclaim is therefore dismissed.

42.  I will now hear counsel on costs and consequential orders.

HCCT 11/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTRUCTION AND ARBITRATION PROCEEDINGS

NO. 11 OF 2008

____________

____________

_______________

J U D G M E N T

_______________

Introduction

1.  The Plaintiffs provide landscape consultancy services and entered into an agreement to provide consultancy services to the Defendant for the soft landscape works for the Venetian Macao at Cotai, Macau (the “Consultancy Agreement”).

2.  In this action, the Plaintiffs are claiming the sum of MOP$796,029.60 which they say is the outstanding balance due to them under the Consultancy Agreement and, by summons under RHC Order 14, the Plaintiffs seek summary judgment on their claim.

The Consultancy Agreement sued upon

3.  The Consultancy Agreement, dated 27 February 2006, is set out in the form of a letter from the Plaintiffs to the Defendant, which the Defendant countersigned to indicate confirmation and acceptance.  The letter is headed:-

“Consultants Services

8021 External Works – Soft Landscape Works for

The Venetian Macao in Cotai, Macau”

4.  The body of the letter provided as follows:-

“Thank you for your invitation regarding our professional consultants services for the captioned project, we would like to list out herewith our professional service and the fee proposal for your perusal.  We provide full quantity surveying services and/or project management services, it is included but not limited to supervise the taking-off of quantity, procurements and subletting works, preparation of interim payment for client and subcontractors, variation and final account, claims preparation and assessment, contractual dispute, attending site meeting and project coordination services.”

5.  Below that rubric is a fee proposal containing 3 paragraphs.  The first two concern a monthly consultancy and travelling allowance and there is no dispute in relation to them for present purposes.  The third paragraph, about which there is a dispute, reads simply:-

“5% Bonus for all the variation amount”.

6.  The Consultancy Agreement was terminable by either party upon 30 days’ notice in writing.

Background

7.  To put the Consultancy Agreement into context, the Defendant had been invited by Hsin Chong Engineering (Macau) Limited, as Construction Manager, to tender for the External Works Soft Landscape Package No.8021 for Venetian Cotai Limited. 

8.  The Defendant duly submitted its tender by a letter dated 21 October 2005.  It is the Defendant’s case that the tender related to 6 sections of work described respectively as Preliminaries, Zone 5A, Zone 5B, Zone 5C, Zone 5D and Zone 5E.  For their part, the Plaintiffs say that the tender documents provided to them when the Consultancy Agreement was being negotiated only contained reference to works in Zone 5A, Zone 5B and Zone 5C and not to Zone 5D and Zone 5E.

9.  Eventually, by a letter of acceptance dated 30 March 2006, the Defendant was awarded the project covering the Preliminaries, Zone 5A, Zone 5B and Zone 5C for a total contract sum of MOP$13,671,852. 

10.  The formal Trade Contract between the Venetian Cotai Limited and the Defendant was entered into on 6 July 2006.  That the scope of the works was limited to Zone 5A, Zone 5B and Zone 5C is confirmed by Annexure 1 to the Trade Contract Articles of Agreement and also Clause 3.3 of the Specification – Preliminaries Part II.

11.  The Trade Contract General Conditions contained the following clauses:-

(1)      Clause 6.2(a) which provided:-

“6.2    Valuation of Construction Manager’s instructions

(a)   If any instruction issued under the Trade Contract:

(i)    requires the Trade Contractor to undertake work not provided for in, or to be reasonably inferred from, the Trade Contract documents; or

(ii)   imposes any additional obligation, restriction or requires the omission of any work, obligation or restriction,

the Trade Contractor must comply with the instruction and the Contract Sum will be adjusted and the provisions of clause 6.3 will apply, subject to clause 6.2(b).”

(2)      Clause 21.6(a) which provided:-

“(a)    The Trade Contract may not be varied except by an agreement in writing signed by both parties.”

12.  Subsequent to the Trade Contract, the Defendant entered into three Supplemental Agreements dated 5 December 2006, 9 July 2007 and 30 August 2007 and respectively relating to soft landscaping works at Zone 5D, Zone 5E (VIP Garden) and Zone 5E (golf course).  Each of the Supplemental Agreements was expressly entered into pursuant to clause 21.6(a) of the Trade Contract General Conditions.  As a result the total contract sum increased to MOP$30,871,589.

The dispute lending to this action

13.  By an invoice dated 31 August 2007, the Plaintiffs invoiced the Defendant for the monthly consultancy fee and travel allowance for the month of August.  The invoice included an item representing 5% of the contract sum for works relating to Zone 5D and Zone 5E as well as 5% of the value of the variations ordered by way of Construction Manager’s Instructions (“CMIs”) under clause 6.2(a) of the Trade Contract General Conditions, both as certified by the project’s cost consultant in its interim valuation certificate No.6.

14.  The Defendant disputed the Plaintiffs’ entitlement to claim 5% of the contract sum for works relating to Zone 5D and Zone 5E.

15.  The dispute eventually led to the Defendant serving a notice to terminate the Consultancy Agreement by fax dated 30 November 2007.  Since the Consultancy Agreement required 30 days’ notice in writing, the Consultancy Agreement was thereby terminated on 30 December 2007.

16.  The Plaintiffs now claim the sum of MOP$796,029.60 being 5% of the contract sum for works relating to Zone 5D and Zone 5E as certified by the cost consultant in its interim valuation certificate No.11 dated 7 January 2008.  The Plaintiffs have selected this interim valuation certificate as the basis of the calculation of the 5% bonus under the Consultancy Agreement since certificate No.11 is a valuation as at 31 December 2008 and this is a certificate of the value of the work closest to the date of the termination of the Consultancy Agreement.

17.  For its part, the Defendant denies that the works relating to Zone 5D and Zone 5E were variations within the meaning of the Consultancy Agreement.  Furthermore, the Defendant counterclaims the sum of MOP$52,555.57 already paid to the Plaintiffs by way of bonus under the Consultancy Agreement on the basis that the accumulated amount of the variations has been valued by the cost consultant as a negative figure so that the sum paid to the Plaintiffs, based on a previous valuation figure that was positive, falls to be repaid.

The relevant principles on an Order 14 application

18.  There was no dispute between the parties as to the relevant principles.

19.  On an application for summary judgment, unless the Court dismisses the application, the burden rests on the defendant to satisfy the Court that there is an issue or question in dispute which ought to be tried or that there ought for some other reason to be a trial of the claim.

20.  It is also trite that the underlying policy of the summary procedure under Order 14 is to prevent a defendant from delaying a plaintiff from obtaining judgment in a case in which the defendant clearly has no defence to the plaintiff’s claim: see Hong Kong Civil Procedure 2008 at Note 14/4/1 (p.188).

21.  On the other hand, unless it is obvious that the defence put forward by the defendant is frivolous and practically moonshine, Order 14 ought not to be applied.  Order 14 is for clear cases, that is, cases in which there is no serious material factual dispute and, if a legal issue, then no more than a crisp legal question as well decided summarily as otherwise: see Hong Kong Civil Procedure 2008 at Note 14/4/9 (p.191).

The application for summary judgment

22.  Mr Desmond Leung, counsel for the Plaintiffs, submitted it was clear that the works relating to Zone 5D and Zone 5E under the Supplemental Agreements were variations within the meaning of the Consultancy Agreement and were therefore work to which the 5% bonus applied.

23.  In support of this contention, he relied on Hudson’s Building and Engineering Contracts (1995 Ed.) Vol.1 at paras. 7.001 and 7.004 which address the meaning of the term “variation”.  Para.7.001 states:-

“In this chapter, however, the term is used in the narrow sense of an alteration in the previously described work and materials to be provided by the contractor (that is, as shown on the drawings and described in the specifications, …”.  (Emphasis in original)

24.  Para.7.004 states:-

“It is perfectly possible for variations to be ordered, carried out and paid for under a separate agreement between the owner and the contractor, whether made orally or in writing, and quite independently of any express provision providing for variations in the contract, unless there is some provision specifically denying effect to any such separate agreement, …”.

25.  Mr Leung submitted that, whilst the work in relation to Zone 5D and Zone 5E were not variations pursuant to CMIs pursuant to clause 6.2(a) of the Trade Contract General Conditions, they were variations pursuant to clause 21.6(a) of those conditions and therefore fell within the ambit of variations for the purpose of the Consultancy Agreement.

26.  Mr Leung pointed to the fact that the works under Zone 5D and Zone 5E were not in contemplation at the time when the Consultancy Agreement was being negotiated by the Plaintiffs and the Defendant, so the subsequent inclusion of those additional or extra works in the Trade Contract must necessarily therefore be variations for the purposes of the Consultancy Agreement.

Is there a triable issue?

27.  The Defendant’s case is that the term “variation” in the Consultancy Agreement does not cover the Zone 5D and Zone 5E works, which were part of the contract works.  Accordingly, there is no basis for the Plaintiffs’ claim to a 5% bonus in respect of the contract sums for those items of work.

28.  Ms Janine Cheung, counsel for the Defendant, submitted that there is a triable issue in the present case as to what is meant by the word variation in the Consultancy Agreement.  The Defendant’s case, she submitted, was that the word should be taken to have the meaning generally understood in the trade, namely as amounts certified and valued as variations pursuant to CMIs.

29.  In this context, she relied upon general statements in McInnis: Hong Kong Construction Law (Issue 17) at paras.1308 and 1310-1350.  The former reference includes the statement:-

“The latter term ‘variations’ is often used synonymously with extra work although, to be more precise, extra work is usually required by the employer through the medium of an instruction of the architect or otherwise and then regarded as a variation of the contract which is valued according to the contract.”

Ms Cheung pointed to the valuation provisions in clauses 6.3 and 6.4 of the Trade Contract General Conditions and submitted that this demonstrated that variations meant work carried out under CMIs which would be valued accordingly.

30.  The latter reference includes the statement:-

“Variations represents [sic] works which are not expressly or impliedly included in the original contract and, therefore, are not included in the contract price.”

In this context, Ms Cheung submitted that the works at Zone 5D and Zone 5E were priced as a lump sum and were included in the interim valuation certificates as part of the contract sum rather than as work carried out under CMIs, which were separately listed as variations.

31.  Ms Cheung submitted that there was at least an ambiguity as to the meaning of the word “variation” in the Consultancy Agreement.  Since this was drafted by the Plaintiffs, any ambiguity fell to be construed contra proferentem.

32.  For his part, Mr Leung submitted that nothing would be served by having a trial of this action.  He said it was clear that any work additional to Zone 5A, Zone 5B and Zone 5C must be a variation to the Trade Contract and therefore be subject to the 5% bonus payment under the Consultancy Agreement.  The position, he submitted, was that the indisputable contemporary documents showed that the scope of the works was limited to Zone 5A, Zone 5B and Zone 5C and did not include Zone 5D and Zone 5E, so that the latter must inevitably have constituted variation works.  He submitted that the subjective intentions of the parties when negotiating the Consultancy Agreement would not be admissible to construe the relevant clause.  He also submitted that the term variation was commonly understood in the trade and would include the Zone 5D and Zone 5E works in the present case.  In this context, he referred to the fact that the Defendant was granted leave to file expert evidence as to the meaning of the bonus clause in the Consultancy Agreement but chose not to file any such evidence for this summary judgment application.  Hence, he submitted, there was no point in having a trial since no evidence could be led that would assist in the resolution of the question.

33.  In my judgment, it is at least arguable that the wording in the clause is ambiguous and there is a question as to what the relevant clause in the Consultancy Agreement means.  That question is this: in the context of this case, does the word “variation” or the phrase “variation amount” in that clause refer solely to variations under CMIs pursuant to clause 6.2(a) (the Defendant’s case) or does it also refer to any additional work including that carried out under a supplemental contract pursuant to clause 21.6(a) (the Plaintiff’s case)?

34.  Notwithstanding Mr Leung’s arguments, I think this question does raise a triable issue for the purposes of Order 14.

35.  In my opinion, I do not think it would be right to determine this question summarily without hearing such admissible factual evidence as may be adduced by the parties concerning the factual matrix out of which the Consultancy Agreement arose.  Evidence may also be admissible and assist in determining the question posed in the context of the Defendant’s submissions as to whether any work done by the Plaintiff in relation to the works at Zone 5D and Zone 5E was already remunerated by the monthly consultancy fee and was not intended to be remunerated by the 5% bonus. 

36.  In addition, expert evidence may be admissible and of assistance in determining how the word “variation” or the words “variation amount” in the relevant clause would be understood in the construction industry.

37.  In the circumstances, I do not propose to express any view on the merits of the interpretation issue raised since that should remain to be decided at trial.

38.  I would add that the Defendant had also pleaded and argued on this application that the Plaintiffs were negligent or in breach of the Consultancy Agreement in performing their services under that agreement.  Although this contention was pleaded in general terms in the Defence, it is not clear to me how this impacted on the Plaintiffs’ claim.  It was not pleaded that the negligence or breach of contract was such as to disentitle the Plaintiffs to the bonus payment under the Consultancy Agreement.  Nor was there any counterclaim for damages based on the alleged negligence and breach of contract.  No evidence of any contemporary complaint of this nature was adduced by the Defendant.  I would not have been disposed to grant leave to defend had this been the only point raised by the Defendant.

39.  Nevertheless, for the reasons set out above, it is my opinion that there is a triable issue raised as to the meaning of the relevant bonus clause in the Consultancy Agreement and I therefore grant the Defendant unconditional leave to defend the action.

40.  Leave has already been granted to the Plaintiffs to file and serve a Reply and Defence to Counterclaim within 7 days of the determination of this application: see the Order of Burrell J dated 19 March 2008.

41.  As to the costs of this application, I make an order nisi that the costs of the application for summary judgment, including the costs reserved by the Order of 19 March 2008, be costs in the cause.