Attorney General v. Super Point Co Ltd

BETWEEN

------------------------------

Coram: Hon. Fuad, Hunter & Macdougall, JJ.A.

Date of hearing: 26 November 1989

Date of Judgment: 28 November 1989

Date of Handing Down of Reasons: 22 December 1989

-----------------------

J U D G M E N T

-----------------------

Macdougall, J.A.:

1. This appeal concerns both an award made by Master Perrior on 26 April 1989 on an assessment of damages and a refusal by him to award interest on the judgment sum prior to the date of judgment.

2. The matter arose as follows. In August 1985 the Government acting through the Director of Civil Aviation invited tenders for a 12 months tenancy of shop B12 in the Arrivals Buffer Hall of the Passenger Terminal Building at Kai Tak airport. The premises were to be occupied for the purpose of conducting the business of money changing.

3. The three highest tenderers were Ruby Profits Co. Ltd, the respondent and Leone Finance Co. Ltd. in that order. The amounts tendered were $1,760,009, $1,210,000 and $1,050,000 per month respectively. On 20 September that year Government accepted the bid made by Ruby Profit Co. Ltd., but the company defaulted. Thus on 19 November the Government accepted the respondent's bid. The tenancy was to commence on or about 29 November. However, by letter dated 29 November the respondent repudiated the agreement and refused to take up the tenancy. As a result the Government rented the premises to the third highest tenderer, Leone Finance Co. Ltd., on 23 December 1985 at a monthly rental of $1,050,000.

4. The Government subsequently instituted separate actions against Ruby Profit Co Ltd and the respondent to recover damages suffered as a consequence of their breaches of agreement. The action against the respondent was commenced on 12 July 1988. The sum claimed was $2,608,907 composed of $968,000 loss of rent for the period 29 November to 22 December 1985 and $1,790,967, being the difference between the rent agreed to be paid by the respondent and that actually paid by Leone Finance Co Ltd from 23 December 1985 to 28 November 1986, less the respondent's forfeited deposit of $150,000.

5. On 18 November 1988 Master Jones assessed damages against Ruby profit Co. Ltd., at $10,639,463 and awarded $1,536,687.76 by way of interest calculated from the date of the issue of the writ to the date of judgment.

6. On 13 January this year the Government obtained interlocutory judgment against the respondent for damages to be assessed.

7. In February the Government failed in its attempt to levy execution against Ruby Profit Co. Ltd., and on 4 April the hearing for the assessment of damages to be paid by the respondent came on for hearing. On 26 April the Master delivered his decision and awarded the Government the sum of $70,931.36 being "the difference between the tender of the defendant and the actual amount pain by Leone Finance Co. Ltd. from the notional end of Ruby Profit Co. Ltd.'s tenancy to the notional end of the defendant's tenancy, i.e. 17th October 1986 to 28th November 1986" less the forfeited deposit of $150,000.

8. The Master concluded that "it would be inconsistent and, by hypothesis, wrong to award damages against the [defendant] for a period when [the plaintiff] already has judgment against Ruby Profit Co. Ltd. for a greater sum".

9. While accepting that the Government had commenced entirely separate actions against different defendants, the Master sought to derive assistance from the following passage from United Australia Ltd. v. Barclays Bank Ltd. [1941] A.C. 1 at 30 in which Lord Atkin said with reference to alternative remedies in tort and contract:

"I therefore think that on a question of alternative remedies no election arises until one or the other claim has been brought to judgment. Up to that stage the plaintiff may pursue both remedies together, on pursuing one may amend and pursue the other; but he can take judgment only for the one, and his cause of action on both will then be merged in the one."

10. It appears that the Master considered that the Government was seeking to obtain what amounted to double damages against two entirely separate defendants, under two separate contracts in respect of the same premises for contemporaneous tenancies.

11. In his view it made no difference that the Government had thus far failed to enforce its judgment against Ruby Profit Co. Ltd. or that it was prepared to give an undertaking to account to the respondent for any damages recovered in excess of its claim against Ruby Profit Co. Ltd.

12. He put the matter this way:

"In short, I consider that the only way in which the plaintiff could have recovered his claim in full from this defendant would be if, in his claim against Ruby Profit Co. Ltd., he had limited that claim to the difference between the tenders of Ruby Profit Co. Ltd., and the defendant. The plaintiff did not do so he went for the greater sum by obtaining the difference between the tenders of Ruby Profit Co. Ltd., and Leone Finance Co. Ltd. Hence, he made his election and is, applying the dictum of Lord Atkin, bound by it.".

13. With the greatest of respect to the Master we profoundly disagree. We are unable to find anything in what was said in United Australia Ltd. v. Barclays Bank Ltd. or elsewhere to support such a conclusion. It is clear that the actions begun by Government against Ruby Profit Co. Ltd. and the respondent constituted different causes of action against different defendants notwithstanding that the premises that formed the subject matter of each action were the same.

14. In B.O. Morris Ltd. v. Perrott and Bolton [1945]1 All E.R. 567 at 569 Lord Goddard had this to say about the decision in United Australia Ltd.:

"It lays down that where there is no joint contract or relation of principal and agent an unsatisfied judgment against one person for the price of goods sold is not a bar to a subsequent action against another for the price of the same goods. It is clear that the test is not whether the subject matter of the contract is the same in both actions but whether the cause of action is identical in both. If it is, as is the case if the liability arises on a joint contract, judgment against one contractor is a bar to an action against another, as laid down in King v Hoare (1884)13 M&W 494, and Kendall v. Hamilton (1897) 4 App. Cas.504. If the causes of action are different, judgment without satisfaction against one is no bar to an action against the other, and this is so even if the plaintiff deliberately refrains from proceeding to execution on the first judgment. The same is true in tort as for instance, where there have been successive conversions of the same goods, trover lies against all persons guilty of conversion and recovery of damages against one is no answer by the defendants in subsequent actions, though a second or subsequent defendant is entitled to credit for what may have been recovered in a former action and as soon as full satisfaction has been obtained the plaintiff has exhausted his rights. It is enough to cite Morris v. Robinson (1824)3 B&C 196 as authority; the causes of action in that case were based on conversion.

That case and Isaacs v. Salbstein [1916]2 KB139 also dispose of the matter that was much argued on this appeal. It was objected that this judgment allows the plaintiff to recover in all £10,379 and not only £5,379. The answer is, as pointed out by BAYLEY, J., in Morris's case, that equity would interfere to prevent a double satisfaction, and BANKES, L.J., in Isaacs' case, at p.155, said:

'It is said that, if this is the rule of law, a person may recover a number of judgments against different persons for the same sum of money. I see no great objection to this, having regard to the fact that a plaintiff cannot receive the amount claimed more than once.'".

15. Mr. Lo, who appeared for the respondent, sought to argue that since the Government had not disclosed to Master Jones at the hearing of the assessment of damages in the action against Ruby Profit Co. that it had also commenced an action against the respondent in respect of the same premises and the same call for tenders, there somehow arose "an estoppel per rem judicatam in the wider sense which gave rise to an abuse of process that the court in the exercise of its inherent jurisdiction should prevent". In an attempt to support this contention Mr. Lo cited Kok Hoong v. Leong Cheong Kwong Mines Ltd. [1964]A.C. 993 and Yat Tung Investment Co. Ltd. v. Dao Heng Bank Ltd. [1975] A.C. 581.

16. In our view neither of these cases is of any assistance to Mr. Lo. We are unable to find anything in the conduct of the Government which could conceivably be said to amount to an abuse of the process of the court. Accordingly the appeal on the award of damages must succeed.

17. As to the matter of interest prior to the date of judgment, the Master gave three reasons for declining to exercise his discretion to make any award in favour of the Government. First, that "by making no, or no adequate, enquiries about tenderers and requiring the payment of what is, given the extraordinary rentals such small shops appear to command at the Airport, no more than a nominal deposit [the Civil Aviation Department] was asking or trouble". Secondly, that "when problems arose the Civil Aviation Department should have taken reasonably expeditious action to remedy the situation" and "did nothing until prodded into action by the Director of Audit in 1988 when it caused proceedings to be initiated against both Ruby Profit Co. Ltd. in Civil Action No. 4927 of 1988, and the defendant." Thirdly, that the shareholding in the defendant company changed subsequent to its failure to take up the tenancy and it would appear that the new shareholders had no notice of the Government's potential claim against the company until it received a letter of demand on 14 May 1988.

18. We are satisfied that none of these considerations could lead to the proper exercise of the discretion not to award interest. Had the Government, having commenced the action against tile respondent, been responsible for unjustifiable delay in bringing it to trial, there can be no doubt that interest for a period shorter than the time from the date of service of the writ to the date of trial should be awarded.

19. As Watkins L.J. said in Birkett v. Hayes [1982]1 WLR 816 at 825:

"Usually this period will run frow the date of the writ to the date of trial, but the court may in its discretion abridge this period when it thinks it is just so to do. Far too often there is unjustifiable delay in bringing an action to trial. It is, in my view, wrong that interest should run during a time which can properly be called unjustifiable delay after the date of the writ. During that time the plaintiff will have been kept out of the sum awarded to him by his own fault. The fact that the defendants have had the use of the sum during that time is no good reason for excusing that fault and allowing interest to run during that time."

20. Although we accept that an award of interest from the date on which the cause of action arose could not be supported, we do not think that the Government's delay in commencing an action within the limitation period justified a refusal to award interest from the date of the service of the writ to the date of the award of damages.

21. For these reasons we allowed the appeal, set aside the award of the Master, and ordered that judgment be entered for the appellant in the sum of $2,608,907.00 with interest thereon from the date of service of the writ to the date of the hearing of this appeal and calculated at the bank prime rate plus 1% averaged over that period.

Representation:

Mr. Robert Andrews, Senior Crown Counsel for Appellant

Mr Lo Man-chiu instructed by Messrs S.H. Chan & Co. for Defendant/Respondent