Komala Deccof & Co S.A. and Others v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara (Pertamina)

HCA000960/1980

BETWEEN

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Coram: Hon. Power, J.

Date of Hearing: 24 February 1984

Date of Delivery of Judgment: 29 March 1984

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JUDGMENT

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1. In this matter the Plaintiffs on the 18th November 1982 applied before Mr. Justice Mayo for summary judgment. Mr. Justice Mayo granted judgment to the Plaintiffs in the sum of US$1,164,225 (being part of the Plaintiff's claim) with interest at the weighted average of the Hong Kong and Shanghai Banking Corporation's prime rate from the 1st of January 1977 to the date of perfection of the order herein and ordered that there was to be a stay of execution for 28 days from the date of perfection of the order. The order was perfected on the 16th December 1982 and was served on the Defendant's solicitors on the 17th December. On the 20th December Mr. Miles, of the Defendant's solicitors, spoke to Mr. Ip, of the Plaintiffs' solicitors, by telephone informing him the Defendant had calculated that the amount due to the Plaintiffs was US$1,962,038.11 together with interest. It seems clear that what Mr. Miles meant, by saying "together with interest", was that the amount was inclusive of interest. He told Mr. Ip that the interest was calculated at U.S. $133,885.88 per annum for 5 years and US$128,383.71 in respect of the first 350 days of 1982. He asked Mr. Ip how he wanted the money paid either by cheque or by draft and said that his own clients' preference was to make a T.T. payment direct to Mr. Ip's clients' account in U.S. Dollars. He told Mr. Ip that his clients were ready to make payment as soon as they were informed how the money was to be paid. Mr. Ip said that he requested Mr. Miles to reduce his request to writing and that he would take instructions from his client.

2. This conversation was, clearly, concerned with the mechanics of payment. The Defendants were asking would the Plaintiffs be prepared to accept a T.T. payment in U.S. Dollars direct into the Plaintiffs' account, i.e. would the Plaintiffs be prepared to allow them to make a direct telegraphic transfer from their own bank account to the Plaintiffs' bank account. This being so it could not be suggested that, at that time, the Defendants had the money ready for payment with their solicitors in Hong Kong. It seems clear that the money was still in Indonesia and was either in their bank or to their use and that they were seeking to be allowed to make payment in a way convenient to them. On the 23rd of December Mr. Miles wrote to the Plaintiffs' solicitors asking them to confirm the correctness of the calculation and saying that if he did not hear from the Plaintiffs' solicitors he would assume that the figure was correct and that payment in that sum would be made.

3. He did not, in this letter, pursue his request that the Plaintiffs agree to payment by telegraphic transfer in U.S. dollars. I am unable to see, on the facts set out above, how, as at the 23rd of December, it could be suggested that the Defendants had tendered the money or that the Plaintiffs had in some way waived an offer of tender. The Defendant was saying that it would make payment if it did not hear from the Plaintiffs but it stipulated no time limit for the reply. Further the Defendant's request as to the mode of payment was still unanswered.

4. On the 28th of November 1982 the Plaintiffs' solicitors wrote to the Defendant's solicitors saying, in reply to the letter of 23rd of December, "Kindly withhold to take any action in respect of the payment of judgment debt until you hear from us since we are taking instructions from our client who is now out of the Colony. We shall revert to you at the soonest".

5. This letter must be seen against the background both of the 23rd of December and of the telephone conversation of the 20th of December. In the letter of the 23rd of December the Defendant had asked the Plaintiffs to confirm the correctness of the calculation and in the telephone conversation they had asked to be allowed to make payment by way of the telegraphic transfer in U.S. dollars.

6. On the 4th of January 1983 some seven days later the Plaintiffs' solicitors again wrote to the Defendant's solicitors saying, that they agreed to the calculation and requesting that the payment be effected by T.T. Remittance in U.S. dollars directly to a named account. In this letter they claimed pursuant to Section 49 of the Supreme Court Ordinance that interest, at the rate of 14%, should be paid on the judgment debt from the 17th of December until the date of payment.

7. On the 13th of January 1983 the Defendant's solicitors wrote to the Plaintiffs' solicitors saying that their clients were arranging to make a remittance in U.S. dollars as requested. In this letter the Defendant's solicitors claimed that their clients had tendered the judgment debt to the Plaintiffs on the 17th of December 1982. The letter stated that the Plaintiffs had indicated they did not want payment to be made at that time and went on to contend that the Plaintiffs were not entitled to any interest. It was not never suggested before me that any offer of tender had been made on the 17th of December. It was submitted that such an offer had been made either on the 20th of December in the telephone conversation or on the 3rd of December by a letter.

8. I am informed that the amount of the judgment debt was in fact paid on the 12th January 1983. Mr. Lyell who appears for the Plaintiffs conceded that if the Defendant was able to establish that as a result of the letter of the 28th December it had acted to its detriment the Plaintiffs would not be entitled to the interest claimed after that date. This is, in my view, a not ungenerous concession as the Plaintiffs might have argued that no payment had ever been actually tendered to them and that the letter of the 28th of December was written not because they were waiving payment but because they were still seeking directions from their clients which would enable them to answer the Defendant's requests that the Plaintiffs confirm the correctness of the amount and that the Defendants be allowed to make the payment by telegraphic transfer in U.S. Dollars direct into the Plaintiffs' account.

9. The Plaintiffs when suggesting that this was so could have pointed to the letter of 4th January where they agreed to the Defendant's suggestion as to the mode of payment. It might have been argued that there was never any real tender of payment and that any delay that did occur was brought about by the Defendants themselves who were seeking to be allowed to make payment in a particular way. This was not, however, the approach taken by Mr. Lyell who was, as I have said, prepared to concede that if the Defendant established any detriment as a result of the letter of the 28th of December the Plaintiffs should be held to be not entitled to recover interest.

10. Mr. Lyell referred to Section 49 of the Supreme Court Ordinance which provides that

"A judgment debt shall carry interest at such rate as may be determined by the Chief Justice by order on the aggregate amount thereof, or on such part thereof as for the time being remains unsatisfied from the date of the judgment until satisfaction.

11. Mr. Lyell suggested that the Defendant must be relying upon an estoppel having been created in its favour by either the words or the letter of the Plaintiffs' solicitors and he referred to Spenser Gower on estoppel which deals, at 4, with the general principles as regards estoppel by representation as follows:

"Where one person has made a representation to another person in words or by acts or conduct, or (being under a duty to the representee to speak or act) by silence or inaction, with the intention (actual or presumptive), and with the result, of inducing the representee on the faith of such representation to alter his position to his detriment, the representor, in any litigation which may afterwards take place between him and the representee, is estopped, as against the representee, from making, or attempting to establish by evidence, any averment substantially at variance with his former representation, if the representee at the proper time, and in the proper manner, objects thereto".

12. What he relied on particularly was the statement that for such an estoppel to operate the representee must have altered his pposition to his detriment. He submitted that there was no evidence that the representee had altered his position to his detriment and that the representee was, therefore, not entitled to rely upon any estoppel.

13. Mr. Reed who appeared for the Defendant indicated that as to the first period, from the 17th to the 20th of December 1983, and as to the final period, from the 5th to the 11th of January 1984, there could be no argument that the Defendant was liable to pay interest. He submitted however that from the 21st to the 27th of December the Plaintiffs because of what their solicitor said in the telephone conversation were not entitled to any interest and that from the 28th December 1983 to the 4th January 1984 the Plaintiffs were in the same position because what their solicitor said in the letter of the 28th of January.

14. Mr. Reed conceded that there had been no formal tender but he said that the facts established that there had been a waiver by the Plaintiffs of payment or an acquiescence by him in the non-payment which prevented him from recovering interest. He referred firstly to Farquharson v. Pearl Assurance Co.⁽¹⁾ In that case an assured had fallen behind in the payment of a premium and the claimant, who later became entitled to the amount of payable under the policy and the Plaintiff in the action, called on the manager of the company and offered to pay the premium due. The manager declined this offer saying that he was arranging for a cheque to be paid by the assured. The cheque from the assured did arrive but it was post-dated and the assured died before the cheque became payable. The court held that the insurance company could not, in the circumstances, be heard to say that the premium which had been due had not been tendered. And the court held at 132:

I think it would be inequitable, in a case of this kind, if the insurance company, having had that offer of payment to its agent and manager, who was authorised to receive payments, having had that opportunity and that offer, was able to say in law there is neither tender nor anything equivalent to tender .... it does seem to me, on full examination of this case, that the insurance company certainly ought not to be heard to say there was nothing in the nature of tender, or that there was not a tender."

15. The facts in Farquharson's case are very different from those in the present one for in that case there was a specific tender and a specific refusal to accept and, more important, this refusal resulted in a clear detriment to the Plaintiff. In the present case what has not been proved is that there was any real detriment.

16. Mr. Reed next referred to Habib Bank v. Habib Bank A.G.:(2) There can be no argument with the statement in the headnote that:

"A broad approach is required in considering the doctrine of laches or acquiescence and not one based on the archaic and arcane distinctions between the assertion of equitable rights and the enforcement by equitable means of legal rights.

In this cas the Defendant bank had continued to trade under its own name and motif in circumstances where the Plaintiffs contended that it was not legally entitled so to do. There was clear evidence that the Plaintiffs had encouraged the Defendant to continue so trading but it was submitted by the Plaintiffs that there was no express proof that the Defendant had acted on that encouragement.

17. In the outcome the Court held that it had not been proved that the Defendant was not legally entitled to trade as it did.

18. The Court, however, went on to observe that even if it had been that the Defendant was not legally entitled so to trade, and even though there had been no express proof that it had acted upon the Plaintiffs' encouragement the Plaintiff would still have failed as the Court would have been entitled to infer such reliance from the circumstances.

19. It was never suggested that the Defendant bank would, by continuing to trade in its own name when not legally entitled so to do, have not suffered a detriment.

20. What the case laid down was that where a Defendant failed to produce specific proof that he had relied upon a Blaintiff's representation it was open to the Court, if the facts warranted it, to draw the inference that he had done so.

21. Indeed the law, in this regard, is, in my respectful view, correctly and succinctly stated in Prikhom Investments Ltd. v. Carr ⁽³⁾ where Lord Denning, at 759, said:

"Once it is shown that a representation was calculated to influence the judgment of a reasonable man, the presumption is that he was so influenced.

22. The Habib Bank case, I am satisfied gave no support to Mr. Reed's submission that the burden of showing that whatever the representee did was not a detriment lay on the representor. His contention was that the representee to succeed need only prove a representation, and produce specific evidence or evidence from which it could be inferred, that he acted upon it. He submitted that it was for the representor to prove that whatever was done by the representee was not a detriment. He sought finally to establish this proposition by citing Greasley v. Cooke.⁽⁴⁾ He referred first to the statement in the headnote which says."

"The burden of proof was therefore on the Plaintiffs to establish that the Defendant had not acted to her detriment or her prejudice by remaining there."

The statement in the headnote appears to lay down a much broader peinciple than is justified by the decision itself. The facts reveal that the Defendant having been a servant in a household had then lived as common-law wife of one of the sons thereof and had acted as an unpaid housekeeper to 2 of his brothers and as nurse to his mentally ill sister. It was found as a fact by the trial judge that the Defendant's belief that she could remain in the house for as long as she wished had been induced by her common law husband and one of his brothers and the judge had "not the slightest doubt" that the Defendant, without payment, had looked after her common law husband and had cared for the mentally-ill sister which "was an unpleasant and hard task". The trial judge asked himself whether it had been "proved that she did that work without payment because of her belief that she would be entitled to live in the house as long as she wished". The judge appears to have had no doubt that representations had been given and that the Defendant had acted to her detriment. He was not, however, satisfied that the Defendant had proved that she acted to her detriment because of the representations. Lord Denning was satisfied that there was no burden, in such circumstances, on the Defendant so to prove. He held, at 713:

"So, instead of looking for another job, she stayed on in the house looking after Kenneth and Clarice. There is a pre-sumption that she did so relying on the assurances given to her by Kenneth and Hedley. The burden is not on her but on them to prove that she did not rely on their assurances. They did not prove it, nor did their representatives. So she is presumed to have relied on them. So on the burden of proof it seems to me that the judge was in error.

The Defendant having proved a detriment and proved a representation which was calculated to influence the mind of a reasonable person to enduce that detriment it was for the Plaintiff to prove that she did not rely upon that detriment.

23. In the present case the Plaintiffs concedes that they made a representation. The Defendant is entitled to ask the Court to infer that it relied upon that representation when delaying payment and it would be for the Plaintiff to prove that it did not. I am satisfied however that there is nothing in the authorities cited to me that relieves the Defendant from the burden of proving that what it did in reliance upon the representation was a detriment. Has the Defendant satisfied that burden? I have no doubt that it has not.

24. The Defendant simply refrained from paying. There is no evidence that it did anything that might have constituted a detriment - such a moving the money from one country to another or prematurely borrowing the money or taking it out of an interest bearing account. It is for the Defendant to establish that it has suffered a detriment and it fails wholly so to do if it proves nothing more than that it refrained from paying a debt due.

25. As the Defendant has not established that it suffered any detriment it is not entitled to rely upon any acquiescence by the Plaintiff to avoid the payment of interest on the amount due. Indeed, as Mr. Lyell finally pointed out, there was some evidence to suggest that the Defendant had not suffered any detriment as it had asked on 20th December to be allowed to make a direct telegraphic transfer from its account to that of the Plaintiffs which indicates that the money was being held by the Defendant in its own account. He submits that the Court would be entitled to infer from this that the Defendant had the use of the money and was suffering no detriment. I do not however, for the reasons set out above, need to consider that submission.

26. The Plaintiffs are entitled to interest at the specified rate from the 17th of December to the date of judgment.

The Plaintiffs also ask for interest on the sum now recovered namely $19,566.82 from 11th January 1983. Mr. Reed submitted that the Court had no power to make any such order as it was prevented by Section 48(2) of the Supreme Court Ordinance from giving interest upon interest. I am unable to agree with this submission. I am satisfied that on the 11th of January 1983, the date of payment of the judgment debt, the Plaintiffs by virtue of Section 49 became entitled to a sum certain in the amount of the interest then due. I am satisfied that the only proper way to regard this amount thereafter is as a judgment debt and that the Court has power under Section 49 to award interest on that amount at the rate determined by the Chief Justice.

(1)     (1937) all B.R. 124

(2)     (1981) 1 W.L.R. 1265

(3)     (1979) 2 all E.R. 753

(4)     (1980) 3 all E.R. 710

Representation:

Mr. Lyell (Messrs. Yung, Yu, Yuen & Co.) for the Plaintiffs.

Mr. Geoffrey Richard Miles (Messrs. Denton Hall & Burgin) for the Defendant.