Yee Sang Metal Supplies Co v. Defag Construction Co and Another
Read the full judgment text of on BabelCite. was delivered on 7 July 1970.
1. On the 3rd of January, 1969, I gave judgment for the plaintiff firm in an action against the second defendant company whereunder the plaintiffs claimed the sum of $352,000 in respect of an alleged promise by the second defendant company to pay for steelwork performed by the plaintiffs on a 16-storey building. In addition to the claim for $352,000, the plaintiffs claimed interest thereon at the rate of 8 per cent per annum from the commencement of the action to the date of payment under O.15 r
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HCA002212B/1966 IN THE SUPREME COURT OF HONG KONG ORIGINAL JURISDICTION ACTION NO. 2212 OF 1966 -----------------
----------------- Coram: Pickering, J. Date of Judgment: 7 July 1970 ----------------- DECISION ----------------- 1. On the 3rd of January, 1969, I gave judgment for the plaintiff firm in an action against the second defendant company whereunder the plaintiffs claimed the sum of $352,000 in respect of an alleged promise by the second defendant company to pay for steelwork performed by the plaintiffs on a 16-storey building. In addition to the claim for $352,000, the plaintiffs claimed interest thereon at the rate of 8 per cent per annum from the commencement of the action to the date of payment under O.15 r.7 of the then Code of Civil Procedure. 2. At the trial both parties requested me, partly with a view to a possible saving of costs, to confine my judgment to the issue of liability leaving that of quantum to be assessed subsequently by an expert, a structural engineer. This I agreed to do and, in the result, I found the second defendant company liable to the plaintiff firm for the balance, if any, of the price of work done on the site by the plaintiff firm in excess of the sum of $884,000 already then received by the plaintiffs. In my judgment I made no reference to the plaintiffs' claim for interest on the sum of $352,000. 3. The matter now comes before me on a notice of motion asking that my judgment of 3rd of January, 1969, be corrected by the inclusion of an order that the second defendant company pay interest to the plaintiff firm on the judgment debt at the rate of 8 per cent per annum from the commencement of the action, or, alternatively, from the date of the judgment to the date of payment pursuant to the claim in the Statement of Claim. The amount of the judgment debt was assessed by the expert at $332,635.17 and judgment has been entered for that amount against the second defendant company. The ground of the present application is that owing to an accidental omission the judgment of 3rd January 1969 as to liability did not provide for interest on whatever sum might be assessed as due to the plaintiff firm. 4. At the outset of the present hearing Mr. Mills-Owens for the second defendant company raised the preliminary argument that the matter was res judicata. A summons had been taken out by the plaintiffs under O.6 r.2A of the Rules of the Supreme Court asking for an order that interest be paid by the second defendants to the plaintiffs on the said sum of $332,635.17 and that such interest be at the rate of 8 per cent per annum from the date of commencement of the action until payment of the judgment debt. On the 16th of August, 1969, my brother Briggs refused the application being, I am informed by counsel, of the view that he had no jurisdiction to make the order sought and that a successful plaintiff could either obtain an order for interest at the time of his judgment or not at all. In the light of that refusal, counsel urged, the issue had been decided and the matter was res judicata. 5. Had this application before me been made under O.6 r.2A I would have been constrained to agree, but the notice of motion does not ask me, as the summons asked my brother Briggs, to, as it were, pluck an amount of interest out of empty air and then tack it on to the amount of a judgment already entered. What I am asked to do is to correct my judgment by including in it an order for the payment of interest which order was in fact a part of the plaintiffs' Prayer in the original Statement of Claim. The application is made under the Slip Rule (O.20 r.11), and I am in no doubt that I have jurisdiction under that order and rule to make the correction sought provided that the original failure to order the payment of interest was in fact an accidental slip or omission and that all the circumstances of the case render it equitable that I should so exercise my discretion. Equally, my brother had no jurisdiction to make the order sought of him, but the issue is now as to whether the Slip Rule should be applied and that issue is not res judicata. 6. Mr. Swaine, for the plaintiff firm, submitted that the question for the court was really whether, if the award or otherwise of interest had been in my mind when I was delivering judgment, I would or would not have acceded to the request for interest. Mr. Swaine quoted the case of Re Inchcape(1) and said that the judgment in the present case having been handed down and not read in court, counsel had had no opportunity to ask for interest and indeed, since the quantum remained to be assessed, such a request might have been premature. 7. Mr. Mills-Owens for the second defendant company pointed out that formal judgment for the amount assessed had been entered on the 23rd of August, 1969, and the second defendant company's appeal to the Full Court on the issue of liability having been dismissed, the matter was now before the Privy Council; it would be highly unsatisfactory to have a parallel series of appeals on the question of interest. This is an observation with which I cannot but agree, but it does not, in my view, constitute a reason for depriving the plaintiffs of the fruits of their claim to interest if otherwise they are entitled to it. 8. Counsel further referred to the case of Mogra v. Pavri & another(2) where the court had declined to add interest to the judgment debt and relied in particular upon a passage where Gould J. said:
9. It does not seem to me that this passage assists the second defendant company for the reason that in the present case, unlike the Mogra case, the plaintiffs did claim interest in their Statement of Claim. Moreover, in the Mogra case, it was held that the judge was functus officio "the Slip Rule apart". The very good reason for refusing to apply the Slip Rule in the Mogra case was that interest had never been claimed in the Pleadings or argued or asked for at the hearing. In the present case there was a specific claim for interest in the Statement of Claim. 10. Perhaps more in point was the next case referred to, which was Moore v. Buchanan(3) where the court of appeal held that "although the court was always competent, on an application under the slip rule, to correct its judgment, it had jurisdiction to exercise its discretion not to do so, not only in cases where the rights of third parties had intervened, but in cases where something had happened since the date of the oral judgment which rendered it inexpedient or inequitable so to do". 11. In the present case, counsel continued, the plaintiffs had failed to act timeously, for, on the admission of their counsel, interest had been very much in their minds at the date of judgment and as early as the 8th of February, 1969, the possibility of an application for the correction of the judgment by the inclusion of an order for interest had been mentioned to the judge when the case was again before the court for the appointment of an assessor of damages: application should have been made timeously and it was no answer to say that at that date the damages had not been assessed. 12. Mr. Mills-Owens' most fundamental approach, however, was in his argument that the court had no jurisdiction to make the order sought. The statutory authority for the award of interest on judgments lay in the Law Reform (Interest on Claims and Judgments) Ordinance, 1970, which came into force on the 9th of January, 1970, and was not retrospective so that it was not in force at the date of the judgment in this action. At common law there was no right to interest in the absence of contract or mercantile usage. True, O.6 r.2A of the present Rules of the Supreme Court purported to give the court power to award interest but notwithstanding that before the court in fact had any such power there must be substantive legislation in force and there was no such legislation until 1970. Since neither the Judgments Act of 1838 nor s.28 of the Civil Procedure Act 1833 were included in the schedule to the Application of English Laws Ordinance, Cap.88, it followed that at the date of the judgment there was no power in the court to award interest. 13. Replying on this issue of the court's jurisdiction, Mr. Swaine, after briefly reviewing the history of the award of interest upon judgments by the courts in Hong Kong, said that at the date of the Statement of Claim, the relevant power was contained in O.15 r.7 of the former Code of Civil Procedure which was the order and rule invoked in the Prayer for interest in the Statement of Claim. That order and rule had been superseded before the action came on for trial by new Rules of the Supreme Court, notably O.6 r.2A which reads:-
and which was reproduced verbatim from O.15 r.7 of the former Code of Civil Procedure. 14. The statutory authority for the making of O.6 r.2A was to be found in s.38, sub-s.(1)(u) of the Supreme Court Ordinance, Cap. 4, providing:
15. Thus, counsel argued, at the date of the judgment there was valid power, derived ultimately from substantive legislation, to award interest as from the commencement of the action. 16. These appear to me to be cogent and convincing arguments, and I am unable to agree that at the date of judgment the court had, in any event, no jurisdiction to award interest. 17. As to the allegation that the plaintiffs had not acted timeously, Mr. Swaine urged that they had not gone to sleep on the matter, but had taken the step, albeit a mis-conceived step, of attempting to obtain an order for the payment of interest under O.6 r.2A of the Rules of the Supreme Court. The case of Buchanan v. Moore (supra) was readily distinguishable since in that case the court of appeal had thought it oppressive to go back to the judge under the Slip Rule at a stage when the application of that rule could no longer possibly assist the applicant. In the present case the application of the Rule would be of very real advantage to the plaintiff firm. 18. A most important matter for me to consider is what I would have done at the time I gave judgment had this matter of interest been in my mind. After a lengthy trial, in the course of which both sides asked me to confine my decision to the issue of liability, and having written a long judgment which occasioned to me no small difficulty, my mind was on the issue of liability rather than upon any figures. But had I thought the matter through further, as I should have done, I am in no doubt whatever, having a very clear recollection of the case and of the evasiveness of Mr. Cheng, witness for the second defendant company, that I would have made an award of interest. Unfortunately for the plaintiff firm, I did not read the lengthy judgment in court but handed it down so that the omission was not obvious to counsel for the plaintiff before I had left the court. 19. On the basis of what I would have done on the date of judgment, had counsel had an opportunity of drawing my attention to the Prayer for interest, I would today be disposed to exercise my discretion to correct my finding to include an award of interest. 20. It remains to consider whether or not anything has occurred in the interim which would render it inequitable for me so to act now. No third party rights have intervened; if the correction is now made the second defendant company will be in no worse position in regard to the amount of the judgment against it than had the award of interest been made at the time of the judgment. It is true that if the second defendants are advised to appeal against my present decision, they would be obliged to run two parallel lines of appeal. Such a disadvantage would go to the question of the costs of such second line of appeal and the question of where the burden of such costs should lie would no doubt be a matter for the appellate court after due consideration of all the factors including whether or not the plaintiffs can be said to have acted timeously in regard to their present application or whether it would have been competent to them to have brought such application in good time for the issue of interest to have been incorporated with the appeal against liability. 21. In all the circumstances the proper course appears to me to be to order the correction of the first sentence of the final paragraph of my judgment of 3rd January 1969. That sentence ran:-
and is to be corrected by the deletion of the full stop at the end thereof and the addition of the words:-
22. In parenthesis I would observe that this is what the plaintiff firm asked for in its Statement of Claim but less than it might have asked for. Under O.15 r.7 of the old Code of Civil Procedure as reproduced in O.6 r.2A of the Rules of the Supreme Court it would have been open to the plaintiff firm to have asked for interest on the amount found due as from the date of the writ to the date of judgment and then for further interest on that aggregate sum so adjudged, from the date of the judgment to the date of payment. Such however was not the Prayer and the correction is confined to the terms of the Prayer. Having now heard counsel as to the costs of this Motion, I order that each side bear its own costs.
Representation: Decision read in Court. Swaine (Hastings & Co.) for Plaintiffs. Mills-Owens (Samuel Soo & Co.) for 2nd Defendants. (1) (1942) Ch. 394 (2) 37 H.K.L.R. 135 (3) (1967) 1 W.L.R. 1341. |