Attorney General v. Cheung Wah Ching

DCCJ014873/1984

HEADNOTE

Whether surcharge of rates under section 22(2) and further surcharge under section 22(2)(A) of the Rating Ordinance preclude the District Court from awarding interest on the surcharges as judgment debt for the period from the date of writ to the date of payment on the ground that such surcharges already embrace interest.

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Coram: H.H. Judge Eric Li in Court

Date of Judgment: 15th March, 1985

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EX TEMPORE RULING

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1. These are two consolidated applications by the Attorney General for the Collector of Rates for a ruling by a District Judge as to whether surcharge of rates under section 22(2) for nonepayment of rates upon due date and the further 3rd charge of 10% for default upon expiry of a period of six months from due date precludes the District Court from awarding interest on the judgment debts for the period from the date of writ to the date of payment on the ground that such surcharges and further surcharges already entailed interest. The Deputy Registrar had refused to award interest when he entered default judgments in both cases.

2. As both cases give rise to the same matter of law, I have consolidated them and heard both applications together to save time.

3. Apparently the Deputy Registrar from his correspondence with the Attorney General relied on section 49(2)(b) of the District Court Ordinance in that he had no jurisdiction to award the interest in question because such interest was already included in or at least was an element of the surcharges and further surcharges. The issue is therefore whether these surcharges and further surcharges (hereinafter called the surcharges) constitute or form an element of interest for the purposes of rating under section 22 of the Rating Ordinance.  For if they did, section 49 of the District Court Ordinance would preclude further interest as being either interest upon interest or interest already awarded.

4. There is no direct authority on all fours either in England or in Hong Kong or for that matter in Australia, New Zealand or South Africa. The only result from the extensive research made by both myself and Mr. Law to whom I am indebted for his useful assistance, which is worth noting is that interest has been specifically provided for on overdue income tax in England under section 86 and 89(a) of the Taxes Management Act 1970.

5. A somewhat helpful meaning of interest is stated in Halsbury 4th Edition, Volume 32 at page 53 paragraph 106 as follows:

"Interest is the return on compensation for the use or retention by one person of a sum of money belonging to or owed to another. Interest accrues from date to to date even if payable only at intervals, and is, therefore, apportionable in respect of time between persons entitled in succession to the principle."

6. The surcharges of 5% and 10% in our instant cases were flat and onee and for all, the basis for which calculation was not by reference to any definite period of time or number of -day or days. The sums yielded from these surcharges were calculable solely by reference to the amounts of rates due at dates certain when overdue and further overdue. Nor were the surcharges for the return or reconpese for the use of retention by the rate payer of money at all. While what is stated in this paragraph has a bearing in considering whether the surcharges entails an element of interest in it or in them I only place persuasive reliance on it. The main foundation of this my ruling rests fairly and squarely on section 22(3) of the Rating Ordinance.

7. To me it is abundantly clear that the Legislature intended this surcharges (and further surcharges) to be nothing less than judgment debt when recovered by Court proceedings. Had the intension been interest or even to embrace an element of interest, the Legislature would have expressly said so as in the instance of section 47 of the Rating Ordinance itself by which interest of 8% per annum on moneys due against those convicted of making false or incorrect statement is imposed, or section 13(10) of the Stamp Duty Ordinance which effectively provided for interest on daily basis or section 33(4) of the Buildings Ordinance on per annum basis.

8. I am convinced that section 22(3) puts it beyond any doubt that the surcharges recovered were intended to be judgment debt exclusive of interest. These surcharges were categorically specified by the Legislature to rank pari passu with the rates proper as debt. I therefore rule that such debt to the Crown, like any other judgment debt, does not preclude the District Court from awarding interest thereon and the section 49 of the District Court Ordinance applies.

9. I see no reason why the discretion under section 49 should not be exercised in favour of the Plaintiff in both cases. There is no prescribed rate of interest for the pre-judgment period but I see no reason to depart from the well established practice by my brethren and myself to adopt the rate of 8% per annum prescribed for the High Court under Order 13 Rule 1(2) of the Rules of Supreme Court. I award, under section 49 of the District Court Ordinance, further interest at the rate of 8% per annum from the date of writ up to the date of judgment. As neatly pointed out by Mr. Law, these applications are made more in the public interest than in the individual merits and I fully agree with Crown Counsel that there shall not be any order as to costs and I so ordered.

Representation:

Mr. Dennis Law, C.C. for plaintiff