Maysun Engineering Co Ltd v. Wormald Engineering Services Ltd

DCCJ 2885/2003

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 2885 OF 2003

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BETWEEN

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Coram :  Her Honour Judge C.B. Chan in Chambers

Dates of Hearing :  24^th March 2006

Date of Handing Down Decision :  2^nd May 2006

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DECISION

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1.The Defendant in this Action applies under Order 20 Rule 11 and Order 42 Rule 5B of the Rules of the District Court and the Inherent Jurisdiction of the District Court for an order inter alia that the order on interest and the order nisi on costs in the Judgment dated 10 March 2006 be varied or amended.  The application sought includes:

1. that the references to “24^th December 2002” under paragraph 66 of the Judgment be amended to 15^th April 2003.

2. interest on the judgment sum of HK$214,278.51 be disallowed.

3. the costs of this action be to the Defendant to be taxed if not agreed with Certificate for Counsel.

2.In respect to paragraph 1 of the application, it is clear that the date of 24^th December 2002 in paragraph 66 of the Judgment was an error arising from an accidental slip and the correct date should have been the 15^th April 2003.  Paragraph 66 of the Judgment refers to an admission by the Defendant in its Defence that a sum of $214,278.51 was due to the Plaintiff in accordance with the Defendant’s Revised Final Account.   This Revised Final Account was sent by the Defendant to the Plaintiff by their letter dated 15^th April 2003 from the Plaintiff to the Defendant and together with that they enclosed their cheque for this sum.   Hence the dates of 24^th December 2002 in paragraph 66 should be amended to 15^th April 2003.    I grant an order in terms of paragraph 1 of the Application.

3.In relation to paragraph 2 of the Application, the Defendant’s Counsel submits that the matter of interest is within the discretion of the Court.   The Plaintiff had tendered payment for the sum of HK$214,278.51 as early as 15^th April 2003.   It was owing to the Plaintiff’s insistence that they were entitled to the other three items of claim in the action that they refused to receive payment tendered by the Defendant except on condition that “they would only take it as partial payment of the said outstanding sum of $552,350.29”.   The Defendant’s Counsel submits that it is not reasonable for the Plaintiff to impose such a condition, in so doing the said sum could have been applied by the Plaintiff to off-set the other disputed items of claim.

4.The Defendant’s Counsel submits that it was due to the Plaintiff’s own fault that they were deprived of the use of this sum as from 15^th April 2003.   Hence they should not be awarded interest on this judgment sum in respect of this same amount.

5.It must be stated at this point that these arguments were not voiced at the trial before Judgment was handed down.  

6.The Plaintiff’s Counsel submits that once judgment has been delivered, amendments and variation should only be made in respect of accidental slips and this is not such and the Defendant’s only option is to appeal.   I agree with the Plaintiff’s Counsel on this.   I do not see any basis for the variation of the order related to interest at this point after judgment has been handed down.  I am of the view that this is not covered by Order 20 Rule 11.   I also see that the Defendant had the use of this sum from 15^th April 2003 until payment-in of this sum under Order 22 Rule 1 of the Rules of the District Court on 30^th June 2003.   However from the date of payment-in the Defendant had been deprived of the use of this sum.   The Defendant could apply for the interest earned on this sum in the Suitors Fund Account in Court to be paid out to them.   Even though the interest earned in the account in Court may not be the same as judgment rate awarded to the Plaintiff, the Defendant will recover a portion of the interest awarded to the Plaintiff.  I am not able to entertain paragraph 2 of the Application for the reasons aforesaid and I refuse paragraph 2 of the  Application.

7.In relation to paragraph 3 of the Application, the Defendant’s Counsel submits that immediately after the commencement of the action, the Defendant admitted the amount due in the sum of $214,278.51 in its Defence and made payment into Court on the 30^th June 2003.  The Defendant filed and served the Notice of Payment Into Court.  Unfortunately the Defendant could not rely on the provisions of Tender before Action because it failed to state the fact of payment in and the amount in the Defence as stated to be required to be pleaded in paragraph 18/16/1 at page 323 of the Hongkong Civil Procedure 2006.

8.After payment in and on 15^th July 2003, the Plaintiff’s solicitors wrote to the Defendant still seeking for the sum of $259,603.33 being the sum of $259,603.33 under their last draft final account.  They proposed that their claims for Price Fluctuation Items and Additional Charges go to trial.   They also wrongly construed the Defendant’s correspondence in April 2003 that the Defendant had therein admitted liability for the sum of $259,603.33.  The Defendant denied that they made this admission.    The Defendant’s Counsel submits that the Plaintiff ought not to have instigated these proceedings.

9.The Plaintiff’s Counsel refers to Order 22 Rule 1(8) which states that the amount paid in, in satisfaction of the Plaintiff’s cause of action should be an amount sufficient to cover interest as might be included in the judgment whether under section 48 of the Ordinance or otherwise.   The amount paid into Court by the Defendant failed to cover interest for the period from the day when the Plaintiff would have been entitled to the sum, from 15^th April 2003 to 30^th June 2003 being the date of payment in.    It is clear that the Plaintiff would have been entitled to interest for this period and the Defendant failed to make provision for this when making payment in.

10.Paragraph 22/5/5 of the Hong Kong Civil Procedure 2006 at page 399 states,

“Nevertheless, if the plaintiff is awarded the exact amount paid into court and the substantial issue between the parties has been whether he should be awarded interest on that sum, and he in fact recovers an increased sum by way of interest in addition to the amount paid in, it seems that the court will award him the costs of the action since he succeeded on the issue on which the parties came to court (Vehicle & General Insurance Co. (in liq.) v. H. & W. Christie Ltd [1976] 1 All E.R. 747.. . )

The defendant can and now should make his payment into court to include a sum in respect of interest claimed or not, under the High Court Ordinance (Cap. 4) and the discretion of the court on the question of costs will be exercised having regard to any award of such interest.  And see r.1(8) and “Claim for interest”, para. 22/1/10.”

11.It is clear that subject to the provisions of the District Court Ordinance (Cap 336), the Court has a complete discretion as to costs.  The discretion must be exercised judicially.

12.The Defendant was fully able to protect itself as regards costs of the action by the provisions under Order 22 Rule 1 to pay into Court a sum representing the amount that will satisfy the cause of action of the Plaintiff inclusive of the interest likely to be awarded.  Unfortunately the Defendant failed to make provision for interest likely to be awarded.   Hence under the aforesaid rules, the Plaintiff is entitled to costs.  

13.However, I consider the conduct of the Plaintiff in these proceedings.   The Plaintiff had refused the offer of payment on 15 April 2003 of the same amount as he had obtained in the judgment.   If he had accepted this payment the action would have been wholly unnecessary.  In refusing payment, his solicitors had imposed a condition that such payment of the sum of $214,278.51 was to be received as partial payment of the said outstanding sum of $552,350.29 and not in payment of this item of the Plaintiff’s claim.    Through his failure to accept payment, the action was instigated.      The Plaintiff had insisted his entitlement to other items of claim.  He initiated this action.  He failed to succeed in his claim for these other items after a long trial.     Having considered the aforesaid conduct, I vary the order nisi for costs in the Judgment dated 10 March 2006 by deleting the said order and substituting this order in lieu thereof.  

“I order that the Defendant do pay to the Plaintiff 70% of the Plaintiff’s costs of the action to be taxed if not agreed with Certificate for Counsel.”

14.I grant an order nisi that costs of the application and hearing be paid by the Plaintiff to the Defendant to be taxed if not agreed with Certificate for Counsel.

Representation :

Mr. Gary Chung instructed by Messrs Peter Lau & Co. for the Plaintiff.

Miss Terry Chan instructed by Messrs C.C. Lee & Co. for the Defendant.