Shine Empire Ltd v. The Incorporated Owners of San Po Kong Mansion and Others

HCA 3444/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 3444 OF 2001

BETWEEN

Coram : Before Master R. Lai in Court

Date of Hearing : 22 November 2010

Date of Handing Down Decision : 28 January 2011

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ASSESSMENT OF DAMAGES

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Background

1.The Plaintiff (“P”) was the owner of the premises known as Roofs of San Po Kong Mansion (the “Roofs”).

2.The 1^st Defendant (“D1”) was the Incorporated Owners of San Po Kong Mansion.

3.The 2^nd to 6^th Defendants were telecommunication companies.

4.This is an action of P for possession of the Roofs and damages and/or mesne profits against all the Defendants.

5.At the material times since 1995, D1 had rented and/or granted licence to the 2^nd to 6^th Defendants for their installation of aerials and transmitters on the Roofs at monthly licence fees.

6.P issued the Writ herein on 1 August 2001.

7.On 20 October 2004, Mr. Justice Sakhrani ordered,inter alia, thatall issues on liability between P andD1 be tried first.

8.Deputy High Court Judge Mayo gave judgment on liability for P against D1 on 3 December 2004.  D1’s appeals to the Court of Appeal and the Court of Final Appeal were dismissed. The Court of Final Appeal dismissed the appeal on 30 April 2007 and handed down its judgment on 31 May 2007 (the “CFA Judgment”).

9.On 13 October 2008, P took out summons for summary judgment against the 2^nd to 6^th Defendant.  On 10 November 2008, interlocutory judgment with damages to be assessed was entered against the 2^nd to 6^th Defendants.  The 2^nd Defendant and P subsequently reached settlement on damages.

10.This is the assessment of damages hearing in respect of P’s claims against the 3^rd to 6^th Defendant (“D3 to D6”).

11.The quantum of damages has been agreed between P and D3 to D6 before the assessment hearing. Thesolicitors of the partiesinformed the Court of the agreed quantum by a joint letter dated 16 November 2010 (the “Settlement Letter”) and submitted a signed consent order dated 22 November 2010 (the “Signed Order”) to Court at the hearing for approval.

12.P and the 3^rd Defendant (“D3”) agreed that D3 would pay damages to P for D3’s installation of aerials and transmitters on the Roofs from 1 December 1996 to 30 November 2004. The quantum of damages as agreed by P and D3is as follows:

Length of Periods	Agreed Rental Per Month	Total Amounts
1.12.96 – 30.11.98	$12,800	$307,200
1.12.98 – 30.11.00	$14,700	$352,800
1.12.00 – 30.11.02	$12,500	$300,000
1.12.02 – 30.11.03	$12,500	$150,000
1.12.03 – 30.11.04	$12,500	$150,000
		Total: $1,260,000

13.P and the 4^th Defendant (“D4”) agreed that D4 would pay damages to P for D4’s installation of aerials and transmitters on the Roofs from 16 April 1996 to 3 December 2004 and from 1 November 2006 to 30 April 2007. The quantum of damages as agreed by P and D4 is as follows:

Length of Periods	Agreed Rental Per Month	Total Amounts
16.4.96 – 15.4.98	$13,400	$321,600
16.4.98 – 15.4.00	$15,400	$369,600
16.4.00 – 15.4.02	$12,500	$300,000
16.4.02 – 3.12.04	$12,500	$390,500
1.11.06 – 30.4.07	$13,600	$81,600
Less payment made on 28.1.08:($60,000)
		Total: $1,403,300

14.P and the 5^th Defendant (“D5”) agreed that D5 would pay damages to P for D5’s installation of aerials and transmitters on the Roofs from 1 May 1997 to 18 January 2005. The quantum of damages as agreed by P and D5 is as follows:

Length of Periods	Agreed Rental Per Month	Total Amounts
1.5.97 – 30.4.99	$13,200	$316,800
1.5.99 – 30.4.01	$12,500	$300,000
1.5.01 – 30.4.03	$12,500	$300,000
1.5.03 – 18.1.05	$12,500	$256,250
		Total: $1,173,050

15.P and the 6^th Defendant (“D6”) agreed that D6 would pay damages to P for D6’s installation of aerials and transmitters on the Roofs from 6 April 1995 to 5 April 2007. The quantum of damages as agreed by P and D6 is as follows:

Length of Periods	Agreed Rental Per Month	Total Amounts
6.4.95 – 5.4.97	$11,600	$278,400
6.4.97 – 5.4.99	$14,000	$336,000
6.4.99 – 5.4.01	$11,900	$285,600
6.4.01 – 5.4.03	$11,900	$285,600
6.4.03 – 5.4.05	$11,900	$285,600
6.4.05 – 5.4.07	$11,900	$285,600
	Total: $1,756,800

16.In the Settlement Letter, the parties agreed that the due date of payment of each agreed monthly rental was deemed and agreed and ought to be paid on the first day of each corresponding calendar month.

17.P and D3 to D6 also agreed that the costs of this action including the hearing for assessment of damages and those costs reserved between P and D3 to D6 be to P to be taxed on party and party basis if not agreed.

18.The only outstanding issue before me is interest on the agreed quantum.  The parties agreed that post judgment interest on the agreed quantum is payable at judgment rate from the date of judgment until payment.  The dispute between the parties is only on pre-judgment interest.

19.P claims interest pursuant to section 48 of the High Court Ordinance (Cap. 4). The questions before me are whether interest shall be paid by D3 to D6 on the agreed quantum to P?  If so, for which period of time and at which rate?

20.Miss Lok representing P submits that interest shall be awarded toP against D3 to D6 on the agreed monthly rental from the first day of their admitted trespass at 1% above the best lending rate of Hang Seng Bank, alternatively at judgment rate.

21.Mr. Yip representing D3 to D6 submits that P is not entitled to pre-judgment interest.  Alternatively, there shall be no interest to P for the period before issuance of the Writ and also for the period from 30 April 2007 to 22 November 2010.  As to the period from 1 August 2001 (i.e. the date of the Writ) to 30 April 2007 (i.e. the date when D1’s appeal was dismissed by the Court of Final Appeal), Mr. Yip submits that the appropriate rate of interest is the prime rate.  Alternatively, Mr. Yip argues that interest shall be awarded at half of the relevant judgment rates on the agreed monthly rental from the respective starting dates of use of the Roofs by D3 to D6, to the date of judgment on damages.

Whether interest shall be paid

22.P claims interest under section 48 of the High Court Ordinance (Cap. 4).  Section 48(1) of the High Court Ordinance provides that:

“(1) Subject to rules of court, in proceedings (whenever instituted) before the Court of First Instance for the recovery of a debt or damages there may be included in any sum for which judgment is given simple interest, at such rate as the Court thinks fit or as rules of court may provide, on all or any part of the debt or damages in respect of which judgment is given, or payment is made before judgment, for all or any part of the period between the date when the cause of action arose and –

(a) in the case of any sum paid before judgment, the date of the payment; and

(b) in the case of the sum for which judgment is given, the date of the judgment.”

23.Mr. Yip contends that no pre-judgment interest shall be awarded to P on the following grounds:

(1) P fails to plead specific statutory provisions relied on for its pre-judgment interest claim; and

(2) D3 to D6 has not obtained unjust enrichment in this case and there is no evidence to show that P has suffered any lost of interest.

24.The first argument of Mr. Yip touches on jurisdiction of the Court to award pre-judgment interest in this case.  The second argument is on whether the Court shall exercise discretion to award pre-judgment interest to P in this case.

Jurisdiction of the Court to award pre-judgment interest in this case

25.Mr. Yip submits that a party claiming interest must plead specifically any claim for interest under section 48 of the High Court Ordinance or otherwise.  If not, the court would not award pre-judgment interest to the plaintiff.  Mr. Yip refers me to Bank of China v Sze Wang (unrep., HCMP 3825/2001, 23 December 2003, Temporary Deputy Registrar Thomas So) which was a proceeding commenced by originating summons.  The plaintiff claimed pre-judgment interest under section 48 of the High Court Ordinance.  The learned Temporary Deputy Registrar stated in para. 29 of his judgment that “I fail to see any such claim pleaded in the Originating Summons.  Because of that I refused to award any pre-judgment interest to the Plaintiff.”

26.A claim for interest under section 48 of the High Court Ordinance need only be included in the prayer to a pleading (see Hong Kong Civil Procedure 2011, para. 18/8/15).  In Bank of China v Sze Wang the pre-judgment interest claim was not pleaded in the originating summons.

27.In this action, P pleaded in prayer (e) of the Re-Amended Statement of Claim – “interest against all Defendants”.  There is no reference to any statute or statutory provision at which interest is claimed.  Mr. Yip has fairly pointed out that in Grandyield Knitters Ltd v MBE Engineering Ltd [2002] 2 HKLRD 88 the Court of Appeal held that the plaintiff’s failure, when pleading its case to interest, to make specific reference to the statutory provisions (in that case the District Ordinance) had not prejudiced the defendant and the Court of Appeal upheld the Judge’s award of interest.

28.Mr. Yip argues that even if P can rely on Grandyield Knitters Ltd v MBE Engineering Ltd to argue that D3 to D6 had notice of P’s intention to seek interest, it is still insufficient in this case in view of the substantial amount of interest involved.

29.Miss Lok submits that the amount of interest is not a relevant consideration when the Court exercises its discretion to award interest.

30.In Grandyield Knitters Ltd v MBE Engineering Ltd the relevant prayer read as follows:

“Interest on the said sum of HK$90,000 or on damages awarded at such rate and for such period as this Honourable Court deems just … .“

31.The defendant in Grandyield Knitters Ltd v MBE Engineering Ltd contended that the court had no jurisdiction to award interest, whether pre-judgment or post-judgment, because the plaintiff failed to “specifically pleaded” the relevant statutory provisions under which interest was claimed.

32.In giving her judgment in Grandyield Knitters Ltd v MBE Engineering Ltd Le Pichon JA said in paras. 16 and 17 that

“ 16. In the present case, unlike Ward v Chief Constable for Avon and Somerset (1985) 129 SJ 606, where there was no claim for interest, there is a claim for interest viz “… at such rate and for such period as this Honourable Court deems just”. The defendant was therefore apprised of a claim for interest which involved the exercise by the court of a discretion vested in it. Having regard to the nature of the claim which was for the return of the deposit and the stipulated penalty or, alternatively, for damages for the vendor’s breach of a sale and purchase agreement relating to land, other than the discretion vested in the Court under the District Court Ordinance, it is not entirely clear what Ordinance could have been pertinent. The Bills of Exchange Ordinance (Cap. 19) plainly did not apply. In any event, Counsel for the defendant was not able to identify any other Ordinance that could conceivably be relevant.

17. Had the plaintiff sought to amend the pleading, there is no doubt in my mind that the judge would have allowed the amendment. Having regard to the rationale behind para. (4) [of Order 18 rule 8 of the then Rules of the District Court], I do not see that the defendant was in any way prejudiced by the absence of a specific reference to the relevant section and/or the Ordinance, ie Cap. 336. In my judgment, the Judge did have jurisdiction to award pre-judgment interest on the facts of this case and I so hold.”

33.In this case, unlike Bank of China v Sze Wang where there was no claim for interest, there is a claim for “interest against all Defendants”.  I find that P has in prayer (e) of the Re-Amended Statement of Claim given fair notice to D3 to D6 of its intention to seek interest.

34.P’s claims against D3 to D6 are for wrongful occupation of part of the Roofs.  I have invited the parties to address me on the English case of Whitwham v Westminster Brymbo Co [1896] 1 Ch. 894 in which Chitty J. refused to award interest upon the damages given for wrongful user of land when he said (at 899) “in regard to interest claimed, I think that all interest ought to be excluded from the computation of damage.  To give interest would be to treat the plaintiffs as having invested their damages at interest in the hands of the defendants.”

35.Mr. Yip refers me to Glenealy Mansion Limited v Norman Persaud (unrep., CACV 60/1986, 4 July 1986) in which the Hong Kong Court of Appeal followed the decision of Whitwham v Westminster Brymbo Co and refused to award interest on mesne profits

36.Miss Lok submits that P’s claim herein under section 48 of the High Court Ordinance is a claim for interest on damages and not interest as damages in Whitwham v Westminster Brymbo Co.  Miss Lok refers me to Yim Kan v Tsang Siu Shing (unrep., HCMP 1804/1998, 21 August 2000, Master S. Cheung) when pre-judgment interest at judgment rate on mesne profits was awarded to the plaintiff in that case.

37.It is noted that Whitwham v Westminster Brymbo Co was decided before statutory intervention in England on interest claim first by section 3(1) of the Law Reform (Miscellaneous Provisions) Act 1934 and later by adding section 35A to the Supreme Court Act 1981 through section 15(1) and Schedule I Part I of the Administration of Justice Act 1982.

38.Statutory interest was introduced to Hong Kong by the Law Reform (Interest on Claims and Judgments) Ordinance 1970 when section 30A was added to the then Supreme Court Ordinance.  Section 30A(1) of the 1970 Ordinance which concerns us read as follows:

“(1) Subject to subsection (2), the court may, in any proceedings brought in the court for the recovery of any debt or damages, order that there shall be included in the sum for which judgment is given interest at such rate as it thinks fit on the whole or any part of the period between the date when the cause of action arose and the date of the judgment.”

39.When the Supreme Court Ordinance was re-enacted in 1975, provision for statutory interest became section 48 of the Ordinance.  Section 48(1) of the 1975 Ordinance reads as follows:

“(1) Subject to subsection (2), the High Court may, in any proceedings brought in the High Court for the recovery of any debt or damages, order that there shall be included in the sum for which judgment is given interest at such rate as it thinks fit on the whole or any part of the debt or damages for the whole or any part of the period between the date when the cause of action arose and the date of the judgment.”

40.The current version of section 48(1) of the High Court Ordinance set out in paragraph 22 above was introduced by the Supreme Court (Amendment) Ordinance 1987 except that the reference to “the Court of First Instance” in the current version was then read as “the High Court”.  This was changed in 1998.

41.It can be seen that statutory interest has been available since 1970.  It is also noted that in 1986 when Glenealy Mansion Limited v Norman Persaud was decided, the Court of Appeal did not allow interest on mesne profits citing the authority of Whitwham v Westminster Brymbo Co.

42.When the Court of Appeal dealt with interest on mesne profits in Glenealy Mansion Limited v Norman Persaud, their Lordship made no reference to section 48 of the then Supreme Court Ordinance which provided for statutory interest. Instead, their Lordship only referred to Whitwham v Westminster Brymbo Co.

43.In Whitwham v Westminster Brymbo Co, interest was excluded “from the computation of damage”.  I agree with Miss Lok that Whitwham v Westminster Brymbo Co is a claim for interest as damages and is different from a claim for interest on damages under statutory provision.

44.As Lord Nicholls of Birkenhead said in Sempra Metals Ltd v Inland Revenue Commissioners [2008] A.C. 561 at 601 (para. 97): “If a party chooses not to prove his interest losses the remedy provided by the law is to be found in the statutory provisions.”

45.I am satisfied that this Court has jurisdiction under section 48 of the High Court Ordinance to award pre-judgment interest to P on the agreed damages from the respective dates when the cause of action against each of D3 to D6 arose. The period during which interest is payable and the interest rate are at the discretion of the Court.

Whether discretion shall be exercised in favour of P in this case

46.Award of interest under section 48 of the High Court Ordinance is at the discretion of the Court.  The Court shall exercise the discretion judicially.

47.In B.P. Exploration (Libya) v Hunt (No. 2) [1979] 1 W.L.R. 783 Robert Goff J. stated at 845 that: “The fundamental principle is that interest is not awarded as a punishment, but simply because the plaintiff has been deprived of the use of the money which was due to him.”

48.Mr. Yip submits that this is not an ordinary trespass case.  D3 to D6 had entered into licence agreements with D1 for installation of their aerials and transmitters at the Roofs, mistakenly believing that D1 had the right to grant them the licence to use the Roofs.  D3 to D6 had paid licence fees to D1.  Mr. Yip submits that there was no unjust enrichment in this case on the parts of D3 to D6.

49.Mr. Yip further submits that there is no evidence that the Roofs had been in any commercial use at and before the material times.  But for the installation of the aerials and transmitters, the Roofs were not generating any income to P. Mr. Yip submits that there is also no evidence that P has incurred any interest charges as a result of the non-receipt of the licence fees.

50.D3 to D6 had actually paid licence fees to D1 for their use of the Roofs.  D3 to D6 will have their respective remedies against D1 for such payments which will no doubt include the element of interest.

51.The mistake of D3 to D6 in making payment to D1 was caused by their failure to properly investigate the title of D1 to the Roofs and D1’s misrepresentation as owner of the Roofs.  D3 to D6 only have themselves and D1 to blame for making such payments to D1.  But for such mistake, D3 to D6 should have paid licence fees to P for their use of the Roofs during the material times or they would not have received the commercial benefits of having their aerials and transmitters installed at the Roofs during the material times.

52.If the Court denies interest to P on the ground that D3 to D6 had paid licence fees to D1 and had not obtained any unjust enrichment, the following will be the two possible scenarios in the claims of D3 to D6 against D1:

(1) D3 to D6 will not receive interest on the payments made to D1 and D1 will have the benefits of using the moneys during the substantial period of time when the moneys were in the hands of D1. In such case, D1 will be unjustly enriched with such benefits; or

(2) D3 to D6 will recover interest on payments made to D1 on the ground that D1 has to account for to them the benefits of having the usage of the moneys for the substantial period of time when the moneys were in the hands of D1. In such case, D3 to D6 will be unjustly enriched with such interest payment.

53.If D3 to D6 are relieved from paying interest to P which they will otherwise have to pay but for their own mistake and the wrongful act of D1, the Court is not doing justice to P.  For the above reasons, in this assessment, I shall not take into account payments paid to D1 by D3 to D6 in considering the position between P and D3 to D6.

54.Interest should generally be awarded in cases where a party has been deprived of his money in order to do justice between the parties.

55.In this case, D3 to D6 should have paid licence fees to P for their usage of the Roofs.  The fact that they had paid licence fees to D1 on the mistakenly belief that D1 was the lawful owner of the Roofs shall not relieve them from their obligations to pay P.

56.P has been deprived of the money which P should have received earlier.  It is only fair that P shall be compensated by payment of interest.

57.In the premises, I would exercise my discretion to award pre-judgment interest to P on damages agreed to be payable by D3 to D6.

For which period of time

58.Under section 48 of the High Court Ordinance, the Court has jurisdiction to award interest for all or any part of the period between the date when the cause of action arose andthe date of judgment.

59.There is no dispute that D3 to D6 started to use the Roofs on the following dates:

D3 1 December 1996

D4 16 April 1996

D5 1 May 1997

D6 6 April 1995

60.The following facts are records of the court files or have been agreed by P and D3 to D6 through their counsel at the hearing:

(1) In 1998 and 1999, P discovered structures elected on the Roofs and checked with D1 to find out what had happened. D1 refused to answer but questioned P’s ownership.

(2) On various dates between May to August 1999, P wrote to the Defendants in relation to the trespass with a view to settle the dispute.

(3) P started settlement negotiation with D1 in January 2001. No settlement was reached. P issued the Writ on 1 August 2001 endorsed with Statement of Claim.

(4) The Statement of Claim was amended on 28 September 2001 and re-amended on 11 November 2002.

(5) D3 filed its Defence on 22 October 2001 and amended the same on 23 November 2002.

(6) D4 filed its Defence on 19 October 2001 and amended the same on 14 January 2003.

(7) D5 filed its Defence on 25 November 2002.

(8) D6 filed its Defence on 7 November 2001 and amended the same on 6 March 2003.

(9) On 20 October 2004 the Court ordered that the liability issues between P and D1 be tried first, leaving the question on quantum between P and D1 and issues of liability and quantum between P and other Defendants be tried after determination of the liability issues between P and D1.

(10) On 3 December 2004 the Court of First Instance entered judgment against D1 on issues of liability. D1 appealed.

(11) On 22 March 2006 the Court of Appeal dismissed D1’s appeal. D1 appealed further.

(12) On 30 April 2007 the Court of Final Appeal dismissed D1’s appeal. On 31 May 2007 the CFA Judgment was handed down.

(13) P was in communication with D3 to D6 from July to November 2007 on statement of account and settlement negotiation. No settlement was reached.

(14) On 31 December 2007 P applied for checklist hearing. Checklist hearing took place on 12 March 2008. Directions were given at that checklist hearing.

(15) On 13 October 2008, P took out summary judgment application against the 2^nd to 6^th Defendants.

(16) Interlocutory judgment against the 2^nd to 6^th Defendant was granted on 10 November 2008.

(17) The parties attended hearing before Practice Master on 9 October 2009 for leave to set down the assessment of damages hearing. The 2^nd to 6^th Defendants opposed to P’s set down application.

(18) Directions on assessment of damages including expert directions were given in November and December 2009

(19) On 28 January 2010, P and the 2^nd Defendant reached settlement.

(20) Expert reports were filed by P and D3 to D6 in March 2010.

(21) Leave to set down the assessment of damages hearing between P and D3 to D6 was granted on 21 April 2010 and hearing was fixed for 22 November 2010.

(22) P and D3 to D6 engaged in without prejudice communication from January 2008 to November 2010.

61.Mr. Yip submits that P was guilty of delay in prosecuting its claims herein and there should be no interest to P before the date of the Writ (i.e. 1 August 2001) and also for the period from 30 April 2007 to 22 November 2010.  Mr. Yip refers me to Mok Merla v Ocean Crown Transportation Ltd (unrep., HCPI 266/1998, 11 July 2002, Deputy High Court Judge B. Yu SC) when interest for two years was disallowed on the ground of unexplained delay of over two years.

62.The complaints of D3 to D6 on P’s pre-action delay can be summarized as follows:

(1) four to six years from the first day of installation of the aerials and transmitters by D3 to D6 respectively on the Roofs had lapsed before P issued the Writ;

(2) two to four years from the first day of installation of the aerials and transmitters by D3 to D6 respectively on the Roofs had lapsed before P raised complaints with the Defendants in May 1999; and

(3) more than two years from P’s complaint letters had lapsed before P issued the Writ.

63.The complaints of D3 to D6 on P’s post-action delay can be summarized as follows:

(1) it took more than three years for P to take the liability disputes between P and D1 to trial;

(2) it took another two years and four months for the liability issues between P and D1 to be finally determined by the Court of Final Appeal;

(3) it took more than one year and four months after the CFA Judgment for P to issue the Order 14 Summons;

(4) it took another two years for P’s claims against D3 to D6 to come to the present assessment of damages hearing; and

(5) more than nine years had lapsed from the issuance of the Writ to the present assessment of damages hearing.

64.Miss Lok submits that P learnt about the trespass only in about 1998.  P took immediate action to clarify the situation with D1 without success.  P also tried to open up dialogue with the Defendants to resolve the disputes and P had continued the negotiation with D3 to D6 up to November 2010 when the parties eventually settled on the quantum of damages.

65.Miss Lok submits that it is extraordinary if a potential litigant who tried to seek settlement or alternative dispute resolution before resorting to litigation would be penalized by disallowing interest to him for the period before the date of writ.  She submits that this would be directly contrary to the spirit encapsulated under Order 1A, rule 1(e) of the Rules of the High Court.

66.Miss Lok submits that after the Court of Final Appeal handed down its Judgment on 31 May 2007, P had applied to the Court on 31 December 2007 for a checklist hearing date.  The matter proceeded to checklist hearing in March 2008 and P took out summary judgment application on 13 October 2008.  Interlocutory judgment was granted on 10 November 2008.  Miss Lok argues that D3 to D6 was still adamant in contesting their liabilities after the CFA Judgment until P’s summary judgment application in October 2008.

67.Miss Lok further submits that after interlocutory judgment was granted in November 2008, P applied in October 2009 to set down the assessment of damages hearing but the application was opposed by the 2^nd to 6^th Defendants on the ground that expert evidence was required.  Miss Lok submits that it was the failure of D3 to D6 in complying with the Court’s directions on expert evidence which caused further delay in setting down the assessment of damages hearing until April 2010.

68.P’s case is that there is no unjustifiable delay on the part of P in this case which calls for disallowing part of the interest to P.  Miss Lok refers me to The Hong Kong Electric Co Ltd v Commissioner of Rating and Valuation (unrep., LDGA 224/2004 & LDRA 356/2004, 12 April 2010) when the Lands Tribunal refused to disallow interest to the appellant in those cases on the ground that the Tribunal was not satisfied that the appellant was guilty of any unjustifiable delay.

69.In the Settlement Letter, the parties proposed that all the witness statements and the supplemental witness statements filed be adduced as evidence without calling the makers.  Relying on the witness statements and supplemental witness statements filed herein, the parties have not called any witness to testify at the assessment of damages hearing.

70.In the witness statement of Kwan Daniel (“Mr. Kwan”) filed herein on 16 September 2003 on behalf of P, Mr. Kwan made the following statements:

(1) “Since 1996 up to the present, Mr. Fung Yu Cheong and or Mr. Vincent Tse Siu Tong of my staff have regularly made around 4 to 5 visits to the Roofs every year with an interval of around three months in between each visit. I were [sic] informed that there were never any difficulty to gain access to the Roofs and the doors at the Roofs were opened and the Roofs were vacant and clean, save for the aerials, transmitters and associated cables connected into fibre glass housings that were found to exist at the Roofs.” [para. 7(iv)]

(2) “The Plaintiff’s representatives never have any difficulty in gaining access to the Roofs. There are eight access staircases leading to the Roofs. My staff frequently went up to the Roofs via different access staircase and at different time of the day and there was never any obstruction or signs erected thereon to indicate possession of the Roofs by any people other than the Plaintiff.” [para. 8]

(3) “In around 1998, it was discovered that some new cottages of around 5 feet x 5 feet in size were erected at several places on the Roofs. At that time, there were no words printed outside those cottages to indicate their ownership. It was also noticed that a large number of aerial type structures were erected near the edge of the Roofs.” [para. 10]

(4) “This fact of ever-increasing aerial type structures was reported to me and I assigned my staff to enquire with the 1^st Defendant as to what had actually happened. My staff went to the office of the 1^st Defendant in around late 1998 or early 1999 and asked the chairman of the owners’ incorporation as to who had put up those strange structures and cottages on the Roofs. The chairman refused to answer but only chose to question my staff to show proof of the ownership of the Roofs of the Plaintiff and questioned my staff’s right and authority to represent the Plaintiff to speak to him.” [para. 11]

(5) “After this futile attempt to retrieve any information from the owners’ incorporation of the said building, I started to make enquiry and negotiation with the owners’ incorporation myself and even with the assistance of solicitors. Yet, there was still no co-operation from the 1^st Defendant to remove those aerial structures.” [para. 12]

(6) “With regard to the information about the aerials and transmitters, the chairman and the members of the 1^st Defendant all along refused to divulge any information to the Plaintiff despite numerous attempts to retrieve the same from them. Enquiries were sent by the Plaintiff to the various Defendants in 1999 to which there was no reply. … ” [para. 16]

(7) “The refusal of the Defendants to release information about the actual activity that might have been going on between itself and the rest of the Defendants had caused immense difficulty to the Plaintiff in its decision to commence legal proceedings since there were the questions of who to sue and what to sue for.” [para. 17]

71.It is P’s case that its representative never had any difficulty in gaining access to the Roofs and its staff frequently went up the Roofs.  It is also P’s case that as early as 1996 it was aware of aerials, transmitters and associated cables being installed on the Roofs.

72.In such case, P should have discovered the installation of the aerials and transmitters by D3 to D6 at the Roofs shortly after their installation.

73.No explanation was given by P as to why it did not take up the matter with D1 until late 1998 or early 1999.  Mr. Kwan’s evidence was that his staff went to the office of D1 in around late 1998 or early 1999 to make enquiries with D1.

74.In his judgment delivered herein on 3 December 2004 on the liability issues between P and D1, Deputy High Court Judge Mayo found in para. 127 that “the Plaintiff made its position clear from 27 April 1999 that it was contesting the 1^st Defendant’s right to receive the licence fees in question.”

75.In this case, there has been a delay of about two years (in D5’s case) to four years (in D6’s case) before P made its position clear on 27 April 1999. Although P did not get into contact with D3 to D6 directly until later dates because D1 refused to divulge information to P, the licence fees should reasonably have been paid to P after P made its position clear on 27 April 1999.

76.In B.P. Exploration (Libya) v Hunt (No. 2) the learned judge said at 847 that: “The basic principle, is, however, that interest will be awarded from the date of loss.”

77.After considering the whole circumstances of this case, I am of the view that the date of loss for P in this case should be 27 April 1999 when P made its position clear but the licence fees were still not paid to it.  In exercise of my discretion, I do not allow interest to P for the period prior to 27 April 1999 when P was aware of the installation of aerials and transmitters by D3 to D6 but did not make its position clear that it would claim fees for such usage of the Roofs.

78.After P got into contact with D3 to D6, P started discussion with them to resolve the matter.  When negotiation was not successful, P issued the Writ on 1 August 2001

79.In The Hong Kong Electric Co Ltd v Commissioner of Rating and Valuation the Lands Tribunal cited with approval at para. 19(2) of its judgment the following principles stated by Jackson J in Clymore Services Ltd v Nautilus Properties Ltd [2007] BLR 452 at 460:

“ (1) Where a claimant has delayed unreasonably in commencing or prosecuting proceedings, the court may exercise its discretion either to disallow interest for a period or to reduce the rate of interest.

(2) In exercising that discretion the court must take a realistic view of delay. In case of business disputes, litigation is for all parties an unwelcome distraction from their proper business. It is not reasonable to expect any party to take every litigious step at the first possible moment, or to concentrate on litigation to the exclusion of all else. Delay should only be characterized as unreasonable for present purposes when, after making due allowance for the circumstances, it can be seen that the claimant has neglected or declined to pursue his claim for a significant period.”

80.I agree with Miss Lok that P should not be penalized for its efforts to avoid litigation.  I would award pre-action interest to P from 27 April 1999 to 1 August 2001.

81.After the CFA Judgment at the end of May 2007, P had been in negotiation with D3 to D6.  At the same time this proceeding proceeded in the usual way.  P applied for checklist at the end of December 2007.  Directions were given in March 2008.  Summary judgment application was taken out in October 2008.  Although the matter had not been pressed on in the most efficient way, applying the aforesaid principles stated by Jackson J in Clymore Services Ltd v Nautilus Properties Ltd, I do not see gross or unjustifiable delay on the part of P in prosecuting its claim after the CFA Judgment until the interlocutory judgment against D3 to D6.

82.After the interlocutory judgment in November 2008, the proceedings were governed by Order 37 of the Rules of the High Court and automatic directions were applied. P went before the Practice Master in October 2009 seeking leave to set down the assessment of damages hearing cannot be considered as undue delay.  It was the objection of the 2^nd to 6^th Defendants which prevent the setting down of the assessment of damages hearing in October 2009.  It was the failure of D3 to D6 in complying with the expert directions which caused further delay in setting down.  The Court had to imposed an unless order on 12 March 2010 to compel D3 to D6 to serve their expert report.  It lies ill in the mouths of D3 to D6 to complain that P had delayed setting down of the assessment of damages hearing.

83.Although P’s claims against D3 to D6 were not concluded until more than 9 years after the Writ was issued, this was not caused by delay on the part of P.  The Court had in 2004 ordered the liability issues between P and D1 to be tried first. D1 took the issues all the way to the Court of Final Appeal.  It took more than two years and four months from the date of judgment of the first instance for such issues to be finally determined by the Court of Final Appeal in April 2007.  In such case, I would award interest to P for the whole period from the date of Writ to the date of judgment.

At which rate

84.In respect of the rate of interest, Miss Lok submits that in commercial cases, the usual interest awarded was by reference to best lending rate of commercial banks.  Miss Lok refers me to Polyset Ltd v Panhandat Ltd (unrep., FACV 28/2000, 25 April 2002).

85.In the third supplemental witness statement of Mr. Kwan dated 4 November 2010, Mr. Kwan stated that P’s banker had been Hang Seng Bank and that P had been able to borrow from Hang Seng Bank at the rate of about 1% over prime rate.  Miss Lok submits that 1% above the best lending rate quoted by Hang Seng Bank, P’s banker, is appropriate.

86.Mr. Yip submits that interest awarded shall be at prime rate or at half of the judgment rate at relevant times.

87.In Polyset Ltd v Panhandat Ltd Mr. Justice Bokhary PJ stated in para. 13 of his judgment that: “To compensate a successful plaintiff for being kept out of his money, the general practice in Hong Kong has, at least since 1984, been to award interest reflecting the theoretical costs to the plaintiff of borrowing the sums withheld.  This is a rate taken to be prime plus 1% unless the evidence in a particular case makes adoption of another rate appropriate: see Komala Deccof & Co SA v Perusahaan Pertambangan Minyak Dan Gas Bumi Negara (Pertamina) [1984] HKLR 219.”

88.I do not see circumstances in this case justifying departure from this general practice.  I would award interest to P at the rate of 1% above the best lending rate quoted by the Hang Seng Bank from time to time.

Conclusion

89.By consent of the parties, I assess the damages payable to P by D3 to D6 in the sums set out in the Signed Order.  Particulars of the agreed damages have been set out in paragraphs 12 to 15 above.

90.I award pre-judgment interest to P on the agreed damages for the period from 27 April 1999 until judgment at 1% above the best lending rate quoted by the Hang Seng Bank from time to time.

91.Each of D3 to D6 shall pay interest to P on the respective amount of agreed assessed rental deemed and agreed to be payable on or before 27 April 1999 by each of them in accordance with the Settlement Letter from 27 April 1999 until judgment at the aforesaid interest rate.

92.Each of D3 to D6 shall pay interest at the same rate to P on the respective amount of agreed assessed monthly rental deemed and agreed to be payable after 27 April 1999 by each of them from the respective due date of each monthly payment deemed and agreed in accordance with the Settlement Letter until judgment.  As D4 had made a part payment of $60,000.00 to P on 28 January 2008, interest payable on that sum shall cease on 28 January 2008.

93.By consent of the parties as set out in the Signed Order, I also order that the costs of this action (including the hearing for the assessment of damages and those costs reserved) between P and D3 to D6 be to P to be taxed on party and party basis if not agreed.

Miss Frances Lok, instructed by Messrs Huen & Partners, for the Plaintiff.

Mr. Timmy C.H. Yip, instructed jointly by Messrs Gallant Y.T. Ho & Co., Messrs Chan, Wong & Lam, and Messrs Kenneth C.C. Man & Co. for the 3^rd to 6^th Defendants.