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CACV000013/1978
| IN THE COURT OF APPEAL |
1978 No. 13 |
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(Civil) |
| BETWEEN |
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LEUNG CHAT-NUI |
Appellant |
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AND
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CHAU KING-WAI |
Respondents |
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CHAN SAI-HUNG |
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Coram: Briggs, C.J., Huggins & Pickering, JJ.A.
Date of Judgment: 24 January 1979
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JUDGMENT
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1. The appellant was injured in a traffic accident which occurred on the 9th June, 1974. She sustained certain injuries and sued the first and second defendants. In the District Court she was awarded general and special damages. The special damages amounted to $2,290 and the general damages were assessed at $3,500. The trial judge did not award any interest on the general damages but he did award interest at 4% per annum upon the special damages. The sole issue with which we are concerned in this appeal is whether the judge was right not to award interest on the sum awarded as general damages. The trial judge relied on the case of Cookson v. Knowles(1). That report dealt with that case in the Court of Appeal. The decision has since been affirmed by the House of Lords and is reported in 1978 2 All E.R. 604.
2. We think that the trial judge was wrong in not awarding interest on the general damages. The authority for this is the recent case of Pickett v. British Railway Engineering Limited (2).
3. Cookson v. Knowles(1) is not on all fours with the present case. It was a case which dealt with a fatal accident and the appropriate assessment of damages for the estimated earnings of the deceased and whether interest should be given on post trial as well as on pre-trial damages. In the present case there was no death and we are only concerned with pre-trial damages. In Pickett's Case(2), the court dealt with two separate issues: (1) inflation, and (2) interest on general damages or, as it was called in that case, "non-economic loss". In his judgment, Lord Scarman quoted a passage from the judgment of Lord Denning in Jefford v. Gee(3) where he said:-
"................ in personal injury cases, when a lump sum is awarded for pain and suffering and loss of amenities, interest should run 'from the date of service of the writ to the date of trial'. At that time inflation did not stare us in the face. We had not in mind continuing inflation and its effect on awards. It is obvious now that that guide-line should be changed. The courts invariably assess the lump sum on the 'scale' for figures current at the date of the trial - which is much higher than the figure current at the date of the injury or at the date of the writ. The plaintiff thus stands to gain by the delay in bringing the case to trial. He ought not to gain still more by having interest from the date of service of the writ. We would alter the guide -line, therefore, by suggesting that no interest should be awarded on the lump sum awarded at the trial for pain and suffering and loss of amenities."
4. Lord Scarman then gives reasons for disapproving that dictum as follows:-
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In the instant case the Court of Appeal has followed its dictum, disallowing the interest granted by the judge on the damages for pain and suffering. My Lords, I believe the reasoning of the Court of Appeal to be unsound on this point. It is based upon a fallacy; and is inconsistent with the statute. |
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First, the fallacy. It is assumed that because the award of damages made at trial is greater, in monetary terms, than it would have been, had damages been assessed at date of service of writ, the award is greater in terms of real value. There is here a complete non sequitur. The cash awarded is more, because the value of cash, i.e. its purchasing power, has diminished. In theory the higher award at trial has the same purchasing power as the lower award which would have been made at the date of the service of the writ: in truth, of course, judicial awards of damages follow, but rarely keep pace with, inflation so that in all probability the sum awarded at trial is less, in terms of real value, than would have been awarded at the earlier date. In theory, therefore, and to some extent in practice, inflation is taken care of by increasing the number of money units in the award so that the real value of the loss is met. The loss, for which interest is given, is quite distinct, and not covered by this increase. It is the loss which is suffered by being kept out of money to which one is entitled. |
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Secondly, the statute. Section 22, Administration of Justice Act 1969, amending section 3, Law Reform (Miscellaneous Provisions) Act 1934, provides that the court shall (my emphasis) exercise its power to award interest on damages, or on such part of the damages as the court considers appropriate, 'unless the court is satisfied that there are special reasons why no interest should be given in respect of those damages.' Such is the general rule laid down by the statute, which does, however, confer upon the court a discretion as to the period for which interest is given and also permits differing rates. Nothing can be clearer than the duty placed upon the court to give interest in the absence of special reasons for giving none. Inflation is an economic and financial condition of general application in our society. Its impact upon this plaintiff has been neither more nor less than upon everybody else: there is nothing special about it. |
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For these reasons I think the Court of Appeal erred in refusing to allow interest on the award of damages for non-pecuniary loss." |
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5. Sub-section 48(4) of the Supreme Court Ordinance contains a similar provision to that in section 22 of the Administration of Justice Act 1969, and sub-section 49(4) of the District Court Ordinance is in the same terms as sub-section 48(4) of the Supreme Court Ordinance.
6. The headnote in Pickett's Case(2) states the purpose of an award of interest on general damages as follows:-
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It is "for the purpose of compensating a plaintiff for being kept out of the capital sum between the date of the service of the writ and judgment ....." |
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7. It follows, therefore, that interest should be given on any sum ordered to be paid as general damages unless there are special reasons to the contrary.
8. The next point that was canvassed before us was: What rate of interest should such damages attract? Various propositions were put forward before the court. It is enough to say that we are not here laying down any hard and fast rule. For the purposes of the present appeal, we think that the right rate of interest is 7%. And that interest is payable from the date of the issue of the writ until judgment. After judgment, of course, so long as that judgment remains unsatisfied, it will attract interest at the rate of 8% as a judgment debt (see Order 42 rule 1(4) and section 49 of the Supreme Court Ordinance).
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(Geoffrey Briggs) |
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President. |
Representation:
Cheung, Q.C., Gittins, Q.C. & Miss A. Mok (D.L.A.) for appellant
Respondents not appearing
Barlow as amicus curiae
(1) (1977) 2 All E.R. 820.
(2) (1978) 3 W.L.R. 955.
(3) (1970) 2 Q.B. 130, at 151.
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