Read the full judgment text of CACV 000153/1982 on BabelCite. This Court of Appeal judgment was delivered on 24 February 1984 before Cons, J.A., O'Connor & Power, JJ..
Commercial law – interest on judgment debts – pre-judgment interest – rate and period of interest – delay by plaintiff in commencing proceedings – whether delay warrants reduction of interest period – whether interest should run from date debt should reasonably have been paid – appropriate rate of interest on commercial debt – 1% above prime rate as guideline – on-demand commercial debt arising from goods sold and delivered, insurance premia and disbursements, with judgment under Order 14 for US$1,164,225 – plaintiffs demanded payment in 1975-1976, did nothing for three years, then sent letter before action in October 1979 and issued writ in February 1980 – first issue: whether the three-year unexplained delay by the plaintiffs should reduce the interest period – held, no; in commercial cases mere delay is not a ground for modifying the prima facie rule that interest runs from the date payment should reasonably have been made, and the onus is on the losing party to show something exceptional such as culpable or unreasonable delay for which the winning party is to blame, applying Lord Wilberforce in General Tyre Co. v. Firestone Tyre Co. Ltd. and Kerr J. in Panchaud v. Pagnan – Birkett v. Hayes concerned personal injury cases and was not applicable – the defendant ignored demands and could have paid at any time, so it created and perpetuated the situation – second issue: appropriate rate of interest – held, the guideline rate in Hong Kong commercial cases should be 1% above prime rate, with possible increases to 2% or 3% for smaller or less well-established concerns, following the approach of Forbes J. in Tate & Lyle Distribution v. G.L.C. and the practice of the English Commercial Court – the evidence before the trial judge (lending rates and rates charged to an unidentified related company) was insufficient to justify departure from 1% above prime – appeal allowed; order varied so that interest runs from 1 July 1975 at 1% above prime rate.
Legal issues: Whether plaintiff's delay in commencing proceedings should reduce the period for which interest is awarded · Appropriate rate of interest on a commercial debt judgment
Outcome: Appeal allowed; order for pre-judgment interest varied as to both period and rate.