The Hongkong & Shanghai Banking Corporation v. The Administrator in Hong Kong of the Catholic Mission of Macau
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CACV000017/1978
----------------- Coram: Briggs, C.J., Huggins and Pickering, JJ.A. Date of Judgment: 9th June 1978. ----------------- JUDGMENT ----------------- Huggins, J.A.: 1. Whilst I agree with my Lord's conclusion regarding reg. 128, I think it is proper first to consider the question of jurisdiction. It is contended on behalf of the Appellant that on a true construction of s. 48 of the Supreme Court Ordinance it was not open to the learned judge to order the payment of interest under that section. Subsection (1) provides:
What is argued here is that there was no "judgment for debt or damages". Indeed, the Notice of Appeal goes further and says that there has been no judgment "for debt or breach of contract or for any tort or breach of duty". 2. It is therefore necessary to consider how the Plaintiff's claim was formulated. In brief he alleged that the Defendant corporation, acting upon forged instruments of transfer, had removed his name from the register of shareholders and had refused to reinstate it, by reason whereof he had suffered loss and damage. Not a word is said in the statement of facts about dividends and it follows that there is no allegation that dividends had fallen due and no allegation of a wrongful failure to pay those dividends, although those would, in my judgment, clearly be material facts and not legal consequences flowing from the facts actually pleaded. Nevertheless the prayer, in addition to asking for restoration of the Plaintiff's name to the register and delivery of share certificates, sought:
No one would question that, if the Plaintiff's name were restored to the register, with effect from the date of its removal he would be entitled to all the benefits of membership, including the right to dividends and the right to any bonus shares issued. However, what we are here concerned with is not whether the Plaintiff would be entitled to such benefits but whether by his Statement of Claim he alleged a cause of action entitling him to an order for payment of the dividends "accrued due", by which I understand to be meant dividends which had become payable in respect of the shares. What in effect the Plaintiff now says is that it was unnecessary for him to plead that the dividends had not been paid to him: that would be assumed from the fact that his name had been removed from the register. I do not think the court ought to make any such assumption: it is not unknown that a company inadvertently pays dividends to a person who has ceased to be a registered shareholder. The Plaintiff was therefore entitled on the facts pleaded and the findings of the judge to a declaration that the Plaintiff was entitled to all dividends which had accrued on the shares since they were transferred from his name, but he was not entitled to an order for payment in terms of the second prayer. Of course, if the Plaintiff had alleged a wrongful failure to pay the dividends the learned judge could properly have given judgment for any amount found to be unpaid and there would then have been a "judgment for debt or damages". As it is, all that the facts alleged in the Statement of Claim would support was what Mr. Dicks has described as a proprietary judgment, i.e. a judgment declaratory of the Plaintiff's rights in property and directing a registration which was necessary to make the declaration effective. Section 48 is concerned only with what may be called money judgments. 3. It is unfortunate that in the event judgment was entered in the terms of the second prayer, because it is the form of that judgment which has enabled the Plaintiff to argue that there was a money judgment. He says that a judgment ordering the payment of dividends is a judgment for payment of a debt. If he had confined himself to the contention that a dividend becomes a debt on the date on which it is declared to become payable, I would have agreed. So I would agree that when a dividend has falled due it may be claimed as a debt. It does not follow that because a dividend has become a debt it must necessarily have been claimed as a debt. As I understand it, a judgment in an action for debt will be in the form of an order that the defendant do pay a stated sum of money or, alternatively, of an order that he pay such sum as may be found due on the taking of an account. The form of the judgment here is neither that of a declaration nor that of an order to pay a sum certain. On what sum has interest been ordered? There might still be a dispute as to that. The Defendant has not asked us to alter the form of the judgment in so far as it relates to the dividends and we ought, therefore, not to alter it. Even as it stands its effect appears to me more akin to a declaratory judgment than to a judgment for money. When one looks at the Statement of Claim as a whole I think there can be no doubt that it was a declaratory judgment which was sought and which it was intended should be given. Accordingly there was no jurisdiction to award interest under s. 48. 4. It is unnecessary to decide the broader issue raised by the Defendant - whether the judgment was one based upon a breach of contract, tort or breach of duty - and I say only that I have grave difficulty in understanding how its contention can be right. 5. If there had been jurisdiction to award interest, it would have been a discretionary jurisdiction, and I agree with my Lord that in the circumstances of this case the discretion could properly be exercised only by declining to make the order sought by the Plaintiff. Reg. 128 of the Hongkong and Shanghai Bank Regulations provides:
Although this was not pointed out to the learned judge, that regulation is practically identical to art. 96 of Table A in the Schedule to the Companies Ordinance, which in turn is identical to art. 122 of Table A in the Companies Act 1948 in England. The learned judge took the view that to construe reg. 128 otherwise than as applying only to dividends remaining lawfully unpaid by the bank "would leave open the possibility that the bank could profit from its own wrong". As we have seen, the Statement of Claim did not allege that the dividends were unpaid, let alone wrongfully unpaid. Apart from that, in my judgment the canon of construction applied by the learned judge cannot control the matter in the face of such unequivocal language in the regulation. The possibility of profit to the bank seems to me to be minimal, although the equal loss to the shareholder may appear much more serious. I see nothing in the fasciculus of regulations under the general heading "Dividends" which supports a restricted interpretation of reg. 128. Mr. Dicks rightly says that if there had been an allegation of wrongful failure to pay the dividends and an express claim to interest thereon the Defendant could successfully have pleaded reg. 128 by way of defence. It is not just that the Plaintiff should nevertheless be able to recover interest under s. 48. The regulation may appear on the face of it to be arbitrary, but it applies equally to all the shareholders and it is not for the courts to interfere with something to which all the shareholders must be deemed to have agreed. I confess that I do not understand the argument, raised by para. 3 of the Respondent's Notice, that the Hongkong and Shanghai Bank Regulations have no application to the present case. 6. So far I have referred only to interest claimed on the dividends declared on the original shares. There was no allegation in the Statement of Claim that the bank had issued bonus shares to which the Plaintiff was entitled and strictly the prayer should have asked only for a declaration that the Plaintiff was entitled to all bonus shares (if any) which had been issued in respect of the original shares since they were transferred from the Plaintiff's name. In the court below it was accepted that the Plaintiff intended also to make a claim in respect of dividends on the bonus shares similar to the claim which had been made in respect of dividends on the original shares. No amendment was made to the Statement of Claim but if it had been made it would presumably have taken the same general form as para. (2) of the prayer. What I have said concerning interest on the dividends on the original shares therefore applies equally to interest on the dividends on the bonus shares. 7. I agree that the appeal should be allowed and all references to interest from the date of the cause of action until judgment expunged. 9th June 1978. Representation:
----------------- Coram: Briggs, C.J., Huggins and Pickering, JJ.A. Date of Judgment: 9th June, 1978. ----------------- JUDGMENT ----------------- Pickering, J.A.: 8. I entertain, with great respect, some doubt as to the correctness of the view formed by my learned brother Huggins J.A. that there was no jurisdiction in the trial judge to award interest under s.48 of the Supreme Court Ordinance (Cap. 4). As it seems to me there is merit in the contention of Mr. Tong, who appeared for the respondent, that all the facts were set out succinctly and impeccably in the Statement of Claim; that on those facts the Court must have found, as it did, a breach of duty and that the appropriate legal remedies would flow from that finding. It is trite law that one pleads facts and not the legal consequences flowing from those facts. So that if the material facts are alleged it is not necessary to plead the legal result, and if for convenience this is pleaded, the party is not bound by, or limited to, the legal result he has alleged but may rely on any legal consequences of the pleaded facts which may properly flow from them. (See re Vandervell's Trusts (No. 2)(1)). In Lever Brothers v. Bell(2) Scrutton L.J. put the matter thus:-
9. I should have thought those comments apt to fit this case which is not one within the exception mentioned by Scrutton L.J. 10. However in view of the conclusion to which I have come in regard to the second limb of Mr. Dicks' argument for the Appellant it would be profitless in this case to dilate further upon this aspect of the matter for I find myself in entire agreement with the other members of this Court, and for the reasons which they have given, that the only proper exercise of the learned judge's discretion would have been to decline any award of interest. 11. Accordingly I would allow the appeal and delete from the order impugned all references to interest from the date of the cause of action to judgment. Representation: A. Dicks (Johnson, Stokes & Master) for Appellant. R. Tong (Woo, Kwan, Lee & Lo) for Respondent. (1) (1974) 3 W.L.R. 257. (2) (1931) 1 K.B. 557. |