EURAMIN S.A. v. SHANGXIANG MINMETALS LTD

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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JUDGMENT

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1. On 25 March 1997, I handed down a judgment in this matter. I awarded damages to the plaintiff against the defendant in the sum of US$7,500. I also granted an indemnity in favour of the plaintiff in the sum of US$176,250, ordering that this sum should be paid by the defendant to the plaintiff on satisfactory proof that it had been paid by the plaintiff to a sub-purchaser. As to interest, I said in that judgment - "I have not heard any argument on the matter of interest. In the absence of agreement, I will hear the parties on this."

2. There was agreement as to interest on the sum of US$7,500. This was that the defendant pay interest on this sum at the rate of 8% a year from the date of service of the writ until judgment, and thereafter at the judgment rate. I order that the defendant pay such interest accordingly.

3. There was no agreement regarding interest on the award of the indemnity. Mr Coleman told me, and there is no dispute about this, that the plaintiff paid the sub-purchaser the sum of US$210,000, being the sum of US$176,250 mentioned in my order and an additional sum as interest. The interest was calculated at 8% a year from 15 September 1994, being the date when delivery should have been made to the sub-purchaser, to 4 April 1997, being the date when the damages were paid to the sub-purchaser, and then rounded down to give the total of US$210,000. So, the plaintiff claims interest in the sum of US$33,750.

4. In its statement of claim, the plaintiff said "Further, the Plaintiff is entitled to and claims from the Defendant an indemnity in respect of the claim brought against the Plaintiff by [the sub-purchaser] in respect of the sub-purchase agreement ..." Particulars were given this claim, being the difference between the market price and contract price with the sub-purchaser. There is no mention in the plaintiff's pleadings that the claim brought against it by the sub-purchaser included interest. There is nothing in the evidence before me at the trial that shows that the sub-purchaser was claiming interest from the plaintiff, or that the plaintiff was obliged to pay such interest.

5. The statement of claim claims that the plaintiff is entitled to interest under section 48 of the Supreme Court Ordinance, Cap. 4, "in such sum and for such periods" as the Court thinks fit. The prayer included a claim for simply "Interest".

6. On 11 April 1997, the plaintiff perfected the judgment. The judgment of this date contains no mention of interest. On 15 April 1997, sealed an Order saying "that there be liberty to restore the hearing on the matter of interest on the sums of US$7,500.00 and US$176,250.00 due by the Defendant to the Plaintiff, if not agreed."

7. A claim for interest under section 48 is for interest "on all or any part of the debt or damages in respect of which judgment is given". In common Ianguage. a plaintiff states his claim for interest by saying - "It has been found that the defendant owes me money. He has kept me out of that money, so he should pay interest to compensate me for not having the use of it.". This not what the plaintiff says here; or it is not what it is entitled to say. Here, the plaintiff's case is - "Because the defendant broke its contract with me, I have been obliged to compensate my sub-purchaser. and, as part of that compensation, I have been obliged to pay interest to my sub-purchaser." So, the plain-tiff's claim to "interest" of US$33,750 is not a claim for interest as contemplated by section 48 at all. It is part of its claim against the defendant to be indemnified against its liability to its sub-purchaser. But it has not claimed that it was under any obligation to pay interest to the sub-purchaser, and has not shown this on the evidence. It is now too late to do so. I have given judgment on the claim for an indemnity, and that judgment has been perfected. Accordingly, I find that the plaintiff is not now entitled to recover this sum of US$33,750.

8. In the course of argument, I put to Mr Hung that nevertheless. the plaintiff was entitled to interest on the sum of US$176,250 in the ordinary course from the date on which the plaintiff paid this sum to its sub-purchaser, which was on 4 April 1997, to the date on which the defendant reimbursed it, which was on 12 May 1997. After he had understood what I was saying, Mr Hung accepted this.

9. Accordingly, I award interest to the plaintiff on this basis.

10. On the question of costs of the matter now before me, it seems to me that the just order should be that there be no order as to costs. The plaintiff has failed to recover the sum of US$33,750, which it set out to do. But it has re-covered something a great deal less on a different basis. The defendant had not offered interest on this basis, but the plaintiff had not claimed it either. It seems that the parties had not considered the matter of interest on the sum of US$176,250 as true interest until the hearing. In these circumstances. I believe neither party was substantially successful. There will be no order as to costs.