HUMMINGBIRD MUSIC LTD v. DINO ACCONCI AND ANOTHER

HCA 836/2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 836 OF 2007

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R U L I N G

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1.  I have asked the parties to lodge written submissions on interest and costs consequent upon my judgment of the 22 January this year as a result of which I had entered judgment in favour of the Plaintiff in the amount of $5,058,000.

2.  As to post-judgment interest, the parties are agreed, and I so order, that the Plaintiff should have interest on the amount of the judgment at the judgment rate from the date of judgment until payment.

3.  As to the interest on damages awarded to the Plaintiff from the date of accrual of the cause of action to the date of judgment, there is a very large measure of agreement as to the approach that should be adopted.

4.  This is governed by section 48(1) High Court Ordinance which gives the court a discretionary power to award interest.  The principle is that interest should be awarded to a successful plaintiff for being kept out of money that ought to have been paid to him.  There is no difficulty about this and in my judgment, the Plaintiff should be awarded interest, the question being at what rate and over what periods of time.

5.  The parties are agreed, and I agree with them, that interest in a case such as this should be for half the amount of damages awarded for the whole of the period over which the Plaintiff has been compensated.  In this regard, the case of Blayney v Clogau St Davids Gold Mines Ltd [2002] FSR 233 explains the court’s approach.

6.  There are three periods for which damages have been awarded and interest should track those periods in the following way:

(a)     Interest on the amount that would have been earned from 1 April 2008 to 31 March 2008, for that period;

(b)    Interest on the sum that would have been earned from 1 April 2007 to 31 March 2008, for the period from 1 April 2008 to 21 January 2008; and

(c)     Interest on the sum that would have been earned from 1 April 2008 to 21 January 2009, for that period.

7.  The approach in Blayney above is appropriate for the periods (a) and (c), which results in a 50% reduction as the loss of income would not yet have accrued to the Plaintiff.  No discount needs to be given for period (b), as the loss of income has accrued as at 1 April 2008.  And so, interest will be at the judgment rate subject to the 50% reduction for the periods in (a) and (c).

8.  In arriving at my computation, I prefer the reasoning put forward by the Defendants which is not based on “estimates” made by the Plaintiff in paragraph 15 of its written submission.  I gratefully adopt the Defendants’ calculations:

 

(million $)	Apr 07-Mar 08	Apr 08-Mar 09	Apr 09-Mar 10	Total
Gross Income	4,500,000	7,000,000	10,000,000	21,500,000
Net Profit after deducting 10% cost of performance	4,050,000	6,300,000	9,000,000	19,350,000
60% of Net profit	2,430,000	3,780,000	5,400,000	11,610,000
Investment as per Tan’s calculation2	1,800,000	2,160,000	2,592,000	6,552,000
Loss of future income	630,000	1,620,000	2,808,000	5,058,000

Accordingly, from 1 April 2008 to 21 January 2009 (296 days), the loss of income would be $1,620,000 x 296/365 = $1,310,000.  This gives a pre-judgment interest payment of $123,636.49 as calculated by the Defendants’ solicitors.  I reproduce, as a schedule to this ruling, their calculations.

9.  As to the reserved costs for 4 September 2007, where neither party was wholly successful, I agree with both parties that there should be no order for costs in respect of that hearing.

10.  The Plaintiff has also asked for a certificate for two counsel.  It seems to me that this was a case of sufficient difficulty and complexity to justify the instruction of two counsel and I will grant such a certificate.

Messrs Deacons, for the Plaintiff

Messrs Haldanes, for the Defendants

Schedule

A.   Interest for period from 1 April 2007 to 31 March 2008 (1^st period)

       Amount of damages estimated to accrue in period: HK$630,000

       Interest on damages estimated to accrue in period:

 

Dates	No. of Days	Judgment Rate	Daily (HK$)	Rate	Total (HK$)
01/04/2007 to 31/12/2007	275	10.75%	185.55		51,025.69
01/01/2008 to 31/03/2008	91	10.42%	179.85		16,366.54
					67,392.23

B.   Interest for period from 1 April 2008 to 21 January 2009 (2^nd period)

B1  Interest on income accruing in period from 1 April 2008 to 21 January 2009

       Amount of damages estimated to accrue from 01/04/2008 to 31/03/2009:

       =  HK$1,620,000

       Amount of damages estimated to accrue from 01/04/2008 to 21/01/2009 (296 days)

       =  1,620,000 x 296/365 =  HK$1,310,000

       Interest on damages estimated to accrue in period:

 

Dates	No. of Days	Judgment Rate	Daily (HK$)	Rate	Total (HK$)
01/04/2008 to 30/06/2008	91	9.398%	337.30		30,694.13
01/07/2008 to 30/09/2008	92	8.353%	299.79		27,580.92
01/10/2008 to 31/12/2008	92	8.250%	296.10		27,240.82
01/01/2009 to 21/01/2009	21	8.192%	294.01		6,174.30
					91,690.17

       Apply 50% reduction in line with Blayney case:          0.5 x 91,690.17

                                                                                             =  HK$45,845.09

B2  Interest on income accruing from 1 April 2007 to 31 March 2008 in period from 1 April 2008 to 21 January 2009

       Interest accruing on 2^nd period on damages estimated to have accrued in 1^st period (630,000)

 

Dates	No. of Days	Judgment Rate	Daily (HK$)	Rate	Total (HK$)
01/04/2008 to 30/06/2008	91	9.398%	162.21		14,761.30
01/07/2008 to 30/09/2008	92	8.353%	144.18		13,264.11
01/10/2008 to 31/12/2008	92	8.250%	142.40		13,100.55
01/01/2009 to 21/01/2009	21	8.192%	141.40		2,969.32
					44,095.28

       (No 50% reduction necessary as income already accrued in full as at 1 April 2008)