POON LOI TAK the Administrator of the late POON NUEN Deceased v. POON LOI CHEUNG DESMOND

HCA 3348/2016

[2023] HKCFI 2093

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 3348 OF 2016

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BETWEEN

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DECISION

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1.  On 9 January 2023, judgment (“the Judgment”) was handed down in respect of this action. By summons dated 26 January 2023 (the “Summons”), the Plaintiff applies to vary the orders nisi made at §§124-125 of the Judgment as follows:-

(1) The Defendant do pay the Plaintiff interest on the whole or part of any sum of money (excluding interest) awarded to the Plaintiff, being the sale proceeds of HK$33,000,000, at a rate not exceeding 10% above judgment rate from 22 November 2017 until full payment;

(2) The Defendant do pay the Plaintiff costs of this action on an indemnity basis from 22 November 2017 with certificate for two counsel;

(3) The Defendant do pay the Plaintiff interest on costs at a rate not exceeding 10% above judgment rate until full payment.

2.  In support of the above application, the Plaintiff relies on a sanctioned offer dated 24 October 2017, and Order 22, rule 24 of the Rules of the High Court (Cap. 4A) which provides as follows:-

“24. Costs and other consequences where plaintiff does better than he proposed in his sanctioned offer

(1) This rule applies where –

(a) A defendant is held liable for more than the proposals contained in a plaintiff’s sanctioned offer; or

(b) The judgment against a defendant is more advantageous to the plaintiff than the proposals contained in a plaintiff’s sanctioned offer.

(2) The Court may order interest on the whole or part of any sum of money (excluding interest) awarded to the plaintiff at a rate not exceeding 10% above judgment rate for some or all of the period after the latest date on which the defendant could have accepted the offer without requiring the leave of the Court.

(3) The Court may also order that the plaintiff is entitled to –

(a) His costs on the indemnity basis after the latest date on which the defendant could have accepted the offer without requiring the leave of the Court; and

(b) Interest on those costs at a rate not exceeding 10% above judgment rate.

(4) Where this rule applies, the Court shall make the orders referred to in paragraphs (2) and (3) unless it considers it unjust to do so.

(5) In considering whether it would be unjust to make the orders referred to in paragraphs (2) and (3), the Court shall take into account all the circumstances of the case including –

(a) The terms of any sanctioned offer;

(b) The stage in the proceedings at which any sanctioned offer was made;

(c) The information available to the parties at the time when the sanctioned offer was made; and

(d) The conduct of the parties with regard to the giving or refusing to give information for the purposes of enabling the offer to be made or evaluated.

(6) The power of the Court under this rule is in addition to any other power it may have to award interest.”

3.  By the sanctioned offer dated 24 October 2017, the Plaintiff offered to settle the whole of his claims herein against the Defendant for HK$29 million, inclusive of all pre-judgment interest and taking into account any counterclaim by the Defendant (the “Sanctioned Offer”). It is common ground that it is a proper sanctioned offer, and the last day on which the Defendant could have accepted it without the leave of the Court was 21 November 2017 (the “Cut-Off Date”); but he did not accept it.

4.  In light of the order made by this Court in the Judgment, it is also not in dispute that the Plaintiff has done better than the Sanctioned Offer. I am of the view that the requirement of Order 22, rule 24(1) has been met.

5.  According to Order 22, rule 24(4), the Court shall then make the orders referred to in rule 24(2) and (3) unless it considers it unjust to do so. The Plaintiff submits that there are no unjust circumstances herein whereas the Defendant also does not contend, rightly so in my view, that it would be unjust to make the orders under rule 24(2) and (3).

6.  The Defendant does not oppose the Plaintiff’s application for costs of this action on an indemnity basis as from 22 November 2017. He asks that certificate for two counsel be granted only for the trial of the action on the basis that the pre-trial conduct of the case should not warrant the involvement of two junior counsel. However, I do not think that such a distinction is warranted in the present case. Given the nature of and the issues involved and also the fact that each party was represented by two counsel at trial, there is no particular reason why the involvement of two counsel in the pre-trial conduct of the case could not be justified.

7.  I now turn to the Plaintiff’s application for enhanced interest. First, it appears from the Summons that the Plaintiff is asking for a variation of the principal sum on which interest should accrue, from HK$14,248,000 as ordered by this Court at §124 of the Judgment (which consists of the withdrawals from the Premier Account between 12 May 2015 and 21 April 2016 as set out at §§24-25 of the Judgment) to HK$33 million (being the amount of the Sale Proceeds from the sale of the Shop in 2014 and subsequently deposited into the two Joint Accounts as referred to in, amongst others, §§88-90 of the Judgment). However, no explanation has been provided on behalf of the Plaintiff for such proposed variation. In any event, I do not think that such variation would be appropriate. Plainly, the order nisi on interest granted at §124 of the Judgment relates to the order granted at §123(2) of the Judgment that the Defendant shall repay the sum of HK$14,248,000 withdrawn by him from the Premier Account. Insofar as the Plaintiff intends to claim from the Defendant any sum(s) in relation to the Sale Proceeds and any interest arising therefrom, this should be dealt with during the process of the account and enquiry as ordered in the Judgment.

8.  In respect of when the interest regarding the aforesaid sum of HK$14,248,000 should accrue, I note from both parties’ submissions that they seem to be content that the starting date should be the date of the Writ, i.e. 20 December 2016. I will proceed on this agreed basis accordingly. The Plaintiff in his submissions further suggests “judgment rate” presumably for the calculation of interest from 20 December 2016 to 21 November 2017 (i.e. the Cut-off Date) but has not explained why such rate should be adopted in this regard. The Plaintiff has failed to establish any other basis to justify the departure from the well-established practice of using prime rate plus 1% as the pre-judgment interest from 20 December 2016 to 21 November 2017: see Lo Yuk Sui v Fubon Bank (Hong Kong) Ltd [2017] 2 HKLRD 477 at §§18-19 per Ng J.

9.  As to the rate of enhanced interest as from 22 November 2017 (i.e. the date following the Cut-Off Date), the Plaintiff in his written submissions seeks a heightened rate of 10% above judgment rate, which is the maximum sanction reserved for the worst kind of cases: see Qvist Henrik v Clatronic Far East Ltd [2020] 1 HKLRD 703 at §29 per Recorder Stewart Wong SC. An example in which the Court had so ordered is Wong Giles v Donowho Simon Christopher & Anor [2020] HKCFI 1053, where the plaintiff was found to be untruthful about the reasons for his installation of what he described in his witness statement as “a stereo system”, which turned out to be 14 speakers purposely installed to make life a misery for his neighbours. Noises and vibrations were created by the plaintiff for at least 16 hours every day for several years to punish and retaliate. Yet, in prosecuting his claim, he portrayed himself as a victim of the defendants’ violence and abuses. K Yeung J granted an enhanced rate of 10% above judgment rate considering that the plaintiff’s conduct was disgraceful and the way he prosecuted his claim constituted an affront to the court and should be deterred.

10.  In the present case, as pointed out in the Judgment including §§50-56, 57-60, 87-94, 112 and 119-120, I found the Defendant’s evidence unsatisfactory and unreliable. I have also identified various examples which demonstrate the inherent inconsistencies and issues regarding general credibility in the Defendant’s case. Counsel for the Plaintiff has also referred to various matters regarding the Defendant’s conduct of this litigation.

11.  However, the above matters in respect of the quality of the Defendant’s evidence and also his conduct are not uncommon in a case of this nature, particularly in the context of a hotly contested dispute within a family and they do not, in my view, constitute an affront to the Court and therefore should not fall within the worst kind of cases for which the maximum sanction is reserved. In view of the sanctioned offer and all relevant circumstances of this case, I find that an enhanced interest rate of 6% above the judgment rate would be proportionate and appropriate.

12.  The Plaintiff contends that the enhanced interest rate should also apply to post-judgment interest and the interest on costs as from 22 November 2017 (i.e. the date following the Cut-Off Date). However, I am of the view that post-judgment interest should run at the judgment rate in the present case: see Zief Incorporated v Tekchandani Ajai Mohan (trading as D’Ziner Collections (Hong Kong)) & Ors [2021] HKCFI 730 at §§38-44 per Recorder Eugene Fung SC. Further, I agree with the Defendant that it is more appropriate to order interest on costs from the date following the Cut-Off Date at half of the enhanced interest rate until judgment: see Golden Eagle International (Group) Lid v GR Investment Holdings Ltd [2010] 3 HKLRD 273 at §18 per Lam J (as Lam PJ then was)

13.  For the reasons set out above, I make an order that the orders nisi regarding interest and costs as contained in the Judgment be varied as follows:

(1) The Defendant shall pay interest on the sum of HK$14,248,000 at prime rate plus 1% per annum from 20 December 2016 (i.e. the date of the Writ) to 21 November 2017, and thereafter at the rate of 6% above judgment rate to the date of the Judgment;

(2) From the date of the Judgment to the date of payment, the Defendant shall pay interest on the sum of HK$14,248,000 (including interest accrued up to the date of the Judgment) at judgment rate;

(3) The Defendant do pay the Plaintiff’s costs of this action, to be taxed if not agreed, on a party and party basis for the period up to and including 21 November 2017, and thereafter on an indemnity basis, with certificate for two counsel;

(4) For the period from 22 November 2017 to the date of the Judgment, the Defendant shall pay interest on costs at half of the rate of 6% above judgment rate.

14.  In view of the above, the Plaintiff’s application by way of the Summons is allowed but only in part. I therefore make an order that the Plaintiff shall have 50% of the costs of this application, to be taxed on a party and party basis if not agreed.