XCHRX QUE JOCELYN CO. t/a SCENTED DELIGHTS v. BROADAIR EXPRESS LTD.

HCA3477/1996

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.3477 OF 1996

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DECISION

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THREE MATTERS

1. There are three matters before me : first, an application to amend my order; second, an application for the costs of the appeal I had dealt with earlier and third, application for the costs of the bankruptcy proceedings.

AMENDMENT OF ORDER

2. The defendant applied to amend my order to provide for payment of interest on the taxed costs of $254,431.83 from the date of the costs order made on 29 April 1997 by Master Cannon against the plaintiff until the date it received the money.

3. Pursuant to my order, Finley had paid $322,941.03 on 12 August 1999 into court of which $266,780.63 was later released to the defendant. This sum was based on the statutory demand by the defendant of the taxed costs of $254,431.83 and interest thereon. The defendant now asks for further interest which was not included in the statutory demand.

STATUTORY DEMAND AND INTEREST

4. Although the arguments of the defendant was that the statutory demand carries with it interest, I am not persuaded that in order to comply with the statutory demand, the debtor (in this case the plaintiff) has to pay the amount specified in the statutory demand and also interest that may accrue from the issuance of the demand to the date of payment. It is not necessary for me to express a final view on this matter, but the intention of the statutory demand is to specify a sum certain so that the debtor can comply with it with certainty. There is no provision in s.6A of the Bankruptcy Ordinance or in the statutory demand itself, that the debtor is required to pay interest that may accrue after the date of the demand. There may well be a vacuum in the statute, but this is not something I need to be concerned with.

INTERESTS ON COSTS

5. While the defendant may not be entitled to further interest under the statutory demand, clearly it is entitled to it as of right under the judgment for costs. The costs order is a judgment and under s.49(1) of the High Court Ordinance, judgment debts shall carry simple interests :

"49.(1)	Judgment debts shall carry simple interest -
	(a)	at such rate as the Court of First Instance may order; or
	(b)	in the absence of such order, at such rate as may be determined from time to time by the Chief Justice by order,

on the aggregate amount thereof, or on such part thereof as for the time being remains unsatisfied from the date of the judgment until satisfaction."

6. The liability of the plaintiff to pay interest on costs arises under the judgment on costs that was made against her. Interest on costs should run from the day when judgment is pronounced : Note 62/35/12, Supreme Court Practice 1999. See also Hunt v. R.M. Douglas Roofing Ltd [1990] 1AC 308. The plaintiff is liable to pay the defendant the interest on costs. It would be unsatisfactory to leave the matter unresolved. If the defendant wishes to pursue the balance of the interest due under the judgment for costs, the plaintiff will have no defence at all. While the statutory demand had been satisfied, the judgment on costs is not. I have ruled that Finley is personally liable for the costs to the defendant. As the costs carry interest, the liability of Finley includes the interest element as well. Finley is liable for no more and no less than his original liability under the judgment on costs. This will reflect the true intention of my judgment.

7. The money was paid into court by Finley on 12 August 1999. It was received by the defendant on 20 August 1999. It may be due to administrative reasons and out of the control of the parties that the money was only received by the defendant eight days later. In my view there should be no further interest on the costs after the payment into court on 12 August 1999. Interests calculated up to 12 August 1999 is $71,767.35. The total indebtedness is $254,431.83 + $71,767.35 = $326,199.18. The balance after deducting $266,780.63 received by the defendant on 20 August 1999 is $59,418.55. Accordingly, paragraphs (1) and (4) of my order should be amended as follows:

(1)	Finley is to pay to the Plaintiff $254,431.83 being the taxed costs relating to the summons of 8th November 1996 and the interests thereof at judgment rate from 29th April 1997 to date of payment.
(4)	Upon payment in,
	(a)	the sum of $266,780.63 is to be paid to the Defendant in satisfaction of debt owing by the Plaintiff to the Defendant in Bankruptcy No.612 of 1999 and
	(b)	the amount of the interest on $254,431.83 from 29th April 1997 to date of payment in (less $12,348.8 interest which was already included in the $266,780.63) is to be paid to the Defendant in satisfaction of the judgment on costs and interest owing by the Plaintiff.

I shall order Finley to pay the additional interest into court within 14 days.

COSTS OF THE APPEAL

1) Costs of the appeal between the plaintiff and Finley

8. As stated in my judgment, I affirmed the decision of the Master. I only varied the order as to who should pay the costs. Finley's argument was that he was not personally liable for the costs in the first place. He was unsuccessful. This being the case, Finley should bear the plaintiff's costs of the appeal.

9. There should be no order as to costs on the amendment by the plaintiff of the summons. No substantial costs was incurred as a result of the amendment.

2) Costs between the plaintiff and the defendant

10. The defendant was granted leave by Findlay J to take part in the appeal. The intervention was caused by the plaintiff obtaining the wrong relief from the Master. The plaintiff is to bear the costs of the defendant in the appeal.

11. There shall be no order as to costs on the correspondence that the defendant had entered into with the plaintiff, many of which were on the statutory demand and on matters before the Master ordered Finley to pay the costs to the defendant.

12. On 9 July 1999, Finley issued a summons returnable on 12 July applying for a stay of execution of the order made against him pending the determination of the appeal. The defendant had no objection to the application. The plaintiff's solicitor objected to the application. As a result the defendant had to attend the hearing of the application for stay. The Master reserved the costs of the application. As between the plaintiff and Finley, Finley is liable to pay the costs of this application. For the defendant's costs, the plaintiff should be liable because the defendant's presence was really caused by the wrong order being obtained from the Master.

13. The plaintiff should seek independent legal advice whether she can recover these costs from her present lawyers.

COSTS OF THE BANKRUPTCY PETITION

14. The bankruptcy petition was heard together with the appeal by Finley. The defendant did not obtain a bankruptcy order against the plaintiff. I shall make no order as to costs on the bankruptcy proceeding.

COSTS OF THE HEARING ON 22 DECEMBER 1999

15. Each party should bear its own costs.