TSANG SING WAH v. POW KAM SHING AND ANOTHER

HEADNOTE

District Court - practice and procedure - interest - District Court Ordinance (Cap.336), section 49 - whether claim must be specifically pleaded.

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                The plaintiff sued in the District Court to recover the cost of repairs to, and damages for loss of use of, a motor vehicle, arising out of an accident allegedly due to the negligence of the defendants. No defence was filed to this claim, which is to be treated as a liquidated demand for the purposes of the District Court Civil Procedure (General) Rules (cf rule 22(9)). With a view to obtaining judgment in default, the plaintiff sought to amend the writ, by including in the body of the Particulars of Claim, a claim for interest under section 49 of Cap. 336, which had originally been included in the prayer

                 Held, allowing the amendment, the application was unnecessary, since the District Court Rules Committee has not made any rules requiring a claim for interest under section 49 of Cap. 336 to be specifically pleaded, and Order 18, rule 8(4) of the English Rules of the Supreme Court does not apply to proceedings in the District Court.

IN THE DISTRICT COURT OF HONG KONG

HOLDEN AT KOWLOON

CIVIL JURISDICTION

ACTION NO. 25850 OF 1984

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RULING

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1. On the 31st December 1984, the Plaintiff by a writ issued out of the District Court sought to recover from the defendants the sum of $12,032.76, being the cost of repairs to, and damages for loss of use of, the plaintiff's car, as a result of an accident allegedly due to the negligence of the defendants. On the same date, the plaintiff's solicitors gave notice of the proceedings to the defendants' insurers. Neither of the defendants, nor their insurers on their behalf, have filed any Defence or taken any step in this action.

2. Copies of the writ and the notice to insurer were served by ordinary post on the 2nd January 1985, in accordance with Rule 20(1)(b) of the District Court Civil Procedure (General) Rules (the District Court Rules). On the 18th January 1985 the plaintiff applied for judgment in default of defence, in accordance with Rule 22. Whether that application was premature, having regard to the amendment of Rule 20 by the District Court Civil Procedure (General) (Amendment) Rules 1985, is, perhaps, a moot point. This amendment was made by the District Court Rules Committe on the 10th January 1985, but not published in the Gazette until the 25th January 1985 (cf. L .N. 16/85). In any event, it was made in accordance with the provisions of the District Court Rules, as they were then generally known to litigants and legal practitioners.

3. By a summons, dated the 30th January 1985, the plaintiff sought leave to amend the writ, by including in the body of the Particulars of Claim, a claim for interest on the sum of $12,032.76. ...... at such rate as this Honourable Court deems fit from date of writ up to date of payment pursuant to section 49 of the District Court Ordinance Cap.336 ", notwithstanding that a claim for interest, in precisely the same terms, had been included in the original prayer! This application was made because the Deputy Registrar had, on the 23rd January 1985, written to the plaintiff's solicitors in the following terms:

The plaintiff s summons came before me today, when I made the order sought, although I was satisfied that the application was unnecessary, and merely obliged the plaintiff to incur substantial additional costs. As this is not the first application which was come before me as a result of such advice given by the Deputy Registrar, and is a matter of some practical concern to practitioners, I consider that it may be of some assistance if I put into writing my reasons for coming to these conclusions. Indeed, whilst the Deputy Registrar, in my view, acted perfectly properly in drawing attention to the ruling of Judge Li, I feel that I should do so, because I am satisfied, after full and respectful consideration of my brother's reasons in the case cited, that it was wrongly decided. In the position in which I now find myself (as, I believe, do other judges), I would respectfully adopt the words of Leggatt. J in Stewart v Oriental Fire and Marine Insurance Co. Ltd [1984] 3 W.L.R. 741 at p. 745:-

"Although there can be no benefit in having conflicting decisions at first instance, I am nonetheless persuaded that if I were fully satisfied that the Bedford case was wrong it would be my duty to say so, regardless of the temerity of such a conclusion."

4. It would seem that Judge Li's decision, that every claim for interest must be specifically pleaded in the Particulars of Claim, was based on his view that Order 18, rule 8(4) of the English Rules of the Supreme Court, although not incorporated into the Rules of the Supreme Court in Hong Kong, nevertheless applies in Hong Kong because it merely codified a long-established practice which had existed in England since the decision in Rodway v Lucas (1855) 10 Exch.667. With the utmost respect, that was not the position in England prior  to the introduction of Order 18, rule 8(4) of the English Rules of the Supreme Court. The note of the learned editor of the Supreme Court Practice 1982 (at page 141) indicates quite clearly that the decision in Rodway v Lucas, supra, had been modified by the enactment of section 3 of the Law Deform (Miscellaneous Provisions) Act 1934, and was confined to interest claimed as of right, by virtue of a contract of some other statutory provision. With respect, Judge Li overlooked this important qualification, when he quoted from the Supreme Court Practice 1982. He also overlooked the decision of the English Court of Appeal in Riches v Westminster Bank Ltd [1943] 2 All E. R. 725, which was, until the recent amendment of the statute and the Rules of the Supreme Court, clear authority for the proposition that a claim for interest under the 1934 Act did not have to be specifically pleaded. Whether interest is awarded by virtue of the 1934 Act has always been a matter for the exercise of the Court's discretion. In the case cited, the Master of the Rolls described as "ill-founded" an argument that such discretion could not be exercised, unless the pleadings were amended to include a claim for interest under the 1934 Act.

5. In my respectful view, Order 18, rule 8(4) did more than codify a long-established practice dating from 1855. As is pointed out in the supreme Court Practice 1985, it negatived Riches v Westminster Bank Ltd, supra, but only with respect to proceedings the High Court.  The 1934 Act still applies to proceedings in the English Court of Appeal - a distinction which is described as ''an unnecessary technicality which does not add to the simplicity of the judicial process." The new rule is a significant departure from the practice and procedure of the English Courts since the enactment of the 1934 Act. What was an unfettered discretion under that statute, is now "subject to rules of Court" as a result of the enactment of section 35A of the Supreme Court Act 1981.

6. In Hong Kong, the legislature has not amended section 49 of the District Court Ordinance (Cap. 336), which appears to be modelled on section 3 of the Law Reform (Miscellaneous Provisions) Act, 1934. Furthermore, neither the Supreme Court Rules Committee nor the District Court Rules Committee has thought fit to introduce rules to regulate the exercise o?the wide discretion conferred by the statutory provisions in force in Hong Kong. Even if Judge Li's understanding of the previous position in England is correct, no reason is given for his ruling that an amendment to the English Rules of the Supreme Court must be applied to proceedings in the District Court of Hong Kong. Although it would seem that the path of a litigantin the Supreme Court can be widened by a new rule made in England (of. Fong Shing Cotton Mill Hong Kong Ltd v CHAN Hing and others (1976) M.P.No. 566 of 1976; 27th October 1976), I know of no principle or authority which would support the proposition that his or her path to the Supreme Court, or the District Court, is to be obstructed by a change in the Law or Procedure in England.

7. Although the Court's discretion to award interest can be exercised "whether or not interest is expressly claimed" (section 49(3)(a) of Cap.336), I would accept that it is good practice for a plaintiff to give notice to the defendant of his intention to clam interest at the earliest moment. But, until the Rules Committee makes specific rules, I do not think that a plaintiff can reasonably do more than indicate that interest will be claimed under section 49 of Cap.336. Until the Court exercises its discretion at the time when judgment is entered, the rate and period cannot be predicted with certainty. In theory, but fortunately not in practice, the amount eventually awarded may vary, as the length of the proverbial Chanceller's font! In my view, a simple claim for interest in the prayer is sufficient. In the absence of more specific pleading, a defendant is entitled to assume that the plaintiff is merely inviting the Court to exercise its wide discretion, conferred by section 49 of Cap. 336.

8. In the present case, the plaintiff's prayer for interest gave the defendant fair notice of the extent or totality of the plaintiff's claim. Moving that prayer into the body of the pleading gives the defendant no additional information. Although the amount of interest cannot be ascertained, because it is within the Court's discretion, the defendant can still calculate the sum to be paid into Court, or to be offered to the plaintiff to settle the claim out of Court. If he pays, or offers to pay, interest at the rate specified in R.S.C. Order 13, rule 1(2), and the plaintiff contends that interest should be awarded at a higher rate, or from some date before the writ, a hearing will have to be fixed to assess the amount of interest. In that event, I imagine that the plaintiff would be at risk as to the costs of the further hearing. But, if, as in this case, the plaintiff is content to obtain judgment for a liquidated sum, by limiting his claim for interest to the specified rate and for the period from the date of the writ, it is, in my respectful view, grossly unjust to deny or delay that judgment by requiring him to go through costly and unnecessary procedural steps, simply to satisfy the cosmetic tastes of individual judges or court officials.

9. For the aforesaid reasons, I am of the view that a claim for interest under section 49 of the District Court Ordinance does net have to be specifically pleaded, unlike a claim for interest due as of right. A simple prayer to that effect is sufficient until the District Court Rules Committee otherwise requires.