COSMOS PRINTING PRESS LTD v. TUNG CHOW METAL FACTORY LTD

HEADNOTE

                Whether it should be specifically pleaded that a claim for interest for the period before the date of judgment is contractual or under a statute for default judgment in the District Court.

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RULING EX TEMPORE

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1. This matter is referred to me by the Deputy Registrar concerning interest for the period from the date of writ to the date of judgment. The short question is, as I see it, whether the basis for such claim must be specifically pleaded either in the Particulars of Claim or in the Prayer, namely on contractual basis or under section 49 of the District Court Ordinance. Since my Ruling in the Hong Kong and China Gas Co Ltd and Top City Co. Ltd. ⁽¹⁾ to the effect that it must be so pleaded, I have had the benefit of the Ruling of my brother His Honour Judge Downey in TSANG Sing-wah, ⁽²⁾ the effect of which is diagonally opposite to my said Ruling. Upon further and careful consideration of the matter in all the aspects and from different angles, I have reached the same conclusion as my brother Downey did but for reasons different from his. It is therefore necessary for me to set out my reasons for this Ruling.

2. Possibly due to my own shortcoming of being too brief in my Ruling on the Hong Kong and China Gas Co. Ltd., it was not emphatically stressed that that Ruling of mine was only for a claim of interest under an application for judgment in default before a Deputy Registrar of a District Court, and not for any other purposes like in a judgment after a full trial. It must also be emphasised that Order 18, Rule 8(4) of the English Rules of the Supreme Court that a party must plead specifically in claim for interest has no application to Hong Kong as we have not adopted it. I did say "With very much in mind that Order 18, Rule 8(4) of the Rules of Supreme Court in England (see page 267 of the 1985 Edition of Volume 1, White Book) has not been incorporated in the Rules of Supreme Court in Hong Kong, I am of the opinion and so rule that the matter should be specifically pleaded". My brother Downey and I are in fact of one mind that a Judge can award interest for the period before the date of judgment whether or not interest is pleaded let alone the basis for it. This general power, however, must not be mixed up with the singularly relevant consideration for the award of interest in a default judgment, the law on which may be succinctly set out by citing the Supreme Court Practice 1982, Volume 1, Para. 3 at page 141 as follows:-

3. One can readily see from the above that in England a claim for interest in a default judgment must be accompanied by a special plea of the basis for it, whereas a Judge at the end of the trial or a Practice Master on assessment of interest may award interest even if the claim for it is not specifically pleaded not to mention its basis.

4. Riches v. Westminster Bank, Limited ⁽³⁾ referred to by my brother Downey was a case in which interest was awarded after a full trial with the award of interest as a minor aspect of the case. With uttermost respect, I agree to disagree that that case is relevant to our purposes.

5. In this case as in the previous cases before my brother Downey and me, I venture to say that the solution hinges on whether the English law and practice as above summarised by quotation should apply to default judgment in a District Court of Hong Kong.

6. Section 49 of the District Court Ordinance, as rightly pointed out by my brother Downey, was modelled on section 3 of the Law Reform (Miscellaneous Provisions) Act 1934. I refrain from quoting both sections in order to save space and time and suffice it to point out that the main differences between them are under our section 49(3)(a) interest is awardable "whether or not it is expressly claimed" and "(c) in the case of a judgment entered by default or by order of the Registrar, by the Registrar", both of which are peculiar to Hong Kong. (For our purposes, the Registrar includes a Deputy Registrar of the District Court - see sections 2 and 14 of Cap. 336) In practice, an application is submitted to the Deputy Registrar under Rule 22 of the District Court Civil Procedure (General) Rules for default judgment and it is he who enters judgment practically as a matter of routine in the absence of complication. This must be contrasted against the English practice of entering judgment in default by virtually signing and registering in the Central Office or the District Registry in the High Court there. In other words, it is done by mere 'rogistration' with a clerk in England in contradistinction to it is being done by a Deputy Registrar, District Court who is acting as a Practice Master albeit a layman. It is mechanical in England while there is a human touch in Hong Kong. As correctly stated in the White Book above quoted, the Practice Master may award interest on being satisfied of the fact that interest is due even if such interest is not pleaded. As I have said, a Deputy Registrar in Hong Kong plays the role of the Practice Master in England in this context. If one doubts that, one needs only turn to section 49(3)(a) and (c) which empowers him to award interest whether or not it is pleaded.

7. I have given further consideration to the possible argument how could a Deputy Registrar be expected to award interest for the period before the date of judgment if he was not told of the basis for such award. Attractive as it may be at first sight, such argument really does not hold water upon deeper thought. There could be only two sources of basis for awarding such interest and they are statutory, i.e. under section 49 or contractual. When there is no indication on the pleadings that the basis for the claim is contractual, it must follow as a matter of irresistible inference if one likes (and not as a matter of presumption or speculation) that the basis is bound to be statutory, and that the Deputy Registrar is in effect asked to exercise his discretion pursuant to section 49. It simply goes without saying and cannot be otherwise. In this regard, I have not lost sight of subsection (2)(b) of section 49 that the whole of section 49 shall not apply "in relation to any debt upon which interest is payable as of right whether by virtue of any agreement or otherwise" which may open up the argument that a Deputy Registrar needs to know the basis for claiming interest in order to rule out (2)(b). But this argument cannot be sustained as it is obvious that the only basis on which a Deputy Registrar is to exercise his discretion must be under section 49 in the absence of any indication that interest is being claimed on contractual basis. His position is for practical purposes, the same as that of a Practice Master in England, who can award interest without any special pleading for it or for its basis.

8. It follows that I have reached the same conclusion as my brother Downey did albeit with uttermost respect not for the reasons as stated in his Ruling but for the reasons stated in this Ruling, particularly the two preceding paragraphs hereof. I further direct Deputy Registrar, Victoria District Court to exercise his discretion in this case on what interest should be awarded to the plaintiff under section 49.

9. I should also mention that I quote the 1982 Edition of the White Book for the reason that Order 18, Rule 8(4) of the Rules of the Supreme Court in England (see page 267 of the 1985 Edition of Volume 1 of White Book) which we all agree has no application to Hong Kong whatsoever had not yet visited the 1982 Edition. 1982 is therefore more relevant to our purposes than the 1985 Edition at page 113 the penultimate paragraph that states the same English law and practice in somewhat different language.

10. For avoidance of the slightest doubt in the mind of any Deputy Registrar, it may be desirable, as it will be very easy to do so, to specifically plead the basis of claim for interest for the period before the date of judgment, but I cannot, for my reasons above stated, rule that this must be a mandatory requirement of pleading.

(1) VCJ 12127 of 1984

(2) KCJ 25850 of 1984

(3) 1943 2 All E R 725