STANDARD CHARTERED BANK (HONG KONG) LTD v. CHEUNG CHI KEUNG

DCMP1877/2006

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO. 1877 OF 2006

______________________

______________________

DCMP1878/2006

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO. 1878 OF 2006

______________________

BETWEEN

______________________

______________________

R U L I N G

______________________

1.  The applicant appeals against the decision of Registrar Ko on 18 August 2006 in both these proceedings, DCMP1877 and DCMP1878 of 2006, of his refusal to include the judgment interest in the two charging orders on the defendant’s property, known as Flat H, 7th Floor, Block 3 Saddle Ridge Garden, 6 Kam Ying Road, Shatin, New Territories (hereinafter referred to as “the property”).

Background

2.  The plaintiff obtained two awards against the defendant under SCTC044979 of 2005 on 17 August 2005, and SCTC067855 on 30 November 2005, both by consent orders.  The SCTC044979 of 2005 award is as follows:

“	經雙方同意，現頒令如下：－
	1.	在沒有承認任何法律責任的情況下，被告人須支付申索人款項13,000元，以完全並最終解釋本案申索（及擬作之反申索）包括任何利息和訟費的申索。
	2.	款項須以下列方式支付：
		a.	按月分成兩期，首期繳付款額5,000元，而第2期則繳付款額8,000元；
		b.	首期款項須於2005年8月31日或之前繳付，而其後款項則須在2005年9月30日或之前繳付。
	3.	有關款項的任何一期或任何部分若有欠付，則整筆餘款須立即繳付及申索人可即時實施執行判決。”
The SCTC067855 order was as follows:
“	經雙方同意，現頒令如下：－
	1.	在沒有承認任何法律責任的情況下，被告人須支付申索人款項13,591.95元，以完全並最終解決本案申索（及擬作之反申索）包括任何利息和訟費的申索。
	2.	款項須以下列方式支付：
		(1)	按月分成14期，首期至第13期每期繳付款額1,000元，而最後一期則繳付款額591.95元。
		(2)	首期款項須於2005年12月24日或以前繳付，而其後款項則須在繼後每月的第26日或之前繳付。
		(3)	有關款項的任何一期或任何部分若有欠付，則整筆款項須立即繳付，申索人並可即時實施執行本命令。”

3.  The defendant failed to comply with the consent orders and the two awards remained wholly unsatisfied. 

4.  The plaintiff applied for a charging order of the defendant’s property pursuant to section 32 of the Small Claims Tribunal Ordinance and section 52A of the District Court Ordinance on 29 June 2006.

5.  The applications came before Acting Registrar Ko.  On his invitation to the plaintiff to make submissions that the charging order should include post-judgment interest on 18 August 2006.  The application to include post-judgment interest was rejected by Acting Registrar Ko.

The issue

6.  Miss Lo, counsel for the plaintiff, submits today that the Small Claims Tribunal made the awards and orders by consent of the parties.  These were made orders of the Small Claims Tribunal.  Section 33(3) of the Small Claims Tribunal Ordinance is as follows:

“	33.	Interest on awards
		(1)	The tribunal may include in the amount of an award interest at the rate specified in subsection (4) on the whole or any part of the sum claimed for the whole or any part of the period between the date when the cause of action arose and the date of the award.
		(3)	An award shall carry interest at the rate specified in subsection (4) on the aggregate amount thereof, or on such part thereof as for the time being remains unsatisfied, from the date of the award until satisfaction.
		(4)	The rate of interest specified for the purposes of subsections (1) and (3) shall be the rate from time to time applicable to judgment under section 50 of the District Court Ordinance, Cap.336.”

7.  Miss Lo further submits that the position is the same as in the Court of Appeal case of Grayfield Knitters Ltd v MBE Engineering Ltd CACV125 of 2006, unreported judgment on 26 April 2002, where Le Pichon JA held, in paragraph 4 of the Court of Appeal judgment:-

“		Section 50 of the District Court Ordinance (prior to the amendment made in 2000) provided as follows:
	‘	A judgment debt shall carry interest from the date of the judgment until satisfaction.’
		Post-judgment interest is mandatory in that it does not require the exercise of any discretion on the part of the judge.  Such interest does not arise unless the plaintiff first obtains a judgment in his favour.  It is a relief subsequent to judgment whereas pleadings are concerned with the plaintiff’s claim to judgment.”

8.  Miss Lo further relies on the judgment of Cons V-P in the Court of Appeal case of Elman v Elman CACV 98/1986 delivered on 5 December 1986, where the Vice-President cited section 50 of the District Court Ordinance and on page 5 of his judgment, in the penultimate paragraph, he said:

“	However the question at issue is not concerned with how a judgment or order is to be enforced, but with what is imported by law into the judgment or order itself.”
And in the last paragraph of his judgment, he said:
“	The summons taken out before the judge below asked that an order for the payment of interest be made.  I do not think that would be correct.  Interest is provided for by the statute.  It is sufficient for the court to say that the order falls within the statute.”

9.  The Elman v Elman case involved a question, whether the wife is entitled to interest for the period of the delayed payment.  The agreement made no provision for interest on the default of maintenance payment.  Miss Lo further relied on the fact that section 33(3) and section 50 of the District Court Ordinance have a similar effect.

10.  I agree with Miss Lo that we have a similar situation here.  The Small Claims Tribunal award is made an order of the court, which is similar to a judgment order in the District Court.  The plaintiff is entitled under section 32 of the Small Claims Tribunal Ordinance and section 52A of the District Court Ordinance to apply for a charging order against the defendant’s property.  Section 33(3) of the Small Claims Tribunal Ordinance and section 50 of the District Court Ordinance are in fact, if not identical, similar.  Both sections require the debtor to be liable for the judgment debt.  If the judgment remains unsatisfied the judgment debt should carry interest from the date of the judgment until satisfaction.

11.  Order 50/9A/40 of the Hong Kong Civil Procedure 2006, at page 764, states the following:

“Extent of the order - interests and costs (rr.1-9A) -

It has been held that though a charging order did not expressly provide for the payment of interest or costs, it did extend to both.  Reference was made to the purpose of the words in square brackets as to interest in PF 76 (Ezekiel v Orakpo) [1994] N.P.C.140, upheld at [1996] C.L.Y. 684, CA) It was further held in the Court of Appeal, allowing the judgment creditor’s appeal on this point, that interest falling due more than six years before the commencement of the instant proceedings was recoverable under the charge.  The right to include interest over a period of more than six years was not affect by section 20(5) of the Limitation Act 1980 (c.f. section 19(5) of the Limitation Ordinance Cap.347 Laws of Hong Kong).”

12.  It is therefore clear that while the two Small Claims Tribunal awards consisted of the agreed terms of the parties at the time, and no pre-judgment or award interest were provided for as intended, the awards need not provide for the post-judgment/award interest because it, in the words of Cons V-P, “has been provided for by statute”.

13.  I therefore allow the appeal and set aside the ruling of Acting Registrar Ko and costs to the Plaintiff to be included in the changing order.