FACV No. 28 of 2000
IN THE COURT OF FINAL APPEAL OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
FINAL APPEAL NO. 28 OF 2000 (CIVIL)
(ON APPEAL FROM CACV NO. 70 OF 2000)
Court: Mr Justice Bokhary PJ, Mr Justice Chan PJ, Mr Justice Ribeiro PJ, Mr Justice Litton NPJ and Lord Millett NPJ
Date of Determination: 25 April 2002
D E T E R M I N A T I O N
Mr Justice Bokhary PJ:
1. The determination of the Court on interest and costs will be given by Mr Justice Ribeiro PJ.
Mr Justice Ribeiro PJ:
2. Two questions were raised in the appeal. The first was as to whether the appellant, a purchaser under a contract for the sale and purchase of land, was entitled to rescind the agreement. The second was whether, if not, the respondent vendor was entitled to forfeit sums paid by way of deposit and part payment equivalent to 35% of the purchase price. The courts below had answered the first question negatively and the second affirmatively. This Court, with one member dissenting, allowed the appeal to the extent of holding that the answer to the second question should also have been "No".
3. The respondent was accordingly entitled to damages for breach of the contract (assessed by the trial judge at $33 million) but ordered to return the excess received by way of deposit and part payment. At the hearing of the appeal, the excess amount was taken to be $7.25 million. The parties now agree that this involved an arithmetical error and that the correct sum is $6.55 million.
4. This Court made an order nisi that each party should bear its own costs here and in the Court of Appeal. The parties were also directed to consult together with a view to agreeing the period and rate of interest payable on the amount ordered to be repaid with liberty to file written submissions for the Court's determination in the event of disagreement.
5. Such written submissions have now been received regarding the period and rate of interest payable and also as to whether the trial judge's award of 80% of the costs of the action in favour of the respondent should be varied in the light of the conclusions reached by this Court.
6. The appellant contends that it should be awarded interest at prime rate plus 1% on the $6.55 million sum as from 29 April 1998, the date when it started proceedings to recover the deposits. It also argues that the trial judge's award of 80% of the costs of the action, upheld by the Court of Appeal, was wrong in principle and that it should have 50% of those costs or, failing that, that each party should bear its own costs of the action or, in the further alternative, that it should not have to pay as much as 80% of the respondent's costs.
7. The respondent invites the Court to order interest on the $6.55 million to run only from the date of Deputy Judge Li's judgment published on 23 November 1999 at the rate that he adopted in respect of the $11.5 million awarded to the appellant at trial (ie, at the Bank of East Asia's 7 day deposit rate). It submits that the trial judge's award of 80% of the costs in its favour should be upheld.
Period and rate of interest
8. Until the trial, the respondent had refused to refund any part of the sums it had received by way of deposit and part payment. At the trial, it conceded that the $11.5 million paid under a supplemental agreement (as described in paragraph 4 of the Judgment) should be returned. However, it refused to repay any further part of the sums received under the agreement.
9. The sole basis for withholding the relevant sums was that they constituted deposits validly forfeited. This Court has declared that position to be wrong and that the sums taken were not true deposits and so were not liable to forfeiture. However, this Court also held that the appellant's liability in damages for breach of contract could be set off against its claims for a return of the purported deposits.
10. It follows, as the respondent argues, that until the purchaser's liability in damages...