Liliau v Trading Company (Solomons) Ltd (No 2) [1983] SBHC 31; [1983] SILR 40 (24 February 1983)

[1983] SILR 40

IN THE HIGH COURT OF SOLOMON ISLANDS

Civil Case No. 20 of 1982.

LILIAU

-v-

TRADING COMPANY (SOLOMONS) LIMITED (NO.2)

High Court of Solomon Islands
(Daly C.J.)
Civil Case No. 20 of 1982

24th February 1983

Practice - judgment given - not perfected - jurisdiction to reconsider O. 45 High Court (Civil Procedure) Rules - damages - interest on - from service of writ - rate of.

Facts:

On 26th January 1983, on judgment being given, an application for interest was not pursued and no order was made. The same day a notice requested restoration of the case for argument on the issue of payment of interest.

Held:

Two matters arose:-

1. As to the jurisdiction of the court to reopen the case. The court had such jurisdiction “so long as the order had not been perfected” (Re Suffield & Watts Ex p. Brown (1888) 20 Q.B.D. 893 followed). Order 45(3) of the High Court (Civil Procedure) Rules merely stated that judgment pronounced in Court dated from the day of pronouncement. The remainder of the Order provided for a procedure which required entry in a “book ... kept for the purpose”. As the order had not been entered in that book it was not ‘perfected’ and the court had jurisdiction.

2. Interest on judgments for general damages could be awarded under section 3 of the Law Reform (Miscellaneous Provision) Act 1934. Such interest should be awarded at least from the time action is brought (Jefford v. Gee [1970] EWCA Civ 8; (1970) All E.R. 1202 followed). In the present case it should run from the date of service of the writ to judgment. The appropriate rate in Solomon Islands is 5% per annum.

Other cases considered:

He Harrison’s Settlement (1955) 1 All E.R. 185
Birkett -v- Hayes (1982) 2 All E.R. 710
Pickett -v- British Rail Engineering Ltd (1979) 1 All E.R. 774
Sukumia -v- S.I.P.L. (1982) SILR 142
Longa -v- Solomon Taiyo Ltd (1980-1981) SILR 239

For Plaintiff: K. Brown Esq.
For Defendant: F. Waleilia Esq.

Daly CJ: On 26th January 1983 I gave judgment in this case in the sum of $19,512.62 for the Plaintiff. This sum was by way of general damages for injury occasioned to the Plaintiff in circumstances for which the Defendant was found to be responsible.

At the end of the judgment I invited submissions on the question of interest. Counsel for the Plaintiff initially submitted that the same order should be made as in Longa v. Solomon Taiyo Ltd (1980-1981) SILR 239 and that seemed at one time to be consented to by counsel for the Defendant. However after further discussion the application was not pursued and no order was made.

The same day a notice requesting the restoration of the case for argument on the issue of payment of interest was filed and as a result the case was restored to the list for argument on 17th February 1983.

The argument raised two interesting points. The first is as to the jurisdiction of the court, the second as to the rate of interest to be awarded; if any interest is to be awarded at all.

As to the first point Mr Brown for the Plaintiff argued that the court had jurisdiction to reopen the case might reconsider any aspect of it until such time as the judgment was perfected. He based his argument on a number of authorities which it is not necessary for me to consider in detail as Mr. Waleilia for the Defendant accepts that general proposition. It will suffice if I quote the words of Fry L.J. in the English case of Re Suffield & Watts, Exp. Brown [1888] UKLawRpKQB 43; (1888) 20 Q.B.D. 693 which have been approved in subsequent decisions:

“... When an order or judgment of the High Court has once been perfected, the court has no jurisdiction to alter it. So long as the order has not been perfected the judge has a power of reconsidering the matter, but, when once the order has been completed, the jurisdiction over it has come to an end.”

Mr Waleilia argues that by virtue of Order 43 Rule 3 of the High Court (Civil Procedure) Rules 1964 the judgment of the court must be taken to have been “perfected” as at the date of pronouncement. Order 43 Rule 3 reads:

“3.Where any judgment is pronounced by the Court, the entry of the judgment shall be dated ‘as of the day on which such judgment is pronounced, unless the Court shall otherwise order, and the judgment shall take effect from that date: Provided that the order may direct that the judgment shall not be entered until a given date, in which case the judgment shall take effect from that date.”’

However this Rule must be read in the context of the other Rules in Order 43. Rule 1 requires “the party entering judgment” to take certain steps and following those steps for the judgment to be entered by the Registrar in a “book to be kept for the purpose”.

A similar point to that taken here was taken in Re Harrison’s settlement (1955) 1 All E.R. 185. In that case a judge having made an order, on hearing of a new development in the law, recalled the matter for further argument in open court and thereupon reversed his earlier order. It was argued that he had no jurisdiction to take this course. The first submission made was “that in general an order is made once and for all at the time when it is orally pronounced, and chariot thereafter be discharged or varied otherwise than on appeal”. As to this submission Jenkins L.J. in giving the judgment of the English Court of Appeal said (at page 188): -

“Few judgments are reversed and it would be unfortunate if once the words of a judgment were pronounced there were no locus poenitentiae. The appellants make a nominal concession to meet this difficulty by saying that the judge retains seisin of the matter so long as the parties are before him, but that, once the parties have left the court and the next case has been called, it is too late because the parties may have already acted on his oral judgment. Our answer to this is that, although the judgment dates from the day of its pronouncement, it is not perfected until drawn up, passed and entered, and anyone who acts on it beforehand must take such risk as there is that it will not be drawn in the form in which it was heard to be pronounced.”

In relation to the present submission the important words are “... although the judgment dates from the date of its pronouncement...” In my view, Order 43 Rule 3 does no more than confirm that this same situation obtains in Solomon Islands, that is, that although the date of pronouncement is the date which the entry in the book will show as the date of judgment, the entry itself may be made at a later date. Indeed that is bound to be so in most cases as the judgment must be drawn up and approved before entry. In this case, no entry of judgment has been made in the “book... kept for file purpose”, which is, the Registrar of High Court Civil Cases. Therefore the judgment, in the words of Jenkins L.J., has not been “drawn up, and entered” or, in a word “perfected”. It follows that, on a well established line of authority, I have jurisdiction to recall my earlier decision in relation to interest that there should be “no order”, and reconsider it. On application by the Plaintiff I have taken recalled my earlier decision and heard further argument on behalf of both parties.

The question of whether interest should be awarded on general damages and if so the rate at which it is to be awarded, has been a matter of some controversy in courts in the United Kingdom. The starting point is section 3 of the Law Reform (Miscellaneous Provision) Act 1934 of the United Kingdom Parliament which applies in Solomon Islands by virtue of Paragraph 1 to Schedule 3 of the Constitution. This reads:-

“3. (1) In any proceedings tried in any Court of record for the recovery of any debt or damages, the Court may, if it thinks fit, order that there shall be included in the sum for which judgment is given, interest at such rate as it thinks fit on the whole or any part of the debt or damages for the whole or any part of the period between the date when the cause of action arose and the date of the judgment:

Provided that nothing in this section -

(a) shall authorise the giving of interest upon interest; or

(b) shall apply in relation to any debt upon which interest is payable as of right whether by virtue of any agreement or otherwise; or

(c) shall affect the damages recoverable for the dishonour of a bill of exchange.”

This section gives the court a complete discretion in this case. In deciding upon the exercise of such a discretion, I observe that, whilst the decisions of courts in other countries may prove most helpful in considering the criteria upon which to approach the matter, this court is obliged to apply its own mind to all the circumstances and reach a decision on the basis of what is appropriate in Solomon Islands and to the case before it.

Again I do not consider it necessary to go in detail through the U.K. authorities. They reveal a conflict of views between the Court of Appeal and House of Lords. The “last reported skirmish available to me is contained in Birkett v. Hayes (1982) 2 All E.R. 710 in which the Court, of Appeal, whilst accepting that they were bound by a decision of the House of Lords to award some interest on general damages, reduced the amount to 2% per annum from the date of service of writ. In the case by which they were bound a (Pickett v. British Railways Engineering Ltd (1979) 1 All E.R. 774) the rate awarded was 9% per annum. This rate was no doubt based upon what the Court of Appeal had itself established as the guiding principle in Jefford v. Gee [1970] EWCA Civ 8; (1970) 1 All E.R. 1202 where Denning M.R. in relation to interest to be awarded on damages for a period before judgment said: -

“A better guide is, we think, the rate which is payable on money in court which is placed on short term investment account.”

The learned Master of the Rolls then analyzed the figures for such an investment over a period of time and taking the mean or average reached a figure of 6% p.a. By 1979 the rates on short term investment may well have increased.

In Jefford v. Gee (ab. cit) one finds too a succinct unclear expression of why a court should exercise its discretion to award interest on general damages. Lord Denning M.R said, at page 1209 g:

“In the words of Lord Herschell L.C. interest should be awarded “from the time of action brought at all events.” From that time onwards it can properly be said that a plaintiff has been out of the whole sum and a defendant has had the benefit of it.””

The Court of Appeal gave two grounds for its retreat from the sensible and straightforward approach which it had adopted in that case in calculating the rate of interest when it came to give judgment in Birkett v. Hayes (ab. cit). The first was that between the service of the writ in 1976 and judgment in 1981 there was in England “racing inflation” (see Denning M.R. at 713 g) and therefore the figure of the final judgment, which reflected purchasing power in 1981, was not a figure which should be the starting point for the award of interest as it was not this amount which the Plaintiff had, been kept out of for the previous 4 ¾ years. The argument goes on that if the award had been made in 1976 it would have been for a lesser amount and the defendant would be penalized if interest were to be paid on the higher amount.

The second is that even if the amount had been invested on short term investment, the interest payable would have been subject in the United Kingdom to income tax (see Denning M.R. at 713 h).

As regards the first ground, in Solomon Islands the period between service of writ and judgment is in general far shorter than in the United Kingdom. In this case the injury was suffered on 27th October 1981, the writ was issued on the 2nd April 1982, served on 5th April 1982 and judgment given after a contested trial on 26th January 1983. Again whilst we have had inflation in the period between April 1982 and January 1983 in common with most other countries, I do not think it could be described as “racing”. In Sukumia v. S.I.P.L. (1982) SILR 142 (Civil Appeal Case 11/1982) inflation between January 1982 and September 1982 was found to be 12½%. I consider that inflation should be taken into account in deciding upon interest to be awarded in these circumstances but the reduction will be of a much lesser order than that which would apply to a U.K. case such as Birkett v. Hayes (ab. cit).

As regards the question of income tax, the ground canvassed by the Court of Appeal in that case is totally inapplicable in Solomon Islands. Paragraph 20 of the First Schedule to the income Tax Act (Cap. 61) as read with section 12 of that Act exempts from income tax: -

“Interest on deposits made with any savings bank in Solomon Islands or on fixed deposit account with any bank in Solomon Islands.”

Thus income tax would not be payable here on a short term deposit.

Mr Waleilia, for the Defendant, whilst accepting the wide discretion of the court, draws attention to the fact that there was no claim in the pleadings for interest. He does not dispute that on the authority of Riches v. Westminster Bank Ltd (1943) 2 All E.R. 725 it is nevertheless open to the Court to make an award but submits that this failure to plead the claim should go to the exercise of the discretion of the court. I have considered this point and make two observations upon it. First, a party must be presumed to know the law and therefore must anticipate the possibility of a court making an award of interest even though not pleaded. In fact in Longa v. Solomon Taiyo Ltd (ab. cit), in which judgment was given on 18th January, 1982 (that is, before the writ in this action was issued) there had been an award of interest at 5% per annum. Second, the award of damages has usually been ordered to date from the service of the writ which, in the standard form, is silent on the question of interest. It has been suggested that the proper date “might in some cases be taken to be the date of a letter before action” (see Denning M.R. in Jefford v. Gee (ab. cit) at p. 1209 e). This suggestion has some force. Again the letter before action is unlikely to specify a claim for interest. This would indicate that the Defendant can find himself made liable to pay interest from a date earlier than that upon which a specific claim is made to that end.

A further point on the exercise of the discretion made on behalf of the Defendant was that there was no precedent in this jurisdiction in April 1982 for assessment of damages for loss of an arm and hence settlement was no easy matter. Counsel for the Plaintiff rightly observes that this was a case in which liability was disputed.

Bearing all these matters in mind, I have concluded that this is a case in which, in the exercise of, my discretion, I should award interest on damages prior to judgment. As to the rate, it is said that the rate for short term deposits in Solomon Islands range from 3½% for a month to 12% for one year. Taking into account inflation as, indicated in this judgment, the proper rate is, in my view 5% per annum on the award made of $19,512.62. In this case the interest is to date from service of the writ, that is, 5th April 1982 and to run to judgment.

Order accordingly.