George Seah SCJ:

The issue in this appeal falls within a narrow compass. It is whether the High Court has jurisdiction to award interest in excess of 8% per annum on a judgment debt?

It is admitted that every judgment debt shall carry interest. For the respondents it was submitted that the maximum rate of interest which a Judge is empowered to award from the date of judgment is 8% per annum. Learned Counsel for the appellant however, contended that the Court has jurisdiction to direct interest at 2% per month, the rate of interest which the parties have agreed.

We do not think it necessary to set out in detail the position of the Courts in England on the award of interest before judgment at common law or under statutory powers because this matter has recently been examined and reinstated extensively by Lord Brandon in giving the leading judgment of the House of Lords in the case of the President of India v. La Pintada Compania S. A. [1985] 1 AC 104. [see also Lord Wright's summary in Riches v.Westminster Bank [1947] AC 390]. It is sufficient if we summarise the position in England (as we understand it) by stating that before the Civil Procedure Act 1833 (Lord Tenterden's Act) the Courts in England could not give interest if there was an agreement to that effect express or implied or by merchantile custom. The common law position was modified by the 1833 Act and under s. 28 of that Act interest could be awarded if a debt or sum certain was payable by virtue of a written instrument at a certain time. Interest by way of damages was also allowed on all other debts or sums certain if a written demand for payment was made on the debtor giving him notice that interest would be claimed from the date of demand until payment, but interest on damages was only allowed by the statute in a limited class of actions which we need not outline here for they do not include breach of contract. These restrictions were adversely commented upon by Lord Herchell LC in London, Chatham & Dover Ry Co.v. South Eastern Ry Co. [1893] ACT 429. Some forty years later Parliament enacted the Law Reform (Miscellaneous Provisions) Act 1934 and s. 3(1) of the Act attempted to deal with the problems raised by Lord Herchell LC However, on the power of the High Court to award interest after judgments the position in England appeared to be governed by the Judgments Act 1838 and s. 17 provided that "Every judgment debt shall carry interest at the rate of four pounds per centum per annum from the time of entering up the judgment ... until the same shall be satisfied, and such interest may be levied under a writ of execution on such judgment." Under the 1838 Act interest was awarded only in respect of the period from the date of settlement or realisation. The statutory rate of interest of 4% per annum on the judgment debt remained the standard rate until 20 April 1971 because by virtue of Judgment Debts (Rate of Interest) Order 1971 made under s. 44 of the Administration of Justice Act 1970 which implemented the recommendation of the report of the committee on the enforcement of judgment debts (Cmnd. 3909 (1069) para 1168), the statutory rate of interest was raised to 7½% per annum. The statutory rate has been altered several times since s. 44 came into operation n 1971, e.g.:

Since 1 March 1977 the rate of interest was 10% per annum (see Judgment Debts (Rate of Interest) Order 1977 (SI 1977 No. 141));

Since 3 December 1979 it was 12½% per annum (Judgment Debts (Rate of Interest) Order 1979 (SI 1979 No. 1382));

Since 9 June 1980 it was 15% per annum (Judgment Debts (Rate of Interest) Order 1980 (SI 1980 No. 672));

Since 8 June 1982 it was14% per annum (Judgment Debts [Rate of Interest) Order 1982 (SI 1982 No. 696));

Since 10 November 1982 it was 12% per annum (Judgment Debts (Rate of Interest) (No. 2)Order 1982 (SI 1982 No. 1427)) and

Since 1 March 1986 it was 15% per annum (Judgment Debts (Rate of Interest) Order 1985 (SI 1985 No. 437)).

We turn now to conside