HUMPHREYS ESTATE (FORRESTDALE) LTD v. UNISTRESS BUILDING CONSTRUCTION LTD

HUMPHREYS ESTATE (FORRESTDALE) LTD v. UNISTRESS BUILDING CONSTRUCTION LTD

The court held that in an arbitration context Order 73 r.14(3) must be read literally and the court retains an unfettered discretion to order payment out without requiring the payer's consent; distinguishing Gaskins on the basis that its policy concerns do not apply to arbitrations. Applying the test from Cumper, Humphreys failed to show a sufficient and substantial change in the risks since payment into court to justify reducing the sum; accordingly the application to reduce was refused and Unistress was granted leave to take out the full $3.3m, with costs ordered as agreed.

Citation
HUMPHREYS ESTATE (FORRESTDALE) LTD v. UNISTRESS BUILDING CONSTRUCTION LTD
Parties
Plaintiff and Defendant (cross Actions): UNISTRESS BUILDING CONSTRUCTION LTD; Defendant and Plaintiff (cross Actions): HUMPHREYS ESTATE (FORRESTDALE) LTD
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
16 March 1992
Case Number
HCMP3311/1991
Procedural Posture
Arbitration Payment Into Court Dispute / Interlocutory Applications on Payment Out and Reduction (cross Summonses)
Outcome
Humphreys' application to reduce the payment into court refused; Unistress granted leave to take out the full sum of $3,300,000; costs orders made in favour of Unistress as agreed.
Legal Topics
Payment Into Court, Order 73 Rules 11 18, Jurisdiction to Order Payment Out, Reduction of Payment in, Procedure for Withdrawing or Reducing Payment, Precedent Gaskins V British Aluminium
Source Language
EN
Arbitration Civil Procedure Contract Costs Payment Into Court Order 73 Rules 11 18 Jurisdiction to Order Payment Out Reduction of Payment in +2 more

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Parties

UNISTRESS BUILDING CONSTRUCTION LTD

Plaintiff and Defendant (cross Actions)

HUMPHREYS ESTATE (FORRESTDALE) LTD

Defendant and Plaintiff (cross Actions)

Procedural Posture

Arbitration Payment Into Court Dispute / Interlocutory Applications on Payment Out and Reduction (cross Summonses)

Legal Issues

  1. 1 Whether court has jurisdiction to allow payment out after arbitration has commenced and after the two‑day acceptance period expired
  2. 2 Whether the defendant's consent is required for a payment out application once arbitration has begun
  3. 3 Whether there has been a substantial change in risks since payment into court to permit reduction

Ratio Decidendi

The court held that in an arbitration context Order 73 r.14(3) must be read literally and the court retains an unfettered discretion to order payment out without requiring the payer's consent; distinguishing Gaskins on the basis that its policy concerns do not apply to arbitrations. Applying the test from Cumper, Humphreys failed to show a sufficient and substantial change in the risks since payment into court to justify reducing the sum; accordingly the application to reduce was refused and Unistress was granted leave to take out the full $3.3m, with costs ordered as agreed.

Court Disposition

Humphreys' application to reduce the payment into court refused; Unistress granted leave to take out the full sum of $3,300,000; costs orders made in favour of Unistress as agreed.

Orders

  • Unistress permitted to take out the sum of $3,300,000 paid into court.
  • Humphreys' application to reduce the payment into court to $2,719,582.20 refused.