MARINER INTERNATIONAL HOTELS LTD v. ATLAS LTD AND ANOTHER

MARINER INTERNATIONAL HOTELS LTD v. ATLAS LTD AND ANOTHER

The court rejected adoption of HIBOR as the standard base rate due to volatility, variability of commercial loan terms and the need for consistency; having reviewed credit histories and comparative evidence the court concluded prime remains the appropriate base but reduced the margin to prime minus 0.5% as the fair compensation for the large deposit held over many years; statutory interest runs from the date of notice of termination, 30 June 1998, pursuant to s.48 HCO.

Citation
MARINER INTERNATIONAL HOTELS LTD v. ATLAS LTD AND ANOTHER
Parties
Plaintiff and 1st Defendant by Counterclaim: Mariner International Hotels Limited; 1st Defendant and Plaintiff by Counterclaim: Atlas Limited; 2nd Defendant: Hang Lung Group Limited; 2nd Defendant by Counterclaim: Sino Land Company Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
15 January 2008
Case Number
HCA10714/1998
Procedural Posture
Civil Contract (deposit) / Decision (in Chambers)
Outcome
Interest awarded at prime minus 0.5% from 30 June 1998; costs awarded to the plaintiff (Sino/Mariner) on a nisi basis.
Legal Topics
Return of Deposit, Statutory Interest, Rate of Interest (prime V Hibor), Date Interest Accrues, Judicial Discretion on Interest
Source Language
EN
Contract Civil Procedure Commercial Law Equitable Remedies Interest Return of Deposit Statutory Interest Rate of Interest (prime V Hibor) +2 more

Case Brief

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Parties

Mariner International Hotels Limited

Plaintiff and 1st Defendant by Counterclaim

Atlas Limited

1st Defendant and Plaintiff by Counterclaim

Hang Lung Group Limited

2nd Defendant

Sino Land Company Limited

2nd Defendant by Counterclaim

Procedural Posture

Civil Contract (deposit) / Decision (in Chambers)

Legal Issues

  1. 1 Appropriate base rate for interest on returned deposit (prime v HIBOR)
  2. 2 Whether to depart from the usual margin of prime+1%
  3. 3 From which date statutory interest runs (date of notice of termination v dates of payment)

Ratio Decidendi

The court rejected adoption of HIBOR as the standard base rate due to volatility, variability of commercial loan terms and the need for consistency; having reviewed credit histories and comparative evidence the court concluded prime remains the appropriate base but reduced the margin to prime minus 0.5% as the fair compensation for the large deposit held over many years; statutory interest runs from the date of notice of termination, 30 June 1998, pursuant to s.48 HCO.

Court Disposition

Interest awarded at prime minus 0.5% from 30 June 1998; costs awarded to the plaintiff (Sino/Mariner) on a nisi basis.

Orders

  • Interest to be calculated at prime minus 0.5% from 30 June 1998
  • Add HKD 96159.30 representing one day's interest at the judgment rate for 2 February 2007