WONG HUNG TAN THOMAS v. REGENT ENGINEERING COMPANY LTD (formerly known as UNIVIC BUILDING CONTRACTORS LTD) AND ANOTHER

DCPI 1673/2023

[2025] HKDC 1146

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

PERSONAL INJURIES ACTION NO 1673 OF 2023

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BETWEEN

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REASONS FOR DECISION

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THE SUMMONS

1.  By a Summons filed on 17 April 2025, the Plaintiff (“P”) seeks to vary the costs order nisi made in the judgment of this Court handed down on 8 April 2025 (“Judgment”).

2.  The basis of P’s application is that the 1^st and 2^nd Defendants (collectively “Ds”) had failed to do better in the Judgment than the sanctioned offer P had made on 13 January 2025 (“Sanctioned Offer”), justifying costs sanctions against Ds under O 22 r 24 of the Rules of the District Court, Cap 336H (“RDC”).

3.  Mr Jonathan Tsang of counsel, assigned by the Director of Legal Aid (“DLA”), appeared for P.

4.  Ds, acting in person, were absent at the hearing.

5.  Valid service of P’s Summons and the supporting affirmation filed on the same date (“P’s Affm”) having been effected, hearing of the Summons proceeded the in Ds’ absence.

6.  Ds did not file any affirmation in opposition of P’s Summons.

Conduct of the Parties

7.  As set out in P’s Affm and shown in the evidence, P had all along expressed eagerness to settle the case with a view to saving costs and time since the early stages of this action and from October 2023. P had made “without prejudice” settlement offers to settle globally this action together with the related employees’ compensation action (DCEC 1210/2022) against Ds (as the Respondents therein) shortly after Ds had filed the Defence.

8.  After the case was set down for trial on 3 December 2024, P put forward a reduced offer in the sum of $350,000 plus costs in full and final settlement of this action.

9.  Ds made no response to P’s settlement offers all along.

The Sanctioned Offer

10.  On 13 January 2025, P made a sanctioned offer under O 22 r 4 of the RDC in the sum of $270,000 (inclusive of interest but on top of the sick leave advance payments of $51,200 already received by P) plus costs (“Sanctioned Offer”).

11.  Ds did not accept the Sanctioned Offer and the action proceeded to trial.

The Judgment Sum

12.  After trial, this Court adjudged Ds fully liable and assessed damages for personal injuries payable by Ds to P as follows:-

PSLA	$200,000
Pre-trial loss of earnings and MPF	$120,874
Loss of Earning Capacity	$125,000
Special Damages	$11,565
Total:	$457,439
LESS: advance payment received:	($51,200)
Nett Total:	$406,239 (plus interest)

Legal Principles

13.  There is no dispute that the Sanctioned Offer was valid and was made in accordance with O 22 of the RDC. It was served on Ds’ then legal representatives Messrs S K Wong & Co.

14.  O 22 r 24 of the RDC provides:-

“(1) This rule applies where —

(a) a defendant is held liable for more than the proposals contained in a plaintiff’s sanctioned offer; or

(b) the judgment against a defendant is more advantageous to the plaintiff than the proposals contained in a plaintiff’s sanctioned offer.

(2) The Court may order interest on the whole or part of any sum of money (excluding interest) awarded to the plaintiff at a rate not exceeding 10% above judgment rate for some or all of the period after the latest date on which the defendant could have accepted the offer without requiring the leave of the Court.

(3) The Court may also order that the plaintiff is entitled to—

(a) his costs on the indemnity basis after the latest date on which the defendant could have accepted the offer without requiring the leave of the Court; and

(b) interest on those costs at a rate not exceeding 10% above judgment rate.

(4) Where this rule applies, the Court shall make the orders referred to in paragraphs (2) and (3) unless it considers it unjust to do so.

(5) In considering whether it would be unjust to make the orders referred to in paragraphs (2) and (3), the Court shall take into account all the circumstances of the case including—

(a) the terms of any sanctioned offer;

(b) the stage in the proceedings at which any sanctioned offer was made;

(c) the information available to the parties at the time when the sanctioned offer was made; and

(d) the conduct of the parties with regard to the giving or refusing to give information for the purposes of enabling the offer to be made or evaluated.

(6) The power of the Court under this rule is in addition to any other power it may have to award interest.”

DISCUSSION

15.  The adjudged nett damages after trial, totalling $406,239, are higher than the Sanctioned Offer of $270,000. There is no question that P had done better than what he proposed in the Sanctioned Offer, thereby rendering Ds liable to face the sanctions on costs and enhanced interest on damages adjudged prescribed under O 22 r 24(2) and (3) of the RDC.

16.  I have referred to the authorities and clear guidelines set out in the decisions of Lam J (as the PJ then was) in Golden Eagle International (Group) Ltd v GR Investment Holdings Ltd [2010] 3 HKLRD 273 and of DHCJ Simon Leung (as he then was) in So Sin Ying v J V Fitness Limited [2023] HKCFI 3352 referred to by P’s counsel.

17.  The burden is on Ds to show that it is unjust for this Court to award costs on an indemnity basis after the deadline date (ie 10 February 2025) on which Ds could have accepted the Sanctioned Offer without leave of the Court.

18.  Ds have not filed any affirmation in opposition to P’s Summons nor provided any reason, and none is shown from the evidence, that would in my view justify departure from the mandatory sanctions stipulated under O22 r 24(2) and (3).

19.  Considering all matters, it is in my view appropriate to award enhanced interest on the nett judgment sum and enhanced interest on costs on an indemnity basis against Ds after the deadline date of the Sanctioned Offer as from 11 February 2025.

20.  In respect of the enhanced interest on the nett judgment sum, I follow the approach adopted in So Sin Ying (supra) and consider the enhanced rate of 2% pa above the judgment rate reasonable.

21.  As to the appropriate rate of enhanced interest on costs, I would adopt the “modified approach” stated in Golden Eagle (supra), and award half of the full enhanced rate, which is taken to be 3% above the judgment rate (currently at 8.276% pa). The figure is rounded to 5.5% pa.

ORDER

Variation of Costs Order Nisi

22.  I made the following variation orders at the hearing:-

(1) The order in respect of interest on damages made under §§99 and 100 of the Judgment be varied as follows:-

(i) Interest on PSLA will run at 2% pa from the date of writ until 10 February 2025;

(ii) Interest on all pre-trial special damages will run at half of the judgment rate from the date of the Accident until 10 February 2025; and

(iii) Interest on the nett judgment sum of $406,239 will run at 2% pa above the judgment rate from 11 February 2025 until the date of the Judgment.

(2) The costs order nisi made under §105 of the Judgment be varied as follow:-

(i) Ds shall pay P’s costs of the action on a party and party basis up to 10 February 2025, and thereafter on an indemnity basis, to be taxed if not agreed;

(ii) Ds shall pay enhanced interest on P’s costs incurred from 11 February 2025 at 5.5% pa until the date of the Judgment; and

(iii) Interest on costs of P under §§(2)(i) and (ii) hereinabove shall be paid to the DLA.

Costs of P’s Summons

23.  There is no question that costs should follow the event, and that P should have costs of the Summons filed on 17 April 2025 against Ds.

24.  P seeks indemnity costs of the Summons. I refused to grant the same in the absence of evidence or submissions justifying indemnity costs which is penal in nature.

25.  I further ordered that costs of P’s Summons be to P, payable by Ds, to be taxed if not agreed, with certificate for counsel.

26.  P’s own costs be taxed in accordance with the Legal Aid Regulations.

27.  The order on costs of P’s Summons is nisi. In the absence of application from the parties to vary the same within 14 days, it shall become absolute.