LIN RUIQING as the Administratrix of the estate of CHEUNG HIN FAI, deceased v. YUNG RUN YEW DANIEL (formerly known as YUNG DING LEUNG DANIEL)

HCPI 988/2017

[2026] HKCFI 3294

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO 988 OF 2017

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D E C I S I O N    O N    C O S T S

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1.  On 26 January 2026, this court handed down the judgment (“the Judgment”) after trial in the absence of the defendant (“Yung”). Judgment was entered against Yung in favour of the plaintiff (“Madam Lin”) in the sum of HK$3,778,528 (“Judgment Sum”) with interest as well as costs ordered on a nisi basis (“the Nisi Costs Order”).

2.  By summons filed on 6 February 2026 (the “Summons”), Madam Lin applies to vary the interest rate on damages and the Nisi Costs Order in the following terms:

(1)  Yung do pay Madam Lin the costs of this action (including all costs reserved, if any) with certificate for counsel up to and including 21 December 2020 on a common fund basis, to be taxed if not agreed;

(2)  Yung do pay Madam Lin the costs of this action (including all costs reserved, if any) with certificate for counsel from 22 December 2020 until 26 January 2026 and thereafter until full payment on the basis of a 3-day trial on an indemnity basis, to be taxed if not agreed;

(3)  Yung do pay to Madam Lin interest on damages for bereavement and funeral expenses from the date of service of writ until 21 December 2020 at the judgment rate, and from 22 December 2020 to 26 January 2026 at the enhanced rate of 5% per annum above the judgment rate, or at any rate the court determines otherwise;

(4)  Yung do pay to Madam Lin interest on damages for pre-trial loss of dependency and special damages from the date of death until 21 December 2020 at half judgment rate, and from 22 December 2020 to 26 January 2026 at the enhanced rate of 5% per annum above half judgment rate, or at any rate the court determines otherwise;

(5)  Yung do pay to Madam Lin interest on the damages (assessed as HK$3,778,528) from 27 January 2026 at the enhanced rate of 5% per annum above the judgment rate until payment in full, or at any rate as the court determines otherwise;

(6)  Yung do pay to Madam Lin the costs of and occasioned by the Summons with certificate for counsel, on an indemnity basis, to be taxed on the High Court Scale if not agreed;

(7)  Yung do pay to Madam Lin interest on the Madam Lin’s costs stipulated in paragraphs 2(2) and 2(6) above incurred after 22 December 2020 until payment in full at the enhanced rate of 5% per annum above judgment rate, or at any rate the court determines otherwise; and

(8)  Madam Lin’s own costs of this action be taxed according to the Legal Aid Regulations.

THE PRINCIPLES

3.  O22 r24 of the Rules of High Court, Cap 4A provides that:

“(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.”

4.  Where the rule applies, the burden is on the defendant to show that it is unjust for the court to make an order under O22 r24(2) and (3): see for instance CEP Ltd v Wuxi Jiacheng Solar Energy Technology Co Ltd [2016] 1 HKLRD 960 at §31. The court shall consider all the circumstances including those set out under O22 r24(5).

5.  The appropriate enhanced interest rate within the range not exceeding 10% above the judgment rate is a matter of the court’s discretion to be exercised according to the circumstances of the case: see for instance OMV Petrom SA v Glencore International AG (No 2) [2017] 2 Costs LR 287.

6.  The background, dispute and findings were set out in the Judgment which will not be repeated. The same definitions and abbreviations in the Judgment are adopted for the present purpose.

MAKING THE ORDER

7.  On 23 November 2020, those acting for Madam Lin made a sanctioned offer to Yung with a view to settling the issue of liability, namely that the assault by Yung on the Deceased tortiously caused the injury and eventual death of the Deceased (“1^st Sanctioned Offer”). According to the affidavit evidence, the written offer was delivered by hand and signed in acknowledgement of receipt on 23 November 2020. On this basis, the last date for acceptance without leave of the court was 21 December 2020. Yung did not do so at all.

8.  On 17 March 2025, those acting for Madam Lin made a second sanctioned offer to Yung to settle the action in a sum of HK$3,653,350 (inclusive of interest) plus costs on the High Court Scale (“2^nd Sanctioned Offer”). The written offer was served at the address provided by Yung in his notice to act in person filed on 9 January 2023. That was not accepted either.

9.  Indisputably Madam Lin did better than her offers. The court shall make the orders in accordance with O22 r24(2) and (3) unless it is unjust to do so. The burden is on Yung to show that it would be the case if the order is made. Yung was absent from the hearing of the Summons. Nor has any written submission been lodged by him in opposition.

10.  Yung acknowledged receipt of the 1^st Sanctioned Offer personally. The situation regarding his subsequent service address, which applied at the time when the 2^nd Sanctioned Offer was made, was discussed in §§115-121 of the Judgment, and will not be repeated. Further, Madam Lin was very much left without choice but to proceed with the claim all the way to conclusion notwithstanding the apparent inaction and the high likelihood of absence from the trial on the part of Yung. There is no reason why she might not make use of O22 r24 to enhance the protection of her costs position instead of resorting to the normal part-and-party costs, and hence definite out-of-pocket consequence, even in the event of success in obtaining judgment. This is so even though Madam Lin is legally aided.

11.  I see nothing unjust in making the order pursuant to the rule.

ENHANCED INTEREST

12.  In Imran v Intrafor Hong Kong Ltd [2024] HKCFI 100 and Gurung Romi v Pizzaexpress (Hong Kong) Limited [2024] HKCFI 1199, this court rehearsed different courts’ consideration in different cases of the appropriate enhanced interest rate.

13.  In the present case, Yung pleaded his defence in denial of liability but did not carry that through and eventually abandoned legal representation. Madam Lin had to proceed to bring the action to a conclusion. Yung’s utilisation of the address of those previously acting for him, instead of his own residential address, as his service address when acting in person invited sceptical view in the circumstances. Acceptance of the 1^st Sanctioned Offer would have resolved the issue of liability only, and it was not until the 2^nd Sanctioned Offer made merely months before the trial, which, if accepted, would have concluded the litigation without trial. All things considered, I take the view that around 4% above judgment rate per annum should be appropriate.

14.  When applying the above enhanced interest rate on costs, the court has two alternative approaches. The traditional approach is to calculate the interest on each item of expenditure from the actual date of payment whereas the modified approach is to order interest at half the rate which the court would otherwise order for the whole of the relevant period: see Golden Eagle International (Group) Ltd v GR Investment Holdings Ltd [2010] 3 HKLRD 273 at §18. This was discussed further in Shih Pik Nog v G2000 (Apparel) Ltd [2011] 4 HKLRD 121 at §18.

15.  The principles behind the two approaches were recently and fully rehearsed in Chan Wai Chung v China Travel Service (Hong Kong) Ltd & Anor [2023] HKCFI 1442. The court stated, amongst other things, that in the event the successful legally aided party seeks enhanced interests on costs but does not provide any information on the costs and disbursements incurred after the expiry of deadline of the unsuccessful party to accept the sanctioned offer, the modified approach would be appropriate especially when the litigation has lasted for quite some time.

16.  No submission was made on the approach. Nor was there evidence of the dates and items of costs incurred and paid by or on behalf of Madam Lin. The circumstances therefore differ from the even more recent application of the relevant principles in Cheung Hon Kin v Chubb Life Insurance Company Ltd (formerly known as New York Life Insurance Worldwide Ltd v Ace Life Insurance Company Ltd. respectively) [2024] HKCFI 3623 at §§22-26 where the traditional approach was considered to be appropriate.

17.  In the circumstances of this case, I adopt the modified approach to enhancing interest on costs. Hence half of 4% above judgment rate on costs incurred since 22 December 2020 ie (8% + 4%)/2 = 6% per annum for the whole period until the date of judgment.

COSTS UNTIL 21 DECEMBER 2020 ON COMMON FUND BASIS

18.  Madam Lin asks for her costs of this action up to 21 December 2020 on a common fund basis. This is not a relevant period covered by the application of O22. In other words, there must be some exceptional features in the case such as conduct of proceedings on the part of Yung which warrants costs to be ordered against him on a higher than usual basis.

19.  Whilst Yung effectively resorted to inaction, particularly after acting in person, that per se without more does not afford Madam Lin with the basis for seeking costs of the action on a higher than usual basis. I do not take the view that the defence was from the outset put up without any genuine conviction in terms of the relevant law or the facts to be found. Nor do I take the view that Yung has conducted any part of the proceedings oppressively or abusively. Essentially, he just did not appear.

20.  In response of the inaction on the part of a defendant, the plaintiff could have proceeded either for summary determination notwithstanding the filing of defence, if so advised, or expeditiously to trial to prove his case even in the absence of the defendant. Further, as acknowledged by counsel, this case at one stage was affected by the intervention of the previous firm of solicitors acting for Madam Lin in mid-2019, which had nothing to do with Yung as the defendant. In any event, in case of concern about the extent of costs recoverable from the defendant in such circumstances, O22 provides the prescribed mechanism whereby the costs protection could be enhanced by the higher indemnity basis. Madam Lin indeed adopted that, albeit not before the end of 2020. The 2^nd Sanctioned Offer with a view to full settlement came only in March 2025, which was 4 months before the trial.

21.  Counsel refers to the discussion of Tai Chau Yung & Anor v Ng Jim & Anor [1999] 2 HKLRD 549 in Hong Kong Civil Procedure 2026 §62/App/8, Law Yin Pok Bosco v Dr Chan Yee Shing, HCPI 369/2010 (20 November 2012). However, the context of consideration in those decisions was the concern about the need to ensure no deduction from the damages would take place for any costs not recoverable by a person under disability from the defendant after taxation. This is therefore the norm that any settlement of claim involving interest of a person under disability pending approval of the court should entail his costs payable by the defendant on a common fund basis. This may not be borrowed in support of the application by Madam Lin in respect of this part of her costs of the action before the deployment of the O22 mechanism. Put differently, the submission of her counsel, if accepted, would invariably entail the entitlement of the plaintiff to seek costs on a higher basis merely because of his claim involves interest of a person under disability. There is no support for that.

COSTS ON THE BASIS OF A 3-DAY TRIAL

22.  I need not repeat my observation made in §§112-113 of the Judgment. The further submission of counsel for the present purpose, in my view, fails to address an important consideration, namely the reasonableness of the care and judgment exercised by the legal representatives in arranging witnesses to testify in the circumstances known and fairly expected in the present case. This goes directly to the question of reasonable costs and use of court resources, and the trial period allocated does not relieve the litigant(s) from such care and judgment to be assessed objectively.

23.  That said, upon further deliberation, this court is prepared to vary this part of the nisi costs order so that costs of the trial would be assessed on a 2-day basis.

ORDER

24.  Hence, the following order:

(1)  Interest on damages for bereavement and funeral expenses shall run at the judgment rate from the date of service of writ until 21 December 2020, and at 4% per annum above judgment rate thereafter until date of judgment;

(2)  Interest on damages for pre-trial loss of dependency and special damages shall run at half judgment rate from the date of death until 21 December 2020, and at 4% above half judgment rate thereafter until date of judgment;

(3)  The order that interest on the Judgment Sum from the date of judgment shall run at the judgment rate do stand;

(4)  Yung do pay Madam Lin the costs of this action (including all costs reserved, if any) up to and including 21 December 2020 on a party and party basis, and from 22 December 2020 on an indemnity basis, to be taxed on High Court scale if not agreed, with certificate for counsel;

(5)  Costs of the trial shall be taxed on the basis of a 2-day trial;

(6)  Yung shall pay enhanced interest on Madam Lin’s costs incurred after 21 December 2020 at 6% per annum until the date of the Judgment;

(7)  The order that Madam Lin’s own costs of this action shall be taxed in accordance with Legal Aid Regulation do stand;

COSTS OF THE SUMMONS

25.  Madam Lin further asks for costs of the Summons on indemnity basis with interest thereon at the enhanced rate.

26.  Whilst an order in respect of interest on any part of the damages awarded under a judgment is on its face final, O22 could only sensibly apply by way of a post-judgment application to vary. Costs would have to depend on the outcome and therefore yet to be argued if judgment is reserved. Hence an order under the judgment on a nisi basis, which becomes absolute only in the absence of application to vary. Unless the court somehow makes it a practice to also order interest on damages on a nisi basis, a party would hardly manage to invite the court to make such order as to interest on damages, when judgment is reserved, without thereby revealing possible argument with reference to circumstances attracting the application of O22. Revelation or indication to that effect before judgment is no doubt unexpected. As such, determination of an O22 application after judgment in respect of interest on damages and/or costs should be considered as part of the final judgment making process. I am therefore prepared to order costs of the Summons to be taxed on an indemnity basis.

27.  As to the interest on such costs, this court does not rule out previous instances of the court having ordered enhanced interest on costs of the application to vary a nisi costs order, including the decision in Ng Kin Yuen v Lai Chun Ho [2024] HKCFI 2274 cited by counsel. However, they do not therefore bind me into doing so. The O22 application came into existence, and costs came to be incurred for that, after the Judgment. Such costs so awarded become a judgment debt only now. There is in the circumstances no concern about unreasonable deprivation of compensation or costs incurred by the plaintiff during the period before judgment, which partly underlies the O22 mechanism and the court’s discretion to award enhanced interest on damages and costs incurred for the period before judgment.

28.  Hence, the costs of and occasioned by the Summons shall be paid by Yung to Madam Lin on an indemnity basis, to be taxed on High Court scale, if not agreed, with certificate for counsel. Madam Lin’s own costs in this respect shall be taxed in accordance with Legal Aid Regulations.