GURUNG JOU BAHADUR v. DRAGAGES HONG KONG LTD AND ANOTHER

HCPI 43/2017

[2026] HKCFI 742

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO 43 OF 2017

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BETWEEN

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REASONS FOR DECISION ON COSTS

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1.  On 30 September 2025, this court handed down judgment in this case after trial (“the Judgment”) whereby the claim was dismissed with a nisi costs order (“the Nisi Costs Order”). Both defendants apply to vary the Nisi Costs Order. I allowed the application. These are my reasons.

2.  The same definitions and abbreviations in the Judgment are adopted for the present purpose.

3.  By the Nisi Costs Order:

(1) Gurung shall pay the Defendants’ costs of this action, including any costs reserved, to be taxed if not agreed; and

(2) Gurung’s own costs up to the discharge of his legal aid shall be taxed in accordance with the Legal Aid Regulations.

4.  On 13 October 2025, the Defendants filed the summons (“the Summons”) to vary the Nisi Costs Order. At the conclusion of the hearing on 4 November 2025, I allowed the application and granted the following order:

(1) Gurung do pay the Defendants their costs of this action (including all costs reserved if any), to be taxed on the High Court Scale, if not agreed, up to and including 26 July 2024;

(2) Gurung do pay the Defendants their costs of this action (including all costs reserved if any), to be taxed on the High Court Scale and on indemnity basis, if not agreed, after 26 July 2024;

(3) Gurung’s own costs up to the discharge of his legal aid (i.e. 27 January 2022) be taxed in accordance with the Legal Aid Regulations;

(4) The Defendants’ Notice of Sanctioned Payment of HK$315,000 into Court on 28 June 2024 (the “Sanctioned Payment”) together with interest accrued, if any, be paid out forthwith to the Defendants through their solicitors Norton Rose Fulbright Hong Kong; and

(5) Gurung do pay the Defendants’ costs of the Summons, to be taxed if not agreed on party-and-party basis, with certificate for counsel.

5.  The factual background, dispute and findings set out in the Judgment refer. For the present purpose, I also set out the following pertinent chronology of events.

6.  The accident happened on 29 June 2015 whereby Gurung allegedly sustained sprain injury to his back at work. In mid-July 2016, he filed his application for employees’ compensation (DCEC 1501/2016). The present action was commenced in mid-January 2017.

7.  Gurung became legally aided in early October 2017.

8.  The employees’ compensation claim was settled in mid-June 2018 in the sum of HK$409,184.65.

9.  On 27 January 2022, notice of discharge of Gurung’s legal aid was issued. He has since been acting in person.

10.  On 28 June 2024, the Defendants made a sanctioned payment in the sum of HK$315,000 on top of employees’ compensation mentioned above (the “Sanctioned Payment”) in settlement of the whole of Gurung’s claim. The last date for acceptance of the Sanctioned Payment without leave of the Court was 26 July 2024.

11.  Worth noting is that the notice of the Sanctioned Payment was accompanied by a letter from the defendants’ solicitors dated 28 June 2024 whereby it was explained to Gurung the potential consequences of non-acceptance of the Sanctioned Payment under O.22 r.5(7) of the Rules of High Court (“RHC”).

12.  Gurung did not accept the Sanctioned Payment by 26 July 2024 or at all.

13.  On 30 September 2025, I handed down the Judgment, as mentioned, dismissing Gurung’s claim against the Defendants for failing to establish liability.

14.  There is no dispute that Gurung failed to obtain a better result at trial than the Sanctioned Payment.

15.  O22, r23 RHC provides that:

“(1) This rule applies where a plaintiff—

(a) fails to obtain a judgment better than the sanctioned payment; or

(b) fails to obtain a judgment that is more advantageous than a defendant’s sanctioned offer. [...]

(3) The Court may order the plaintiff to pay any costs incurred by the defendant after the latest date on which the payment or offer could have been accepted without requiring the leave of the Court.

(4) The Court may also order that the defendant is entitled to—

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

(b) interest on the costs referred to in paragraph (3) or sub-paragraph (a) at a rate not exceeding 10% above judgment rate.

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

(6) In considering whether it would be unjust to make the orders referred to in paragraphs (2), (3) and (4), the Court shall take into account all the circumstances of the case including—

(a) the terms of any sanctioned payment or sanctioned offer;

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

(c) the information available to the parties at the time when the sanctioned payment or 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 payment or offer to be made or evaluated.

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

16.  O22A, r1 RHC provides:

“(1) Subject to Order 22, rule 17, any money paid into court in an action (whether or not in accordance with Order 22) may not be paid out except in pursuance of an order of the Court which may be made at any time before, at or after the trial or hearing of the action.

(2) Where an order under paragraph (1) is made before the trial or hearing and the money in court is a sanctioned payment made in accordance with Order 22, the money may not be paid out except—

(a) in satisfaction of the cause or causes of action in respect of which it was paid in; or

(b) to the extent to which the sanctioned payment may be withdrawn or diminished pursuant to Order 22.”

17.  The issue is whether it would be unjust for the court to make an order under O22, r23. The burden was on Gurung to show that it would be, if the court did so, in the circumstances of the case. However Gurung was absent from the hearing. Nor has this court received any written submission from him in opposing the Summons.

18.  Considering the circumstances of the case, including the further chronology of events summarised above, and the Defendants’ submissions, I in any event saw no reason why it would be unjust to make the order. I should therefore make the order as required by the rule.

19.  I also had no problem with the Defendants’ application for release from court of the Sanctioned Payment, following the outcome of this case.

20.  Hence the order made on 4 November 2025.