IMRAN v. INTRAFOR HONG KONG LTD

HCPI 434/2020

[2024] HKCFI 100

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO 434 OF 2020

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D E C I S I O N

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1.  After trial, this court handed down judgment on 16 August 2023 (“the Judgment”) dismissing the claim of the plaintiff (“Imran”) against his then employer, the defendant (“Intrafor”), with costs on nisi basis. This is Intrafor’s application for variation of the nisi costs order.

2.  Unless otherwise specified, the same definitions and abbreviations in the Judgment are adopted for the present purpose.

3.  The dispute and findings set out in the Judgment will not be repeated here. Suffice to say that Imran failed to discharge his burden of proving liability on the part of Intrafor for the accident at work, and hence dismissal of his claim. Imran claimed total damages in excess of HK$4,000,000. This court found that the quantum of damages would have been HK$162,552.

4.  However, since this court also found that had liability been established, there would have been substantial contributory negligence, and that Imran has already received employees’ compensation in the sum of HK$500,000, his claim would have yielded nil award in any event.

5.  The claim was therefore dismissed with nisi order awarding costs to Intrafor to be taxed, if not agreed; and Imran’s costs up to the discharge of his legal aid certificate shall be taxed in accordance with legal aid regulations.

6.  By summons filed on 18 August 2023, Intrafor applies for the nisi costs order to be varied as follows:

(1)  Imran shall pay Intrafor’s costs of the action to be taxed if not agreed;

(2)  Intrafor’s costs incurred up to and inclusive of 16 December 2020, being the last date on which Imran could have accepted Intrafor’s sanctioned payment dated 18 November 2020 without leave of the court, to be taxed on party and party basis;

(3)  Intrafor’s costs incurred from and inclusive of 17 December 2020 onwards to be taxed on indemnity basis;

(4)  Imran’s own costs up to the discharge of the legal aid certificate on 27 January 2022 shall be taxed in accordance with the Legal Aid Regulations;

(5)  Intrafor shall be entitled to interest on their costs incurred from and inclusive of 17 December 2020 onwards at the rate of 2% above the judgment rate;

(6)  The sanctioned payments in the sums of HK$80,000 and HK$80,000 dated 18 November 2020 and 28 June 2021 respectively, together with the interest accrued thereon (if any), be paid out to Intrafor through its solicitors.

7.  Intrafor also asks for costs of the present application, to be taxed on indemnity basis, if not agreed.

The principles

8.  O22, r23 of the Rules of the High Court, Cap 4A provides that where the plaintiff fails to obtain a judgment that is more advantageous than a defendant’s sanction payment:

“…

(3) The Court may order the plaintiff to pay any costs incurred by the defendant after the latest date on which the payment … 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 … without requiring the leave of the Court; and

(b) interest on the costs referred to in paragraph (3) or subparagraph (a) at a rate not exceeding 10% above the 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 …;

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

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

…”

9.  It is the burden of the paying party, ie Imran, to show that it is unjust to make the order under O22, r23.

10.  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 OMV Petrom SA v Glencore International AG (No 2) [2017] 2 Costs LR 287.

11.  Counsel refers to the following instances from his research.

12.  Extreme cases involving complete lack of merits, untruthful account, egregious character and manifest exaggeration have attracted award by the court of enhanced interest rate near the top end of the range: see for instance Grupo Pacifica Incorporada v Worldwide Marine Product Ltd & Ors [2018] HKCFI 2584 at §§17, 19; Wong Giles v Donowho Simon Christopher & Anor [2020] HKCFI 1053 at §27; Yeung Ho Man v Shum Kin Leung & Anor [2020] HKCFI 2781 at §§17, 23; Angbuhhang Netra Jang v Laing O’Rourke Construction Hong Kong Limited & Anor [2021] HKCFI 232 at §§11-12; Thapa Hari Bahadur v Paramount Engineering & Manpower & Anor [2022] HKCFI 1305 at §11.

13.  The court has awarded relatively lower enhanced interest rate despite finding of exaggeration or dishonesty: see instance Ki Tak Yan v The Incorporation Owners of Kam Yuen Building, Boundary Street [2021] HKCFI 1148 at §36 (6% above judgment rate); Tse Lai Sing v Tung Wah Group of Hospitals [2021] HKDC 1095 at §16 (5% above judgment rate); Carrie Woo v Lui Mo Dock and Wong Miu Yung [2019] HKDC 348 (4% above judgment rate).

14.  For less serious cases, the court has awarded further lower enhanced rates: see for instance Maysun Engineering Co Ltd v International Education and Academic Exchanges Foundation Co Ltd [2011] 2 HKLRD 844 (2% above judgment rate); Chan Lap Kwan v Skypy Limited & Anor, HCPI 258/2012 (7 September 2016) (2% above judgment rate); Union Glory Finance Inc & Others v Merrill Lynch International Bank Limited & Anor, HCA 2494/2013 (13 December 2016) (2.5% above judgment rate); Tsang Chiu Yip v Ho Kwok Leung, HCPI 305/2013 (8 August 2016) (3% above judgment rate).

15.  The discrepancy between the claim put forward and the findings of this court as explained in the Judgment is obvious.

16.  Imran commenced the present action after he had already received his employees’ compensation in the sum of HK$500,000. The amount of the first sanctioned payment would have been better than nothing as he got after trial. The result would have been even better for him, had he accepted the second sanctioned payment. There is no suggestion that he was unable to evaluate his case and litigation risk. He decided not to accept the sanctioned payments while he was all along legally advised. He reiterated at the trial and the present hearing the insufficiency of the sanctioned payments to support him and family as he has become unemployable. That was and apparently still his stance. His legal aid was eventually discharged in February 2022.

17.  Considering the above circumstances, I accept counsel’s submission in answer to my query as to the appropriate commencement date for enhanced interest on Intrafor’s costs. It is not unjust to refer to the latest date on which Imran could have obtained a better result by accepting the first sanctioned payment and thus saving himself from his ordeal now.

18.  It is not shown that making the order under O22, r23 would be unjust in the present case. Nor would the enhanced interest rate of 2% above judgment rate requested by Intrafor be.

19.  Considering the circumstances explained by Intrafor’s solicitors by affirmation and counsel, I also agree to adopt the full rate instead of the modified approach in awarding enhanced interest at the abovementioned rate on Intrafor’s costs payable by Imran.

ORDER

20.  I therefore give an order in terms as sought by Intrafor. As to Intrafor’s costs of the present application, I have considered Intrafor’s statement of costs and given Imran the opportunity to address me on that (with the assistance of the interpreter) at the hearing. I summarily assess such costs in the sum of HK$42,000, which shall be payable by Imran to Intrafor within 14 days from the date hereof.