THAPA HARI BAHADUR v. PARAMOUNT ENGINEERING & MANPOWER AND ANOTHER

HCPI 408/2016

[2022] HKCFI 1305

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO 408 OF 2016

____________

____________

_______________

D E C I S I O N

_______________

Background

1.  In 2016, the Plaintiff issued the writ, seeking damages for personal injuries. He was legally aided. The Defendants made a sanctioned payment in the sum of $100,000 on 26 July 2019. The last date for acceptance was 23 August 2019. The Plaintiff did not accept it. The legal aid certificate was discharged on 22 December 2020. The sanctioned payment was re-opened on 10 September 2021 when the Plaintiff was acting in person. The Plaintiff did not accept it either. After trial, on 31 January 2022, this Court handed down judgment dismissing the Plaintiff’s claim for damages and ordered, on a nisi basis, that the Plaintiff should bear the Defendant’s costs on indemnity basis with certificates for 2 counsel.

2.  This is the Defendants’ application for variation of the costs order, seeking enhanced interest of 10% or 5% above the judgment rate for costs incurred after expiry of the time for accepting the sanctioned payment up to the date of the judgment; and payment out of the sanctioned payment to the Defendants.

3.  On 16 February 2022, this Court gave directions on the filing of affirmations and written submissions with a view to disposal of the application on paper. Neither the Plaintiff nor the Director of Legal Aid (“DLA”) have filed any affirmation in opposition or written submission. However, DLA has reached a settlement with the Defendants.

4.  Since the Plaintiff has failed to beat the sanctioned payment, the costs consequence under Order 22 rule 23(4)(b) of the Rules of the High Court, Cap 4A should follow unless it is unjust. The Defendants ask for enhanced interest on costs incurred after 23 August 2019.

5.  The Defendants invite the Court to either:

(1)  Make a detailed calculation of the full enhanced pre-judgment interest on each payment of costs from the actual date of each payment to the date of judgment; or

(2)  Reduce the enhanced interest by half but apply it to the whole period from the last day on which the plaintiff could have accepted the sanctioned payment without leave to the date of judgment.

Enhanced interest on costs

6.  Under Order 22, rule 23(4)(b), the Court may award a rate of interest that can be greater than purely compensatory to provide the appropriate incentive to defendants to engage in reasonable settlement discussions and mediation aimed at achieving a compromise, to settle litigation at a reasonable level and at a reasonable time, and to mark the Court’s disapproval of any unreasonable or improper conduct: OMV Petrom SA v Glencore International AG (No.2) [2017] EWCA Civ 195, §§38-39, Sir Geoffrey Vos, Chancellor of the High Court.

7.  The Court should take into account all the circumstances of the case, including the factors in Order 22, rule 23(6).

8.  In Yeung Ho Man v Shum Kin Leung & anor [2020] HKCFI 2781 (PI case), the plaintiff did not accept the sanctioned payment and his claim was dismissed after trial. Bharwaney J found that the plaintiff was a blatant and unmitigated liar in prosecuting his claim. He engaged in various exaggerated theatrics to mislead the court and the experts and fabricated evidence. The learned judge awarded enhanced interest at 10% above judgment rate having regard to the egregious character of the plaintiff’s conduct(§§17,23).

9.  In Angbuhhang Netra Jang v Liang O’Rouke Construction Hong Kong Limited & anor[2021] HKCFI 232 (PI case), Lisa Wong J strongly disapproved of the litigation conduct of the plaintiff in giving a new version of the accident on the first day of the trial which altogether changed the complexion of the case on liability. The learned judge was also convinced that the plaintiff ha d manifestly exaggerated his case on quantum in terms of the physical injuries that he sustained, the residual pains and impairments left by such injuries, his earnings and whether and when he could have resumed his pre-accident occupation (§§11-12). The plaintiff had failed to accept 4 sanctioned payments totalling $800,000. He was ordered to pay enhanced interest on costs at 10% above judgment rate(§14).

10.  In Ki Tak Yan v The Incorporation Owners of Kam Yuen Building, Boundary Street [2021] HKCFI 1148 (PI case), the plaintiff refused to accept 2 sanctioned payments totalling $800,000. After trial, the amount of employee’s compensation exceeded the assessed damages for personal injuries. Whilst K Yeung J disapproved of the plaintiff’s conduct in exaggerating multiple facets of his case, he held that 6% above judgment rate would be proportionate and sufficient on the facts of that case to show the Court’s disapproval (§36).

11.  In the present case, the Court found “egregious exaggeration of the Plaintiff’s symptoms” (§136), feigning of symptoms which caused the trial to be adjourned (§137) and dishonesty in the pursuit of a claim for $9 million (§138). The sanctioned payment was made at an early stage in July 2019. Had the plaintiff accepted it, then together with employee’s compensation and interim payment, the Plaintiff would have received over $400,000. His refusal to accept the sanctioned payment was totally unreasonable, which wasted much of the court’s resources, legal aid funds, Defendants’ costs and even public medical resources. In the circumstances, I have no hesitation in ordering the Plaintiff to pay enhanced interest on costs at the statutory maximum of 10% above judgment rate.

12.  As the Defendants have identified the costs incurred and the dates of each payment, the option in paragraph 5(1) above is preferred.

Agreement with DLA

13.  DLA will have to pay the Defendants’ costs and enhanced interest on costs up to and including 22 December 2020 when the legal aid certificate was discharged. As the Defendants have reached an agreement with the DLA that the enhanced rate should be at 5% above judgment rate, I make an order accordingly, that this rate should apply to each payment of costs incurred between 24 August 2019 and 22 December 2020 from the respective dates of payment by the Defendants up tothe date of Judgment on 31 January 2022.

Order

14.  I order as follows:

(1)  The costs order nisi in paragraph 148 of the judgment made by the Honourable Madam Justice Au-Yeung on 31 January 2022 be varied and replaced by the following:

“(a)  The Plaintiff do pay the Defendants’ costs of the action to be taxed on indemnity basis, if not agreed, with certificates for 2 counsel;

(b)  The Plaintiff do pay the 1^st and 2^nd Defendants enhanced interest:

(i)  at 5% above judgment rate on each payment of costs incurred between 24 August 2019 and 22 December 2020 from the respective dates of payment by the Defendants up to the date of judgment on 31 January 2022; and

(ii)  at 10% above judgment rate on each payment of costs incurred since 23 December 2020, from the respective dates of payment by the Defendants up to the date of judgment on 31 January 2022.”

(2)  There be payment out of the sanctioned payment together with interests accrued to the Defendants.

(3)  Cost of this application be paid by the Plaintiff, to be taxed if not agreed, also on indemnity basis.

15.  I thank Mr Simon Wong for his assistance.