I can't help much with the capbadge, but I can say he's a Warrant Officer class1 (Regimental Sergeant Major), not an officer. As such he would have been awarded the MBE (military).
Going back to the capbadge, it doesn't appear to have any Gurkha connection as their capbadges usually feature crossed Kukris (first image below). It seems to feature a five pointed star surrounded by laurel leaves and surmounted by a George VI crown. A five pointed star is most unusual, so maybe it's some device that looks like a star. I don't think it's the 10th Battalion the Paddington Rifles, although it's similar (second image). Hope scrimnet will pop in soon and help you out.
