Wei Cuidan, Administratrix of the Estate of Ngai Tsang Keung, Deceased v. Ming Fung Engineering Corporation Ltd and Others

HCPI 972/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO 972 OF 2014

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REASONS FOR JUDGMENT

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1.The plaintiff beings this claim on behalf of the dependants and the estate of her deceased husband who suffered a fatal accident on 4 November 2011. At the time, he was acting in the course of his employment by the 1^st defendant at a construction site known as Phase 8 Development Project of the Hong Kong Polytechnic University, Chatham Road South, Kowloon. The 2^nd defendant was the principal contractor at the site. The accident involved a crane truck which had been leased by the 1^st defendant, together with its operator, from the 3^rd defendant.

2.The fatal accident occurred when the deceased was struck by an I-beam that was being lifted at the site by the jib of the crane truck that was operated by the 3^rd defendant’s crane operator.  At the time, two I-beams were being lifted together by using a single leg chain in a choker hitch.  Unfortunately, the two I-beams – which were not secured together – tilted and one of the two I-beams slipped out on one side, striking the deceased and causing him traumatic head and pelvic injuries from which he died.

3.Although the defendants initially disputed both liability and quantum, after the trial had commenced the defendants admitted 100% liability and the trial then proceeded as an assessment of damages.  Following further discussions between the parties, a substantial amount of agreement was reached leaving 2 issues in dispute:

(a)   firstly, whether the plaintiff, who had worked part time prior to the death of her husband, had pooled her income with the income of the deceased to create a joint pool of income from which the expenses of the family were met; and, if so, whether the formula in Coward v Comex Houlder Diving Ltd [1988], (unreported), EWCA Civ 18and Crabtree v Wilson [1993] P.I.Q.R. Q24ought to be adopted to assess loss of dependency; and

(b)   secondly, what were the notional future earnings of the deceased, had the accident not occurred; in particular, whether he would have passed the general welder’s certifying examinations, which he was scheduled to take in December 2011, and, if so, whether he would have gone on to become a general welder on construction sites, instead of pursuing his pre-accident work as a metal worker on construction sites.

4.The parties agreed the claims for bereavement and special damages, and how interest was to be awarded on these 2 heads of claim; they agreed that interest was to be awarded on pre-trial loss of dependency at 4% per annum from the date of the accident up to the date of payment of employees’ compensation, and that the latter was to be deducted from the gross damages awarded; they also agreed the award for net accumulation of wealth.  The parties agreed that the deceased, who was then 42 years of age, earned $20,000 per month at the time of the accident.  They also agreed to adopt the conventional approach established in Harris v Empress Motors [1984] 1 WLR 212 to assess loss of dependency; i.e. at 75% of the deceased’s notional earnings up to the time their children ceased to be dependants and, thereafter, at 66.6% of the deceased’s notional earnings. The parties agreed the post-trial multiplier for loss of dependency at 13.54 years and they also agreed that the children would cease to be dependent 3 years after the date of trial.

The first disputed issue

5.The Harris v Empress Motors approach is commonly applied when the deceased was the sole bread winner of the family and the widow (or widower) did not earn any wages or salary and did not have any other source of income to contribute to the family.  However, the situation is different in cases where the widow was also in employment prior to the death of her husband and, this is critical, she also contributed to the joint family pool. As succinctly summarized by the learned editors of Kemp & Kemp, The Quantum of Damages, Vol 1, Release 144: July 2017 at §29-041:

“The simple method set out above needs to be adjusted where the claimant, the widow or widower, worked both before and after the deceased’s death. In this case, there would have been joint pooled income and after the death there will be a sole income.

In such cases, the courts adopt the following approach which arose from the decision of the Court of Appeal in Coward v Comex [1988], (unreported), EWCA Civ 18.” [My emphasis]

The court must determine, as a question of act, whether or not there was a joint pooled income. There is no presumption that “there would have been a joint pooled income”.

6.In Butterworths Personal Injury Litigation Service Vol 1, Division II, Issue 149, the learned editors summarised the principle as follows:

Ҥ167 Where the surviving spouse also worked, and the family earnings were pooled, it is now conventional to use the joint family income as the starting point for this calculation, as described by Ralph Gibson LJ in Coward v Comex Houlder Diving Ltd:

“Where both are earning and pooling their net earnings, application of the same principle requires that one-third of the joint earnings be treated as spent for the benefit of each, and one-third for their joint benefit; and the justification for that is that a couple living together as a stable family are likely to divide their common resources fairly and equally.”

This presumption can be displaced by the evidence in any particular case, particularly with incomes outside the average range or families with particular characteristics …” [My emphasis]

7.Similarly, the editors of McGregor on Damages (19^th ed.) have stated^[1]:

“§39-045 What does remain clear is that, where the wife has been working before as well as after the death so that her earnings were already contributing to the family pool, the earnings after the death do fall to be taken into account. …

§39-046 The manner in which the wife’s working before and after the death affects the calculation of dependency was usefully dealt with in … Coward v Comex Houlder Diving. It had there been submitted by counsel for the wife that, in the absence of evidence of a different dependency, both husband and wife should be able to claim to be dependent to the extent of two-thirds of the other’s net earnings. Ralph Gibson L.J. was quite unable to accept such a contention; it was unrealistic not to bring into the equation the whole of the wife’s continuing net earnings against the two-thirds of the joint net earnings. “Expressed in terms of a formula”, he said, “the claimant’s dependency … is two-thirds of [the deceased’s] net earnings less one-third of her own net earnings; or it is two-thirds of the joint earnings less her own earnings.” Mathematically, the conventional 66.6 per cent of the husband’s net earnings is on this basis modified to produce for the widow just 50 per cent of those earnings should her own earnings in the joint pool equal half of her deceased husband’s; the percentage would drop to 33.3 should she be earning as much as her husband. …

§39-048 Two other conclusions may be drawn from this development in the law. The first is that the same result should follow where the contribution from the wife to the joint pool comes not from her earnings but from her private means. To the extent that she is relying on her own income for her support she is not relying on that of her husband and this will be true whether the income of her own is earned or unearned.  The second conclusion is that the conventional 75 per cent, used where there are dependent children in addition to the wife and mother, will also be modified so as to produce a lower percentage figure of dependency. The children will be dependent on both their parents in respect of the joint pool income while the wife’s dependency will be unaltered.”  [My emphasis] 

8.Assuming that the Harris v Empress Motors approach was appropriate, it was not disputed that, in a case of a husband and wife without children, where both husband and wife were earning and pooling their net earnings, the dependency was to be assessed by taking two-thirds of their joint pooled income and deducting, from that figure, the amount of the survivor’s income.  There was some controversy as to whether in a case of a husband and wife with children, where both husband and wife were earning and pooling their net earnings, the dependency was to be assessed by taking 75% of their joint pooled income and deducting from that figure the amount of the survivor’s income.  Having considered the judgment of Glidewell LJ in Crabtree v Wilson and having carefully gone over the calculations in his judgment^[2],  I am satisfied that this is the correct formula to apply.  Indeed, the editors of Kemp & Kemp, The Quantum of Damages, Vol 1, Release 144: July 2017 expressly state as much at §29-041:

“So the loss is 2/3 of the pooled income less the survivor’s own income if there are no dependent children and 75% of the pooled income less the survivor’s income if there are dependent children.”

At first blush, this formula appears to reduce the children’s dependency. However, as the editors of McGregor on Damages (19^th ed.) have explained in the passage cited above:

“The second conclusion is that the conventional 75 per cent, used where there are dependent children in addition to the wife and mother, will also be modified so as to produce a lower percentage figure of dependency. The children will be dependent on both their parents in respect of the joint pool income while the wife’s dependency will be unaltered. [My emphasis]”

There is no reduction of the children’s dependency on the deceased parent.  The formula assesses the children’s dependency on the deceased parent and removes from the calculation the children’s dependency on the surviving parent.

9.Assuming that the Harris v Empress Motors approach was appropriate, and assuming, further, that the pre-trial notional median monthly income of the deceased husband and surviving widow was $25,000 and $15,000 respectively, and that the post-trial notional monthly income of the deceased husband and surviving widow is $30,000 and $20,000 respectively, the following calculations can be made based on the formula in Coward v Comex Houlder Diving Ltd:

	Pre-trial	Post-trial
Deceased’s monthly income	$25,000 (median)	$30,000
Widow’s monthly income	$15,000 (median)	$20,000
Joint pooled monthly income	$40,000	$50,000
Harris v Empress Motors percentage	75% of $40,000 = $30,000	75% of $50,000 =$37,500 (during the period when the children remain dependent)	66.6% of $50,000 =$33,300 (after the children cease to be dependent)
Less Widow’s monthly income	($15,000)	($20,000)	($20,000)
Value of dependency (of  widow and children; and of widow only)	$15,000 per month	$17,500 per month	$13,300 per month

10.The factual dispute between the parties in this case turned on whether or not Madam Wei pooled her income with that of the deceased and whether or not she contributed towards the family expenses. At the time of his death on 4 November 2011, the deceased was 42 years old, Madam Wei was 41 years old and their 2 daughters were aged 19 and 13 respectively. They were both in full time education then. The elder daughter was studying at City University and the younger daughter was a secondary school student. It was not disputed that Madam Wei worked part time as a salesperson before and at the time of the accident and that she earned $14,000 at the time of the accident.

11.Madam Wei said in her witness statement dated 3 July 2015 that:

“12. The Deceased was a good husband, a good father, and also a filial son. He worked very hard so as to provide a better living standard for the family. He had no bad habit. Apart from being required to work overtime due to busy work, he would always come home right after work to stay with our two daughters and me.

…

14. At the time of the accident, the Deceased was earning approximately $20,000 per month and our monthly expenses were as follows:-

[1]	Rent	$4,200
[2]	Tuition fees for two daughters	$600
[3]	Tutorial fees for two daughters	$2,000
[4]	Stationery expenses, pocket money and Miscellaneous items for two daughters	$2,000
[5]	Food expenses	$4,000
[6]	Family dine out expenses	$800
[7]	Sundries	$1,000
[8]	Water, Gas and Electricity expenses	$800
[9]	Phone and internet expenses	$500
	Total:	$15,900

15.   The Deceased was a responsible person; he was responsible for the household expenses and would not allow “women” to pay.  I was a part-time salesperson at the time of the accident and my monthly salary was only about $14,000.  I like dressing up, so there was not much money left after my personal expenses.  I would only buy one or two pieces of clothes for my daughters occasionally.

16.   After the accident, we lost our main source of income for the family.  My income was not even sufficient to cover the expenses.  I was very anxious.  Since I had not received the employees’ compensation at that time yet, in order to support the family, I changed to work as a full-time salesperson since around April 2012, and was promoted to a supervisor in November 2013. Presently, my monthly earning is approximately $21,000.00 per month.  My eldest daughter is now studying at the university and my younger daughter is now studying Form 5 and is preparing for the public examination next year.  Thus, the tuition fees for my daughters and the tutorial expenses for my younger daughter are much higher now.  Also, due to inflation, our present household expenses are much higher than before the accident. 

17.   At present, my household expenditure is as below:-

[1]	Rent	$1,850
[2]	Tuition fees for my daughters	$5,700
[3]	Tutorial expenses for my younger daughter	$5,000
[4]	Stationery, pocket money and miscellaneous Expenses for my daughters	$2,000
[5]	Food	$4,000
[6]	Family dine out expenses	$800
[7]	Sundries	$1,000
[8]	Water, Gas and Electricity expenses	$800
[9]	Phone and internet expenses	$500
	Total:	$21,650

18.   As shown from the list above, the household expenditure is higher than the income that I currently earn, and I also need to pay my daily personal expenses for work.  The income really could not meet with the expenses.  At present, my family is relying on the employees’ compensation to support our expenses.”

12.In her evidence in chief, she said that her husband was the head of the household and he was responsible for family expenses. Although she was working part time, her husband was the man of the house and needed to be responsible for the expenses of the household. Her husband was responsible for paying the expenses listed in §14 of her first witness statement as set out above.  She did not pool her income with her husband’s income to form a family pool. She used to use her own bank account to make PPS payments to her children’s school to pay for their lunch but her husband would reimburse her and sometimes paid several dollars extra.  She used part of her own income to support her mother who was on medication.  From time to time she would buy presents and clothes for her daughters when they went shopping together.  This was in addition to the expenditure on the daughters that was paid by her husband. She liked to dress up and would use her own income to buy dresses watches and jewellery for herself.  After her husband passed away she had to work full time to support the family.  If he had not died, she would have only worked part time.

13.Under cross examination, she denied that she paid for supermarket purchases from her own income and reiterated that the money for the purchases was given to her by her husband. She agreed that there were increases in family expenditure after the accident but she denied that, with these increases, she would have contributed to the family expenditure even if the accident had not occurred. She agreed that her husband’s income fluctuated from month to month and that in January 2011 it was as low as $16,260 but she denied that she would have contributed to the family expenditure during those months when her husband’s income was low. That list did not include Madam Wei’s expenditure on her clothes and her other personal expenses.

14.I found Madam Wei to be a credible and truthful witness. She answered her questions in a straight forward manner. She was not shaken under cross examination. No bank account was produced showing any pooling of income. No documentary evidence was produced showing any pooling of income. Although Madam Wei had produced her bank passbook covering a later period, no application was made for discovery of her bank passbook that covered the period before and including the time of the accident.  The agreed income of the deceased at the time of the accident was sufficient to support his personal expenses as well as the entirely of the family expenditure listed in §14 of Madam Wei’s first witness statement set out above.

15.Her evidence was inherently probable in the context of a Chinese traditional family where the income of the head of the household was sufficient to support the family expenses and his own personal expenses.  Their daughters were not only dependent on their father but also on their mother to the extent that she made purchases for them. Madam Wei’s mother was solely dependent on her.  I have no hesitation in finding that Madam Wei did not pool her income with her husband to jointly support the family expenditure.

16.There are many modern families in Hong Kong in which husband and wife pool their incomes to support the family expenditure. In some cases, particularly among higher income earners or professionals, wives may be earning more than husbands.  It is a question of fact in each case whether or not the husband and wife pooled their income to support themselves or to support themselves and their children. If they have pooled their income, then the assessment of loss of dependency can be made based on the formula in Coward v Comex Houlder Diving Ltd.

The second disputed issue

17.The second disputed issue was what were the notional future earnings of the deceased, had the accident not occurred; in particular, whether he would have passed the general welder’s certifying examinations, which he was scheduled to take in December 2011, and, if so, whether he would have gone on to become a general welder on construction sites, instead of pursuing his pre-accident work as a metal worker on construction sites.

18.I have carefully considered the evidence I have received, and which I find to be truthful, from Mr Ngai Tsang Wai, the nephew of the deceased who often worked with him as a metal worker, and Mr Hui Keung, the sub-contractor who often engaged the deceased and Mr Ngai Tsang Wai to work on his projects. I find that the deceased would likely have passed the welding test that he was scheduled to take on 16 December 2011, a month or so after his untimely death.  I also find that he would have gone to change his employment as a metal worker to become a general welder on construction sites. I find, based on the relevant statistics from the Census and Statistics Department of the earnings of general welders in November 2014, that he would have been earning at the rate of about $1,300 per day by November 2014. I also find that he would have been working about 25 days a month.  The latter figure of 25 days is an average for the entire year and is reached on the basis that he would have taken some days off as holidays in the course of the year. Working 25 days a month at the daily rate of $1,300 will produce a notional income of some $33,000 per month by November 2014, taking also into account some extra overtime that he was likely to have earned.  Accordingly, I find that his notional median earnings from the time of the accident to November 2014 would have been $26,500 ($33,000 + $20,000/2).

19.I find further that his income would have risen in line with the increase in the wages of general welders as shown by the Census and Statistics documents from November 2014 onwards and that his likely notional income by the time of trial would have been $36,000, produced by multiplying a daily wage of $1,400 by 25 working days in a month, plus some additional overtime pay.  Accordingly, I find that his notional median earnings from November 2014 to the time of trial would have been $34,500 ($36,000 + $33,000/2).

The award of damages

20.I am grateful to counsel who have prepared detailed calculations based on these amounts and, based on following the table prepared by counsel, I have awarded damages as follows:

Item	Basis of Calculation	Figures
Pre-trial loss of dependency	Nov 2011 to Nov 2014 = $26,500 x 75% x 36 months = $715,500   Dec 2014 to Oct 2017 = $34,500 x 75% x 35 months = $905,625	1,621,125
Interest on pre-trial loss of dependency until Dec 2013 (Notice of Acceptance of EC claim dated 29 Nov 2013)	496,875 x 4% x 25/12	41,406
Post-trial loss of dependency (for the first 3 years post trial)	36,000 x 75% x 12 x 3	972,000
Post-trial loss of dependency (remainder of agreed multiplier)	36,000 x 66.6% x 12 x 10.54	3,035,520
Loss of Accumulation	Agreed	400,000
Bereavement	Agreed	150,000
Interest on Bereavement	Agreed	71,000
Special Damages	Agreed	200,000
Interest on Special Damages	200,000 x 8% x 71 months / 12	94,667
	Sub-Total	6,585,718
Less EC		1,305,000
	Grand Total	5,280,718

21.I have awarded pre-trial loss of dependency in the sum of $1,621,125. I have awarded interest on pre-trial loss of dependency from the time of the accident up to December 2013 in the sum of $41,406, being interest at 4% per annum on the pre-trial loss of dependency up to the time of receipt of Employee’s Compensation.

22.I have awarded post-trial loss of dependency for the first 3 years post trial in the sum of $972,000.  This is the three-year post-trial period when the children would remain dependent on the deceased, this being is a matter of agreement between the parties.  For the period thereafter, I have awarded $3,035,520, by taking 66.6% of the notional earnings of $36,000 and multiplying it with a period of the remainder of the agreed multiplier, which amounts to 10.54 years. There has been a calculation error here. I would apply the slip rule and amend my award of damages by reducing it by the sum of $3,036. Taking 66.6% of the notional earnings of $36,000 and multiplying it with a period of the remainder of the agreed multiplier, which amounts to 10.54 years, produces the sum of $3,032,484.  The difference between $3,035,520 and $3,032,484 is $3,036.

23.The other items are subject of agreement: loss of accumulation of wealth has been agreed in the sum of $400,000, and bereavement in the sum of $150,000.  Interest on bereavement is agreed in the sum of $71,000, being an award of 8% per annum from the date of death. Special damages in respect of funeral expenses are agreed in the sum of $200,000 and, applying the same interest rate of 8% per annum from the date of death, produces an agreed interest award of $94,667.

24.The gross total then comes to $6,585,718 from which the Employee’s Compensation payment of $1,305,000 has to be deducted, leaving a net award of 5,280,718, which is the amount of damages I have awarded to the plaintiff and which I now reduce by the sum of $3,036 to the sum of $5,277,682.

25.I have asked the plaintiff’s solicitors to give me a short note on how my award of damages ought to be apportioned between the estate of the deceased and the dependants, and between Madam Wei and the other dependants.

26.Following upon further submissions on costs, I made a costs order nisi that the defendants pay the plaintiff the costs of the action.

Mr Ashok K Sakhrani, instructed by Szwina Pang, Edward Li & Co, assigned by Director of Legal Aid, for the plaintiff

Mr Victor Gidwani, instructed by Chu & Lau, for the 1^st, 2^nd and 3^rd defendants