Chung Sui Cheong the Administrator of the Estate of Chung Wai Man Joseph Deceased v. Tsang Wai Hung

HCPI 1058/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO 1058 OF 2015

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Before: Hon Wilson Chan J in Court

Dates of Hearing: 24 & 25 April, 16 May 2017

Date of Judgment: 3 November 2017

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J U D G M E N T

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A. INTRODUCTION

1.Chung Wai Man Joseph (“the Deceased”) died tragically in a car accident on 4 March 2013 at the age of 43.  His father is the plaintiff herein.

2.Interlocutory Judgment on liability was entered against the defendant on 5 November 2015.

3.This trial is concerned with quantum of damages only.

4.The hearing for assessment of damages for the current action took place on 24 April 2017 and 25 April 2017.  For the purpose of this assessment, the pre-trial period is taken as between 4 March 2013 to 4 March 2017 (ie 48 months).

5.The follow heads of damages are agreed between the parties: –

(1) Bereavement of $150,000 (with interest at 8% p.a. from date of accident to judgment);

(2) PSLA of $40,000 (with interest at 2% p.a. from date of service of writ to judgment); and

(3) Funeral expenses of $361,188 (with interest at 8% p.a. from date of accident to judgment).

6.The defendant mainly disputes the following: –

(1) The Deceased’s income at the time of the accident;

(2) That but for the accident, the Deceased would have continued to be employed by Disneyland at the same terms or better;

(3) The Deceased’s income at the time of Assessment but for the accident;

(4) Whether or not loss of dependency to the parents should be awarded and if so, the value of their respective dependency; and

(5) That loss of accumulation of wealth should be around $500,000, bearing in mind the vast uncertainties and substantial accelerated receipt.

7.During the assessment hearing, the plaintiff called 2 witnesses, namely Mr. Chung Sui Cheong (ie the plaintiff) and his wife, Madam Ng Siu King.  They adopt their respective witness statements as their evidence-in-chief.

8.The defendant submitted that their evidence is speculative and unreliable; and that they gave inconsistent and inherently improbable evidence in their oral evidence.  The defendant further submitted that they are evasive witnesses who shifted their evidence from time to time in order to suit their purpose.  

B.   DEPENDENCY CLAIMS UNDER FATAL ACCIDENT ORDINANCE

B1.   The Plaintiff’s claim on Loss of Dependency

9.In the Amended Revised Statement of Damages (“ARSOD”), the plaintiff’s claim on pre-trial dependency is pleaded as follows: –

(1) Monthly contribution: $5,000 in total for both parents;

(2) Meals: $1,500 per month for the share of the plaintiff’s and his wife’s meals out about once a week, which cost between $300 to 800 per meal.  That works out to be about $750 for each dependant; and

(3) Monthly rent: $8,000 for the apartment at Tung Hei Court owned by the plaintiff and his wife purchased under the Home Ownership Scheme offered by the Hong Kong Housing Authority.

(4) Total: $5,000 + $1,500 + $8,000 = $14,500 a month.

B2.   Monthly Contribution

10.The plaintiff’s case is that the Deceased would contribute about $5,000 per month, in cash, to the plaintiff and his wife as contribution for both of them.

11.The plaintiff did not adduce: –

(1) any evidence of bank transaction record, or

(2) any entries in the Deceased’s salaries tax return where he would have declared contribution to parents so as to enjoy tax deductions.

12.The defendant submitted that since there is no document evidencing actual payment of the alleged contribution, this item should be scrutinized by the court with caution.

13.The defendant further submitted that the plaintiff’s evidence on the contribution is inconsistent and unreliable.

(1) The plaintiff said that the Deceased would contribute about $5,000 to him monthly.  However, the plaintiff could only vaguely say that “sometimes the Deceased gives him $3,000, sometimes $5,000 per month, and one time when the plaintiff went on trip, the Deceased gave him $10,000”. 

(2) There is no sufficient evidential basis upon which he can substantiate the pleaded figure that the Deceased had and would have contributed $5,000 for each and every month before the accident and during the pre-trial period.

(3) In the Statement of Damages (“SOD”) at paragraph 2, it was pleaded that the Deceased would contribute about $59,334, which was 75% of his income, towards maintenance of the plaintiff.  This figure was drastically decreased to $14,500 in the current ARSOD.  When asked to explain the drastic difference between the SOD and ARSOD, the plaintiff only said he did not know why, he just told his lawyer and the lawyers calculated it and he has no idea how the lawyers make the calculation. The defendant submits that this was an evasive answer to cover up the fact that the plaintiff was merely plucking numbers out of the air in relation to contribution.  If the plaintiff was genuine about his claim, he should have pleaded $14,500 as the value of dependency when he signed the Statement of Truth to the SOD.

(4) There is no evidence on how often the plaintiff and his wife travelled before the accident.  The suggestion is that the Deceased might contribute as much as $10,000 when they travelled.  Given the uncertainty about the frequency of travel, the alleged higher contribution of $10,000 should not be taken as the upper range for calculating the average.

14.As for the plaintiff’s wife’s evidence, the defendant submitted as follows: –

(1) Her witness statement stated that she adopted all the plaintiff’s evidence as stated in his witness statement.  However, during cross-examination, it transpired that she had not read the English contents exhibits annexed to the plaintiff’s witness statement, despite the fact that she signed a Statement of Truth in vouching for the accuracy of the contents.  She was blindly supporting the plaintiff’s evidence.  It is clear that her evidence is unreliable in this regard. 

(2) The probative value of her evidence in the witness statement is therefore low for she was merely adopting what the plaintiff had written.  Such evidence was not given in her own words, which she should have.

(3) Her oral evidence is also evasive.  She gave multiple versions of how much the Deceased would contribute. 

(a) During cross-examination, the plaintiff’s wife accepted when the defendant put the case to her that if there was a contribution, the Deceased paid her every month at $3,000 to $5,000. 

(b) Subsequently, in re-examination, her evidence changed to “多數一定$5,000” (“mostly for sure $5,000”), and then “拉混$5,000” (“on average $5,000”), which in itself are contradictory concepts. 

15.The defendant submitted that the evidence of the plaintiff and his wife shows that the figure of $5,000 is clearly arbitrary and that the pleaded sum of $5,000 was obviously created for the purpose of this litigation.

16.For the reasons submitted by the defendant as set out above, I agree that under this head, at most $3,000 per month should be awarded.  Such a contribution is more in the nature of sporadic gifts to the parents, rather than contributions towards their household expenses and/or livelihood (which is a common feature in most dependency claims). 

17.The defendant’s alternative case of $3,000 a month would be a reasonable amount to be awarded given that the Deceased was not the only child of the plaintiff.  The other two children are all grown up and presumably earning.  If each contributed $3,000, that would be $9,000 per month, which is more than a reasonable amount to support two elderlies, given that the plaintiff has continuous pension income and rental income and the evidence suggests that they are reasonably well off financially.  A monthly contribution of $3,000 is partly supported by the evidence of the plaintiff.  If the Deceased had always contributed $5,000 a month, there is no reason for the plaintiff to provide a range of $3,000 to $5,000 in his evidence.

18.The plaintiff said in his oral testimony that the Deceased handed over the monthly contribution whenever they met over meals.  However, the wife said that the Deceased left the money at home whenever he visited them.  This is a slight but important inconsistency in the manner that the Deceased paid them.

B3.   Meals with Parents

19.In relation to the meal expenses, the defendant submitted there is no evidence at all regarding the occurrence of the “weekly meals” and the amount.  The plaintiff said the Deceased usually paid for the meals by credit card.  The burden of proof rests squarely on the shoulder of the plaintiff and I agree he has failed to discharge that burden in the current case.  The plaintiff has not identified from the credit card bills which item related to the meals.  It is not the duty of the Court or the defendant to guess which ones were incurred for such meals.

20.Given the evidence on the Deceased’s lifestyle and the frequency of his overseas trips, it is inherently improbable that the Deceased would have meals out with the plaintiff and his wife about once a week as alleged.

21.Further, given the fact that the Deceased was only one of the three children of the plaintiff and his wife, it is improbable that the Deceased would be responsible for meal payment every time.

22.The plaintiff’s evidence is that he and his wife liked Chinese yumcha.  Such kind of meal should not be too extravagant and the expenses should not be much for a table of 3 persons.

23.The defendant is prepared to accept that if the Deceased did in fact incur expenses on meals for his parents, it should be no more than once every two weeks, ie twice a month, at $300 per meal for 3 persons (ie the Deceased, the plaintiff and his wife).  The plaintiff admitted in his evidence that each meal was about $300 - $400 on average.  The defendant submits and I agree that for Chinese “yumcha”, $300 for 3 persons is a reasonable sum.  Accordingly, I am prepared to accept $300 x 2 = $600 per month as the value of meals. 

B4.   “Promise of Rental Fees”

24.The primary case of the defendant is that the plaintiff has failed to prove that the $8,000 promise was actually made by the Deceased. 

25.Alternatively, the defendant submits that even if the Court accepts that such promise was made, the claim should not be allowed for the reasons that: -

(1) It could not have been intended as a contribution, but as a “rent”, which was the pleaded case; and

(2) “Rent” should not be allowed as it is illegal.  It would be against public policy for the Court to enforce such a claim.

B4.1  No Promise to pay rent

26.The defendant submitted that the plaintiff has failed to prove the existence of such a promise made by the Deceased.  The promise of $8,000 “as rent in the form of contribution” is inherently improbable.

27.Significantly, the issue of rent was not mentioned at all in the original SOD.  The defendant submitted that the allegation of payment of $8,000 as rent was an idea which the plaintiff thought about after he had signed the SOD.  The SOD was signed in October 2015, which was only 7 months before the plaintiff signed his witness statement.

28.It is the plaintiff’s evidence that the Deceased promised to pay them $100,000 in aggregate after he received his end of contract gratuity to cover the $8,000/month of “rent to be paid in the form of contribution”.  The plaintiff also stated that the Deceased told him it was to “make them happy” and to make up for the fact that he had not increased contribution over all these years.

29.According to the plaintiff’s oral evidence, since the first time the Deceased got paid a salary, he paid his parents $5,000 a month.  From the CV of the Deceased, that was around the year 1996.  Up to the time of the accident, despite the numerous promotions and salary increments the Deceased had received over the course of around 17 years, the Deceased never increased the contribution.

30.In the circumstances, it is inherently improbable that the Deceased would suddenly, at this point in time, decide to increase the contribution a further $8,000, as alleged by the plaintiff. Despite all the other promotions/salary increments the Deceased enjoyed in the past and the level of the Deceased’s income, the Deceased never paid the monthly rent.  

31.The payment of $100,000 as aggregate of the $8,000 monthly rent is also illogical and without basis because the Deceased had been living in Tung Hei Court since September/October 2012 and he was to receive his end-of contract gratuity in March/April 2013. In other words, if the $8,000 per month formula is accepted, the total payment in aggregate should be $8,000 x 6 = $48,000, not $100,000. 

32.Further, it would have been unlikely for the Deceased to ever want to give up the whole of his year-end gratuity and offer that to the plaintiff as rent.  It would have made more sense for the Deceased to pay each month than to pay in one go.

33.In these premises, I agree that the plaintiff has failed to prove the existence of the alleged promise by the Deceased to pay $8,000 a month as contribution/rent.

B4.2  The alleged promise cannot amount to reasonable expectation of pecuniary benefit because it is illegal

34.Even if such a promise was made, it is undisputed that the $8,000 was never paid and it was a mere “promise” to pay (taking the plaintiff’s case at its highest).

35.Whereas the defendant does not dispute the viability of a claim of dependency where the dependant has a “reasonable expectation” of financial benefit from the Deceased, in the current case, the defendant submits that the plaintiff and his wife did not and could not have such “reasonable expectation”.  The expectation of pecuniary benefit has to be “reasonable” in order to be recoverable in law [see: McGregor on Damages, 19^th ed, paragraph 39-027].

36.The plaintiff and his wife could not expect the Deceased to have paid the rent for the next few decades because it was unreasonable to expect an illegal transaction to carry on uncensored.  It is unreasonable for the plaintiff and his wife to expect this Court to sanction such a rental transaction, which is forbidden by law.

37.Such “rent payment” is clearly illegal under the Home Ownership Scheme.  The plaintiff himself admitted in paragraph 26 of his Witness Statement that he was not allowed to rent it out by law so that when the plaintiff and his wife moved to the Grand Promenade (嘉亨灣) the Apartment had been left vacant.

38.In Wong Keung v Ng Kwok-leung, HCA 3143/1975, the deceased was knocked down by a light public bus driven negligently by the defendant.  The deceased made a living as an illegal street hawker.  Li J (as he then was) in considering the issue of dependency based on the illegal earnings, held that he must disallow the claim.  At paragraph 10 of his Judgment he says: –

“… It has been argued that, in the light of the case of Tam Choi... which approved the extension of the principle laid down in the case of Burns v. Edman …, the earning of an unlicensed hawker, is termed an illegal earning. As such whatever contribution out of such earnings, whatever dependency there might be on such earnings would not give a right of action on the principle of ‘ex turpi causa’. While for myself I find it rather difficult to assimilate the earning of an unlicensed hawker with the illegal earning of a criminal - criminal in the sense as we understand it - I am bound by the decision of the Court of Appeal here. I would not express any further opinion on this matter. Sufficient it is to say that when the contribution comes from the earnings from unlicensed hawking it appears that that decision puts a stop to any claim on that basis.”

39.In my view, the present case is a fortiori.  The illegality in letting out housing purchased under the Home Ownership Scheme and using “contribution” to cover up the illegality is far more serious than illegal hawking, especially in light of the housing shortage problem in Hong Kong and the fact that the Deceased was more than capable of renting private property elsewhere.  It would be an affront to the administration of justice to permit the plaintiff’s claim in this regard.

40.Therefore, I agree that even if the Court accepts there was such an agreement, the Court should still disallow the claim as the agreement is illegal. 

B4.3  The Plaintiff’s own view of the promise was unclear to form a reasonable expectation of pecuniary benefit

41.The plaintiff (and his wife) gave evidence that the Deceased had promised that he would pay rent in the form of contributions (“以家用形式交租”) at a rate of $8,000 per month, to be payable in aggregate of one year’s rental upon the Deceased receiving his end of contract gratuities from Disneyland.  

42.Even during the assessment hearing, the plaintiff’s and his wife’s evidence was inconsistent and muddled as to whether it was a “rent” or a “contribution” – which are of course two separate concepts. 

43.At one point when it was put to the plaintiff that the Deceased would at most contribute to him $3,000 - $5,000 but for the accident, the plaintiff answered that “the Deceased says he will increase a further $8,000 but only after receiving his end of contract bonus.  He said he had never increased his contribution to me, so this time give me more”. 

44.On the other hand, the plaintiff’s wife said twice in her evidence that the $8,000 was “當租用嘅形式當家用比” (that is, pay contribution in the form of rent).

45.Nonetheless, the plaintiff’s pleaded case in paragraph 5 of the ARSOD clearly states that the “Deceased had promised to pay to his Parents HK$8,000 per month as rent for his use of the Apartment.  It was the Deceased’s plan to pay his Parents 12 months’ rent in a lump sum from the gratuities he would receive from Disneyland in March 2013. Thereafter, he would continue to pay his parents rent of HK$8,000 a month and the Parents would not have sold the Apartment.”

46.In paragraph 6 of the ARSOD, the loss of pre-trial dependency pleaded 6 months of “unpaid rent” in arrears. 

47.From the ARSOD, there is no ambiguity that the plaintiff is claiming for “rent” and that clearly the $8,000 was for rent. 

48.No amendments to the ARSOD were made by the plaintiff to say it was a “contribution”.  The plaintiff is of course bound by his own pleaded case, which was verified by the plaintiff’s Statement of Truth. 

49.I agree with the defendant that the bare allegation of “paying rent in the form of contribution” or vice versa as raised by the plaintiff and his wife is merely to muddle the waters. 

50.I agree that the labelling of the rent as “contribution” is a recent fabrication because the plaintiff and his wife became aware that it was illegal to rent. 

B4.4  The rental arrangement with the Deceased was a business benefit

51.In any event, any such agreement, despite the labelling of the same as “以家用形式交租”, would still be in the nature of a “business benefit” to the plaintiff in essence. 

52.As stated in the Law Commission Report No. 263 at para 2.9, any loss of dependency must be based on “non-business benefit”: –

“…damages awarded under the Fatal Accidents Act 1976 generally compensate the loss of any non-business benefit that the claimant reasonably expected to receive from the deceased had the deceased continued to live (often referred to as “loss of dependency”). …”

53.In Burgess v Florence Nightingale Hospital for Gentlewomen [1955] 1 QB 349, the plaintiff and his wife, the deceased, were professional dancing partners, their income being derived from demonstration fees and prize money won prior to the accident. The wife died as a result of the negligence of a surgeon.  The plaintiff claimed damages under the Fatal Accidents Act 1846 for, inter alia, the loss of his wife as dancing partner and loss of her contribution to their joint living expenses.  Devlin J (as he then was), in finding there was no loss of dependency, held that the earnings did not arise from their relationship as husband and wife.  The relationship was a very convenient and usual incident of the partnership, but they had been professional dancing partners and shared an income for years even prior to their marriage.  The marriage is just a relationship superimposed on their dancing partnership.  As such, there was no real service rendered by the deceased to the plaintiff and there was no benefit arising in the dancing partnership that can properly be attributed to the relationship of husband and wife.  

54.In the present case, the alleged promise by the Deceased to make the monthly payment of $8,000 was on account of his occupation of the Tung Hei Court flat.  The parent-child relationship between the plaintiff and the Deceased was just a relationship superimposed on the landlord and tenant relationship between them.  As such, the promised payment cannot properly be attributed to the parent-child relationship giving rise to a claim of loss of dependency. 

B5.   Findings on Pre-Trial Loss of Dependency

55.For the foregoing reasons, I would only allow an award for loss of dependency for items B2 and B3 above (ie monthly contribution and meals expenses).  I am of the view that no more than $3,600 (being $3,000 for contribution and $600 for meals) per month should be awarded: $3,600 x 12 x 4 years = $172,800.

B6.   Findings on Post-Trial Loss of Dependency

B6.1  Monthly Contributions

56.The plaintiff claims in paragraph 9 of the ARSOD that in 1995 the Deceased contributed $5,000 per month, while at the time of the accident he contributed $5,000 + $8,000 which is a 160% increase.  It was also pleaded that the Deceased would have increased contribution to the maintenance of his parents, with a 20% increment for the duration of the parents’ lifetime. 

57.I agree with the defendant that there is insufficient evidence to prove on a balance of probabilities that the increase in the Deceased’s salary would lead to an increase in contribution to the plaintiff and his wife.

58.The Deceased’s pre-accident track record suggested that despite his previous increments, his monthly contribution had remained within the same range for years.

59.The alleged increment by $8,000 in 2012 was not supported by any documentary evidence and was not mentioned in the plaintiff’s witness statement. 

60.In fact, such claim is directly in contradiction to paragraph 18 of the plaintiff’s Witness Statement, where it was stated that:

“從他第一份工作第一次出糧起，他都有給家用我及太太，在過身前大約是每月$5,000元。”

61.In other words, at the time of the accident, the plaintiff’s evidence is that the Deceased was contributing $5,000 per month. There was no mention of the $8,000 nor was there any mention that the Deceased increased contribution when he had increased salary.

62.I agree that this is probably because the parents are reasonably well off and did not require contribution from the Deceased anyway.  The monthly contribution was a gift and was likely a symbol of respect.  It was never intended to be linked with the percentage of increase of the Deceased’s income.  It was never meant to be scientific in its calculation.

63.In the circumstances, I find that the monthly contribution should remain at $3,000 per month, which is a reasonable sum as a gesture of filial piety. 

B6.2  Meal Expenses

64.I allow $600 per month under this head. 

B6.3  Rental Fees

65.I repeat my finding that no award shall be made at all.

B6.4  Conclusion on Post-Trial Loss of Dependency

66.For the reasons stated above, I would award $3,600 per month to be shared equally by the plaintiff and his wife.  Further, I agree with the defendant that when the plaintiff’s dependency ceases, the plaintiff’s wife’s share will probably remain the same.

67.The plaintiff was born on 23 June 1950 and his wife was born on 18 March 1951.  At the time of the accident, the plaintiff was 62 and his wife was 61.

68.Under Table 1 (for male) and Table 2 (for female) of Personal Injuries Table HK 2016, the whole life multiplier (calculated upon the dependants’ ages as at the time of the accident and a rate of return of 2.5%) is therefore: –

(1) plaintiff: 17.49 years – 4 years (pre-trial period) = 13.49 years; and

(2) plaintiff’s wife: 20.55 years – 4 years (pre-trial period) = 16.55 years.

69.Therefore, my award for post-trial loss of dependency is:

(1) plaintiff: $3,600/2 x 12 x 13.49 years = $291,384; and

(2) plaintiff’s wife: $3,600/2 x 12 x 16.55 years = $357,480

(3) Total: $648,864

C.   LOSS OF ACCUMULATION OF WEALTH UNDER LAW AMENDMENT AND REFORM (CONSOLIDATION) ORDINANCE, CAP 23 (“LARCO”)

C1.   The Statutory provisions and legislative intent

70.The claim for loss of accumulation of wealth is brought under s.20(2)(b) of LARCO which provides that:

“(2) Where a cause of action survives … for the benefit of the estate of a deceased person, the damages recoverable for the benefit of the estate of that person –

(b) shall, where the death of that person has been caused by the act or omission which gives rise to the cause of action –

(iii) not include any damages for loss of property, whether income or otherwise, in respect of any period after his death, except in so far as the Court is satisfied that, but for the act or omission that gave rise to the cause of action, the deceased would have achieved an accumulation of wealth by the time he would otherwise have died, in which case damages may be awarded in respect of the loss of that wealth:

Provided that damages awarded under this subsection shall be subject to such deduction as the court considers it just to make in the circumstances of any particular case on account of the accelerated receipt of that wealth and in order to avoid over-compensation.”

71.It can be seen from the proviso that the pronounced legislative intent is to avoid over-compensation and to make proper deductions for the accelerated receipt.

72.The legislative intent for section 20 of LARCO was to prevent a “windfall to the deceased’s estate” [see: Dall v Choy Ying Wai (No. 2) [1999] 1 HKC 544, 561H-I, per DHCJ Lugar-Mawson (as he then was)].  It was further held at 561I – 562A that what the Court has to “determine is whether or not at the date of death by natural causes, [the Deceased] would have achieved an accumulation of wealth.  Traditionally this has been taken to mean the amount a deceased would have saved during his working life, not spent during his retirement and died possessed of”.

73.In Wong King Tai, the Administratrix of Wong Tak Luk v Lau Ka Kui, HCPI 488 of 1996 (Judgment dated 24/11/1998), Deputy Judge de Souza held at page 8 of the Judgment that:

“… The same exercise must be undertaken even where some savings can be identified at the date of the tortious death for the existence of such savings cannot tantamount to saying that accumulation would necessarily have occurred at the date of natural death…”

74.In Ho Pang Lin v Ho Shui On [1994] 3 HKC 294, Deputy Judge Jones stated as follows:

“I suggest that there are three situations a court will have to consider on the issue of accumulation of wealth. Firstly and most simply, there is the deceased with the obvious savings pattern. This should be applied in quantifying the accumulation and perhaps upgraded for a likely increase, for example, when the future departure of children from the household would increase the disposable income.

The second category is where there is no savings pattern and no indication whatsoever from the lifestyle of the deceased whether or not accumulation was likely. This situation would usually be found when the deceased was a young person whose lifestyle had not yet crystallized into a recognizable pattern. This was precisely the position I addressed in Wai Kang Kwan in declining to make an accumulation award to the estate of a young girl who died at 17. Not only did the evidence fail to disclose a savings pattern, but there was no indication that the deceased either was or was not likely to have accumulated wealth. In those circumstances, an award could only have been speculative.

The third category of situation is that of the deceased without any identifiable savings pattern, but whose habits and lifestyle indicate a probability the he would accumulate wealth. As always, the court must avoid speculation. However, if thrift, frugality, responsibility and perhaps good employment prospects clearly emerge from the evidence then an award should be made even if the contemporary income is fully utilized, for example, on maintaining a young family.

The difficulty in such a situation lies not in deciding that wealth would have been accumulated, but in quantifying the damages for the loss of that wealth. It was this dilemma which Nazareth J addressed in assuming that a notional 10% of net income would be devoted to savings. I confess I find this approach unattractive, as it confers on the award a spurious mathematical validity by assuming a savings percentage calculated at a time when the evidence shows that no savings were made. It is of course a device and I think unnecessary.

Compensation for personal injuries and death is an area of the law replete with artificiality. This is necessarily so when assumptions are extrapolated from the present and projected into an unknown and often distant future. However, the artificiality should be minimized, particularly when it conflicts with the evidence.

In this third situation, when the court is satisfied that accumulation would have occurred but can find no evidential basis to quantify it, I suggest that a global award is appropriate. .....” (pp.299C-300B)”

75.Bokhary PJ held in Lam Pak Chiu v Tsang Mei Ling [2001] 2 HKC 1, 14G-H:

“…But finding a multiplicand for a loss of accumulation of wealth award would be very difficult, to say the least. Except in cases where there is something more to go on than one has in those cases where the court is driven to taking an almost arbitrary percentage of earnings as a multiplicand, judges and masters calculating such awards would be well advised to make global awards. This is not to say that a conventional figure across the board ought to be adopted. Nor is it to say that a figure should be plucked out of the air. Even where the exercise does not lend itself to the precision of a multiplicand as in loss of dependency claims, some process of ratiocination must underlie the global award made. And it is necessary that the judge or master indicate at least in general terms how the award has been assessed in the light of the relevant factors, including expenditure during the retirement years.”

76.The most recent Judgment referred to this court on how to calculate loss of accumulation of wealth is Fung Suen Sim v Liu Chun Pong, HCPI 896/2007 (Judgment of Bharwaney J dated 23/12/2011). 

77.It can be seen from all the authorities cited by the defendant that it is rare, if at all, that the courts had ever made an award for loss of accumulation of wealth at the level that the plaintiff is claiming in this action.

78.Indeed, even in the Fung Suen Sim case, where the deceased (aged 58 at time of death) earned a monthly income of about $70,000 per month and lived frugally, the court awarded loss of accumulation of wealth at $450,000, thus prompting Bharwaney J to state at paragraph 64 of the Judgment as follows: –

“64. On the basis of the above assessment, I award the sum of HK$450,000 as the loss of the net accumulation of wealth in favour of the estate under the provisions of LARCO. This case demonstrates that this remnant of the abolished lost years’ claim is unlikely to yield a very high award, even in a case such as the present where the deceased was likely to accumulate substantial savings on account of the fact that he was a high income earner and lived frugally.” (emphasis supplied)

79.In the present case, the defendant submits that the Deceased’s inability to accumulate a substantial amount of savings by the time of accident, despite the level of his income, indicates strongly against an accumulation of vast amount of wealth by the time of his natural death but for the accident.

C2.   The Deceased’s Income at the time of Accident

80.The defendant accepts that at the time of the accident, the Deceased was employed as a “construction manager – field operations”, with contractual term from 14 September 2009 to 31 March 2013 (“the 2009 Contract”). 

81.The contractual terms include the following remunerations:

(1) Total annual compensation at $433,668 (ie $36,139 per month, net employee’s MPF of $1,250, that is $34,889 actually received). 

(2) Management allowance of $84,000 per annum, paid in 12 equal monthly installments (ie $7,000 per month).

(3) Annual merit adjustment – based on company’s fiscal year (Oct 1 to Sept 30) with payouts dependent upon both company and individual performance (“Merit Adjustment”);

(4) Discretionary bonus plan and annual performance bonus at discretion of company based on company and individual’s performance (“Discretionary Bonuses”);

(5) Service gratuity of $85,414 to be paid upon successful completion of contract on 31 March 2013 (“Service Gratuity”).

(6) Rental reimbursement program.

(7) Company’s medical and dental insurance scheme.

82.According to letter dated 28 January 2013, after taking into account the Deceased’s performance, the business performance of the company and the market condition, Disneyland HK had decided to increase the Deceased’s basic salary to $60,593 per month (net MPF = $59,343), effective 1 February 2013 (ie just a month before the accident).

83.Analysis of the tax returns for the duration of the 2009 Contract showed the following income:

Year	Basic Salary	Leave Pay	Bonus	Allowance	Other	Total
2010-2011	$523,167	Nil	$66,120	$84,000	$200	$673,487
2011-2012	$514,846	Nil	$60,011	$84,000		$658,857[1]
2012-4/3/2013 (date of Accident)	$592,033	$75,481	$176,304	$154,314		$998,132[2]

84.When referring to the tax returns, the rental reimbursement (which was not subject to tax) should be included as part of the Deceased’s remuneration.

85.According to the letter from Disneyland dated 28 August 2014 as explained by the letter dated 28 November 2014, the breakdown of the Deceased’s remuneration as of time of the accident was as follows:

(1) Basic Salary: $60,593/month (net MPF of $1,250/ month: $59,343)

(2) Allowance: $7,000/month (ie $7,000 x 12 = $84,000 a year)

(3) Service Gratuity: $85,414, which is the contract end gratuity.

(4) Additional gratuity: $90,890, offered also at end of contract to recognize the Deceased’s effort and commitment.  The amount was at discretion of the company, and represents 1.5 months’ worth of base salary.

(5) Vacation payout – for unused annual leave: $75,481

(6) Fringe benefits:

(a) Annual discretionary bonus for 2012 was already paid in January 2013.

(b) Life insurance: Deceased is entitled to 30 times basic monthly salary, ie $1,817,790, as well as reimbursement for funeral.  It is accepted that such sum should be disregarded in the current proceedings.

(c) Rental Reimbursement Scheme: The Deceased did not participate in this so no payment was made.

86.It can be noted that the said letters dated 28 August 2014 and 28 November 2014 did not explain the “allowance” of $154,314, which is much larger compared to previous years’ sum of $84,000.

87.According to the plaintiff’s witness statement at paragraph 7, the $154,314 comprises of $84,000 in management allowance, and further $70,314 in bonuses. The defendant rightly pointed out that this breakdown cannot be within the personal knowledge of the plaintiff. However, I accept this as an inference of fact drawn by the court.

88.From the above evidence, I accept that the average amount for annual bonus during his term of contract (as gleaned from the tax returns) would be:

Year	Annual Discretionary Bonus
2010-2011	$66,120
2011-2012	$60,011
2012-4/03/2013 (date of accident)	$70,314
AVERAGE:	$65,481.67, round up to $65,482

89.It can be noted that the discretionary bonus for 2011/12 is lower than 2010/11.  In other words, it is not necessary that the discretionary bonus must rise every year.  In fact, it was expressly stated in the contract that the entitlement of discretionary bonus was contingent on both the Deceased’s performance and Disneyland’s performance.  If Disneyland is not making any or any substantial profit, the Deceased may not be entitled to any or any substantial discretionary bonus.  It is therefore inappropriate to apply the rate of increase of basic salary (if any) to the discretionary bonus when calculating the Deceased’s income but for the accident.

90.When considering the Deceased’s earning/spending pattern and assessing any pattern of savings, as at the time of the accident, I agree that the court should only consider the disposable income, or cash, that the Deceased would have received. 

91.As such, the disposable income the Deceased was earning at the time of the accident should be assessed as follows: –

(1) Basic Salary (net MPF): $59,343

(2) Allowance: $7,000/month

(3) Discretionary Bonus: $65,482 / 12 = $5,457 per month

(4) Average monthly income: $71,800

(5) After 15% tax liability: $61,030

C3.   Deceased’s Lifestyle

92.An analysis of the Deceased’s credit card statements allows a glimpse of the lifestyle that the Deceased had been living prior to the accident, which I agree cannot be said to be frugal.  Such a lifestyle is totally understandable and expected for a single person (divorced since 2011) without any family commitments.  It is noteworthy that the Deceased had issued a supplemental credit card to an unknown person and paid for it too.

93.The lifestyle as gleaned from the credit card statements is not at all consistent with that of a “frugal man with healthy lifestyle” as stated by the plaintiff in paragraph 16 of his witness statement.  Indeed, under cross-examination, the plaintiff admitted that he does not know how the Deceased spent his money, all he knew was that the Deceased was not in debt. 

C4.   Analysis of Bank Accounts

94.Apart from those expenditures that could be understood from the credit card statements, the defendant has also provided an analysis of the Deceased’s bank passbooks to take into account his cash expenditure as well.

95.To summarize, the total expenditures of the Deceased as shown in his Standard Chartered Bank and Hang Seng Bank accounts are as follows:

	Expenditure
SCB	$482,521.26
HSB	$123,044.38
Total:	$605,565.64
MONTHLY AVERAGE:	$50,464

96.The above shows that at the time of the accident, the Deceased earned an average monthly disposable income of about $61,030 but spends on average $50,464 per month.  In other words, he spends almost as much as he makes, saving $10,566 per month, which is about 17% of his income at the time of the accident. 

97.I agree that this is consistent with the expected spending pattern of a single man with a high paying job, without any children or family and therefore no incentive to save.  In fact, his level of expenditure explains why the Deceased was unable to pay rent to the plaintiff (if there was indeed a rental arrangement).  Indeed, that explains why he did not continue to rent Westland Court and chose to live at Tung Hei Court free of charge.

C5.   The Deceased’s income under the 2013 Contract

98.The defendant accepts that but for the accident, the Deceased would have started on his role as Senior Construction Manager from 1 April 2013, the contractual period being 1 April 2013 to 31 March 2015 (2 years) (“the 2013 Contract”) and enjoying all the bonuses and benefits provided therein, which includes:

(1) Annual compensation of $843,637 = $70,303.10 per month;

(2) Cash allowance of $84,000 + $32,532 increment (paid in 12 equal installments) = $9,711 per month;

(3) Annual merit review every year at the discretion of the Company;

(4) Discretionary bonus plan based on both Company and individual performance (there is however absolutely no evidence of the Company’s view of the Deceased and the chance of him receiving such discretionary bonus), and a “service end of contract gratuity” which is 15% of average monthly basic pay multiplied by number of months served within contract period, less total amount of MPF contribution made by the Company. The gratuity is therefore $(843,637/12) x (15% - 10% for MPF) = $3,515 a month.

(5) Rental reimbursement program (no evidence that the Deceased would have re-joined the plan).

(6) Sub-Total of (1), (2) and (4): $83,529

(7) Net tax liability of 15% = $70,999.65

C6.   Increment in Salary

99.The plaintiff argued that there would have been a further increment in salary of 9% from 2014 to 2015, 30% from 2015 to 2016, and 9% from 2016 to 2017. 

100.In effect, there was a 30% increase after a 3-year contract (ie the 2009 Contract), but the plaintiff is applying the same for every 2-year contracts thereafter. 

101.Under paragraph 45 of the ARSOD, the plaintiff even pleaded that there was a slightly more than 100% increase of income in the 4 years between accident and trial.

102.Such an increment projected for the whole of the rest of the Deceased’s working life is excessive and lacks any evidential basis.  Being a personal injuries action, the plaintiff could have and should have sought the court’s leave for discovery against third party, ie Disneyland, for the income of comparable employees for the said period.  The burden of proof is on the plaintiff and such discovery against third party is a necessary interlocutory step that the plaintiff should have taken.

103.Further, the 30% increase took into account the repeating of the “additional gratuity”, which as discussed below, has no evidential basis.  There is no evidence that the same gratuity would have been given to the Deceased under the 2013 Contract. 

104.The fact that there was increment of the Deceased’s salary in the past does not predicate increment in the future.  The plaintiff is required to adduce evidence relating to comparable workers in Disneyland to prove an increment and if there is an increment, the rate of increase. 

105.Although it is noted that Disneyland refused to provide any such information to the plaintiff, it is open to the plaintiff to subpoena Disneyland to produce evidence on such matters or to take out a summons for discovery from third party.  The plaintiff did not do so, without any reasonable explanation. 

106.By failing to adduce such evidence, the plaintiff has failed to discharge its onus of proving an increment of the Deceased’s income but for the accident.

107.In the absence of any comparable evidence from Disneyland itself, I agree that the court can only rely upon the best available evidence of the 2013 Contract when considering the Deceased’s income for the pre-trial and post-trial period, which is the post-tax income of about $70,999 per month as stated above.

C7.   Service Gratuity and Additional Gratuity

108.The Service Gratuity and additional gratuity of $85,414 and $90,890 (total: $176,304, which is categorized as “bonus” in the Notification to Inland Revenue), they are one-off bonuses payable at end of contract.  These amounts were explained in the letter dated 28 November 2014, where it was stated that these amounts were still paid in full to the Deceased despite the accident intervening with the completion of the contract. 

109.I agree that apart from the $85,414 which was stated as a fixed sum in the 2009 Contract, the additional $90,890 was not stated anywhere in it.  The contractual terms of “merit adjustment” and “discretionary bonus” only referred to the company’s fiscal year but not “end of contract”.  Merit adjustment caters for annual review of the basic salary and discretionary bonus is accrued at the end of each contract.

110.Disneyland had explained that the sum of $90,890 was only given at the discretion of the company.  It does not seem to form any part of the 2009 Contract. 

111.As the plaintiff did not subpoena anyone from Disneyland to further elaborate on the matter, it is more likely than not that this additional bonus was either an isolated event or made ex gratia.  There is no evidence that the additional bonus would have been recurring or in any event a term of the 2013 Contract.  The plaintiff is unable to discharge his burden of proving that but for the accident, the Deceased would have received such additional bonus for the rest of his working life.  There is no evidence that the Deceased knew about this additional bonus or that he had expected the same to be included in the new 2013 Contract. 

C8.   Mandatory Provident Fund (retirement age 60)

112.In relation to MPF, the Deceased held 2 MPF accounts with the following balance at the time of the accident:

(1) Fidelity No. 097139750: $213,288.90

(2) Fidelity No. 015358122: $143,064.29

(3) Total: $356,353.19

113.The plaintiff’s case is that the employer will continue to contribute a further 5% of voluntary contribution at a total of 10% of base salary, while the Deceased would continue contributing at 5% of his base salary. 

114.However, I agree that since the top up is a voluntary contribution at the discretion of the employer, rather than fixed by law, the top up MPF might not necessarily be included in the future contracts. 

115.The plaintiff did not adduce any evidence on how the MPF is calculated by Disneyland, and the top-up was not an express term in the employment contract.

116.Putting the plaintiff’s case at its highest, the calculation should be as follows:

(1) Pre-trial: 10% of $843,637 per annum (per the employment contract) x 4 years = $337,455

(2) Post-Trial: $843,637 x 10% x (13.67 years[3] – 4 years for pre-trial period) = $815,796

(3) Total MPF at retirement (age 60): $356,353.19 (pre-existing) + $337,455 + $815,796 = $1,153,251

C9.   Promotion Prospects

117.In paragraph 3 of the Plaintiff’s witness statement, he highlighted the probability that the Deceased would be further promoted to higher ranking positions with higher pay, or be transferred to Shanghai Disneyland but for the accident.

118.However, the court would require cogent evidence before accepting that there would be prospect of promotions.  In fact, cogent evidence is required for any substantial increase of income.

119.According to the letter from Disneyland dated 27 May 2016, there is no definite career path for a Senior Construction Manager and no evidence is given for any higher paygrade. 

120.Further, the letter in effect stated that there is no guarantee that a Senior Construction Manager would be employed by the Disneyland in China, as it is only “possible subject to availability of vacancies and selection results”. 

121.In essence, the evidence does not support any prospect of further promotion.  There is no evidence for the court to even consider when the promotion would likely occur, or how much the higher position would pay. 

C10.  Assessment of Pre-Trial Accumulation (from savings of income minus expenses)

122.At the time of his death, the Deceased held, inter alia, the following assets (according to the Schedule of Assets and Liabilities):

(1) Cash at Hang Seng Bank and Standard Chartered Bank accounts:

(a) HKD: $29,959.74

(b) EUR: 0.01 (@ 1 EUR = 10.1055 HKD) = HK$ 0.10

(c) CNY 313,089.50 (@ 1 CNY = 1.256 HKD) = HK$393,240.41

(d) Total HK$: $423,200.25

(2) Shareholding:

(a) 2,000 shares in China Water

(b) 10,000 shares in PICC Group-H Shares

(c) 4,000 shares in GCL-Poly Energy

(at the time of accident, the total present value of the shareholdings is around $59,180)

(3) Total: $423,200.25 + $59,180 = $482,380.25

123.I accept that the Deceased would have continued his expenditure as calculated above at $50,464 per month.  That means after the 2013 Contract has taken effect, the Deceased would save $70,999 (paragraph 98 above) - $50,464 = $20,535 or, say, $20,000 per month.  This will be taken as the multiplicand.

124.It is not in dispute that the Deceased must retire from Disneyland at the age of 60. 

125.The plaintiff argues that the Deceased would have worked until 70 years old since his work was not labour intensive, but failed to give any convincing reason as to whether he would in fact work until 70. 

126.I agree with the defendant’s submission that there is in this case no evidence as to whether the Deceased would still continue to work after retirement from Disneyland at age 60.  In fact, it is more likely than not that the Deceased would have retired at 60 due to the following reasons.  Firstly, the Deceased had no children or family to support and therefore there is no incentive for him to continue working.  Secondly, the pre-accident lifestyle of the Deceased, which shows that the Deceased liked to have a more relaxed lifestyle travelling and enjoying life, should also be considered. 

127.Therefore, the pre-trial accumulation of wealth should be assessed as follows, from March 2013 to Trial: $20,000 x 48 months = $960,000

C11. Assessment of Post-Trial Accumulation of Wealth (from savings of income minus expenses) up to retirement age 60

128.The Deceased was aged 43 at the time of the accident.  Assuming the Deceased retires at age 60, that would be 17 years after his death.

129.Hence, post-trial loss of accumulation of wealth is $20,000 x 12 x (17 years – 4 years’ pre-trial period) = $3,120,000.

C12.  Total Accumulation of Wealth up to Retirement Age 60

130.Total additional savings at time of retirement at the age of 60 but for the accident is therefore:

(1) MPF (Pre-trial + Post-trial): $1,153,251

(2) Pre-trial (from income – expenses): $960,000

(3) Post-trial (from income – expenses): 3,120,000

(4) Total: $5,233,251

C13.  Net accumulation of wealth after retirement age of 60 and as at natural death at age 83

131.The Deceased was born on 30 December 1969.  According to the Hong Kong Life Tables, a male of age 43 in 2013 has life expectancy of 39.19 more years, rounded to 39.  That means his natural death would have occurred in the year 2052, or at age 83.  

132.Under the scenario of retirement at the age of 60, his post-retirement period would be 23 years (83 – 60 years).   In this 23 years of post-retirement period, any accumulation of wealth up to his retirement age will be depleted by his own expenditure during his retirement.

133.It is expected that as the Deceased entered retirement, more expenses would be incurred for his own medical problems and daily activities.  On the other hand, after his retirement, the Deceased would still be contributing to his parents – ie the plaintiff for another 5 years up to 2034 and the plaintiff’s wife for another 11 years up to 2040.

134.Assuming the Deceased did not get re-married and did not have a family, and continues to live in the Apartment rent-free, it is likely that the Deceased would have kept up the lavish spending even post-retirement as there is no incentive for him to cut down.  He would have continued to travel the world (even more frequently) and enjoy life, coupled with increased medical expenditures, I agree that a post-retirement expenditure of at least $45,000 per month can be expected (10% less than pre-retirement spending), that is $540,000 per annum.  This represents about 10.32%of the total savings at retirement (ie $540,000 / $5,233,251).

135.Assuming rate of return of 2.5%, that is a depletion of accumulated wealth at a rate of 2.5% – 10.32% = negative 7.82% per annum.

136.The net accumulation of wealth after depletion of personal expenses between retirement age of 60 to natural demise at age 83 years (ie a depletion period of 23 years) = $ 5,233,251 x (1-0.0782)²³ = $804,296.

C14.  Net accumulation of wealth after taking into consideration of a very substantial accelerated receipt between now and date of natural demise: a period of 36 years

137.The Deceased would have been 47 years old at the date of assessment but for the accident.  That is an accelerated receipt by 83-47 = 36 years.  Taking into account accelerated receipt, and considering Table 27 of Hong Kong Personal Injury Tables 2016, the discount factor for accelerated receipt of 36 years is 0.4111.

138.Giving this discount factor to the net accumulation of wealth after depletion of personal expenses, the net accumulation of wealth should be $804,296 x 0.4111 = $330,646.

139.In my view, the above calculations are in line with the methodology based on the authorities and reflect the legislative intent to avoid windfall to the estate and over-compensation.

140.However, since the defendant has pleaded in the Answer that a sum of around $530,000 is to be awarded in the alternative, I consider it appropriate to award the sum of $530,000 under this head. 

141.There should be no interest on the award for loss of accumulation of wealth.

D.   SUMMARY OF QUANTUM

142.

Heads of Damages	Amount awarded
Under the FAO
Pre-trial Loss of Dependency	$172,800
Post-trial Loss of Dependency	$648,864
Bereavement	$150,000
Funeral Expenses	$361,188
Under LARCO
PSLA	$40,000
Loss of Accumulation of Wealth	$530,000
Total	$1,902,852 plus interest

143.I award interest at full judgment rate on bereavement damages and funeral expenses from date of death to date of judgment.

144.I award interest on damages for PSLA at 2% per annum from date of service of writ to date of judgment.

145.I award interest at 4% per annum on damages for pre-trial loss of dependency from date of death to date of judgment.

146.Full judgment rate to apply for all of the above items from date of judgment to full payment.

147.I make a costs order nisi that the defendant do pay the costs of the action to the plaintiff, to be taxed if not agreed.

148.I cannot conclude this judgment without thanking counsel for their considerable assistance to me in this case.

Ms Winnie Chan, instructed by Wat & Co., for the plaintiff

Mr Victor Gidwani, instructed by Winnie Leung & Co., for the defendant