Kan Wai Ling and Fan Mei Na the Co Administratrices of the Estate of Kan Siu Hong, Deceased v. Kan Chi Fai
Read the full judgment text of HCPI 232/2011 on BabelCite. This High Court CFI judgment was delivered on 9 May 2018.
1. This is an assessment of damages in a fatal accident action brought by the plaintiffs, Ms Kan Wai Ling and Madam Fan Mei Na (“Madam Fan”), who are the co-administratrices of the estate of Kan Siu Hong (“the deceased”). The deceased sustained fatal injuries in a traffic accident that occurred on 11 February 2009 at Lam Kam Road, Pat Heung, New Territories. By a consent order dated 2 December 2015, interlocutory judgment for damages to be assessed was entered in favour of the plaintiffs agains
Cited by 6 cases · Cites 8 cases
|
HCPI 232/2011 [2018] HKCFI 1024 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE PERSONAL INJURIES ACTION NO 232 OF 2011 __________________________
__________________________
_______________ J U D G M E N T _______________ INDEX 1.This is an assessment of damages in a fatal accident action brought by the plaintiffs, Ms Kan Wai Ling and Madam Fan Mei Na (“Madam Fan”), who are the co-administratrices of the estate of Kan Siu Hong (“the deceased”). The deceased sustained fatal injuries in a traffic accident that occurred on 11 February 2009 at Lam Kam Road, Pat Heung, New Territories. By a consent order dated 2 December 2015, interlocutory judgment for damages to be assessed was entered in favour of the plaintiffs against the defendant. 2.The deceased was born on 25 October 1957 and was 51 years and 3 months of age at the time of his death on 11 February 2009. He was the sole proprietor of Cheung Hong Engineering Transportation Company (“Cheung Hong”), a business he established in 1985[1]. He was the registered owner of 6 dump trucks and 1 private car at the time of the accident. The 6 dump trucks were used for the transportation of construction waste which was the business of Cheung Hong. A substantial portion of the hearing was spent on the issue of the deceased’s earnings from this transportation business. 3.Claims for loss of dependency were advanced from behalf of the following persons:
4.At the time of the accident, Kan Wai Ling worked in the United States and Kan Ho Chuen was studying in the United States. The length of time that Madam Fan, Kan Wai Ling and Kan Ho Chuen stayed in Hong Kong and in the United States in the years preceding the death of the deceased was the subject matter of inquiry during the hearing. 5.The allegation of Madam Fan, that she was cohabiting with the deceased at the time of the accident, was in dispute. However, it was common ground that she was a dependant of the deceased, being a former wife of the deceased within the meaning of section 2(1)(a) of the Fatal Accidents Ordinance, Cap. 22. It was also common ground that Kan Wai Ling and Kan Ho Chuen, the daughter and the son of the deceased, were dependent on him at the time of the accident. The extent of their dependency and that of Madam Fan, and of Wong Lai Sheung, was a matter of some controversy. 6.Equally controversial was the claim for loss of accumulation of wealth. 7.Damages for bereavement are agreed in the sum of HK$150,000. Funeral expenses, the cost of a grave at a cemetery in the United States, and travelling expenses have been claimed in the sum of HK$207,661. Did Madam Fan cohabit with the deceased as husband and wife for at least 2 years before his death? 8.A dependant within the meaning of section 2(1) of the Fatal Accidents Ordinance, Cap. 22, includes:
9.It was the plaintiffs’ case that, notwithstanding the divorce of the deceased and Madam Fan, they continued to live together “like a married couple”[2]. Madam Fan also stated in her witness statement: “[a]lthough I divorced from Kan Siu Hong in 1997, ..., in fact our whole family had been living together and had never lived apart, until our daughter Kan Wai Ling and our son Kan Ho Chuen went to the US for studies in 1998 and 2005 respectively”[3]. 10.Madam Fan obtained a United States Permanent Resident Card (“Green Card”) in February 1998[4]. It became apparent, in the course of her cross-examination, that her application for a Green Card had been made by one, Mr Lam Wai Shing, with whom she had had an affair in 1996 and whom she married in 1997, after her divorce from the deceased[5]. She said in evidence that she married Mr Lam because she loved him[6]. She added that she took her two children to live with Mr Lam in the United States and that they lived as husband and wife[7]. That relationship did not last and eventually she returned to Hong Kong with her son sometime at the end 1998[8]. When it was suggested to her that her relationship with the deceased had broken down, she said: “You cannot say that our relationship has totally broken down because we still had children”[9]. In fact, just as Madam Fan had married Mr Lam in 1997 after her divorce, so did the deceased re-marry. Madam Fan stated in the supplemental witness statement dated 15 March 2013 that the deceased married her sister, Sherry Fan, on 3 June 1997 at the San Po Kong marriage registry in Hong Kong, that they did not hold any wedding ceremony and had never lived together, and that two or three days afterwards, Sherry Fan left Hong Kong and returned to the United States where she applied for the deceased to be granted permission to reside in the United States[10]. Just as Madam Fan divorced Mr Lam, so did the deceased subsequently divorce Sherry Fan. Although the marriage of Madam Fan to Mr Lam and the marriage of the deceased to Sherry Fan, and their subsequent divorces, give the impression that their marriages were marriages of convenience, to enable applications for Green Cards to be issued to Madam Fan and to the deceased, I need not make any findings on this point. In the course of her cross-examination, Madam Fan conceded that, even before, and when Madam Fan was dating the deceased prior to their marriage, her sister, Sherry Fan, actually liked the deceased[11]. She also stated that she did not actually know the deceased had filed an affidavit in support of his petition to divorce Sherry Fan in which he had stated that they had cohabited together in a flat in Waterloo Road[12]. 11.Madam Fan explained that when she returned with Kan Ho Chuen to Hong Kong from the United States at the end of 1998, she sometimes stayed with her relatives and sometimes in the 1st floor, 313 Shanghai Street subdivided flat that the deceased had rented[13], but which he was then not occupying as he had rented a flat in Ma On Shan that was close to the site where he was working[14]. Eventually, the deceased had to return possession of the Ma On Shan flat and he moved to the Shanghai Street property at the end of 1999, “because there was nowhere that he could move to”[15], and he occupied a room in the front portion of the Shanghai Street flat, which was different from the portion that she was occupying[16]. She did not assert that they were living together there as husband and wife. 12.Madam Fan stated that this state of affairs continued for about 6 years until she moved into a flat at Room 1206, Fung Yam House, On Yam Estate, Kwai Chung, in October 2005. The deceased did not move with her and he remained in Shanghai Street[17]. 13.She was asked about her knowledge of where the deceased lived after she had moved out. She admitted that she did not know when the deceased moved out of the Shanghai Street unit because “[he] did not tell me,”[18]; and she also said that, after she left the Shanghai Street flat, the deceased continued to rent that place “but whether he did go back to stay, I do not know”[19]. 14.Madam Fan started to spend more of her time in the United States after November 2005. The records from the Immigration Department showed that she was out of Hong Kong for 74 days from 11 November 2005, 129 days from 17 February 2006, 12 days in September 2006, and 278 days from October 2006 to July 2007[20]. 15.Subsequently, the deceased moved out of the Shanghai Street subdivided room and, according to Madam Fan, he “frequented” the Fung Yam House flat[21]. Madam Fan again disowned knowledge of where he stayed when he was not in the Fung Yam House flat: when she was not in Hong Kong, she did not know where the deceased stayed during those periods[22]. She also said:
16.There was no evidence that their relationship changed after July 2007 and there was no evidence that they started to live together as husband and wife. Whilst I accept the evidence of Madam Fan that “[in the two or three years before the accident, we] were cohabiting with each other,”[24], in the sense that they were living in the same premises, I am not satisfied on the evidence before me that they were cohabiting as husband and wife. The evidence that the deceased went out with Madam Fan for “yum cha” and that they had travelled to the United States to visit their children does not lead me to conclude that they were cohabiting as husband and wife. 17.The fact that counsel for the plaintiff, Mr C K Wong, did not re-examine Madam Fan on this issue prompted the following exchange between us:
18.In the course of my exchanges with Mr Wong, I had mentioned that I found it very difficult to apply the percentages in Harris v Empress Motors to assess loss of dependency, given the fact that there were 2 households, in Hong Kong and in the United States, and that I was driven to look for evidence of actual contributions made to the family[25]. I have carefully considered Mr Wong’s final submissions that I should adopt the percentages in Harris v Empress Motors to assess loss of dependency[26]. I find that I am unable to do so. In Fung Suen Sim v. Liu Chun Pong, HCPI 896/2007, 23 December 2011, I had stated that:
19.I omitted, in the above citation, a portion of the judgment of O’Connor L.J.[27] which ought to be set out in full as it bears upon the subject at hand:
20.This is not a case where there was joint expenditure on rent and meals at home. Yes, the deceased would pay when they went out for “yum cha” or for a meal together[28] but, apart from isolated and occasional joint expenditure of that nature, there was an insufficient joint element in the patterns of expenditure of the deceased, on the one part, and Madam Fan and the children in the United States, on the other part, to enable the application of the formula set out in Harris v Empress Motors. 21.The business of Cheung Hong was the transport of construction waste for disposal at various dumping sites in Hong Kong primarily using the six 24-ton dump trucks owned by the deceased. The deceased ran his business single-handedly[29] from his home[30]. The turnover in and the income from the transportation business was very substantial. The total income received by Cheung Hong from 1 April 2006 to 11 February 2009 was HK$21,589,314[31]. What profit was earned from the income that was received was the big question in this case. Mr Lau Dick Pau, a chartered accountant who has worked for more than 40 years in Hong Kong, and Mr Martin Tupila, a chartered accountant specialising in forensic accounting for more than 10 years, were appointed by the parties respectively to review the accounting record and report on the profits earned by Cheung Hong over this period of time. In their joint report dated 31 March 2015, they agreed that the parties had little knowledge about the business and that the books and records provided to the experts were incomplete and might be unreliable[32]. Madan Fan had stated in her Answer to Interrogatories and in her 2nd supplementary witness statement that she did not participate in the business of the deceased and that she did not know how much income the deceased had.[33]. I find these statements to be credible. In a further joint statement dated 15 January 2016[34], the experts reiterated that the invoices provided were incomplete and/or inaccurate; that insofar as other expenses could be identified from the bank statements, such as insurance, repairs and maintenance, and licencing fees, these were in addition to the invoices provided; and that there was evidence that some of the invoices provided were settled in cash and, given the nature of the business, that it was likely that other cash withdrawals were used to pay business expenses. 22.The stark difference between the parties is highlighted by the initial positions taken by the experts: Mr Lau was of the opinion that Cheung Hong earned a profit of HK$5,953,396 over this period of time[35]; Mr Tupila was of the view that Cheung Hong suffered a loss of HK$204,155 over this period[36]. 23.Given the substantial difference between the experts and the time it would take to review their evidence, I drew the parties attention to the relevance of that evidence to the issues before me in this case in these terms:
24.Despite this exchange, the parties failed to reach agreement and 2 days were spent on the expert evidence. 25.Mr Lau had not given expert evidence in any court or tribunal before this occasion. He has appeared as an advocate for his clients on a number of occasions before the Inland Revenue Board of Review. He was at pains to explain that he was not performing an audit. He was simply reconstructing the profit and loss account of Cheung Hong for the period from 1 April 2006 to 11 February 2009 based on the turnover and expenses invoices provided to him. He compared the former to the income deposited into the company’s bank accounts and, applying the methodology set out in his report dated 17 December 2012[39], he arrived at a turnover amount of HK$20,474,508.17 and profits of HK$5,953,396.48 for the period from 1 April 2006 to 11 February 2009. At trial, Mr C K Wong for the plaintiff happily accepted the larger turnover amount of HK$21,377,392 arrived at by Mr Tupila in his report[40]. 26.Mr Lau very quickly abandoned his projection method in the course of his cross-examination[41]. It was clear on the evidence that the deceased had grossly understated his income to the Inland Revenue. The profit and loss accounts submitted to the Inland Revenue bore no resemblance whatsoever to reality[42]. By way of example, the profits and loss account for the year ended 31 March 2007 submitted to the Inland Revenue showed gross income of HK$953,205 and expenses of HK$763,492. Mr Lau’s reconstruction for this period showed gross income of HK$6,774,502 and expenses of HK$4,374,631. I had stated in Fung Suen Sim v. Liu Chun Pong[43]that:
§80 of the Inland Revenue Guidelines on the Projection Method[44] stated:
No reliance whatsoever could be placed on the utterly false returns that had been submitted to the Inland Revenue. 27.However, I accept the opinion of Mr Lau that the industry average for similar businesses identified by Mr Tupila was unhelpful. The deceased ran the business from his home. He did not have to pay office rent nor rental for vehicles as he owned the dump trucks used in the business. He did not even draw a salary for himself[45]. Whilst the industry average for this particular type of business was showing losses[46], the purchase by the deceased of dump trucks between May 2007 and May 2008[47] and the increasing turnover of the business, from HK$6,545,726 for the 12 months ending on 31 March 2008, to HK$7,997,849[48] for the 11 and a half months from 1 April 2008 to 11 February 2009, suggested an expanding profitable business rather than a loss making one. 28.The cross examination of the experts was wide ranging and covered many aspects of the review they had conducted in their examination of the accounts of Cheung Hong and, in particular, on the business expenses that had been incurred. In the end, Mr C K Wong agreed to adopt, as a starting point, the profit figure arrived at by Mr Tupila in the sum of HK$7,603,003 for the period in question, as appearing in Figure 1 of his report dated 15 December 2014[49] which I set out below[50]: Figure 1: Comparative Profit and Loss Account of Cheung Hong for the Review Period
29.I find as a fact, based on Mr Lau’s and Mr Tupila’s review of the business and other records, that:
30.Mr Tupila stated in his report dated 15 December 2014 that:
A court of law cannot make findings of facts based on such assumptions. Findings of fact must be evidence based. If there is insufficient evidence to enable a court to make a finding of fact on the issue, it is duty bound to say so. 31.Although this was the first time Mr Tupila had given evidence in court, he had prepared many forensic accounting reports for court use. The first area of controversy that emerged during his cross examination was the adjustment that Mr Tupila had made to the total income earned during the period in question of HK$21,589,314, being transport service income of HK$21,377,392 and other income of HK$211,922. He reduced this total amount of HK$21,589,314 by the sum of HK$1,697,845, as shown by the calculations contained in Figure 4 of his report dated 15 December 2014[53]. During this period, he found unidentified deposits from bank statements in the sum of HK$18,524,117 (these are listed in Annexure 10 to Mr Tupila’s report[54]) which he could not match to any transport service fee or income invoices[55]. On the other hand, he was unable to match HK$16,826,272 shown on the transport service fee invoices. Assuming that all income earned by Cheung Hong would have been deposited into one of Cheung Hong’s or the deceased’s accounts, he adjusted the unidentifiable deposits to the sum of HK$1,697,845 (HK$18,524,117 less HK$16,826,272 and less HK$211,922, being the other income that had been earned). 32.Under cross examination, Mr Tupila said:
33.Mr Tupila produced a number of attachments. Attachment 4 was a schedule showing the utilisation of a loan from Hang Seng Bank taken out by Cheung Hong[57]. There is no suggestion that this loan formed part of the unidentified deposits of HK$1,697,845. The loan credit of HK$250,000 on 28 September 2006 is not shown on Annexure 10. Attachment 5 was a schedule showing credit card instalment loan repayments of loans taken by the deceased[58]. The attachment shows that:
34.Mr Lau did not address this particular issue. 35.I am unable to correlate any of the aforesaid loan drawdown with any unidentified deposits into Cheung Hong’s or the deceased’s bank accounts at or around the dates of the loan drawdowns. Whilst the deposits of HK$1,697,845, remain unidentified, I find, on a balance of probabilities, that these deposits were income earned by Cheung Hong and that they were not loans that had been raised and paid into the bank accounts. I will work with round figures from this point. For these reasons, I am not prepared to reduce the starting point profit figure of HK$7.6m[59] by the amount of the unidentified deposits in sum of HK$1.7m. 36.More controversial were the further adjustments Mr Tupila had made in respect of the expenses of the business of Cheung Hong. He found, during the period in question, unidentified withdrawals from the bank accounts in the sum of HK$9,794,534 (these are listed as Annexure 12 to Mr Tupila’s report[60]) which he could not match to any amounts in the various expense invoices. On the other hand, he was unable to match HK$4,139,892[61] of expenditure from the invoices with withdrawals shown in Cheung Hong’s and the deceased’s bank statements. Assuming that the only source of funds for the settlement of expenditure would have been one of Cheung Hong’s and the deceased’s bank accounts or credit cards, he adjusted the unidentifiable withdrawals as shown in his Figure 5[62]: Figure 5: Adjustments to Unidentifiable Bank Withdrawals:
37.In addition to Mr Tupila’s adjustment of HK$5.65m in respect of unidentifiable withdrawals, he also adjusted unknown ATM withdrawals of HK$3,123,901, listed in Annexure 11[63], from the accounts of Cheung Hong and the deceased. As cash payments had been made for some expenses such as salaries and wages and vehicle fuel, Mr Tupila assumed that these cash withdrawals were entirely used for settlement of cash expenses and he treated them as part of Cheung Hong’s expenditure[64]. 38.In the joint report[65], Mr Lau offered his opinion that of this amount of unidentifiable withdrawals of about HK$5.65m, 69 withdrawal transactions appeared to be funds drawn for personal use which he set out in his Appendix 1[66]. These were withdrawals in various rounded amounts each in the sum of or exceeding HK$20,000. 5 of these were each in the sum of HK$100,000 and one in the sum of HK$120,000. Mr Tupila disagreed with Mr Lau on this point. He said in his evidence in chief:
During his cross examination, he gave evidence as follows:
39.I have reached a critical part of my decision making process. It is clearly wrong to adjust the starting point profit of HK$7.6m by deducting from that amount the total amount of HK$3.1m, being unknown ATM withdrawals, and the total amount of HK$5.65m, being the unidentifiable withdrawals, on the basis that these amounts were used to pay the expenses of the business. As accepted by Mr Tupila, these amounts were not entirely spend on business expenses, some of these amounts were spent on personal expenses. However, he stated with some force, that there was no scientific basis to make the determination of how much of these amounts were spent on business expenses and how much on personal expenses. 40.The decision of the Court of Appeal in Ashcroft v Curtin [1971] 1 WLR 1731, bears on the point in question. I quote from the headnote of that judgment:
In his judgment Edmund Davies LJ stated[69]:
41.The editor of Munkman on Damages for Personal Injuries and Death (12th ed.), stated at p.110:
42.There are limits to taking a broad brush approach. In McRae v. Chase Intl Express Ltd[2004] PIQR P314, 322, line 36, Newman J said:
Crane J. in Bordin & anr. v. St. Mary’s NHS Trust, No. 1998-B-697 stated at pg. 9:
43.I adopt this approach and ask myself whether I can accept Mr Lau’s opinion that HK$2.82m were personal expenses. 44.At this point, I address the submissions made by Mr Sakhrani, on behalf of the defendant, regarding Cheung Hong’s cash flow problems. I accept that Cheung Hong must have had ongoing cash flow problems which caused him to borrow at relatively high rates of interest from 2006 into 2008[70]. However, cash flow problems do not mean that the business was not ultimately profitable when the transportation service income was ultimately received. Indeed, a total of HK$911,638, being transportation service income from the business of Cheung Hong, was paid into the accounts of Cheung Hong and of Madam Fan, after the death of the deceased, from 25 February to 30 April 2009[71]. As stated in §27 above, the purchase by the deceased of dump trucks between May 2007 and May 2008[72] and the increasing turnover of the business, from HK$6,545,726 for the 12 months ending on 31 March 2008, to HK$7,997,849[73] for the 11 and a half months from 1 April 2008 to 11 February 2009, suggested an expanding profitable business rather than a loss making one. 45.I turn to deal with the more complex submission made by Mr Sakhrani that I should find that only 17.7% of the withdrawals in large rounded amounts of HK$2.82m were made on account of personal expenses and that the balance 82.3% was utilised to settle business expenses. This submission is based on attachments 2[74] and 3[75] of Mr Tupila’s report. Attachment 2 showed company expenses paid by the deceased as identified in the deceased’s bank and credit card statements amounting to HK$343,819[76]. Attachment 3 showed deceased’s expenses paid by the deceased as identified in the deceased’s bank and credit card statements amounting to HK$61,000. The transfers from the respective accounts were 82.3% -17.7% in favour of Cheung Hong. The simple answer to this submission is that the sample size (HK$343,819[77] and HK$61,000) was too small to provide a reliable demarcation between company and personal expenses in the total amount of HK$8.75m (being unknown ATM withdrawals in the amount of HK$3.1m and the unidentifiable withdrawals in the amount of HK$5.65m). Mr Tupila did not support any such demarcation and he expressly stated that there was no scientific way to demarcate between company and personal expenses. 46.However, Mr Sakhrani submitted that the percentage demarcation was also supported by the tables produced by Mr Tupila called the Peach Table[78]. Table 1 was compiled from the transactions shown on Schedule B1[79] and is made up of withdrawals made right after a intrabank transfer in the total sum of over HK$1.55m. Immediate utilisation by Cheung Hong of amounts transferred from the deceased’s accounts would suggest that the amounts were being utilised for Cheung Hong’s business purposes, as was accepted by Mr Lau[80]. Likewise, immediate utilisation by the deceased of amounts transferred from Cheung Hong’s accounts would suggest that the amounts were being utilised for the deceased’s personal expenses. Table 1 showed that the amounts that were transferred from Cheung Hong’s accounts to the deceased’s accounts and then withdrawn shortly afterwards amounted to HK$288,639.70, whereas, the amounts that were transferred from the deceased’s accounts to Cheung Hong’s accounts and then withdrawn shortly afterwards amounted to HK$1,267,059.01. The former amount was only 18.6% of the total amount of these transfers in the total sum of HK$1.55m. Whilst this sample size (HK$1.55m) was larger, relative to the total amount of HK$8.75m (being unknown ATM withdrawals in the amount of HK$3.1m and the unidentifiable withdrawals in the amount of HK$5.65m)), I am not persuaded to adopt the percentages of 18.6% and 81.4% as providing a reliable demarcation of personal and company expenses. I reiterate that Mr Tupila did not support any such demarcation and he expressly stated that there was no scientific way to demarcate between company and personal expenses. 47.I return to the question whether I can accept Mr Lau’s opinion that HK$2.82m were personal expenses. 48.I can quickly dispose of one submission made by Mr Sakhrani[81]. During his cross examination, Mr Lau said:
I did not understand Mr Lau to be saying that part of the HK$2.82m were spent on personal expenses; he was saying that part of the HK$5.65m, namely, HK$2.82m, were spent on personal expenses, which is what he had stated in the joint report. 49.Mr Lau’s opinion has the support of common sense. People usually make cash withdrawals in rounded numbers for their personal expenses. Although there were some business expenses in round numbers of, and over, $20,000, the existence of such business expenses does not lead me to reject Mr Lau’s opinion. I find, on a balance of probabilities, that HK$2.82m out of the unidentifiable withdrawals of HK$5.65m were made to cover the personal expenses of the deceased, including contributions he made to Madam Fan and to his children. HK$2.82m is about 50% of HK$5.65m. Whilst I accept the evidence of Mr Tupila that there were some business expenses in round numbers of, and over, $20,000, I also find, on a balance of probabilities, that unidentifiable withdrawals in amounts less than HK$20,000 were also made for personal expenses, such that part of the remainder of HK$5.65m was also used for personal expenses. In all likelihood, the total value of withdrawals for personal expenses in amounts less than HK$20,000 was greater than the value of business expenses in round numbers of, and over, $20,000, such that the ratio of 50% that I have adopted is likely to be an underestimate of the amount expended on personal expenses, including contributions made to Madan Fan and to his children. I adopt the same ratio of 50% to find, on a balance of probabilities, that 50% of the unknown ATM withdrawals of HK$3.12m, i.e. HK$1.56m, were made to cover the personal expenses of the deceased, including contributions he made to Madam Fan and to his children. With these findings, I adjust the starting point profit figure arrived at by Mr Tupila in the sum of HK$7.6m[84] by the sums of HK$2.82m (being 50% of unidentifiable withdrawals of HK$5.65m) and HK$1.56m (being 50% of unknown ATM withdrawals of HK$3.12m ) to HK$3.22m. 50.I turn to deal with the other adjustments made by Mr Tupila and to a concession he had made regarding credit card double counting. The latter concession was made in a letter from Mr Tupila to the defendant’s solicitors dated 5 February 2016, after the parties had closed their respective cases. The letter contained amendments to his report dated 15 December 2014, and included a replacement Figure 3, as set out below, with the amendments in red. Figure 3: Adjustments to Profit based on Additional Transactions in Bank and Credit Card Statements:
51.This additional material is, strictly speaking, inadmissible. However, I accept the concession made by Mr Sakhrani, on behalf of the defendant and based on Mr Tupila’s letter of 5 February 2016, that no adjustment is sought in respect of credit card repayments in the sum of HK$332,931. 52.It remains for me to deal with the other adjustments made by Mr Tupila and the submissions made by Mr C K Wong regarding them, and Mr Tupila’s treatment of hire purchase instalment payments. 53.Figure 1, reproduced in §28 above, sets out finance charges, insurance, telephone charges, repairs and maintenance and other operating expenses. The total expenses amounted to HK$13,986,311 during the period in question. Mr Tupila also stated in §3.4.12 of his report dated 15 December 2014 that he had identified other bank charges, insurance[89], telephone charges, repairs and maintenance, licensing fees and other miscellaneous expenses[90] for which invoices had not been provided or were not available. I have reproduced these additional expenses from Figure 3 as follows:
54.Mr Wong submitted that the two largest items of these additional expenses, being “insurance (HK$127,599)” and “miscellaneous & other unknown expenditure” (HK$236,672)” ought to be removed: the insurance premium was for life insurance[91], and Mr Tupila accepted that such premia should not be classified as business expenses[92]; and a majority of the miscellaneous items (HK$231,700 out of HK$236,672) were repayment of loans[93]which ought not to be classified as business expenses. 55.Mr Wong also submitted that the operating expenses shown in Figure 1 ought to be reduced for these reasons:
56.I accept Mr Wong’s submissions that the land line charges in the total sum of HK$8,524[96] ought to be removed as they were not business expenses. As Mr Tupila has already conceded the double accounting point by deleting the credit card repayments as business expenses[97], the submission made regarding double accounting of autotoll expenses, and the invoices from Shing Tak Tyre Polytechnic Co. Ltd. and Crown Motors Ltd. - Hino Hong Kong[98], falls away. 57.I also accept Mr C K Wong’s submissions that the amount of HK$127,599 relating to life and health insurance premia ought to be removed as they were not business expenses. I am satisfied from my perusal of Annexure 7 that the entire list of insurance premia set out therein related to life and health insurance. Indeed, Mr Tupila appeared to accept that in the course of his cross examination[99]. 58.Mr C K Wong submitted that instalment payments under hire purchase agreements of dump trucks appearing in Mr Tupila’s Attachment 2[100] totalling $257,044[101] and in Annexure 13[102] totalling $547,871 were capital in nature and could not be treated as expenses. Mr Tupila dealt with this point in his evidence as follows:
59.Mr Tupila has taken a shortcut by treating the instalment payments under the hire purchase agreements as a business expense. These payments are of a capital nature and ought to be removed. However, if that were to be done, one would need to input the depreciation of the vehicle under hire purchase as a business expense. As it is common to depreciate a vehicle under hire purchase over the same period of time as the hire purchase agreement, treating the instalment payment as the amount of the depreciation achieves the same result and does not affect net profitablilty. 60.Mr Tupila’s shortcut does not accord with normal accounting principles. Clauses 28 and 29 of Hong Kong Accounting Standard 17 – Leases (June 2010)[104] state:
61.Mr C K Wong has performed some calculations of what the depreciation ought to be. He has come up with a figure of $339, 291.53[105]. However, these calculations for depreciation have not been addressed by Mr Lau nor put to Mr Tupila. In the circumstances, whilst Mr Tupila’s shortcut is a departure from strict accounting principles, I am prepared to adopt it for our purposes, which is to look at all available documents to reconstruct the profit and loss accounts of Cheung Hong. 62.Based on the findings that I have made above, I conclude, on a balance of probabilities, that Cheung Hong earned a profit of $2,965,016 over the period in question as set out in the following table: Adjustments to Profit based on Additional Transactions in Bank and Credit Card Statements:
63.The period in question from 1 April 2006 to 11 February 2009 was a period of about 34.5 months. Dividing the profit of $2,965,016 by this period of time gives an amount of just under $86,000 per month as the monthly profit earned by Cheung Hong. This equates to an annual profit of $1,032,000. 64.I must express my gratitude to Mr Lau and to Mr Tupila for their assistance which has enabled me to determine this controversial issue. 65.The annual profit in the amount of HK$1,032,000 has to be reduced on account of tax liability. For the year 2008/09, the basic allowance[111] was HK$108,000 and the children’s allowance[112] was HK$50,000 per child. Mr Kan Ho Chuen, the son of the deceased, was aged 13 years and 8 months at the time of the accident. Although Kan Wai Ling, the daughter of the deceased, was aged 24 years 4 months at the time of the accident, she had already completed her education and had started work in 2007[113]. Accordingly, the deceased would only have been able to claim one child’s allowance for the year 2008/09, making his total allowance of HK$158,000. Applying these allowances to HK$1,032,000 reduces the net chargeable income to HK$874,000. Of this amount, HK$120,000 would be charged to tax of HK$8,400 and the balance HK$754,000 (HK$874,000 - HK$120,000) would be charged to tax of HK$128,180, making a total tax of HK$136,580, calculated as follows: For the years of assessment 2008/09 to 2016/17 inclusive[114]
At the standard rate of 15%[115], the tax on HK$1,032,000 would amount to HK$154,800. In this case, personal assessment would result in less tax being paid. 66.In addition, pursuant to Schedule 19 of the the Inland Revenue Ordinance, Cap. 112, the amount of tax under personal assessment was reduced by HK$8,000. The net tax due would be HK$128,580 (HK$136,580 - HK$8,000) and the net income after tax would be HK$903,420 (HK$1,032,000 - HK$128,580) per annum or HK$75,285 per month (HK$903,420/12). 67.In January 2009, the Composite ConsumerPrice Index stood at 98.8[116]. In January 2015, the Composite Consumer Price Index stood at 123.1[117]. In January 2016, 2017, and 2018, the year on year change in the Composite Consumer Price Index was +2.5%, +1.3% and +1.7% respectively[118], which makes the Composite Price Index stand at 128.6 (123.1 + 2.5 + 1.3 + 1.7) in January 2018. This is an increase of 29.8% from the level in January 2009. I find that the present notional income of Cheung Hong would have risen by the same percentage to HK$1,339,536 (HK$1,032,000 x 129.8%), after taking into account inflation since January 2009 and without even taking account of the increase in construction work, and the resultant increase in construction waste, in Hong Kong since then[119]. 68.As Kan Ho Chuen would be completing his 5-year undergraduate course in Drexel University in 2018, the deceased could enjoy the basic allowance of HK$132,000 and a child’s allowance of HK$100,000 for the year of assessment 2017/2018[120]. Applying these allowances to HK$1,339,536 reduces the net chargeable income to $HK1,107,536 (HK$1,339,536 - HK$232,000). Of this amount, HK$135,000 would be charged to tax of HK$9,450 and the balance HK$972,536 (HK$1,107,536 - HK$135,000) would be charged to tax of HK$165,311, making a total tax of HK$174,761, calculated as follows: For the year of assessment 2017/18 and for each year after that year:
At the standard rate of 15%[121], the tax on HK$1,339,536 would amount to HK$200,930. In this case, personal assessment would result in less tax being paid. 69.In addition, the amount of tax under personal assessment for the year of assessment is to be reduced by HK$30,000[122]. The net tax due would be HK$144,761 (HK$174,761 - HK$30,000) and the post-trial notional net income after tax would be HK$1,194,775 per annum (HK$1,339,536 - $144,761) or HK$99,565 per month (HK$1,194,775/12). The median pre-trial notional net income after tax would be HK$1,049,098 per annum (HK$903,420 + HK$1,194,775/2) or HK$87,424 per month (HK$1,049,098/12). The Assessment of the Awards for Loss of Dependency 70.As mentioned in §5 above, it was common ground that Madam Fan and Kan Wai Ling and Kan Ho Chuen, the daughter and the son of the deceased, were dependent on the deceased at the time of the accident. The extent of their dependency and that of Madam Fan, and of Madam Wong Lai Sheung, the mother of the deceased, was a matter of some controversy. 71.I have declined to adopt the approach set out in Harris v. Empress Motors for the reasons set out in §§18 to 20 above. I will assess the awards for loss of dependency by considering the evidence of the contributions made by the deceased to his dependants prior to is death. 72.It was pleaded in the Re-Revised Statement of Damages[123] that:
73.The observations of Lord Goddard CJ bear repeating, particularly in relation to the bald assertion that food, miscellaneous expenses and entertainment (including dining outside) amounted to HK$20,000 per month. He said:
74.Madam Fan became a permanent resident of the United States on 17 February 1998[125]. After her divorce from the deceased in April 1997, she married Mr Lam Wai Shing in May or June 1997 who then sponsored her application for residence in the United States[126]. In her supplemental witness statement, Madam Fan had said that both before and after her divorce from the deceased, they had been living like a married couple. She made no mention in her witness statements of her marriage to Mr Lam Wai Shing. Her evidence that the deceased was supporting her while she lived with her husband Mr Lam is difficult to accept[127]. She had moved to the United States in February 1998[128] with her son and daughter and had lived with Mr Lam in New York where her daughter attended school[129]. She subsequently divorced Mr Lam after she had learned, in October 1998, that he was having a relationship with another woman[130]. At the end of 1998, she returned to Hong Kong with her young son[131]. Her daughter remained in the United States and lived with Madan Fan’s parents who took care of her[132]. After Madan Fan returned to Hong Kong with her son, they stayed at the flat in 313 Shanghai Street while the deceased stayed at a rented flat in Ma On Shan[133]. Eventually, the deceased had to return possession of the Ma On Shan flat and he moved to the Shanghai Street property at the end of 1999 “because there was nowhere that he could move to”[134] and he occupied a room in the front portion of the Shanghai Street flat, which was different from the portion that she was occupying[135]. This state of affairs continued until she moved into a flat at Fung Yam House in October 2005[136]. The deceased did not move with her and he remained in Shanghai Street[137]. Madam Fan started to spend more of her time in the United States after November 2005. Subsequently, the deceased moved out of the Shanghai Street subdivided room and, according to Madam Fan, he “frequented” the Fung Yam House flat[138]. 75.A summary of the plaintiffs’ closing submissions, based on the traditional approach of assessing the awards for loss of dependency by considering the evidence of the contributions made by the deceased to his dependants prior to his death, is set out below:
Household expenses in Philadelphia and Hong Kong and Madam Fan’s personal expenses 76.I shall deal firstly with the claims for household expenses in Philadelphia and Hong Kong and Madam Fan’s personal expenses. The plaintiffs’ supported these claims on the following basis:
77.Mr C K Wong conceded, in the course of the cross examination of Madam Fan, that direct payments from the banks accounts of the deceased into the bank accounts of Madam Fan in Hong Kong could not be identified[140]. I do not accept as credible the statement in Madam Fan’s witness statement dated 30 March 2012 that the deceased used to deposit HK$20,000 into her bank account every month for her saving[141]. Madam Fan has made very limited discovery of her bank passbooks, having only produced a bank passbook of Bank of China for the period from 1 February 2001 to 18 December 2002 and a bank passbook of Hang Seng Bank for the period from 14 November 2005 to 15 March 2011. Bank passbooks covering the period from 2003 to 13 November 2005 have not been produced. I have further observations to make below on the failure of the plaintiffs to discover relevant documentary evidence, particularly in connection with their bank accounts in the United States, just as I did in the course of Madam Fan’s evidence[142]. Having found that Madam Fan has made an untruthful statement in her witness statement dated 30 March 2012, I must approach the rest of Madam Fan’s evidence would caution and evaluate it carefully. 78.The particulars of the household expenses set out in Madam Fan’s witness statement duplicate the same particulars in the Re-Revised Statement of Damages set out in §72 above. Notwithstanding the many discrepancies in her evidence which have been pointed out in the defendant’s closing submissions, I accept the evidence of Madam Fan on the contributions made by the deceased towards the Hong Kong household expenses as credible and I am prepared to assess damages for loss of dependency, based on these contributions, except for her bald assertion that he contributed HK$20,000 per month for food, groceries, entertainment and miscellaneous expenses. I do so, not because I disbelieve Madam Fan that the deceased contributed financially towards her upkeep, but because I find her assertion that he contributed as much as HK$20,000 to be unreliable. There was no breakdown offered of this substantial claim and no explanation of the specific expenses that were incurred every month to make up the sum. This assertion stands out in sharp contrast to the other amounts set out in the table of expenses some of which are recorded with two decimal places, such as the monthly cost of insurance for private car use in Hong Kong of about HK$113.09 and the monthly cost of insurance and tax in Philadelphia in the amounts of US$41.67 and US$108.33 respectively. Whilst I am prepared to accept the contributions made to the household expenses in Hong Kong in the monthly sum of about HK$3,300, I need to look closely at the evidence to ascertain how much the deceased gave to Madam Fan per month towards the cost of food, groceries, entertainment and miscellaneous expenses. 79.I have already found in §20 above that the deceased would pay when he and Madam Fan went out for “yum cha” or for a meal together[143]. I also accept the evidence of Madam Fan that the deceased would, on occasion, take her to join gatherings with the drivers of the dump trucks and other business associates[144]. Notwithstanding her divorce from the deceased and the subsequent marriage to, and divorce from, Mr Lam, and notwithstanding that they did not live together as husband and wife, I am satisfied that the deceased regarded her as a former wife who would continue to be financially dependent on him. Given his substantial income, he would have had no difficulty supporting her financially. Further, the evidence she gave resonates with a “wife’s” disapproval of the behaviour of her “husband”:
80.I accept the evidence of Madam Fan that the deceased kept cash at both the Shanghai Street flat as well as in the Fung Yam house flat, from which he would make payments to her for her personal and household expenses[149]. However, from mid-2005 onwards Madam Fan spent more time in the United States. From the statement of her travel records, she was away from Hong Kong, travelling by air via the Hong Kong airport, for 828 days out of 1503 days[150], during which period of time the deceased would not have been making any cash payments to her for her personal and household expenses in Hong Kong. The records show that she left Hong Kong for about two months from July to September 2005, for about two months from November 2005 to January 2006, for about four months from February 2006 to June 2006, for a very substantial period of about nine months from October 2006 to July 2007, for about two months from December 2007 to February 2008, and for about two months from April to June 2008[151]. Looking at the matter broadly, and taking into account the finding I made in §91 below, I find that that the average monthly cash contributions the deceased made to Madam Fan for her expenses on food, groceries, entertainment, including dining outside, and miscellaneous expenses in Hong Kong, for the four years up to the time of his death on 11 February 2009, ought not to exceed HK$10,000 per month. Accordingly, I find that the total average monthly contribution made by the deceased to Madam Fan for expenses incurred in Hong Kong amounted to HK$13,300 (HK$10,000 + HK$3,300[152]) and I award damages for loss of dependency on this basis. 81.I should mention that I do not accept the submissions of Mr C K Wong that the deceased made average monthly cash contributions to Madam Fan in the sum of HK$20,000 to cover, not only expenses on food, groceries, entertainment, including dining outside, and miscellaneous expenses, but also the cost of the many trips made by Madam Fan and her children to Shenzhen over this period of time[153]. This claim was not pleaded in the Re-Revised Statement of Damages and Madam Fan did not give any evidence that the deceased’s alleged contributions of HK$20,000 per month included these expenses. What she said, in re-examination, was:
82.The evidence Madam Fan gave regarding her financial dependence on the deceased at the time of their divorce in 1997[155] was not of any assistance to me in assessing the children’s and her loss of dependency at the time of the death of the deceased in February 2009. 83.I turn to consider the claim for loss of contributions to the household expenses in Philadelphia including mortgage repayments, utilities, insurance and government rent in the total sum of US$2,130 per month. Inexplicably, no claim has been made in respect of any contributions towards the cost of food, transport and clothing. The overall preparation of this case on the part of the plaintiff’s solicitors left much to be desired, particularly having regard to the lack of discovery of relevant banking documents and documents to prove the amount of university fees paid. I am minded to think that these claims for the cost of food transport and clothing might have been omitted as a result of an oversight on the part of those preparing this case for the plaintiffs. There is also the distinct possibility that the parents of Madam Fan, who resided in the United States, made contributions to meet the needs of Madam Fan and her children living in Philadelphia. Given the incomplete discovery in this case and the complete failure on the part of the plaintiffs to discover the bank passbooks and accounts in the United States of Madam Fan and Kan Wai Ling, I have insufficient evidence to say any more than that. In any event, I only respond to claims which have been made and not claims which might have been made. 84.As set out in the agreed chronology prepared by the parties dated 17 August 2016, a property in 2135 Tyson Avenue, Philadelphia, was purchased in April 2003 for US$93,000. The absence of direct evidence from Madam Fan and scanty discovery of loan agreements entered into makes it very difficult to ascertain how this purchase was funded. A loan statement issued by an organisation called World Savings has been disclosed[156]. This document is dated 13 April 2006 and shows that Madam Fan had an outstanding loan of US$69,249. Whilst it appears to have been a loan taken out to finance the purchase of the Tyson Avenue property, I am unable to make any such finding in the absence of direct evidence. Another loan agreement was made on 10 July 2006[157] when Madam Fan borrowed US$120,000 from another organisation called Countrywide Home Loans with a monthly instalment repayments, spanning 15 years, of US$1,181, which, rounded off to US$1180, forms part of the monthly household expenses of the flat in Philadelphia set out in §76 above. Again, absent direct evidence, I am unable to find whether or not this was the loan taken out to repay the earlier loan from World Savings or whether it was an additional loan taken out by Madam Fan. As at 12 March 2007, the outstanding principal balance owing to Countrywide Home Loans was US$116,326[158]. It appears that the principal balance under this loan was reduced to the sum of US$105, 628 as at 3 May 2009[159]. 85.On 18 January 2016, I had directed the plaintiffs to provide, with their written closing submissions, a schedule of documentary evidence of remittances made by the deceased to the United States; a schedule of transfers made by the deceased to Madam Fan’s bank accounts; and a schedule of receipts and other documentary evidence that had been disclosed to prove the contributions made by the deceased to the alleged dependants. Despite the plaintiffs’ refusal to disclose and produce bank statements of accounts maintained by Madam Fan and her daughter, Kan Wai Ling, I am satisfied, from the schedules produced pursuant to my direction, that there is sufficient evidence, from the money exchanges, and the remittances to these bank accounts in the United States, that were made by the deceased, to establish that Madam Fan and his children were dependent on his financial contributions towards their expenses incurred in the United States. 86.Mr C K Wong submitted, in the plaintiffs’ closing submissions that[160]:
87.Mr Sakhrani produced a similar schedule which he attached to his reply closing submissions as Annex II. He agreed that remittance slips from 12 January 2005 to 3 February 2009 had been disclosed in the total amount of US$86,500, as set out in the table which I have replicated in §86(1)above. With the exception of one item, he also agreed with Mr C K Wong’s table, which I have replicated in§86(3)above, showing money exchanges from Hong Kong dollars to US dollars. The total amount of Hong Kong dollars exchanged amounted to US$34,000. Mr Sakhrani, rightly, did not agree with the entry in that table dated 3 July 2008 in the sum of US$10,000, for the reason that the relevant entry showed that foreign currency had been exchanged into Hong Kong dollars and then deposited into Madam Fan’s account, rather than the other way around[161]. 88.I do not agree with Mr Sakhrani’s submissions that a monthly average should be taken of the remittances and money exchange transactions from September 1998 to the time of death of the deceased in February 2009[162]. The best evidence to look at to assess this item of loss is to look at the remittances and money exchange transactions from 2005 to the time of death of the deceased in February 2009. I have reviewed the remittance slips and the bank statements and bank passbooks identified in the above tables. The remittances set out in the 1st table were all made from the bank account of the deceased. Mr Sakhrani submitted that it was unfair to include the remittance of US$50,000 made on 21 January 2005 when no direct evidence had been adduced in respect of the purpose of this remittance. I do not agree with the submission. Taking an average must mean taking an average of all remittances, big and small. I have determined that the 4 years and 2 months preceding the death of the deceased was the most appropriate period to use to assess the claims for loss of dependency. Having made this decision, it is not right, as a matter of principle, to single out and exclude any specific remittance in the absence of specific evidence that the particular remittance was not made by way of contribution to dependants but was made, for example, for the purchase of a capital asset. 89.The 2nd table lists out the money exchange transactions when Hong Kong dollars was exchanged for US dollars. The source of the funds came from the bank account of the deceased in respect of the 2 transactions in February 2007. Cash was paid for the money exchange transaction in April 2005. The other exchange transactions listed were funded from Madam Fan’s Hang Seng bank savings account. I accept the submissions that Mr C K Wong made in respect of the source of funds for these money exchange transactions. I am satisfied on the evidence that the deceased had provided the cash to be converted into US dollars in order that Madam Fan could take the US currency with her to the United States to pay for the household expenses in Philadelphia. 90.Disregarding the US$10,000 transaction in July 2008, the other remittances and money exchange transactions, spread over a period of 4 years and 2 months (or 50 months), were of the total value of US$110,500. Dividing this amount by 50 months produces a monthly average of US$2,210, which is in excess of the monthly amount of US$2,130 claimed as household expenses of the flat in Philadelphia, as set out in §76 above. I am satisfied that I ought to award the latter amount of US$2,130 per month (or HK$16,610, at the rate of HK$7.8 = US$1), as loss of dependency in respect of the contributions of the deceased towards the household expenses of the flat in Philadelphia. My award, in full, of the plaintiffs’ claim for loss of dependency of US$2,130 per month is not to be taken as a finding of fact that the remittances and money exchanges from the deceased, amounting on average to about US$2,130 per month, was in fact expended to make mortgage repayments and to meet the other expenses listed in §76 above. Clearly, there were other needs such as Kan Ho Chuen’s additional expenses, which I have dealt with in §§97 and 98 below, which might have been met from the remittances and money exchanges from the deceased. I will grant liberty to the plaintiffs to apply to me in due course to apportion my total award in respect of pre-trial and post-trial loss of dependency as between the various dependants. The award of loss of dependency of HK$16,610 per month is in addition my award of loss of dependency of HK$13,300 per month as loss of dependency in respect of the contributions of the deceased towards the expenses incurred in Hong Kong[163]. The total amount I allow under this head of claim is HK$29,910 (HK$16,610 + HK$13,300). 91.Having made these findings, and this award, I need not make a decision on the other disputed matters raised in Mr C K Wong’s submissions set out in §86 above in respect of this particular claim. However, as these matters might impact on the other claims for loss of dependency, I shall proceed to deal with them. I do not agree with the submission contained in §86(4) that, as regards the further entries set out in the table in that sub-paragraph, there was ample evidence that Madam Fan withdrew substantial amount of cash in Hong Kong dollars shortly before her overseas trips and that the only reasonable inference was that the cash was withdrawn for the purpose of the overseas trips. As Mr Sakhrani cogently submitted, and which submission I accept, it is reasonable to infer that money exchanged into US dollars and withdrawn from the account, shortly before Madam Fan’s return to the United States, was withdrawn for the purpose of being expended in the United States. The amounts withdrawn, shown on the table in §86(4) above, had been withdrawn in Hong Kong dollars and, on one occasion, US dollars was specifically deposited into the account to be exchanged into Hong Kong dollars and then withdrawn in Hong Kong dollars. The only reasonable inference to draw from these withdrawals is that the monies withdrawn was to be expended in Hong Kong. I am satisfied, however, that the source of these funds was the deceased. The total amount withdrawn in the course of the 3 years from 2006 to 2008 was the sum of HK$167,000, which amounts to an average annual sum of HK$55,667, or a monthly sum of HK$4,638. I rely on this evidence to support my finding in §80 above. 92.I proceed to deal with the remaining items of claim for damages for loss of dependency set out in §75 above, namely:
Air tickets and family trip expenses 93.The plaintiffs’ claims in respect of our air ticket expenses and family trip expenses are set out in Mr C K Wong’s submissions in these terms:
94.The Re-Revised Statement of Damages is very poorly drafted and difficult to navigate. The averments making these claims are contained in §12 and §13(b)[165]. Mr Sakhrani rightly pointed out that no claims had been advanced for the cost of family trips in China or other parts of Asia. Further, no evidence was adduced why the cost of these trips, that were pleaded originally in the sum of US$300 per person in the Statement of Damages[166], was increased to the sum of US$500 person in the Re-Revised Statement of Damages[167]. Whilst I accept the submissions of Mr C K Wong and award damages for loss of dependency in respect of the cost of family trips that was paid by the deceased, I only do so on the basis of the cost being US$300 per person, assessed as follows: US$300 x 3 dependants x 2 trips per year / 12 = US$150 or HK$1,170 per month. 95.I also allow as damages for loss of dependency the claim made by Madam Fan that the deceased paid for her air fares to and from the United States at a cost of about US$1,300 per round-trip. The summary of the trips Madam Fan made in and out of Hong Kong airport[168], and not counting the short trips of less than 2 weeks which were likely to have been trips within Asia, shows that in the 4 years from 2005 to 2008, Madam Fan made 8 trips to and from the United States, which was approximately 2 trips per year. On that basis, I assess and award damages for loss of dependency for loss of the contributions made by the deceased towards her air fares as follows: US$1,300 x 2 x 7.8/12 = HK$1,690 per month. 96.In §66 above, I had found that, at the time of his death, the net income after tax of the deceased was HK$903,420 per annum or HK$75,285 per month (HK$903,420/12). This income was sufficient to support his contributions towards Madam Fan and his children in the total sum of HK$32,770 per month (HK$29,910[169] + HK$1,690 + HK$1,170). In §67 above, I found that the present notional net income after tax of the deceased would have risen by 129.8% to HK$1,339,536 (HK$1,032,000 x 129.8%), after taking into account inflation since January 2009. I apply the same percentage increase to the loss of dependency of Madam Fan and Kan Ho Chuen to find that their loss of dependency today would be HK$42,535 per month (HK$32,770 x 129.8%). In §69 above, I found that the post-trial notional net income after tax would be $1,194,775 per annum or HK$99,565 per month (HK$1,194,775/12) and that the median pre-trial notional net income after tax would beHK$1,049,098 per annum (HK$903,420 + HK$1,194,775/2) or HK$87,424 per month (HK$1,049,098/12). I find that the median pre-trial loss of dependency would be HK$37,653 per month (HK$32,770 + HK$42,535/2). On this basis, I award damages for pre-trial loss of dependency to Madam Fan, Kan Wai Ling and Kan Ho Chuen for the pre-trial period from the date of the death on 11 February 2009 to the date of judgment, a period of about 9.25 years, in the total sum of HK$4,179,483 (HK$37,653 x 12 months x 9.25 years). Ms Kan Wai Ling, the daughter of the deceased, was aged 24 years 4 months at the time of the accident. She is aged 33 years and 7 months today. She started work as an accounting associate in January 2007[170]. In the Re-Revised Statement of Damages, it is averred that Kan Wai Ling would have ceased to be dependent on the deceased by the end of August 2011. I do not see any reason why the deceased would have reduced his contributions towards the household expenses in Philadelphia or stop paying the expenses of their family trips after Kan Wai Ling ceased to be dependent. As stated in §90 above, I will grant liberty to the plaintiffs to apply to me in due course to apportion my total award in respect of pre-trial and post-trial loss of dependency as between the various dependants. Claim in respect of Kan Ho Chuen’s personal expenses 97.Mr Kan Ho Chuen, the son of the deceased, was aged 13 years and 8 months at the time of the accident. He is aged 22 years and 11 months today. In addition to his share of the contributions of the deceased towards household expenses in Hong Kong and Philadelphia, and family holiday expenses which I have awarded above, Kan Ho Chuen also claims the following additional losses of dependency in the Re-Revised Statement of Damages[171]:
98.He supported these claims in his witness statement dated 30 March 2012[172]. He gave evidence explaining that every year and every now and then he would come back to Hong Kong and his father would give him a lot of money in Hong Kong dollars to spend; and that, in the United States, money would be given to him through the hands of his mother.[173] No claims had been advanced by the plaintiff’s solicitors in respect of Kan Ho Chuen’s loss of spending money that his father used to give him, in Hong Kong dollars, to spend during his stay in Hong Kong. Insofar as Kan Ho Chuen claims loss of the contributions the deceased made to him via his mother, that must be considered in the apportionment exercise of the award I have made in respect of the loss of contributions towards the household expenditure (including expenditure on Kan Ho Chuen’s needs) that were incurred in Philadelphia. Given the incomplete discovery in this case. and the complete failure on the part of the plaintiffs to discover the bank passbooks and accounts in the United States of Madam Fan and Kan Wai Ling, I have insufficient evidence before me to enable me to make any award in favour of Kan Ho Chuen, that is additional to the award I have already made in favour of all 3 dependants in §90 above. 99.In September 2013, Kan Ho Chuen commenced his studies in a 5-year undergraduate programme in Mechanical Engineering at Drexel University in the United States[174]. In his supplemental witness statement dated 4 December 2015, Kan Ho Chuen stated that he changed his studies in 2015 to study Marketing and International Business. The University offered a 5-year “Co-Op Programme”, meaning that university tuition was combined with periods of working outside. Being a 5-year programme, he would graduate in September this year. He claims the following additional loss of dependency in the Re-Revised Statement of Damages[175]:
100.Kan Ho Chuen supported these claims in his 2 witness statements but, apart from 1 tuition statement from Drexel University for 2013 showing fees of US$37,504 and a scholarship of US$8,702[176], no other statements or receipts have been produced for these very substantial claims for tuition fees and the cost of supporting his interest in photography and related expenses. I remarked, in the course of his evidence, how easy it must be to get a statement from the university’s bursary of the university fees paid and how astonished I was that this was not done. 101.I am pleased to note, having regard to the complete absence of any documentary proof to support the very substantial claims being made in respect of photography and related expenses, that Mr C K Wong has not made any submissions in his closing submissions to support these claims. Even if he had, I would have dismissed these claims outright on the ground that I was not satisfied on the evidence adduced that these expenses had been incurred. 102.No evidence was led as to who paid for the fees for Kan Wai Ling when she was at university. Evidence that the deceased had done so would have been cogent evidence from which one could infer that the deceased would also have paid for Kan Ho Chuen’s university fees when he became old enough to enter university. Notwithstanding the absence of such evidence, I find that the deceased would have paid Kan Ho Chuen’s university fees had this accident not occurred. Kan Ho Chuen lived with him for a longer period of time then his elder daughter, Kan Wai Ling. Kan Ho Chuen returned to Hong Kong in late 1998 and lived here until September 2005, when he started to study in Philadelphia[177]. Even so, he returned to Hong Kong during his summer holidays and the deceased made many family trips together with Ho Kan Chuen[178]. I have heard no evidence that he was estranged from his son, or that the deceased did not care for his son and did not have the affection for his son that a father would naturally have for his own son. 103.Some further documentation was discovered before written closing submissions were exchanged. Mr C K Wong submitted, in his closing submissions[179], that:
104.Instead of resolving the dispute, the account activity schedule appears to have raised more controversy. In his closing submissions, Mr Sakhrani stated[180]:
105.Let me state at the outset that I strongly disagree with the submission that the right question to ask is not what was actually paid but the best estimate, at the time of death of the deceased, of Kan Ho Chuen’s university tuition fees and other expenses. On this point, there is no better statement of principle than that contained in McGregor on Damages, 20th Ed., at §40-037, where it is stated:
Mr C K Wong quoted from the decision of Hunter J, as he then was, in Wong Wai Han v. Kowloon Motor Bus Co. (1933) Ltd. [1985] 2 HKC 132 at p.134I that “[w]e have to assess what might have been: and what can be seen at the trial since death, may substantially be influenced by the death itself.” That statement of principle is irrefutable: it applies to the situation where, for example, a child of the deceased drops out of university because the loss of his father’s contribution towards his fees prevents him from carrying on his studies - the fact that he has dropped out of university does not prevent him from claiming damages for loss of the contributions his father would have made towards those university fees had his father not been killed. It does not apply to the present case where the child has been awarded a scholarship to cover part of those fees. Even if he were alive today, the contribution Mr Kan would make towards Kan Ho Chuen’s university fees would be in the reduced amount of such fees. However, I agree with the submissions of Mr C K Wong that the student loans taken by Kan Ho Chuen ought not to be deducted from his claim for damages for loss of dependency[181]. I have found[182] that that the deceased would have paid Kan Ho Chuen’s university fees had he not been killed by this accident. I also find that, if the deceased were alive and was paying Kan Ho Chuen’s university fees, Kan Ho Chuen would not have needed to take out any student loans. 106.I agree with Mr C K Wong’s calculations that the amount charged this university fees from August 2003 to February 2016 was just over US$100,000, after deducting late payment fees and refund of tuition fees, probably on account of Kan Ho Chuen switching from mechanical engineering to a business major. The period in question was about 2.5 years and the activity report shows that on average Kan Ho Chuen’s fees at Drexel were about US$40,000 per year. The following table is a table of grants and scholarships made to Kan Ho Chuen that I have extracted from the activity report:
The total value of the grants and scholarships over this period of 2.5 years was US$53,052, or an average of US$21,220 per year. I assess the cost of Kan Ho Chuen’s education at Drexel University for the period of 5 years from September 2013 to the summer of 2018 to be US$18,780 per year (US$40,000 – US$21,220) or HK$146,484 per year (US$18,780 x 7.8). 107.In §69 above, I found that the median pre-trial notional net income after tax of the deceased would be HK$1,049,098 per annum or HK$87,424 per month (HK$1,049,098/12). I find that had he lived, the deceased would have had sufficient income to contribute the sum of HK$146,484 per annum to pay for Kan Ho Chuen’s university fees in Drexel from 2013 to 2018, in the total amount of HK$732,420 (HK$146,484 x 5 years), in addition to the other contributions he made to Madam Fan and his children as I have found in §96 above. Claim on behalf of Madam Wong Lai Sheung, mother of the deceased 108.The plaintiffs no longer pursue a claim for damages for loss of dependency in respect of the deceased’s alleged contributions towards the parents of Madam Fan. Mr C K Wong’s submissions only contain submissions regarding the claim in respect of the loss of dependency of the mother of the deceased, Madam Wong Lai Sheung. The defendants contest this claim because “nothing was said about the state of health of the deceased’s mother today.”[183] The parties have a continuing obligation to the court up to the time that judgment is delivered to check and ensure that statements contained in pleadings, such as a Statement of Damages, continue to be true and accurate. If there has been an event or an occurrence which detracts from the truth of any claim pleaded in the Statement of Damages, it is the obligation of the party concerned to withdraw or amend such claim. There is been no withdrawal or amendment of this particular claim in these proceedings. 109.The parties did not examine any witnesses in respect of this claim at trial. They were probably too preoccupied on the other and more complex issues raised in the proceedings. I accept the evidence of Madam Fan that the deceased would meet his mother about 10 times every year and would give her HK$2,000 to HK$3,000 every time he met her[184], amounting to about HK$25,000 per annum (HK$2,500 x 10). Madam Wong Lai Sheung was born on 28 July 1934. She was aged 74 years and 7 months at the time of the accident and is aged 83 years and 9 months today. I find that, but for his death, the deceased would have continued to gives sums of money to his mother, for as long as she lives, in the total sum of about HK$25,000 per annum. I find that he would not have increased these payments to his mother on account of inflation but would maintained the payments at or about this level. No evidence has been adduced of any increasing needs on her part. On the other hand, as she grew older, she would probably spend less and less on herself. I award pre-trial loss of dependency to her at the rate of HK$25,000 per annum for the period from the date of death on 11 February 2009 to the date of judgment in the total sum of HK$231,250 (HK$25,000 x 9.25 years). Summary of the awards for pre-trial loss of dependency 110.The following is a summary of the awards I make in this action for pre-trial loss of dependency:
111.The deceased was born on 25 October 1957 and was 51 years and 3 months of age at the time of his death on 11 February 2009. If he were alive today, he would be 60 years and 6 months old. The Re-Revised Statement of Damages contained inconsistent averments: in §22(a) it was assumed that the deceased would have worked until the age of 65 but in §29(c) it was averred that, but for the accident, the deceased would have retired when he reached 70 years of age. I permitted Mr C K Wong to open his case on both scenarios without requiring a further amendment of the Re-Revised Statement of Damages. 112.In Fung Suen Sim v. Liu Chun Pong HCPI 896 of 2007, 23 December 2011, I had stated:
113.At the time of trial, the parties were aware that an appeal was going to be heard in the UK Supreme Court on whether or not the multiplier in a fatal accidents action should be assessed as at the date of trial. It was anticipated that the judgment of the UK Supreme Court would be handed down before the parties returned to make their closing submissions. That case was Knauer v. Ministry of Justice [2016] UKSC 9, [2016] A.C. 908 and the joint judgment of the Supreme Court, delivered by Lord Neuberger and Lady Hale, was given on 24 February 2016. In that case, a widower appealed directly to the Supreme Court, pursuant to a certificate granted by the judge, against a decision on the damages he had been awarded for future loss following the death of his wife. The widower's wife had died from mesothelioma aged 46, having contracted it from being exposed to asbestos during her employment by the respondent ministry. The ministry admitted liability in the widower's claim brought under the Fatal Accidents Act 1976. The damages assessed included a multiplicand for the value of the income and services lost as a result of the wife’s death. The judge held that the multiplier was to be calculated from the date of death rather than the date of trial, following the House of Lords' decisions in Cookson v Knowles [1979] A.C. 556 and Graham v Dodds [1983] 1 W.L.R. 808. The issues were (1) whether the Cookson and Graham approach properly reflected the principle of full compensation; (2) if not, whether the instant court should depart from that approach, applying the Practice Statement (HL: Judicial Precedent) [1966] 1 W.L.R. 1234. 114.The UK Supreme Court held that calculating damages for loss of dependency upon the deceased from the date of death, rather than from the date of trial, meant the claimant suffered a discount for early receipt of the money when in fact the money would not be received until after trial. That resulted in under-compensation in most cases. The current approach in fatal accidents cases involved taking a multiplier as at the date of death and then deducting from it the time which elapsed between death and trial. That mixed up a calculation based on properly considered actuarial principles with an arbitrary arithmetical deduction. The Law Commission in their report on Claims for Wrongful Death[188] had recommended that, as in personal injury cases, actuarially calculated multipliers should be used for calculating future losses in fatal accident cases from the date of trial. Cookson and Graham had been decided in a different era, when the calculation of damages for personal injury and death had been nothing like as sophisticated as it had become. The approach at the time, relying on the intuition of the barristers and judges in the cases, was wholly unscientific. The Ogden tables had not existed when the cases had been decided. Wells v Wells [1999] 1 A.C. 345 had laid to rest any doubts about using the tables in the courts. While the Supreme Court should be very circumspect before exercising its power to depart from previous decisions of the House of Lords or the Supreme Court, there had been a material change in the relevant legal landscape since the two House of Lords decisions, namely, the use of actuarial tables to calculate future losses in personal injury and fatal accident cases. The application of the reasoning in those decisions was illogical and resulted in unfair outcomes. Accordingly, the Supreme Court would exercise its power to depart from those decisions. 115.Not surprisingly, Mr C K Wong, in the plaintiff’s closing submissions, submitted that I ought to follow the decision of the UK Supreme Court in Knauer v. Ministry of Justice, adding that, since my decision in Chan Pak Ting v. Chan Chi Kuen (No.2) [2013] 1 HKLRD 1, Hong Kong courts have applied the Personal Injury Tables Hong Kong (“the Chan Tables”), which are based on the Ogden tables. He submitted that there was no reason for Hong Kong not to adopt the approach of the Supreme Court such that from now on the multiplier should be assessed as at the date of trial and not at the date of death[189]. Mr Sakhrani, in the defendant’s closing submissions, conceded that the defendant did not contend that Knauer v. Ministry of Justice should not be applied in Hong Kong[190]. I have conducted my own researches to ascertain whether there is any Court of Appeal decision in Hong Kong, which would be binding on me, which has followed the decision in Cookson v Knowles [1979] A.C. 556 or Graham v Dodds [1983] 1 W.L.R. 808 that the multiplier in a fatal accident case should be ascertain as at the date of death. Although the Court of Appeal in Hong Kong has applied the decision in Cookson v Knowles [1979] A.C. 556 on the discount rate to be adopted in calculating multipliers[191], there is been no decision of our Court of Appeal on the issue in question, namely, whether the multiplier in a fatal accident case ought to be ascertained as at the date of death or as at the date of trial. As I am not bound by higher authority, I am free to follow the UK Supreme Court’s decision in Knauer v. Ministry of Justice, which is persuasive authority. I consider that decision to be correct and I have no hesitation following it. Therefore, I shall ascertain the multiplier to be adopted in this case by having regard to the notional age of the deceased, had he lived, as at the date of this judgment. 116.Although the defendant did not contend that Knauer v. Ministry of Justice should not be applied in Hong Kong, Mr Sakhrani went on to submit in the defendant’s closing submissions[192] that:
Having regard to the findings I have made in connection with the profits earned by the deceased from his dump truck transport business and the continuing profitability of the business, I see no basis for making the discount that has been sought by the defendant. It is accepted that the discount due to the risk of natural death or disability might well be very small in the pre-trial period from the date of death and the date of the judgment which, in this case, is 9.25 years. Table E of the Ogden Tables[193] is a table showing the factor by which the pre-trial damages should be multiplied in a fatal accident case to allow for the likelihood that the deceased would not in any case have survived to provide the dependency for the full period to the date of trial. In the case of a deceased male aged 50[194] and where the pre-trial period is 9 years, the factor is 0.98. If a similar table were to be produced based on the Hong Kong Life Tables, it is likely to show an even smaller discount factor, given the higher life expectancy in Hong Kong, such that the reduction would be de minimus. For these reasons, I decline to apply any discount to my assessment of the award for pre-trial loss of dependency. The multiplier to be adopted in this case to assess post-trial loss of dependency 117.As I had said in my decision in Fung Suen Sim v. Liu Chun Pong,[195] the multiplier should be adopted by having regard to the age and health of the deceased and, in particular, to the date when he would likely have retired if the accident had not occurred. The age and health of the dependants claiming post-trial loss of dependency was also relevant. The deceased was 51 years and 3 months of age at the time of his death on 11 February 2009. If he were alive today, he would be 60 years and 6 months old. Madam Fan is aged 58 years and 5 months today and there is no doubt that she would live much beyond the likely retirement date of the deceased. 118.In Fung Suen Sim v. Liu Chun Pong[196], I had concluded that the probabilities were that the deceased in that case would have continued his occupation as a sole proprietor of his wholesale vegetable business and would have carried on his business until he reached the age of 70. His pre-accident lifestyle was such that I could not conceive of any reason why he would stop working, in order to pursue other activities, unless he had to stop by reason of ill health or business losses. I had found that the outlook for his business was very positive and continued to remain positive. I noted in that case that I had not received any evidence that would have led me to conclude that he was unlikely to remain healthy up to the age of 70. I found particular assistance from the decision of O’Connor J, as he then was, in Davies v Whiteways Cyder Co Ltd [1975] 1 Q.B. 262 before reaching that conclusion. In that case, Mr. Davies was killed in a traffic accident in 1971 when he was 55 years old. He was a successful businessman. Until 1963, he owned and ran a family business. In that year, the business was taken over. He then started a partnership with a Mr. Phillips to build houses and to sell them. In assessing the appropriate multiplier, O’Connor J had regard to age of health of Mr. Davies, the age of health of Mr. Phillips, and the age of the business. Mr. Davies enjoyed excellent health prior to the time of his death. He was an active man and highly enjoyed the business in which he was engaged, which was carried out from his home. O’Connor J was of the view that it was highly improbable that he would have wanted to retire before he reached the age of 70. He also held that the probability was that the business would have remained profitable for a long time to come. 119.The deceased in the present case also carried out his dump truck transport business from his home. Cheung Hong employed drivers to operate the dump trucks. The deceased did not himself drive the dump trucks. I have already found that his business was profitable and I have assessed his notional net of tax income today to be HK$1,194,775 per annum or HK$99,565 per month (HK$1,194,775/12)[197]. Cheung Hong had purchased a dump truck in 2007 and 2 more dump trucks in 2008[198]. I have no basis to find that his business would not have remained profitable. His habit of often travelling to Shenzhen for massages[199] would not have prevented him from working until the age of 70. I accept the evidence of Madam Fan[200] and find that, prior to his death, the deceased was in good health and lived a normal life. He did not smoke or drink. He was a hard-working person, cheerful and helpful, and he was well liked by his friends and business colleagues who liked to work with him. I have no basis to conclude that he was likely to become healthy before the age of 70 years. I find that, but for his untimely death, the probabilities are that the deceased would have continued to carry on his dump truck transport business for a further 9.5 years until he reached the age of 70. 120.Table 11 of the 2016 Chan Tables provides multipliers for loss of earnings to pension age 70 for males. As the deceased would have been 60.5 years of age today, the period of future loss would be less than 10 years in respect of which a discount rate of 1% would be appropriate[201]. At that discount rate, Table 11 provides multipliers of 9.17 for a male aged 60 and 8.31 for a male aged 61. The median of the 2 multipliers is 8.74 (9.17 + 8.31/2), which I adopt in the present case to assess post-trial loss of dependency for Madam Fan and Kan Ho Chuen. Post-trial loss of dependency of Madam Fan and Kan Ho Chuen 121.In §96 above, I had found that the loss of dependency of Madam Fan and Kan Ho Chuen today would be HK$42,535 per month. Applying that amount to the multiplier of 8.74 produces a post-trial loss of dependency of HK$4,461,071 (HK$42,535 x 12 months x 8.74), which I award in favour of Madam Fan and Kan Ho Chuen. 122.I find that Kan Ho Chuen will remain dependent on the contribution of the deceased towards the household expenses in Philadelphia up to the end of August 2018. I do not see any reason why the deceased would have reduced his contributions towards the household expenses in Philadelphia or would have stopped paying the expenses of their family trips after Kan Ho Chuen ceased to be dependent. The quantum of Kan Ho Chuen’s post-trial loss of dependency can be determined when application is made to apportion the various awards for loss of dependency between Madam Fan, Kan Wai Ling and Kan Ho Ching. Post-trial loss of dependency of Madam Wong Lai Sheung 123.Just as I took judicial notice of the Consumer Price Indices published by the Census and Statistics Department in Fung Suen Sim v. Liu Chun Pong[202] so too do I take judicial notice of the Hong Kong Life Tables published by the Census and Statistics Department. The current expectation of life for females is 87.3 years[203]. A female aged 83 is expected to live another 10.24 years and a female 84 is expected to live another 9.62 years[204]. The calculation of the expectation of life is explained on p.5 of the publication and takes into account the risk of earlier death. I find that Madam Wong Lai Sheung, who is aged 83 years and 9 months today, is likely to survive another 10 years. As the risk of earlier death is already taken into account in the calculation of expectation of life, it is appropriate to refer to Table 28 of the Chan Tables, being the table of multipliers for pecuniary loss for term certain, to ascertain the appropriate multiplier to apply. For a term of 10 years, the table produces a multiplier of 9.52 at the rate of return of 1%, which is the appropriate rate of return for a duration not exceeding 10 years[205]. Accordingly, I award damages for post-trial loss of dependency to Madam Wong Lai Sheung in the sum of HK$238,000 (HK$25,000 x 9.52). Summary of the awards for post-trial loss of dependency 124.The following is a summary of the awards I make in this action for post-trial loss of dependency:
The Award for Loss of Accumulation of Wealth 125.At the time of his death on 11 February 2009, the deceased had net assets worth almost HK$860,000 (excluding the value of the dump trucks owned by him and the insurance policies taken out by him[208]) as set out below:
Although he was legally obliged to do so, there is no evidence that the deceased made any contributions to the Mandatory Provident Fund (“MPF”). 126.The assets listed above have not been lost by his untimely death. They form part of his estate. What has been lost is the net wealth he would have accumulated, from the date of his actual death until the date of his natural death, had the accident not occurred. Although a substantial part of the assets listed above came from the receivables of Cheung Hong, those receivables would contribute towards the accumulation of his wealth, as much as his bank deposits would. I find that the deceased accumulated wealth during his 24 years of working life, since he established Cheung Hong in 1985 up to the time of his untimely death in February 2009[210], and that he would have continued to do so, had the accident not occurred. 127.In Fung Suen Sim v. Liu Chun Pong[211], I proposed a new method of assessing this award which has since been adopted in a number of fatal accident cases[212]. The starting point is to have regard to the likely savings the deceased would have made, from the time of death to the time of his retirement, had the accident not occurred. In §69 above, I found that the post-trial notional net income after tax of the deceased would be HK$1,194,775 per annum or HK$99,565 per month (HK$1,194,775/12) and that the median pre-trial notional net income after tax would be HK$1,049,098 per annum or HK$87,424 per month (HK$1,049,098/12). There is no evidence in this case that the deceased actively pursued some savings plan or investment plans. He used his personal bank accounts and Cheung Hong’s bank accounts interchangeably. Where there is no established pattern of savings but the evidence clearly shows that the deceased would likely have made some savings from his income, which is the present case, the courts should adopt a savings rate of 10% of such income to assess this head of claim. There is ample authority to support this approach which was reviewed by the Court of Final Appeal in Lam Pak Chiu & Anors v Tsang Mei Ying and So Sau Lin (Administratrices of the estate of To Shing Chiu, deceased) [2001] 1 HKLRD 193 at p. 207:
128.Applying a savings rate of 10% of pre-trial median notional net of tax earnings of HK$1,049,098 per annum would produce savings, over the pre-trial period of 9.25 years, of HK$970,416 (HK$1,049,098 x 10% x 9.25 years). Applying a savings rate of 10% of post-trial notional net of tax earnings of HK$1,194,775 per annum would produce savings, over the post-trial period of 9.5 years up to the notional date of retirement at age 70, of HK$1,135,036 (HK$1,194,775 per annum x 10% x 9.5 years). On the above basis, I conclude that he would have saved HK$2,105,452 (HK$970,416 + HK$1,135,036) at the time of his natural retirement at the age of about 70. These savings would grow, during the period he was accumulating his savings, as well as during the period, after his retirement, when he would have stopped saving. 129.As I stated in Fung Suen Sim v. Liu Chun Pong[213], it is inappropriate to use a multiplier to assess his notional savings over this period of time. The award under this head of claim is not a lump sum award to represent the loss of a future continuing stream of income, which has to be discounted, on account of accelerated receipt, by the use of a multiplier. The above assessment has to be made in order to assess the total notional accumulation of wealth from the time of death to the time of notional retirement, including any likely growth of these accumulated savings from investment returns. Once this amount has been assessed, the next stage is to determine whether this accumulated wealth would grow, or be depleted, by the time of natural death. If there is a net balance at the time of natural death, this net balance, which is a future loss sustained by the estate of the deceased, must be discounted for accelerated receipt. However, this discount is a discount for the accelerated receipt of a future lump sum loss rather than for the loss of a future continuing stream of income. 130.In Fung Suen Sim v. Liu Chun Pong[214] I had stated:
I was off the mark to assess the accumulated fund to be about HK$1,300,000 as my re-calculations, using Excel software, show. These calculations are attached as Annex 1 to this judgment. 131.The discount rate was reduced to 2.5% for future losses in excess of 10 years by my decision in Chan Pak Ting v. Chan Chi Kuen (No. 2) [2013] 2 HKLRD 1. In Bibi Bushra and Nabela Qoser, the co-administrators of the estate of Khalid Mehmood, deceased v. Method Building and Engineering Works Ltd (in liquidation) & Ors. [2014] 3 HKLRD 21, I observed that[215]:
132.I set out in Annex 2 to this judgment my calculations, using Excel software, to show the rate of growth of the deceased’s notional savings at the net rate of return of 2.5%, which I adopt in the present case, and which Wilson Chan J adopted in his recent judgment in Chung Sui Cheong v. Tsang Wai Hung HCPI 1058 of 2015, 3 November 2017[216]. These calculations show that the accumulated savings would have grown to HK$2,742,082 at the date of notional retirement at age 70. 133.I now turn to consider what would happen to this fund during the years from the date of notional retirement at age 70 to the date of natural death. The current expectation of life for males is 81.3 years[217]. A male aged 51 is expected to live another 31.84 years to the age of 82.84 years[218]. Taking 83 years as the likely age of natural death of the deceased, I have no doubt that a substantial part of the accumulated wealth would have been depleted, during the post-retirement period of 13 years, on account of his personal expenditure which would exceed the assumed rate of return of 2.5% per annum on the accumulated fund. 134.I have assessed that he would be saving about 10% of his net after tax income up to the time of retirement. I found that the post-trial notional net income after tax of the deceased would be HK$1,194,775 per annum or HK$99,565 per month. This would leave a balance of 90%, or HK$89,609 per month, for his personal expenses and contributions to his dependants. His post-trial contributions to his dependants amounted HK$42,535 per month[219] and HK$2,083 per month (HK$25,000/12 months)[220], a total of HK$$44,618, or about 50% of HK$89,609, leaving the balance 50%, i.e. HK$44,805 per month (HK$89,609 x 50%) or HK$537,660 per annum, as his personal expenses,. His expenses after retirement are likely to be reduced by about one-third to about HK$30,000 per month, or about HK$360,000 per annum, as he would probably curtail his expenditure after retirement to preserve his savings. This amounts to about 13% of his accumulated savings at the time of retirement of HK$2,742,082. Reducing this sum of HK$2,742,082 by 13% per annum, and increasing the balance by the assumed rate of return of 2.5% per annum, will result in a net reduction of the accumulated savings by 10.5% per annum. The fund, therefore, will reduce to about HK$648,306 in 13 years’ time, being the period of time between the notional date of retirement and the date of natural death. 135.I set out in Annex 3 to this judgment, my calculations, using Excel software, to show that the value of the accumulated fund at the time of natural death would be HK$648,306. 136.This remaining net balance on the notional date of death would then have to discounted for accelerated receipt of 22.5 years from the date of natural death to the date of judgment. Table 27 of the Chan Tables 2016 shows a discount factor of 0.5809 for a term certain of 22 years at the discount rate of 2.5%. It shows a discount factor of 0.5667 for a term certain of 23 years at the discount rate of 2.5%. I adopt a discount factor of 0.57 (i.e. a discount of about 43%), being the median of these 2 values, as the appropriate discount factor to apply for this length of time. Applying this discount factor to the accumulated fund at the time of natural death produces the sum of HK$369,534 (HK$648,306 x 0.57), as shown in Annex 3 to this judgment. 137.On the basis of the above assessment, I award the sum of HK$369,534as the loss of the net accumulation of wealth in favour of the estate under the provisions of LARCO. This case again demonstrates that this remnant of the abolished lost years’ claim is unlikely to yield a very high award[221]. 138.Before I leave this area, I ought to confess that I was, indeed, off the mark in Fung Suen Sim v. Liu Chun Pong to award HK$450,000 as damages for loss of net accumulation of wealth, but only slightly. I set out in Annex 4 to this judgment, my recalculations, using Excel software, which show that my award should have been HK$436,623. These miscalculations were picked up by the parties concerned, who had appealed against my judgment and, in a respondent’s notice, contended that the award for the loss of net accumulation of wealth should be less than the amount I had awarded. I understand that the parties eventually reached a settlement and the appeal was not pursued. 139.Damages for bereavement are agreed in the sum of HK$150,000. I award this amount to the children of the deceased, Kan Wai Ling and Kan Ho Chuen, to be divided equally between them, pursuant to the provisions of section 4(1), (2)(b) and (4) of the Fatal Accidents Ordinance, Cap. 22. I also award interest on this amount at the rate of 8% per annum from the date of death to the date of judgment[222]. 140.I accept the evidence of Madam Fan that the funeral and related expenses amounted to HK$140,496 (being funeral costs), US$2,420 (being the cost of travel to Hong Kong from the United States for her and her children) and US$6,191 (being the cost of the graveyard in the Greenwood Cemetery in the United States where he was buried)[223]. I find that these expenses were reasonably incurred and I award this head of claim, totalling HK$207,661[224], in full. I also award interest on HK$207,661 at the rate of 8% per annum from the date of death to the date of judgment[225]. 141.I award interest on damages for pre-trial loss of dependency at the rate of 4% per annum from the date of death to the date of judgment. 142.No interest is awarded on damages for loss of net accumulation of wealth which is an award to compensate for future loss. 143.The following is a summary of the awards I make in this action:
144.I make a costs order nisi that the defendant pays the costs of the action to the plaintiff. 145.I grant liberty to the plaintiffs to apply to me within 42 days to apportion my total award in respect of pre-trial and post-trial loss of dependency, and interest thereon, as between the various dependants. 146.I cannot conclude my judgment without thanking counsel for their assistance in this difficult case.
Mr Wong Chi-Kong and Mr Leon Ho, instructed by ONC Lawyers, for the plaintiffs Mr Ashok K Sakhrani, instructed by Deacons, for the defendant Annex 1
Annex 2
Annex 3
Annex 4
[1] [CBB/114 §11] [T/2S] [2] [CBB/111 §5] [3] [CBB/112 §6] [4] [T/13P] [5] [T/13T] [T/14J-S] [6] [T/14L] [7] [T/17L] [8] [T/23J] [9] [T/24P] [10] [CBB/157 §8] [11] [T/21K] [12] [CB3/3032] [T/21H] [13] [T/26M-Q] [14] [T/26T-27A] [15] [T/27L-N] [16] [T/27M] [17] [T/29K-O] [18] [T/4H] [19] [T/29P] [20] [CB3/3064] [21] [T/4M] [22] [T/4P] [23] [T/37B] [24] [T/7Q] [25] [T/126L-M] [26] P’s Closing Submissions, §37 at pp. 27-32. [27] At p. 217. [28] Madam Fan gave evidence that “[sometimes] he saw that I was alone at home and hearing that I was bored, he took me out for a meal. I did not always follow him.”: [T/67C-D]. [29] [T/2U] [30] [T/3A-4I] [31] [CBC/429 §3.2.1] [32] [CBC/598 §2.1.1-2] [33] [CBA/89] [CBB/165] [34] [CBC/607-1] [35] [CBC/274] [36] [CBC/435§3.4.5] [37] The projection method uses historical data, such as Inland Revenue returns, to project future profits and losses. Based on returns submitted to the Inland Revenue by Cheung Hong, Mr Lau estimated an average gross profit ratio of 12.42% which he applied to the gross income earned for the period from 1 April 2006 to 1 February 2009 to arrive at gross profits in excess of $2.5m [CB?/536-537]. [38] Counsel for the defendant. [39] At p. 279 [40] At §§3.2.2 & 3.2.3. The difference in the amounts was the result of duplicate invoices, errors relating to totals specified in the invoices and income identified in bank statements which did not have supporting documents. Other income earned, for transporting materials such as sand from one site to another, in the sum of $211,922 brought the total income earned over this period to $21,589,314. [41] [T/231Q-232B] [42] Cf. CBC/589-592 with Figure 1 of Mr Tupila’s report dated 15 December 2014. [43] §15 on p.10 [44] [CBC/570] [45] [T/217J-218B] [46] A loss ratio of 7.7% [CBC/440, Figure 6]. [47] [CB3/3037, 3041 & 3043] [48] See Figure 1 in §28 below. [49] P’s Closing Submissions p.3 §4 [50] [CBC/490] [51] Mr Lau [52] Mr Tupila [53] [CBC/436, §3.4.6] [54] [CBC/496-52]. Whilst there were many ATM transfers, most were cheque deposits. [55] The balance of the deposits shown on the bank statements (i.e. HK$21,377,392 less HK$18,524,117) could be matched to transport service fee invoices. [56] $1,697,845/$21,589,314 = 0.077 or about 7.7%. [57] [CB3/3289] [58] [CB3/3290] [59] See §28 above. [60] [CBC/515-529] [61] [CBC/437] [62] [CBC/437] [63] [CBC/503-514] [64] [CBC/437, §3.4.9] [65] [CBC/600] [66] [CBC/606-7] [67] [T/260O-Q] [68] [T/293H-S, 300I-M] [69] At p.1737E – 1738E. [70] See §33 above. [71] [CBB/115, §14] [72] [CB3/3037, 3041 & 3043] [73] See Figure 1 in §28 above. [74] [CB3/3273-3274] [75] [CB3/3278] [76] There was a dispute whether payment for a telephone land line was a company expense and whether payment of hire purchase instalments was properly accounted as a company expense, which I deal with below. [77] Assuming that these amounts are correctly described aa company expense. [78] By reason of the fact that Table 1 was in peach colour [CB3/3252]. [79] [CB3/3256-3258] [80] [T/242T-243D] [81] D’s Closing Submissions pp.19-20, §25(b) [82] [CBC/600] [83] [T/233G-L] [84] See §28 above. [85] I have only reproduced part of Figure 3 that is relevant to our purposes. [86] I have reduced this amount to HK$1.56m in §49 above. [87] I have reduced this amount to HK$2.82m in §49 above. [88] I have only reproduced part of Figure 3 that is relevant to our purposes. [89] Annexure 7 contains a list of the insurance charges, telephone charges, repairs and maintenance, and licensing fees [CBC/487-488]. [90] In Annexure 13 [CBC/530-532]. [91] [CB3/819] [92] [T/283F-289J] [93] [CBC/530-532] [94] Shing Tak Tyre Polytechnic Co. Ltd. [95] P’s Closing Submissions pp.6-9, §11 [96] Being the total of the PCCW-HKT-DDA payments from the BEA - Visa Card listed in Attachment 2 [CB3/3273]. Mr Tupila conceded this in evidence in chief [T/263M]. [97] See §§50-51 above. [98] Namely, the duplication of invoices from Shing Tak Tyre Polytechnic Co. Ltd. (HK$1,760) (appearing once in CBC/365 as a listed invoice and again in Attachment 6 [CB3/3291] as a credit card expense) and Crown Motors Ltd. - Hino Hong Kong (HK$3,423) (appearing once in Attachment 2 [CB3/3273] as a credit card expense and again in Attachment 6 [CB3/3291] as a credit card expense). [99] [T/289J] [100] [CB3/3273-3274] [101] 13 payments of HK$16,388 and 4 payments of HK$11,000. [102] [CBC/530-532] [103] [T/263T-265H] [104] Annex III to D’s Reply Closing Submissions [105] P’s Closing Submissions at p.5, §6: “... provision should be made for the three dump trucks which the Deceased made hire purchase agreements at HK$330,000 on 8 December 2007 i.e. 431 days before the Accident [CB3/1136], HK$782,904 on 20 March 2008 i.e. 328 days before the Accident [CB1C/401], and HK$840,399 on 26 May 2008 i.e. 262 days before the accident [CB1C/402].Adopting a 5-year straight line depreciation rate, which is sufficiently generous as one of Cheung Hong’s available dump trucks at the time of the Accident was manufactured in 1990 [CB3/617], a further HK$339,291.53 should be deducted [HK$782,904 x 20% x 328/365 + HK$840,399 x 20% x 262/365 + HK$330.000 x 20% x 431/365 = HK$339,291.53]”. [106] See §56 above. [107] I have reduced this amount to HK$1.56m in §49 above. [108] Removed to avoid double-counting [109] I have reduced this amount to HK$2.82m in §49 above. [110] See §57 above. [111] Under s.28 and Schedule 4 of the Inland Revenue Ordinance, Cap. 112. [112] Schedule 4 of the Inland Revenue Ordinance, Cap. 112. S.31(1) of the Inland Revenue Ordinance, Cap. 112, provides that “an allowance (child allowance) shall be granted under this section in the prescribed amount in any year of assessment if the person had living and was maintaining at any time during the year of assessment an unmarried child who was - (a) under the age of 18; (b) of or over the age of 18 years but under the age of 25 years and was receiving full time education at a university, college, school or other similar educational establishment; or ...”. [113] [CBB/134 §5] [114] Schedule 2 of Cap.112. [115] Schedule 1 of Inland Revenue Ordinance, Cap. 112. [116] [CB3/3164] See also Personal Injury Tables Hong Kong 2016 at p.77 against the month January 2009. [117] Personal Injury Tables Hong Kong 2016 at p.78 against the month January 2015. [118] Monthly Report on the Consumer Price Index, Table S2 on p.8. [119] Cf. my findings in §28 of Fung Suen Sim v. Liu Chun Pong. [120] Schedule 4 of Inland Revenue Ordinance, Cap. 112. [121] Schedule 1 of Inland Revenue Ordinance, Cap. 112. [122] As announced in the 2018-2019 Budget on 28 February 2018. [123] [CBA/4-6 §§7-9] [124] In Bonham-Carter v. Hyde Park Hotel Ltd (1948) 64 TLR 177, cited by Kempster JA in World Realty Ltd. v. Kwan Ngar Yin [1987] 3 HKC 148. [125] [T/13R] [126] [T/13T-14T] [CB3/3029] [127] [T20/B-D] [128] [T17D-F] [129] [T/17L-R] [130] [T/23F-I] [131] [T/23H-K] [132] [CBB/118 §18] [T/72A-D] [133] [T/26P-U] [134] [T/27L-N] [135] [T/27M] [136] [T/29K] [137] [T/29K-O] [138] [T/4M] See also §§10-15 above. [139] P’s Closing Submissions at §§38-42 and 59. [140] [T/76A-J] [141] [CBB/121 §26] [142] [T122Q-126G] [143] Madam Fan gave evidence that “[sometimes] he saw that I was alone at home and hearing that I was bored, he took me out for a meal. I did not always follow him.”: [T/67C-D]. [144] [CBB/114 §12] [145] [T/36R – 37E] [146] [T/115J & T] [147] [CBB/115 §14] [T/58N-59L] [148] [T/59R-T] [149] [CBB/121 cp27] [T/83I-K] [150] [CB3/3066-1] P’s Closing Submissions at §29(3) [151] [CB3/3065-3066] [152] See §78 above. [153] P’s Closing Submissions at §29 [154] [T/112A-D] [155] [CB3/3029] [CBB/112 §6] [CBB/157 §11] [T/39O] [156] [CB3/3111] [157] [CB3/1140-1142] [158] [CB3/1140-1142, 3112] [159] See the Agreed Chronology dated 17 August 2 016 at p.8. [160] At pp. 21-24 §30 [161] [T/Submissions/31J-32M, 33K] [162] D’s Closing Submissions at p.29 §38(b) [163] See §80 above. [164] P’s Closing Submissions pp.34-35 [165] [CBA/8] [166] [CB3/3144] [167] [CBA/8 at §12] [168] [CB3/3066-1] [169] See §90 above. [170] Agreed Chronology dated 17 August 2016 at p. 4. [171] [CBA/11 §16(b)] [172] [CBB/145 at §7] [173] [T/152F-H] [174] Agreed Chronology dated 17 August 2016 at p. 9. In his supplemental witness statement dated 4 December 2015, Kan Ho Chuen stated that he changed in 2015 to study Marketing and International Business. [175] [CBA/14 §23(b)] [176] [CBB/182, 233] [177] Agreed chronology dated 17 August 2016 at pp. 1, 3. [178] See P’s Closing Submissions at §§29(4) and 44. [179] At p. 37-40, §§50-57. [180] At pp.13-14. [181] P’s Reply Submissions at p. 20, §42 [182] At §102 above [183] D’s Closing Submissions at p.15 §20 [184] See the Re-Revised Statement of Damages at CBA/12 §17(a) which is supported by a statement of truth at CBA/23 and see Madam Fan’s witness statement at CBB/121 §28. [185] At §96 above. [186] At §107 above. [187] At §109 above. [188] 2 November 2002 [189] P’s Closing Submissions p.27 §35 [190] D’s Closing Submissions p.33 §47 [191] Chan Pui Ki v. Leung On [1996] 2 HKLR 401 [192] At p.33. [193] Actuarial Tables in Personal Injuries and Fatal Accident cases, 7th Ed., at p. 25. A similar table does not appear in the Chan Tables 2016 although the point is noted on p.14, §51. [194] The deceased in this case was 51 years and 3 months of age at the time of his death on 11 February 2009. [195] See §112 above. [196] At §§49-50 [197] At §69 above [198] [CB3/3037, 3041, 3043] [199] See §79 above. [200] [CBB/122 §31] [201] Chan Pak Ting v. Chan Chi Kuen (No. 2) [2013] 2 HKLRD 1 at p.67 §133 [202] HCPI896/2007, 23 December 2011 at §28 [203]See Hong Kong Life Tables 2011-2066 September 2017 at p.7 §2.4 available at https://www.statistics.gov.hk/pub/B1120016072017XXXXB0100.pdf [204] See Hong Kong Life Tables 2011-2066 September 2017 at p.33, Table 13. [205] Chan Pak Ting v. Chan Chi Kuen (No. 2) [2013] 2 HKLRD 1 at p.67 §133. [206] At §121 above. [207] At §123 above. [208] [CBA/18] [209] Payments to Yee Tat Company, Wai Shing Vehicle Maintenance, Keung Chai Vehicle Rescue, Kam Tin Filing Area, Tong Kung Leng, and for and for the private car nearing vehicle registration no. LV 6770. The other items, which are not expenses (for e.g. loan repayments) or which are related to the death of the deceased, e.g. funeral expenses, have not been included. [210] See §2 above. [211] At §§53-65. [212] See the recent decision of Wilson Chan J in Chung Sui Cheong v. Tsang Wai Hung HCPI 1058 of 2015, 3 November 2017. [213] At §58 [214] At §60 [215] At footnote 21 under §38 [216] At §135. [217]See Hong Kong Life Tables 2011-2066 September 2017 at p.7 §2.4 available at https://www.statistics.gov.hk/pub/B1120016072017XXXXB0100.pdf. [218] See Hong Kong Life Tables 2011-2066 September 2017 at p.31, Table 12. [219] See §96 above. [220] See §123 above. [221] My “guestimate” during my exchanges with counsel, quoted in §23 above, turned out to be correct. [222] Bibi Bushra and Nabela Qoser, the co-administrators of the estate of Khalid Mehmood, deceased v. Method Building and Engineering Works Ltd (in liquidation) & Ors. HCPI 301/2012, 6 March 2015 at §§14-17. [223] [CBA/21] [CBB/123-124 §33] [T/8D] [224] Adopting an exchange rate of US$1 = HK$7.8. [225] Bibi Bushra and Nabela Qoser, the co-administrators of the estate of Khalid Mehmood, deceased v. Method Building and Engineering Works Ltd (in liquidation) & Ors. HCPI 301/2012, 6 March 2015 at §17. [226] See §139 above. [227] See §140 above [228] At §96 above. [229] At §107 above. [230] At §109 above. [231] At §141 above [232] At §121 above. [233] At §123 above. [234] At §137 above | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cases cited in this judgment
Other judgments that cite this case