V.S.L. Engineers (Hong Kong) Ltd and Another v. Yeung Wing

Read the full judgment text of CACV 27/1981 on BabelCite. This Court of Appeal judgment.

1. YEUNG Chun-chung was a young man of about 24 years of age who was employed as a labourer upon a construction site at H.M.S. Tamar, Hong Kong. The principal contractors upon that site were Messrs. Technic Construction Co. Ltd. and Messrs. V.S.L. Engineers (Hong Kong) Ltd. were subcontractors working upon the same site. They were respectively the second and the first defendants in the action.

Case No.CACV 27/1981
Court
Court of Appeal
Date
Judge
Case Document
100%Judiciary

CACV000027/1981

Law Reform and Fatal Accidents Ordinances - Damages - award for the "lost years" and for loss of expectation of life under the former whether deductible from award under the latter - mutual merger of damages - Effect of decisions in Pickett v. British Rail Engineering Ltd. and Gammell v. Wilson - Whether sum awarded under Law Reform Ordinance as savings accruing to estate of deceased took account of sum awarded as value of lost dependancy under Fatal Accidents Ordinance.

IN THE COURT OF APPEAL  
   
 

1981 No. 27

 

(Civil)

BETWEEN    
  V.S.L. Engineers (Hong Kong) Ltd. Appellants
  Technic Construction Co. Ltd.  
  and  
  YEUNG Wing Respondent

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Coram: McMullin, V.-P., Li, J.A. & Baber, J.

Date of Judgment: 21st May, 1981.

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JUDGMENT

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McMullin, V.-P.:

1. YEUNG Chun-chung was a young man of about 24 years of age who was employed as a labourer upon a construction site at H.M.S. Tamar, Hong Kong. The principal contractors upon that site were Messrs. Technic Construction Co. Ltd. and Messrs. V.S.L. Engineers (Hong Kong) Ltd. were subcontractors working upon the same site. They were respectively the second and the first defendants in the action.

2. On the morning of the 19th of May 1978 YEUNG Chun-chung was engaged in work upon the site. The cage in which he was working upon the 29-storey building became detached and he was precipitated to the ground, a distance of some 110 feet. He sustained injuries from which he dies a short time later.

3. The deceased's father, YEUNG Wing, took action on behalf of himself and other family members as dependants under the Fatal Accidents Ordinance (Cap.22) and on behalf of the estate of the deceased under the Law Amendment and Reform Consolidation Ordinance (Cap.23).

4. The case was tried by Sir Denys Roberts, C.J. and following his example I will for convenience refer to these legislative provisions respectively as "Fao" and "Larco". At the hearing the defendants admitted liability and by agreement between them the first defendant accepted liability to the extent of 60% and the second defendant 40% for the consequences of the accident.

5. The deceased was one of a family of seven children, several of whom were contributing, together with the mother but not the father, to the "pool" of family financial resources. The evidence established a dependency, as claimed, in the father, mother and three of the younger children of the family. The deceased died intestate and it was accepted that the beneficiaries of his estate would be the father and the mother only.

6. On the evidence before him, by a series of calculations and estimates of the kind familiar in such actions, the learned Chief Justice found that the total dependency under Fao amounted to $56,640. He awarded interest at 5½% on the $18,240 which he had estimated as the sum of the pre-trial dependency damages.

7. He next awarded a sum of $15,000 in respect of the loss of expectation of life. This was an upward revision by $5,000 of the "conventional" award under this head in Hong Kong. This he did to offset the decline in the value of money since 1977 the year in which, as he found, the conventional award of $10,000 had become generally applicable in such cases. No issue is taken upon this appeal as to the appropriateness of these awards. Indeed, the figures employed by the Chief Justice in arriving at his awards under the various heads have not been in controversy and none of the individual sums awarded has been challenged so far as mere quantum is concerned.

8. We come now however, to the award of damages in respect of the "lost years" under Larco. The Chief Justice came upon the action before him at an interesting stage in the law's development. It had already been established in Pickett v. British Rail Engineering Ltd(1) that a living plaintiff is entitled to claim damages representing the loss of such moneys as would have accrued to him from earnings in the years which, in the estimate of the court, would be lost to him through the shortening of his life as a result of the injury caused by the tortious act of the defendant.

9. At the date of trial the Court of Appeal in England in Gammell v. Wilson(2) had by a majority found that a similar claim was available under the equivalent of Larco at the suit of a deceased person's legal representative for the benefit of his estate following upon his death as a result of such a tortious act. This establishes what is in effect a new head of damage separate and distinct from the familiar and conventional award in respect of the loss of expectation of life.

10. In following the decision of the majority in the Court of Appeal the Chief Justice acknowledged that it was not an authority which was binding upon the courts of Hong Kong. He was however disposed to follow it as a "powerful persuasive authority". Since then the principle in Gammell has been affirmed by the decision of the House of Lords and has thus become a binding principle for these courts also. (See de Lasala v. de Lasala(3)).

11. There has been no debate before us as to the existence of this new head of damage. The relevant provisions of the Law Reform (Miscellaneous Provisions) Act 1934 are to practical intent in identical terms with those of Larco, the local provision. There has however been lively debate as to the proper interpretation of those provisions in the light of the judgments in both Gammell and Pickett.

12. Many of the judges who have dealt with this matter in the recent cases have expressed dissatisfaction with the speculative character of the calculations to which the court is put in estimating this head of damage and all of the judges in Gammell's case without exception, both in the Court of Appeal and in the House of Lords, expressed dissatisfaction with the current state of the law. What has caused this concern is the combined effect of the provisions of paragraph (c) of subsection 2 of section 1 and the declaration contained in the opening words of subsection 5 of section 1 of the English Act the material terms of which are identical with the corresponding provisions in section 20 of the Ordinance and are as follows:

  "(2) Where a cause of action survives as aforesaid for the benefit of the estate of a deceased person, the damages recoverable for the benefit of the estate of that person-  
  .........  
  (c) Where the death of that person has been caused by the act or omission which gives rise to the cause of action, shall be calculated without reference to any loss or gain to his estate consequent on his death, .....  

(5) The rights conferred by this Act for the benefit of the estates of the deceased persons shall be in addition to and not in derogation of any rights conferred on the dependence of deceased persons by the Fatal Accidents Acts 1846 to 1908..."

Of the eight judges who dealt with Gammell's case only Megaw, L.J. in the Court of Appeal interpreted paragraph (c) as excluding from recovery by the estate damages which would have been recoverable by the deceased if he had not died i.e. damages for the lost years. All the remaining judges construed that provision in the opposite sense as excluding from recovery by the estate only such damages as would not have been recoverable by the deceased in his life time. This depends on a fine but necessary distinction between damages which are "consequent upon death" and damages which are consequent upon the tortious act. Lord Wright in Rose v. Ford(4) dealing with this provision said (at p.368):

"Obvious instances of what are referred to are such items as, on the one side, insurance moneys falling due on death, and, on the other, annuities ceasing on death."

The life insurance policy seems to have attracted universal approval as an example of a gain to the estate which is not to be regarded in estimating damages but the instance of annuities, as an example of a possible loss to be so excluded, has not. The effect of paragraph (c) (corresponding with paragraph (b) in section 20 of the Ordinance) is succinctly stated by Lord Edmund-Davies at page 586 in Gammell's case where he says:

"But its effect, in my judgment, is that the fact that death has occurred as a result of the defendant's wrongful act is not to increase or reduce such damages as would have been recoverable by the plaintiff when alive."

He then refers to Chapman's Statutes on the Law of Tort (1962, p.6) which gives as examples of relevant loss and gain respectively: (a) the untimely falling due of death duties which might have been avoided if the deceased had survived a little longer and (b) benefit to the estate deriving from family settlements by reason of the deceased having died upon a particular day.

13. The effect of all this is that by the consensus of all these judges - with Megaw, L.J. as a lone dissentient - damages may be awarded to the estate of the deceased in respect of lost earnings in the lost years and are not to be regarded as a gain to the estate "consequent on his death". It was the view of Megaw, L.J. that that provision prevented the recovery of damages on behalf of the estate in respect of any earnings other than those which had been forfeited as a result of the tortious act while the deceased still lived but none of the other judges was prepared to follow this view nor was the Chief Justice in the present case.

14. The present state of the law, thus interpreted, is regarded in these many judgments with distaste because it is perceived as likely to occasion in justice to defendants. This may occur in actions brought under both of these ordinances (as many actions are) where the result of the litigation is to secure to the successful plaintiff an unmerited enrichment of the kind which has been described either as a "windfall" or else as double recovery of damages. Unless I misunderstood the arguments of counsel the terms were used more or less synonymously but, as used by Griffiths, J. in Kandalla v. British Airways Corporation(5) where the expression seems to have originated, they appear to refer to two quite different situations. Where the dependants of the deceased are also the beneficiaries entitled to his estate (as in the present case) they will recover under Fao a sum calculated to compensate them for the loss of his support. The court awarding damages under Larco will be entitled to award a sum of precisely the same size in respect of the lost years. But this will not be paid to the dependants in addition to what they have already recovered under Fao. They will take only what is in the estate over and above the sums of damages awarded in respect of the loss of expectation of life and of the lost years after the court has made a due deduction in respect of the estimated living expenses of the deceased during those years.

15. Where, as in the present case, the principal beneficiaries of the deceased's estate are the parents of the deceased it is clear that had he lived his life through then, in the ordinary course of things, they would have pre-deceased him and consequently would never have had a share in his estate at all. Since they have received under Fao a sum estimated to compensate them for the support which they would have had from the deceased during the lost years this additional and accelerated distribution of his assets to them under Larco may indeed be regarded as a "windfall". There is, in this case, however, no question of double recovery of damages.

16. Such double recovery is said to arise in the case where the deceased has by testamentary disposition left his estate away from the dependants. The consensus of opinion in the House of Lords in both Pickett and Gammell appears to be that in such circumstances the beneficiaries might be entitled to a sum equivalent to the amount of the earnings lost over the lost years even although the dependants in the fatal accident claim stood to be, or had already been, compensated in a like amount. Nevertheless I confess that I have some difficulty in seeing why that must be so. Since in calculating the amount by which the estate is to be compensated for the results of the tortious act allowance must be made, as is conceded universally, for what the deceased would have spent upon himself during the lost years and since this would inevitably have included some spending upon friends and companions what reason can be assigned for treating the moneys notionally expended upon his dependants in any different way? Both are alike expenditures proceeding out of his conscience and free will (albeit at different levels of moral obligation) and both are equally opposed to the accumulation of assets for transmission after his death. Moreover, if the basis of the action under Larco is the recovery of such sums as the deceased would have been entitled to recover has he brought the action when living any court, especially when both actions are brought simultaneously, would surely be entitled to resist the suggestion that, merely because there are two different sets of claimants, these very different beneficiaries of the deceased's notional bounty are both to be gratified. The assumption underlying each claims is that the deceased would have gone on contributing to the support of his dependants. No doubt the court finds itself in a dilemma: there are two perfectly viable claims each seeking to lay hold of compensation for the lost dependency. But where the calculations involve much that is already suppositious and speculative, to compound these unrealities with a final pretence that the deceased has honoured his obligations twice over is an extremity which must surely be avoidable if only on the common sense basis that the actuality of the dependency makes the claim of the dependants paramount.

17. In rejecting the argument that the principle established by the House of Lords in Pickett was equally applicable in an action brought under the Law Reform Act as in one brought by a living claimant, Megaw, L.J. considered the various arguments advanced to show that the judges in the House of Lords must have intended their conclusion to extend to Law Reform cases. He was not convinced that they had considered the matter, in particular the difficulty posed by section 1(2)(c) of the Act. He discounted the references to "overlapping damages" in the speeches in the House as affording any indication that they had done so. He said (P.596 3 W.L.R.)

"The risk of such double recovery would not exist if, in a Law Reform Act action, the estate was not entitled to recover anything in respect of the earnings of the lost years."

He escaped from the dilemma by construing the section in a sense which disposed of its power to create anomalies. He did so by holding that the removal of the deceased's power to earn in the lost years was a "loss consequent on his death" and thus excluded from consideration in awarding damages. No one has followed that lead, nor, with respect, would I. It must be on a different understanding, if at all, that the anomalies are to be avoided.

18. Counsel in the present case are content to accept that the present state of the case and statute law may give rise to anomalous results. They each take issue with the learned Chief Justice over the manner in which, applying the law in its latest development in Gammell and Pickett, he has calculated the amount of damages to be awarded under the two ordinances. Following Gammell the Chief Justice concluded that no distinction should be drawn between the case of a live plaintiff claiming damages for the lost years and that of his representative claiming on behalf of his estate. He said (page 12 of his judgment):

"This means that the judge would have to assess what the earnings for the lost years would have been and deduct from this total an estimated sum to represent the victim's probable living expenses during those years. This follows the principle that the basis for recovery lies in the provision which he would make for his dependants out of the surplus of his income."

He adopted what he described as a practical approach which went upon the assumption that the deceased like any young man of his kind would in the course of his natural span of life have accumulated over and above his spendings a certain surplus which could be represented as a percentage of income over those years. The Chief Justice went on to say:

"I realise that any percentage which I take cannot be justified by logic, but I believe that such a figure is necessary to provide at least a starting point for courts faced with the task of estimating a future surplus of income on inadequate material. Of course, if there is evidence which suggests a different figure, this will replace the proposed conventional percentage which I will set at 10%."

19. He found nothing in the evidence to suggest that that percentage would not be the correct one in the case before him. On the basis of a monthly income of $2,000 and a multiplier of 15 he arrived at a total of $360,000 for the lost earnings. 10% of this gave a figure of $36,000. That was the valuation of what had accrued to the estate through the forfeiture of earnings in the "lost years". To this he added the $15,000 awarded in respect of the loss of expectation of life bringing the figure to a total of $51,000 under Larco. He said:

"The award for loss of expectation of life of $15,000 will merge with the award under Fao. The award for lost years will not so merge. This will leave a total award of $92,640."

20. Mr. Swaine for the appellants complains that in refusing to merge the lost years damages with the Fao damages the Chief Justice was in effect granting the plaintiff double recovery of damages.

21. On the cross-appeal Mr. Denis Chang for the respondent upholds the method of calculation of the Chief Justice all but for his provision as to the $15,000 damages for loss of expectation of life. Mr. Chang says that on the basis adopted by the Chief Justice there was no reason in logic to distinguish between the lost years damages and the loss of expectation of life damages and therefore the final award should have been increased by $15,000.

22. So far as the estimate of damages for the lost years is concerned the difference between counsel comes down to a single simple point. Mr. Swaine says that in arriving at his final figure of $36,000 the Chief Justice has had regard to everything which he estimates would have been earned by the deceased during the lost years and everything which the deceased would have spent either upon himself or his friends or in other personal ways but has not made allowance for the contributions which would have been made by the deceased during those years to his dependants. Therefore, he says, this final figure, being the surplus available after that calculation, must be held, as it were, in reduction of the obligation to his dependants which, by common assent, the deceased would have honoured during those years.

23. It is true that the Chief Justice addressing himself to the problem has referred only to the need to deduct the deceased's own probable living expenses from what he earned during those years. Nevertheless, I am quite satisfied that Mr. Denis Chang has correctly interpreted his award as having taken account of the fact that he had already found what the deceased would have allocated to the needs of his dependants in the lost years, It is true that the process of his mere arithmetic does not disclose that he has done so. The surplus to which he is referring is to my mind as counsel maintains. the notional savings of the deceased over the whole extent of his putative natural span.

24. I believe that this idea of savings surplus to expenditure over the lost years is the key both to an understanding of the approach of the Chief Justice and to such a reconciling of the disparate demands which may arise under these two statutes that justice can be done without affronting common sense. It is true that in the several speeches in the House of Lords in Gammell specific reference is made only to the deceased's own personal expenses as necessary deductions from his earnings but, throughout, the import of these observations is to establish what the deceased would have "saved so as to increase his estate" (See the quotation from the judgment of Lord Atkin in Rose v. Ford which appears in the speech of Lord Edmund-Davies at p.584h). I see nothing here to indicate that any of those learned judges would have excluded expenditure upon dependants from any computation of savings which had followed the line taken by the Chief Justice in the present case.

25. If that be the proper way. of looking at the award then it is inconceivable that in arriving at his figure the Chief Justice had not already marked off the amount of the dependency in fixing the amount by which the estate was to be replenished to compensate. for the effects of the tortious act. If we were to hold otherwise it seems to me that we would be saying that the Chief Justice. regarding the matter from the Fao angle, was satisfied that the sum awarded, $56,640, would in fact have been expended upon the dependants by the deceased whereas, looking at it from the Larco angle, he had come to the conclusion that in the end the deceased would have been unable folly to honour his obligations even though he had wished to do so. For my part I am quite satisfied that the Chief Justice rightly ordered that the Larco damages to the extent of $36,000 should not merge with the Fao damages.

26. That leaves, only the question of the cross-appeal. It is quite true as Mr. Swaine points out that the merging of lost expectation of life damages has been over many years, an almost automatic affair in fatal accident cases. But the ground rules have changed drastically following upon the decisions in Pickett and Gammell and before them in the case of Kandalla. Is there any reason why these damages should merge if the others do not? No reasons are given by the Chief Justice for the distinction which he drew between them. I appreciate that this order relating to the lost expectation of life award follows the distinction between pecuniary and non-pecuniary loss to which reference is made at paragraph 1352 of the 14th edition of McGregor on Damages. For my own part I cannot see why such a distinction should be made. The text at that ponnt appears to rely principally on Murray v. Shuter(6) where the Court of Appeal approved the deduction from a fatal accidents award of a sum awarded in respect of loss of amenities where the deceased had survived the accident for some four years. On the other hand, in Gammell v. Wilson both Brandon L.J. and Sir David Cairns in the Court of Appeal express dissatisfaction with this distinction and I do not find it approved in any of the judgments in the House of Lords. I can find no good reason to distinguish between these two heads of damage. Both are accretions to the estate of the deceased which, to use a distinction applied by Lord Russell in Rose v. Ford and approved by Lord Edmund-Davies in Gammell (p.586G):

".... are not for loss to the estate consequent on the death, but for loss to a living person consequent on the wrongful act of the defendant."

Both are sums which, had he lived, the deceased could have claimed in respect of the lost years. I am unable to see why they should be treated differently in the final assessment and to this extent only I would depart from the decision of the Chief Justice.

27. In cases of this kind henceforward it would seem that where awards are made under both ordinances the Larco figure will almost invariably overtop that given under Fao. It was no doubt this consideration which moved Lord Scarman in Gammell to remark (page 595):

"The logical, but socially unattractive, way of reforming the law would be to repeal the Fatal Accidents Act, now that the rule actio personalis moritur cum persona has itself belatedly perished."

This would not be feasible in Hong Kong since we lack what the learned judge went on to refer to as the "final safeguard of the Inheritance (Provision for Family and Dependants) Act 1975". But it does indicate an abrupt alteration in the manner in which courts must view such claims in the future.

28. The method (as I have understood it) employed by the Chief Justice in the present case to meet the new situation would seem to offer a logical and readily comprehensible manner of honouring the intention of the existing legislation and of accommodating the requirements of the different claims which may arise under it. Clearly it is not the only method. In some cases, it may be thought preferable to make no award at all under the Fatal Accidents Ordinance which is what was done by the trial judge in Gammell.

29. Counsel in this court have not sought to quarrel with the adoption of a "conventional" percentage of 10% in estimating the possible surplus available to the estate. This is no doubt, as the Chief Justice indicated, to be regarded merely as a starting point and it should not be used by the courts to avoid the task of closely scrutinising the evidence in order to determine whether that percentage or a different percentage or no percentage at all ought to be applied in a given case.

30. For these reasons I would dismiss the appeal and allow the cross-appeal.

Representation:

John Swaine, Q.C. and William Lane instructed by Deacon for the appellant.

Denis Chang, Q.C. and Miss A. Eu instructed by Director of Legal Aid for the respondent.

(1) (1979) 1 All E.R. 774.

(2) (1980) 2 All E.R. 591.

(3) (1980) A.C. 546.

(4) (1937) 3 All E.R. 359.

(5) (1980) 2 W.L.R. 730.

(6) 1076 Q.B. 972.

Li, J. A.:-

31. On the 19th May, 1978 one Yeung Chun-cheung (the deceased) died as a result of an accident while working in the construction site in the employment of the appellants. The 1st appellant was the sub-contractor of the 2nd appellant. His father (the respondent) brought an action against both appellants on behalf of the deceased's estate under the Law Amendment & Reform Consolidation Ordinance (Cap. 23) and on behalf of himself and other dependants under the Fatal Accident Ordinance (Cap.22).

32. At the hearing before the learned Chief Justice both appellants admitted liability to be apportioned between themselves. The only question left was one of quantum of damages. Having considered the evidence with his usual meticulous care and analysis the Chief Justice awarded the following heads of damages:-

  (1) Loss of dependency to be apportioned between the various dependants under Cap.22 - $56,640.  
  (2) Loss of Expectation of Life under Cap.23 - $15,000.  
  (3) Lost years (of earnings) under Cap.23 - $36,000.  

33. He further ordered that the $15,000 in Head (2) above be merged with the $56,640 in Head (1) and that the $36,000 in Head (3) should be additional to and not merged with the higher sum of $56,640 in Head (1).

34. There is no dispute as to the actual sums awarded for the various items of damages. Nor is it disputed that ever since the case of Gammell v. Wilson (1981) 1 All E.R. 578 damages for the loss of prospective earnings of the deceased during his lost years can properly be awarded to his estate in the case of a fatal accident. This appeal and cross-appeal is confined to the narrow compass of the Chief Justice's order of merger and non-merger of Heads 2 and 3 respectively.

The Issue

35. On behalf of the appellants it is contended that the learned Chief Justice is wrong in law in holding that the award of $36,000 under Cap. 23 for lost years does not merge with the award of $56,640 under Cap.22. In his Notice of Appeal the respondent contends that the Chief Justice erred in his findings that the sum of $15,000 awarded in respect of loss of expectation of life merged with the damages awarded under Cap.22. In the course of the hearing of this appeal, the respondent obtains leave to file a Respondent's Notice in support of the Chief Justice's decision not to order that the $36,000 awarded for lost years be merged with the award under the Fatal Accident Ordinance (Cap.22).

Arguments

36. On behalf of the appellant Mr. Swaine contends that since both the awards for the loss of expectation of life and for lost years in the sums of $15,000 and $36,000 respectively were made under Cap.23 a total of $51,000 should be merged with the sum of $56,640 awarded under Cap.22. This is particularly so when the Chief Justice ordered the merger of $15,000 for loss of expectation of life. In support of his argument he cites the passage in McGregor On Damages para. 1349 to the effect that the Court should deduct damages awarded under the Law Reform Acts and from damages awarded under the Fatal Accident Acts but not vice versa. The principle is to avoid double dependency. He days that the respondent and his wife as parents would become heirs of the deceased under Section 4(6) of the Intestate's Estate Ordinance Cap.73. As dependants they were apportioned 7/8 of the award of $56,640 on the ground of dependency. If they get another $36,000 from the deceased's estate it means that they received double compensation. Counsel submits that the Chief Justice misinterpreted the Gammell's case by taking it as authority for refusing to deduct the lost years award from the dependency award. That is not warranted in that case. He contends that both in Gammell's case and in Kandalla v. British European Airways Corporation (1980) 2 W.L.R. 730 the judges refer to recovery for lost years as 'windfalls' to the dependants.

37. Mr Chang for the respondent argues that the Chief Justice started with the sum of $360,000 as representing the lost years of earnings. He had made allowances for the various sums that the deceased, had he lived his normal life, would have spent on himself and in support of his dependants before he found that the net savings accrued to the estate was $36,000. By so doing it is obvious that the Chief Justice had taken into consideration of the $56,640 awarded for the dependency claim. He had already applied the merger once. If the $36,000 were to be merged with the $56,640 that would be, in effect, a double merger of at least $36,000. He contends that the deduction of the $15,000 for loss of expectation of life from the $56,640 award is wrong. He contends that the principle of merger applies in a sense that awards under the Fatal Accident Ordinance or the Law Reform Amendment Consolidation Ordinance will merge with one another. In short whatever greater sum is awarded under either Ordinance would absorb the smaller sum.

38. In the present case the learned Chief Justice had started off with the highest figure of $360,000 awarded under the Law Reform Ordinance to which must be added the $15,000 awarded under the same Ordinance. The award of $56,640 was a smaller sum which had been accounted for when the Chief Justice arrived at the sum of $36,000 as net savings after all expenses. Since the Chief Justice had already assessed that the deceased's contribution to the family was $56,640 that sum must be deemed to have already been deducted from the $375,000 before the Chief Justice came to the net saving of $36,000.

39. The learned Chief Justice assessed the damages for lost years of earnings as $360,000. In his further assessment and calculations he said at p.39 as follows:-

"This means that the judge would have to assess what the earnings for the lost years would have been and deduct from this total an estimated sum to represent the victim's probable living expenses during those years. This follows the principle that the basis for recovery lies in the provision which he would made for his dependants out of the surplus of his income...................... I guess that a normal young man, having made a generous contribution to the family income, would see little reason not to spend most of the balance on himself and his friends. But as he grew older he might well see more clearly the virtues of saving a larger part of his wages and living below his income. I am prepared to assume, however, that a person will, during the course of his working life, spend on the average somewhat less than his income."

40. Thus it is obvious that in arriving at the figure of $36,000 the Chief Justice had taken into consideration that the deceased would have contributed to his dependants to the sum of $56,640 though he did not expressly say so.

The Law

41. In the earlier part of his judgment the learned Chief Justice had examined and considered the English authorities and come to the conclusion that the lost years of earnings should be assessed as a separate head of damages even in cases of fatal accidents. He also concluded that this head of damages should be awarded under Cap.23. I do not propose to go through the authorities apart from saying that, with great respect, I agree entirely with him in his conclusion. Nor do counsel for both parties argue to the contrary of such authorities The only argument by Mr. Swaine is the suggestion that it is a 'windfall' and a double compensation. Be that as it may Lord Edmond-Davies said in Gammell's case (1981) 1 A.E.R. 578 at 587 as follows:-

But, my Lords, such 'windfalls' have not appeared inadvertently on the legal landscape. On the contrary, the legislature had them clearly in contemplation when it provided by s.1(5) of the 1934 Act that -

'The rights conferred by this Act for the benefit of the estates of deceased persons shall be in addition to and not in derogation of any rights conferred on the dependants of deceased persons by the Fatal Accidents Acts, 1846 to 1908 ...........'

At p.588 Lord Fraser said:-

"It is particularly difficult to justify the law in cases such as the present, in each of which the deceased was a young man with no established earning capacity or settled pattern of life. In such cases, it is hardly possible to make a reasonable estimate of his probable earnings during the 'lost years' and it is, I think, quite impossible to take the further step of making a reasonable estimate of the free balance that would have been available above the cost of maintaining himself throughout the 'lost years', and the amount of the free balance is the relevant figure for calculating damages. The process of assessing damages in such cases is so extremely uncertain that it can hardly be dignified with the name of calculation: it is little more than speculation. Yet that is the process which the courts are obliged to carry out at present."

42. Speaking for myself and with the greatest respect to their Lordships, I cannot say that the award for lost years is a 'windfall' to the dependants. Had the injured of the accident survived he would, without the authorities of recent decisions, been able to recover damages for his future loss of earnings as a separate item of damages. He might spend all or part of them - and most likely part only for himself and his dependants. Whatever is saved will go to his estate. The dependants are receiving no more than the amount of dependency in the ordinary way plus what is left in the estate in their capacity as beneficiaries. Applying the common concept of human behaviour I suggest that the beneficiaries and the dependants are most likely to be the same persons. That being the case it is only a question of converting an expectant interest into a vesting interest as far as the leftover of the lost year award is concerned. It cannot be said that the tortfeasor has been required to pay twice over. He is responsible for the consequences of his own wrongful act. He only pays for the lost years of earnings once the sum for dependency is deducted from the award for lost years. Whoever benefits from the compensation payable by him is not his concern. The only remaining question is whether there could be a mutual merger i.e., the lesser award either under Cap.22 or Cap.23 merges with the greater figure.

43. In this connection I do not accept the statement in para. 1349 of McGregor on Damages as conclusive. The passage in that paragraph reads:-

"Davies v. Powell Duffryn Collieries settled not only that a deduction was proper but that the Law Reform Act award went to reduce the Fatal Accidents Act award and not vice versa. This is clearly the correct method analytically, but there had previously been doubts as to the rule in practice by reason of the views expressed obiter on the question by Lord Atkin and Lord Wright in Rose v. Ford."

44. However, in another paragraph, namely para. 1352 of the same work, having considered the case of Murray v. Shuter [1976] Q.B. 972 (C.A.) the same authority wrote as follows:-

"The result must be that, to the extent that the award to the estate represents damages in respect of earning capacity throughout the lost years, it will fall to be deducted from the award under the Fatal Accidents Act if, as will normally be the case, the dependants inherit the estate. Since the deceased's earnings less his own living expenses must always equal or exceed his contribution to his family from those earnings, Pickett would seem, unless legislation intervenes, to eliminate the great bulk of Fatal Accidents Act claims, and to render largely otiose the great bulk of this chapter."

45. To this I may add that Davies's case was decided well before the concept for award for loss of years of earnings was established. This clearly implies that award under Fatal Accidents Acts may merge with awards under Law Reform Acts if the former happens to be less.

46. In any event, it is not Mr. Swaine's principal argument. The very notion of a "windfall" as accepted from the English authority indicates that there can be such a merger otherwise the dependants will indeed be compensated twice over.

The Conclusion

47. For the aforesaid reasons I am of the opinion that the Chief Justice is correct in not ordering the $36,000 to merge with the $56,640 award. He has made it quite clear as to his mode of his calculation in the passage of his judgment I have cited. On the other hand the $15,000 for loss of expectation of life being awarded to the deceased's estate should be added to the sum total recoverable for the estate. There is no reason why it should not be added to the notional $360,000 for the lost year. Accordingly, I will dismiss the appellant's appeal and allow the cross-appeal by the respondent in terms.

  (Simon F.S. Li)

Representation:

Mr. John Swaine, Q.C. & William Lane (Deacons) for appellants

Mr. Denis Chang, Q.C. & Miss A. Eu (D.L.A.) for respondent