Yvonne Ng v. Royal Hong Kong Yacht Club

HCPI 1100/2016

[2021] HKCFI 31

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO. 1100 OF 2016

________________________

________________________

Before: Deputy High Court Judge To in Court

Dates of Trial: 23 – 25 November2020

Date of Judgment:  7 January 2021

________________________

J U D G M E N T

________________________

Introduction

1.This is a personal injury action in which the Plaintiff sues the Defendant for damages for personal injuries suffered in an accident inside the Defendant’s premises (the “Clubhouse”) in Kellett Island on 28 November 2015.  At the time, the Plaintiff was a 68 years old businesswoman.  As a result of the accident, the Plaintiff sustained multiple injuries, mostly to her right leg.   She claimed damages in the sum of $15.8 million, which mainly represents the loss of profit which her business could have made but for her inability to resume work during her period of incapacity.  The accident and the injuries are not disputed.  What are in dispute are the cause of the accident and damages.

2.The Plaintiff was a regular patron of the restaurant inside the Clubhouse called “The Bistro”.  At the time, the Clubhouse was under renovation.  The washroom closest to The Bistro had been closed.  Female customers of The Bistro had to use another washroom near the restaurant called “The Compass Room” on the floor above (the “Washroom”).  A convenient way to reach that Washroom from The Bistro was to walk up the staircase at the back exit of The Bistro (the “Staircase”) and to return by the same route.

3.At around 9:45 pm on that unfortunate evening, the Plaintiff was walking down the Staircase returning to The Bistro after visiting the Washroom.  After she turned from the first flight of stairs to the second, she slipped and slid down for about 10 steps to the landing between the second and third flight of stairs.  The Plaintiff got up and made her way back to The Bistro.  She lodged a complaint to the duty captain.  The manageress arrived shortly and attended her.  An ambulance was called.  The duty captain escorted the Plaintiff to the hospital.  The Plaintiff was hospitalised, had an operation and was then discharged on 6 December 2015.

Legal principles on liability

4.Counsel have no dispute about the legal principles on liability applicable to this case.  I convenient quote the propositions as submitted by Mr Wong, counsel for the Plaintiff.  The cause of action relied upon by the Plaintiff are negligence and breach of common duty of care under the Occupiers Liability Ordinance Cap 314 (the “Ordinance”).  Mr Wong submitted that for the present purposes, there is no material distinction between these two causes of action and would focus on the liability under the Ordinance.  The legal issue is whether the Defendant was in breach of the common duty of care under the Ordinance.

5.Section 3(2) of the Ordinance provides that “the common duty of care is a duty to take such care as in all the circumstances of the case is reasonable to see that the visitor will be reasonably safe in using the premises for the purposes for which he is invited or permitted by the occupier to be there.”  Section 3(3) provides that “the circumstances relevant for the present purpose include the degree of care, and want of care, which would ordinarily be looked for in such a visitor…”

6.It is well established that the duty of care an occupier owes is to take such care as is reasonable in all the circumstances of the case to ensure his visitors are reasonably safe in using the premises.  In Turner v Arding & Hobbs Ltd[1], Lord Goddard CJ said:

“The duty of the shopkeeper in this class of case is well-established. It may be said to be a duty to use reasonable care to see that the shop floor, on which people are invited, is kept reasonably safe, and if an unusual danger is present of which the injured person is unaware, and the danger is one which would not be expected and ought not to be present, the onus of proof is on the defendants to explain how it was the accident happened.”

7.The learned authors of Clerk & Lindsell on Torts[2] also wrote:

“In determining whether what was done or not done by the occupier was in fact reasonable, and whether in the particular circumstances of the case the visitor was reasonably safe, the court is free to consider all the circumstances, such as the foreseeability of injury, how obvious the danger is, the age or infirmity of the visitor, the purpose of his visit, the conduct to be expected of him, and the state of knowledge of the occupier. The difficulty and expense ore removing the danger is a relevant factor, as is the time in which a reasonable occupier may be expected to spot and deal with a hazard.”

The burden of proof is on the Plaintiff to show that the accident was caused by the Defendant’s failure to ensure that the Staircase was kept reasonably safe for visitors.  Once the Plaintiff has discharged that burden, it is for the Defendant to show how it was that the accident happened without breach of duty on its part or that the danger that caused the accident is an usual and inherent danger which the Plaintiff would expect in using a staircase in that kind of premises and of which the Plaintiff was aware: see Siu Chi Cheung v Sincere Time International Limited t/a Neway Karaoke Box[3].

8.The Plaintiff alleged that the Defendant was in breach its duty to provide adequate lighting in the Staircase, and to make risk assessment in view of the on-going renovation.  The Plaintiff also made an oblique complaint about the design and construction of the Staircase as part of her case of the Defendant’s breach of duty to provide adequate lighting in the Staircase.

Credibility of the parties’ witnesses

9.The disputes in this case are all factual.  Credibility and reliability of the witnesses’ evidence is at the heart of this case.  This is particularly so for the Plaintiff as she bears the burden of proof.  The basic test of credibility is inherent probability. Apart from considering the demeanour of the witnesses, the court makes its own assessment by testing the witnesses’ evidence against contemporaneous documents and incontrovertible evidence or evidence not in dispute.  If a witness has been discredited over one or more matters to which he has given evidence using the above tests, that should be taken into account in considering his overall credibility.

10.The Plaintiff is the sole factual witness in support of her case.  She was born in 1947 and was 68 at the time of the accident.  She is obviously an intelligent businesswoman having operated Lucretia Apparel Industries Limited (“Lucretia”) as a very profitable business, though only until 2016.  She appeared to be credible and accepted all documentary evidence without challenge, even though some of it was to her disadvantage. 

11.However, she was obviously exaggerating in relation to the injury she suffered and the profitability of Lucretia.  She knew she suffered no direct injury to her left eye during the accident, yet she attributed the sight loss in the central visual field of her left eye to the accident.  She received consultation for her left eye from Pamela Youde Nethersole Eastern Hospital (“PYNEH”), Hong Kong Sanatorium & Hospital, Union Hospital Polyclinic for two years.  There were corneal abrasions over both eyes.  She had cataract and other problems with her right eye, which was related to degeneration.  She also had cataract in her left eye.  She received intra-vitreal injections for her left eye in January and February 2016.  Given her age and the above diagnosis she ought to know and accept that the sight loss in her left eye was due to the natural process of degeneration. Yet she attributed it to the accident.  Her claim was not supported even by her own ophthalmologist.  Yet, with full knowledge of the condition of her left eye, she still put forward a claim for pain, suffering and loss of amenities (“PSLA”) for her left eye in her Revised Statement of Damages dated 24 January 2018.  Her exaggeration about the injury caused to her left eye seriously damaged her credibility.

12.My analysis of the performance of Lucretia also showed that the Plaintiff exaggerated about the gain she derived from the orders she obtained.  She claimed she had an average gross profit was 10% of the total sale over three years from 2013/2014 to 2015/2016. That was a gross exaggeration.  She painted a rosy picture of the business of Lucretia to support her $15.8 million claim.  But, on the evidence, Lucretia had been suffering loss for three consecutive years before the accident.  Its business was declining, the number of staff was reducing and it was in the course of down-sizing.  She was an exaggerating witness.  I do not find her credible.

13.The Defendant called only one factual witness, the Health, Safety and Sustainability Manager (“Safety Manager”).  His evidence was basically supported by objective facts, such as measurements of the step tread, step width and step rise.  His evidence of adequacy of the lighting in the Staircase well was largely one of opinion, but was supported by objective facts as to the number and position of the wall lamps.  Apart from a small blemish about number of steps in the third or fourth flights of the Staircase which has no impact on the credibility of his evidence, his evidence is on the whole credible.  There was some criticism about the Defendant’s failure to produce log books, but that has no impact on his credibility.  I accept his evidence.

The Staircase where the accident occurred

14.There was some confusion as to where the accident occurred.   There are altogether four flights of stairs starting from the Washroom down to The Bistro.  According to the Plaintiff, the accident occurred on the second flight after she left the Washroom, ie the second flight counting down from the Washroom.  The manageress of The Bistro who prepared the accident report took a photograph of the second flight of stairs counting up from The Bistro, which would be the third flight counting down from the Washroom.  The accident report with that photograph was disclosed to the Plaintiff identifying two photographs as “Photos of the Staircase that Ms Ng mentioned”.  The Plaintiff raised no issue about the photograph.  During her testimony, the Plaintiff was shown the photograph in the accident report and she accepted that the photograph showed the Staircase where the accident occurred.  When the Safety Manger testified, he identified that photograph as showing the third flight of stairs counting down from the Washroom.  The manageress was not called to testify.  There was no way for clarification to be sought from her.  But based on the number of steps in the flight of stairs shown in that photograph, the Safety Manager could not have erred.

15.I accept the Plaintiff’s evidence that the accident occurred on the second flight of stairs counting down from the Washroom and accept the Safety Manager’s evidence that the photograph in the accident report shows the third flight of stairs which was not where the accident occurred.  I also accept the Safety Manager’s evidence about the sketch of the Staircase and photographs.  I identify the flights in the Staircase by counting down from the Washroom. 

Design and construction of the Staircase

16.The Defendant had a long history in Hong Kong.  There is no evidence when the Clubhouse was built.  It would not be less than 50 years old.  According to the Safety Manager, the Staircase is an ordinary one and had been in the Clubhouse and remained the same without structural alteration since he joined the Defendant ten years ago.  The Staircase connects the different facilities of the Clubhouse and is commonly used by members of the Clubhouse and customers of The Bistro. 

17.The Staircase consists of four flights of stairs in a L-shaped staircase well with two flights in each limb of the inverted letter L.  The first flight starts from about the middle of one limb of the inverted letter L, descending from the corridor outside the Washroom to a semi-circular landing.  It consists of five steps.  The second flight begins after a 180^o left turn from the landing.  It consists of 13 steps.  It was in this flight where the accident occurred.   The third flight begins after a 90^o right turn from the square landing into the other limb of the inverted letter L in the staircase well.  It consists of eight steps.  The fourth flight begins after a 180^o right turn from the rectangular landing.  It consists of nine steps and ends on a landing leading to The Bistro.  The Safety Manager produced a sketch of the four flights of stairs in the staircase well (“The Sketch”).  The number of steps in the third and fourth flights of stairs shown in The Sketch is reversed.  Either he got the number of steps wrong or his sketch was wrong.   As the error occurred in relation to the third or fourth flights, this slight dent in his evidence has no impact on his credibility.  I accept his evidence.  The Sketch is annexed to this judgment and forms part of this judgment.

18.On 9 November 2020, the Safety Manager inspected the Staircase and took some measurements of the step rise (ie the height between steps), the step tread (ie step run) and the step width in respect of each flight of stairs.  His measurements and the statutory requirements under the Building (Planning) Regulations Cap 123F are as follows:

Table 1 – Dimension of the Staircase

	Number of steps	Step rise  (mm)	Step tread (mm)	Step width (mm)
First flight	5	160	240	1050
Second flight	13	170	230	1080
Third flight	8	170	260	1090
Fourth flight	9	170	260	1080
Building Ordinance Requirement	Not more than 16	Not exceeding 175	Not less than 225	Not less than 900

According to the above table, the design of the Staircase complies with the requirements of the Building (Planning) Regulations.

19.The Plaintiff complained that the tread is too narrow and could not accommodate the length of her foot which is 250 mm.  The step tread in the second flight is 230 mm which is 5 mm wider than the minimum requirement.  The tread is narrow, but wider than statutory requirement.  In fact, such tread width is very common, particularly in domestic premises.  It is common experience that people walk up a staircase of narrow tread width with their heels off the step or walk down the staircase with between one-third to one-quarter of the sole outside the step.  I do not think there is any substance in this complaint.

20.The Plaintiff also complained that the flight was too long and steep.  The number of steps is three less than the permissible maximum.  Steepness is a function of the step rise and step tread ie the elevation for each step.  The maximum statutory permissible gradient is therefore 175/225, ie 0.77.  The gradient in the second flight is 170/230, ie 0.73.  As the step tread of the second flight is the narrowest, that flight is the steepest among the four flights.  But it is well within the permissible gradient.

21.This flight of stairs may not be comparable with grand staircases in hotel lobbies, but its design is well within the requirements of the Building (Planning) Regulations.  The Building Authority must have satisfied itself that the Clubhouse including this flight of stairs complied with all requirements under the Building Ordinance and subsidiary regulations before it issued occupation permit.  Besides, the Home Affairs Department carries out annual inspection of the Clubhouse before renewing its annual Certificates of Compliance.  It would appoint a surveyor from the Buildings Department and a surveyor from the Fire Services Department to carry out inspection on building safety and fire safety matters.  According to the Safety Manager, in the twelve months prior to the accident, the Clubhouse was inspected by the Building Authority on 26 March 2015 and by the Fire Services Department on 3 December 2014.  There was no complaint about the Staircase.   I do not think there is any substance in the Plaintiff’s complaint about the design of the Staircase.  Of course, I note that the Plaintiff does not complain about the design and construction of the Staircase as such, but as part of her case of the Defendant’s breach of duty to provide adequate lighting in the Staircase.  I shall bear this in mind in considering the lighting issue.

Lighting in the staircase well

22.According to The Sketch, there are three wall lamps installed on the wall of the semi-circular landing between the first and second flight of stairs and one wall lamp installed on the wall of the square landing between the second and third flights.  There are three main thrusts in the Plaintiff’s case of inadequate lighting.  First, Mr Chan, counsel for the Defendant, argued that the second flight is a long flight consisting of 13 steps.  The wall lamp at the landing between the second and third flight could not possibly provide sufficient illumination to the whole of the second flight.  The Plaintiff could only rely on the wall lamp at the top of the second flight.  The Plaintiff’s second thrust is that she had to walk with her back against those wall lamps such that the illumination coming from the wall lamps was blocked by her body.  Third, the Plaintiff complained that the lights were dim.

23.Having seen the photographs produced by the Safety Manager, I have the following observations.  First, the illumination as shown in the photographs is misleading.  It depends on the angle from which the photograph was taken and the aperture and exposure selected (if taken manually).  If the lens of the camera is directed towards the lamp, the surrounding will be dim.     If the lens is directed at objects under the lamp, the objects will be well illuminated.  I bear the above observations in mind when examining the photographs.

24.The wall lamps are designed like those used on ships.  They are installed at relatively high locations near the plumbing installed at the top of the staircase well.  In those positions, they are as good as ceiling lamps.  The three wall lamps on the wall of the semi-circular landing are installed equidistant from one another.  There is one in the middle and one on each side of the Staircase.  Unlike the third or fourth flights, there is no partition between the first and second flights so that the first half to one third of the second flight could be obliquely illuminated by the wall lamp near the first flight and directly illuminated by the other two wall lamps.  The wall lamp at the square landing between the second and third flight is installed against the wall underneath the concrete slab of the floor above.  It is located at about the mid-point between the second and the third flight, but closer to the third flight.  As there is no partition between the two flights, the light from this wall lamp illuminates both the second and third flights[4]. The top part of the second flight could be well illuminated by the three wall lamps from the semi-circular landing.  The bottom part of the second flight could be illuminated by the wall lamp at the square landing and obliquely by the wall lamp near the first flight through the gap between the two flights of stairs and obliquely by the wall lamp near the second flight.  Since the wall lamps at the semi-circular landing are installed at relatively high locations, the illumination could not be seriously affected by the person walking with his back against the lamps.   Mr Chan emphasised on the importance of the steepness and length of the second flight.  I think he is blowing these matters out of proportion.  The flight was only 13 steps with step tread of 230 mm or a total length of 2,990 mm or 9.8 feet.  There are four wall lamps providing illumination for that length of staircase plus the square landing.

25.As for the question whether the illumination was adequate, this is one man’s word against another.  The Safety Manager said that the Staircase was well lit.  The Plaintiff said it was dim.  The Safety Manager admitted under cross-examination that the wall lamps were fitted with incandescent light bulbs and he did not know their wattage. He said that the Staircase had always been used by members of the Clubhouse, such as users of the squash courts.  It was not used just because of the renovation.  The Staircase was cleaned once a day.  Staff of the House Department would take routine walks around the Clubhouse every day and report to him or the Technical Department on discovery of any maintenance issues.  He had not received any complaint about inadequate lighting in the Staircase.

26.In the Defendant’s Defence, the Defendant pleaded that there were no reported complaints of the lighting, width and condition of the Staircase prior to the accident.  To this assertion, the Plaintiff responded in her Reply that she had made a prior complaint, but no particulars were given.  The Plaintiff’s solicitors sought discovery of the records evidencing no complaint.  Despite an order was made a master requiring discovery of such documents, no explanation was given for the Defendant’s failure to make disclosure.  Mr Chan submitted that adverse inference should be drawn against the Defendant.   

27.There is no answer to Mr Chan’s submission.  But the inference to be drawn depends on the circumstances.  The Plaintiff’s evidence under cross-examination is that she made an informal complaint to a waitress.  She confirmed that she had not made a formal written or telephone complaint.   No particulars of her complaint were given in her Reply or in her evidence.   As it was an informal complaint, it is unlikely that it would have been entered into any formal record of the Clubhouse.  The Defendant’s failure to produce the records was unfortunate, but has no impact on the Safety Manager’s evidence.  As the complaint was so wanting in particulars, I can give little weight to that complaint.  I can only bear in mind that at an unknown occasion before the accident the Plaintiff had complained about dim lighting in the Staircase.  That was a subjective opinion of the Plaintiff.  Whether the lighting then or at the time of the accident was adequate remains an issue to be determined on the basis of objective evidence. I cannot jump from this failure to produce records to the conclusion that the lighting was dim at the time of the accident. 

28.Given the fact that the Staircase is being regularly used and given the existence of a system of maintenance and inspection, I have no doubt about the evidence of the Safety Manager.  I accept his evidence that there was no formal complaint made about the lighting condition of the Staircase.  That reflects on an objective view that the lighting was adequate.  That in turn supports the Safety Manager’s evidence about the lighting condition in the Staircase.  This evidence together with my finding on the design of the Staircase and the position of the wall lamps enable me to come to the finding that the lighting condition in the Staircase at the time of the accident was in fact adequate.

Risk assessment

29.Mr Chan argued that in view of the renovation, the use of the Staircase was expected to increase as most female customers of The Bistro would use it to go to the Washroom.  He suggested that the Defendant had failed to make a proper assessment of the heightened risk and take appropriate measures to minimise that risk.  Under cross-examination, the Safety Manager accepted that there was a heightened risk in the use of the Staircase but said that he had conducted risk assessments.  He had held a meeting to discuss the arrangement of directing female customers of The Bistro to use the Washroom.  He had conducted visual inspections and had found no problem with illumination of the Staircase.  Mr Chan doubted the Safety Manager’s evidence because of the lack of written record of the risk assessment or meetings.  While keeping written record is desirable, absence of written record is not prima facie evidence of absence of risk assessment.  Given the size of the renovation project and the fact that the business of the Clubhouse was to continue in parallel with the renovation, I doubt very much if no risk assessment had been made.  The fact that minor issues of lighting was not recorded is neither here nor there. 

30.In any event, I fail to see how lack of risk assessment could have a causal connection with adequacy of lighting.  If lighting is adequate, lack of risk assessment would not reduce its illumination.  Lack of risk assessment may have an impact on cleanliness or overcrowding; but these are not in issue.

How the accident occurred

31.On the finding I have made above, the design of the Staircase conformed with the requirements under the Buildings Ordinance and subsidiary regulations, and the lighting was adequate.  The Staircase was regularly maintained and cleaned.  The Plaintiff also confirmed that there was no water or grease on the steps.  That was the physical environment in which the accident happened.

32.The Plaintiff’s account of the accident is as follows.  Prior to the accident, she had made an informal complaint to a waitress about the dim lighting in the Staircase.  She had used the Staircase once or twice before the accident.  On the date of the accident, after using the Washroom, she walked down the Staircase to return to The Bistro.  As The Sketch showed, there were only four steps (or five including the landing).  The area was well lit.  She made a 180^o left turn on the semi-circular landing and walked down the second flight of stairs with her back against the wall lamps.  She used her left hand to hold onto the handrail.  She saw the steps as she walked.  She stepped with her left foot on the first step.  Then, as her right foot stepped onto the second step, she “flew” down the Staircase.  It happened all very fast.  She said that she felt one third of her sole could not rest on the step.  She slipped and slid all the way down to the landing at the end of the second flight.  She put the blame on the Staircase in that the steps tread was too narrow, the Staircase was too long and steep and lighting was too dim.

33.The Plaintiff said that she had her back against the wall lamps and the Staircase was dim.  However, it is important to note that she was asked under cross-examination whether she could see the steps at the time of the accident, she did not answer spontaneously. After being asked three times, eventually she admitted that she could see the steps.  That wholly destroyed her case that the lighting of the Staircase was too dim.  The Staircase might not have been very brightly lit but was not dim.  On the evidence of the Safety Manager, The Sketch and the photographs, lighting was adequate.

34.According to the Plaintiff’s Reply, she was holding the left side handrail with her left hand and had taken all necessary precautions for her own safety while walking down the Staircase. On her evidence, she was holding the handrail at the time of the accident.  In the face of such evidence, it is difficult to see how the accident could have happened in the way she described; that it happened very fast, she could not find support for her right foot and she “flew” down the stairs.  And it is important that on her evidence she could see the steps as she was walking down the Staircase. The probability is that she did not watch where she was going.  Her right foot landed too near the edge of the step (much more than one third of her sole as she alleged) or not at all.  Hence, she lost balance and her body weight dragged her down the Staircase, pulling her hand off the grip of the handrail, if she had held onto it.  That was why everything happened so fast that she felt she “flew” down the Staircase.   In the circumstances, it was an unfortunate accident.  The Plaintiff has failed to prove negligence or breach of duty on the part of the Defendant.

35.The above conclusion is sufficient to dispose of this action.  However, I shall, for completeness, deal with assessment of damages very briefly as if the Defendant were found liable. Given the facts of the case, the assessment has to be made on the basis that the Plaintiff is liable in contributory negligence.   The Staircase and handrail are static.  Only the Plaintiff was in motion.  She could see the steps when the accident happened.  There was no grease or water which could have caused the accident.  On these facts, even if lighting was inadequate, the Plaintiff must be liable in contributory negligence to the extent of at least 75%.

Injuries suffered by the Plaintiff

36.After the accident, the Plaintiff was sent by ambulance to the Accident and Emergency Department of Ruttonjee & Tang Shiu Kin Hospitals and then admitted into the orthopaedic ward of PYNEH for treatment.  She suffered right ankle injury.  X-ray of the right ankle shows fracture of lateral malleolus.  She had an operation for fracture fixation on 2 December 2015 and was then given analgesics and physiotherapy.  Her condition was stable and was discharged on 6 December 2015. She received follow up consultations and was given 101 days of sick leave. However, she resumed work on wheelchair since 14 December 2015, just 12 days after the operation or two weeks after the accident.

37.During one of her orthopaedic follow up consultations, the Plaintiff complained of persistent sight loss in the central visual field of her left eye.  She claimed she never had such a condition prior to the accident and she attributed the cause of her eye condition to the accident.  She received treatments and consultations for two years.  She was jointly examined by her and the Defendant’s ophthalmologists. Both experts opined that she did not sustain any direct trauma to her eye during the accident and that choroidal rupture or other features of ocular trauma were never found in her eye.  They concluded that the visual impairment of the Plaintiff’s left eye is a result of myopic macular degeneration which is wholly unrelated to the accident.

38.The Plaintiff was jointly examined by her orthopaedic expert, Dr Tio, and the Defendant’s expert, Dr Lam on 15 March 2017.  She complained of episodic right ankle aching pain which is worse with changing weather.  She had left knee pain with gradual onset upon frame walking since December 2015.  She had right lower limb radiating pain from the buttock to ankle with gradual onset upon stick walking since January 2016.

39.Dr Tio and Dr Lam are of the consensus that as a result of the accident the Plaintiff suffered (1) head contusion with right posterior scalp haematoma, (2) back contusion with mild right lower lumbar paraspinal muscle tender, (3) right ankle injury with weber B fracture right distal fibula and (4) left ankle injury with mild tenderness over lateral malleolus.  They considered the treatment appropriate and the Plaintiff had steady progress.  She was able to walk in a normal gait unaided, but with slight limping while walking on tiptoes or heels.  Her right lower limb did not have significant asymmetrical muscle wasting.  She had mild swelling, an 8 or 10cm surgical scar, mild tenderness, and mild lag in ankle movement.  X-rays showed that the fracture has healed in good bony alignment.  The left ankle injury was a minor one and she had recovered within a short time.  The right ankle injury is static.   Further ankle operation is not indicated.  Orthopaedically, she could be considered as having reached maximal medical improvement from the accident.  Her ankle injury would have minimal adverse effect on her activities of daily living.  In brief, both experts opined that the Plaintiff almost fully recovered. 

40.On her right ankle injury, Dr Tio said that the Plaintiff was still having residual right ankle pain with slightly thinner right calf, residual right ankle swelling and some stiffness, possibly due to the fracture of her fibula.  He assessed the Plaintiff to have suffered 4% permanent impairment of the whole person.  On the other hand, Dr Lam opined that she had a good functional recovery.  Dr Lam assessed her impairment at 2% only.

41.However, according to the medical records of PYNEH, the Plaintiff was able to walk with full weight bearing steadily and unaided with no ankle pain on 8 March 2016.  She was found to have good range of motion of the right ankle with no ankle pain on 26 July 2016.  These are findings by the treating doctors when the Plaintiff was under treatment and when she was concerned about her recovery.  She must have told the treating doctors all her pains and discomforts.  The treating doctors were truly independent witnesses concerned with the health and treatment of the Plaintiff.  Their observation is reliable.  In assessing the Plaintiff’s condition, I test the experts’ opinion against the contemporaneous record of the treating doctors.  There is no reason why a year after the Plaintiff’s recovery, her condition would have deteriorated, albeit mildly.  Dr Lam’s finding is more consistent with the contemporaneous record of the Plaintiff’s condition than Dr Tio’s.  The opinion of the parties’ experts was based on what the Plaintiff told them during the joint examination.  I cannot rule out an element of exaggeration by the Plaintiff.  I prefer Dr Lam’s opinion and assessment to Dr Tio’s.

42.At the joint examination, the Plaintiff complained of left knee pain with gradual onset upon frame walking since December 2015.  She was found to have mild left knee swelling with mild medial joint line tenderness.  There was patella-femoral joint grinding pain and crepitus during movement.  X-ray shows osteoarthritis of the knees.

43.Dr Lam opined that the Plaintiff’s condition was due to natural progress of degeneration which is very common among females of her age.  He attributed no impairment.  Dr Tio opined that the Plaintiff’s left knee pain could be partially contributed by the re-distribution of load after her right ankle fracture at least to the extent of 30%.

44.Mr Chan submitted that the Plaintiff’s complaint of knee pain is not credible.  It was not pleaded and not mentioned in her witness statement.  It was only raised after the joint orthopaedic examination.  I agree with Mr Chan’s submission.  I do have a feeling that the Plaintiff is an exaggerating witness.  She even attributed her eye condition caused by degeneration to the accident.  The Plaintiff was 68 at the time of the accident and 70 at the time of the joint examination.  As suggested by Dr Lam, osteoarthritis of the knees is a very common condition with people of her age, particularly women.  She has a body weight of 88.5 kg and height of 1.63 metres.  Her body mass index (ie body weight in kilogrammes divided by the square of height in metres) is 33.31.  The healthy range is 18.5 to 24.9.  A person with of a body mass index of 25.0 or more is considered overweight, and index of 30.0 to 35.0 is obese class I.  With such a body mass index, it is likely that she would have developed osteoarthritis before the age of 68.  I accept Dr Lam’s opinion.

45.The Plaintiff also complained about right lower limb radiating pain from the buttock to ankle with gradual onset upon stick walking since January 2016.  Dr Lam’s opinion is that the Plaintiff only suffered an uncomplicated back contusion with mild right lower lumbar paraspinal muscle tenderness and such injury would recover within a short time.  He therefore considered that the Plaintiff’s current back complaint was due to natural progress of degeneration which is also very common among females of her age.

46.Dr Tio said that the Plaintiff’s back injury during the accident was documented.  Though there was pre-existing degenerative change in the lumbar spine, Dr Tio considered that her back symptoms should be partially caused by the accident with soft tissue involvement as well.

47.Though the back injury was documented, the radiating pain etc was not.  As shown in the medical records of PYNEH, the Plaintiff was able to walk with full weight bearing steadily and unaided with no ankle pain on 8 March 2016.  She had not made such complaint in March 2016 related to stick walking.  For the same reason as given in relation to her knee pain, I do not find her credible and do not accept Dr Tio’s opinion.  I accept Dr Lam’s opinion that the condition, if genuine, is part of the natural degeneration process not attributable to the accident.

48.Orthopaedically, the Plaintiff suffered right ankle fracture.  As a result of the operation, she regained full range of motion and achieved full functional recovery.  Her left ankle injury was a minor one which had also fully recovered within a short period of time after the accident.  There are some swelling and stiffness in the ankle and some residual pain.  She is able to walk bearing weight steadily and unaided.  She suffered 2% impairment of the whole person.  She has practically fully recovered.

The Plaintiff and Lucretia before the accident

49.The Plaintiff was the sole shareholder and director of Lucretia which manufactured apparel for sale in the United States (“the US”).  She drew a high salary from Lucretia.  According to her tax returns, she received a salary and accommodation allowance of $4,138,001 in 2013/2014.  Her salary actually declined thereafter to $2,400,000 in 2014/2015, $1,340,000 in 2015/2016 (the year of the accident) and then to $96,000 in 2016/2017.  Being the sole shareholder of Lucretia, the Plaintiff’s income is tied with her salary from Lucretia and its profit.

50.The Plaintiff was the directing mind and soul of Lucretia.  She was its managing director, responsible for making all decisions regarding its operation, marketing, business/product development, liaison with customers and bidding orders.  She used to make presentation in December in the US and solicited and obtained orders for delivery in April to June in the following year.  Lucretia would sub-contract the production in China or Vietnam and export the clothing to the US.  She had to travel regularly to accompany customers’ visit to the factories in Vietnam.

Mode of assessment of the Plaintiff’s and Lucretia’s loss

51.The damages claimed by the Plaintiff are basically the profits which she estimates could have been made by Lucretia but for her inability to manage the company, to make business decision, to make a presentation in the US in December 2015 and to obtain orders.  Despite there were seven key staff in Lucretia, the Plaintiff claimed she was indispensable and irreplaceable.  Apart from losing the orders, Lucretia also lost the access to manufacturing capabilities (ie the connection to sub-contract) in China and Vietnam.  That sets the basis of her claim for loss of future earnings.  She painted a very rosy picture of Lucretia.  She assessed her loss as the gross profit which Lucretia could have made on the estimated value of the orders which she would have obtained.  She assessed that gross profit to be 10% of the estimated value of the orders.  She also claimed a monthly loss of income of $50,000 since Lucretia closed down in 2018 until she reached 75 in 2022.

52.The Defendant did not raise any argument about corporate personality or reflective loss and, in my view, rightly so.  But it argued that the loss should be assessed on the basis of Lucretia’s profit and loss as reported in its profits tax returns filed with the Inland Revenue Department (“IRD”).  It further argued that Lucretia had been down-sizing and suffering loss for three consecutive years including the year of her accident.  Table 2 hereunder sets out Lucretia’s assessable profits as reported in its profits tax returns from 2012/2013 to 2016/2017, its profit/loss as shown in its own unaudited income statement for management purpose, and the Plaintiff’s salary.

Table 2

Lucretia’s assessable profits/loss as reported to IRD

and as in its unaudited income statement

	2012/2013	2013/2014	2014/2015	2015/2016	2016/2017
As per profits tax return filed with the IRD
Profits/loss ($)	4,750,080	-20,115,164	-18,528,340	-13,380,699	-5,172,525
As per unaudited income statement
Total sales ($)	-	298,341,513	245,261,075	122,589,829	-
Gross profits ($)	-	22,173,874	24,172,829	7,281,312	-
Plaintiff’s salary($)	-	4,138,001	2,400,000	1,340,000	96,000
Profit/loss ($)		-24,896,331	-21,614,657	-80,648,273	-

Thus, on that basis, there was no profit made by Lucretia and effectively no loss suffered by the Plaintiff. 

53.Starting from basic principle, the measure of damages in tort as well as in contract is that there should be restitution in integrum.  Where any injury is to be compensated by damages, in settling the sum of money to be given for reparation of damages, the court “should as nearly as possible get at that sum of money which will put the party who has been injured, or who has suffered, in the same position as he would have been in if he had not sustained the wrong for which he is now getting his compensation or reparation”[5].

54.Lucretia is a small company and the Plaintiff is its directing mind and soul.  It is the alter ego of the Plaintiff.   In the circumstances, I accept that the loss in profit of Lucretia reflects to a certain degree the loss the Plaintiff suffered as a result of the injury.  Mr Wong argued that as a result of the accident, the Plaintiff could not attend the presentation in the US and suffered the loss of the chance to obtain orders in the US and hence the loss to make profit for Lucretia.  Even accepting that chance of obtaining orders and the chance of making profit is real, the question is how to assess that loss and the extent to be appropriated to the Plaintiff. 

55.In my view, the Plaintiff’s as well as the Defendant’s approach are not entirely correct.  Gross profit is the surplus of total sales income over direct production costs, such as costs of labour and material and sub-contractor’s fees involved in production of goods for sale.  Indirect production costs include sales and marketing expenses, commission, finance costs etc incurred indirectly to generate the gross profit, but are not treated as part of the costs of goods sold or taken into account in calculating gross profit.  These costs would not be incurred if there are no orders received and no goods to produce.  Fixed costs are the usual expenses in running the company, including overheads, depreciation, rent, staff salaries, etc.  These fixed costs have to be incurred even if no orders are obtained and no goods are produced.  The reported profit and loss in the tax returns takes into account the fixed costs in operating Lucretia and indirect production costs in generating the gross profit.  It is these fixed costs and indirect production costs which turn the gross profit into net profit or loss in the account of Lucretia.  Thus, to adopt the Defendant’s approach would give the Defendant the benefit of reducing the Plaintiff’s claim by Lucretia’s fixed costs which Lucretia had to incur in maintaining its own corporate personality whether the Plaintiff was injured or not.  On the other hand, to adopt the Plaintiff’s approach would inflate Lucretia’s profit, and therefore the Plaintiff’s loss, by not taking into account its indirect production costs. 

56.The parties have not adduced evidence on such indirect production costs.  Since Lucretia’s business was solely to manufacture garments for sale to the US, it is reasonable to assume all indirect production costs as shown in the income statement were attributable to generating the gross profit.  Doing the best I can, I set out in Table 3 below such expenditures and the adjusted profit after taking into account the indirect production costs for 2013/2014 to 2015/2016.  That adjusted profit is the Plaintiff’s personal gain.

Table 3 – Profit/loss after adjusting for indirect production costs

	2013/2014	2014/2015	2015/2016
Total sale ($)	298,341,513	245,261,075	122,589,829
Gross profit ($)	22,173,874	24,172,829	7,281,312
Gross profit as percentage of total sale	7.43%	9.86%	5.94%
Indirect production costs
Selling and  distribution expenses ($)	648,344	845,656	491,745
Marketing expenses (Trips) ($)	1,572,395	878,375	602,608
Commission paid ($)	91,801	135,228	109,847
Consultancy fee ($)	173,480	0	751,160
Donation ($)	63,300	39,720	12,800
Travelling ($)	692,779	604,253	545,926
Finance costs ($)	11,347,777	8,357,968	4,815,813
Total indirect production costs($):	14,589,876	10,861,200	7,329,899
Total indirect production costs as percentage of Total sale	4.89%	4.43%	5.98%
Plaintiff’s personal gain (Gross profit – Total indirect production costs)
($)	7,583,998	13,311.629	-48,587
As percentage of Total sale	2.54%	5.43%	-0.0396%
As percentage of Gross profit	34.20%	55.07%	-0.667%

I have also expressed the Plaintiff’s personal gain as a percentage of total sale and as a percentage of gross profit.  The table gives a fair picture of the relations between the Plaintiff’s personal gain and gross profit. 

57.The fourth row in Table 3 shows the actual gross profit for the years 2013/2014, 2014/2015 and 2015/2016 were 7.43%, 9.86% and 5.94% of total sale respectively.  The average gross profit was 7.74%, which is nowhere near the 10% figure suggested by the Plaintiff. The actual range is 5.94% to 9.86% which is far too wide to suggest that an average percentage could be a reliable figure for any particular year.

58.The Plaintiff received a salary from Lucretia regardless whether Lucretia made any profit.  For tax purpose, the Plaintiff and Lucretia are separate identities.  Lucretia’s assessable profits would be reduced by the amount of salary paid to the Plaintiff, while the Plaintiff would be entitled to personal allowance under the salaries tax regime.  In having two separate tax paying entities, the Plaintiff was able to mitigate her tax liability.  In reality, whatever personal gain the Plaintiff made through the orders she obtained for Lucretia ended up as profit or loss of Lucretia.  But gross profit did not accurately reflect the Plaintiff’s personal gain arising from the order because the indirect production costs have not been taken into account.  In the circumstances, the fairest approach to assess the Plaintiff’s loss as a result of the accident is to treat the Plaintiff’s personal gain as her own gain separate from Lucretia’s profit or loss.  The profit from garments sold as a result of the orders obtained by the Plaintiff should be treated as her personal gain.  Given the way Lucretia is operated, her personal gain is deemed to have been injected into Lucretia as Lucretia’s income.  In that way, the Plaintiff’s personal gain net of Lucretia’s fixed costs became Lucretia’s profit or loss as reported to the IRD.  The Plaintiff’s personal gain was equivalent to the total sale net of direct production costs and indirect production costs, ie gross profit net of indirect production costs.  In Lucretia’s account, the gross profit was applied to set off Lucretia’s fixed costs, indirect production costs and direct production costs.  If there was a surplus, Lucretia made a profit.  If there was no, Lucretia suffered a loss.  The Plaintiff’s salary from Lucretia, which was part of Lucretia’s fixed costs, actually came from the Plaintiff’s own personal gain. It should not be treated as another separate item of her income, otherwise it would result in a double count.  According, the Plaintiff’s salary should not be taken into account in assessing her loss.

59.The Plaintiff bears the burden of proof.  I reject the Defendant’s argument that the Plaintiff’s loss should be based on the reported profit and loss of Lucretia.  Though I do not accept the Plaintiff’s formula of assessing her loss on the basis of 10% of the value of the orders she could have obtained but for her inability to attend the presentation in December 2015, I accept that any gain which could have been made from the orders which she could have obtained should be treated as her loss.  It remains her burden to prove the value of the orders which she could have obtained, the gross profit which could have been generated from those orders, and her personal gain which she could have derived from those orders, ie the gross profit net of indirect production costs. 

Assessment of the Plaintiff’s loss

60.On the objective evidence, Lucretia was not as rosy as painted by the Plaintiff.  As shown in Table 2, despite the gross profit, Lucretia actually suffered loss of over $24 million and $21 million in 2013/2014 and 2014/2015 respectively.  It suffered loss of $80 million in 2015/2016 in the year of the accident.  Mr Wong argued that a substantial part of the loss was caused by one-off accounting treatment of “bad debt written off” of $16 million and “impairment of investment” of $49 million.  Discounting those sums, Lucretia only suffered a loss of $15 million.  That was still a hefty loss.  The overall picture is that the business of Lucretia had been declining and it had been suffering hefty losses three years in a row before the accident.

61.It should also be noted that the accident had no impact on Lucretia’s profit and loss in 2015/2016 because the orders which would have been obtained in December 2015 was for production and delivery in April to June 2016.  In other words, the alleged loss would be reflected in 2016/2017, whereas the loss in 2015/2016 reflected that business of Lucretia was or had been on the decline.  As shown in Table 3, the gross profit margin reduced from 7.43% in 2013/2014 or 9.86% in 2014/2015 to 5.94% in 2015/2016, while the indirect production costs increased from 4.89% in 2013/2014 and 4.43% in 2014/2015 to 5.98% in 2015/2016.  It is difficult for a business to be profitable or to survive with a gross profit margin below 10%.  The Plaintiff’s gross profit margin of 5.94% probably reflected the strong competition facing Lucretia and/or the Plaintiff’s error in her pricing policy and hence Lucretia’s failure in 2015/2016.  Its gross profit was not sufficient to cover direct and indirect production costs.  These objective facts cast serious doubt on the Plaintiff’s assertion that she could have obtained orders of the same value as she obtained in December 2014 had she been able to make the presentation in the US in December 2015.  These objective facts also demonstrate the fallacy of the Plaintiff’s formula based on gross profit.

62.On the issue of staffing, the Plaintiff said she had to reduce her staff to three as a result of the decline in business caused by her inability to return to regular work.  On the other hand, Lucretia’s organisation chart shows that during the period from November 2014 to March 2015, there were seven key staff in Hong Kong which was reduced to five during the period from April 2015 to March 2016 before the reduction to three as asserted by the Plaintiff.  Thus, the reduction in personnel had been an on-going process before the accident and was accompanied by a continuing decline in the business of Lucretia.

63.The Plaintiff said that as a result of the accident, she was unable to travel as frequently as before.  She said she used to travel to Vietnam every month and to other regions about eight to ten times per year.   But the Statement of Travel Records issued by the Immigration Department shows that although the Plaintiff travelled quite frequently in 2014 and 2015 before the accident with departures from Hong Kong a couple of times per month, there was no record of departure from Hong Kong in October and November 2015 before the accident.  The record not only shows that the Plaintiff exaggerated her travelling needs, it reflected a decline in the activity of Lucretia before the accident occurred.

64.It is not disputed that the Plaintiff had difficulty travelling to the US in December 2015.  The Plaintiff said she could not have delegated her marketing manager to do the presentation for her.  In view of the exaggerations she demonstrated, I can give little weight to her assertion.  There is no reason why her marketing manager could not have made the presentation supplemented with her video conferencing. 

65.All in all, the rosy picture of Lucretia painted by the Plaintiff is an illusion.  The performance of Lucretia from 2013/2014 to 2015/2016 showed that its business was declining. It consistently suffered loss in the tune of over $20 million.  In 2015/2016, it suffered loss of $80 million.  During those years, Lucretia was also downsizing, quite independent of the accident.  The Plaintiff’s travelling was reduced.  All these occurred before the effect of the accident could have any impact on Lucretia’s business.  It is difficult to attribute Lucretia’s failure in 2016/2017 and its subsequent closure in 2018 to the accident. Against such background, it is also difficult to draw any inference that Lucretia would have been a profitable business such that it is possible to allocate a certain percentage of its total sale as the Plaintiff’s personal gain, let alone one as high as 10%.

66.On the evidence, there is practically no cogent evidence tending to support the proposition that Lucretia suffered a drop of orders during December 2015 to March 2016 as a result of the Plaintiff’s injuries and her reduced work efficiency.  That was not the Plaintiff’s case.  Her argument was focused on the impact of the effect of the accident on Lucretia’s business in 2016/2017.

67.Based on the result of the previous year, the Plaintiff argued that had she been able to attend the presentation in December 2015, she would have at least obtained orders of the value of US$3,741,688.  I accept that any personal gain which she could have made from such sale should be treated as her loss, which she could have contributed to Lucretia to produce a net profit or to reduce its net loss.  Even accepting the Plaintiff’s postulated value of the orders she could have obtained (which I do not accept), based on the gross profit margin and indirect production costs, she could make no personal gain from the orders.  The Plaintiff has totally failed to discharge her burden of proving damages for 2016/2017 or up to Lucretia’s closure in 2018.

68.The Plaintiff said she was in good health and could work up to the age of 75 at a salary of $50,000.  She had lost her position in Lucretia in 2018 due to its closure.  By then, she was 71 and was beyond the usual age of employment.  There is no evidence that she could obtain employment in a similar or other position earning that salary. Accordingly, I am not satisfied that the Plaintiff has discharged the burden of proving her loss of income, whether pre-trial or post-trial.

Loss in mandatory provident fund

69.For reasons as explained in paragraph 58 above, the Plaintiff’s salary should not be taken into account in assessing her loss otherwise it would constitute a double gain.  Any salary taken into account would have to be deducted from her personal gain from the orders as indirect costs.  For the same reason, any mandatory provident fund to be paid to her would also reduce her personal gain as indirect costs.  Accordingly, I make no award for these heads of claims.

Pain, suffering and loss of amenities

70.Apart from pain and inconvenience, the Plaintiff complained that her work efficient is reduced, she was unable to travel as frequent as before, could not tolerate prolonged standing, walking or carrying heavy objects.  This aspect of her evidence is supported and contradicted by her expert’s evidence.  Dr Tio opined that “she may need intermittent breaks of 15 minutes after each 1 to 2 hours’ walk”.  For a person of her and body mass index, that is a very high level of tolerance.  In my view, that is absolutely normal.  In her evidence, she said she could not participate in her social life as before, such as shopping, drinking, gathering and travelling.  She developed phobia on seeing a staircase.  She is unable to wear shorts or skirt due to embarrassment caused by the 8 or 10 cm ugly scar on her right leg.

71.Mr Chan referred me to some cases involving similar injuries in recent years.  Mr Wong has no disagreement with the awards made in those cases.  The awards ranged from $200,000 to $350,000. In Chan Mok Yau v 黃吉利& Anor[6], the plaintiff was 56 years old (54 years old on the date of accident).  He suffered a distal fibula fracture at his right ankle.  He was treated with a cast for six weeks and followed by physiotherapy and occupational therapy.  He had a delayed union of the fracture which eventually healed after conservative treatment.  He had to walk with crutches for six weeks while his ankle was in a cast.  He was left with stiffness in the right ankle, residual pain with prolonged walking for more than one hour.  He could not manage full squatting.  His walking tolerance was above 30 minutes.  There was no evidence of early degenerative change.   He was awarded $250,000 for PSLA. 

72.I consider that case a relevant comparable.  The plaintiff in that case did not have to undergo an operation for internal fixation, but had to wear a cast and walk on crutches for six weeks.  On the other hand, his fracture did not heel three months after the injury and he suffered a greater degree of disability.  He suffered 4% impairment of the whole person.   He did not have pre-existing degeneration.  After making adjustment for these differences, I consider an award of $200,000 appropriate.

Other damages

73.The parties agreed that special damages be assessed in the amount of $80,000.

74.The Plaintiff claims future medical treatment in the sum of $35,000 as supported by Dr Tio and future travelling expenses of $10,000.  I accept Dr Lam’s opinion that the Plaintiff has achieved maximum recovery and that further treatment or operation is not indicated.  As such, future medical treatment and travelling expenses are unnecessary.

Summary on quantum

75.For the above reasons, I assess damages for PSLA and special damages in the respective amount of $200,000 and $80,000, totalling $280,000, on the basis of no contributory negligence on the part of the Plaintiff; and $70,000 after allowing for a 75% contributory negligence.  The above assessments are made on the assumption that contrary to my finding the Defendant is liable for breach of duty.

Conclusion     

76.Having found the Defendant not liable for any breach of duty whether under common law or under the Occupiers Liability Ordinance, I dismiss the Plaintiff’s action with an order nisi that the Plaintiff shall pay the Defendant’s costs, to be taxed if not agreed.

Mr. Damian Wong, instructed by Messrs. W. K. To & Co., for the Plaintiff

Mr. Daniel Chan, instructed by Messrs. Winnie Leung & Co., for the Defendant