Lo Yuen Chong v. Iws Environmental Technologies Ltd (Formerly Known As Fook Woo Environmental Technologies Ltd)

CACV 69/2019

[2021] HKCA 89

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 69 OF 2019

(ON APPEAL FROM HCPI NO 1070 OF 2014)

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REASONS FOR JUDGMENT
AND
DECISION ON COSTS

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Hon G Lam J (giving Reasons for Judgment and Decision on Costs of the Court):

Background

1.This is an appeal from Master J Wong’s decision on 1 February 2019[1] (“2019 Decision”) rejecting the plaintiff’s application for an amendment of an assessment of damages under the slip rule or inherent jurisdiction of the court.  At the end of the hearing we allowed the appeal.  These are our reasons and our decision on costs.

2.The assessment of damages was made by the Master in the action brought by the plaintiff against her employer, the defendant, for damages for personal injuries.  The plaintiff, a workshop clerk, suffered injury to her left wrist from a slip and fall accident in the work place on 15 December 2012.  She was thereafter on sick leave, until 21 February 2014 when she resigned, having given 7 days’ notice. 

3.The plaintiff brought proceedings against the defendant in the District Court for employee’s compensation and in the High Court for damages.  She recovered $143,389 by way of employee’s compensation.  In January 2015, interlocutory judgment was entered in the High Court action by consent, for damages to be assessed.  After trial, on 28 October 2016 the Master issued his assessment of damages (“2016 Assessment”).  He found that the plaintiff suffered comminuted fracture in her left distal radius and from a mild form of carpal tunnel syndrome.  He assessed the damages payable as follows, which were corrected by the Corrigendum dated 9 December 2016 referred to in §5 below:

		2016 Assessment $	After Corrigendum $
(a)	PSLA	300,000	300,000
(b)	Loss of past earnings and MPF	129,066	131,817
(c)	Loss of future earnings	Nil	Nil
(d)	Loss of earning capacity	52,680	52,680
(e)	Special damages	18,211	18,211
	Sub-total	499,957	502,708
	Less: Employee compensation received	143,389	143,389
		356,568	359,319

4.In the 2016 Assessment, the Master explained the calculation of loss of past earnings and MPF as follows:

“ PRE-TRIAL LOSS OF EARNINGS

20. Regarding loss of pre‑trial earnings, parties agreed that the average month earning of the plaintiff is $7,954 and 14 months’ of sick leave, reasonable. However, both counsel came up with different calculations.

Mr. Lam: $11,635.71 x 17.46 months x1.05 = $213,317

Ms. Lau: $8,780 x 14 months x1.05 = $129,066

21. Upon thought, I agree with the suggestions from Ms. Lau.

22.     To start with, the joint medical report does not support the case of the plaintiff.  [The Master then quoted parts of the report which stated that the plaintiff should be able to continue with her pre-injury job as a workshop clerk.]

23. Second, on balance, I find that the defendant resigned from the defendant on her own. It was not related to her ability to resume her pre‑injury job. …

24. Third, having found the above, it is not necessary for me to resolve the argument as to why the plaintiff resigned from her new job as a cashier in a snack shop from May to July 2014 … If I had to do so, on balance, I would find it unrelated to her injury. …

25. Mr. Lam asked me to accept the explanation from the plaintiff, having taken into account of her feelings on the injury, her attempts to practice physiotherapy and her demeanour in giving testimony before the court. However, the joint report was there for a long time and no step had been taken to seek correction, if any, from the experts. ‘Close of business’ is simple and straight-forward and I cannot see how it could fit in the explanation sought to offer by the plaintiff. As suggested by Ms. Lau, if the plaintiff would agree that she quitted because of the closure of the snack shop, she would, in effect, admit that she could work there, lifting weight in the course of work and earning a sum exceeding her pre‑accident job.

26. With the above findings, together with the concession from the defendant that the plaintiff would have been enjoyed similar increase in her salary (but for the resignation) as her colleagues, I agree to adopt a notional increment of 11.14% which is to be applied to the said average month earning of the plaintiff at $7,954, arriving at $8,780.  In the end, I accept the calculation proposed by Ms. Lau.”

5.Following correspondence from the parties, on 9 December 2016 the Master issued a corrigendum for the 2016 Assessment (“Corrigendum”) which, so far as relevant, made the following corrections:

“ 1. Paragraph 20 should read as ‘...parties agreed that the average month earning of the plaintiff is $7,954 and sick leave from 15 December 2012 to 21 February 2014, reasonable...’

2. Paragraph 21 should read as ‘...I agree in principle with the suggestions from Ms. Lau.’

…

4. Paragraph 26 should read as ‘...I accept in principle the calculation proposed by Ms. Lau.’ ”

6.In addition, Item (b) in §3 above (loss of past earnings and MPF) was corrected to $131,817, reflecting the fact that sick leave was taken not for 14 months but for 13 months together with 17 days in December 2012 and 21 days in February 2014.[2]  The sub‑total and the net amount of damages were consequentially revised.

7.Following a contested hearing on interest and costs, on 21 July 2017 the Master gave his decision on interest on the sums awarded.  Further, since the result was that the plaintiff failed to beat the defendant’s sanctioned offer made on 19 November 2014 by $475, the Master awarded the defendant the costs of the assessment from 18 December 2014 to 28 October 2016 on the indemnity basis (“2017 Decision”).

8.On 4 August 2017, the plaintiff filed a notice of appeal to a judge in chambers against the Master’s 2017 Decision.

9.On 1 December 2017, a certificate reflecting the 2016 Assessment as revised by the Corrigendum was sealed and filed.  Shortly afterwards, on 5 December 2017, the order reflecting the 2017 Decision was sealed and filed.

10.The plaintiff’s “appeal” against the 2017 Decision to a judge in chambers was heard before Bharwaney J on 20 March 2018.  It is not entirely clear what happened at that hearing but it suffices for present purposes to note that that appeal did not proceed and, instead, on 27 April 2018, the plaintiff issued the summons returnable before Master J Wong that became the subject matter of the 2019 Decision (“Summons”). 

11.By the Summons, issued under Order 20 rule 11 of the Rules of the High Court (Cap 4A) and the court’s inherent jurisdiction, the plaintiff sought an order that §26 of the 2016 Assessment be amended, replacing the phrase “arriving at $8,780” with “arriving at $8,840.08”.  Consequential amendments were sought to the 2016 Assessment for the amounts of loss of pre‑trial earnings and MPF and loss of earning capacity, and ultimately for the net amount of damages payable to be revised from $359,319 to $360,581.31.  The amendments involved very small sums, but evidently the ultimate object was to reach the conclusion that the plaintiff had beaten the sanctioned offer.  According to the Summons, if all the proposed amendments were made, the plaintiff would beat it by $918.57.  The Summons further sought an order that the costs order made pursuant to the 2017 Decision be “amended” and replaced by an order, inter alia, requiring the defendant to pay the plaintiff the costs of the assessment of damages.

12.The basis of the Summons was stated in the affidavit of the plaintiff’s solicitor, Mr Lau, dated 10 May 2018, namely, that there were “mathematical mistakes” or “mathematical errors” in the 2016 Assessment.  It was said that the Master had accepted the agreed figure of $7,954 as the plaintiff’s average monthly earnings at the time of the accident.  The notional increment of 11.14%, which was proposed by the defendant and accepted the Master, should be applied to $7,954, producing an increased figure of $8,840.08.  Instead, the Master had increased $7,900 by 11.14% to arrive at the figure of $8,780.  The result should therefore be corrected to $8,840.08.

13.Having heard the parties, on 1 February 2019, the Master handed down his 2019 Decision, stating as follows:

“ 10. First, the slip rule aims at correcting clerical mistakes arising from accidental slip or omission, including arithmetical error in calculation of damages. However, upon review of the assessment, it was indeed my intention to adopt the figure of $8,780 for the purpose of calculating the damages to be awarded to the plaintiff.

11. Second, the argument of the plaintiff can also be dismissed if one looks at the relevant exchange of letters and correspondence with the court from the handing down of the assessment to the corrigendum. …

12. … From these documents, it is clear that parties adopted the figure of ‘$8,780’ and only disputed on the period to be applied.

…

14. Third, at the hearing on 2 October 2018, Ms Lau took me again through parties’ case and counsel’s skeletons as to how the figure of $8,780 was arrived at.

‘ 16. The Plaintiff was on sick leave between 15^th December 2012 and 21^st February 2014. Before her sick leave, her average monthly earning was about $7,954 — as her earnings varied from month to month.

17. There was no dispute between the parties at the assessment hearing that the Plaintiff started to work for the Defendant as a workshop clerk as from 31^st October 2011 onwards. Her basic salary, as per the employment agreement disclosed at page 256, was $7,560 with three months’ probation. The Plaintiff was entitled to receive overtime allowance should she work overtime but not double pay under the employment agreement.

18. There was also no dispute between the parties that Madam Wong Mei Mei and Madam Kwok Yuen Kwan were comparable workers. They were comparable workers because both of them were, like the Plaintiff, employed to work as a workshop clerk for the Defendant since 2012 and their salaries were also comparable to that of the Plaintiff prior to the Accident, namely, $7,560 as at January 2012 (as per their wage records disclosed at page 253 and 255).

19. In the Closing Submission of the Defendant, the Court’s attention was drawn to the following factual matters (which were not denied by the Plaintiff):

(1) The basic salary of both Madam Kwok and Madam Wong as at January 2012 was $7,560;

(2) Similar to that of the Plaintiff, their respective basic salary was later increased to $7,900 in June 2012;

(3) Their respective basic monthly salary was increased to $8,780 in 2013;

(4) Their respective basic monthly salary was increased to $9,050 in 2014.

{all the above figures were shown on the disclosed wage records at pages 252-255}

20. While the Plaintiff contended in her Revised Statement of Damages that she would have enjoyed a flat 10% increase per annum in her salary but for the Accident, the increase in the earnings enjoyed by Madam Kwok and Madam Wong during the sick leave period of the Plaintiff, ie between 2012 and 2013, was 11.14% only (being [($8,780 ‑ $7,900) / $7,900 x 100%]).

21. Hence, the rate of 11.14% was adopted by the Defendant as the notional increase in the notional earnings of the Plaintiff for her sick leave period between 15^th December 2012 and 21^st February 2014 (as per paragraph 91 of the Closing Submission of the Defendant at page 211).

22. The figure of $7,900 was used as it was the basic salary of both comparable workers which was also similar to that of the Plaintiff in 2012. This thus gives the figure of $8,780 (being $7,900 x 11.14%).

23. The Plaintiff, on the other hand, contended that her notional earnings would have been increased to $11,635.71 by the time of the assessment hearing in 2016 by comparing the salaries of both Madam Wong and Madam Kwok (see paragraph 14 of the Plaintiff’s Closing Submission at page 180). No detail was provided as to how the figure of $11,635.71 was calculated.’

15. Ms Lau’s submissions refresh and coincide with my memory and I respectfully adopt them.”

14.Accordingly the Master dismissed the Summons with costs to the defendant.

15.The plaintiff now appeals against the 2019 Decision, seeking essentially an order in terms of her Summons.  It is contended on her behalf that there was clearly a mathematical error in §26 of the 2016 Assessment which ought to be corrected under Order 20 rule 11, and that the Master erred in failing to do so and in re‑opening the issue of monthly earnings by adopting a new figure of $7,900 when it was no longer open for him to do so.

16.Opposing the appeal, the defendant submitted that as it was the Master’s intention to adopt the figure of $8,780 as the basis for assessing past loss of earnings, as confirmed in the 2019 Decision, the slip rule did not apply.  It was submitted that the plaintiff had accepted in her evidence that her basic monthly salary for December 2012 was $7,900, which was the same as that of the two comparable workers, and that the defendant had adopted that figure in its submissions at trial.  The Master accepted that basis knowing that it excluded overtime allowance, double pay and bonus.  It was the plaintiff who was impermissibly trying to re-open the issue on its merits without launching a proper appeal.

Discussion

17.Order 20 rule 11 (often called the “slip rule”) provides:

“ Clerical mistakes in judgments or orders, or errors arising therein from any accidental slip or omission, may at any time be corrected by the Court on summons without an appeal.”

18.The jurisdiction of the court to correct mistakes under the slip rule or its inherent jurisdiction has been described by Godfrey JA in Skink Ltd (in liquidation) v Comtowell Ltd [1998] 1 HKLRD 542 at 543G as follows:

“ The court has an inherent power to vary its own orders so as to carry out its own meaning and to make that meaning plain; and an express power (under R.H.C. (Cap. 4 Sub. Leg.) O.20 r.11) to correct any error in any order resulting from an accidental slip or omission. But these powers extend only to the correction of errors in expressing the court’s intention. The court has no power to correct mistakes of its own; even where it is satisfied that it has indeed made such a mistake.”

19.To be capable of being corrected in this way, the error or omission must be an error in expressing the manifest intention of the court: Li Tze Cho v Ching Hua Co (H. K.) Ltd (No. 3) [1961] HKLR 201, 205; MKKWH (also known as MKGWH) v RKSH [2018] HKCA 395, §§63‑68; Bank of China v Xinyuan Trading Co Ltd (CACV 276/1998, 21 June 2000), p 3; see also R v Cripps, ex parte Muldoon [1984] QB 68, 80‑81.  As Ribeiro PJ said in Man Ping Nam & another v Man Fong Hang (No. 2) (2007) 10 HKCFAR 140 at §10, the court has power to clarify the original order “if the court’s intention appearing from the body of the judgment is manifest”.

20.That there was a mistake in §26 of the 2016 Assessment is beyond dispute.  The product of 11.14% and $7,954 is not $8,780, but $8,840.08.  $8,780 is instead the product of 11.14% and $7,900.  To see what the mistake was, it is necessary to examine the court’s reasoning as expressed in the 2016 Assessment in its context.

21.The plaintiff’s pleaded case was that her monthly earnings immediately before the accident were $8,137.73 and that, but for the accident, they would have increased by 10% per annum.  Assuming a notional trial date of 15 December 2015, she adopted a mean figure of $9,484.53 for her pre‑trial loss of earnings, claiming full loss for the period from 15 December 2012 to 21 February 2014, and partial loss thereafter (giving credit for a notional lower income from alternative employment) until trial.

22.In its Answer to Revised Statement of Damages, the defendant admitted that the plaintiff’s monthly earnings immediately before the accident were $8,137.73, but stated that her average monthly earnings were $7,954.63, with substantial variation from month to month.  It was also contended that the pre‑trial loss should be confined to the period ending on 21 February 2014.

23.In closing submissions, the plaintiff agreed that she had earned $7,954.53 per month on average and submitted that but for the accident, she would be earning $11,635.71 by the time of trial.[3]  She submitted that it would be unfair to exclude the bonuses, double pay and overtime allowance,[4] and asked for damages for pre‑trial loss of earnings (including 5% of her pay as the employer’s MPF contribution) calculated as:[5]

$11,635.71 × 17.46 × 1.05 = $213,317.47

The figure of 17.46 represents 434 days divided by 30 days per month, plus a grace period of 3 months after 21 February 2014.

24.The defendant’s written closing submissions at trial read as follows:

“ 46. The Plaintiff started work with the Defendant since December 2011. There is no dispute between the parties that the average monthly earning of the Plaintiff during the preceding 12‑month between November 2011 and November 2012 was HK$7,954.53.

…

85. One could see from the wage records of both Madam Wong and Madam Kwok that their basic salary was also $7,560 as at January 2012. Similar to that of the Plaintiff, their basic monthly salary was later increased to $7,900 after their respective probation … Their respective basic monthly salary was further increased to $8,780 per month …

…

87. The increase in the earnings enjoyed by the comparable workers between 2012 and 2013 is therefore, 11.14%, being [($8,780 – $7,900) / $7,900 × 100%].

…

89. The Plaintiff admitted in her testimonies that the increment in the salary of a workshop clerk was determined by the Defendant. It is not a flat 10% increase per annum as pleaded …

…

91. The Defendant accepts that but for the Accident, the Plaintiff probably would have enjoyed similar increase in her salary between 2012 and 2013, similar to that of Madam Wong and Madam Kwok, i.e. about 11.14%. This would be $8,780 per month.

92. It is the shared view of both Dr. Chan and Dr. Lam that it is reasonable to allow the Plaintiff to have 14 months’ sick leave.

93. It is not reasonable to allow the Plaintiff to claim for another 3‑months grace period in the assessment because it was she who resigned from the Defendant in February 2014 for personal reason. Had she not resigned, she would have resumed work upon the expiry of her sick leave on 21^st February 2014. It is therefore reasonable and fair to assess her entitlement for pre‑trial loss of earnings for the sick leave period only.

94. The pre‑trial loss of earnings of the Plaintiff is thus assessed as follows:

$8,780 × 14 months = $122,920

95. Her pre‑trial loss of MPF contribution is thus:

$122,920 × 5% = $6,146 ”

25.In the 2016 Assessment (as revised by the Corrigendum), the Master twice (at §§20 and 26) referred to the plaintiff’s agreed average monthly earnings of $7,954.  After setting out the rival calculations in §20, he stated his agreement in principle with the defendant’s suggestion.  He then gave his explanation in §§22-25, but those paragraphs deal only with why no loss was allowed beyond the sick leave period.  Then in §26, after referring to “the above findings”, and then to the defendant’s concession that the plaintiff would have enjoyed a similar increase in salary as her colleagues (calculated to be 11.14% as at the beginning of 2014), the Master said: “I agree to adopt a notional increment of 11.14% which is to be applied to the said average month earning of the plaintiff at $7,954, arriving at $8,780”.  The “said” average monthly earnings plainly refer to the agreed figure of $7,954 set out earlier in §20.  The use of this figure accords with the generally accepted approach that lost income is calculated by reference to actual earnings rather than a basic salary that excludes additional remuneration for overtime, bonuses and double pay. 

26.On behalf of the defendant, Ms Lau pointed out that the Master also indicated in the 2016 Assessment (as revised) that he agreed in principle with the defendant’s calculations, and that the defendant did not use the average monthly earnings as the multiplicand.  However, the Master only expressed an agreement in principle.  The defendant’s submissions at trial also accepted that the average monthly earnings of the plaintiff were $7,954.[6]  In stating that $8,780 should be adopted as the increased monthly income, the defendant’s trial submissions stated that the plaintiff probably would have enjoyed a similar increase to that of Madam Wong and Madam Kwok, ie about 11.14%, without specifying that the basic salary of $7,900 was used as the base rather than the agreed average monthly earnings of $7,954 (see §§91, 94 and 95 of the defendant’s closing submissions quoted above). 

27.There was no reference in the 2016 Assessment to basic salary or the figure of $7,900 at all, no specific indication that the Master had decided to use the basic salary as the multiplicand, and no reason given for adopting the plaintiff’s basic salary (as opposed to actual average earnings) as the basis for calculating her notional increased monthly income. Construed in its context, we do not think that the 2016 Assessment evinced any intention to adopt the figure of $7,900.  On the contrary, the court’s intention, as appears from the 2016 Assessment, was to derive the plaintiff’s hypothetical increased income by applying the notional rate of increment over the relevant period of time to her average monthly earnings as at the time of accident.  The fact that the formula was maintained after the Corrigendum reinforced this construction of the 2016 Assessment.

28.In the 2019 Decision, the Master did not deal with the average monthly earnings of $7,954 at all.  He appears to have concluded there was no arithmetical error in §26 of the 2016 Assessment on the ground that he had actually intended to adopt the figure of $8,780, as he recalled after a review of the materials.[7]  With respect, we are unable to agree.  On both parties’ contentions, there was an error.  The defendant in effect submitted that what should be amended in §26 of the 2016 Assessment was not the figure of $8,780, but the phrase “the said average month earning of the plaintiff at $7,954”, to be replaced by “the basic monthly salary of the plaintiff at $7,900”.  The Master implicitly accepted that as the correct position.  This was in our view not permissible because, far from being a correction of an error in expressing the manifest intention of the court, it would be to alter a substantive holding in the 2016 Assessment, after the order had been perfected, by reference to some unexpressed intention of the court — an exercise that is outside the scope of the slip rule.  In our judgment, the Master did not correctly direct himself with regard to the proper purpose and ambit of the application before him, and his decision is therefore vitiated.  The intention manifest from the 2016 Assessment was to calculate the plaintiff’s loss of earnings on the basis of her average monthly earnings.  On that footing, the figure of $8,780, expressed as the result of the equation adopted, was a mathematical error.  Such an error can be, and ought to have been, corrected pursuant to the slip rule.

29.The Master also erred, in our view, in considering that the correspondence leading to the Corrigendum detracted from or precluded the plaintiff’s application.  The mathematical error in §26 of the 2016 Assessment can be corrected “at any time” by the court under the slip rule.  It is true that the plaintiff’s solicitors did not point out the mistake at the time of the correspondence, but there is nothing to show that they were aware of it so that the plaintiff might arguably be said to have waived the right to seek a correction. 

30.For the above reasons, we allowed the appeal.  On that basis, Ms Lau confirmed on behalf of the defendant that there was no objection to the consequential amendments to various figures and statements in the documents set out in the schedule of amendments annexed to the plaintiff’s supplementary notice of appeal.  In particular, Ms Lau informed us that in light of the appeal being allowed, the defendant agreed that the costs order made in the 2017 Decision should be replaced by an order that the defendant do pay the plaintiff the costs of the assessment of damages and the costs of the defendant’s application for reduction of interest and variation of costs order which led to the 2017 Decision.  There will therefore be an order for those amendments to be made accordingly.

31.We consider that the costs of the appeal and below should follow the event.  Although Mr Kwok had included arguments in this appeal that became unnecessary to deal with, they were directed against matters raised in the 2019 Decision or were alternative arguments.  We do not consider it appropriate to deprive the plaintiff of any of her costs.  There will therefore be an order that the plaintiff do have the costs of this appeal and below in relation to the Summons.

Mr Tim Kwok, instructed by Mike So, Joseph Lau & Co, for the Plaintiff

Ms Julia Lau, instructed by John Lam, Law & Co, for the Defendant