Yeung Pak Kwan As Administrator of the Estate of Lam Fan, Deceased v. Chen Decang

HCPI 994/2012

[2022] HKCFI 3605

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO. 994 OF 2012

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BETWEEN

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J U D G M E N T

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A.   INTRODUCTION

1.Madam Lam Fan (“the Deceased”)  was unlawfully killed by the defendant on 16 January 2010.  This action was brought by her son (“Steven”)  under the Fatal Accidents Ordinance (Cap.22, Laws of Hong Kong)  (“FAO”)  for the benefit of the Deceased’s dependants and under the Law Amendment and Reform (Consolidation)  Ordinance (Cap.23, Laws of Hong Kong)  (“LARCO”)  for loss of accumulation of wealth in favour of the Deceased’s estate (“the Estate”).

2.On 21 January 2014, interlocutory judgment on liability was entered against the defendant with damages to be assessed. 

3.This is the Judgment for the trial of assessment of damages.

4.The defendant had been convicted of intentional killing of the Deceased and sentenced to death with two years’ suspension of execution by the Guangdong Zhanjiang City Intermediate People’s Court on 19 November 2010.  His appeal to the Higher People’s Court of Guangdong Province had been dismissed on 19 November 2012.  He is now serving his sentence in Dongguan Prison of Guangdong.  While he was legally represented at the earlier stage of these proceedings, his solicitors obtained a “cease to act” order on 31 January 2018 and came off the Court’s record officially on 25 April 2018. The defendant has since then been unrepresented.  By reason of his detention in the Mainland, he could not attend any hearing in person.  Be that as it may, since I am sure that if it were the defendant’s intention to engage any solicitors’ firm (and counsel)  to represent him in this trial (as to which I am satisfied that he has been given adequate notice), he would have done it long time ago. Hence, there is no reason why the trial should not proceed in his absence.

B.   BACKGROUND

5.The Deceased was born in China on 24 March 1958.  She married her first husband, Mr Yeung, in about 1988.  They had 2 children – Steven and Lily Yeung (“Lily”).  The Deceased worked as an estate agent in 1990s.  She owed a company (known as Turbo Trim Limited)that was engaged in re-export trade of raw plastic materials in Hong Kong.  

6.Apart from her raw plastic business, the Deceased also invested in real estate properties, stock, and funds.  In addition, she worked as an insurance agent. She was very successful in her business and investments, and as a result, by the time of her death, she had accumulated assets worth more than $40 million. 

7.The Deceased and Mr. Yeung divorced in about 1995/1996 and she later married the defendant in 1998.  The relationship between the Deceased and the defendant turned sour a few years before her death.  They often quarreled over money. The defendant eventually killed the Deceased on around 16 January 2010.  However, no one else knew about that at that time.  The Deceased just went missing with no apparent reason.  Her body was only found 3 months later in a sand well.

8.At the time of her death, the Deceased was 51 years and 10 months old.

9.As aforesaid, the Deceased had two children.

10.The Deceased’s elder son, Steven, was born on 4 June 1990.  He was 19 years old when she was killed.  He was the natural son of the Deceased and Mr. Yeung, and the step-son of the defendant.  He started his studies at the Hong Kong University of Science and Technology (“HKUST”)  in September 2009 for a degree in Biochemistry.  At around the same time, the Deceased bought Steven a flat in Tseung Kwan O (“the TKO Flat”)  as a gift.  The TKO Flat was registered under the names of Steven and the Deceased as joint tenants.  Steven has been living in the TKO Flat on his own since then.  After the Deceased’s death, Steven was diagnosed to be suffering from depression.  According to the medical chit prepared by Dr Peter Yu, Steven had developed mental symptoms typical of Posttraumatic Stress Disorder subsequent to the tragic death of his mother. He nevertheless managed to graduate in June 2014 and started his online trading business in rare whisky in Hong Kong.  This wine business ceased operation in 2017.  Steven has since then occasionally assisted Mr. Yeung (his father)  in his renovation work business.

11.The Deceased’s younger daughter, Lily, was born on 24 November 1991.  She was the natural daughter of the Deceased and Mr. Yeung, and the step daughter of the defendant.  She was 18 years old at the time of the Deceased’s death.

12.She was enrolled in a one-year university preparation course at De Anza College in the United States in September 2009. Initially, Lily planned to study accounting in the United States.  However, when the Deceased had gone missing in January 2010, Lily returned to Hong Kong to assist Steven in the search for their missing mother.  After the Deceased’s corpse was eventually found, Lily stayed behind to assist in the investigation of the murder of the Deceased and take care of Steven, who was suffering from depression. She later decided to discontinue her studies in the United States and stay in Hong Kong.  While investigating into the murder, she met a man from the Mainland who was able to and did provide invaluable assistance in the investigation. Both Steven and Lily were very grateful and felt indebted to this person.  Lily later married this man in December 2011.

13.In September 2011, Lily was admitted into the Hong Kong Polytechnic University (“PolyU”), and studied in Accounting and Finance. She graduated in June 2015 with a Bachelor’s degree.   

C.   CLAIMS UNDER FAO

C1. The Legal principles

14.Sections 3 and 6(1)  of FAO provide that:

Section 3

If death is caused to any person (the deceased)  by any wrongful act, neglect or default which is such as would (if death had not ensued)  have entitled the deceased to maintain an action and recover damages in respect thereof, then subject to section 4(2)  an action for damages may be brought for the benefit of the dependants of the deceased against the person who would have been liable in damages to the deceased in respect of that wrongful act, neglect or default.

Section 6(1)

In the action, such damages, other than damages for bereavement, may be awarded to dependants in such proportions as reflect their respective injuries as a result of the death.

15.The claim of loss of dependency has been described by the learned authors of McGregor on Damages (21^st Ed (2021))  as follows:

“the loss of the pecuniary benefit arising from the relationship which would be derived from the continuance of the life and which may consist of money, property or services: in other words, the value of dependency. The dependent is entitled, by clear principle of law, to full compensation for the loss of the pecuniary benefit […]

The basic rule, originally laid down in Franklin v S.E. Ry and ever since accepted and acted upon, is that the damages are to be calculated ‘in reference to a reasonable expectation of pecuniary benefit, as of right or otherwise, from the continuance of life’ […]” (at paragraph 41-028 and 41-029)

16.The principles in relation to assessment of dependency have been set out by Seagroatt J in Tsang Mei Ying & Another v Lam Pak Chiu & Another [1999] 2 HKLRD 807 as follows:

“The starting point is to calculate the value of the dependency as at the date of death, usually as a percentage of the income of the deceased. It is then revised in the light of the income which he would have received at the date of trial had he survived. The best means of calculating the dependency is to set out item by item where possible, the value annually (or monthly)  of the payments made for the benefit of the family as a whole subject to any deduction to represent the benefit to the deceased. It is a check on the reasonableness of such figures to compare the total with the net annual or monthly income of the deceased at the date of his death. The calculations are easier to make where the evidence clearly shows the deceased making a regular payment to his wife for running the family and the home, and also paying for certain fixed items e.g. rent. The reasonableness and the accuracy of such calculations often depend upon hard evidence, in the form of records, and oral evidence e.g. from the widow. Sometimes the picture can be more complex such as where the wife earns and contributes to the household, unless there is clear evidence which allows that to be treated in isolation so as to determine real dependency. Many items of dependency are common to the family whether there are children or not, and, if there are, when they leave home and the picture of dependency in other respects, changes. The common items remain part of the dependency picture. Examples of these are, rent, utilities (though these may vary according to exceptional use)  and other fixed payments. Moreover as some dependents cease to be such, the dependency of those remaining in the household often increases. The modern practice is to deduct a percentage from the net income of the deceased to represent what he would have spent on himself. These percentages tend to be used ‘unless there is striking evidence to make the conventional figure inappropriate because there is no departure from the principle that each case must be decided on its own facts’ (per O’Connor L.J. in Harris v. Empress Motors [1984] 1 WLR 212 (at p. 216-217).” (at 810I – 811E)

17.The statutory claim for loss of dependency under FAO is not limited to the loss of benefit in money or money’s worth which would have accrued to the dependant if the deceased had not died as a result of the tort complained of.  Services rendered which can be translated into money are also recoverable.  In Tsang Mei Ying & Another (administratrices of the estate of To Shing Chiu, the deceased)  v Lam Pak Chiu & Another [2000] 1 HKLRD 883, Rogers JA (as he then was)  explained as follows:

“Dependency in terms of what is recoverable under the Fatal Accidents Ordinance can be quantified both in terms of money and money’s worth, in other words, services. If, as a result of the death, a dependant has lost services provided by the deceased, then the monetary cost of replacing those services may be recoverable. If the services were of such a personal nature that they could only be replaced by services of a personal nature such as family member replacing a family member in looking after a young child, then the cost of providing that family member might be quantified not on the basis of what it would cost for a child minder but what it would cost for the only available family member to give up their other employment. It would be a matter for the court to decide whether that was reasonable in the circumstances.” (at 888G – I)

18.The fact that the dependants did not actually incur expenses on a replacement for the deceased’s gratuitous services should not be a bar to this claim.  In Cape Distribution Ltd v O’Loughlin [2001] P.I.Q.R Q8, it was held by the English Court of Appeal that:

“12. […] in Taff Vale Railway v. Jenkins [1913] 1 AC 1 the courts first recognised that a claim could be made in respect of services rendered gratuitously by the deceased […] the Lord Chancellor, Viscount Haldane pointed out that there was evidence that the daughter had come to her parent’s house at night and given assistance and also might have given assistance in her mother’s greengrocer’s shop. He was clearly of the view that that could properly form part of the basis for the jury’s award. […]

13. This principle has been applied time and time again by the court in cases where the claimant has lost the services of a wife or mother.

14. It follows, it seems to me, that the court’s task in any case is to examine the particular facts of the case to determine whether or not any loss in money or in monies worth has been occasioned to the dependants and if it determines that it has, it must then use whatever material appears best to fit the facts of the particular case in order to determine the extent of that loss. […]

15. In the present case, the judge came to the clear conclusion that the dependants had lost the flair and business acumen which would, by clear inference have resulted in a successful development of the property portfolio which represented the family’s assets, with consequential increases in both the capital and the income value of that portfolio. In my view the judge was clearly correct in concluding that the dependants had thereby suffered a loss capable of being measured in money terms. He could, as submitted by Mr Alliott, have been asked to embark upon a complex evaluation of the extent to which the portfolio managed by Mr O’Loughlin would have been more valuable than the assets managed by the respondent. This would have involved a comparison of on the one hand, the likely increase in income and capital to be expected from prudent investment by somebody on the respondent’s behalf of these assets, for she herself on the judge’s findings, could not be expected to have managed them herself, and a projection of the increase in income and capital values of the portfolio based upon an extrapolation from Mr O’Loughlin’s success between 1989 and 1995. It seems to me that such an exercise, although theoretically possible, would be so riddled with uncertainty and speculation as to make it difficult for a judge to find a secure basis for any conclusions that he might seek to reach.

16. But one thing is certain, namely that the respondent would have to have professional advice in order to manage the family assets properly and effectively. The cost of such advice therefore represents the most secure basis from which to attempt to place a pecuniary value on the loss to the dependants arising from Mr O’Loughlin’s death. Whether she chooses to have such an adviser or not is another matter. But the fact will always remain that she and the dependants will have lost the services of Mr O’Loughlin as the manager of the family assets, and that loss is capable of being valued in money terms. I have no doubt, in these circumstances, that the judge was entitled to take the course that he did.” (emphasis added)

19.In Cheng Shiu Ling & Another (Administrators of the estate of Tsai Lao Sha, deceased) v. Hui Wai Hung & Another [1990] 2 HKC 367, it was also held by Master Jones that:

“It has long been established that the award should represent the pecuniary value of even gratuitous services likely to have continued but for the intervening death. Moreover, it has been more recently recognised that replacement services need not actually be purchased for the right to compensation to arise.”(Emphasis added)

20.In the present case, claims for loss of dependency have been made on behalf of both Steven and Lily.  It can be seen that their claims are separate from each other.  In this regard, in Bushra Bibi and Nabela Qoser the co-administrators of the estate of Khalid, Mehmood, the deceased v Method Building & Engineering Works Limited (in liquidation)  & Others [2014] 3 HKLRD 21, Bharwaney J had this to say at [28]:

“Although each dependant has his or her individual claim for loss of dependency, it has long been acknowledged that ‘separate calculation of the award to each of the dependants is every bit as permissible a method of arriving at the total award of damages as is the ascertainment of a lump sum and its apportionment between those dependants’ and that the court should choose the ‘method which will do justice both to the defendants and to each dependant.’ ”

C2. Steven’s pre-trial loss of dependency

C2.1  Tuition fees

21.Steven was a Year 1 student at HKUST studying in a  Biochemistry undergraduate degree course when the Deceased died.  It is undisputed that Steven has taken a total of 4.5 years to complete the course[1]. 

22.The total tuition fee payable for Steven’s degree course was in the sum of $189,450.  By the time of the Deceased’s death, the Deceased had already paid for the said tuition fee up to September 2009 in the sum of $21,050.  I accept that the Deceased would have paid for the entirety of such fees but for her demise.  Steven therefore suffered the loss of value of the balance of the tuition fees in the sum of $168,400 ($189,450 – $21,050).

C2.2  Miscellaneous expenses incurred during studies at HKUST

23.Steven claims for $5,000 per year as miscellaneous expenses incurred during his studies, such as for the purchase of textbooks and stationery.  I accept that this is a reasonable amount, which would have been paid by the Deceased but for her death.

24.I therefore allow the sum of $22,500 ($5,000 x 4.5 years)  under this head.

C2.3  Costs of living expenses/pocket money

25.It is undisputed that Steven had been given $5,000 every month by the Deceased as pocket money as his living expenses during his studies at HKUST.

26.I therefore allow the sum of $270,000 ($5,000 x 12 x 4.5 years)  under this head.

C2.4  The utilities for the TKO Flat during Steven’s studies at HKUST

27.Steven claimed that the total amount of expenses for utilities for the TKO Flat was around $800 per month.  Although Steven could not produce the bills in relation to the period between 2009 and 2014 in support of his claim herein, I accept that that is a reasonable amount.  I will therefore allow the sum of $43,200 ($800 x 12 x 4.5)  under this head.

C2.5  Steven’s whisky business

28.Once Steven has graduated from HKUST in 2014, he started a whisky selling business and incurred various setting up expenses such as establishing a company, designing a web page and purchasing whiskies.

29.I accept Steven’s evidence that the Deceased would have supported his decision in starting his own business by, inter alia, giving him the financial support he needed for this purpose.  Indeed, since Steven had not worked before, it could not have been possible for him to enter into such a business venture without the financial assistance from the Deceased.

30.While I accept Steven’s evidence that he had incurred a total sum of $1,356,158.87 for the said business, I would only allow his claim in the amount of $1,112,000 as that is the amount claimed in his Re-Re-Revised Statement of Damages.

C2.6  Steven’s pre-trial loss of gift / loss of value of mortgage payment

31.According to the evidence of Steven, the Deceased purchased the TKO Flat as a gift for him on about 18 September 2009 at the purchase price of $2.3 million.  I accept Steven’s evidence in this regard because this is consistent with the fact that he started his studies at HKUST at around the same time (hence it would be convenient for Steven to travel to HKUST from home).  More importantly, this purchase was also referred to in the Judgment of the criminal trial of the defendant conducted in the Guangdong Zhanjiang City Intermediate People’s Court, in which it was mentioned that the Deceased and the defendant had had a quarrel before the murder because the Deceased had concealed from the defendant the fact that he had purchased a flat for Steven.

32.The Deceased paid 30% of the purchase price as deposit for the TKO Flat and settled the balance of the purchase price by a mortgage loan of $1.61 million.  By the date of the Deceased’s death in January 2010, she had made 3 mortgage loan monthly repayments in the total sum of $21,953.32.  In my view, it is more likely than not that the Deceased would have continued to pay for all outstanding mortgage loan repayments but for her death. 

33.The statements from the mortgagee bank show that the average mortgage loan repayment was in the sum of $7,500 at the material time.

34.Steven’s pre-trial loss of value of the TKO Flat mortgage loan repayments for the period from January 2010 to August 2022 (151 instalments)  is therefore calculated as follows:

$7,500 x 151 = $1,132,500

C2.7  Steven’s loss of value of insurance premium

35.The Deceased had taken out two saving insurance policies for Steven.  According to Steven, the Deceased had told him that those insurance policies were meant to be gifts to him, and therefore she had been paying the premium thereof before her death.

36.As a result of the tragedy, Steven had to pay for the outstanding premium of those insurance policies.  I agree that such payments are recoverable from the defendant:

Policy No. 1001832793: $100,000 x 3 years = $300,000

Policy No. 1001996109: $34,360 x 9 years = $309,240

37.Total loss of dependency under this head is therefore $609,240 ($300,000 + $309,240).

C2.8  Steven’s loss of value of the Deceased’s services

38.According to the evidence of Steven, he lived together with the Deceased at Queen’s Terrace, Queen Street before the TKO Flat was bought.  After the purchase of the TKO Flat, he moved and lived there alone, but the Deceased had visited him about once a week and helped him tidy up his home, washed his clothes and cooked for him. 

39.On the basis of the aforesaid lost service rendered by the Deceased, Steven now claims for the replacement costs of such service during his 4.5 years’ studies at the HKUST.  He has made reference to the minimum allowable wage of foreign domestic helpers which was at the level of $3,580 per month plus monthly food allowance at $750 at the material time, in the total sum of $4,330.  He only claims half of such a sum which in my view is reasonable.

40.The award under this head should therefore be $116,910 ($4,330 x 54 months x 50%).

Pre-trial loss of dependency of Steven - summary

Description	Amount
Tuition fees at HKUST	$168,400
Miscellaneous expenses	$22,500
Costs of living expenses/pocket money	$270,000
Utilities	$43,200
Whisky business	$1,112,000
Mortgage repayment of the TKO Flat	$1,132,500
Insurance premium	$609,240
Loss of service	$116,910
Total:	$3,474,750

C3. Steven’s post-trial loss of dependency

41.Under this head, Steven only claims for mortgage loan repayments in relation to the TKO Flat, in respect of which I accept that the Deceased would have made for Steven until the whole mortgage loan together with interest had been repaid but for her death.

42.The current monthly repayment is in the sum of around $7,500, and there are 86 instalments left to be paid.  The total amount is therefore in the sum of $645,000 ($7,500 x 86).

43.Given the fact that 86 monthly instalments are outstanding, Steven would receive the whole sum in advance by 7.16 years (86/12 months).

44.According to Table 27 of Hong Kong Personal Injury Tables 2019, the discounting factor for a term certain of 7 years at the discount rate of 2.5% is 0.8413, whereas the discounting factor for a term certain of for 8 years at the same discount rate is 0.8207.

45.The discounting factor for a term certain of 7.16 years at the discount rate of 2.5% is therefore 0.838004 (0.8413 – [(0.8413 – 0.8207)  x 16%]).

46.I would therefore award the sum of $540,512.58 ($645,000 x 0.838004)  to Steven under this head.

C4. Lily’s pre-trial loss of dependency

47.Lily initially received her secondary school education in Australia (Form 1 and Form 2)  and in the United States (Form 3 and Form 4).  She then came back to Hong Kong and attended an international school here.  Later on, she was admitted into an international school in Zhongshan, PRC.  She then went to further her studies in the USA in September 2009 and enrolled in a University preparation course.  

48.By reason of the Deceased having gone missing, Lily discontinued her studies in the US and came back to Hong Kong.

49.In September 2011, Lily enrolled in a degree course in Business Administration majoring in Accounting and Finance in PolyU.  She graduated in June 2015 with a Bachelor’s Degree.  In the meantime, she got married in December 2011.  

C4.1  Living expenses

50.Lily originally pleaded that she was still a dependant of the Deceased despite her change of marital status in December 2011, and on that basis, claimed for, inter alia, living expenses up to 2021.  Mr Chong and Mr Shum have now rightly accepted that Lily should only limit her claim for the period up to December 2011.

C4.1.1   January 2010 to November 2010

51.Lily returned to Hong Kong on 21 January 2010.  She assisted in the investigation and searched for the Deceased until March 2010 when the Deceased’s body was found.  In the following months, she had to liaise with the local PRC police and the Chinese authority on various follow-up matters, and as a result, Lily had to pay frequent visits to the Mainland.  According to her evidence, she had incurred the following expenses as a consequence:

(1)  Traveling expenses to Shenzhen or Zhanjiang, which was mainly by bus or taxi: at around $2,200 per month;

(2)  Accommodation expenses in the Mainland which were incurred during her stay there (on average around one week per month): at around $400 per day x 7 days = $2,800 per month;

(3)  Meals: $200 x 30 = $6,000 per month.

52.She therefore claims for $121,000 (($2,200 + $2,800 + $6,000)  x 11 months). 

53.This claim is allowed in full.

C4.1.2   December 2010 to September 2011

54.Lily continued to make frequent visits to the PRC to deal with events resulting from the Deceased’s death in the period between December 2010 and September 2011.  Her pattern of monthly expenditure for this period was as follows:

(1)  Living expenses in Hong Kong was approximately $6,000; 

(2)  Traveling expenses between Hong Kong and Shenzhen: $140 per day x 20 days in a month = $2,800 per month;

(3)  Rental of a flat in Shenzhen: Around $5,000 per month;

(4)  Meals: $200/day x 30 days = $6,000 per month;

(5)  Miscellaneous household expenses: $1,500 per month.

55.I accept these claims. Lily’s claim for living expenses in respect of the period between December 2010 and September 2011 is therefore assessed at $213,000 (($6,000 + $2,800 + $5,000 + $6,000 + $1,500)  x 10).

C4.1.3   September 2011 to December 2011

56.Lily started the undergraduate course of Business Administration at PolyU in September 2011. 

57.She claims for her costs of living while studying in PolyU in the period between September 2011 and December 2011 as follows:

(1)  Traveling expenses: $20 x 20 days = $400 per month;

(2)  Expenses on food: $300 x 30 days = $9,000 per month;

(3)  Expenses for miscellaneous household purchases: $3,000 per month;

(4)  Expenses on books and stationeries: $500 per month;

(5)  Rental at $10,000 per month.

58.Her claim of $91,600 ($22,900 x 4 months)  is allowed.

C4.1.4  Total living expenses from January 2010 to December 2011

59.The total amount of claim allowed for Lily’s living expenses in the period between January 2010 and December 2011 is therefore $425,600 ($121,000 + $213,000 + $91,600).

C4.2  Tuition fees

60.Mr Chong and Mr Shum have now sensibly limited Lily’s claim for tuition fees to the fees incurred before she got married.

61.I will therefore allow her claim in the sum of $21,765 ($21,660 + $105).

C4.3  Lily’s loss of value of insurance premium

62.The Deceased had taken out four saving insurance policies for Lily, and it was her evidence that they were meant to be gifts to her, and that was the reason why the Deceased had been paying the annual premium thereof for Lily before her death.  I accept Lily’s evidence in this regard.

63.As a result, I think it is more likely than not that, even if Lily had got married, the Deceased, but for her death, would have continued to pay for the outstanding premium of those policies until they were fully paid off in 3 to 6 years, as the case may be.

64.I therefore allow Lily’s claims in relation to the following policies:

Policy No. 100939497: $50,000 x 2 years = $100,000

Policy No. 1001819307: $16,000 x 3 years = $48,000

Policy No. 1001832787: $100,000 x 3 years = $300,000

Policy No. 1001939486: $33,714.60 x 5 years = $168,573

65.Hence, Lily’s total loss of dependency under this head is $616,573 ($100,000 + $48,000 + $300,000 + $168,573).

C4.4  Lily’s loss of value of the Deceased’s services

66.It may be recalled that Steven has claimed for (and has been granted)  half of the costs of hiring a foreign domestic helper. The other half of such costs is claimed by Lily. 

67.In support of this claim, it was said that the Deceased helped plan and organise her studies abroad, and had taken care of her household chores whenever she was back in Hong Kong during term breaks.

68.As far as the planning of Lily’s overseas studies is concerned, it is noted that she is now putting forward the 50% salaries of a foreign domestic helper as her “loss”, rather than the costs of any overseas studies advisors.  In my view, the costs of hiring foreign domestic helper cannot be linked with the loss of the Deceased’s gratuitous service in planning Lily’s overseas studies.  Hence, the claim of such salaries cannot be supported by the alleged loss of service. 

69.In relation to Lily’s alleged loss in the Deceased’s service in taking care of her, it should be noted that Lily only came back to Hong Kong during term breaks.  There is no evidence as to whether she would be back during each of those breaks, and the length of time when she would be staying in Hong Kong.  In such circumstances, I am not satisfied that she has established her loss in this regard.

Pre-trial loss of dependency of Lily - summary

Description	Amount
Living expenses	$425,600
Tuition fees	$21,765
Insurance premium	$616,57
	$1,063,938

C5. Lily’s post-trial loss of dependency

70.According to the evidence of Steven and Lily:

(1)  Soon after the Deceased purchased the TKO Flat for Steven, the Deceased had told Lily that she intended to buy the latter a flat as well when she reached the age of 18 as a gift;

(2)  The Deceased had brought up the matter of buying a flat in Hong Kong or a house in the United States for Lily for about 3 to 4 times since around September 2009.

71.Lily therefore claims that she should be able to recover from the defendant the value of a land property which the Deceased would have bought her but for her death.

72.In relation to the facts, I accept the evidence of Steven and Lily in this regard.  I take the view that it is reasonable for Lily to expect, in the circumstances of the present case, that the Deceased would have treated Steven and herself equally.  If the Deceased had bought a flat for Steven, it is natural that she would do the same for Lily. 

73.As a matter of law, counsel for the plaintiff have referred this Court to the following authorities:

(1)  In Betney v. Rowlands and Mallard [1992] CLY 1786, a dependant daughter succeeded in her claim against the defendant for the costs of her wedding which her deceased father had agreed prior to his death to pay for; 

(2)  In Taff Vale Railway Company v. Jenkins [1913] A.C. 1, the House of Lords held that prospective loss may be taken into account when assessing damages for loss of dependency.  It was stated that it is not a condition precedent to the maintenance of an action under the Fatal Accident Act 1846 that the deceased should have been actually earning money or money’s worth or contributing to the support of the plaintiff at or before the date of death, provided that the plaintiff had a reasonable expectation of pecuniary benefit from the continuance of the life of the deceased;

(3)  In Piggott v. Fancy Wood Products Ltd (unreported, 31 January 1985)  (noted in Kemp and Kemp on Quantum on damages Vol 4 para O4-002), the deceased was an undergraduate reading physics at the university, and would become a teacher in due course.  His parents claimed that their deceased son had expressed his intention to assist them financially in buying a house.  The court accepted that the deceased had done well in school, and had good prospects of a successful career as a schoolmaster.  It was held that the parents had a substantial prospect of benefiting from the continuance of the son’s life and were awarded damages for their loss.

74.Having considered the above authorities, I agree that there is a valid legal basis in awarding Lily her loss of the value of a flat which her mother had promised to buy for her as a gift.

75.Lily suggested that the amount to be awarded should be assessed by reference to the current market value of the TKO Flat.  I agree that it is a fair approach to be adopted.

76.While no expert evidence on valuation has been adduced for the purpose of this assessment exercise, Steven has produced evidence to show that a flat which is in the same block and direction of the TKO Flat has recently been put on sale at the asking price of $6,330,000.  This is in fact lower than the average figure which Steven obtained by using the online property valuation services provided by three major banks in Hong Kong[2]. I would therefore adopt the figure of $6,330,000 as the damages under this head.

D.  LOSS OF ACCUMULATION OF WEALTH

D1. The Legal principles

77.Section 20(2)(b)  of LARCO provides that:

“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—

(a)  […]

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

(i)  be calculated without reference to any loss or gain to his estate consequent on his death, except that a sum in respect of funeral expenses may be included;

(ii)  not include any damages in respect of loss of ability to render services after his death;

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

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

78.In Re Lau Chuen Fat, deceased[1994] 2 HKLR 173, Kaplan J had the following discussion in relation to the operation of section 20(2)(b)(iii)  of LARCO:

“It is clear from this sub-section that an award of damages based on an accumulation of wealth which would have existed as at the date of the likely natural death of the deceased can be made provided that the court is satisfied that some would have existed. I can find nothing in this section that provides for the award of a conventional or notional sum which I note is frequently awarded in some of the reported cases.

It seems plain to me that what the court has to consider is whether, at the date of death by natural causes, there would have been an accumulation of wealth, the realization of which the tortious death has prevented. The mere fact that some savings can be shown at the date of the tortious death is not tantamount to saying that such savings would have been in existence at the date of the natural death. It seems clear to me that whereas a man in this sort of work can make some savings, these are inevitably earmarked for the period after which he has retired and during which there is no meaningful old age pension or other support. Further, savings that can be identified at the date of the tortious death may well be spent on a variety of matters during the normal working life.

It also seems clear to me that the amendments introduced by section 20 of LARCO to counter the ‘lost years’ claim were enacted to prevent a windfall accruing to estates which could not be justified on the evidence. In fact, section 20 itself exhorts the court to ensure that there is no over compensation to the estate.” (at 182 – 183)  (emphasis added)

79.In Lam Pak Chiu & Another v. Tsang Mei Ying & Another (2001)  4 HKCFAR 34, Bokhary PJ also explained that:

“Where a person is killed by an act or omission giving rise to a cause of action which survives for the benefit of his estate, the damages recoverable for the benefit of his estate may include an award in respect of loss of accumulation of wealth. Such an award is recoverable if and in so far as the court is satisfied that, but for such fatal act or omission, he would have left an accumulation of wealth by the time when he would otherwise have died. Section 20(2)(b)(iii)  of the Law Amendment and Reform (Consolidation)  Ordinance, Cap. 23, so provides.

[…]

Thus if the court were to find in any given case that an accumulation of wealth would have been achieved by the notional time of retirement, the realistic possibilities, factoring in probable inflation, would then be as follows:

(i)  expenditure during retirement may exceed the income from the accumulation plus any pension and the like received during retirement so as to exhaust the accumulation some time before the notional time of death, thus leaving the deceased dependent upon state, family or other help during his notional final years; or

(ii)  post-retirement expenditure may exceed post-retirement receipts but only so as to diminish the accumulation without exhausting it; or

(iii)  such receipts may more or less match such expenditure so as to leave the deceased's financial position at the notional time of death much the same as it had been at the notional time of retirement; or

(iv)  it may even be that such receipts would exceed such expenditure so as to leave his financial position better at the notional time of death than it had been at the notional time of retirement.

It would be for the court to select from these possibilities the one which it considers the most realistic in the particular circumstances of the case, remembering that the burden lies on the party who asserts.” (at 39H – J and 48A – F)

80.In Kan Wai Ling and Fan Mei Na, the co-administratrices of the estate of Kan Siu Hong, Deceased v Kan Chi Fai [2018] 4 HKC 324, [2018] HKCFI 1024, Bharwaney J had the following to say at [129] – [131]:

“129. As I stated in Fung Suen Sim v. Liu Chun Pong, it is inappropriate to use a multiplier to assess his notional savings over this period of time. The award under this head of claim is not a lump sum award to represent the loss of a future continuing stream of income, which has to be discounted, on account of accelerated receipt, by the use of a multiplier. The above assessment has to be made in order to assess the total notional accumulation of wealth from the time of death to the time of notional retirement, including any likely growth of these accumulated savings from investment returns. Once this amount has been assessed, the next stage is to determine whether this accumulated wealth would grow, or be depleted, by the time of natural death. If there is a net balance at the time of natural death, this net balance, which is a future loss sustained by the estate of the deceased, must be discounted for accelerated receipt. However, this discount is a discount for the accelerated receipt of a future lump sum loss rather than for the loss of a future continuing stream of income.

130. In Fung Suen Sim v. Liu Chun Pong I had stated:

‘The current practice is to assess multipliers, and discounts for accelerated receipt, on the assumption that prudent investments made of the damages awarded to victims of torts would yield an annual return of 4.5% per annum (see Cookson v. Knowles [1979] AC 556 and Chan Pui Ki (an infant)  v. Leung On [1995] 3 HKC 732). Where a court finds that the deceased would, but for the accident, have accumulated wealth from the date of his death to the date of his natural retirement and that he would have invested the wealth he accumulated, then, in order to be consistent with the current practice, it is only right that the court should assume that such investments would yield a similar rate of return of 4.5%. Although I have not attempted to make detailed calculations in this regard, I am probably not much off the mark in assessing the assumed return on savings to have augmented the accumulated fund to about HK$1,300,000.’

[…]

131. The discount rate was reduced to 2.5% for future losses in excess of 10 years by my decision in Chan Pak Ting v. Chan Chi Kuen (No. 2) [2013] 2 HKLRD 1. In Bibi Bushra and Nabela Qoser, the co-administrators of the estate of Khalid Mehmood, deceased v. Method Building and Engineering Works Ltd (in liquidation)  & Ors. [2014] 3 HKLRD 21, I observed that:

‘In Fung Suen Sim, the personal representative and administratrix of the estate of Lung Kai Hon, deceased v. Liu Chun Pong & Anor., HCPI 896/2007, 23 December 2011, I held that the claim for loss of accumulation of wealth, a remnant of the abolished lost years’ claim, was unlikely to yield a very high award, even in cases where the deceased was likely to accumulate substantial savings on account of the fact that he was a high income earner and lived frugally. In that case, I assessed the award for loss of accumulation of wealth based on a rate of return, net of inflation, of 4.5% per annum. If the net rate of return of 2.5% per annum, assessed in Chan Pak Ting v. Chan Chi Kuen & Anor. [2013] 2 HKLRD 1, is taken to make the assessment, the award may be even lower.’ ”

81.The legal principles for the claim under LARCO have also been summarised by Wilson Chan J in Chung Sui Cheong the administrator of the estate of Chung Wai Man Joseph deceased v Tsang Wai Hung (HCPI 1058/2015, unreported, 3 November 2017).  Having referred to section 20(2)(b)  of LARCO, his Lordship stated that:

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

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

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

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

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

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

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

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

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

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

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

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

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

D2.   The Deceased’s accumulation of wealth

82.The Deceased had enjoyed great success in her career, and had earned substantial income from her raw plastic trading business and as an insurance agent.  She also made sound investments in securities and investment funds.  In addition, she had bought many real estate properties, either solely or jointly with her ex-husband or the defendant, or her younger brother, in Hong Kong and PRC.  I accept that, but for her untimely death, it is likely that the Deceased would have continued to accumulate wealth at least until her notional date of retirement.

D3.   The approach to be adopted

83.The plaintiff’s counsel proposed that this Court should follow the approach adopted by Master B Kwan in Chan King Wan v Yip Siu Yin (HCPI 1267/1996, unreported, 4 July 2000)  which was described by Rogers VP as “realistic and practical” on appeal when assessing the Deceased’s accumulated wealth.  By this method, the Court would first of all find out the wealth which the Deceased had accumulated as at her date of death, and then divide it by the number of years which the Deceased used to accumulate such wealth.  Once that is done, the Court would use that average figure as the multiplicand, and work out the amount of accumulated wealth as at the date of her notional date of retirement.

84.I agree that this is an appropriate approach to be adopted in the present case in the light of the fact that the Deceased had various income sources.  Further, it is difficult to assess her profit earned from her raw plastic materials business given the incomplete trading documents available to the expert and the Court.

D4.   The Deceased’s accumulated wealth at her date of death

85.According to the expert report adduced by the plaintiff (which I accept), the Deceased had left behind assets in the total sum of at least $41,952,362 at the time of her death.  It is noted that the figure might well be higher if the market prices, rather than the price at cost, of the respective real properties had been adopted as the value of those properties.  However, this Court has been informed by the plaintiff’s counsel that they do not seek to rely on a higher figure.

D5.   The Deceased’s accumulated wealth at her notional date of retirement

86.Having decided on the Deceased’s accumulated wealth as at her date of death, the next question which this Court has to consider is at which point in time the Deceased had started to accumulate her wealth. 

87.Based on the evidence placed before the Court, the plaintiff suggested that there are 3 possible alternatives: -

(1)  Scenario 1: The Deceased started to amass her wealth in 1987, as Turbo Trim Industrial Limited (the company through which she conducted her trade in raw plastic materials)  was incorporated on 18 September 1986.  Under this scenario, it took her 23 years[3] (1987-2009)  to amass her wealth.  As such, on average her annual accumulation of wealth was about $1,824,015.74 ($41,952,362 / 23 years);

(2)  Scenario 2: The Deceased started to amass her wealth in 1989, when she and her ex-husband first ventured into the property investment market.  Under this scenario, it took her 21 years[4] (1989-2009)  to amass her wealth.  As such, on average her annual accumulation of wealth was about $1,997,731.52 ($41,952,362 / 21 years); or

(3)  Scenario 3: The Deceased started to amass her wealth in 1995, when she and her ex-husband were divorced.  Under this scenario, it took her 15 years[5] (1995-2009)  to amass her wealth.  As such, on average her annual accumulation of wealth was about $2,796,824.13 ($41,952,362 / 15 years).

88.Mr Chong and Mr Shum submitted that Scenario 3 should be adopted herein.  They supported their argument by reference to the Profit and Loss Table compiled by the expert, on the basis of which it was found that in the period between 2006 and 2009, the Deceased had:

(1)  an average annual income in the sum of $3,793,982.50;

(2)  an average annual expenses in the sum of $867,709.75;

(3)  an average annual savings in the sum of $2,926,272.75 ($3,793,982.50 – $867,709.75).

89.It was said that the average annual savings of $2,926,272.75 is extremely close to the average figure under Scenario 3, and therefore Scenario 3 should not be far off the mark.

90.In my view, the Court should not lose sight of the evidence of the Deceased’s ex-husband (the natural father of Steven and Lily), who stated in his witness statement that:

“3. I got married with the Deceased in 1988. When we got married, I worked in the renovation field and the Deceased was trading raw plastic materials between Hong Kong and China. As far as I am aware of, the Deceased had been trading raw plastic materials with a Company called Turbo Trim Industrial Limited, which was solely owned by the Deceased.

[…]

5. I am and was working in the renovation field close to the property market. I have the idea of buying and redecorating old properties and then resell them at a higher price to earn money. Nevertheless, I did not have enough financial resources. That was why I proposed to the Deceased to buy and sell properties together after marriage. I also proposed that she could keep the gains and if there was lost (sic), I would bear the lost (sic). The Deceased accepted my proposal. We bought the first property in 1989, we bought at around $300,000 and sold at around $400,000 after redecoration and we earned approximately $100,000. Since we saw that it was profitable to buy and sell properties in this way, we had consecutive transactions in the coming year […] I recall that at most we had up to 7 transactions in one month […] Before I divorced with the Deceased, we kept buying and selling properties in this pattern. During our marriage, I gave all my money to the Deceased’s handling. The main reason was because the Deceased needed more credit for the bank to issue letter of credits for her trading of raw plastic materials. By the time our family income was about $150,000 to $250,000 per month.

[…]

7.  During our marriage and as far as I know about the Deceased, she was frugal […].  Because the Deceased was born in the middle-class family in China, she used to be hard working and seldom bought luxurious brands […]”

91.From the above evidence, one can appreciate that the Deceased must have started to accumulate her wealth even before she started her investment in land properties together with her ex-husband, otherwise she would not have been able to agree to her ex-husband’s proposal in commencing their investment plan in 1989. 

92.Furthermore, it should also be noted that the Deceased together with her ex-husband were earning about $150,000 – $250,000 per month in around 1992.  This is a substantial amount (the purchase price of the first property which they bought in 1989 was only $300,000), and in my view this amounts to solid proof that the Deceased must have accumulated some wealth already back then, rather than starting to do so in 1995 as suggested.

93.The plaintiff’s counsel submitted that since the Deceased and her ex-husband were still living in public housing before their divorce, it is unlikely that they had already amassed substantial amount of wealth as suggested in Scenario 1 or Scenario 2.  With respect, I do not accept this argument.  It is clearly evident that the Deceased had all along led a frugal life.  Even though she had accumulated tens of millions of wealth before she passed away, she did not even hire any foreign domestic helper.  She normally took MTR rather than taxi when she went out.  As her ex-husband put it, she lived a simple life all along.  Hence, the fact that the Deceased was still living in public housing does not necessarily mean that she had not accumulated any wealth.  Indeed, her ex-husband had confirmed that, when they were divorced, they had real properties which worth about $4,000,000.  While those properties were bought with the assistance of mortgage loans, I do not think that would affect the conclusion that the Deceased had already started to accumulate her wealth at the material time.

94.I therefore find that the Deceased had started to accumulate her wealth in 1987.  Hence, on average her annual accumulation of wealth was about $1,824,015.74 ($41,952,362 / 23 years).

95.Assuming that the Deceased would retire at the age of 65 (i.e. 24 March 2023), her total loss of accumulation of wealth between her death in 2010 and her retirement (13.17 years in between)  would be $24,022,287.30 ($1,824,015.74 x 13.17).

96.Mr Chong and Mr Shum asked this Court to assume that the Deceased would have earned the same amount of income on average even if she had remained alive after 2010.  With that assumption, this Court then has to take into account the projected additional expenses based on Steven’s and Lily’s claims for loss of dependency, because such additional expenses would eat into the Deceased’s savings. 

97.The following sums would have been spent on them by the Deceased from 2010 onwards:

For Steven:

(1)  All the items under “Pre-Trial Loss of Dependency for Steven” as set out above, except “loss of service” in the sum of $116,910. The sub-total under this part is $3,357,840 ($3,474,750 – $116,910).

(2)  The mortgage repayments between September 2022 and the Deceased’s retirement date (March 2023): $52,500 ($7,500 x 7 months).

(3)  Therefore, between 2010 and 2023, the Deceased would need to spend on Steven in the total sum of $3,410,340 ($3,357,840 + $52,500).

For Lily:

(4)  All the items under “Pre-Trial Loss of dependency of Lily” as set out above.  The sub-total under this head is $1,063,938.

(5)  In addition, the Deceased would have paid $690,000 down payment of a property for her and monthly mortgage repayment similar to Steven’s at $7,500 (between September 2011 and the date of retirement in the total sum of $1,042,500 (139 months x $7,500).

(6)  Therefore, between 2010 and 2023, the Deceased would have spent on Lily in the total sum of $2,796,438 ($1,063,938 + $690,000 + $1,042,500).

98.Hence, the Deceased would need to spend $6,206,778 ($3,410,340 + $2,796,438)  in total on Steven and Lily for the awarded items under their loss of dependency claims.

99.To find out how much more the Deceased would have spent on Steven and Lily after 2010 when compared to the figure before her date of death, the Court has to know the amount of expenses which the Deceased had incurred on her children before 2010.  Because of incomplete records, the best that the Expert could do was to compile a table in this regard for the period between 2006 and 2009.  According to his calculation, the Deceased had on average spent on Steven and Lily a total sum of $401,620 annually in those 4 years.

100.In other words, had there been no increase in dependency between 17 January 2010 and 24 March 2023 (13.17 years), the Deceased’s total expenses on her children over those years would be in the sum of $5,289,335.40 ($401,620 x 13.17).

101.Therefore, the sum of $917,442.60 ($6,206,778.00 – $5,289,335.40)  would have to be paid out of the Deceased savings.  In other words, this would eat into her accumulation of wealth.

102.Hence, the Deceased’s accumulated wealth on her notional date of retirement would be $23,104,844.70. ($24,022,287.30 – $917,442.60).

D6.   Post-retirement expenses

103.The next question which this Court has to consider is whether the Deceased’s notional post-retirement expenses should be deducted from her accumulated wealth at her notional date of retirement. If so, the Court has to decide how much should be so deducted.

104.In this regard, the plaintiff’s counsel submitted that no such deduction should be made because the Deceased had 3 solely owned properties and 3 jointly owned properties (one of which was used as her residence)  at the time of her death. The rental income from the 5 properties would be more than enough to support her retirement life.  Moreover, by the time of her retirement, she would no longer need to support her children (apart from paying for various gifts mentioned above).  I agree with this submission.  In the present case, the Deceased’s frugal lifestyle should also be borne in mind.  I am of the view that it is reasonable to assume that the Deceased would have lived the same way after her retirement.

105.The above conclusion is also supported by expert evidence.  According to the accountancy expert, there would be a recurring monthly rental income in the total sum of $97,650. In addition, there would be interest income in the sum of $75,000 per month (assuming interest is earned at 2.5% per annum)  from the Deceased’s liquid assets of around $36 million.  The total monthly income would be more than adequate to cover the Deceased’s personal monthly expenses, her insurance premium and the monthly mortgage loan instalments of her properties (including the TKO Flat and Lily’s flat).

D7.   Discount for accelerated receipt

106.Pursuant to the proviso of section 20(2)(b)(iii)  of LARCO, the Court has to take into account the accelerated receipt of the accumulation of wealth, and if it is just in the circumstances to do so, the amount to be awarded under this head should be deducted so as to avoid over-compensation.

107.If it is appropriate to do so, the deduction would usually be made by applying a discount to the assessed accumulation of wealth.

108.However, as emphasized above, whether such a deduction should be made would depend on what is just in the circumstances of the case. 

109.In the present case, I accept the plaintiff’s argument that no such deductions should be made because the Deceased’s notional retirement date will fall on 24 March 2023, which is less than 4 months away.  Since the defendant is in custody in the Mainland, it is highly unlikely to say the least that he would satisfy this Judgment on his own initiative.  In other words, it is most likely that the plaintiff has to go through enforcement procedures before he would be able to get his hands on the defendant’s assets in satisfaction of this Judgment.  Taking into account the time which will be required for such enforcement (which may involve selling the defendant’s land properties), it is nearly a certainty that the plaintiff would not be paid before the said notional retirement date.  There is therefore no “accelerated receipt of the accumulation of wealth” in the present case.

110.Furthermore, on the basis of the analysis above, I am satisfied that the Deceased’s wealth would have further grown even after her retirement.  In other words, her financial position would even be better at the notional time of natural death than it had been at the notional time of retirement but for her early death.  However, the plaintiff is not making any claim in that regard.  With this in mind, I am confident that there should be no over-compensation even if no deduction is made.

D8.   Conclusion on loss of accumulation of wealth

111.I therefore conclude that the award under this head should be assessed at $23,104,844.70.

E.   BEREAVEMENT

112.In the Re-Re-Revised Statement of Damages, the plaintiff claims for the sum of $150,000 as damages for bereavement which is agreed by the defendant.

113.The plaintiff’s counsel asked that this sum be specifically awarded to Steven and Lily as opposed to the defendant, because it would be against public policy for the defendant, the murderer of the Deceased, to be benefited in any way by reason of the Deceased’s death.

114.As pointed out to Mr Chong and Mr Shum at the trial, I have doubt as to whether this Court has the jurisdiction to do so.

115.Section 4 of FAO provides that:

(1)  An action under this Ordinance may consist of or include a claim for damages for bereavement unless, by reason of the act, neglect or default referred to in section 3, any person has recovered, by action or otherwise, a sum in respect of loss of the deceased’s society under section 20C(1)  of the Law Amendment and Reform (Consolidation)  Ordinance (Cap.23).

(2)  A claim for damages for bereavement shall only be for the benefit of such of the following persons as survive the deceased for not less than 30 days –

(a)  the wife or husband of the deceased, unless they had been living apart for a continuous period of at least 2 years immediately preceding the death of the deceased; or

(b)  where there is no spouse by or for whom a claim can be made under paragraph (a), the children of the deceased; or

[…]

116.There is no dispute that the Deceased and the defendant did not live apart at all preceding the death of the Deceased. Hence, the defendant, as a widower, is on the face of it eligible for the claim for damages for bereavement pursuant to section 4(2)(a)  of the FAO.

117.However, the plaintiff, relying on the case of R v Chief National Insurance Commissioner, Ex parte Connor [1981] 1 QB 758, argued that by the operation of the rule of public policy, the defendant should not be entitled to the damages for bereavement.  The plaintiff’s counsel went further to submit that once the defendant had been disentitled of such damages, the Deceased’s children, i.e. Steven and Lily, would become the first in priority to such damages.

118.I cannot accept this argument.  The entitlement to damages for bereavement of various categories of persons has been clearly set out by FAO.  In my view, even if the operation of the common law rule of public policy would disentitle the defendant to such damages, such a rule would not have the effect of rewriting the statute to the extent that the children of the Deceased would become entitled to such damages.

119.This Court has been informed by the plaintiff that, in the event this Court does not accept the plaintiff's argument that the children of the Deceased would become the first in priority to claim damages for bereavement by the operation of the rule of public policy, the plaintiff would abandon the claim for damages for bereavement altogether.

120.I would therefore make no award under this head.

F.   FUNERAL AND OTHER EXPENSES

121.Pursuant to section 20(2)(b)(i)  of LARCO, funeral expenses are recoverable for the benefit of the estate of the Deceased. 

122.The term “funeral expenses” is not defined in LARCO.  The question which this Court has to consider is whether the expenses claimed are reasonable in all the circumstances.  In considering such a matter, the Court has to consider the status and financial position of the Deceased and of her family, and also their religious beliefs: Wong Sau Wah and Chui Hing Chuen respectively the administratrix and co-administrator of the estate of Chui Yau Hang, deceased v. Leung Cham Cheuk & Anor (CACV 46/1982, unreported, 6 July 1982), at page 6 thereof.

123.In the present case, the plaintiff has made the following claims under this head:

(1)  $100,000 for two religious ceremonies;

(2)  $513,800 for purchasing a cinerary urn space at Yuen Yuen Institute.

124.The sum of $100,000 incurred for two religious ceremonies is in my view reasonable and therefore should be allowed.

125.In relation to the cost of purchasing a cinerary urn space, as a matter of principle, I cannot see why this item should not be allowed.  As DHCJ Muttrie observed in Hung Oi Mui, the intended personal representative of the estate of Hung Tin Kai, deceased v. Lam Kwok Leung & Another (HCPI 205/1998, unreported, 16 August 1999)  (at page 9 thereof):

“My own view is that the ashes have got to go somewhere. People cannot be expected to keep them at home. Few people in Hong Kong are likely to wish to scatter a parent’s ashes on land or at sea […]”

126.While the above observation was made more than 20 years ago, in my view it is still largely applicable to the situation nowadays.  I accept that there may well be more people who are willing to scatter their parents’ ashes on land or at sea now.  However, it is still reasonable for a space in a private columbarium to be bought for the permanent storage of the Deceased’s cremated ashes, especially when the financial position of the Deceased and the circumstances surrounding her death are taken into account.  I also find that the amount of expenses which has been incurred in purchasing the said space is reasonable.

127.I therefore allow the entire claim of $613,800.

G.  INTEREST

128.Interest on the funeral and cinerary urn space expenses awarded under Section F above will be payable and calculated at half judgment rate from the date of the death of the Deceased to the date hereof.

129.Damages on pre-trial loss of dependency will attract interest at half judgment rate from the date of the issue of the writ until the date hereof.

130.Full judgment rate shall apply to all of the above from the date of Judgment to payment.

H.  SUMMARY OF THE DAMAGES AWARDED

Steven’s pre-trial loss of dependency	$3,474,750.00
Steven’s post-trial loss of dependency	$540,512.58
Lily’s pre-trial loss of dependency	$1,063,938.00
Lily’s post-trial loss of dependency	$6,330,000.00
Loss of accumulation of wealth under LARCO	$23,104,844.70
Funeral and other expenses	$613,800.00
Total:	$35,127,845.28 (Plus Interest)

I.   COSTS

131.I make a cost order nisi that the defendant shall bear the costs of the plaintiff (including all costs reserved, if any), with certificate for two counsel.  The above order nisi shall become absolute in the absence of application to vary (which shall be made by letter, if any)  within 14 days hereof.  Any application to vary the costs order nisi shall be dealt with on papers.

132.Mr Chong and Mr Shum asked this Court to assess the plaintiff’s costs of the whole action by summary assessment.  It was submitted that:

(1)  It is desirable to end this tragic case as soon as possible so that Steven and Lily can get back to their normal life sooner;

(2)  As the defendant is now in custody in the Mainland, it would take a long time to serve the taxation proceedings papers on him;

(3)  The plaintiff’s former solicitors (“the Former Solicitors”)  have issued a final bill in September 2022, and the plaintiff has been chased to settle that bill;

(4)  Since the said final bill has not been settled, a lot of papers are still kept by the Former Solicitors.  As a result, it is difficult for the plaintiff to prepare for the taxation proceedings;

(5)  A large part of the costs is comprised of counsel’s fees.  This makes it easier for the Court to assess costs summarily even though the quantum of costs claimed is substantial.

133.The plaintiff is now asking for costs in the total sum of $7,041,295.43.  In support of this application, the plaintiff has lodged a statement of costs which consists of 7 pages.  From my reading of the said statement of costs, I have been driven to the conclusion that it is simply impossible to adopt a broad-brush approach which is usually deployed in the summary assessment procedure, because the details of a large number of the items are simply not apparent to the Court.  For example, the cost claimed in relation to the fees paid to the counsel who was originally instructed to conduct this trial on behalf of the plaintiff is in the sum of $2,568,300. There is absolutely no information as to what work had been done by counsel in relation thereto.  Although the plaintiff’s counsel suggested that they could provide further information to the Court if necessary, I do not think that is the correct approach, because this is just one of the examples.  There are many other items of fees in respect of which this Court cannot realistically assess whether they should be allowed or not.  If the Court asks for more information in respect of each of those items, in effect this Court would be doing, to say the least, a mini-taxation.  I do not think that is right. 

134.As far as the grounds relied on by the plaintiff are concerned, with respect, they do not advance the plaintiff’s case at all:

(1)  While it is appreciated that Steven and Lily would very much like to end this court case as early as possible so that they can move on, this Court must bear in mind that it has to do justice in the case.  Conducting a summary assessment of costs in the present case cannot do justice to the defendant because the Court has to undertake a lot of guess work in the process which is highly undesirable;

(2)  In order to enforce the Judgment, it is most likely that the plaintiff has to commence enforcement proceedings, for example, applying for an order for sale of the defendant’s land properties.  In other words, he will have to serve further case papers on the defendant in the Mainland anyway;

(3)  Even if the Court has assessed costs summarily, this cannot assist the plaintiff in settling the final bill of the Former Solicitor, because, as mentioned above, it is highly likely that the plaintiff would have to commence enforcement proceedings for the purpose of getting paid.

135.Therefore, in the event the costs order nisi above is made absolute, the plaintiff’s costs of the whole action (including all costs reserved)  shall be taxed if not agreed.

Mr Patrick Chong and Mr Jesse Shum, instructed by Oldham, Li & Nie, for the plaintiff

The defendant was unrepresented and did not appear