Ng Kwok Wing v. Lau Ping Kwan and Others
Read the full judgment text of HCPI 1013/1995 on BabelCite. This High Court CFI judgment was delivered on 23 May 1996.
1. In this action the Plaintiff seeks damages for personal injuries sustained in the course of his employment on 17th October 1990. The Plaintiff was the employee of the 1st Defendant who were partners of a firm. The 2nd Defendant was the occupier of the premises at which the Plaintiff carried out his work on the day of the accident.
Cited by 6 cases · Cites 1 case
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1995, No. PI 1013 IN THE SUPREME COURT OF HONG KONG HIGH COURT ---------------
--------------- Coram : Hon Mr Justice Cheung in Court Dates of hearing : 27, 28, 29 March, 1, 2, 3 and 25 April 1996 Date of handing down judgment : 23 May 1996 ----------------------- J U D G M E N T ----------------------- Damages for personal injury 1. In this action the Plaintiff seeks damages for personal injuries sustained in the course of his employment on 17th October 1990. The Plaintiff was the employee of the 1st Defendant who were partners of a firm. The 2nd Defendant was the occupier of the premises at which the Plaintiff carried out his work on the day of the accident. Employees' Compensation 2. The Plaintiff recovered an award of $1,095,120.30 against both Defendants in the employee's compensation proceedings. The Defendants failed to pay the award and as a result the Plaintiff instituted bankruptcy and winding-up proceedings against the Defendants respectively. The three partners of the 1st Defendant were declared bankrupt and a winding-up order was made against the 2nd Defendant. 3. In this action, the 2nd Defendant did not take part in the proceedings and default judgment has been obtained against it. The 1st Defendant initially took part in these proceedings, however they have since abandoned their defence in this matter. 4. Payment of the sum of $1,095,120.30 was only made by Employees' Compensation Assistance Fund on 15th April 1996. The application for payment was lodged in November 1993. How did the accident occur 5. The Plaintiff was a metal worker and a welder. On the day of the accident he was sent by the 1st Defendant together with a co-worker named Cheung Bing to the 2nd Defendant's premises to build the bridge of a ship. 6. One of the partners of the 1st Defendant, namely Mr Chan Bo-lut, was also present at the site. The workers were asked to fabricate the metal frame of a ship's bridge. There was a working platform and the fabrication was carried out on the working platform. The platform was above the ground level and materials such as angle iron bars have to be lifted up to the platform by a crane. A temporary extension was made to the platform by welding a metal strip which protruded horizontally from the platform. Angle bars would be placed with one end resting on this protruding metal strip and the other end on the steel beam which extended beyond the platform. As the protruding metal strip was found to be inadequate to withstand the weight of the two iron bars, it was decided to weld a vertical support to its free end. The Plaintiff was asked to weld this vertical support. 7. Before the welding, the two angle iron bars were already lifted by the crane which was mounted onto a lorry. The lorry belonged to the 2nd Defendant and the crane was operated by an employee of the 2nd Defendant. As the iron bars were suspended above Mr Ng, he asked for the iron bars to be removed to the other side of the lorry. This was done and Mr Ng carried on with his work. However, while he was welding, the iron bars moved back to the position which was above him. The iron wires which were used to tie the iron bars to the jib of the crane suddenly broke and the bars crushed onto him and he sustained serious personal injuries. 8. The iron wires consisted of six parts of metal strands and a fiber core. Cheung Bing had earlier picked up the iron wires from the lorry and used them to tie the iron bars to the crane. Unsafe system of work 9. I am satisfied that the 1st Defendant had not provided a safe system of work for the Plaintiff. The iron bars were suspended above the Plaintiff which was extremely dangerous to the Plaintiff. Secondly, they allowed Cheung Bing to use the iron wires without ensuring that they were fit to carry the two iron bars which were over 9 metres long and weighed about 300 lbs. 10. The Plaintiff stated that after the accident Cheung Bing admitted to him that he had replaced the iron wires which had been broken with another one. The iron wires inspected by the factory inspector were not the ones that were used in the operation. 11. In any event, the wires inspected by the factory inspector showed that they had many kinks and were partly corroded. Corrosion may occur where slings had been improperly stored. The most likely cause of the failure of the iron wires was due to a combination of corrosion and kinking which resulted in a reduction of strength. 12. Further, the crane had not been tested, which was in breach of Clauses 5(1), 5(2), 5(3), 6(1), 7(1), 7(2) and 7(3) of the Factories and Industrial Undertakings (Lifting Appliances and Lifting Gear) Regulations. The iron wires had not been tested which was in breach of Clause 18(1)(a), (b), (d), (e), (ea), and (f) of the Factories and Industrial Undertakings (Lifting Appliances and Lifting Gear) Regulations. The iron bars were kept suspended over the Plaintiff which was in breach of Clause 12(a) of the Factories and Industrial Undertakings (Lifting Appliances and Lifting Gear) Regulations. 13. It is the duty of the 1st Defendant as the employer of the Plaintiff to devise a safe system of work so that the work on the temporary extension to the working platform should have been completed before the iron bars were lifted and suspended over Mr Ng. Furthermore, the 1st Defendant should ensure that the iron wires were of sufficient strength to carry the load. The 1st Defendant were liable for the accident. Transfer of employment 14. The 1st Defendant pleaded that they assigned the Plaintiff to work as a worker for the 2nd Defendant at the site. There is, of course, no evidence in this regard, but even if the 1st Defendant's contention was true, they would still not be absolved from liability. In Nelhams v. Sandells Maintenance Ltd. and Another [1996] PIQR P52, the Court of Appeal approved of the earlier decision of Morris v. Breaveglen [1991] PIQR P294 in which Beldam L.J. held that :
Injuries sustained by the Plaintiff 15. The Plaintiff sustained the following injuries as a result of the accident.
There was extensive infection of the right hip which was identified in 1993. Debridgement and the drainage of abscess were carried out on three occasions between May and June 1993. On 22nd June 1993, a girdle stone operation was carried out. The infection of the right hip was further complicated by tuberculosis involvement of the right hip. There was also wound on the left hip excision of the greater trochanter. 16. The Plaintiff has suffered urinary tract infections. In 1993 he was re-admitted to hospital because of the urinary tract infection. This was treated by intravenous anti-biotics. During this time he suffered persistent fever as well as the development of deep enlarged sacral sore with pus discharge. Investigation revealed that there was extensive destruction of the right hip joint as well as abscess formation in the right hip and around the right upper femur. Operations were performed. During the operation, two pieces of plain short gauzes were retrieved from the right hip joint. Paraplegia 17. Because of the fracture of the T-12 and L-1, the Plaintiff is now a paraplegic and can only move on a wheelchair. He lost movements of both lower limbs. There is also loss of sensation at both lower limbs. Because of the girdle stone operation, his right hip became frail and he needs support for his lower limbs while transferring between the bed and wheelchair. There is severe wasting of muscles of both legs with a total loss of reflexes in his lower limbs. This suggested that the conus medullaris containing both descending fibres as well as the nerve cells supplying the muscles of the lower limbs had been destroyed. At the same time he suffered great pain at his lower limbs, this was because of injury to the nerve. He has to constantly tap on the abdomen which he said help him to relieve the pain. 18. Dr Brian Choa had considered the possibility of cordotomy which is an operation to cut the pain fibres in the spinal cord but this has disadvantages in that it is a major procedure and secondly the abnormal pain sensation may nevertheless recur after a time. The Plaintiff has tried a transcutaneous electrical nerve stimulator ("TENS") and found it helpful to relieve his pain. Dr Choa said that the treatment by TENS should be given a further try as well as acupuncture. 19. The Plaintiff suffered incontinence of the bladder and bowel and need catheterisation and diapers. He has to drain his bladder through the process of self-catherization. Also his bowels do not work unless a suppository is used every other day. He lost his sexual function. He suffered stiffness on the movement of the right shoulder after prolong immobility. There are deep pressures sores still unhealed on his body. Admissions to hospitals 20. Immediately after the accident he was admitted to the Tuen Mun Hospital where surgeries were performed in respect of his fractured bodies. He remained in the hospital until August 1991. Between August 1991 and January 1992, the Plaintiff was either in the hospital or in convalescence hospitals. He stayed at home for about a year between January 1992 and the early parts of 1993. In March 1993, he was re-admitted to hospital because of the urinary infection. Between March 1993 and October 1993, he was at various hospitals either for the purpose of the operations or at infirmary for rehabilitation. From November 1993 onwards, he lived in the Fu Ka Home for the Aged. 21. Between the accident on 17th October 1990 and January 1992, Mr Ng had not returned home as shown by the following : 22.
Present accommodation 23. The Plaintiff is currently living in the Fu Ka Home for the Aged ("Home for the Aged"). He has been living there since November 1993. He moved to the Home for the Aged because his wife was not able to look after him. The evidence, which I accept, is that the wife was deeply traumatised by the accident of the Plaintiff. Whereas she used to work before the accident, she found that she could no longer continue with her former occupation as a sewing worker in a garment factory. She was deeply depressed and found herself to be in a helpless state. More importantly, she just could not treat the deep pressure sores of her husband. The horror of the sores is revealed in the photographs that were produced in this hearing. As Mrs Alice Tsang, the occupational therapist, who is also a trained nurse, said that the clearing of the pressure sores is not something that one would expect Mrs Ng to perform. Unsatisfactory condition of the Home for the Aged 24. The Plaintiff is now occupying a bed space on a floor with 40 other residents. The residents are old people, some of them are mentally retarded. There is no privacy even during the times when the Plaintiff had to be dressed for his wounds and had his diapers changed. The Home for the Aged is built on a deep slope and there is no place for the Plaintiff to move about. The only activity for the residents is to watch a communal television. The televisions are usually turned on at full blast and Mrs Tsang, who had prepared an evaluation report of the Plaintiff, observed that there was only one nurse on the floor where Mr Ng lives. There are some maids doing domestic chaos but they did not seem to be able to perform nursing care. Reduced life expectancy 25. The Plaintiff's life expectancy is reduced because of his propensity for developing a recurrent urinary tract infection and pressure sores. Impairment of kidney function may occur and repeated infections may eventually prove to be life threatening. Dr Brian Choa was of the view that a healthy 47 year old man today in Hong Kong has a life expectancy of some 35 years. The Plaintiff's life expectancy could be substantially improved if he has proper and continuous nursing care. If this happens, then he estimated that Mr Ng's life expectancy be reduced by about 10% to about 30 years. His permanent impairment and loss of earning capacity are at 95% and 100% respectively. Professor C.K. Wong 26. Professor C.K. Wong of the Chinese University of Hong Kong, Faculty of Medicine, was of the view that the Plaintiff is suffering from major depressive disorder. He also suffers from adverse psychological reactions which include :
Dr Kelly Busche 27. Dr Kelly Busche is a lecturer in the School of Economics and Finance of the University of Hong Kong. He has previously given evidence in the case of Chan Pui Ki v. Leung On and K.M.B. (H.C. Action No.A2006 of 1992). I have referred extensively to his evidence in that case. Dr Busche confirmed the evidence he had given in that case. He provided the Court with an up-dating of the data he had previously supplied at the hearing. Per Capita GNP 28. In November 1995 the Hong Kong Census and Statistics Department published, for the first time ever, Hong Kong Gross National Product figures (Hong Kong Government CSD, 1995b, December, Monthly Digest PF2). GNP includes payments from inside and outside of the geographical boundary received by residents. The first (and so far only) GNP figures refer to 1993 and show HK$909.8 billion or HK$153,708 per capita. At the 1993 exchange rate of HK$11.54/￡, that is equivalent to ￡13,320 per capita. By comparison the U.K. GNP per capita in 1993 was ￡8,227. In 1993, Hong Kong per capita GNP was 62% higher than U.K. per capita GNP. Gross domestic product 29. By 1994, the Hong Kong per capita Gross Domestic Product ("GDP") had surpassed the U.K. figure by 43% instead of 40%. Purchasing power parity GDP 30. The 1995 figure based on the December 22nd, 1995 issue of the Asia Week, the Hong Kong per capita GDP, Purchasing Power Parity ("PPP") is 24% above the U.K. figure. 31. Per capita GDP, PPP, as percentage of US, selected years
Below average income 32. Dr Busche also referred to the below average income measures of individuals and households in U.K. and Hong Kong. He said that there is little analysis available comparing individual's or household's incomes in the U.K. and Hong Kong where those households or individuals have substantially below average income. However, the 1994 edition of Social Trends (Government of Great Britain CSO, 1994b) offers some information, for U.K. persons, about "various characteristics of the individuals who make up the bottom 20% (of bottom quintile) of the 1990-1991 household income distribution (the latest year for which data are available)". Information of interest includes the following : 1. The income share of total U.K. household income accruing to the bottom 20% is between 6 and 7% (depending on how housing costs are treated). 2. This analysis (of sources of income) is only meaningful before housing costs ... Only 20% of the income of those in the bottom quintile comes from employment; the vast majority, 70% comes from social security benefits. 3. Washing machines are absent in 14% of U.K. households from the bottom quintile of income. Telephones are absent in 28% and central heating is absent in 29% of lowest quintile housing. (All calculated before housing costs). 4. Only 23% of lowest quintile individual worked the full year. A further 10% worked at least 26 weeks. Income in Hong Kong higher than U.K. 33. Of the three measures of average income, namely, the per capita GNP, GDP and PPP, GDP shows that income in Hong Kong has been growing more quickly than income in the U.K. 34. Values of nominal Hong Kong GDP per capita incomes are between 23% and 40% higher than the U.K. levels during the 1992 to 1994 period, and Hong Kong per capita purchasing power parity GDP incomes are between 20% and 30% higher than U.K. levels during the same period. 35. The only measure of GNP yet produced in Hong Kong indicates that per capita GNP was 62% higher in Hong Kong than in the U.K. in 1993. Social conditions 36. In terms of social conditions, Dr Busche again confirmed the data he had provided in Chan Pui Ki. His updating is as follows. The 1994 figure for maternal mortality shows that the rates in Hong Kong and U.K. are about the same. 37. In terms of crime, the 1996 figure shows that there is less robbery per capita in Hong Kong than in U.K. In terms of life expectancy, there is a differential increase in favour of Hong Kong. 38. Between the summer of 1995 and now, the trend of the unemployment rate in Hong Kong shows that it has gone up but has come down again. In terms of price inflation, it has come down a bit but similarly the interest rate has come down as well. The differential is not as wide as expected, price inflation was reduced by about 1-11/2%. The price inflation for this period ranged from 9% to 7.6%. Pain, suffering and loss of amenities 39. In Lee Ting Nam v. Leung Kam Ming [1980] HKLR 657, the category of gross disability includes injuries which leave the victim with very restricted mobility or cause serious mental disability or behavioural changes. This includes paraplegic who, particularly if young, can expect to be placed at the upper end of the bracket. If victims require constant care and attention and is incapable of ever leading or approaching an independent adult life, the injury will fall within the disaster category. 40. The range of damages as set out in Chun Yat Nam v. A.G. (Civil Appeal No.92 of 1994) for gross disability is $415,000 to $630,000. Disaster is from $630,000 onwards. 41. In Li Tin Yau v. Leung Chi Tai and Hung Sang Engineering Works Ltd., High Court Action No.7524 of 1985 (Decision 3rd February 1984), $340,000 was awarded to a paraplegic whose injuries were classified to be in the gross disability category. U.K. awards 42. The English awards for injuries involving paralysis are as follows :
(Guidelines for the Assessment of General Damages in Personal Injury Cases the Judicial Studies Board of U.K., 2nd Edition, which is based on decisions reported up to June 1994.) 43. The earlier damages as set out in the 1st Edition, which is in respect of cases reported up to September 1991, is ￡100,000 to ￡115,000 for quadriplegia and ￡75,000 to ￡85,000 for paraplegia. The comparison of the two awards show that in respect of serious injuries, the U.K. awards are much higher than the Hong Kong awards. Disaster 44. The injuries of the Plaintiff would certainly fall within the top range of the gross disability category. I am satisfied that the additional problems encountered by the Plaintiff, namely his psychiatric problem, his constant pain in the lower-limbs notwithstanding the loss of function in those parts, the pressure sores, the reduction of his life expectancy and the loss of amenities suffered during his days in the old age home and his requirement for constant care for the rest of his life put the injury into the disaster area. The award 45. The evidence I have heard in Chan Pui-ki convinced me that the Hong Kong awards should be increased. It is noteworthy that in Pillai v. Joseph Yeung [1966] HKLR 366 at 370, Briggs J. (as he then was) stated that "Pain and suffering is pain and suffering whether it is undergone in England or in Hong Kong. The same applies to loss of amenities." 46. The current U.K. award for paraplegia is ￡80,000 to ￡95,000. Based on a conversion rate of HK$12.5 to ￡1, the damage in Hong Kong dollar terms is $1 million to $1,187,500. Inflation should also be taken into account since June 1994. 47. Mr Ozorio Q.C., counsel for the Plaintiff argued that I have not gone far enough in Chan Pui-ki. He submitted that there is no good reason why the Hong Kong plaintiff should not receive the same level of damages for PSLA which are awarded in the U.K. It is not necessary for the Court to effect a percentage increase. It is only necessary for the Court to find that there should no longer be any difference in the awards. 48. The issue would be examined by the Court of Appeal in the appeal in Chan Pui-ki. Based on the evidence I have heard, I am satisfied that the award in this case should be in the sum of $1.5 million. Mr Danny Quant 49. Mr Danny Quant, actuary, also gave evidence on behalf of the Plaintiff. He has previously given evidence in the case of Chan Pui Ki. The evidence he gave in this hearing is along the same lines of those he had previously given. He provided the court with some updated information. 1. The rate of price inflation as measured by the Hang Seng CPI has averaged 9% in the period 1983 to 1995. Over the same period the CPI(A) has increased by 8.1% per annum and the CPI(B) has increased by 8.2% per annum. 2. The simple average of the change in nominal payroll index for Hong Kong workers between June 1984 and June 1995 is 11.6%. Salary inflation from November 1985 to October 1995 as represented by changes in the average daily wage for structural steel erector was 13.7% (HK$205.8 to HK$732.6). The average daily wage for a structural steel erector in October 1990 was HK$420.3. The rate payable to the Plaintiff was HK$315. 3. Salary inflation over the same period as measured by the Wyatt Remuneration Data Service (RDS) has increased by 12.1% per annum. 4. Returns on three months Hong Kong dollar deposits in the period 1985 to 1995 have averaged 6.1% per annum. 5 Average annual returns on guaranteed Hong Kong dollar deposit administration contracts offered by life insurance companies had been 9.9% per annum in the period 1985 to 1995. 6 The median investment return achieved on assets managed on behalf of retirement funds in Hong Kong as measured by the Wyatt Measurement of Investment Performance (MIP) survey during the period 1983 to 1995 was 15.9%. Summary of returns of investment over inflation (price and salary)
The yield referred to above has not taken into account the expenses of investment management fees and trustee administration fees in the order of 11/2% per annum. Investment portfolio 50. Mr Quant also recommended that the same portfolio structure he had dealt with in Chan Pui Ki. The net return against salary inflation as measured by RDS is 1.6% per annum. Difference between this figure and the figure 1.4% referred to in the earlier case was due to the salary inflation of 12.1% instead of 12.3%. 51. Mr Quant's evidence was that in the past, the return of investment on retirement fund or a modified form of retirement fund over salary inflation is about 3%. This is before deduction of expenses. He would expect the gap to remain at that level. Actuarial Table 52. Mr Quant has in January 1996 published the Actuarial Tables for use in Hong Kong. This is the Hong Kong version of the U.K. Ogden Tables. Adjustments for vicissitudes of life 53. Mr Quant stated that the multipliers in the Actuarial Tables do not make allowance for cessation of income other than due to death. It is assumed that the person will continue to earn an income until death (or retirement age in respect of the relevant multipliers). Death is expected to occur in the usual ways, i.e. by way of accident, natural causes etc. Factors that would affect the income of a person other than death will include :
Samples 54. He was of the view that statistically it is possible to construct tables of "decrements" for these factors. However, this would require a large sample of decrements, i.e. a large number of vocations when people have been made redundant, got married, had children, become ill, etc. These statistics need to be compiled separately for females and males in age bands. They should be categorised by distinct industries. Account should be taken of temporary and permanent periods of ceasing work. 55. In Hong Kong with a work force of some 3,000,000 people, if a statistical study were carried out, the results would not be statistically credible. In U.K. some work had been done, the data was separated into males and females, age bands, geographical location and economic cycles. A population of some 25,000,000 workers enabled this to be done although the result was accompanied by a caveat that these adjustments are "ready reckoners" and should not be taken as scientifically proven. 56. He is of the view that the adjustments suggested by the U.K. results are applicable in Hong Kong. The reason being that the magnitude of the adjustment is not large in themselves. Hence, any change in those adjustments for the Hong Kong situation is unlikely to be significant. This is reflected in the small difference in the multipliers themselves which had been produced in using the Hong Kong and U.K. mortality rate. U.K. adjustment 57. The table of adjustment quoted in the Ogden Tables could be used in Hong Kong. The table is as follows :\ Adjustment factor for vicissitudes of life
Thus the award relating to income would be calculated as : Loss income x multiplier x adjustment factor The adjustment factor is not applied in the case of compensation for future expenses. The reason is that the claim for future expenses is not related to the cessation of income of the injured person due to other factors. 10% adjustment 58. What Mr Quant said regarding the adjustment makes sense. However, for the purpose of this case, I will continue to adopt the 10% adjustment which I have used in Chan Pui Ki. It is interesting to note that in Page v. Sheerness Steel PLC, Dyson J. adopted a 10% adjustment to the multiplier as well. U.K. position 59. Certain statistics have been extracted by Mr Quant from the report compiled by Barclay de Zoette Wedd Equity Gilts Study which are as follows : 1) the real rate of return (gross of tax) of UK equities versus price inflation before tax over the 25 to 35 years to the end of 1995 has been between 5.7% p.a. and 7.5% p.a. (see page 72) 2) the real rate of return of UK gilts versus price inflation over the 25 to 35 years to the end of 1995 has been between 1.7% p.a. and 3.1% p.a. (see page 77) 3) the real rate of return of UK Treasury Bills (i.e. 30 day bonds) versus price inflation over the 25 to 35 years to the end of 1995 has been between 1.6% p.a. and 1.7% p.a. (see page 76). Mr Andrew Buchanan 60. Mr Andrew Buchanan, the Managing Director of the Royal Bank of Canada Investment Management (Asia) Limited gave evidence. He is a member of the Securities Institute of London, England and the Hong Kong Institute of Investment Analyses. He is also a member of an 11-men Global Investment Committee of the Royal Bank of Canada and Chief Investment Officer in the Far East. 61. He has been commissioned to provide a report on the appropriate investment strategy to provide sufficient immediate and future income for the Plaintiff and his family for the remainder of his life. In case of total disability, Mr Buchanan recommended that a substantial proportion of the assets be invested for income generation while excess income can be retained and re-invested to further enhance the income stream in future years. An element of the portfolio can be invested for capital growth but he said that there can be little or no tolerance of investment risk, or volatility by the Plaintiff as there is no ability to replace capital in the event of losses. The portfolio is established to provide sufficient income now and sufficient excess income to grow the fixed income portion for at least the next 10 years. After this period, the process of taking down of the equity component to supplement the capital invested for income production can begin, but should obviously be deferred as long as possible and once only increment to cover the effects of inflation have to be met. Comment on retirement scheme 62. He is of the view that using the Hong Kong retirement investment scheme is only partially appropriate because of the following : 1) Income generation - the need for stable and growing income production is immediate. Hong Kong retirement schemes operate on a total return basis, but because of the negative real interest rate environment in Hong Kong, managers are forced to invest substantially, 80% typically, into equities. Hong Kong retirement schemes have future liabilities in terms of resigning or retiring members but only so far as providing them with a capital sum, and not income. Most local schemes are defined contribution, with only minimal defined benefits. Any defined benefit normally relates to the amount of the payout from the scheme which can be the greater of a multiple of salary or the investment return. 2) Volatility/risk measurement - Hong Kong retirement schemes because of their large equity component carry a high degree of risk, measured as standard deviation of investment returns. Because the liabilities are longer term and not income driven, trustees normally are prepared to accept these risks as any shortfall in terms of funding would be re-imbursed by the employer. The plaintiff has no such fall back position, not even an ability to earn at reduced levels, and therefore the level of risk assumed by the plaintiff should be considerably less than that taken by a HK retirement scheme. His recommended portfolio 63. The structure proposed by him consisted of 70% bonds, 25% equity and 5% cash. The total return is 6.71%. Details of these structures can be seen from this chart :
Out of the return of 6.71%, 3.8 would be the cash yield. The return of 6.71% is not sufficient to beat price inflation of about 9%. This negative return will last for about 2 to 3 years and thereafter his estimate of the gross return of the portfolio is 10%. The return would still be negative after deducting expenses and in any event it would still be below the price inflation. Comments by Mr Quant 64. Mr Quant has commented on Mr Buchanan's reports. It is not necessary for me to go into the details. Fundamentally the difference between the recommendations of Mr Buchanan and Mr Quant lies in the degree of risk that is expected of the Plaintiff. Multiplier 65. The Plaintiff is 47 years of age, the conventional multiplier is about 10 years. The conventional multiplier is based on the discount rate of 4-5%. In Chan Pui-ki, after hearing evidence from the economist and actuary, I have come to the view that the discount rate in Hong Kong is 2.7% and where the damage is required to be managed, the discount rate is 1.2%. In order to achieve a discount rate of 2.7%, the assistance of professional fund managers are required. 66. In England, there has also been a number of cases which departed from the conventional multiplier. These cases are Thomas v. Brighton Health Authority, Decision of Collins J., 7th November 1995 (Action No.94/NJ/1147), Wells v. Wells Decision 13th June 1995 (Action No.94/NJ/1519), Page v. Sheerness Steel Decision of Dyson J., 4th December 1995 (Case No.94/NJ/1959), I understand that the English Court of Appeal will consider these decisions in the latter part of June 1996. Purpose of hearing evidence from actuary and economist 67. The purpose of hearing evidence from actuaries, economists or fund managers is not for the purpose of devising an investment scheme for the injured person or ascertaining whether a particular investment scheme is suitable for an individual. Such an approach will only become relevant after the judgment with respect to plaintiffs under disability. 68. The purpose of hearing these evidence is to ascertain what is the real rate of return of a fund prudently invested and to see whether the 4-5% return upon which the conventional multiplier is based could be achieved in Hong Kong in the present economic environment. 69. Depending on how one structures the investment, different return will be achieved. In view of the high return for equity, if the fund is substantially put into equity, the return of course will be higher than either price inflation or salary inflation. By the same token, the risk factor is extremely high. Conversely, if the equity portion is reduced and in place thereof investment in bonds is made, then the return cannot beat salary inflation let alone price inflation. This can be seen from the model of investment suggested by Mr Buchanan. 70. However, the court is not concerned with the individual needs but rather the return rate of a prudent investment. In the absence of index linked gilts in Hong Kong, any investment in Hong Kong would necessarily involve an element of risk. The mode of investment suggested by Mr Quant, which is a modified form of the pension fund, is able to accommodate, with a degree of flexibility, the need of beating inflation without exposing the investor to an unacceptable level of risk. This is what I consider to be prudent investment, a matter referred to by Lord Fraser in Cookson v. Knowles [1979] AC 556. 71. If Mr Buchanan's approach is adopted, then the return would be less than 1%. Mr Ozorio submitted that the evidence of Mr Buchanan can be used in two ways. First, it can be preferred so that this court will go further than Chan Pui Ki and refuse to discount. In other words, the court should apply a 0% discount rate. Alternatively, it can be used to support the view taken in Chan Pui Ki that the conventional multipliers are no longer appropriate and the conventional 4.5% must be substantially reduced. 72. In view of what I have said earlier, I do not think that such argument is sustainable. In my view, the approach I have taken in Chan Pui Ki must stand or fall on its own. The evidence of Mr Buchanan is not something that I could usefully adopt in ascertaining the true investment returns. Multipliers for future loss of earnings 73. Based on a working life of 65 years, the appropriate multiplier is 13.5. This is based on the 1.2% real rate of return and 10% adjustment for vicissitudes of life. Mr Ozorio submitted that the data upon which the real rate of return as calculated are bound to change and it is more desirable for the court to find a real rate of return of approximately 1% or 2.5% in respect of managed funds. The rate of return is not susceptible to precise calculation. 74. This is a view I share but the actual adjustment in the multiplier, whether it is based on 1% or 1.2%, is minimal. I would therefore continue to use the 1.2% in this case. Multiplier for future expenses 75. The future expenses will be incurred for the duration of the Plaintiff's life irrespective whether he would be working or not. According to a report entitled "Mortality, Morbidity and Psychosocial Outcomes of Persons Spinal Cord Injured more than 20 years ago" by Whiteneck and others, Paraplegia 30 (1992) 617-630 (published by the International Medical Society of Paraplegia), for a complete paraplegia injured between the age of 30 and 49, the median survival time is 23 years. Dr Choa's comment on the report was that the 23 year may well be an under-estimate. There has been gradual improvements on the survival rate. 76. I accept Mr Ozorio's submission that 74 years is probably fair. The multiplier is 22. Damages for loss of earnings Pre-trial loss of earnings 77. The Plaintiff was a welder earning $9,000 per month at the time of the accident. He has been incapable of work since the accident. It is unlikely that he would ever work again. The Plaintiff would be earning $18,434 per month according to the information provided by his workers' union. His mean pre-trial loss is $13,717 per month since October 1990. Nearly 67 months have elapsed since the accident in October 1990, the pre-trial loss of earnings is $13,717 x 67 months = $919,039. Of this sum, $24,000 representing 2/3 of the 4 months' wages had been actually paid by the 1st Defendant, this amount has to be deducted, leaving a balance of $895,039. Mr Ozorio accepted the incidence of tax of 3% should come out from this award, leaving a balance of $868,188. Interest at 6% per annum is awarded on this sum. Post-trial loss of earnings 78. Although Professor Wong stated that the Plaintiff would be capable of employment, the real prospect is that no employer would ever employ him. The monthly loss is $18,434 per month taking into the incidence of tax, the Plaintiff's net earning would be $17,973.20 per month. The post trial loss of earnings is $17,973.20 x 12 x 13.5 = $2,911,658. Loss of retirement benefit 79. With the introduction of the Mandatory Provident Fund Ordinance, the Plaintiff, but for the accident, would have received retirement benefits equals to 5% of his earnings from the date hereof to death. The amount he is entitled to this fund is 5% of $2,911,658, i.e. $145,583. Pre-trial expenses 80. Pre-trial expenses in the sum of $109,071 representing medical expenses, travelling expenses, nourishing food, installation of special facilities at home, expenses incurred as a result of the relocation of daughter to a different school after the accident and expenses such as diaper and tissue are necessary and reasonably occurred. The same is recoverable. Pre-trial loss of earnings of the wife 81. The wife has worked throughout the marriage. After the accident she had to stop work in order to look after the Plaintiff. Her loss of earnings at $257,650 represents a fair reflection of her loss of earnings for services provided to the Plaintiff since the accident and works out at roughly $4,000 per month. Expenses in relation to the Home for the Aged 82. The payment to the Home for the Aged after deducting the social welfare contribution is at the sum of $108,818. This sum is recoverable. Mrs Alice Tsang 83. Mrs Alice Tsang had made recommendations as to the type of accommodation and provisions that the Plaintiff would require. Mrs Tsang has in the past prepared 20-30 reports on the need of paraplegic. Mr Andrew Kwok 84. The recommendations of Mrs Tsang are supported by the opinion of Mr Andrew Kwok. Mr Kwok is a member of the Hong Kong Disabled Persons Claims Service ("HKDPCS"). HKDPCS is an independent body whose members are disabled persons of different types and degrees. This body has prepared reports concerning the needs of people with permanent disabilities since January 1988. 85. Mr Kwok is a disabled person. He suffers from cerebral palsy and was wheelchair bound since the age of 13. He is a qualified social worker with a degree in Master of Social Work obtained from the University of Hong Kong. He has been lecturing students of health care professions at the University of Hong Kong on subjects relating to the concerns of persons with physical disabilities. He has prepared about 60-70 reports for the Legal Aid Department in relation to the needs of disabled person. 86. I find that Mr Kwok has provided the Court with valuable assistance in assessing the needs of disabled persons who are on wheelchair. Home in Shatin 87. The current home of the Plaintiff is about 370 sq.ft. in area, it has two bedrooms together with a living/dining room. During the time when the Plaintiff stayed at the home, one of the bedrooms was used by him, the doors to that bedroom and to the bathroom had to be widened for him to enter in his wheelchair. Due to the layout of the flat, the doors to the other bedroom and to the kitchen could not be widened. During the time when he stayed at home, his wife and the daughter stayed in one of the other bedroom. The sitting area is too small for him to manoeuvre in his wheelchair. 88. In the Plaintiff's existing home, the shopping areas are located in another nearby housing estate. While the residents can use the staircase to reach the shopping areas, the Plaintiff would have to travel a long distance in order to reach there. This distance involves travelling on slopes and crossing streets. There is a small garden in the Plaintiff's building but there is no other recreational facilities. The Plaintiff just could not stay in the garden all the time. Recommended accommodation 89. A flat with at least three bedrooms is recommended. The layout of the flat has to be altered in order to accommodate the use of the wheelchair. What is more important is the location of the alternative accommodation. It has to be located in an area which is accessible by wheelchair users. 90. Ian Cullen Associates, Chartered Surveyor and Valuer ("Cullen"), had carried out an investigation on the suitable accommodation for Mr Ng and his family. The New Town Plaza, Shatin was found to be the most suitable building. This complex is almost like a self-contain town. It has its own podium gardens with sports and commercial facilities. It is near to the KCR station and there are parking facilities for disabled persons. The rent for a 734 sq.ft. flat in the New Town Plaza is about $23,500 per month including rates, management fees and rental of car parking space. The annual expenses will be $350,000. Valuation of the Plaintiff's home 91. The current home of Mr Ng was purchased in July 1988. It is a Home Ownership Scheme flat. There is restriction imposed by the Housing Authority which prevents open market alienation or disposal for the first ten years from acquisition. Under such restriction, the owner is only permitted to dispose of this flat back to the Housing Authority or to a third party nominated by the Housing Authority at the following prices : (a) During the first five years from acquisition, at the original purchase price (of $200,000); or (b) During the final five years at a price assessed by the Housing Authority calculated by a formula which incorporates the current disposal price of similar accommodation in the locality. Such figure can only be precisely assessed by the Authority on formal application for such sale. Assuming that the flat can now be freely disposed of in the open market, the capital value of the flat is assessed at HK$1,480,000, and for the rental value on a normal two-year lease, it may command a prevailing marketing rental, exclusive of rates and management fees, at about $9,000 per month. Cost of the alternative accommodation 92. There is no doubt that the existing accommodation would not serve the need of the Plaintiff. The experts agree that the New Town Plaza in Shatin is suitable for the Plaintiff in view of the size of the flat, its easy access to amenities and also the general transportation system. The Plaintiff is seeking the difference in the rental between the flat in New Town Plaza at $350,000 per annum and the notional annual rental of his accommodation at $120,000 per annum. 93. The recovery of rental difference was the approach adopted in two cases, namely Leung Sai Kui v. F. Zimmern & Co. (HCA1151 of 1985, decision 11th July 1986) and Li Tin Yau v. Leung Chi Tai (HCA7524 of 1985, decision 3rd February 1989). The approach adopted in these two cases was correct because the plaintiffs were living in rental accommodations and because of the disability they were required to move to another accommodation with a higher rental. 94. In the present case, the Plaintiff has his own property and the evidence of the wife is that they intend to purchase a property of their own which is suitable for the Plaintiff. Attempts to look for alternative rental accommodations have been unsuccessful so far because landlords are reluctant to alter the premises in order to meet the needs of the Plaintiff. Roberts v. Johnstone 95. In situations where the plaintiff has bought or intends to buy special accommodation, the principle to be applied is set out in the Court of Appeal decision of Roberts v. Johnstone and Anr. [1988]3 WLR 1247 where it was held that : (1) the damages to be awarded in respect of the purchase of special accommodation necessitated by a plaintiff's injuries should not be the net capital cost of the purchase but the additional annual cost over the plaintiff's lifetime of providing that accommodation; (2) such annual cost was to be taken as 2 per cent of the net capital cost which, if necessarily expended, was not to be reduced by reason of any element of betterment not required to meet the plaintiff's needs; (3) in addition, damages amounting to the full capital cost of any conversion works necessary to adapt a property for the plaintiff's needs were to be awarded, save in so far as they enhanced the value of the property. 96. The rationale that the full capital value of the assets should not be recoverable as damage is because the capital will remain intact at the date of the Plaintiff's death and this represents a windfall to the estate. The 2% represents a tax-free yield in risk-free investment over and above inflation. Calculation 97. Kemp and Kemp, The Quantum of Damages at para.5-047 - para.5-049 illustrated the calculation of the loss. In Thomas v. Brighton Health Authority, Collins J. held that in the light of the state of economy in the U.K., a 3% interest rate rather than the 2% should be used in the calculation. 98. Mr Ozorio submitted that social conditions in Hong Kong and the U.K. are different and one should not apply Roberts v. Johnstone. Although the conditions of the two places are different, the rationale of the case must be of common application to these two jurisdictions. Where it is the express intention of the Plaintiff to purchase a new property this is not being a far-fetched idea as he and his wife have already a property of their own -- and the fact that rental accommodation to meet the needs of the Plaintiff would be difficult to obtain in the open market, it would be wrong to adopt the rent differential approach in this case. 99. According to the supplemental survey report of Cullen, the current open market price for the New Town Plaza flats is as follows : (1) For a 734 sq.ft. flat, $5,000,000 will be required. This includes $4,770,000 as purchase price and the balance being agency fees, stamp duty and conveyancing fee. In addition a capital sum for renting a carpark is required at $600,000. (2) For a larger flat of 876 sq.ft., the total outlay would be $6,540,000. 100. The valuation of the property is at $1,480,000. The difference of the capital cost of these two accommodation is $3,520,000 (i.e. $5,000,000 - $1,480,000). 101. I will apply the return of 1.2% which is the real return on investment to the sum of $352,000 arriving at $42,240 and further apply a multiplier of 22. The amount is $42,240 x 22 = $929,280. 102. On top of that, a sum of $410,000 for alteration will be added, making a total sum of $1,339,280. I am not convinced that the Plaintiff would be able to drive again and hence the capital sum of $600,000 for carpark is disallowed. I will round up the figure to $1.5 million to cater for additional expenses that may be incurred in the delay of disposing of the property by reason of the restrictions. Special equipments that are required
Medical consumable
Provision for non-medical equipment (1) Air-conditioning would be required during the hot season. This will reduce the occurrence of pressure sores. Heater will be required during the cold months to keep him warm due to the lack of mobility. This is a recognized head of damage : Kemp & Kemp, Para.5-036. Costs
Provision for domestic helper and attendant 103. A domestic helper is needed to relieve the wife from the burden of doing the household chores and at the same time looking after the husband. Furthermore, due to the presence of the pressure sores, a nurse is required to deal with the wound care service. Mrs Tsang set out in her report the frequency and charge of the nurse.
104. I think the first three recommendations are correct. As for the recommendation of the frequency of the nurse visits after age 60, I think the 24 hour attendance is probably excessive, I will apply a 12 hour shift or $194,304 per year. The amount recoverable is : $132,130 + $66,065 + $225,888 (i.e. $18,824 x 12) + $1,594,432 (i.e. $199,304 x 8 (balance of the multiplier of 22)) = $2,018,515
105. I use 13 months to cater for the extra expenses to hire a relief worker during the regular helper's leave. Subtotal = $3,095,015.00 Provisions for transportation and additional costs (1) It is clear that it would be detrimental to the mental health of the Plaintiff if he remains housebound. Due to his impairment in mobility, funding should be provided for transportation for outgoing such as attendance of rehabilitation and for social events. Costs
The Plaintiff is seeking additional costs that might be incurred when he is taking holiday. The cost of the Plaintiff taking holiday is not recoverable, but the additional cost such as hiring a helper during the time he was on holiday is a recognized head of damage (Kemp & Kemp, Para.5-036). A sum of $100,000 is to be awarded under this head. (2) It is suggested that a motor car would enhance the area of mobility of the Plaintiff. It is true that the Plaintiff has a driving licence before the accident, but as the Plaintiff has been bed-ridden in sheltered environment for so long, it would probably take a while for him to adjust to the normal daily life. In this case I have great reservation about the Plaintiff's fitness to drive again bearing in mind his constant pain in the lower limbs. I will decline to award a sum under this head. Treatment for depressive disorder 106. The treatment of the Plaintiff's major depressive disorder will include drug treatment and supportive psychotherapy. Most elements of the psychiatric treatment are to be administered by the same psychiatrist. The treatment will last two years. The recommendation is : 107. First three months : weekly one hour sessions; 108. Next three months : fortnightly one hour sessions; 109. Next six months : monthly one hour sessions; 110. The second year : monthly 30-minute sessions. The fee for a one hour session is currently $3,000 inclusive of medication and the fee for a 30-minute session at monthly intervals is currently $2,000. A 10-15% increase in fees is needed to allow for adjustment. 111. The costs for psychiatric treatment is :
Occupational and physical therapy 112. As the Plaintiff had spent a large part of the past five years in hospitals and institutions, he has become institutionalized. He has lost his repertoire of work and has a very restricted repertoire in the Home for the Aged. He needs occupational therapy to help him to expand his activities and behaviour and to help him regain confidence. Both Professor Wong and Mrs Tsang have advised on the frequency of the treatment. As Mrs Tsang is an occupational therapist, I will adopt her recommendation on the frequency of the treatment. Costs
Family treatment 113. As a result of the Plaintiff's injuries, his family has also suffered psychosocial and psychiatric problems. This arose as a direct consequence of the accident. The Plaintiff's recovery from major depressive disorder and the prevention of future relapses and deterioration in his mental state depend very heavily on the effective management of these problems. The psychosocial and psychiatric problems of the family include : (1) Mrs Ng is suffering from chronic adjustment disorder; (2) The daughter has become a persistently sad and over-sensitive girl; (3) Mrs Ng and the daughter have been suffering from a very constricted way of daily life. As a family, they used to enjoy going out regularly on weekends and holidays and engaged in a range of outdoor activities before the accident. Now they spend all their Saturdays to visit Mr Ng and keep him company. The daughter has not had the positive influences of the confident, cheerful, energetic, loving and successful father that Mr Ng used to be before the accident. Professor Wong recommended family therapy. He expected a course of 10 sessions will achieve these objectives. The fee for one family session which usually lasts about 1-11/2 hours is $3,000. The total costs of this treatment is $30,000. Relapse in major depressive disorder in the future 114. Professor Wong is of the view that it is likely that Mr Ng may require in-patient psychiatric treatment when he is faced with crisis. This will increasingly be likely as he grows older and weaker and as his social support dwindles, for example, in the circumstances that his wife should pass away before him. He recommended that as long as he lives, Mr Ng will require an average of four weeks in-patient psychiatric treatment per year. The current maintenance fee per day in the second class ward of the Hospital Authority hospitals is $1,860. 115. The sum of about $1.5 million is claimed. Provisions for the future psychiatric treatment should certainly be made. However, considering the fact that I will allow a claim for medical consultation and hospitalisation to cater for future ailment, the total amount I will allow for future medical and psychiatric treatment is $1,000,000. 116. I have only dealt with the items that I consider to be reasonably required by the Plaintiff and hence recoverable. Other items have been claimed and they are set out in Mr Ozorio's submissions and Amended Schedule of Damages. Summary of recoverable items for future care
Summary of quantum of Ng Kwok Wing
Judgment 117. There shall be judgment to the Plaintiff for the sum of $14,791,193.70 together with the costs of action. Remarks 118. I would like to comment on the state of personal injury litigation in Hong Kong. Since being in charge of the Personal Injury List from the beginning of 1995, I have the opportunity of observing the pattern in personal injury litigation which otherwise would not be discernible if one is dealing with these cases on an isolated basis. The disturbing pattern is that in Hong Kong it takes far too long for personal injury cases to be resolved. The starting point is that the action would generally only commence at the end of the three year limitation period. In industrial accidents, claims for employees' compensation would generally only be lodged at the end of the two year limitation period. This is totally unacceptable. Whereas the ideal situation is for a personal injury claim to be resolved within two to three years of the date of the accident, the situation now is that the action would only commence after three years. 119. If this delay is due to the ignorance of accident victims in lodging their claims as soon as possible, then publicity must be launched immediately by the appropriate authority advising the public of their legal rights. If the delay is due to late referral of cases by bodies such as the Labour Department, which handles industrial cases, to the Legal Aid Department, then this situation must be looked at immediately. If the delay is caused by processing of claims, then the procedural steps must be appraised critically. 120. The delay in the commencement of personal injury cases is only the tip of the iceberg. Long delays also occur after the issuance of the writ. Cases which were commenced five to six years ago are still not in a fit state to be set down for trial. The court is still dealing with accidents which took place in the 1980s and cases commenced in the 1980s. In recent months, more cases have been set down for hearing. This is certainly a step in the right direction but whether there will be any overall improvement in the time taken to deal with these cases remains to be seen. I urge all lawyers handling personal injury litigation, both as plaintiffs and defendants lawyers, to change their approach immediately. It is to everyone's interest that these cases should be resolved as quickly as possible. The automatic directions and the new Practice Direction on Personal Injury cases implemented in April 1996 must be observed so as to bring these cases to an early resolution. I take this opportunity to remind lawyers that a more robust approach will be taken by the court in future in dealing with delays and defaults of the parties in the conduct of the personal injury cases.
Representation: Mr Michael Ozorio Q.C., inst'd by M/s Wilkinson & Grist, for the Plaintiff Defendants absent | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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