Chan Tak Yim v. Wong Tit Kin and Another

HCPI000278/1999

HCPI 278/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO. 278 OF 1999

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Coram: Before Master Wong in Court

Date of Hearing: 2nd - 4th January 2001

Date of Handing Down: 23 January 2001

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ASSESSMENT OF DAMAGES

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1. This is an assessment of damages for a claim of injuries suffered as a result of a traffic accident on 23 July 1989. Judgment by consent with damages to be assessed was entered against the 1st and 2nd defendants on 5 August 1993. Thereafter, save for an agreement on the award of pain, suffering and loss of amenities at $400,000 in 1996, the action was dormant until a notice of intention to proceed was filed by the plaintiff's then solicitors on 6 May 1998. The matter went to sleep again until the plaintiff's solicitor applied to set down the hearing for assessment of damages on 26 February 1999. On 22 March 1999, Master Barnes ordered the transfer of the matter to the Personal Injuries List and the filing of a plaintiff's statement of special damages. It was only then the matter took the usual course leading to an assessment of damages hearing.

2. The plaintiff blamed the delay in prosecuting the assessment of damages on his lack of funds to pay his former solicitors.

3. As general damages have been agreed and paid, the hearing concerned mainly the loss of earnings, loss of profits of the plaintiff's business and special damages to be assessed.

The Plaintiff's case

4. The plaintiff claimed his business folded up due to the injuries he suffered as a consequence of the traffic accident. His injuries consisted of a basal fracture neck of right femur, fracture shaft right femur and abrasion of right upper arm. His medical treatments included an operation for open reduction and plating of both fractures followed by twice weekly physio-therapy sessions for five months after a hospitalisation period of 1 month and 11 days. In a medical report prepared in March 1990, his right leg was found to be 1 cm longer than the left, there was no wasting of muscle and movement of the right hip was found to be satisfactory. The last medical report prepared by Dr. Chan Kwok Pui, Brian on 24 November 1999 produced by the defendant and Dr. Wong Kwok Shing Patrick of 27 September 1999 produced by the plaintiff revealed little change in the plaintiff's condition from the March 1990 report. His present complaints are: discomfort in the right leg when the weather changes, difficulty in running and pain experienced when lying on the right side of the body. It is not disputed that he now walks unaided with a mild lump and experiences difficulties squatting down. Dr. Chan assessed the plaintiff to suffer from 15% impairment of the whole person while Dr. Wong assessed the whole person impairment to be 26%. Both doctors agreed and advised the removal of the metallic implants of the right femur.

5. The plaintiff was aged 39 years at the time of the accident, his date of birth was 19 December 1949. He is now aged 51 years old.

He set up Win Harvest Development Co. Ltd. ('Win Harvest') in August 1986, it was wholly owned by him and his wife. He claimed that he had only made his wife a director because he was told that the law requires at least two directors be appointed.

6. In October 1986, he signed an agreement with the Shenzhen Nantau District Sze Lee Industries and Trading Company ('SNDS') to jointly develop a water sliding stone ('Fu' powder) processing factory at Sze Lee in the Nan Tau District of Shenzhen. That the Shenzhen partner ('SNDS') would provide 500 square metres of factory land at a monthly rental of ￥4 per square metre, and an open field of 2,000 square metres at ￥0.50 per square metre per month. In addition, SNDS would supply factory workers and supervisors to work at the factory their wages to be paid by the plaintiff's company. Under the agreement, the plaintiff's company would supply machinery, training and technical support worth HK$2,500,000. The duration of the agreement was agreed to be 15 years from 16 October 1986 up to 15 October 2001.

7. By a supplemental agreement dated 28 February 1987, the parties amended the rental for the covered area of the factory to ￥0.80, to be adjustable according to market rental. Furthermore, under clause 3 of the supplemental agreement, all immovable properties on the land would go to the Shenzhen partner at the conclusion of the agreement. The plaintiff's company is also bound to pay to its Chinese partner an amount equivalent to 20% of the wages paid to the workers at the factory as well as employing a representative from the Shenzhen partner as factory manager at HK$700 per month. The joint venture business operated under the name of Shenzhen Nantau Wah Shing Water Sliding Stone-Powder Plant ('SNWS').

8. The plaintiff produced 3 receipts as evidence of payment for the construction of the factory. These stated the construction of the covered area for office, staff quarters, dining and kitchen area of 380 square metres, the leveling of 2,500 square metres of land and a 250 square metre factory area, water storage area of 200 square metres, a water tank, an 80 metre duct, 20 drying pools etc. They were dated 25 June 1987, 30 September 1987 and 20 March 1988 respectively for a total payment of HK$730,000.

9. The plaintiff claimed that the factory had commenced operation in late 1987 though the final payment for construction work was not made until March 1988.

10. The plaintiff claimed that he was unable to return to work because of his immobility after the accident and due to his failure to take an active part in the factory business after the accident. The factory closed down in February 1990. The above was confirmed by the evidence of his nephew PW2 Chan Kam Hing in court

.The plaintiff claimed that he could not begin working again until 1994 and has only been able to earn $3,000 - $5,000 per month up to now.

11. On 14 May 1990, the plaintiff's company signed an agreement to terminate the joint venture agreement of 16 October 1986 with the Shenzhen partner. This agreement of termination was approved by the Shenzhen Nan Tau Foreign Investment Management Offices on 23 May 1990. The inventory list attached to the termination agreement of 14 May 1990 set out the value of the properties returned to the plaintiff's company as $367,000 and the items which were considered as spent, damaged and depreciated and these were valued at $37,800.

12. According to a document produced by the plaintiff prepared by a Chinese registered Shenzhen accountant on 10 May 1992 on the instruction of the plaintiff's company, the total investment capital of Win Harvest was said to be $1,104,800. It's break down is: -

1. equipment and machinery	$367,000
2. material costs	$7,800
3. factory and other structures	$730,000

13. The plaintiff further produced receipts for sale of the machinery and equipment repossessed by his company from the joint venture factory business (SNWS) as scrap valued at $750.

14. He claimed that if allowed to carry on, the business of SNWS would eventually expand and would have a total of 30 grinding machines with a 24 hour production line. He claimed that each machine would produce 4.5 to 5 tons of 'Fu powder' in a 24 hour day (i.e. 3 rounds). He had 7 machines in production in 1989 at the time of the accident. In his statement of 12 October 1999, he claimed that on average, each machine would operate at least 2 rounds per day, sometimes even up to 3 rounds a day, one round being 8 hours. He also claimed that the monthly production was not less than 400 tons. Further, his net profit per ton was $280 at a sale price of $620 per ton in Hong Kong.

15. By May 1989, the plaintiff claimed that the joint venture factory 'SNWS' was also producing marble curb stones, making a net profit of $7-8 each at a sale price of $15-17 per piece.

16. Under cross examination, the plaintiff claimed that in spite of the Environmental Protection Law promulgated in 1989 in China, he believed he would still be able to carry on the manufacturing of 'Fu powder' and marble curb stones for he used a non polluting manufacturing process. He agreed Sze Lee County has been classified as a clean air and water zone that all factories have to comply with state regulations. He further believed that the joint venture project could carry on beyond 2001, i.e. after the expiry of 15 years, should he agree to transfer 30% - 40% or 50% shareholding to the joint venture Chinese partner.

17. The plaintiff produced a statement from Lin Xue Yau who was the factory manager of SNWS up to 1990 and the representative of the Chinese partner in Shenzhen. He also happened to be the town representative at Sze Lee and the general manager of SNDS the Chinese partner in the joint venture. His statement is admitted as evidence under a hearsay notice filed by the plaintiff. Mr. Lin denied any pollution of air, water or noise of the SNWS, or that the production of SNWS would be contrary to the Environmental Protection Law of China. He further claimed that the location of the factory is outside the area zoned as protected area in Shenzhen citing the example of Chit Yi Shing Marble (Shenzhen) Ltd. less than 1 km away from the site of SNWS and a number of other factories in Shenzhen. He claimed that even if it was polluting the environment, the manufacturers would be given a grace period for compliance of environmental protection regulations. Mr. Lin denied he had ever met anyone from Dynamics Investigation Consultant Limited or its agent to discuss the business of SNWS, this is corroborated by a joint statement of two officers working under Mr. Lin Messrs. Yip Wan Ngau and Cheung Ming Sun.

18. The plaintiff further called five witnesses who were his former Hong Kong customers of 'Fu powder' and marble curb stones in 1988-89 and his nephew Chan Kam Hing who was working at SNWS between 1987-90. Mr. Chan Kam Hing PW1 admitted in court that he did not have sufficient expertise and knowledge to take over the running and purchasing of raw materials of the factory after the plaintiff's accident at the end of 1989.

19. Under cross examination, the plaintiff admitted that he merely took money from the cash flow of Win Harvest or SNWS. It made no difference to him which account it came from whether the company's or the factory's. It is quite apparent he never regarded Win Harvest as a corporation which under Hong Kong law is required to operate in compliance of the Companies Ordinance. Nor did it occur to him he was required to keep any accounts for auditing purposes. He confessed Win Harvest had never filed any tax returns nor had he apparently done so for the income he received. He also claimed that the money he took from the cash flow of the business was never recorded anywhere, neither had he paid the money into any of his bank accounts. Though Win Harvest had two bank accounts, he could no longer recall which banks they were in. Under cross examination, however, he claimed one of the bank accounts was at Hang Seng Bank, but claimed he could not obtained the bank account records for they were over 6 years and no longer kept by the bank. He claimed there was no account, ledger or tax return of the business ever prepared. Neither were any trading record of Win Harvest or the joint venture business of SNWS nor any documentary evidence of his monthly drawings which the plaintiff claimed was $30,000 per month. The plaintiff claimed the drawings as director's remuneration, but he admitted his wife did not make any such drawings as a director. He explained in court that the earlier statement of specific damages claiming only $12,000 per month was wrongly inserted by his former solicitors who told him he could only recover the equivalent of the tax allowance amount as he could not produce any documentary evidence in support. He also denied that he and his wife had separated for 2 years prior to their divorce decree on 28 November 1990 based on two years separation. He said it was done on the advice of his former solicitors.

20. In the statement of damages filed on 12 October 1999 the plaintiff claimed he had been paying $25,000 per month for the maintenance of his wife and three children instead of the $6,000 ($3,000 to wife, $1,000 for each children) under the court order. However, he admitted to be at present residing in Mainland China working as an agent in the supply of construction material and has a monthly income of $3,000 - $5,000 only.

The Defence Case

21. The defence called one witness Mr. Kwan Yin, the investigation manager of Dynamic Investigation Consultant Ltd. (Dynamic). He referred to the 6 investigation reports prepared by his company at the instruction of the defendant. The purpose of the investigation was the business of Win Harvest and Shenzhen Nantau Wah Shing Water Sliding Stone-Powder Plant ("SNWS") in Hong Kong and Mainland China. The areas of the investigation were set out in page 2 of the first report including the financial condition of Win Harvest since 1986; the interests of Win Harvest and Shenzhen Nantau District Sze Lee Industrial Co. (SNDS) in SNWS; the value of SNWS and its capital at the time of accident; the accrual and share in the profit from the sale of 'Fu' powder and marble curb stone and its production and the costs of production of the two products and the profit margin of SNWS.

22. The 6 reports were produced under a hearsay notice served on 27 September 2000.

23. It was Mr. Kwong's evidence that the investigation work in Shenzhen was done by his PRC agent Sino Information Limited because his company did not carry out cross border investigation. He was consequently unable to confirm the person whom his agent talked to in Sze Lee County of Nantau District who claimed to be Lin Xue Yau was indeed the same person who made the 20 November 2000 statement produced under a hearsay notice by the plaintiff. He said when he pretended to file an application on behalf of SNWS he was told off by the official at the Environmental Protection Bureau in Shenzhen for the delay in the reporting of the 'Fu' powder factory of SNWS for such factories are operating against State regulations. He was told that all factories in Shenzhen are required to file a report to the Environmental Protection Bureau in Shenzhen.

24. In preparing the 6 reports, Dynamic verified the plaintiff's documents with the People's Court. They were:-

1. Guangdong Province Special License for foreign material process 16.10.1986 - 16/10/2001;

2. Certificate of approval for import material process facility compensation trading 16/10/1986;

3. Agreement no. 005 of 1986;

4. Agreement dated 28/2/1987;

5. Termination agreement dated 14/5/1990;

6. Application for termination of agreement dated 20/9/1990.

25. He was not able to verify the receipts issued by Wan Foa Province Dokei Construction Engineering Department dated 25/6/1987, 25/6/1987 and 30/9/1987.

26. Mr. Kwong maintained under cross examination that no 'Fu' powder factories can be found to be in operation in Shenzhen at the time of investigation, that they can be found only at north of Quangdong Province to be close to the quarries. That information obtained at the Public Securities Bureau was that there were no factories in operation in Sze Lee County for it belongs to the water conservation area for Shenzhen and Hong Kong. Under cross-examination, he admitted he could not explain the statement of Lin Xue Yau that a Chit Yi Shing Marble (Shenzhen) Ltd. was operating 1 km from the site of SNWS at the time of his investigation. He placed his reliance on the PRC legislation and state regulations exhibited to the 6 reports.

Findings

27. The present claim relied on by the plaintiff is set out in his 4th Schedule of Damages filed on 12 July 2000:

1. Pre-assessment loss of earnings	$7,369,374.25
2. Post-assessment loss of earnings	$8,684,647.51
3. Pre-assessment loss of profits	$24,392,625.75
4. Post-assessment loss of profits	$18,799,609.50
5. Loss of capital	$1,104,050.00
6. Special Damages	$100,180.00
Total	$60,450,487.01

28. The damages sought by him in the amended statement of claim on 5 March 1993 was:

1. Loss of earnings up to March 1993 (at $12,000 p.m.)	$492,000
2. Other special damages	$93,500
3. Loss of capital	$1,104,800
4. Loss of profits per year at	$550,000

29. There was clearly a huge inflation in the claim for both loss of earnings and loss of profits. The defence criticised the plaintiff for amending the schedule of damages four times as an attempt to substantially changing the basis of the claim by adding new items of claim and inflating the figures without sound and convincing reasons.

30. The credibility of the plaintiff is criticised by the defence. He was criticised for his failure to produce any company accounts and ledgers, bank account statements or tax returns of the Win Harvest or of the joint venture business of SNWS or any of his personal bank accounts or tax returns. The plaintiff blamed the delay in pursuing the assessment of damages on his lack of funds and his reliance on the advice of his former solicitors. He also blamed the doctors who examined him for mistakenly recording that he was still a factory owner in mainland China at the time of his medical examination in 1999. He denied he owned a factory after the collapse of SNWS.

31. I find the lack of documentary support of the plaintiff's claim for damages disturbing, due to the lack of documentary evidence, the court is asked to estimate the plaintiff's loss base only on the evidence of the plaintiff.

Loss of Earnings

32. The plaintiff referred to his monthly withdrawal from the SNWS cash flow as director's fees or remuneration. He claimed that the monthly sum was $30,000 with an annual inflation of 10% up to the age of 60.

33. The evidence of the plaintiff showed that he treated the business of SNWS as his own, he had never regarded he had any duty to prepare monthly or annual accounts for either Win Harvest or SNWS. He further admitted he had never deposited any trade receipts into the bank accounts of either SNWS or Win Harvest. There is then no traceable documentary evidence to prove the amount taken from the cash flow of SNWS nor to show the profits of SNWS.

34. He admitted there were no board resolutions from either SNWS or Win Harvest for a director's remuneration be paid to him for no board meetings was ever held.

35. Based on these admissions, I accept the submission of Mr. Chow, counsel for the defence, that the $30,000 p.m. taken from the cash flow can only be regarded as drawings on the director's 'current account' with the company.

36. The plaintiff has never claimed the sum was paid as salary, therefore, it follows that it cannot be recovered as loss of earnings.

37. Consequently, I make no award under the head of pre-trial and post-trial loss of earnings.

Loss of Profits

38. The plaintiff claimed SNWS had a net profit of $280 per ton of 'Fu' powder produced and that each plant can produce 40 tons a month. He also claimed that by the time of the accident, the factory had increased from the initial 5 plants to 7 plants. He further claimed that by 1992, 10 plants would have been installed and increased to 30 plants by 1994.

39. From the evidence of the witnesses he called, I am satisfied that he had been selling 'Fu' powder to his customers at around $600 per ton.

40. It is, however, a different matter when it comes to the calculation of the costs of production and delivery to customers. The plaintiff claimed that such costs came to $305 per ton. He was, however, unable to give a breakdown as to how he arrived at this figure. He was only able to give the assessed costs of workers' wages at $40 per ton (an increase of 100% from 1989), the costs of raw materials, rent, management charges, sales expenses and other unforeseeable costs which he claimed to be $197. He relied on the figure of $197 which he gave in his witness statement of 31 January 2000.

41. There are no business accounts produced or any of the overhead expenses accounted for or supported by receipts save for some transportation receipts for the period after the accident. I find there is no means by which the costs and expenses can be verified. I have great reservations that the net profit for the production of 'Fu' powder would amount to 46.67% of its wholesale price after deduction of the costs of local transport and sales commission. Clearly, the plaintiff has everything to gain by not producing any supporting documents of his business and at the same time failing to recollect the details of the costs breakdown. For an experienced businessman of many years, it is incredible that he should have kept no business accounts and being still in the business dealing in construction materials he is unable to give an account of the cost breakdown.

42. I accept SNWS did have a profit and the sale price of Fu powder was around $600 per ton, but I am unable to accept that the costs should be what the plaintiff claimed. Like most factories operating in China, business profits comes from the quantity of production. A net profit of 46% of sale price is incredible and unbelievable particularly when costs factors such as maintenance and repair, plant and machinery and an expansion of the factory are to be taken into account.

43. For the aforesaid reasons, I make an assessment that a net profit of $140 ($280/2) per ton to be closer to the net profit gain of the business.

44. The production from 7 plants from the date of accident to 22 July 1992 (3 years) at 40 tons per plant

3 x ($140 x 40 x 7 x 12) = $1,411,200

45. I do not consider it to be realistic to work on the basis that the plaintiff would be able to increase his production to 30 plants by 1994 for to do so he would have to increase both the size and the number of plants of his factory 3 times in the short space of 2 years. I am not satisfied the plaintiff has shown that there are buyers for his products from 30 plants (an increase production of 328.5%). I would assess his loss of profits on the basis on a 10 plants production basis from 1994 onwards with no further expansion. In reaching this decision, I have taken into account the evidence of the plaintiff's witnesses that there are a number of other 'Fu powder' manufacturers in the market and a number of these have already acquired a good reputation such as "長城" (Cheung Shing alias Great Wall), "Mei Kei" and "Siu Shing" etc. According to the evidence of the plaintiff's witnesses who used to purchase from the plaintiff, they also had other suppliers based in Hong Kong. It is important to note that some of these witnesses had difficulties in recalling the brand name of the plaintiff's product. Furthermore, they all agreed that the 'Cheung Shing' brand is more popular and some consider it of better quality than the rest in the market. One witness said it was possible that the plaintiff named his product 'Qin Shing' because it sounded similar to 'Cheung Shing'. It is obvious, the plaintiff's product had to face strong competitions, and it is by no means certain the plaintiff will be able to expand his market share in 'Fu' powder in Hong Kong.

46. I have also taken into account that the plaintiff had failed to give a satisfactory account as to how he intended to achieve this physical expansion of the factory to accommodate the addition of 23 plants, neither did he give a satisfactory account for the financing of such a large scale expansion. For these reasons I would allow an assessment of loss of profits based on an expansion to 10 plants from July 1992 only.

My assessment of his loss of monthly profit from July 1992 is $(140 x 40 x 10) = $56,000.

47. As to the production of marble curb stones, the plaintiff claimed a production of 6,000 pieces a month and a profit of $8 per pieces in the second half of 1989. However, in his statements of 12 October and 14 December 1999, he claimed the production costs of $7-8 and the sale price of between $15-17 per piece. He further claimed in the few months since June 1989, he sold over 12,000 pieces. Clearly the 12,000 pieces were from more than two months of sales.

48. PW6 Mr. Ling Yuk Yin and PW7 Mr. Chan Chi Hok in their respective evidence claimed they each purchased from the plaintiff 1,500 pieces of marble curb stones at $15 per pieces in the second half of 1989.

49. The plaintiff was vigorously cross-examined on the costs of production of this product. He put a general cost of $5 per piece and $3 for transportation, again he was unable to give a breakdown as to how he worked out those figures and as he produced no documentary evidence in support, I find the plaintiff had again exaggerated the net profit of this product by disregarded expenses that are necessary such as packaging and sales costs.

50. On the basis of the costs of production, packaging, delivery charges, and sales commission would cut the plaintiff's claimed profit of $7 by 50%, and the sale of 12,000 pieces of marble curb stones was for the second 6 months of 1989 (i.e. 2,000 per month), the projected monthly profit from this product would have been:

$(2,000 x 3.5) = $7,000

51. Consequently, pre-assessment loss of profits from 23 July 1992 to 22 January 2001:

$(56,000 + 7,000) x 102 =	$6,426,000
23 June 1989 to 22 June 1992 =	$1,411,200
Total	$7,837,200

52. Deducting the average monthly income of the plaintiff from 1994 to date of $4,428.57:

$4,428.57 x 78 = $345,428.46

and the factory income from 23 July 1989 to February 1990 - 7 months assessed at $63,000 per month:

$63,000 x 7 = $441,000

53. Pre-trial loss of profits comes to:-

$7,837,200 - $(345,428.46 + 441,000) = $7,050,771.60

Multiplier

54. Since judgment was entered in this matter in 1993 when assessment of damages was ordered, this matter had been lying dormant for 7 years. It was not until early 1999 that any serious thought was given in the pursuance of the assessment of damages. The plaintiff must be largely to blame for his failure to pursue it expeditiously. He blamed his former solicitors and his lack of funds for the delay. He failed to explain why he lacked funds when he apparently sold the office unit in Good Hope Building in Mongkok at a profit for $1,925,000 in June 1992. He had bought this property in 1988 for $890,000. There is justification in the defence's submission that the plaintiff should not benefit from his failure to prosecute his case with expediency in the assessing the suitable multiplier. I have therefore taken into account the appropriate multiplier had the assessment been heard in 1993-94 in my consideration of the multiplier applicable now.

Delay

55. On the point of delay, Mr. Pun submitted that assessments of damages sometimes are brought many years after the accident. He referred to the case of Lau Ka Po (a minor) v. Mau Cheuk Ming & anor, HCPI 584 of 1996 (a judgment of Chung J. on 10 March 1997), where the plaintiff who was 11 at the time of accident in September 1988 was 19 years old at the hearing of the case, a multiplier of 16 was used in the calculation of his loss of future earnings.

56. Clearly, in Lau Ka Po's case, when the victim was a 11 year old infant the extent of recovery and the growth of the infant victim are relevant factors, particularly where loss of future earnings is concerned.

57. In the present case, clearly the plaintiff's injuries became stablised in about 1990, indeed, he claimed he had returned to work in 1994. There is a clear delay of 6 years.

58. Mr. Pun referred to the case of Ng Kwok Wing v. Lau Ping Kwan & Ors [1996] 4 HKC 667, where Cheung J. applied a multiplier of 13.5 for the calculations of post trial loss of earnings for the 47 year old plaintiff departing from the conventional approach in reaching the multiplier. His method of calculation was criticised by the Court of Appeal in the case of Leung On & anor v. Chan Piu Ki (an infant) ]1996] 2 HKC 565, where the Court of Appeal applied a multiplier of 15 for the 161/2 year old plaintiff.

59. Mr. Pun submitted that a multiplier of 10 should be used in the present case. While Mr. Chow for the defence urged me to take into account the delay of 7 years between 1994 and 2001 and submitted a multiplier of 2 to 4 as the appropriate multiplier.

60. In the case of Chan Kam Hoi v. Dragage et Travaux Publics [1998] 2 HKLR 958, the Court of Appeal held that for a 53-54 year old claimant, the appropriate multiplier for loss of future earnings to age 65 is 7, while the appropriate multiplier for a 45 year old claimant to age 65 is 12. The plaintiff in that case was 53 at time of trial, the Court of Appeal used a multiplier of 5 due to the risks associated with the claimant's construction site work.

61. In the case of Ma Kam Yeung v. Fu Hay Kin & Ors. [1998] 2 HKLR & D 616, Deputy Judge Gill used a multiplier of 10 in the loss of future earnings of the 46 year old plaintiff who was 39 years old at the time of accident.

62. It follows that the usual multiplier for a 51 year old claimant who would retire at 60 should be 5.

63. However, I find: due to (1) the uncertain nature of the plaintiff's joint venture business of SNWS at expiry of the joint venture agreement in 2001, in spite of the plaintiff's bare assertion that it would be extended beyond 2001, there was no such provision in the two agreements; (2) the PRC Environmental Protection Law put stringent restriction on factories that are likely to pollute the environment. Though the plaintiff insisted that the manufacturing of 'Fu powder' of SNWS was by a watering process as opposed to the dry process, and no pollution is resulted, clearly DW1 had a very different impression from the Environmental Protection Bureau in Shenzhen. Further, even if the manufacturing process is not of highly polluting nature, the waste water resulted cannot be said to be unpolluted. This is of particular importance for Sze Lee District in Shenzhen is water reserve area for Shenzhen and Hong Kong. Upon reading the regulations and requirements exhibited to the 6 reports produced by the defendant, I cannot see how the plaintiff can convince the authorities to allow him to carry on the operation of SNWS.

64. Consequently, I have great reservation as to the survival of the business of SNWS beyond 2001 at Sze Lee County of Shenzhen which had been zoned as a class 2 clean water and environment area and the manufacturing business of stone grinding has been classified as an industry greatly affecting the environment and can only operate under stringent supervision by the State under State regulations. (see exhibits to DW1's report)

65. For the aforesaid reasons, I assess the post trial loss of profits at 9 months and 3 weeks to take the plaintiff to the end of the joint venture agreement.

66. Post assessment loss of profits is therefore

$63,000 x 9.68 = $609,840

Loss of Capital

67. I accept the submission of Mr. Chow, counsel for the defendant, that to allow the plaintiff's claim on loss of capital on top of loss of profit would be double counting. This item is only recoverable should the plaintiff failed in his claim for loss of profits. The reason is, if the factory was allowed to carry on had the accident not taken place, he would have profited from the business profits gained and at the expiry of the joint venture after 15 years, he would not have recovered more than he did in 1990. Now that the plaintiff has been awarded his loss of profits and with the depreciation of plant and machinery taken into account as part of business expense, and after over 15 years of operation, the capital investment would be of little value. The plaintiff should not be able to recover any damages under this head.

Special Damages

68. I find the plaintiff's claim under this head to be reasonable and the defence only disputed the item of the costs of future operation, I will allow the following:

Medical expenses	$1,230
Loss of clothing	$1,000
Loss of vehicle	$7,950
Travelling expenses	$5,000
Tonic food	$5,000
Total	$20,180

69. As to future operation costs, the plaintiff's doctor put the costs at $80,000, while the defendant's doctor put it at $50,000. I find the costs of $50,000 to be reasonable. Dr. Chan who gave the estimate of operation costs had assumed the plaintiff using a third class room in a private hospital inclusive of costs of rehabilitation. I am not prepared to award the higher sum of $80,000, as the plaintiff had all along been treated by doctors at public hospitals and he had expressed no dissatisfaction to the care given to him.

Interests

70. I allow the interest of 2% on general damages from the date of service of writ to date of assessment and half judgment rate on special damages from the date of accident to date of assessment. Thereafter at full judgment rate until full payment.

Conclusion

71. The damages recoverable by the plaintiff is:

Loss of profit -
Pre-assessment	$7,050,771.60
Post-assessment	$609,840.00
Special damages	$20,180.00
Cost of future operation	$50,000.00
Total	$7,730,791.60

Costs

72. Costs nisi on the costs of assessment to the plaintiff with certificate for counsel.

Representation:

Mr. Hector Pun instructed by Messrs. Chan, Leung & Cheung for Plaintiff

Mr. Anderson Chow instructed by Messrs. T.S. Tong & Co. for Defendants