Carolyn Dall v. Choy Ying Wai
Read the full judgment text of HCPI 176/1995 on BabelCite. This High Court CFI judgment was delivered on 4 November 1998.
1. The Plaintiff, Mrs Carolyn Dall, sues upon her own behalf and on behalf of her daughter Lauren, as dependants of her late husband Gordon Harvey Dall under the Fatal Accidents Ordinance, Cap 22 , and under the Law Amendment (Reform and Consolidation) Ordinance, Cap 23 , as executrix of the estate of Mr Dall.
Cites 2 cases
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HCPI 176/95 IN THE HIGH COURT OF THE HONG KONG SPEICAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE PERSONAL INJURIES ACTION NO.176 OF 1995 ----------------------------
------------------------ Coram : Deputy Judge Lugar-Mawson in Court Dates of hearing : 16, 17, 18, 22 June 1998, 24 June 1998, 2, 3 July 1998 and 8 August 1998 Date of delivery of Judgment : 4 November 1998 ---------------------- J U D G M E N T ---------------------- 1. The Plaintiff, Mrs Carolyn Dall, sues upon her own behalf and on behalf of her daughter Lauren, as dependants of her late husband Gordon Harvey Dall under the Fatal Accidents Ordinance, Cap 22, and under the Law Amendment (Reform and Consolidation) Ordinance, Cap 23, as executrix of the estate of Mr Dall. 2. On 27 May 1992, Mr Dall was driving his Honda Civic car along Cheung Pei Shan Road, Tsuen Wan, New Territories, Hong Kong. He was stationary at an interchange behind a bus, when a lorry owned and driven by the Defendant, Mr Choy Ying-wai, came into collision with the rear of an unladen container tractor and trailer stopped behind Mr Dall's car. This moved forward and crushed Mr Dall's car between it and the bus. Mr Dall suffered terrible injuries and died from them soon after. 3. The Defendant's lorry's rear brakes were mal-adjusted and had a braking efficiency of between 0% - 31%. The legally required minimum braking efficiency was 50%. It was carrying a load of 42.58 tonnes, which was 10 tonnes over its permitted gross combined weight of 32 tonnes. The Defendant was convicted by Caird J. in the District Court on 1 March 1994 of an offence of Causing Death by Reckless Driving, contrary to s.36 of the Road Traffic Ordinance, Cap.374. He was sentenced to nine months' imprisonment, and was disqualified from holding or obtaining a licence for five years. 4. By reason of this accident Mrs Dall and Lauren, Mr Dall's dependants, and the beneficiaries of his estate, have suffered injury loss and damage. 5. The Defendant's liability is not disputed and interlocutory judgment has been entered against him. 6. Mr Dall died intestate, his estate falls to be distributed under Scottish law. A grant of representation to his estate was granted to Mrs Dall on 26 October 1994, by the Sheriff Clerk Depute of Kirkcaldy District, Scotland. 7. At the time of her husband's death, Mrs Dall was not working as she was looking after Lauren, who was still a small child. She was born on 17 September 1958. Lauren was their only child, she was born on 14 June 1989 and was three when her father died. 8. Mr Dall was born on 17 April 1959, he was 33 when he died. He was employed by Astec International Ltd. in Tsuen Wan, as a Principal Engineer in Astec's Advanced Technology Centre. He had worked for the Astec Group, of which Astec International Ltd. was part, since 1987 in the United Kingdom, Malaysia and the U.S.A. 9. His contract with Astec International Ltd. in Hong Kong had started on 1 March 1992, less than three months before his death. Under it he earned HK$39,964.00 per month, paid on a 13 month basis. He was entitled to a housing allowance of $25,000 per month; medical benefits; a management bonus; a patent incentive bonus; an education allowance for Lauren when she became four (pre-school nursery education was not included in that allowance) and a return air fare Hong Kong to Edinburgh, Scotland for Mrs Dall, Lauren and himself every two years. He would have received benefits under Astec's Provident Fund on reaching his 60th birthday. His employment contract was for a fixed term of two years from 1 March 1992, it continued thereafter on an indefinite time basis, subject to either party giving two months' notice to the other of termination. 10. Mr Dall had left school in Scotland at 16 to start work as an engineering apprentice. As an apprentice he had attended various night schools and day release courses. He had no university degree, it is agreed that his qualifications, a Scottish B.TECH diploma, are equivalent to an English Higher National Diploma. His qualifications did not entitle him to describe himself as a Chartered Engineer. The issues 11. There is considerable agreement between Mr Nicholas Pirie, Counsel for the Plaintiff and Mr Mohan Bharwaney, Counsel for the Defendant and after trial, there remain only the following matters to be dealt with :
The Multiplier 12. The Plaintiff claims an overall multiplier of 16. The Defendant contends that it should be no more than 14. Mr Dall was 33 years old at the time of his death. Retirement age at Astec was 60, and it is likely that Mr Dall would have retired at that age. 13. As to comparables, the Defendant says that in Chu Che Ping [1980] 10 HKLJ 240, Mr Commissioner Rhind awarded an overall multiplier of 14 in the case of a woman labourer who died at the age of 32. In Mohamad Hanifa [1990] HKLY 514, an overall multiplier of 15 was agreed for the widow in the case of a male taxi driver aged 32 at the time of death. In Leung Siu Chun [1991] HKLY 422, an overall multiplier of 14 was agreed for the widow in the case of a male scaffolding sub-contractor aged 34 at the time of death. The multiplier of 15 can be explained in Hanifa on the ground that taxi drivers often work beyond the age of 60. 14. The Defendant accepts that Lauren is likely to enter university and does not suggest a lower multiplier for her claim. 15. The Plaintiff says these comparables are not appropriate for a professional man like Mr Dall. Professional man in Hong Kong are likely to continue in work beyond 60, and therefore a longer multiplier is appropriate. There are very few reported cases in Hong Kong involving professional men of any age and I was asked to look at English cases in the table in Kemp & Kemp Vol.3 pages 63021-63022. That shows that in England longer multipliers are used, and professional people in their early thirties attract multipliers of 16. Older persons in their 40's can have attracted multipliers of 15. The Plaintiff further says that in Hong Kong the average life expectancy is longer than in the United Kingdom, so a longer multiplier should be used. 16. There is force in both parties' arguments. Though from the evidence I heard, I doubt if Mr Dall would have continued in employment past 60. I am therefore taking a multiplier of 15. 17. The pre-trial period is 73 months, leaving a post-trial period of 107 months. The Multiplicand 18. As there is no evidence of Mr & Mrs Dall's actual personal expenditure, because they were in Hong Kong for just a few months staying in hotels prior to the accident, the Defendant accepts the conventional multiplicand of 75% of earnings and benefits established in Harris. But says, the factor of 75% is not absolute and is subject to reduction to 70% if I find that Mrs Dall will return to gainful employment in about 3 to 5 years' time when Lauren becomes a teenager and is settled into secondary school. 19. The Plaintiff says these assumptions are not borne out by the evidence and there should be no such reduction. On these matters Mrs Dall said : "On our 1st trip to Asia when Gordon came to Hong Kong, I settled in very easily, and got jobs. I remember working in a jewellery shop in Hung Hom, and then for the British Government at Chung Hom Kok for short while doing administrative work."
20. I am with the Plaintiff here. Mrs Dall had no intention of finding work in May 1992. She and her husband planned to have a second child. It would be presumptuous for me to assume that she will want to return to work when Lauren is in her early teens. There will be no reduction of the 75% multiplicand. 21. The Plaintiff further says the education allowance should be treated separately and not included in the 75% factor, because it was not really part of Mr Dall's income at all as it was a payment additional to his salary. It would have been paid directly to the school by Astec, or to Mr Dall on a 100% reimbursement basis. The Harris percentage formula only deals with the normal suburban English case where children go to local government schools at no extra expenses to their parents. It does not deal with men in higher income brackets, or expatriates who have packages designed to cover their other expenses. 22. The Defendant says the Harris approach is to take a broad view and not to make a detailed breakdown or calculation and it is both wrong in principle and inconsistent with that approach, to treat the education allowance separately. If it is treated separately, then each item of expenditure should also be calculated separately, so that the actual dependency can be calculated rather than take an estimated dependency of 75% of Mr Dall's earnings and benefits. 23. Although I see force in Mr Bharwaney's argument, I am of the view that the education allowance should be taken separately, because of its exceptional nature as a prospective part of Mr Dall's remuneration benefits. At the date of his death, he was not yet entitled to it as Lauren was below compulsory school age. It would have been payable on Lauren starting primary school at around age five up to such time as she left school (presumably at 18) or on it being withdrawn by Astec from Mr Dall as one of his remuneration benefits. The period for which it can form part of the claim depends on the view I take of Mr Dall's prospective career path and future earnings and benefits. 24. There is not much dispute between the parties as to the value of Mr Dall's earnings and benefits from 1992 to 1995. The claim for management bonuses is not disputed, neither is the claim for patent incentive payments. A dispute over the claim for loss of the Provident Fund was resolved at trial. However, they differ considerably on whether or not Mr Dall would have returned to the United Kingdom in 1996. And on the value of his earnings and benefits, even if he had remained in Hong Kong. 25. To ascertain the multiplicand, I have to project Mr Dall's likely career path had he lived and the earnings, including the value of benefits, he would have enjoyed, which raises the questions :
I will deal with the first four questions together. I will deal with the fifth question, stock options, separately. The evidence For the Plaintiff 26. The Plaintiff called three witnesses :
27. Mrs Dall indicated that she would have gone with her husband to another country, if his salary and benefits were equivalent to those he received at Astec Hong Kong. 28. The gist of Mr Stewart's evidence in chief was to the effect that :
29. Arising from Mr Bharwaney's cross-examination of Mr Stewart, I have to ask how much is Mr Stewart truly aware of Astec's personnel policies and history so as to be able to project the likely position of Dall in Astec today. The broader question I must ask myself is: how far away from the common ground on employment policies and conditions of service are Astec's in the electronic engineering industry in Hong Kong? 30. In his pre-trial statement he said that Mr Dall was on the technical and not management side of Astec's operations. Therefore, if alive today, Mr Dall's job title and position at the Advanced Technology Centre would have remained unchanged. At the time of the accident Mr Dall was a Product Manager. This position no longer exists in Astec. It apparently is the equivalent of a Principal Engineer. 31. Mr Stewart resiled from his pre-trial statement and said that Mr Dall would be a senior principal engineer today (since 1996), but this is contradicted by :
32. Mr Stewart's own pre-trial statement, his excuse was that this is a lawyer's document. 33. Mr Stewart said that there is no localisation in Astec. By referring to the list of terminated expatriates he said that only Mr Andrew Tierney was made redundant due to company restructuring, the other twelve left for reasons unrelated to that. According to Mr Stewart's evidence, all except Mr Tierney, left Astec of their own accord. But the documentary evidence demolishes Mr Stewart's oral evidence. Both Mr Thomas Illy and Mr F.L. Cheng (who despite his Chinese surname was employed on expatriate terms) were made redundant in 1995. Mr Illy, who was employed on a permanent rather than contract basis, was made redundant on 1 August 1995. He is a German national, Mr Stewart said he wished to go back to Germany. Mr F.L. Cheng was made redundant on 31 July 1995. Mr Stewart himself wrote a memo regarding his redundancy. Both Mr Illy and Mr Cheng had good personnel records at Astec. 34. Mr David Cross, one of the two employees, Mr Stewart took as comparable with Mr Dall, replaced him after his death (see the letter from Astec to Mr Macmillan of MacRoberts dated 25 October 1994). On completion of his two years contract, he returned to the United Kingdom. Mr Stewart said Mr Cross wanted to go back to the United Kingdom because his wife wanted to go back there. This is not borne out by the documents. In a letter dated 1 July 1994 from Astec to Mr Cross, Astec said that his employment contract was due for renewal on 8 September 1994 and gave notice that it would not be renewed. No document in the files disclosed shows a reason for Mr Cross's departure which support Mr Stewart's allegations. On the face of the contemporaneous document, Mr Cross was told to go back to the United Kingdom. 35. What is more telling is that no one replaced Mr Cross, instead, locals were promoted. On Astec's files there is no indication that an expatriate replaced him. It appears that locals replaced him, either Mr Tse Man Keung or Mr Wong Shu Chung, both are now senior principal engineers. According to Astec's organisation chart, they are employed on local terms. 36. When asked why there was no performance evaluation report on Mr Dall's personnel file, Mr Stewart said that either they were not used in 1992, or possibly none existed because Mr Dall was then in Malaysia. Almost all the other personnel files disclosed contain performance evaluation reports. Mr Cheng Wing Ling, who is now the Engineering Manager at Astec, was in Malaysia at roughly the same time as Mr Dall was and with the same company, and yet there is a 1992 evaluation report for him. 37. Mr Stewart admitted that he is not in charge of recruitment, which was essentially the job of Astec's Personnel and Administration Department. 38. Mr Stewart's evidence has to be looked at in light of the inconsistencies I have mentioned. It contradicts both contemporaneous documents, and his own pre-trial statement and cause me to ask how deep his understanding of the personnel policies in Astec is? 39. The fact that Astec has recruited four expatriate engineers in the past four months, does not answer the question whether Mr Dall would have remained in its employment in the years 1995/96, when Mr Cross, Mr Illy, Mr F.L. Cheng, were made redundant and Mr Smith returned to the United Kingdom. All were expatriate employees with good performance records. 40. Although Mr Stewart chose Mr Smith and Mr Cross as comparable with Mr Dall, it was brought out in cross-examination that Mr Smith and Mr Cross have very different qualities. By reference to the Master Patent List, it became clear that both were more inventive and prolific in patent designs than Mr Dall was. Mr Stewart backtracked and said that most engineers can drive a product through the company, implying that Mr Dall could too and that he was very good at dealing with customers. From the technical viewpoint, Mr Cross and Mr Smith appear to have been superior to Mr Dall. Mr Stewart did not dispute that Mr Dall was a 'technical person' and would not have moved over to a management position in Astec. 41. I regret to say that I found much of Mr Stewart's evidence to be spontaneous with a good degree of embellishment. He appeared impatient with the questions asked of him and gave the impression that he regarded the degree of precision required of him in his answers mere lawyer's pettifogging. 42. I do not find Mr Smith a good comparable with Mr Dall. Mr Smith was with Astec longer than Mr Dall and was much more inventive, which must be of value to Astec. Mr Smith's current employment terms are somewhat unusual in that he works from home in Oxford. Essentially, as I understand it, as a consultant with Astec. I am satisfied that if he were alive today and had he remained with Astec, Mr Dall's salary would have been less than Mr Smith's. 43. According to the company search record of Astec (BSR) plc, Astec's holding company, Mr Stewart resigned as a director on 9 March 1998 and was reappointed on 20 May 1998, which indicates that there is presently volatility and uncertainty in Astec. 44. Astec's documents show, very clearly, that it pursued an active localisation policy in the mid-1990's. There was a small percentage increase in salary for expatriate staff and a higher increase for locals to enable them to catch up with the expatriates. There was a gradual disappearance of benefits such as education allowances. 45. Dr Kotius' evidence assessed what the remuneration package of Mr Dall would be today had he lived. He also gave evidence on the availability and valuation of stock options to employees, both generally and in the "high-tech" industry. He gave his opinion on Mr Dall's likely remuneration package today without making any allowance for his possible promotion. 46. In assessing Mr Dall's notional compensation package, Dr Kotius adopted a benchmark job description method instead of a points system. He selected eight employees in comparable companies from a sample of 250 companies in general industry and 75 in the high-tech industry. The eight employees form the database for Dr Kotius' assessment. 47. There are "don't knows" and "not sures" in Dr Kotius's evidence. In summary, they are :
48. All eight of Dr Klotius' comparable employees are employed on local terms. Two have housing. None has education or home leave travel allowance. 49. In item 3 of his report he says :
Dr Kotius was asked why he had to look at employees in general industry if Wyatt has expatriates in high-tech industry in its database? He said that Wyatt may not have sufficient data to produce information on expatriates in the high-tech industry, which I take to mean that expatriate benefits in the high-tech industry are becoming a rarity. For the Defendant 50. The Defendant called three witnesses :
51. Mr Singh gave his opinion of what Mr Dall's salary would have been from 1992 to today had he remained in the United Kingdom. He gave three sets of figures based on a lower quartile basis, a median basis and an upper quartile basis. In his view Mr Dall fell into the median quartile. Mr Singh's figures included benefits such as the value of a company pension scheme in which the employer contributes 10% of the base salary, employee protection insurance (life, disability and medical insurance) paid by the employer at a rate assumed to be 1% of base salary, and luncheon vouchers valued at ￡55 per year. He would not have received a housing allowance or an education allowance. Given his lack of a graduate qualification, Mr Dall would be classified as an Engineering Technician. 52. Mr Singh said job descriptions can be misleading. He considered the questionnaire method used by Wyatts, Dr Klotius' company, in preparing its database to be flawed as there is a subjective interpretation of the job description by the person filling in the questionnaire. He preferred his company's job evaluation system in which there is an objective consideration of a number of factors. 53. He criticised Wyatt's sample size of eight comparables as too low. Saying that the larger the sample size, the more valid the result will be. 54. In his experience, companies do not necessarily pay a premium for "hands-on" engineers. 55. In his experience in dealing with long term expatriate employees, those employed on contract terms for 1 to 5 years, such as Mr Dall was, will be localised after 5 years, or their contracts renewed on local terms. There is a trend to remove discriminatory terms of employment between locals and expatriates. I take this to mean that companies cannot afford to remain "politically incorrect" for so long. 56. The education and academic qualifications of a candidate are important. In the United Kingdom, a lot of credence is given to them, due to the prestige United Kingdom professional institutions enjoy. 57. In expatriate employment contracts, housing allowances are being gradually phased out. They may remain as modest token benefits. He considered that a housing allowance worth about 65% of the basic salary, as Mr Dall's was, could not be described as "modest". 58. Professor Chan spoke of the effect of Mr Dall's lack of a university degree and professional qualifications. 59. He said that on a degree course, students are taught the fundamentals and trained to do their own research. They therefore adapt to changes and are more versatile than someone who is trained on the job, who will find it more difficult to adapt, especially to advanced technology, later in life 60. In Hong Kong, there is an abundant supply of electronic engineering graduates. These graduates are all trained in both software and analogue technology. 61. After allowing for what I found to be something of an academic's contempt for those without formal qualifications, Dr Chan's evidence persuasively counters Mr Stewart's assertion that it is difficult to find good engineers in Hong Kong today who possess Mr Dall's professional skills. 62. Mr Neirynck told me that Primelink has a database of 7,500 individual records of employment terms and conditions, each containing detailed resumes of the employees and their remuneration packages. From these he had extracted 658 files, all in engineering or related fields. Very few of these 658 employees are employed on full expatriate terms. There is a definite trend towards localisation. When the economy is growing, companies can afford to pay expatriate packages. In a recession these companies have to re-evaluate how they pay their expatriate employees. 63. He maintained that the ten people described in Appendix A of his report are true comparables based on their background, current employment, remuneration package and age with Mr Dall, for, as opposed to Dr Kotius' company, Primelink has direct information of these matters. Primelink carries out reference checks and the facts stated in the employee' resumes are checked. Mr Neirynck's sample size is larger than Dr Kotius. 64. Mr Neirynck, like Mr Singh, criticised Dr Kotius' questionnaire method, as that involves a third party filling in the questionnaire and by reason of that, there is subjective assessment. 65. Mr Neirynck also emphasized the importance of formal qualifications in the electronic engineering field. 66. Mr Neirynck placed Mr Dall somewhere between the lower quartile and the median in Mr Singh's report. This was because in his view Mr Dall's years of experience would have counterbalanced his lack of academic training and qualifications. 67. Mr Neirynck said there is a tendency for companies to opt for gradual localisation, except in very senior posts. He said that expatriate terms may be relevant in some years, but expatriates are usually employed to train and teach local employees to do what the expatriate does, after which the expatriate will be repatriated. 68. Mr Neirynck did not consider that a housing allowance of $25,000 on a basic salary of $40,000 can be described as modest, as it is over half the basic salary. Some companies have removed housing allowances, others retain them as a tax planning exercise. 69. He concluded that, in his opinion, if Mr Dall was alive today, he would have been offered local terms, or repatriated to the United Kingdom. 70. He did not consider Mr Smith a good comparable to Mr Dall. Mr Smith was more valuable to Astec since he contributed more directly to the future earnings of the company by designing their future products. In addition, Mr Smith is older than Mr Dall would have been and has a better education and been with Astec longer. The fact that he is more inventive, justifies his high pay. 71. Mr Neirynck said his examination of Astec's employment records showed that Mr Cross was not replaced with an expatriate after he left. Two locally employed men Mr Tse Man Keung and Mr Wong Shu Chung, who are now both senior principal engineers were appointed. Mr Tse was appointed in October 1995 and Mr Wong in September 1995. 72. He said that Primelink's associated office in the United Kingdom had advised that Mr Dall's likely earnings in the United Kingdom today would be between ￡32,000 to ￡35,000 per annum all inclusive. There would be no housing allowance and no education allowance. Those figures correspond in general terms with the figures given by Mr Singh. Determination of the first four issues 73. Mr Dall was obviously highly thought of by Astec. He had been employed by them for six years before he died. Mr Stewart said he had been "headhunted" by Astec from his former employers, who were in a form of loose association with Astec. However, he was not irreplaceable. Neither was he an obvious "high flyer". Mr Stewart said his strengths lay on the technical side, and that he was unlikely to have moved into a management position. 74. His lack of a graduate qualification did not concern Astec, they were prepared to treat him of equal status as graduate electronics engineers. But it is clear from Dr Chan and Mr Singh's evidence that had Mr Dall been forced out on to the job market, his lack of qualifications would have restricted the range and level of jobs open to him. I am aware that both in the past and now many Captains of Industry have no formal qualifications, but the evidence does not indicate that Mr Dall would have become one of these men. 75. I find that the evidence shows that it is more likely than not that Astec would have repatriated Mr Dall in the mid-1990's. The evidence shows a noticeable trend within Astec to localisation in that period, and as Dr Chan has shown there is no shortage of locally qualified graduate electronics engineers capable of doing the work Mr Dall did at Astec. Ascertaining the day and year this would have happened is an almost impossible task, but given Mr Dall's value to Astec, I am taking it as being the very end of 1996, that is 31 December 1996. The evidence shows that it is highly unlikely Mr Dall would have remained in Hong Kong past the end of 1996. 76. Although Mr Stewart said Mr Dall would have been promoted to the rank of Senior Principal Engineer in 1996, I do not consider that is likely to have happened if Astec had repatriated him at the end of that year. 77. As to the level of his salary, I accept Mr Neirynck's figures for the period from his death to 31 December 1996. These include housing and education allowance, management bonuses and patent incentive payments. I am satisfied it is more likely than not that Astec would have continued to pay Mr Dall these for so long as he remained in their employ in Hong Kong. These figures are set out in the table at the end of this judgment. Provision is made for Hong Kong tax. 78. For the period 1 January 1997 onwards, when Mr Dall would have been back in the United Kingdom, I accept Mr Singh's median figure of an United Kingdom inclusive salary of ￡32,213 per annum for 1997 and ￡37,311 per annum for 1998 onwards. This is the figure he very fairly conceded in the course of his evidence after hearing Mr Stewart's assessment of Mr Dall's abilities and value to Astec. It is roughly ￡3,618 per annum higher than the figure of ￡33,693 given in his report. I am satisfied that on return to the United Kingdom, Mr Dall would have ceased to receive education allowance, housing allowance, medical expenses, management bonuses and patent incentives. The figures are set out in the table at the end of this judgment. In arriving at the figures, I have taken a United Kingdom tax rate of 22.5% and an exchange rate of Hong Kong $13 to ￡1 sterling. Adjustment may be needed to reflect current United Kingdom tax rates and current exchange rates. Stock options 79. This claim was raised late in the day, I gave permission for it to be argued. 80. The evidence shows that Astec was giving stock options to employees at the level of Mr Dall in or about 1994 - some got them earlier - others a little later. Mr Stewart said they gave them as :
81. Dr Kotius thought that, although stock options are offered on a discretionary basis, the eligibility criteria for stock options will be clearly stated as written company policy. No written policy on eligibility criteria for stock options can be found in Astec's disclosed company policy documents. Mr Stewart said that stock options in Astec are offered at the discretion of the board. 82. Mr Smith received stock options in 1992. He got 98 pence x 50,000 = ￡49,000, which at an exchange rate of $13 to ￡1 = $637,000.00. This is approximately one third of his gross salary for those years - 1992-1995. The Plaintiff is not claiming from 1992, but 1994. 83. Mr Neirynck said in his report :
84. On looking through the tables in his report, I am a little puzzled where Mr Neirynck got his figure of HK$754,897 from. But as I understand it both the Plaintiff and the Defendant accept that figure and the basis of calculation, which is based on an accepted mathematical formula known as the "Black-Scholes Method". Mr Neirynck said in evidence that companies use the Black-Scholes Method to try to give their staff a 35% overall profit on shares purchased under the option. On past performance Astec gave slightly over that figure. 85. The Plaintiff says that as stock options were a benefit Mr Dall would have enjoyed had he lived, they should be carried over into the future. 86. The Defendant accepts that Mr Dall would have enjoyed stock options had he remained in Hong Kong, but there is no evidence of his entitlement to them had he returned to the United Kingdom. It is Mr Singh's evidence that only employees falling into a higher class enjoy stock options there. Using his company's points range; Mr Dall fell into points class 54. The majority of companies do not give stock options to employees in this class. Normally only those in points class 57/58 and above get them 87. The Defendant accepts that there should be an award for loss of stock options for the pre-trial period, for the years 1995, 1996 and 1997, on the premise that options granted in 1994 cannot be exercised until three years later, but submits that a projection of likely future discretionary awards of stock options is too speculative an exercise, given the dual effect of localisation, the state of Astec's commercial affairs (it is the subject of take over bids) and their discretionary nature. 88. The Plaintiff counters that argument by saying the battle for control of Astec should not upset what it has to pay its staff. If the stock price goes down, then the option price and quantity will be adjusted upwards, and if the stock price rise, the option price and quantity is adjusted downwards. These matters are taken into account in the Black-Scholes Method. 89. Here I am with the Defendant. I am satisfied that Mr Dall would have enjoyed the benefit of stock options, based on his Hong Kong service, over the years 1995, 1996 and 1997. However, as I am satisfied that Mr Dall would have returned to the United Kingdom at the end of 1996, I am as equally satisfied that his entitlement to stock options would have ended then. A grant of them in 1994 was the only grant he would ever have received. 90. In determining their value, I am taking Mr Neirynck's figures and rounding up the percentage calculator from 16.3264% to a flat 17% and all decimal places to the nearest whole number. The amount awarded under this claim is $517,185, equally apportioned over the three years 1995, 1996 and 1997 [17% of $754,897 per annum = $128,333 + $44062 = $172,395 x 3 years = $517,185]. These figures are shown in the table at the end of this judgment, a reduction of 25% has been made to reflect the 75% dependency, the amount awarded under this head of claim is $387,888. 91. The calculation for the pre-trial period of 73 months is $3,939,886 and the post trial period of 107 months is $2,513,882. On all figures, the effect of inflation has been ignored. The Claim for the loss of the Provident Fund 92. There is a dispute between the parties on the proper method of assessing this head of claim although there is no dispute that it is properly brought. However, the parties are close on the actual figure and the Defendant is prepared to agree this head of claim in the sum of $1,000,000 and that is the amount I award under this head. It is included in the table at the end of this judgment. 93. There can only be one award for loss of the provident fund entitlement, either under the Fatal Accidents Ordinance or under the Law Amendment (Reform & Consolidation) Ordinance, as there is only one loss. Because she has two avenues of claim does not mean that the Plaintiff can recover the loss twice over. As Mr Bharwaney reminded me, funeral expenses can be awarded under the Fatal Accidents Ordinance or under the Law Amendment (Reform & Consolidation) Ordinance, but a court does not make a double award for funeral expenses. In Singapore Bus Service v. Lim Soon Yong [1985] 1 WLR 1075 PC, the Privy Council held that the failure to claim the loss under one avenue does not mean it cannot be claimed under the other. But that is not authority for the proposition that a court can make two awards for the same loss. Bereavement and special damages 94. The parties agree these at $70,000 for bereavement and $86,250 for special damages, it is not necessary for me to particularise them in this judgment. I award these figures. Again, they are included in the table at the end of this judgment. The claim for loss of accumulation of wealth. 95. I turn now to the claim for loss of accumulation of wealth. 96. Sub-sections 20(1) and (2) of the Law Amendment (Reform & Consolidation) Ordinance provide as follows :
97. Section 20 was enacted to prevent a windfall accruing to a deceased's estate that could not be justified on the evidence. The provision in s.20(2)(b)(iii) requires the court to ensure that there is no over compensation to the estate. 98. What I have to determine is whether or not at the date of death by natural causes Mr Dall 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. 99. In Admors of Lau Chuen-fat (dec'd) v. Sheen State International Ltd [1994] 2 HKLR 173, Kaplan J. said an award of damages based on an accumulation of wealth can only be made if the court is satisfied that some wealth would have existed at the likely date of natural death of the deceased. Kaplan J. found that there is nothing in the section that provides for a routine award of a notional sum as had been awarded in the past. 100. The fact that savings existed at the date of accidental death is not the same as saying that such savings would have existed at the date of the victim's natural death. As Kaplan J. said in Lau Chuen-fat :
101. Mr Dall had no savings in the sense of deposits in banks or a share portfolio at the date of his death, but he did have an interest in three properties in Scotland and according to Mrs Dall, they were planning to buy another. Mr Pirie argued that Mr Dall had a consistent pattern of acquisition of properties in Scotland which evidenced a pattern of saving such as would have left Mr Dall possessed of considerable capital on his natural death. He further argued that the claim can include Mr Dall's loss of inheritances. His argument is that the words used in s.20(2)(b)(iii) "accumulation of wealth" are not limited to savings, but are wide enough to include likely inheritances and expectancies. 102. The properties in which Mr Dall had a claimed interest were : 103. No.2 Cowal Crescent, Glenrothes, Scotland, this was purchased for his mother to live in. The land was purchased from the Glenrothes Development Corp. on 22 November 1979 for ￡3,000.00. Mr Dall provided the purchase cost and paid the stage payments for the house to be built, jointly with his brother Ian Dall. The Development Corporation conveyed the property to his mother, Mrs Sheila Dall and himself on 1 December 1980. In 1983 Mr Dall conveyed his interest to his mother and his brother Ian, and in 1984 Ian Dall conveyed his interest to his mother. No consideration passed in either transaction. Ian Dall died in 1988 and the property passed into the sole name of Mrs Sheila Dall. Had Mr Dall survived her, he would have been entitled under her intestacy to a 100% interest in the property on her death. She died on 29 May 1993. The administrators of her estate sold the property on 15 April 1994 for ￡77,000. 104. Mr Pirie argues for a pre-trial loss to Mr Dall's estate of ￡92,837 in respect of this property : Calculated at ￡77,000.00 less the value of one year's discount of say 4.5% = ￡73,535 plus interest from date of sale (15 April 1994) @ 6.3% Say 50 months = ￡19,302.94 = ￡92,837. 105. No.16 Scotstarvit Place, Glenrothes, Scotland was purchased jointly by Mr & Mrs Dall as joint tenants on 30 June 1989 for ￡37,500. Mr Dall provided the deposit and paid the mortgage installments out of his income. The mortgage of ￡30,000.00 on the property was discharged by a life endowment insurance policy on his death. This property was held for investment purposes and was rented out. Mrs Dall sold this property on 19 January 1993 for ￡54,000. Today's estimated value is ￡75,000. 106. Mr Pirie argues for a pre-trial loss to Mr Dall's estate in respect of one half of this property's current value, i.e. ￡37,500 ( 2 = ￡18,750. 107. Mr Dall purchased No.13 Drum Close, Glenrothes, Scotland, for ￡23,750 on 4 February 1983 for Mrs Dall's parents to live in. Mr & Mrs Dall held it as joint tenants. There was a simple interest mortgage, which Mr Dall paid. Today's estimated value is ￡32,000.00. 108. Mr Pirie argues for a pre-trial loss of ￡16,000 to Mr Dall's estate, representing one half of the current value of this property. 109. Mr and Mrs Dall were in the process of negotiating the purchase of 2 Laurieston Park, Balfarg Glenrothes, Scotland at the date of his death. It was to be an investment property, to be held in their joint names and rented out. It was to be financed by a mortgage from the Bank of Scotland for the full purchase price, secured by an endowment mortgage. The asking price in 1992 was ￡104,000.00. The value of the property today is ￡110,000.00. 110. Mr Pirie argues for a pre-trial loss of ￡55,000 to Mr Dall's estate, representing one half of the current value of this property. 111. In respect of post-trial losses in respect of these properties he puts forward claims totalling ￡163,285, representing future property purchases and the loss of his expectancy of his mother's estate. 112. I cannot accept that any loss in respect of these properties has been caused to Mr Dall's estate. He had neither a legal nor an equitable interest in No.2 Laurieston Park. Its purchase was in the course of negotiation and no evidence has been put before me that the negotiations had reached such a state that under Scots Law Mrs Dall and he would have been contractually bound to purchase it. No.2 Cowal Crescent was in his mother's sole name, any claim he had to it would have been under her will or her intestacy. She could have left it to any one she wanted to by will. No.16 Scotstarvit Place and No.13 Drum Close he chose to hold with Mrs Dall as joint tenants. His interest passed to her under the trusts established on the purchase of these properties and never formed part of his estate. 113. Neither am I persuaded that s.20(2)(b)(iii) should be extended in the way Mr Pirie argued for. As Cheung J. said, in ruling on 25 June 1997 on the interlocutory application to adduce actuarial evidence in this case, these properties never were part of Mr Dall's estate. A question of loss of wealth does not arise, their only relevance is to show that Mr Dall had a pattern of saving. 114. Mr Bharwaney accepts that the acquisition of properties establishes a pattern of savings, but submits that there is no room for any further award for loss of wealth in a case where the court adopts the Harris approach and awards 75% of earnings and benefits for loss of dependency as such an award includes an element of savings. To make an additional award for loss of wealth would amount to over-compensation and ignore the fact that part of the earnings and benefits of the deceased would be used on his personal expenditure. 115. If I am not with him on that point, he says that it is wrong in principle to claim the entire value of the properties as lost when in fact only a small down-payment was made. There was a gain arising from death as the endowment policies paid off the entire outstanding mortgage on No.16 Scotstarvit Place and No.13 Drum Close. And the properties they held as joint tenants passed to Mrs Dall in accordance with Mr Dall's assumed wishes. A substantial discount is also required for accelerated receipt, this was emphasised by Kaplan J. in Lau Chuen-fat, accordingly only a token award under s.20(2)(b)(iii) is appropriate. 116. I am of the view that this claim exists independently from the Harris dependency claim. If it were not so s.20(2)(b)(iii) would appear to serve no purpose. However, I am of the view that Mr Pirie's claimed amounts are grossly overstated and, if accepted, would amount to over compensation. I repeat, the purpose of s.20(2)(b)(iii) is to prevent a windfall accruing to a deceased's estate which cannot be justified on the evidence. 117. Though Mr Dall clearly was a careful man, apart from the provident fund he had no pension provision. No evidence of one has been put before me. He no doubt expected that No.2 Cowal Crescent would pass to him on his mother's death as he had funded its purchase. His purchase of a number of properties indicates that he looked to their likely future value as a source of income and capital. The best that I can say is that, as a careful man, he would have planned to acquire a reasonable house for his wife and himself during his working life and have repaid any mortgage needed for its acquisition before his retirement, so that Mrs Dall and he could enjoy a financially secured retirement and have a valuable asset to bequeath to Lauren on their deaths. 118. The evidence shows that they were negotiating to buy No.2 Laurieston Park for ￡104,000. Property prices are far lower in the United Kingdom than they are in Hong Kong and from its price, it no doubt is a substantial property. Mr and Mrs Dall obviously thought that they could afford to purchase it. Although it would be held in both their names as joint tenants and pass to the survivor, the source of the funds for its purchase would have been Mr Dall's earnings. Its current value is said to be ￡110,000 and Mr Bharwaney takes no issue over that. 119. Doing the best I can from the evidence before me, I consider it more likely than not, that at the date of his natural death Mr Dall would have had an unencumbered interest in a property worth ￡110,000 at to-day's values and an interest in another property of a value equivalent to today's value of 16 Scotstarvit Place, that is ￡75,000. I do not believe that I can assume that he would have dissipated those savings before his natural death. I believe, however, that any capital realised from the sale of the other two properties, assuming his mother's passed to him, would have been spent in his lifetime. The fact that he had no established pattern of saving amounts in a bank or an investment plan makes it impossible for me to say that he would have turned to this method of saving later in life, say when Lauren had finished her education.. The total figure of ￡185,000 must be discounted to provide for early receipt and I discount it by 30% to ￡129,500. This figure is shown in the schedule. 120. Before apportionment between Mrs Dall's and Lauren's claims and the calculation of interest, the total sum awarded is $9,293,518. 121. I would now like to hear from counsel on the question of apportionment and interest.
Representation: Mr Nicholas Pirie & Mr Jeremy Cheung, inst'd by M/s Barlow Lyde & Gilbert, for the Plaintiff Mr Mohan Bharwaney & Mr M.C. Chiu, inst'd by M/s Tong & Tsui, for the Defendant SCHEDULE OF DAMAGES
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Cases cited in this judgment