Chu Shiu Chen v. Chan Lau Chu and Another

HCA003028/1983

1983 No. 3028

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

BETWEEN

Coram: Master Hansen in Chambers

Date of Hearing: 19 March 1984

Date of Delivery: 27 April 1984

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ASSESSMENT OF DAMAGES

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1. Although the procedure was explained to the first defendant he did not cross-examine any witnesses nor did he give evidence himself or call evidence on his behalf.

2. On the 7th March 1981 FONG HA was killed when the car in which he was a passenger, crashed in Kam Tin Road near the Au Tau Roundabout. The vehicle was owned by the 2nd defendant and driven by the let defendant. At the time of his death Fong Ha was single, aged 29 years and was a partner in a motor repair firm. The plaintiff is the administratrix of Fong Ha, who was her son:

3. Three witnesses were called for the plaintiff. Dr Fung formally produced the post mortem report.

4. Madam Chu, the plaintiff, gave evidence and also produced a number of documents. She said that at the time of his death Fong Ha did not reside at home. However, he would spend the occasional night there and would eat the odd meal at home. At the time of his death she said Fong Ha gave her $2,000 p.m. towards the family expenses. "Other contributions came from her husband Fong Yu, $1,200 p.m.; Fong Chi Ming the deceased's brother, $200-$300 p.m.; and Fong Yuen the deceased's sister, $500 p.m. Madam Chu said that in 1981 the family expenses were $3,000 odd p.m. and she was able to save $500 odd p.m. She produced her son's birth and death certificates. She also produced her deceased son's bank accounts. She gave evidence that her son was in partnership in a motor repair firm called Chung Shun Motor Service. This business operated from the Ground floor, Wing Fat House, 4 On Lok Road, Yuen Long. She also produced a tenancy agreement in relation to these premises. Madam Chu also produced receipts for the funeral expenses amountihg to $4,700.

5. The only other witness for the plaintiff was Lee Yan, the deceased's partner in Chung Shun Motor Service. He said that he and the deceased had been in business for about 2 years prior to March 1981. Normally, the partnership employed 4 or 5 people, but if business was brisk another 1 or 2 would be employed. He said that the deceased took 60% of the profits and the witness 40%. At the time of his death the deceased's average drawings were $3,300 to $3,500 p.m. The deceased was responsible to obtain all the business and he would also help with repair work. The witness said the deceased was good at getting new business. He also stated that the deceased had arranged to do all maintenance work for a construction company. Apparently, the boss of that firm was known to the deceased. The witness estimated this contract would require the employment of another 10 workers. He also stated the expected increase in net profits would be between $9,000 to $10,000 p.m. He further said that as the boss of the construction company trusted only the deceased the matter did not proceed after the 7th March 1981.

6. This witness also gave evidence of the deceased's life style. Apparently, the late Fong Ha lived in a very frugal manner. He slept in a simple room that he shared with a friend. He ate at cheap restaurants or cooked food stalls.

Lost Years Claim

7. In this case it is quite clear that the FAO award and the LARCO award merge.

8. Mr Pirie submitted that any assessment of damages requires a consideration of the deceased's future prospects. In this case this meant his future business prospects. In support of this he cited Harris v. Empress Motors Ltd [1984] 1 WLR 212 and Peter Zee and Tung Bean Administrators of the estate of Leonard Zee deceased v Yan Yut Shing and another CA 59/83. Mr Pirie submitted that the evidence showed there would clearly be a substantial increase in the deceased's income and this should be taken into account. I accept that submission. I am satisfied that if the deceased had lived he would have had a substantially improved financial situation. I doubt that this improvement would have been quite as spectacular as his business partner suggested. Indeed Mr Pirie quite properly conceded that it is a question that ought to be approached modestly. He submitted that the proper figure to adopt for the deceased's drawings from the business, if he had survived until trial, would be $5,000 p.m. In all the circumstances of this case I accept that figure to be correct.

9. When turning to consider the question of the "free balance" there was the typical paucity of evidence. There was clear evidence that the deceased gave $2,000 p.m. to his family. It is equally clear that only a very small part of this was expended on the deceased himself. The evidence was that he only ate and slept at home sporadically. There was also evidence, which I accept, that the deceased lived quite modestly. However, apart from this, the evidence required to accurately assess the free balance was absent.

10. Mr Pirie reviewed the authorities and submitted that in similar circumstances the H.K. Courts accept the free balance of a single man to be 40% of his income. There is of course authority for the higher figure of 55% (See The Peter Zee case, supra) and also Chan Ng Miu (Administratrix of the estate of Leung Wing Kin Tony v Chan Lau Chan and another 1982/9989). Mr Pirie further submitted I should follow the formula adopted by Webster J. in White v London Transport Executive [1982] 1 All E.R. 410. In that case Webster J. used a certain percentage for 5 years and thereafter a different percentage for the balance of the multiplier. This formula was approved by O'Connor L.J. in Harris v Empress Motors Ltd (supra) at page.231. Mr Pirie further submitted that the deceased would probably marry within 3-4 years and that after that period the appropriate free balance to be applied would be that of a married man. He then cited various HK authorities and said an analysis of this shows a free balance for a married man of between 66 2/3% and 90%. Taking a mid-line he said the appropriate percentage was 75. I accept that the deceased should not be treated as an eternally single man (See Harris v Empress Motors supra Pg. 231; Peter Zee Case supra Pg. 6) However, I can find no authority for Mr Pirie's proposition that after a period the multiplicand should be increased. Indeed in White v London Transport Executive (supra) Webster J. reduced the multiplicand after 5 years. The reason for that is given at Pg. 419 -

"Third, is there any factor which makes his case other than an average one? In my judgment, the fact that at the date of his death aged 25 he was living with his mother is such a factor, and I find that on that account the cost of his housing and heating would have been less, and his available surplus therefore more, than it normally would be. So long as he would have lived with his mother, therefore, I infer that his available surplus would have been one-third of his net earnings rather than one quarter of them. I find that sooner or later he would have been likely to have stopped living with his mother, and that he would have gone to live on his own or with a wife, and that of the many possibilities as to when that would have happened, the most likely is that it would have happened about 5 years after his death, that is to say, at the age of about 30. In these circumstances my award for lost earnings is one-third of his net earnings for the first 5 years of the 15 years purchase and one quarter of those earnings for the remaining ten years."

11. In approving Webster J's decision O'Connor L.J. in Harris v Empress Motors Ltd supra at p g. 231 said

"The reason for supporting this high rate of deduction in cases such as White v London Transport Executive, Gammell and Furness, is that the future is speculative and allowance has to be made for the fact that a man may never marry, may never save a farthing, may never support anybody."

The two cases then, seem to me, to support the reduction of the surplus balance after a period of time rather than an increase as Mr Pirie submitted.

12. However in The Personal Representatives of the estate of Wong Sai-chuen deceased v Tam Mei Chun and others CA 133/81. Sir Denys Roberts C.J. said at Page 11

13. I can only agree with such remarks. Indeed, they are common sense.

14. Does this passage, then, support Mr Pirie's contention? I think not.

15. In the Peter Zee case at page 6 Roberts C.J. said

"On arriving at his figure of 45% the judge seems to have made some allowance for the possibility that the deceased would have married some time in the future without expressing any definite opinion as to the chances. Mr Ching argues that he was wrong to do so relying upon a comment in Wong Sai Chuen that "a single man should be treated as if he would have continued to do so. " That comment was obiter, since in Wong Sai Chuen the deceased was already married, so that the point did not directly arise. And there is recent English authority going the other way: Harris v Empress Motors. We do not think the judge can be criticised for his line of approach. "

This seems to me to be clear authority for the proposition that the 55% free balance takes into account the possibility of future marriage.

16. LARCO and FAO calculations are notorious for the necessary degree of speculation involved. However, to uphold Mr Pirie's submission that the "single man's free balance" should be increased to a "married man's free balance" would be speculative to a totally unacceptable extent. As I understood the matter, Mr Pirie based this submission on Webster J's formula in White v London Transport Executive supra. Yet in that case Webster J. reduced the free balance after 5 years. Such a formula would work against Mr Pirie's client and I am not prepared to adopt it.

17. In this case I am satisfied the deceased was particularly frugal and industrious. There is also the evidence that his contributioni to the family was something more the half of his in come. For this reason I feel it is appropriate to take a free balance of 60%, which is somewhat more than is usually allowed in Hong Kong for a single man. The multiplicand is, therefore $3,000 p.m. or $36,000 per year.

18. Turning now to consider the appropriate multiplier. At the time of his death the deceased was age 20. I consider the appropriate multiplier to be 16, but that of course is to run from the date of death (See : Graham v Dodds (H.L.)  The Times July 4 1983). The deceased died 3 years prior to the hearing of this assessment the post trial loss is therefore:-

19. 3,000 × 12 × 13 = $468,000.

Pro Trial Loss

20. As I said earlier I considered the appropriate income level to take for the deceased at the date of this hearing was $5,000. At the time of his death he was earning $3,500. I consider the increase should be spread over the 3 years and the 50% free balance should again be applied :-

Loss of Expectation of Life

21. There is of course the award for loss of expectation of life. Mr Pirie urged me to take account of the fall in the value of money and update that award. Such a view was urged on Master Betts in Chan Ng Mui (Administratrix of the estate of Leung Wing Kin Tony) v Chan Lau Chu and Wong Chan Hung HCA 9989/82). He stated at pg. 5

"I decline to increase it. It is not an assessed figure arrived at in the same way, as for example, loss of future earnings or earning capacity, but a conventional figure more in the nature of solatium. "

In support of his submission Mr Pirie referred me to the decision in Yeung Wing v VSL Engineers (HK) Ltd and another HCA 3072/79 where the Chief Justice increased the award from $10,000 to the present level at $15,000. However, at page 6 Sir Denys Roberts said:-

22. It may well be that the time has come to consider increasing the conventional award. However, that seems to me to be a matter for the court of Appeal. Under this head I adopt the remarks of Master Betts cited above and award $15,000.

Special Damages

23. The only special damages claimed were for funeral expenses. Receipts were produced and I award $4,700 as claimed.

Summary

24. There will be interest on the general damages at the rate of 2% p.a. from the date of the service of the writ until judgment and on the special damages at the rate of 7% p.a. from the date of the accident until judgment. There will be no interest on the assessment for the lost years.

25. There will be an Order for payment of the Plaintiff's costs by the defendant and for the plaintiff's own costs to be taxed under the Legal Aid Regulations. There will be a certificate for counsel.

Representation:

Mr Pirie instructed by Rowdget W. Young & Co for Plaintiff

1st Defendant : in person

2nd Defendant : absent