Wong Shu Wan v. Wu Kwok Yau, Simon

CACV000097/1984

IN THE COURT OF APPEAL

BETWEEN

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Coram: Sir Alan Huggins, V.-P., Cons & Fuad, JJ.A.

Date of hearing: 9th Octoner 1984

Date of delivery: 23rd October 1984

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JUDGMENT

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Sir Alan Huggins, V.-P.:

1. The Appellant alleges that the Master erred in his assessment of the damages payable to the Respondent Plaintiff under the Law Amendment and Reform (Consolidation) Ordinance. It was common ground that in assessing both the pre-trial and the post-trial losses it was necessary to ascertain the "free balance". It is also accepted that the free balance is to be calculated in the manner described by Roberts, C.J. in The Personal Representatives of the Estate of WONG Sai-chuen, deceased v TAM Mei-chun Civ.App. 1981 No.133, where he said at p.10:

"It seems to me that there can be no doubt, in the face of Gammell (1981) 2 W.L.R. 248 (which had not reached the House of Lords at the time of the trial in Yeung Wing (1981) H.K.L.R. 130) that the correct approach for a trial judge, in assessing the free balance must be as follows –

No issue remains in the present case as to the income, but it is said that the Master was wrong in his approach to the "personal expenses".

2. There was evidence that before his death the Deceased was, out of his earnings of $2,200 a month, contributing $1,500 in cash towards the family expenses and in addition was paying $50 for electricity and $39 for the telephone. There was evidence that the basic living expenses of the Deceased were one-sixth of $2,704, i.e. $451. The only other direct evidence as to his "personal expenses" came out in cross-examination of his elder brother:

It is not surprising that the Master said in his Reasons for his assessment:

"There was quite simply insufficient evidence to do a precise calculation of the free balance".

However, he went on:

"In Peter Zee and Tung Bean Administrators of the Estate of Leonard Zee Deceased and Yan Yat Shing and another CA 59/83 the Court of Appeal approved a free balance of 55% for a single man. This approach was also adopted in Chan Ng Mui (Administratorx of the estate of Leung Wing Kin, Tony) v Chan Lau Chu and Wong Chau Hung HCA 9989/82. It seems to me an appropriate approach in this case. "

The argument turns upon what he meant by this.

3. The Appellant contends that, having decided that the evidence was not sufficient to enable him "to work out an exact free balance", the Master thereafter ignored completely such evidence of the personal expenses as there was and simply adopted a conventional figure of 45% of the income. The Respondent argues that there is no compelling indication that the Master did that: rather does it appear that he viewed such evidence as was before him in the light of the previous cases and concluded as a matter of fact that the Deceased had incurred, and would in future incur, personal expenses amounting to 45% of his income.

4. The basis of Mr. Suen's submission on behalf of the Appellant was the Master's somewhat ambiguous references to "the approach" adopted in the two cases he cited. In Peter Zee & Tung Bean v YAU Yat-shing Civ. App. 1983 No.59, Mr. Suen said, the Court of Appeal properly declined to interfere with an assessment of personal expenses at 45% of the income, the Master having arrived at it after a full consideration of such evidence as there was. However, he contended, the Master in Chap Ng Mui v Chan Lau Chu Civ. App. 1982 No. 9989 had expressly found that "no evidence was adduced as to what [the deceased] spent on himself" and, in purported reliance upon Peter Zee's Case, had gone on to substitute for an assessment based on admissible evidence what he thought was a conventional figure for a young single man. That, he submitted, could not be right and, in taking the same "approach", the Master in the present case must have gone wrong. It followed that his assessment could not stand, that this court should make an assessment based on the evidence and that a proper figure here would be 50% of the income. He does not suggest that, if the Master's approach was legitimate, the resulting assessment was so manifestly wrong that we ought to interfere.

5. Mr. Sujanani for the Respondent referred us to the reasons given by the judge in Peter Zee's Case and showed that in truth there was no direct evidence of the deceased's personal expenses: the judge had merely deducted the proved contribution to the household expenses from the income and had said:

"At the time of his death his expenditure on his personal expenses was probably confined to the balance of $1,500 (30 per cent of his income) per month after making payments amounting to a total of $3,500 to his parents and grandmother. His background was not one of riches but he came of a family who were well off enough to own their own flat and a motor car, the latter evidently acquired from the money made available from the family tailoring business. "

Having thus concluded that expenses of $1,500 a month had been proved, the judge went on:

"A young man of the deceased's background would in my view have been likely to expand his personal expenditure very soon after entering a substantially increased salary bracket. Whether or not he would have married and had a family I consider it probable that he would very soon have entered into an appreciably more independent and expensive manner of life than that he enjoyed before his death. There must have been a realistic prospect of his acquiring a motor car and acquiring or renting a flat of his own and spending money, albeit not extravagently, on entertainment, a holiday and insurance in addition to the ordinary necessaries of life.

Doing the best I can when attempting, necessarily by guesswork, to assess all these imponderables and bearing in mind the high cost of accommodation and living generally in Hong Kong, I consider that taking the 15 lost years as a whole the deceased would probably have spent about 45 per cent of his net income on his personal expenses as contemplated by that expression in Wong Sai Chuen's case. I make no attempt to ascertain a different percentage for any particular period of the lost years because the very substantial increase in income would have occurred by July 1981 and I consider it likely that the deceased would have adjusted his standard of personal expenditure to his increased income. "

It was in relation to that reasoning that the Court of Appeal said:

"We see nothing so unreasonable about this figure that we ought to interfere with it. It must be remembered that a judge is being asked to try to assess, with scant evidence of the likely mode of life of the subject, his pattern of expenditure over a long period. It is mainly guesswork: and we would not impose our guess for his unless we were persuaded that his figure is clearly wrong. "

6. As it seems to me it is for a plaintiff to adduce some evidence of a free balance prior to the death or, if he fails to do that, to establish grounds for believing that there would have been a free balance in the future. There is no conventional figure which can properly be adopted as the assumed free balance in every case (see per Lord Salmon in Pickett v British Rail Engineering Ltd. 1980 A.C. 136, 153F) and, therefore, no conventional figure for the expenses. However, once there is evidence that there would be a free balance, if there is nothing to indicate that the probable expenses of the particular deceased might be higher or lower than average, I think Peter Zee's Case is authority for saying that an assessment of the expenses in the region of 45% of income for a single young man in comparable circumstances is unlikely to be upset.

7. Here there was some - albeit incomplete and unsatisfactory - evidence of the Deceased's expenses which indicated that there would be a free balance, and I am not persuaded that the Master in the end completely ignored that evidence. The Deceased was not in similar circumstances to those of the deceased in Peter Zee's Case, but it is impossible to say that he would have spent a larger or a smaller proportion of his net income upon himself. Accordingly I do not think the Master was wrong to assume personal expenses amounting to 45% of the Deceased's income.

8. I would dismiss the appeal.

Cons, J.A.:

9. A full and useful discussion of the problems connected with the assessment of damages for "lost years" is to be found in the judgment of O'Connor L.J. in Harris v. Empress Motors Ltd. (1984) 1 W.L.R. 212. There he dealt with the three solutions that had been put forward in England and Wales: -

10. In the end O'Connor L.J. opted for the "available surplus" solution for reasons which he gives from page 228G onwards. The other two members of the court agreed with him.

11. That approach had already been accepted here under the guise of the "free balance"; see Personal Representatives of Wong Sai Chuen v. Tam Mei Chun Civil Appeal No.133 of 1981. It involves a simple mathematical calculation, although it may not always be easy to arrive at accurate figures to work on and in many cases a certain degree of speculation or educated guesswork will be necessary. For this reason O'Connor L.J. is willing to acknowledge an exception in the case of young persons when something of a more conventional figure would be acceptable. He said:-

"The reason for supporting this high rate of deduction in cases such as White v. London Transport Executive [1982] Q.B. 489, Gammell and Furness, is that the figure 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; but when one is faced with the position in Pickett v. British Rail Engineering Ltd. [1980] A.C. 136, or in the present two cases, the position is entirely different. That which was speculative in Gammell to a very high degree is not speculative at all; that which is not to be deducted can be seen with reasonable clarity and, as one would expect, a very much smaller part of the net earnings will fall to be deducted. "

12. In White the deceased was a single man of twenty-five living with his mother. In Furness he was twenty-two living at home with his parents. In the present instance the deceased was twenty-six living with his parents in a family group of six adults. However, as I read the words of that passage it seems to me that the underlying feature is not the question of age as such but that at the time of the hearing it is impossible to say with sufficient certainty what life style the deceased would have been likely to adopt for the next fifteen years or so. The general situation may not be quite the same here in Hong Kong where the individual does not have the cushion of the welfare state behind him and usually starts to realise the importance of personal financial responsibility at an early age. It may therefore be possible that by his middle twenties a single man, although subsequently changing his parental family for one of his own, will have established a sufficiently stable pattern of life for the court to assess quite accurately how he would have adapted himself over that period.

13. This would seem to have been the view of those acting for the Plaintiff before the Master for he has recorded that -

"Mr. Wills sought to persuade me that in this particular case there was sufficient evidence from the plaintiff and the deceased's brother to work out an exact free balance. "

But the Master was not persuaded. He said -

"There was quite simply insufficient evidence to do a precise calculation of the free balance. "

I think he was using there the word "insufficient" in its meanings of deficient in quality rather than deficient in quantity. The evidence was there.

14. The Master continued-

"In Peter Zee and Tung Bean Administrators of the of the Estate of Leonard Zee Deceased and Yan Yat Shing and another CA 59/83 the Court of Appeal approved a free balance of 55% for a single man. This approach was also adopted in Chan Ng Mui (Administratrix of the estate of Leung Wing Kin, Tony) v. Chan Lau Chu and Wong Chau Hung HCA 9989/82. It seems to me an appropriate approach in this case. "

15. If the first sentence had stood alone there could have been no cause for concern. The Master would be merely confirming the probable correctness of the figure which he had already fixed in his own mind by reference to a case where in similar circumstances another court had come to a similar conclusion. It is the use of the word "approach" in the second sentence, and again in the third, that raises doubts. He might have been expected to use the word "figure" or some similar word had he indeed been merely referring to that case for confirmation. The word "approach" gives the impression that he was assuming that Peter Zee laid down a conventional percentage. The impression is strengthened by his reference to Chan Ng Mui, where that assumption was clearly made, although the Master in that case did not explicitly refer to Peter Zee, merely mentioning "recent decisions". We do not know what other cases he may have had in mind.

16. The facts in Peter Zee have little in common with those of the present instance. There the young man in question was comfortably off and "whether or not he would have married and had a family .... would very soon have entered into an appreciably more independent and expensive manner of life than that he enjoyed before his death". The evidence before the Master below disclosed no such position or prospects for our young man. Yet, curiously enough, the application of arithmetic to the evidence that there was produced almost the same percentage to be discounted.

17. The calculation of a free balance requires three basic figures - the net income of the deceased, what might be called his "home expenses" and his outside expenses, by which last I mean the cost of travelling, clothing, entertainment and so on. Had the Plaster attempted this calculation on the evidence that was before him he would have come to a free balance of 52.2%. The three figures respectively would have been $2,200, $451 and $600.

18. The figure of $2,200 was the average income for the few months prior to death. That of $451 is a one-sixth share of the family expenses which, according to the evidence of the deceased's brother, came to a monthly average of $2,704. That evidence is likely to be reasonably reliable because his brother was, as he said in evidence, at that time in charge of the family finances and can be presumed to have known what they were. Not so with regard to what his brother was spending outside. Indeed, when first asked he declined to give any figure in this respect, but he was then persuaded to accept, in response to a directly leading question, that $20 per day would be more or less the amount. That kind of evidence does not inspire confidence. And it must be observed that if the figure of $20 per day were reduced by a mere 10%, i.e. to $18, the calculation of the free balance would come instead to 55%. When, from an unstable base, so small a divergence leads directly to the figure reached, by whatever route, below then the situation is such that I think this Court ought not to interfere. I would therefore also dismiss the appeal.

Fuad, J.A. :

19. I agree and have nothing to add.

23rd October 1984

Representation: