Gordon Taylor Graham v. P.J. Mansell
Read the full judgment text of HCA 1252/1972 on BabelCite. This High Court CFI judgment.
1. The Plaintiff was injured on 2nd May 1971 when his car was in collision with the Defendant's car. He now seeks damages from the Defendant.
IN THE SUPREME COURT OF HONG KONG HIGH COURT -----------------
----------------- Coram: Mr. Registrar Barnett in chambers Date of Judgment: 1976 Mr. R. Mills-Owens (Deacons) for Plaintiff Mr. C. Ching, Q.C. and Mr. Y.C. Mok (F. Zimmern & Co.) for Defendant --------------------------------------------------- ASSESSMENT OF DAMAGES --------------------------------------------------- 1. The Plaintiff was injured on 2nd May 1971 when his car was in collision with the Defendant's car. He now seeks damages from the Defendant. 2. The Plaintiff's injuries and consequent suffering and disability are set out with considerable particularity in the amended statement of claim as follows:-
3. Upon the evidence I have heard and from the agreed documents and medical reports, I am satisfied that all these particulars have been proved. Indeed, there was no real challenge. However, one or two points need elaboration or emphasis. 4. The Plaintiff was rendered unconscious by the collision and only regained consciousness about 10 days later in Matilda Hospital. He had by then already been transferred from Queen Mary Hospital where he spent the first 7 days. He remembers nothing of that. He spent about a month in traction, in pain and feeling very uncomfortable. He was receiving injections. Two bone screws had been inserted to fix the rim of the hip socket. 5. At the end of 1971 and the beginning of 1972 the Plaintiff saw improvement in his leg and found strength returning. There were optimistic reports from his doctors. However, in February 1972 he began experiencing pain in his hip and was found to be developing osteoarthritis. Cortisone injections failed to arrest or reverse this process. The Plaintiff was unable to carry out his strenuous duties as electrical superintendent at Taikoo Dock and had to retire. Upon medical advice, in August 1972 he moved to Perth, Western Australia, where the normally dry climate is suited to his injury. 6. The Plaintiff now suffers severe pain and discomfort. He cannot stay in any one position for any length of time, not even when sleeping. He takes painkillers once or twice a week because "they assist me in having a reasonable night's rest and help to make up for the lost sleep which I experience on other nights" (Ex. P5 - para. 2). This clearly indicates a general level of severe pain from which the plaintiff seeks relief once or twice a week and not, as Mr. Ching suggests, a degree of pain that only rises to a level requiring analgesics once or twice a week. 7. Furthermore, the Plaintiff said that he has been taking sleeping tablets and pain killers on and off since 1972. In Document 7 of Ex. P1 Dr. Bell reported that the pain was becoming more severe and less relieved by analgesic. By the time the Plaintiff undergoes the operation to replace his hip at about the end of this year, I accept that he will have been in increasing pain for at least 3 years. 8. Happily, after the operation, the Plaintiff will have substantial if not complete relief from pain and will be restored to normal or near normal function for light or sedentary work. 9. I now turn to consideration of the damages claimed. Mr. Mills-Owens produced a very helpful schedule of calculations of the various amounts claimed. Including the suggested awards for pain and suffering and suffering and loss of future earnings, the Plaintiff's claim totalled approximately $1.1 million. Mr. Ching suggested that this might be a little excessive. 10. In considering the damages, I therefore have firmly in my mind, as Mr. Ching asked, that this is an award of compensation, not punitive damages. The object is to put the Plaintiff in the same position as he would have been if he had not suffered the injuries. $1 million at interest of approximately 8% would produce $80,000 p.a. upon which the Plaintiff could live in reasonable comfort without touching the capital. Prima facie, Mr. Ching said, such a figure must be wrong. Special damages 11. These are agreed with the exception of one item: Loss of extra leave salary and travelling allowance (£642.50 @ $14.55) $9,348.38. Quantum but not liability has been agreed. 12. By the terms of his employment, the Plaintiff was entitled to 6 weeks' annual leave for which his employer paid economy return air fares from Hong Kong to Glasgow for the Plaintiff and his family. The parties have agreed that the normal cost of such a fare is $5,200 per person. The Plaintiff was unable to take his leave in 1971. 13. I do not understand how this item has been quantified; nor do I clearly understand to what the item relates. There has been no evidence as to leave salary or travelling allowance, only that the plaintiff's employer paid the air fares for the annual leave. The Plaintiff has not shown he has suffered any exact pecuniary loss. He has merely lost the benefit of his annual leave. I shall go into the matter more fully later but I consider that the Defendant is liable to pay something for such a loss. 14. Since quantum has been agreed, I will allow the sum of $9,348.38. 15. Total special damages are therefore $24,862.28 as claimed. Loss of Salary, Providence Fund and Bonus 16. This being easily quantifiable it is strictly divided, as Mr. Mills-Owens said, into special damages for loss up to the date of assessment and general damages thereafter. 17. The Plaintiff was electrical superintendent at Taikoo Dock (now Hong Kong United Dockyards). He received a monthly salary. In addition, his employer made a payment equivalent to 20% of his annual salary into a provident fund on his behalf. He was also entitled to an annual bonus which varied between the equivalent of one half and 3 months' salary. 18. The Plaintiff was paid in full up to 31st July 1972. He would have had to retire when he reached the age of 55 on 6th August 1977. 19. To round things off, Mr. Mills-Owens' first calculation was to the end of January 1976. Mr. Ching had no quarrel with the figures which amount to $376,896.28. 20. For the period 1st February 1976 to 6th August 1977, Mr. Mills-Owens' calculations came to $191,142.10. Mr. Ching had no quarrel with this except for the projected bonuses which Mr. Mills-Owens put at 2 ½ months for 75/76 and 2 months for 76/77. There is not very much in it and the witness, Mr. Smith, did mention these figures in evidence. I will therefore leave this figure as it is. Loss of other Benefits (a) Accommodation: the Plaintiff was provided with free furnished accommodation by Taikoo Dock. Maintenance was also free. He claims the value thereof, being the total value of the monthly rental until 6th August 1977, which is approximately $283,000. Mr. Ching says it is wrong to quantify the loss this way, since the Blaintiff has lost not money but the benefit of the standard of accommodation provided. The Plaintiff now lives in a bungalow in 1/4 acre of ground which, Mr. Ching suggests, is not only more attractive but also, on the evidence, an appreciating asset. 21. In connection with this claim, I was referred to Barnett and Anr. v. Chan Ting-chung 1975 HKLR p.482. Cons, J. found that the total annual value of the plaintiff's employment was about $150,000, which included free furnished accommodation. He adopted a multiplier of 6 but then, bearing all matters in mind, awarded $300,000 for loss of future earnings. While this award was under the head "Loss of future earnings", I think it must contain at least some element attributable to accommodation. The Plaintiff had already purchased a house in Australia since the date of the accident giving rise to the action. 22. In the circumstances, I think there must be some award under this head, but nothing approaching the sum suggested on behalf of the Plaintiff. I confess I have no idea of how to quantify this loss. However, I propose to allow a sum of $40,000. In my opinion this represents the cost of furnishing and equipping a house with a provision for free maintenance. The Plaintiff has had to furnish his house and keep it in repair 5 years earlier than would have been necessary but for the accident. In 5 years, many things such as chair covers or refrigerators wear out or rust. Therefore the Plaintiff must be in a position to refurbish his house in 1977 so that everything is clean and new just as it would have been upon his normal retirement. (b) Utilities: the Plaintiff originally received a sum of approximately $200 per month to cover utilities. He claims at the rate of $250 per month until 6th August 1977. 23. However, shortly before the Plaintiff retired, Taikoo decided to incorporate a lump sump in their employees' salaries to cover utilities. It is quite clear on the evidence that the salary on which the calculations for loss of earnings have been based includes such a sum. I therefore allow nothing. (c) Leave passages: as already mentioned, the Plaintiff was entitled to annual leave with air fares paid for himself and his wife, his son up to 18 and daughter up to 21. He now claims for the value of the air fares from 1973 to 1977. 24. I have no hesitation in allowing the whole sum. Annual leave is a valuable term of employment. It benefits one physically and mentally. Above all, it enables one to keep in touch with one's family, relatives and friends. The Plaintiff's home and family were in Glasgow. I see no reason why he and his family should not be in a position to visit Glasgow if they wish as many times as they could have done had the Plaintiff been able to continue at Taikoo until 1977. 25. I allow $72,800 as claimed. (d) Education: the Plaintiff's employer paid for children's education up to the age of 18. The Plaintiff's son reached 18 on 17th Narch 1972 and his daughter on 16th November 1973. 26. The final paragraph of Doct. 13 of Ex. P1 reads:
27. That seems to me to be plain. The Plaintiff's employer had paid school fees for son and daughter in 71/72 and for daughter in 72/73. Both children having reached 18, there was no obligation on the employer to pay further fees. 28. Therefore, the Plaintiff has shown no loss. I allow nothing. (e) Bonus: the Plaintiff received a bonus of £150 p.a. under a scheme for middle grade managers who were expected to work extra hours or at week-ends. I allow the sum claimed of $7,500 in full. (f) Medical expenses: the Plaintiff received free medical treatment. He joined a hospital benefit fund in Australia to which he contributed:
There was evidence of soaring inflation in Australia. I will therefore allow A$180 for 1976 and A$150 for 1977 up to 6th August. 29. The total is A$762 which I shall convert at the rate of 6.5:1 = HK$4,953. 30. I allow this sum. (g) Operation: the replacement of the Plaintiff's hip will cost A$3,000. There was some doubt in the evidence as to whether the Plaintiff will have to pay or not. However, the weight of evidence seems to be that he will have to pay so I allow this sum which I convert at 6.5:1 = $19,500. (h) Pain and Suffering, and Loss of Amenities: Mr. Mills-Owens quoted extensively from Kemp & Kemp, 4th Edn. and said that in comparable cases awards ranged from £5,000 - £8,500. He suggested that a proper award might be $75,000. 31. Mr. Ching, after pointing out that English awards tend to be higher, referred me to Wan Chi-wai v. Cheung Kwok-wah O.J. 361/71. There the plaintiff, whose injuries and consequent pain and suffering appear to have been equally as bad, was awarded $55,000 general damages which included at least $25,000 for the cost of an operation. The award was in 1973. 32. Mr. Mills-Owens suggested that the courts in Hong Kong are in conflict over the question of English awards and whether or not they should be discounted to suit Hong Kong conditions. In any event, he says, the Plaintiff is a Scotsman. 33. I do not think there is this conflict. I think it is well settled that English awards have to be scaled down. The Plaintiff chose to live in Hong Kong; he must accept Hong Kong conditions. Had he been injured in the U.S.A. where awards of damages are, I believe, considerably high, I wonder if the Plaintiff would have asked for a lesser sum. 34. I do not need to repeat the Plaintiff's injuries and suffering. I have only to add that the Plaintiff will be in hospital 3 or 4 weeks for the coming operation, which must necessarily involve further pain and unpleasantness, and will then be recovering for about 3 months. Happily, he will then be restored to some degree of normality. Although the evidence does not directly say so, I imagine he will be able to resume many of his former activities and take up the reins of a social life again. 35. I think perhaps the award in Wan's case was on the low side. Bearing in mind that I am satisfied that the Plaintiff has been in considerable pain since 1973, I award $55,000. (i) Loss of Future Earnings: the Plaintiff, without question, has always been an active man and a hard worker. He would certainly have sought employment upon retirement in the normal course. 36. I discount any suggestion that the Plaintiff might have been able to continue with Taikoo after he reached 55. That is far too speculative. 37. Mr. Mills-Owens said that we cannot ignore the fact that the Plaintiff is highly skilled and eager to work. He would have con-siderable experience to bring to bear on any job in the future. He said that we have to do the best we can and submitted that $5,000 per month is an appropriate sum, with a multiplier of 5. 38. Mr. Ching said that this is far too much. He said that the Plaintiff, in fact, had shown no loss. There is no evidence of job opportunities in Scotland where the Plaintiff would have retired in 1977. In any event, after the operation he will have no need to stay in Australia and will be able to return to family and friends in Glasgow. There in familiar surroundings he will, thanks to the operation, be able to seek and obtain sedentary work if such is available or even set up in a small business on his own. 39. I think the question of future employment is far too uncertain and speculative. I make no award under this head. DEDUCTIONS (a) Tax: Mr. Ching said there must be a deduction for tax. In the absence of argument I will deduct tax at the rate of 15% from gross salary and bonus, including the annual bonus of £150. The gross figure that would have been earned up to the date of retirement is $493,272. 40. Tax deductible is therefore $73,990. (b) Pension: upon normal retirement, the Plaintiff would have been entitled to a pension of £300 p.a. Instead, he received a commuted pension of £2,607. Mr. Mills-Owens conceded that a deduction should be made for accelerated payment. 41. The evidence of Mr. Holgate (PW 1) was that upon normal retirement the pension would have been worth £3,000 to £3,500. If anything, it appears that the Plaintiff has lost. 42. I do not propose to make any deduction for the pension. (c) Australian earnings: to date the Plaintiff has earned A$16,291 net. By the end of this year, he will have earned a further A$6,183 net, allowing for tax at 25%. He will then lose his job when he goes into hospital for the operation and is unlikely to find further employment before 6th August, 1977. 43. Therefore A$22,474 converted at 6.5:1 = $150,575 must be deducted. (d) Ex gratia payment: the Plaintiff received £2,150. It is agreed that this must be deducted at a conversion rate of 12:1 = $25,800. (e) Provident fund: in cross examination, the Plaintiff stated that he received payment of £16,000 in respect of payments into the fund. Mr. Ching said that this amount, and also the award for loss of future earnings, should be subject to deduction for accelerated payment. As far as the provident fund is concerned, he suggested that it should be discounted on the basis of 8% p.a. for a period of five years. However, Mr. Smith (PW 2) stated that provident fund balances earn 6% p.a. fixed interest to cover inflation. I therefore think that the proper discount, bearing in mind interest rates that are available particularly when substantial sums are involved, is at the rate of 4% p.a. This would give a not figure of £13,045 i.e. a deduction of £2,955 which converted at 12:1 = $35,460. 44. As to future earnings, salary and bonus from 1st February 1976 to 6th August 1977 would amount to $165,236, less tax at 15% = $140,450. From this must be deducted net Australian earnings of $30,142 for the same period. The net award for loss of future earnings is therefore $110,308. I shall discount this by 8% which gives a deduction of $8,824. 45. Let us now look at the overall picture:
47. The only remaining question is whether I should discount the final lump sum. Assessing damages is, of course, far from an exact science. In this case, however, the most substantial awards all admitted of fairly precise calculation. By the same token, I have been able to make what I think to be reasonably fair and accurate deductions and allowances. In all the circumstances, I do not propose to tamper further with the figure although I do not imagine that the Plaintiff will object if I round the final figure down to $498,000.00. 48. The Defendant has already paid $175,000.00 on account. Therefore the sum of $323,000.00 is to be paid to the Plaintiff's solicitors within 14 days. 49. Special damages of $24,862.28 will carry interest at the rate of 8% from the date of the accident. 50. Bearing in mind Mr. Ching's stricture as to the distinction between compensation and punitive damages, the large lump sum which is to be paid, and the fact that the Plaintiff has already received a substantial payment on account, I make no other award of interest. 51. The Plaintiff will have his costs. 52. Certificate for counsel. 53. Liberty to apply. 54. Dated the day of 1976.
Representation: Mr. R. Mills-Owens (Deacons) for Plaintiff Mr. C. Ching, Q.C. and Mr. Y.C. Mok (F. Zimmern & Co.) for Defendant |