CHEA KAM WING VICTOR v. KWAN KIN TRAVEL SERVICES LTD

HCPI 970/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO. 970 OF 2005

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J U D G M E N T

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1. The plaintiff, now aged 41, claims damages for personal injuries sustained by him in a traffic accident in Taiwan on 18 October 2004.

2. At the time of the accident the plaintiff was a member of a tour group travelling on a package tour organised by the defendant company.  He and 36 other tourists were passengers in a double decker tourist coach which was travelling down a sloping stretch of road shortly after leaving the mountain town of Jiufen in Taiwan.  The coach went out of control, crashed through fencing alongside the road, fell down the hillside and overturned.  Five of the plaintiff’s fellow passengers were killed.  The plaintiff was fortunate to suffer relatively minor injuries bearing in mind the circumstances of the accident.

3. He brings this action for damages for personal injuries against the defendant on the basis of the defendant’s alleged breach of contract and/or negligence.

The negligence of the driver

4. The driver of the coach at the time of the accident was a Mr Tsui Chung Hing.

5. The evidence before the court pertaining to his responsibility for the accident came from the oral evidence of the plaintiff himself and from two documents, namely, what is described as the indictment of the Taiwan Keelung District Prosecutor’s Office and the judgment of the Taiwan Keelung District Court.  Even without the evidence from the two Taiwanese documents, which is inevitably hearsay, the evidence of the plaintiff himself, who I find to be an honest and reliable witness, is sufficient to establish the driver’s negligence.

6. On the plaintiff’s account, after members of the tour group had taken their lunch at Jiufen they were waiting for the coach to return from where it had been parked to collect them.  As it approached them the rear of the coach struck a signboard in the street before moving on to the pickup point.  He and the other passengers boarded the coach while its engine was still running.  On at least two occasions after first moving off, the engine of the coach had stopped after a short distance and had then been restarted.  The weather was foggy and the road wet and slippery.  Despite this and the fact that the road leading down from Jiufen was very narrow, the driver drove the coach at what the plaintiff described as an excessively high speed.  He noticed the coach swerving from side to side and failing to slow down before it crashed through a barrier on a corner and fell down the hillside.

7. The plaintiff was a professional driver, both of goods vehicles and public light buses.  I am satisfied that he was well able to assess the appropriate speed for such conditions.  He was sitting at a seat in the middle of the coach next to a window on the right side.  I am satisfied that bearing in mind that vehicles drive on the right side of the road in Taiwan he would have been well able to make this assessment.  I am satisfied that this combination of circumstances indicates negligence on the part of the driver.

8. The indictment and the judgment of the Taiwan court, both recite a factual history of the accident and a list of the witnesses from whose accounts the history was compiled.  The judgment of the Taiwan court states that Tsui Chung Hing, the driver, had admitted “the facts”.  Under the heading “Facts” it states, inter alia, that Tsui had two previous drink driving convictions, one of which had led to the temporary suspension of his driving licence; that during the lunch break after arriving at Jiufen on 18 October 2004, Tsui had become intoxicated after consuming Yuksan Kaoleung wine; that after the accident a breath test had revealed that the alcohol content of his breath was 1.632 mg/l whereas the legal limit was 0.25 mg/l (in other words, he was more than six times over the legal limit); that the coach driven by him had struck a signboard while proceeding to collect its passengers; that after collecting his passengers Tsui had inappropriately engaged third gear while travelling downhill rather than first or second gear and had failed to reduce speed; that he had later, as he was endeavouring to make a turn, applied the brake over five times causing a sudden drop of pressure in the brake system resulting in brake failure; that he had then failed to take appropriate steps to minimize casualties by sounding the horn, and driving close to the hillside.

9. The fact that Tsui was convicted of two offences arising from the incident (one of which was a drink-driving offence) and sentenced to a term of imprisonment is not in itself admissible evidence of negligence as it would have been under section 62 of the Evidence Ordinance, Cap. 8 if the conviction had been in Hong Kong.

10. However, this court is entitled to take into account the summaries of the facts in the indictment and the judgment which are said to come from named witnesses and the fact that it is stated that Tsui admitted those facts.

11. I have considered the weight to be given to the hearsay evidence contained in the Taiwanese indictment and judgment in the light of the considerations referred to in section 49(2) of the Evidence Ordinance, Cap. 8.  I have borne in mind in particular that there is a discrepancy between the facts related in those documents and the evidence of the plaintiff in relation to the driving of the coach by Tsui as he approached the passengers to pick them up.  Both referred to Tsui having accelerated the engine of the coach, moving forward, then stopping before accelerating the engine again.  While the plaintiff said that the engine was still running, the related facts state that the engine stopped on each occasion.  The plaintiff, who had experience of driving a vehicle with a similar braking system, stated that this was a proper way of building up pressure in the braking system, however the related facts, at least by implication, appear to suggest that this was an improper way of driving the vehicle.

12. I am satisfied that the discrepancy was a minor one and only related to Tsui’s driving before the tour group boarded the coach.  Otherwise there was remarkable consistency between the account of the plaintiff and that in the related facts.  In admitting the related facts, in particular his previous convictions and his intoxication at the time of the accident, Tsui was making a statement against his own interest.  I am satisfied that those admissions are reliable. 

13. I find that the accident was occasioned by the negligence of the driver, Tsui Chung Hing, in driving the vehicle while intoxicated and therefore being in no position properly to control it.

the contractual relationship between the plaintiff and the defendant

14. There is no dispute that Miss Cheung Wai Yin, a friend of the plaintiff, was acting on his behalf when she entered into the contract with the defendant to provide this tour.

15. It is the nature of the resulting contractual relationship between the plaintiff and the defendant that has been in issue.

16. The question is whether the defendant was simply the agent of the plaintiff to arrange the services to be supplied by others or whether the defendant itself undertook to supply those services.

17. The relevant principles are well settled and were set out by the Privy Council in Wong Mee Wan (Administratrix of the Estate of Ho Shui Yee, deceased) v. Kwan Kin Travel Services Limited (coincidentally the defendant in this case) [1995] 3 HKC 505.

18. The fact that services were performed by others is not decisive.  As Lord Slynn said, :

“…. The fact that it is known that another person will or may perform the services or part of them does not mean that the contract is one of agency.  In each case it has to be asked as a matter of construction into which category the contract falls.”  (ibid p.510, at I)

19. The nature of the contractual relationship between the plaintiff and the defendant is of crucial significance in this case.

20. If the defendant was simply acting as a travel agent arranging the tour with others as the plaintiff’s agent, then the consequence would likely be that it :

“…. undertook no liability for any default by those providing the goods and services or, at the most, a liability to take reasonable care in the selection of those who provided the services.”  (ibid Lord Slynn, p.514 at E).

21. If on the other hand the defendant had themselves undertaken to supply the services, there would be implied in the contract (subject to any exemption clause) a term that they would as suppliers carry out the services with reasonable skill and care.  This obligation would remain even if the defendant had arranged for others to carry out all or part of the services.

22. In the words of Lord Slynn :

“The fact that the supplier of services may under the contract arrange for some or all of them to be performed by others does not absolve the supplier from his contractual obligation.  He may be liable if the service is performed without the exercise of due care and skill on the part of the sub-contractor just as he would be liable if the sub-contractor failed to provide the service or failed to provide it in accordance with the terms of the contract.  The obligation undertaken is thus, if the person undertaking to supply the services performs them himself, that he will do so with reasonable skill and care, and that if, where the contract permits him to do so, he arranges for others to supply the services, that they will be supplied with reasonable skill and care (see Chitty on Contracts (7^th Ed, 1994) pp 987-988, paras 19-046 and 19-047).”  (ibid p.510, at C).

23. The case for the plaintiff is that the defendant had contracted itself to provide the package tour.  The case for the defendant is that it was the agent of the plaintiff to arrange for the tour to be supplied by others, including Zhong Chun Travel Service Limited of Taipei (“Zhong Chun”), with whom the defendant had entered a “Tourist Reception Agreement”.

24. The primary evidence of what was agreed between the parties is inevitably the terms of the agreement, but the court is also entitled to look at the evidence of what actually occurred and of the agreement between the defendant and Zhong Chun.

25. The application form for the tour signed by Miss Cheung on the plaintiff’s behalf included the following declaration :

“I agree to accept the itinerary including perusing the back page of this application form and the back page of the receipt and the latest version of the revised ‘Issues of Detailed Rules of Travel and Responsibility’”.

Three documents therefore constitute the contract between the plaintiff and the defendant :

(1)   the application form, on the back of which are the “Issues of Detailed Rules of Travel and Responsibility”;

(2)   the receipt, on the back of which are 19 “Remarks”; and

(3)   the itinerary.

26. The evidence is, in my view, overwhelming, both from the contractual documents and the other evidence, that the defendant was not simply arranging on behalf of the plaintiff for services to be supplied by others but was itself the organizer and provider of the tour, albeit that it had engaged others to perform part of the services it had contracted to supply.

27. All three contractual documents were headed with the name and logo of the defendant company.  While that may be of no significance in so far as the receipt is concerned, one would not expect the application form and itinerary to be so headed if the defendant were simply acting as a travel agent arranging for the plaintiff to participate in a tour provided by Zhong Chun.

28. One would expect if the defendant was arranging for the plaintiff to join a tour supplied by Zhong Chun that there would be some reference to Zhong Chun’s name in the contractual documentation.  There was none.  Indeed, it is apparent from the evidence of the plaintiff that when he went on the tour all the indications were that it was a tour organized and run by the defendant.  At the airport in Hong Kong, the tour group was met by a uniformed employee of the defendant, Madam Lo Pui Ka, who was holding a bag and sign of the defendant company.  She gave the passengers a badge bearing the defendant’s name to identify themselves during the tour.  She helped the passengers check in in Hong Kong, retrieve their baggages when they arrived in Taiwan and go through customs formalities there.  She remained with the tour group throughout the tour.  Even the local guide, who presumably was an employee of Zhong Chun, introduced himself as representing the defendant rather than Zhong Chun.  The sign bearing the defendant’s name which the tour leader had displayed at Hong Kong airport was taken to Taiwan and displayed in the front windscreen of the coach used by the group.  I have no doubt that if a member of the tour group had been asked who was organising and providing their tour, he or she would have replied that it was the defendant.

29.  In support of his argument that the defendant was acting as the plaintiff’s agent, Mr Kevin Wong, for the defendant, points out the references in the contractual documents to the provision of part of the services by other parties, in particular, to clauses under the heading “Issues of Responsibility” in the “Issues of Detailed Rules of Travel and Responsibility” on the back of the application form.

30. Clause (I) states that :

“The transport, accommodation, places for meal, sightseeing or entertainment programmes arranged by our company for the tour members are not owned, managed or operated by our company.  Tour members if met with transport delays, loss or damage of luggage, injuries or death in an accident, or loss or damage to property which does not involve our company staff’s negligence or dereliction of duty; or if tour members during the journey met with any eventualities (for example, met with an accident when participating in any entertainment or game item) resulting in injuries or death; or loss or damage to property, our company will not be responsible for such injuries or death or loss or damage.”

31. Clauses (VI), (VII) and (VIII) make reference to “our company or our appointed organisation”.

32. On the itinerary, Mr Kevin Wong has pointed out the passages that state “flights shall be subject to the arrangement of the airline company” and “itinerary shall be subject to arrangement of local receiving units”.

33. It is significant, in my view, that there is no reference anywhere to the defendant being the agent of the plaintiff in contracting with these third parties, nor is there any mention of the names of the third parties.

34. I am satisfied that it is clear from the documents as a whole that the tour was organized and arranged by the defendant using third parties to carry it out.  Clause (I) says as much.  There is no dispute that the defendant arranged the itinerary which it filed with the Travel Industry Council.  It was the defendant which decided which airline to use.  In so far as the plaintiff was concerned, it was the defendant company which decided upon the hotels, restaurants and transportation companies.  All that the itinerary was stating was that the defendant’s arranged itinerary was subject to alternative arrangements by the airline chosen by the defendant and the receiving units used by the defendant.  The references “our company or our appointed organisation” are references to the defendant and the organisation which the defendant had arranged should provide the services on its behalf. 

35. Other terms in the contractual documents are also consistent with the defendant being the organiser and provider of the tour rather than simply the plaintiff’s agent making a booking or bookings on the plaintiff’s behalf.  They include its right to refuse to accept any application, to adjust the price before departure, to change the accommodation, meals or sightseeing programmes and even to cancel the tour if there were insufficient participants.

36. In reaching this conclusion, I have taken into account the “Tourist Reception Agreement” between the defendant and Zhong Chun.  It is an agreement between the two companies to cooperate in marketing and providing package tours, and broadly delineates areas of responsibility, the plaintiff’s principally being to design and market package tours and the defendant being to implement the itinerary.  I am unable to attach much significance to this agreement as it formed no part of the contractual terms agreed by the plaintiff.  Indeed, it was unknown to him.  In any event, the terms indicate that the defendant retained close control over the arrangements made by Zhong Chun and responsibilities if problems arose which are indicative of the package tour being the ultimate responsibility of the defendant.

37. It follows from my conclusion that the defendant had a contractual duty subject to the terms of any exemption clause to ensure that the elements of the package tour were provided with reasonable skill and care, even if provided by others on its behalf.

38. I am satisfied they failed to do so.  The transport service was not provided with such skill and care in view of the coach driver’s negligence.  Furthermore the coach driver was a man who had two drink-driving convictions in the recent past.  He was clearly unsuitable to be entrusted with the task of driving the coach.  No adequate checks can have been made to ensure that he was a competent and suitable person to drive the coach.  It is apparent from the facts in the judgment of the Taiwan court that he was not a direct employee of Zhong Chun.  Zhong Chun had subcontracted the provision of transport to another company, Joi Hing Transportation Company Limited, which, having insufficient vehicles, had entrusted its obligation to provide transportation to Tsui Chung Hing.  The defendant had entrusted the provision of transportation to Zhong Chun with no stipulation as to those to whom the driving of the coach should be entrusted and no prohibition again subcontracting the work.  I find that the defendant was in breach its contractual duty to the plaintiff.

The exemption clause

39. The exemption clause in the “Issues of Detailed Rules of Travel and Responsibility” on the back of the application form to which I have already referred purports, inter alia, to exclude the defendant’s liability for personal injury except when it is occasioned by the negligence or dereliction of duty of a member of the defendant’s staff.

40. I am satisfied that the defendant cannot avail itself of this clause by virtue of section 7(1) of the Control of Exemption Clauses Ordinance, Cap. 71 which provides :

“(1)   A person cannot by reference to any contract term or to a notice given to persons generally or to particular persons exclude or restrict his liability for death or personal injury resulting from negligence.”

41. By virtue of section (2) of the Ordinance, negligence is defined to include the breach :

“of any obligation, arising from the express or implied terms of a contract, to take reasonable care or exercise reasonable skill in the performance of the contract;”

I am satisfied that the defendant was in breach of such an implied term.

42. I find therefore that the defendant is liable to the plaintiff for damages for his personal injuries sustained in the accident.

QUANTUM

43. There has been substantial agreement between the parties regarding quantum.

44. Following the accident, the plaintiff was admitted to a local Taiwanese hospital complaining of pain in his lower back, injury to his head and his left abdomen.  X-rays of his injured regions showed no fracture, and he was able to return to Hong Kong the following day.

45. On arrival in Hong Kong, he was admitted into Yan Chai Hospital with the same complaints.  Investigations included a CT scan of the brain, X-rays of the chest, skull and pelvis, right elbow and knee showed no fracture.  Upper endoscopy showed only mild gastritis.  He was discharged after about five days and thereafter had follow-up treatment at the Surgical Unit of Yan Chai Hospital and physiotherapy.

46. Despite being on sick leave he tried to resume his previous employment from 22 to 26 November 2004 but could not cope, and therefore resigned.  The following month he took up employment as a PLB driver with City Joy Investment Limited but it involved long period sitting in the bus and no opportunity to rest.  He was dismissed after six months.  During the same period, he attempted to supplement his income by working for Pizza Hut delivering pizzas, but the long hours exacerbated his back pain.

47. Since 1 June 2005 he has been again driving PLB’s, initially as a green minibus driver and now as a self-employed red minibus driver.  He can cope because the routes he drives are relatively short and allow him periods of rest.

48. He still complains the following symptoms :

(a)    intermittent right-sided low back pain which radiates down to his buttocks;

(b)   intermittent numbness in his right leg which radiates down to the lateral aspect of his thigh and calf down to the dorsum of his foot to his 2^nd and 3^rd toes; and

(c)   the above symptoms are associated with the following activities :

-      sitting for one hour;

-      walking for 30 minutes;

-      standing for 30 minutes;

-      stooping;

-      lifting his right leg straight up in the seat;

-      doing sitting up exercises; and

-      lifting up of heavy objects (e.g. the sofa or table at home).

49. Damages for Pain, Suffering and Loss of Amenities have been agreed at $180,000.  Future Medical Expenses have been agreed at $5,000 and Special Damages at $8,600.

50. It is admitted that the daily wage of the plaintiff before the accident was $750 per day.

51. A post-trial multiplier of 12 is agreed.

52. The defendant does not dispute the authenticity of the receipts in respect of the plaintiff’s post-accident earnings.

Pre-accident loss of earnings

53. Although the daily wages of the plaintiff prior to the accident are agreed at $750 per day, the monthly wage is not.

54. The plaintiff had started working for his pre-accident employer, Lin Sin Transportation Company Limited, on 25 August 2004 as a medium goods vehicle driver and delivery worker.  He had obtained a Medium Goods Vehicle Licence shortly before taking up this employment.  This employment involved long working hours (8 a.m. to 10 p.m.).  His wage receipts showed that between 25 August and 16 October 2004 (his last working day before the accident) he earned $34,500.  This indicates an average earning of approximately $19,500 per month based on a 26 day working month.  He would not have received pay for the period he was away in Taiwan and any other period he chose to take a holiday.  Nevertheless, I am satisfied that the plaintiff is an industrious man and that he would have worked the same long working hours on an average of 24 days per month up until the date of the trial.  For the purpose of his loss of pre-accident earnings, I adopt an average monthly wage of $18,000 in his pre-accident employment.  He would have resumed working on 20 October 2004 after his holiday.  Therefore but for the accident his pre-trial earnings would have been :  $18,000 x 2710/30 = $492,000. 

55. I find that the plaintiff has done his best to mitigate his loss of earnings since the accident. 

56. I find that his earnings following the accident have been as follows :

City Joy Investment Limited	$48,655
Pizza Hut	$7,790
Choi Kee Maxicab
1-6-05 to 31-1-06	$70,227
1-2-06 to 30-6-06 (5 x $10,032.49)	$50,162
Self-employed Red PLB driver         30-6-06 to 30-1-07 (7 x $12,032)	$84,224
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Total :	$261,058
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57. I have calculated his earnings as a self-employed PLB driver on the basis of his evidence that a red PLB driver would earn approximately $2,000 more per month than a green PLB driver.

58. His total pre-trial loss of earnings are therefore : $492,000 - $261,058 = $230,942.

Post-trial loss of earnings

59. I accept the plaintiff’s evidence that he still now, two years three months after the accident, suffers from the residual symptoms of which he complains.

60. The principle matter in issue has been whether he will be able to resume his pre-accident work as a medium goods vehicle driver and delivery worker.  I accept that it is work that requires from time to time some heavy manual lifting.

61. The plaintiff’s orthopedic expert, Dr Lau Hoi Kuen, examined him on 7 October 2005.  He was of the opinion that the plaintiff had suffered “contusion injury to the soft tissue (right paraspiral muscles) of his low back”.  His opinion was as follows :

“I do expect that Mr Chea will be left with some degree of residual pain in his low back even after completion of the recommended conservative treatment course.  With the need to avoid heavy manual lifting, he has much problem in working as a delivery worker.  Heavy manual lifting of more than 30 Kg. needs to be avoided.

He will also have certain degree of decreased efficiency at work in working as a professional driver (both for the light goods vehicle or the public light bus).”

62. The defendant’s expert, Dr Lam Kwong Chin, saw the plaintiff seven months ago on 9 June 2006.  He agreed with Dr Lau that the plaintiff might have contusion injury to the soft tissues of his low back, but he was of the opinion that it was to the right sacro-iliac joint area rather than the right paraspiral muscles.  He said :

“….. as the pain is mainly at the sacro-iliac joint and there is no evidence of disc problem, there should be no problem for [the plaintiff] to lift or bear weight.  There should be no physical hindrance for him to return to work as a driver which he had indeed done so for the past year.”

He accepted, however, that the plaintiff might have “some residual pain even after treatment”.

63. I am unable to resolve the conflict as to whether the contusion injury to his lower back was to the sacro-iliac joint area rather than the right paraspiral muscles. 

64. I do however accept that the plaintiff still suffers lower back pain, the triggers of which include lifting heavy weight and prolonged sitting.  Given the notorious difficulty of treating low back pain, the fact that it still persists two years and three months after the accident, his age and Dr Lau’s advice to avoid a job involving heavy lifting, the plaintiff would, in my view, be very unwise to take up a job that involves the possibility of heavy lifting.  It might well aggravate his present discomfort and prevent him even from working as a PLB driver.

65. I consider his current earnings of approximately $12,000 per month reflect what he can reasonably be expected to earn in the future (without inflation).  I consider it likely that any job as a medium goods vehicle is likely to involve some heavy lifting or prolonged sitting.  

66. His pre-accident earnings were those of a man in his late 30s who was prepared to work very long hours.  I consider that as he moved into middle age, he would have been unlikely to have been able or willing to sustain the same number of working hours.  

67. His evidence was that a medium goods vehicle driver working normal working hours would expect to earn between $13,000 to $15,000 per month.  I consider that had it not been for the accident his earnings would have ultimately fallen to within that range, though probably at the high end of that range to reflect his eagerness to earn overtime.  Any finding as to his hypothetical likely earnings must inevitably involve a large element of conjecture, but I consider a wage level corresponding to around $14,500 per month reflects his probable long term earning capacity had it not been for the accident.

68. I accordingly find that his monthly post-trial loss of earnings to be : $14,500 - $12,000 = $2,500 per month.

69. Given the agreed multiplier of 12, his post accident loss of earnings are therefore : 12 x 12 x $2,500 = $360,000.

SUMMARY

70. In summary, I assess and award damages as follows :

Pain, Suffering and Loss of Amenities	$180,000
Pre-trial Loss of Earnings	$230,942
Post-trial Loss of Earnings	$360,000
Special Damages	$8,600
Future Medical Expenses	$5,000
Loss of Retirement Benefits (MPF) ($230,942 + $360,000 x 5%)	$29,547
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Total :	$814,089
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71. I give judgment for the plaintiff in the sum of $814,089.  The defendant is to pay interest on general damages at 2% from the date of service of the writ until judgment and on special damages at half the judgment rate from time to time from the date of the accident until the date of the judgment.  After judgment interest is to be paid at judgment rate until payment.

72. I make the following order nisi as to costs that unless either party applies within 14 days of the handing down of this judgment to be heard on the question of costs, the plaintiff’s costs to be taxed and paid by the defendant.