LEE YUEN NGAN, AMY LAWRENCE v. LAU WING HOP

HCPI 223/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO.223 OF 1999

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J U D G M E N T

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1. On 25 March 1998 the plaintiff was injured in a traffic accident when she was a front seat passenger in a private car owned and driven by the defendant which came into collision with a public light bus when the defendant's car made a right turn at a road junction where right turn was prohibited for the defendant's car. She claims against the defendant in negligence for damages arising from the injuries suffered by her as a result of that accident.

2. Liability was admitted in full by the defendant on the first day of trial. The defendant also conceded that he no longer relied on the plea of contributory negligence of the plaintiff. All that remains therefore is for me to assess the damages to the plaintiff arising from her injuries from the accident.

The plaintiff's injuries and treatment

3. The plaintiff was 30 years old at the time of the accident. There is no dispute that the plaintiff was admitted to hospital after the accident and was diagnosed to have suffered a ruptured spleen with intraabdominal haemorrhage. An emergency splenectomy was performed on the same day. She recovered well from the splenectomy and was discharged from hospital after a stay of some 16 days. That operation left an 11 cm surgical scar on her abdomen.

4. It is also not disputed that the plaintiff also suffered a chronic whiplash injury to her neck as a result of the collision. This is an injury to the paraspinal soft tissue of the neck with or without organic neurological involvement and manifest itself by chronic neck pain. Such neck pain was stated by Dr Kan in his latest report prepared in December 2000 that "passive movement of the head about the neck was full and painless but active movement showed mild restriction as she complained of pain towards the extremes of motion".

5. Apart from the neck pain, she also felt "pins and needles" in her left hand and arm especially when she lied down, and also in her left leg from buttock to ankle when she sits for longer than two hours. She also experienced chest pains on the left side at the end of each work day. There was also stiffness, numbness and dull ache in her lumbar and thoracic regions and also the sacrum.

6. Apart from such pain the plaintiff also experiences anxiety and stress when she encounters situation reminiscent of the accident. At times panic attack sets in leaving her with palpitation and shortness of breath. On one such occasion, the panic attack was so severe that the plaintiff had to seek treatment at the Accident and Emergency Department of a local hospital.

7. All these symptoms and impairments had affected her social and daily living as well as her work.

8. When examined by Dr Kan towards the end of 2000, he found her mood to be calm but at one point when she related her mental anguish and predicaments the plaintiff could not hold back her tears. Dr Kan found her to be obviously depressed about her various impairments but her grasp of reality was unimpaired and she displayed no ideas of paranoia, delusion or hallucination.

9. In so far as the chronic whiplash injury is concerned, three years after the accident, the plaintiff still attends the Tang Chi Ngong Clinic every six to eight weeks where painkillers is prescribed to her. She also attends regular physiotherapy twice a week at Government hospital, each session lasting for about an hour. She intends to continue with such physiotherapy sessions.

10. Her major complaint in this case is her psychiatric problems. Firstly, and again there is no dispute, she suffers from post traumatic stress disorder. This arises as a result of the traumatic experience which the plaintiff went through because of the accident. This manifests itself in the form of her fear of cars, of driving and anything which reminds her of the traumatic experience that she went through and results in anxiety and panic attacks already referred to above. It can, however, subside with time.

11. The second aspect to her psychiatric problem, and which is the crux of the dispute in this case, comes in the form of what Dr Wong calls "dysthymic disorder". In order to fully appreciate this aspect of the case, a little background information concerning the plaintiff is necessary.

12. From young, the plaintiff was actively engaged in water sports and activities. Before the accident, she was already a regional scouter and a qualified instructor in canoeing and was actively engaged in training and instructing scouts in this sport on a voluntary basis. This she had been doing for a number of years.

13. Quite apart from such outdoor activities, the plaintiff has also obtained qualifications from the United States of America in the field of nail beauty and was a pioneer in establishing the first nail beauty boutique in Hong Kong. A further testament to her achievements in this field is the fact that she was the first Asian invited to adjudicate at the Professional Beauty Nail Competition held in London in 1997. She was also one of the winners of the Innovative Entrepreneur's Award in the same year.

14. The plaintiff's case is that the combined effect of the trauma of the accident itself, her chronic whiplash injury giving rise to persistent neck pain and more importantly the unsightly aspect of the surgical scar on her abdomen as a result of the splenectomy resulted in her post traumatic stress disorder and her dysthymic disorder.

15. Evidence of her psychiatric impairment came from Dr C.K. Wong, professor of psychiatry at the Chinese University, who was called by the plaintiff. He explained that post traumatic stress disorder and dysthymic disorder are two different psychiatric disorders. For post traumatic stress disorder, it results from a traumatic experience, usually life threatening, and results in extreme fear with the subject usually trying to avoid being reminded in any way of that traumatic experience. The key words for such post traumatic stress disorder are "fear" and "avoidance". The symptoms for such a disorder is mainly anxiety and panic attacks both of which the plaintiff suffers from.

16. As for dysthymic disorder, Dr Wong explained that it results from a sense of loss which can not be regained. In the case of the plaintiff, it is the feeling of the loss of her beauty, her health and perfection epitomized by the presence of the surgical scar on her abdomen and to a lesser extent by her persistent neck pain. The symptoms for such disorder is severe depressive moods and hopelessness and the inability to pick oneself up from it. The key word for such disorder is "loss".

17. Dr Wong further explained that while the plaintiff has improved her post traumatic stress disorder, possibly with the help of her boyfriend/fiancé who, inter alia, has "forced" her to resume driving cars, such that this disorder has taken a back seat, the dysthymic disorder has gradually assumed a larger proportion and has moved to the forefront and taken over from the post traumatic stress disorder. Dr Wong goes on to say that this has come about because the plaintiff cannot let go of the loss (in terms of her beauty, health and perfection) which she feels that she has suffered as a result of the accident. That feeling of the plaintiff has manifested itself in the following ways since the accident :

(a) the plaintiff has restricted much of her water sports activities which would require her to wear swimsuits which would reveal the scar on her abdomen;

(b) up to the trial of this matter, the plaintiff has refused to let her boyfriend/fiancé touch her or the scar on her abdomen;

(c) the plaintiff has consulted a number of overseas cosmetic surgeons with a view to either eradicating the unsightly scar or improving its appearance; this has finally resulted in cosmetic surgery being performed on the abdominal scar in August 2000. As a result of such cosmetic surgery, the scar had somewhat improved in appearance but will still be present on her abdomen for the rest of her life;

(d) the plaintiff has become withdrawn, both in her work and her daily living; before the accident, the plaintiff, except when she was on overseas business trips, worked an 8 hour-day for 6 days in a week. After the accident, she was off work completely for about 6 months. Thereafter even up to the trial she worked a half day but only for 3 days per week.

(e) in relation to her work, pre accident, she had about 600 or thereabout clients who requested her personal service or attention in respect to nail treatment, but since the accident, the plaintiff's inability to personally attend these clients has resulted in her being only left with some 18 or so clients whom she still served personally;

(f) pre-accident, the plaintiff would travel overseas to source nail beauty products for sale or retail purposes not only in her own boutique but also for the Hong Kong and Asian market almost on a monthly basis, but since the accident, she has only undertaken several such trips in the last three years;

(g) pre-accident, the plaintiff took it upon herself to make presentation in Hong Kong to her customers (being other beauty shops or boutiques) of new beauty products on a frequent scale but after the accident, the plaintiff has not resumed such presentation;

(h) pre-accident, the plaintiff agreed to and did give interviews to local media in relation to her work of nail beauty, but after the accident she had lost the interest and incentive to do so and has shied away from all such media coverage of her work except on one occasion when she gave in to the persistent request of and in order to assist the journalist concerned;

18. On the other hand there is also evidence from the plaintiff that during the period from the accident to the trial of this matter, she did take and complete a course in aroma therapy which she attended in Australia for some 16 days. She also did travel on several occasions with her boyfriend/fiancé to Scotland to visit his family.

19. In so far as the abdominal scar's effect upon the plaintiff is concerned, I can do no better than repeat what was stated by Dr Kan in his first report as follows :-

"She (the plaintiff) considers the laparotomy scar to be extremely ugly and which has totally destroyed her self esteem and confidence. She claims to be a very appearance conscious woman who has always been proud of her body look. Her wardrobe was full of garments that boldly showed off her body and she used to wear bikinis at beaches. The ugly scar has ruined her beauty and spoiled her social life as well as her zeal for water activities. Moreover her obsession that the scar is so repulsive that she would bluntly terminate any attempt at sexual intercourse with her fiancé with whom she enjoys an otherwise highly satisfactory relationship. Physically, the scar feels itchy at times but is never painful and has not limited movements at the abdominal wall."

20. Dr Wong goes as far as to express his opinion in the witness stand that if the plaintiff's condition, in so far as her dysthymic disorder is concerned, deteriorates any further, then it may well be that the only useful treatment for her is for her to "let go" of her entire past including the work which she is now involved in and for her to start afresh all over.

21. The defendant has also adduced expert psychiatric evidence by calling Dr S.Y. Chun as an expert witness. He agrees with Dr Wong that the plaintiff suffers from post traumatic stress disorder. However, their agreement departs when it comes to dysthymic disorder. Although Dr Chun agrees and accepts that all the diagnostic criteria for dysthymic disorder is present in the plaintiff, he comes to the conclusion that she is not suffering from dysthymic disorder. The reason he gives for so saying is that she is suffering from post traumatic stress disorder already. However, at the same time he also accept the opinion expressed by Dr Wong that both disorders can co-exist at the same time in a patient.

22. In my view the reason given by Dr Chun for saying that he considered the plaintiff not to be suffering from dysthymic disorder while at the same time accepting that both post traumatic stress disorder and dysthymic disorder can occur at the same time in a patient seems to be an anomaly in his evidence as an expert which has not been (or cannot be) explained. For that reason I prefer the expert evidence given by Dr Wong where the two experts differ. Perhaps that difference between the two experts are not really that great since both are agreed that all the diagnostic criteria (in the form of symptoms) for dysthymic disorder is present in the plaintiff. The difference between them is really one of terminology. There is in fact no dispute between them that the plaintiff has all the symptoms of that disorder, whether it is called dysthymic disorder or whether it should be a part of the post traumatic stress disorder. Once that premise is accepted, then it follows that all the disabilities arising from those symptoms must also be present. That, in my view, is the important thing for the purpose of this assessment.

General damages for pain, suffering and loss of amenities

23. Both parties have properly identified the range of awards under this head to be between $550,000.00 and $650,000.00.

24. I have no hesitation in finding that the plaintiff is a truthful and honest witness and that her complaints and disabilities are genuine. Indeed there has been no suggestion by the defendant otherwise throughout the trial - not even of the least exaggeration by the plaintiff. Taking into account not only the injuries and resultant disabilities of the plaintiff as detailed above, including the splenectomy and the risk of infection as well as its resultant scar on her abdomen, the whiplash injury to her neck and her psychiatric disorder(s), but also her loss of the enjoyment of life resulting from the accident. I have come to the conclusion that a reasonable award under this head of damage is $600,000.00

Loss of earnings (pre-trial)

25. The plaintiff's claim for loss of earnings arises in two ways. Firstly her loss arising from the personal nail beauty service which she provides to her clients and secondly from the loss in product sales.

26. I shall deal first with her loss arising from personal service. The plaintiff's case relies primarily on a report from Andrew Ross, an accountant. The report is prepared on the basis that the shareholding of Ready Supply Limited, being the operator of Amy's Nail Boutique, although in the names of both the plaintiff and her boyfriend/fiancé, the boyfriend/fiancé in fact holds those shares in his name in trust for the plaintiff and therefore the business is in fact wholly owned by the plaintiff. This is not disputed by the defendant.

27. In his report Mr Ross arrives at the figures of $387,069, $380,754 and $383,912 as being the loss of service income by the plaintiff for the years ended 31 March 1999, 2000 and 2001 respectively. These figures are calculated as follows :

(a) From pre-accident accounting records of the nail boutique business of the plaintiff, the total income derived by the plaintiff from personal service to clients divided by the number of days actually worked by the plaintiff in the boutique gives the average daily income of the plaintiff to be $1,702;

(b) On the assumption that the plaintiff would have increased the number of days spent working at the boutique after the accounting year for 1998, Mr Ross took 260 days per year as the time the plaintiff would have worked at the boutique for each of 1999, 2000 and 2001. It should be noted that for the year before the accident, the plaintiff was on record working 236 days at the boutique (the rest of the time, apart from holidays, she travelled overseas mainly for sourcing new material and products for the business);

(c) After multiplying the daily average income of the plaintiff by 260 for each of the years 1999 and 2000 he deducted from that figure arrived at the actual service income generated by the plaintiff for each of those years. Because the audited accounts for 2001 was not yet available when his report was prepared (or even at trial for that matter), he took the average of the actual service income generated by the plaintiff for the preceding two years as the figure for the accounting year ended 31st March 2001.

28. As for the loss from product sales, Mr Ross arrived at the figures of $196,589, $240,240 and $304,892 for the accounting years ended 31 March 1999, 2000 and 2001 respectively. These figures for such loss in those years were calculated using the sales figure of $407,603 in the audited accounts of Ready Supply Limited for the accounting year ended 31 March 1998 and adding to it an assumed growth rate of 20% compounded for each succeeding year and taking a gross profit percentage of 52% for each accounting year which is 5% less than the 57.69% calculated using the gross profit margin shown in the audited profit and loss accounts of Ready Supply Limited for the immediate five years preceding the one ending 31 March 2000.

29. From these two sets of figures for the loss from personal services and from product sales, Mr Ross arrived at the combined loss figures of $583,658, $620,994 and $688,804 for 1999, 2000 and 2001 respectively. After making further adjustments to take into account taxation (at 16%) he arrived at the final figures of $508,721, $529,881 and $578,596 as being the loss of income of the plaintiff for these three years due to the accident.

30. On the other hand, the defendant relies on the report prepared by their own expert, Mr Benny Kwok, for the pre-trial loss of the plaintiff. Mr Kwok's report is also based largely on the audited accounts of Ready Supply Limited but the methodology used to arrive at the final figures as representing the pre-trial loss of the plaintiff differs from that of Ross. Dealing first with personal service loss, the main difference between the two experts is that Kwok's figures are based firstly on a "no growth" scenario while Ross' figures are given on a 10 % increase in the number of work days by the plaintiff and secondly Kwok makes the assumption (because of the "no growth" scenario) that all the increase in income of the other beauty consultants engaged by the plaintiff in her boutique for the years after the accident was due to the fact that the personal clients of the plaintiff whom the plaintiff no longer serves has switched over to the other consultants in the plaintiff's boutique therefore increasing the income of these consultants for the years following the accident. This is what Kwok calls the "Cannibalism Effect".

31. As for the actual figures, Kwok starts off by taking the figures from the audited accounts of Ready Supply Limited of the "total service income" for the years ended 31 March 1997, 1998, 1999 and 2000 and from those figures reduced the service income generated by the plaintiff for each of those accounting years thus obtaining the underlying service income generated by the other four consultants for each of those years respectively. The total underlying service income generated by the other four consultants is thus worked out as being $788,320 for 1997, $1,334,454 for 1998, $1,562,324 for 1999 and $1,512,019 for 2000.

32. Upon the assumption that there is no growth in the business after the accident and that the income of the other consultants for 1999 and 2000 should be what it is for 1998, Kwok draws the conclusion that the excess income of the other consultants for 1999 and 2000 being respectively $227,888 and $177,565 to be the income earned by the other consultants from the plaintiff's customer base i.e. the "Cannibalism Effect".

33. Kwok then used the plaintiff's service income at the 1998 level which is $401,780 and applies it to both 1999 and 2000 on the assumption of no growth. From that he deducts the plaintiff's actual income for 1999 ($55,451) and for 2000 ($61,766) as well as the amounts of the "Cannibalism Effect" for those two years but adds back 30% of the amounts of the "Cannibalism Effect" as being the commission paid to the other consultants being the plaintiff's incremental loss due to the "Cannibalism Effect". This give the figures of $186,807 and $215,719 as being the total loss from personal services suffered by the plaintiff in her business for 1999 and 2000. The average of these two figures are then taken to represent the plaintiff's loss for the year 2001. The total loss for the three years from personal services therefore comes to $603,789 and after taxation at 16% it comes to $507,183.

34. In so far as product sales is concerned, the Kwok report comes to the conclusion that there is no evidence (presumably from the audited accounts) to support any loss. Three reasons are given for this. Firstly the qualified audit opinion on the accuracy of the closing stock figure in the 1998 accounts of Ready Supply Limited potentially impact upon the cost of goods sold and gross profit figures of the 1998 and 1999 accounts therefore reliance could not be placed on those figures in those two accounts. Secondly the stock turnover ratio in the 1998 and 1999 accounts indicate slow moving stock do not support the assumption by Ross of a 20% annual growth at 52% gross profit margin. Thirdly, the economic recession in Hong Kong (supported by data and statistics) show severely depressed consumers' confidence affecting the demands for the plaintiff's cosmetic products during the three year pre-trial period.

35. However, notwithstanding what was contained in the Kwok report in relation to product sales, counsel for the defendant saw fit to put forward an alternative scenario that in the event the court came to the view that there was some loss suffered by the plaintiff for product sales as a result of the injuries sustained by her in the accident, then that loss should be quantified on a "no growth" basis and not upon the 20% compounded growth as suggested and adopted by Ross in his calculations. On the "no growth" basis the figures for such loss submitted by defence counsel comes to $154,108.56, $147,070.56 and $150,598.56 for the three years after the accident but before trial. This totals $451,768.68 before tax and $379,485.69 after tax.

36. On that basis, the defence submits that on the first scenario (i.e. loss in relation to personal services only), the plaintiff's total pre-trial loss of earnings should be $510,000 (rounded off) and on the alternative scenario it comes to $890,000 (rounded off).

37. As already indicated, the dispute here between the parties really centres on two issues, namely, whether firstly there should be any growth factor in so far as the plaintiff's business is concerned for the three years following the accident and secondly the "Cannibalism Effect" if any.

38. In so far as the growth factor is concerned, my own view after considering all the relevant evidence is as follows. Firstly a distinction must be drawn between the personal service aspect of the business and the product sales aspect. If there should be growth in one it does not necessarily follow that there must therefore be growth in the other, particularly in view of the economic situation prevailing at the material time.

39. Dealing firstly with the personal service of the plaintiff first, I accept that from the audited accounts of Ready Supply Limited, it shows not only that the plaintiff's business was expanding quite rapidly in the years before the accident. The total service income jumped from $1,011,914 for the year ending March 1997 to $1,736,234 the following year. Furthermore the plaintiff's own service income increased from $223,594 to $401,780 in those same two accounting years.

40. From the audited accounts and the other records kept by the plaintiff, it can be calculated that the service income of the other consultants in the plaintiff's business rose from $788,320 for the accounting year ending March 1997 to $1,334,454 for the year ending March 1998 and then increased again to $1,562,342 for the year ending March 1999 and then fell slightly to $1,512,019 for the year ending March 2000. It seems clear enough from these accounts and records that the income earned by the other consultants from personal service was on the increase at least for most of if not all of 1998 and possibly up to March 1999.

41. On the other hand, there is evidence from the plaintiff herself which I accept that she herself was fully booked for the year before her accident in so far as personal service was concerned, although that was not the case for the other consultants in her business. In those circumstances, whilst the accounting and other records may show some growth in respect of the personal service income which she generates herself of the other consultants for most of 1998 and possibly part of 1999, that same growth cannot apply to the plaintiff herself since before the accident, her income from personal service would have reached saturation point as she was fully booked all the time. The only possibility of any further growth for the plaintiff in respect of personal service income which she generates herself would be if she increased the number of her work days spent in the boutique doing personal service. It is not disputed that for the whole accounting year up to the accident, she spent 236 days doing personal service for her clients in Hong Kong. The rest of the times being spent on business trips overseas to source new material and products for the business.

42. As for the number of work days of the plaintiff, I take the view that the plaintiff would more likely than not have spent a bit more time in Hong Kong had the accident not taken place. I have come to this conclusion because I accept her evidence that before the accident, she was fully booked for those days that she was in Hong Kong and was therefore under pressure to devote more of her time to servicing clients in Hong Kong and also because by the time of her accident, she had already entered into several sole agency agreements with cosmetic manufacturers overseas to distribute their products in Hong Kong and other parts of Asia therefore the need for making frequent trips overseas may have been reduced somewhat.

43. On the other hand, I must not overlook the economic recession which set in towards the end of 1997 in Hong Kong. Furthermore, nail beauty is undoubtedly a non-essential and as such would be adversely affected. I further note that despite the economic recession, the service income of the other consultants did increase by not a small margin for the year following the plaintiff's accident.

44. In all the circumstances, I take the view that the vast expansion of the plaintiff's nail beauty business and the great demand there was for the personal service of the plaintiff herself probably cancelled out the effect of the economic recession by and large. Also taking account of the fact that when the accident occurred on 25 March 1998, there was another six days to go before that accounting year ended, it would not be unreasonable to take 250 days as the plaintiff's work days in the calculation of the pre-trial loss in respect of personal service.

45. Dealing next with the "Cannibalism Effect", there is also evidence from the plaintiff which I accept that before the accident, she had some 600 clients whom she served personally. After the accident about 15% of her former clients have been absorbed into the timetable of her other consultants in her boutique. On these facts it was quite wrong for the Kwok report to have speculated on the basis that all the increased income of the other consultants in the years that followed the accident was due to the "Cannibalism Effect".

46. On that basis therefore, the pre-trial loss of the plaintiff from loss of personal service income will be calculated as follows :

(a) Plaintiff's expected income for each of 1999, 2000 and 2001 will be $1702 x 250 = $425,500.00;

(b) Less the actual income of the plaintiff for those years (the actual income for 2001 being the average for the other two years) -

	1999: $425,000 - $55,451 =	$369,549
	2000: $425,000 - $61,766 =	$363,234
	2001: $425,000-$58,608 =	$366,392

(c) 15% of her clients absorbed by other consultants comes to:

15% of $425,000 = $63,750 to be for each year (i.e. "Cannibalism Effect");

(d) 30% commission paid to other consultants being plaintiff's incremental loss due to "Cannibalism Effect" -

30% of $63,750 gives $19,125

(e) Thus the final figure for each year's loss (before tax) comes to :

	1999: $369,549 - $63,750 + $19,125 =	$324,924
	2000: $363,234 - $63,750 + $19,125 =	$318,609
	2001: $366,392-$63,750 + $19,125 =	$321,767

(f) The sum of these three figures come to $965,300 which represents 36 months of pre-trial up to March 2001. Since it has been 38 months from the accident, this amount will be adjusted pro-rata to take account of the extra two months giving $1,018,928 before tax. After deduction for tax at 16% this comes to $855,900.

47. I turn now to consider the pre-trial loss arising from product sale. It is accepted by all concerned that wholesale to other beauty establishments in Hong Kong constitutes 90% of the plaintiff's product sales and the remaining 10% relates to sales of products to those clients of the plaintiff attending her boutique for beauty service. The wholesale aspect of her business is conducted mainly by fax orders placed by other establishments in Hong Kong. The fax machine through which the plaintiff receives such orders is located in the plaintiff's home - possibly because the plaintiff attends the boutique less frequently after the accident.

48. The plaintiff's business, which started in 1993, had sole distributorship agreements with five cosmetic manufacturer at the time of the accident and had been the distributor of their products for some three years before the accident happened. One of those distributorship agreement was withdrawn after her accident because the plaintiff was unable to place any orders with the manufacturer after her accident because of her injuries. The other four continued with the plaintiff. The one that was withdrawn constituted only about 5% of the plaintiff's distributorship business before the accident.

49. The figures from the audited accounts show that the sales of products had jumped from $118,202 in the accounting year ended March 1996 to $407,797 for the year ended March 1998 and that the gross profits for the 1996 accounting year correspondingly jumped from $45,432 to $367,996 for the year ended March 1998. However, after the accident, sales dived to $225,590 for the year ended March 1999 and gross profits came to only $57,845 for that year. For the accounting year ended March 2000, sales was $113,830 with gross profit at $64,883.

50. The plaintiff's case is that these drop in sales and therefore gross profits for product sales of her business was due to her injuries sustained in the accident which prevented her from getting herself personally involved in the marketing of these products as she used to do before the accident. Her personal involvement in the marketing of such products took the form of going round the various beauty establishments in Hong Kong doing presentation in order to promote the products which she was distributing for the manufacturers on the one hand, and, on the other hand, contacting the various manufacturers personally by going on business trips in order to see for herself the new products being produced by those manufacturers. Two reasons were given by the plaintiff as to why another of her employee could not take over this part of her work for her when she was incapacitated by her injuries. Firstly that the level of English of the other girls in her business was not good enough and secondly, she did not wish to give away too much trade secret to the other girls for fear that they would leave her business and set up on their own rivalling hers.

51. On the other hand, there is also the economic recession setting in towards the end of 1997. The effect of that on the product sales of Ready Supply Limited could well be more drastic than its effect on the personal services aspect of that business because the majority of product sales being wholesale to other establishments, those other establishments may well feel a greater impact of the recession when compared to the plaintiff's own business as they may not have the same kind of demand by their own clients as there was in the plaintiff's own business for the plaintiff's own personal service.

52. For these reasons, I have come to the conclusion that the great disparity in the gross profits of Ready Supply Ltd for the years before and after the plaintiff's accident came about due to a combination of factors involving both the plaintiff's injuries from the accident as well as the economic situation prevailing at the time in Hong Kong. In the circumstances, I am unable to accept the suggestion in the Ross report that there should be a compounded 20% growth for each of the three years after the accident in calculating the loss due to product sales. I much prefer to adopt the suggested approach by defence counsel to quantify such loss on a "no growth basis" and which defence counsel has already worked out to be $380,000 after taking into account taxation at 16%. Adjusting that figure to take account of 38 months instead of 36 months, the loss comes to $401,000 rounded off.

53. The total pre-trial loss of earnings therefore comes to $1,256,900.00.

Other special damages

54. Other special damages claimed by the plaintiff are agreed between the parties at $125,374.00 and will be allowed. The items include medical expenses, tonic food and travelling.

Future loss of earnings

55. Under this head of claim, the dispute between the parties is essentially on the multiplier to be applied. The plaintiff was 30 at the time of the accident, and 33 at the time of trial. It is submitted on behalf of the plaintiff that a multiplier of 14 should be adopted in this case. While the defendant does not object to 14 as a multiplier if the condition of the plaintiff is permanent, the defendant's stance in this matter is that the condition of the plaintiff can and will improve with psychiatric treatment and since the plaintiff is also claiming future expenses for such psychiatric treatment, it is reasonable to expect the condition of the plaintiff to improve with time therefore a multiplier of only 7 should be adopted in this case for future loss of earnings.

56. In this respect, the evidence of Dr C.K. Wong, who was called by the plaintiff, was that while the plaintiff's post traumatic stress disorder was subsiding with the passage of time, her dysthymic disorder is coming to the fore and that her depression is taking on more the characteristics of a sense of loss (of perfection, beauty, health). He further expressed his opinion that the plaintiff may have to change her life and while he believes that there is a good chance of substantial improvement with high quality private treatment over the next few years, it may result, however, in the plaintiff having to "let go" and start afresh. This according to Dr Wong means possibly giving up the business and starting a new and different life.

57. It was this evidence of Dr Wong that forms the basis for the plaintiff claiming a multiplier of 14 for if the plaintiff had to "let go", give up her business and start afresh that suggest that her loss of earnings from her present business would be permanent.

58. I, however, find myself unable to accept in its entirety the opinion expressed by Dr Wong. For one thing, the evidence from the plaintiff given in the witness box indicates that the plaintiff has no intention of giving up her present business or starting afresh. Far from it, that evidence indicates that to a certain degree the plaintiff is still very much concerned with her nail beauty work. She attended an exhibition in Las Vegas some time between August and October 1999 and in the process was able to secure another distributor for cosmetic products by the name of EZ Flow. There was also evidence from the plaintiff that she feared that her other consultants would leave her business to either set up a rival business on their own or be taken up by other beauty establishments. All this points in the direction that the plaintiff is far from willing to give up her beauty business but is trying her best to preserve and protect it.

59. Another reason which causes me to have some doubts about the opinion of Dr Wong relating to the plaintiff "letting go" is the fact that it is not the beauty business in which the plaintiff is involved which is the direct cause of her psychiatric disorder. The singular most important factor which is the cause of her dysthymic disorder as I understand it is the ugly scar on her abdomen and which she cannot get herself to accept. That being the case, I am not persuaded how "letting go" of her business as suggested by Dr Wong is going to assist the plaintiff's psychiatric condition since her abdominal scar is going to be there permanently whether or not she continues with her present business of nail beauty. For these reasons I am not persuaded that "letting go" of her business and starting afresh can provide an effective solution to the plaintiff's psychiatric problems.

60. I do however accept that high quality psychiatric treatment may be beneficial to the plaintiff in time. Dr Wong puts the time frame for that as "the next few years" but that may well be more than just a few years. Even if the plaintiff's psychiatric condition can be overcome in the next five years or so, it may well take another five years more for her business to be put back on the footing that it would have been but for the accident. On the other hand I must also take into consideration the accelerated receipt of the damages under this head. Therefore after full consideration of the above factors, I take the view that 7 would not be an unreasonable multiplier to be used to calculate future loss of earnings.

61. As for the multiplicand, based on the figure awarded for pre-trial loss of earnings, it works out to be $396,916 per year. Applying a multiplier of 7 the figure arrived at for future loss of earnings comes to $2,778,412.00.

Loss of earnings capacity

62. There is also a claim for loss of earnings capacity. The plaintiff is not employed but is the sole proprietor of her own business. From the scenario as painted by my findings above, the chances of her losing or giving up her present business and having to go into the labour market at some future date is not great. However, the defendant has seen fit to concede an amount of $200,000.00 under this head, and that sum will be awarded to the plaintiff.

Future medical expenses

63. Under this head of damages, the plaintiff claims, firstly, an amount of $167,700.00 for future psychiatric treatment. This amount for psychiatric treatment has been agreed to by the defendant and will be allowed in full.

64. Secondly, the plaintiff also claims $31,200.00 for future physiotherapy treatment. The sum of $31,200.00 was recommended by Dr Kan who suggested 104 sessions of physiotherapy at $300 per session.

65. However, the evidence from the plaintiff is that throughout the pre-trial period she had been receiving physiotherapy treatment from government hospital which she finds helpful and wishes to continue the same. Moreover, the evidence of Dr Kan was that the present arrangement for physiotherapy for the plaintiff was reasonable. In the circumstances, the evidence from the plaintiff and from her doctor do not support this claim for future physiotherapy in the private sector. Hence the claim for physiotherapy is disallowed.

Interests

66. Interests at 2% p.a. will be awarded for general damages for pain suffering and loss of amenities from the date of writ until judgment and thereafter at judgment rate. This gives $26,500.00.

67. Interests at half judgment rate (6.25%) will be awarded on pre-trial loss of earnings and on special damages from the date of accident to judgment. This comes to $273,575.00.

Summary

68. The damages assessed above can be summarised as follows :

(a)	PSLA	$600,000.00
(b)	Pre trial loss of earnings	$1,256,900.00
(c)	Other special damages (agreed)	$125,374.00
(d)	Future loss of earnings	$2,778,412.00
(e)	Loss of earnings capacity	$200,000.00
(f)	Future expenses for psychiatric treatment	$167,700.00
(g)	Interests on (a)	$26,500.00
(h)	Interests on (b) and (c)	$273,575.00
	Total :	$5,428,461.00
		==========

Total damages including interests comes to $5,428,461.00.

Costs

69. There will be the usual costs order nisi that the defendant pays the plaintiff the costs of this action to be taxed if not agreed.