Chan Ki and Another v. Travel Trade Communication Network and Marketing Services Ltd. and Another

l995, PI No.343

IN THE HIGH COURT OF HONG KONG

COURT OF FIRST INSTANCE

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Assessment of Damages

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1. This assessment of damages arises out of an accident which occurred on l5th September, l993, when Madam LO sui lan, who was aged 59, was crossing Chui Tin Street near the Sun Tsui Estate between Shatin and Tai Wai, when she was knocked down by a light goods vehicle owned by the first defendant and driven by the second defendant. Madam LO suffered severe head injuries, fell into a coma, and died two days later. The two plaintiffs suing as administrators in the estate of Madam LO are the husband and only daughter of the deceased.

2. The Writ in this case was filed on l8th April, l995, and on 3rd June l996 the defendants filed a Notice of Admission of Liability. On 8th July, l996, it was by consent ordered that, inter alia, judgment on liability be entered against the defendants in favour of the plaintiffs and the assessment of dmages be adjourned to a date to be fixed. On 24th October, l997, a notice of appointment of assessment of damages was filed.

3. Four bundles were produced by the Plaintiff for use at the hearing, being Bundle of Pleadings, Bundle of Plaintiff's agreed documents, Bundle of witness statements, and Bundle of plaintiff's documents not agreed. The plaintiff called four witnesses who were cross examined by the defendant. The defendant did not adduce any evidence.

4. Two items of damages were agreed by the parties, as follows -

(l) Damages for bereavement under section 4 of the FAO, Cap. 22, in the sum of $70,000,

(2) Funeral expenses in the sum of $7,758

5. I accordingly make an award of $70,000 and $7,758 under these two heads of damage.

6. The following heads of damages sought by the plaintiff were not agreed -

(3) Damages for loss of accumulation of wealth under

section 20(2)(b)(iii) of the Law Amendment and Reform

(Consolidated) Ordinance, Cap. 23 (LARCO)

(4) Damages for loss of personal attention and maternal

affection of the deceased under section 6(l) of the

Fatal Accidents Ordinance, Cap. 22 (FAO)

(5) Loss of services under section 6(l) FAO, Cap. 22, in the sum of $28,800. The quantum was agreed by the defendant, but the claim under this head of damage was not.

(6) Interest on the damages for bereavement, funeral expenses,

loss of services and loss of personal attention and maternal

affection.

7. At the date of the accident, the deceased lived with her husband, Chan Ki, and their four children at Fu Wai House, Sun Tin Wai Estate, Shatin. The eldest son was aged 27 and worked as an account supervisor, the only daughter was aged 26 and worked as a material control supervisor, the second son was aged 22 and was in his fourth year at the school of medicine at Hong Kong University, and the third son was aged l7 and was a Form 6 student.

8. The husband, daughter and eldest son gave evidence that Madam LO was a good wife and mother and that she performed all the household chores for the family, and that she was a frugal person. The eldest son referred to the statement he gave to the police on 8th October, l993, and he confirmed the contents. In that statement, he described his mother has being well and only suffering from rheumatism of her left arm. His mother walked normally, had normal eyesight and did not wear glasses. His mother was optimistic and very nice to her family and friends, she did not smoke or drink. She did some trading in foreign currencies. He confirmed in oral evidence that his mother was in full control of all her faculties at the time of her death.

9. In cross examination, Chan kam mui said that she paid her mother $6,000 per month and that she would contribute another $2,000 per month to the family budget by way of taking the family members out to meals and spending on other household expenses, so that the total contribution was $8,000 per month, as mentioned in her statement. In cross examination, Chan kam yau said that he paid his mother $4,500 per month, although the contribution he made was more like the $8,000 per month mentioned in his statement, but he did not have documentary evidence to support the higher figure. He too made contributions to the household budget from time to time on an ad hoc basis. The daughter and son referred to the lower figures of $6,000 and $4,500 as set out at page 20 and 2l of Bundle D.

I accept the evidence of the family members.

10. Mr. Chan yuk sing of Cargary Securities Limited gave oral evidence, and produced the letter and statement of account found at page 5 and 6 of the Bundle. The statement showed that between 3l.5.93 and l0.9.93, the deceased had bought and sold 4,000 HK Telecom Shares, 8,000 Shanghai Pechem shares, 40,000 Chuangs Chi W95, which produced a modest profit of $2,l00.9l. She also bought l0,000 Four Seas Mer. shares and l2,000 Ngai Lik Ind shares, which were assets in her estate when she died. In cross examination, Mr. Chan said that the Chuang Chi warrants were issued by the company and were not cover warrants. Such warrants need not be as regulated as high risk warrants, but all warrants involve risk. I accept the evidence of Mr. Chan.

11. Mr. Ian Robinson gave oral evidence and produced his report which is found at page 7-48 of Bundle D. Mr. Robinson compiled his report from the Schedule of Documents Provided which is found at page l9 of the Bundle D. At paragraph 2.l, page l0, of his Report, Mr. Robinson sets out his terms and reference as being "prepare this report, to express my opinion as a professional accountant and to comment on the savings pattern of the deceased". I accept Mr. Robinson as an expert witness. In this regard, the question of the quantum of damages for loss of accumulation of wealth is a matter for the court and not for the witness, but in so far as the role of the witness was to prepare his report on the basis of documents provided to him, this was of assistance to me. As to the accuracy of the documents provided and the conclusions reached, on which much of the cross examination turned, those are matters for my consideration. For guidance in this area, there are the comments on the use of experts found in the case ofChan pui-kin v. Leung on and another ((l996) 2 HKLR page 40l, at page 4l9, and on the use of expert accountants found in Tristram Hodgkinson's Expert Evidence: Law and Practice at page 286.

12. The monthly contributions of the widower and the son and daughter are found at page 20, 2l and 22 of the Bundle, and the contributions of the younger son at page 23. The provisional shedule provided by the Inland Revenue Department is found at pages l5 and l6 of Bundle B.

13. In his IGR l4 at page 48 (which in turn relate back to IGR 7, 8 and 9 at pages 37 to 4l), Mr. Robinson has summarised what the plaintiff's claim would be as at 3lst December, l997, and in IGR l6 at page 53, he has up-dated the claim to 3lst January, l998, as follows -

14. Method l - starting with the balance of $373,628.75 in the estate at death, he then takes the annual nett estimated savings (estimated contributions less the estimated costs) and applies the savings bank interest rate applicable at the time. The resulting figure if $685,307.49 as at 3lst January, l998.

15. Method 2 - this is based on the deceased's pattern of actual and income savings for the nine year period to September l993. The savings from the contributions of the family members for the period to September l993 is deducted from the value of the estate assets, resulting in a figure of $85,885.35, being the increase in those savings derived from the investments made by the deceased. This equates to double the applicable savings bank interest rate and results in a figure of $768,786.25 as at 3lst January, l998.

16. Method 3 - this is calculated by applying a l0% growth per year to the existing estate value of $373,628.75 as at September l993. This produces a figure of $567,452.90 as at 3lst January, l998.

17. IGR l7 at page 53 sets out the average accumulated monthly income relating to the first method by reference to IGR 7 and l4, and the second method by reference to IGR 8, l4 and l6.

18. At page l5 and l6 of his report, Mr. Robinson sets out his reasoning, and at page l8 concludes that method 3 is not realistic, and that in his opinion either method l or 2 would be appropriate.

19. I accept Mr. Robinson as a credible witness who was not shaken in cross examination. He demonstrated his neutrality as an expert in that in his calculations he used the most conservative figures in so far as the plaintiff was concerned. For example, he used the lower figure for the contributions of the son and daughter as $4,500 and $6,000, and not $8,000 and $8,000 respectively. He used the higher figure of $ll,000 for household expenditure and not $8,500. While I accept that the report is fair and reasonable given the facts on which it is based, the issue is whether those facts are beyond dispute or whether they are mere conjecture or speculation.

20. In the case before me, the first step is to consider whether the claim under the head of loss of accumulation of wealth is sustainable on the facts. The authorities before me are concerned with the loss of accumulation of wealth where the claim by the estate is based on the earnings of the deceased worker, including the case of Ngai chit chuen and Ngai shuk yuen, Administrators in the Estate of Sae-Koy Vannaporn, deceased v. Lui Chi hung trading as Chi Tat Transportation Company and Cheng kwok-wa, unreported, P.I. No. 320 of l995, l6 May, l997, where Master Sweeney found that the deceased, a 39 year old housewife, was earning an income from farming prior to her death, and he made an award for the loss of accumulation of wealth on that basis.

21. I am being asked to extend the meaning of earnings to gains in a broad sense to encompass family contributions received by the deceased for the household expenses of the family, out of which she managed to save and make profit by way of investments. It is not comparable to the situations in the authorities before me, where the deceased received earnings, and damages were assessed on the amounts shown to be expended for the benefit of dependants and the amounts saved. From the evidence, it appears that Madam Lo was astute in handling those voluntary contributions in that she left $373,628.75 at death. Her estate will be distributed to her widower and children in accordance with the Intestate Estates Ordinance, and her beneficiaries will benefit from her prudent management of the family contributions. Since her death, the family members may retain the money they gave to their mother, and may invest it on their own behalf if they wish. They may decide to make the contributions to another family member, who in turn may accumulate the surplus and gain interest on it by way of bank accounts or other investments. The voluntary contributions cannot be equated to earnings from employment or income from a business. There is no authority before me to justify an extension of the law to include voluntary family contributions in a claim for loss of accumulation of wealth. I am satisfied that there is no sustainable claim for loss of accumulation of wealth in this case.

22. In the event that I were to be found wrong on this issue, I go on to consider the quantum of damages under this head.

23. In considering a claim under the sub-section, Kaplan J.'s statement in In re Lau Chuen-fat, deceased, (ll94) 2 HKLR l73, at page l82, is a useful starting point -

"It is clear from this sub-section that an award of damages based on an accumulation of wealth which would have existed as at the date of the likely natural death of the deceased can be made provided that the court is satisfied that some would have existed. I can find nothing in this section that provides for the award of a conventional or notional sum which I note is frequently awarded in some of the reported cases."

24. It seems plain to me that what the court has to consider is whether, at the date of death by natural causes, there would have been an accumulation of wealth, the realization of which the tortious death has prevented. The mere fact that some savings can be shown at the date of the tortious death is not tantamount to saying that such savings would have been in existence at the date of the natural death. It seems clear to me that whereas a man in this sort of work can make some savings, these are inevitably earmarked for the period after which he has retired and during which there is no meaningful old age pension or other support. Further, savings that can be identified at the date of the tortious death may well be spent on a variety of matters during the normal working life.

25. It also seems clear to me that the amendments introduced by s. 20 of LARCO to counter the "lost years" claim were enacted to prevent a windfall accruing to estates which could not be justified on the evidence. In fact, s. 20 itself exhorts the court to ensure that there is no over compensation to the estate.

26. It is necessary to consider whether there is a pattern of savings and whether there would have been any accumulation of wealth at the date of the natural death. Counsel for the plaintiff referred to Ho pang lin v. Ho shui on (l994) 2 HKLR 3l3, at page 3l7, in which Deputy Judge Jones refers to the three situations the court will have to consider on the issue of accumulation of wealth. The first one is where a deceased has an obvious savings pattern.

27. In September l984 Madam LO had $283.63 in a bank account. When she died her estate was valued at $373,528.75. Clearly, she had established a pattern of savings prior to her death. I have then to consider whether this would have continued in the future and whether there would have been an accumulation of wealth at the date of Madam Lo's natural death.

28. Counsel for the plaintiff submitted that Madam LO was 59 when she died. She had the four children, aged between l7 and 27. All were unmarried and, save for Kam Hoi, were not in any steady relationships and her daughter and eldest son are still not in any steady relationships. Kam Hoi married in l997, about four years after his mother's death. Had she lived, Madam LO would have been 63 when Kam Hoi married. Madam LO was not a young mother, and might not have lived to see her daughter and sons marry. This was a closely knit family, as is evidenced by the fact that the second son still contributes $5,000 per month although he is now married, and the daughter spends more time at home because her father is now alone and aged 70. The children are not the sort of children who would be likely to borrow money from their mother for their own use or look to her for any help.

29. While I accept all those points, I bear in mind that equally in the next few years, as the children move through their twenties, you would expect changes in their lives, including marriage, the establishment of their own homes and families, including the likelihood that they will buy their own flats or even businesses, with the consequent financial commitments that these changes bring. I also have to bear in mind the possibility that the children might lose their jobs or that their incomes could be reduced due to economic factors outside their control. As has been seen recently, jobs are not secure, even for young workers. Further, with the advancing years, a person in Madam LO's position might have to spend some of her life savings on medical care for herself or her husband. While the fact that Madam LO had only $283.63 in her bank account in l984 and that she had accumulated $373,628.75 at her death in l993 shows a pattern of savings prior to death, it does not persuade me that those figures can be the foundation of a wholly speculative exercise to establish that such a pattern of savings would have continued in the future and that such savings would have been in existence at the date of her natural death. Even on a balance of probability, such an exercise is not realistic and cannot be used to sustain a claim for damages under this head.

Loss of services

30. This claim is brought on behalf of the widower and the children. It is submitted on their behalf that Madam LO, without the assistance of a domestic helper, performed all the household duties required in a household consisting of the widower and the four children.

31. I was referred to Ngai chit chuen, where there were four children aged l7, l5, l0 and 8 at the date of their mother's death. Under the claim for loss of services, where no domestic help was in fact engaged, Master Sweeney awarded a sum of $288,490 to be divided equally between the four children, and in the claim for loss of personal attention and maternal affection he awarded $40,000 to each child. In that case, the father was a drug addict and was a long distance truck driver between Hong Kong and China. Since the death of the mother, they had moved in with their paternal grandparents, and Master Sweeney found that there had been emotional as well as physical disruption in their lives.

32. In the case of Leung sing-kiu v. Wong shek-keung (l989) l HKC page 206, the late Master Jerome Chan (as he then was) at page 2l2 gave consideration to a claim for loss of services. He held that the estate's right to claim for loss of services was abolished by section 20B of LARCO. Under section 6(l) of the FAO a dependant was entitled to be awarded damages in such proportions as reflect their respective injuries as a result of the death, and such injuries include a claim for loss of services. Morris v. Rigby (l966) ll0 FJ 8934 and Mehmet v. Perry (l977) 2 All ER 529 were followed. Section 20B of LARCO abolished the husband's right to claim for loss of services. Sub-section 20C(l)(a) preserved the husband's right to claim for loss of "society" but not "services". Such right is only preserved where the injured wife survived but not where the injured wife died as a result of the injury which would give rise to a claim for bereavement under section 4 of the FAO. By virtue of the provisions of section 4(l) of the FAO and section 20C(3) of LARCO, a claim for bereavement and a claim for loss of society by the surviving husband are mutually exclusive. In this case, there is the claim for bereavement, so that a claim for loss of services by the husband cannot be maintained.

33. As to the claim by the children for loss of services. Master Jerome Chan held that the language of section 20C of LARCO was not capable of depriving the children of a deceased mother of a claim under section 6(l) of the FAO for loss of services (irrespective of whether a right to bereavement under section 4 of the FAO had arisen or not). I accept that the claim by the children for loss of services is maintainable. Since the quantum under this head has been agreed at $28,000, I make an award of that sum to the children, to be divided equally between the four.

34. I draw attention to, and concur in, the comments made by Master Jerome Chan in the case of Leung sing kiu v. Wong shek keung, that the language of section 20C and the interaction and relationship between section 20C and section 4(l) perhaps require further consideration by the legislature.

Loss of personal attention and maternal affection

35. In the cases of Regan v. Williamson (l976) 2 All ER 24l and Mehmet v. Perry (l977) 2 All ER 529, the loss of the personal attention of a wife and mother as distinct from that of a housekeeper was considered. In Regan v. Williamson it was said that the wording of the English equivalent of section 6(l) should not be construed narrowly or restrictively and should include an award for the loss of personal attention and affection of a deceased mother.

36. In the Hong Kong case of Lam nai yau v. Lee shu choi (A9l5/78, unreported), the court awarded a further 45% over the cost of services to cover the factor of personal attention. In Cheng shiu ling v. Hui wai hung (l990) 2 HKC 367, Master Jones considered the English authorities and awarded the sum of $40,000 under this head to each of the two children aged just three and one year nine months at their mother's death.

37. In the case of Ngai Chit Chuen, Master Sweeney awarded the sum of $40,000 to the four children aged l7, l5, l0 and 8 at the time of their mother's death. The father was a drug addict and was engaged in long distance truck driving into China since the death of the mother. The children were then residing with their paternal grandparents in order to maintain a stable family environment. Master Sweeney accepted that there had been emotional as well as physical disruption in their lives. He noted that the children would share in the award for loss of services.

38. It was submitted here that I should make an award of $40,000 for the youngest child, Kam kwok, and $20,000 each for the older children, Kam yau, Kam mui, and Kam hoi. Master Jones was dealing with a case involving very young children, and Master Sweeney's case concerned teenage children with a father who was a drug addict. This case involves three adult children in their twenties with the fourth child aged l7. There is a stable family life which has continued, the only change being a move to larger premises in the Shatin area. In the circumstances of the case now before me, I make an award of $l0,000 to each of the three older children and $20,000 to the youngest, being a total of $50,000, under this head.

39. Interest on the damages for bereavement, funeral expenses, loss of services and loss of personal attention and maternal affection

40. Interest on these heads of damages are not agreed. Following the authority of Keith J. in Kwan lai kuen v. National Insurance Company Limited (PI No. 960/l995, unreported), the award for bereavement will attract interest at the prevailing rate of interest payable on suitors' funds from the date of the deceased's death. As to the award for funeral expenses, loss of services and loss of personal attention and maternal affection, these will attract interest at half the judgment rate from the date of the accident. I will leave it to the parties to calculate the actual amount of interest.

Costs

41. There will be an order nisi that the plaintiff's costs be paid by the defendant, with certificate for counsel, such order to be made absolute within 2l days of the handing down of this assessment, with the plaintiff's own costs to be taxed in accordance with the Legal Aid Regulations if not agreed.