HUSSAIN KAMRAN v. KHAN, AMAR formerly t/a THREE STAR RECYCLING CO (A FIRM) AND ANOTHER

CACV 255/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 255 OF 2014

(ON APPEAL FROM HCPI NO 953 OF 2012)

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JUDGMENT

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Hon Chu JA:

1.  This is the plaintiff’s appeal against the judgment of MasterChow (“the Master”) awarding HK$226,122to the plaintiff as damages for personal injuries he sustained as a result of anindustrial accident.

The accident

2.  The plaintiff was employed by the 1^st defendant as a recycling factory worker.  The accident in question happened at about 2:30 pm on 10August 2010 when the plaintiff was tasked to extract wires from old air-conditioners by using a machete type knife and hammer to split the motor to get to the copper wiring.  As his knife became blunt, he sharpened it with a hand-held electronic grinder provided by the 1^st defendant.  In the course of doing so, the disc of the grinder suddenly shattered and became detached from the grinder.  The detached disc hit and cut the plaintiff’s right wrist, causing him to let go of the grinder, which then hit the bottom joint of his right thumb.     

The plaintiff’s injuries

3.  As a result of the accident, the plaintiff sustained injuries to his right wrist and thumb, namely,

(1) Right wrist laceration;

(2) Right thumb extensor tendon rupture; and

(3) Partial detachment of the right thumb nail.

5.  The plaintiff was hospitalized for 4 days, during which wound exploration and tendon repair were carried out.  The right thumb was put on static extension splint. 

6.  After discharge from hospital, the plaintiff attended out-patient physiotherapy treatment.  After the splint was removed, he also received occupational therapy treatment and underwent a tendon rehabilitation program.  The last physiotherapy session and occupational therapy session took place in February 2011.

7.  The plaintiff was given sick leave up to 24November 2011.

8.  According to the single joint orthopaedic expert, Dr Patrick Wong,[1] the plaintiff has reached maximal medical improvement (MMI) at the examination in August 2012.  Dr Wong found the plaintiff to have mild reduction in right wrist movement, moderate reduction in right thumb movement, and severe reduction in both right hand grip strength and right thumb pinch strength (being half of the strength of the left hand). 

9.  In Dr Wong’s opinion, the plaintiff will have some residual pain, especially upon heavy exertion, and the stiffness and weakness of his right thumb will persist.  Dr Wong is further of the opinion that the overall functional use of the plaintiff’s right hand will be impaired for general purpose and daily activities, with greater impairment expected for heavy manual-work, or fine use requiring much dexterity.

10.  As to the plaintiff’s ability to return to work, Dr Wong considers[2] he will have difficulty performing the full duty of a recycling factory worker in that he has to avoid handling very heavy object, and his work efficiency and capacity will be reduced, such as requiring more frequent rests in between prolonged work.  In Dr Wong’s opinion, the plaintiff may take up less-demanding manual work, such as packing worker, cleaning worker or security guard.       

The plaintiff’s employment

11.  The plaintiff was born in September 1992.  He is a Pakistani national.  He joined his father in Hong Kong in February 2010.  He was educated up to secondary education level in Pakistan.  He speaks Punjabi, Urdu but minimal Cantonese and English.  He is right-hand dominant.  

12.  Since coming to Hong Kong, the plaintiff had worked as a general labourer.  He began working as recycling factory worker for the 1^st defendant on 16 March 2010, about five months before he met with the present accident.  

13.  In January 2012, approximately1.5 months after the expiry of the sick leave, the plaintiff returned to work as a part-time computer packing worker in a shop in Sham Shui Po.

Employees’ compensation award and payment received by the plaintiff

14.  The plaintiff was awarded HK$107,400 compensation in the Employees’ Compensation proceedings in the District Court (DCEC 1933/2011).  As at the hearing of the assessment of damages before the Master, the plaintiff had not yet received payment of the award.

15.  The plaintiff had, however, received a cash payment of $22,000 from the 1^st defendant, which he agreed to give credit for.

The Master’s assessment

16.  The plaintiff brought the proceedings below against the1^stdefendant for damages for negligence, breach of duty and breach of employment contract.  On 7 March 2013, judgment on liability with damages to be assessed was entered against the 1^st defendant.  Subsequently, the 2^nd defendant applied for, and was granted leave, to be added as a defendant.  On 5 June 2014, the 2^nd defendant filed an Answer to the plaintiff’s Revised Statement of Damages.

17.  At the hearing before the Master to assess damages, the 1^st defendant was present. He was unrepresented, and took no active part in the assessment.  The 2^nd defendant was represented by counsel, who cross-examined the plaintiff and made submission challenging the plaintiff’s claim.  

18.  The Master awarded $226,122 to the plaintiff, the breakdown of which is as follows:

(1)	Pain and suffering and loss of amenity		$ 170,000
(2)	Pre-trial loss of earnings
	(Up to end of sick leave period)
	-  Total loss of earnings	$155,000
	-  Partial loss of earnings	$  26,611	$ 181,611
(3)	Future loss of earnings		nil
(4)	Medical and travelling expenses (agreed)		$   3,911
(5)	Deductions
	-  Employees’ Compensation	$107,400
	-  Cash payment	$  22,000	($ 129,400)
		Total:	$  226,122

19.  The Master refused the plaintiff’s application for costs against the 2^nd defendant. She ordered the 1^st defendant to pay the costs of the plaintiff and the 2^nd defendant with certificate for counsel, to be taxed on District Court scale.

The plaintiff’s appeal

20.  Broadly speaking, the plaintiff’s appeal is directed at the following aspects of the Master’s decision:

(1) Assessment of loss of earnings (Grounds 2 to 14)

This relates primarily to: (a) the refusal to award loss of earnings for the 1.5 months between the expiry of the sick leave and the time when the plaintiff returned to work; (b) the refusal to award mandatory provident fund (MPF) payment for the sick leave period; (c) the finding that the plaintiff has failed to mitigate his loss by not taking up full-time employment or taking up supplement work; and (d) the assessment of the plaintiff’s residual earning capacity and future earnings.

(2) Refusal to make an award for loss of earning capacity (Ground 15).

(3) Refusal to order costs against the 2^nd defendant (Ground 16).

21.  Ground 1 in the Notice of Appeal dealing with the plaintiff’s notional salary at the date of the assessment was not pursued.  

Loss of earnings for the time taken to find a new job

22.  At the time of the accident, the plaintiff’s monthly salary was $10,000.  He worked 12 hours a day for 26 days a month.  No MPF account had been set up for him. 

23.  The plaintiff gave evidence on the attempts he made to look for work after the end of the sick leave period in November 2011.  It was accepted that in January 2012, through his uncle’s introduction, he secured the present job working as a part-time computer packing worker.

24.  According to the plaintiff, his income depends on the amount of work available.  He says he works between 15 and 20 days a month, with daily working hours ranging between two or three hours to five hours.  He will be paid $200 for a two to three hours’ working day, and $500 if it is a five hours’ working day.  On average his monthly income is about $6,000.  The plaintiff said he is employed on a part-time basis because, as a result of the residual pain and disability, he is not able to handle the loading and unloading of computers, a task which full-time employees are required to undertake.  The plaintiff’s evidence on his income from his current job was challenged. I shall return to deal with this in the latter part of my judgment.

25.  The Master awarded total loss of earnings from the date of accident to the end of the sick leave period in the sum of $155,000 (i.e. $10,000 x 15.5 months).  She made no award for the 1.5 months that the plaintiff took after the expiry of sick leave to find a job.  This is primarily because she considered that the plaintiff could have started to look for work during the sick leave period.  In §35 of the Judgment, after noting that the plaintiff has a good social network and that through his uncle’s help, he found his pre-accident and post-accident jobs within a short time, the Master said:

“Actually it is the testimony of the plaintiff that he had asked his uncle for referral of job openings, leading not only to his weighing up the possibility of taking up work at a construction site, or working as a driver or security guard, but also to his ultimate realization that those types of work are not something he can handle because of his inability to lift heavy objects or because of language barrier. As the enquiry conducted did not entail exertion of the injured hand of the plaintiff at all, all such job-hunting efforts could have been undertaken while the plaintiff was still on sick leave. The plaintiff might have taken some time in trying to secure a full time employment and so reluctant to start work on a part-time basis, but he could have looked for both part-time and full-time employment at the same time. Whatever the actual reason may be, I see no justification to allow time for looking for new employment in the present case.”

26.  Mr Sakhrani, who appeared for the plaintiff, submitted that since sick leave is a period of leave, the plaintiff should not be expected to make applications and to attend interviews for jobs during the period, and that the Master’s reasoning was not in line with the practice of the courts to allow a reasonable time after the end of the sick leave to find work, citing Ma Yuet Pong v. Chan Kar Wai (unreported) HCPI 577/2010; Gurung Krishna Jang v. Precious Swine Ltd (unreported) HCPI 486/2009, and Wong Yun San v. Cheung Yue Yiu t/a Radio Engineering Co (unreported) DCPI 1909/2007.  Ms Leong for the 2^nd defendant disagreed, submitting there was no such rule or practice.  She also pointed out that the Master had given reasons for her conclusion, which is a finding of fact.      

27.  I agree with the Master that whether, and if so how much, time should be allowed for looking for employment depends on the circumstances of each case.  The test is one of reasonableness. 

28.  I also accept Ms Leong’s submission that it is open to the Master to find as a matter of fact that the plaintiff could have made enquiries with his uncle for job openings when he was still on sick leave.  However, I do not agree that this finding is determinative of whether loss of earnings is to be awarded for the 1.5 months after the expiry of the sick leave.  The test is whether it is reasonable that the plaintiff return to work 1.5 months after the end of the sick leave period.  What the Master should have considered is whether it is realistic and reasonable to expect the plaintiff to look for work while on sick leave and then to resume work immediately after the expiry of the sick leave period, when there is no evidence to suggest he knew in advance when his sick leave would come to an end and when the medical evidence is that he has residual pain and disabilities in the right hand.   

29.  The Master made no adverse finding on the plaintiff’s efforts to find employment.  Neither did she find that 1.5 months was an unreasonable period of time to look for new employment. In the circumstances, and having regard to the plaintiff’s education background and limited language abilities, and the fact that he had been out of the job market for over 15 months, had the Master directed her mind to the issue in question, she would have concluded that it was not unreasonable for the plaintiff to return to work 1.5 months after the end of the sick leave period. I would allow this part of the appeal and award total loss of earnings for a total period of 17 months (15.5 months + 1.5 months).

MPF payment

30.  The Master refused to make award for MPF payment for the period up to the expiry of the sick leave.  She explained her decision at §36 of the Judgment:

“MPF is claimed and there is no challenge by the Board to the award of an additional 5% of the amount computed. However, it is the plaintiff’s own testimony that he had no MPF benefits from the 1^st defendant. Given that the plaintiff should be put in a position had the accident not occurred, the 5% should not be added since he would not have received such amount from the 1^st defendant. As pointed out by HH Judge Simon Leung in Chan Chi Shing v Chan Shu Kuen [2009] HKLRD 259, at paragraph 43, “Damages are compensatory and it is [the plaintiff’s] burden to prove his loss rather than assumed entitlement”. I therefore make no award for MPF for this period.”

31.  Mr Sakhrani’s submitted that the Master should not have ignored the 2^nd defendant’s concession.  He further argued that it should not be assumed that throughout the sick leave and subsequent periods, the plaintiff would not have received the MPF contribution when it is a criminal offence for an employer not to make MPF contribution.  Ms Leong supported the Master’s decision on the basis that as the plaintiff had been in the 1^st defendant’s employment for five months by the time the accident happened, and given he had not received MPF payments thus far, it is probable that he would not receive such payment during the sick leave period. 

32.  In coming to her view that the plaintiff should not be awarded MPF payment for the sick leave period, the Master did not appear to have considered that an employer is under a mandatory statutory obligation to make MPF contributions for his employees, and that employers who default in making contributions are liable to be prosecuted and ordered to make good the amount in arrears.  MPF benefits are not contractual entitlements.  Accordingly, the fact that the 1^st defendant had not been making the MPF payments is not conclusive of the matter; it cannot be conclusively inferred that had the plaintiff continued to be in employment during the sick leave period, he would not have received MPF payments.  I would reverse the Master’s decision and allow 5% MPF payment for the 17 months that the plaintiff was totally out of employment. 

33.  Accordingly, I would have awarded pre-trial total loss of earnings in the sum of $178,500 ($10,000 x 17 months x 105%).

Pre-trial and post-trial partial loss of earnings

34.  The Master assessed the salary that the plaintiff would have received had the accident not happened at $11,500, being the mean of the plaintiff’s salary at the time of the accident ($10,000) and the increased salary suggested by the plaintiff ($13,000).  As noted above (paragraph 21), the plaintiff does not pursue the appeal against this part of the Master’s assessment.

35.  On his earnings from the present job, the Master rejected the plaintiff’s evidence that he is earning on average $6,000 per month on the ground of lack of documentary support.  She also rejected the 2^nd defendant’s primary position that the plaintiff is able to return to his pre-accident employment with no reduction in earnings as being not viable in light of Dr Wong’s report.  She, however, accepted the 2^nd defendant’s fall-back position that the plaintiff is capable of earning the average salaries of male security guards working under a two-shift system. 

36.  On that basis, the Master assessed the plaintiff’s monthly earnings from his present part-time job by taking the mean of the average monthly salaries of male guards working under a two-shift system ($9,867[3]) and the income the plaintiff claimed he has been earning ($6,000).  She explained this at §46 of the Judgment:

“Mr Sakhrani has voiced concerns about the competitiveness of the plaintiff and the appropriateness of a direct extrapolation of such figure. I do not agree that the physical condition of the plaintiff poses any real limitation to his working full time, whether on a 2-shift or 3-shift basis, when there is nothing in Dr. Wong’s report to support such a conclusion. Security guard is also a type of employment which Dr. Wong considers the plaintiff to be capable of undertaking without physical limitations. In view of the language barrier issue, I will adopt the mean of the HK$9,867 figure and the current salary as claimed by the plaintiff. The figure to be adopted as the current monthly salary of the plaintiff is thus (HK$9,867 + HK6,000) ÷ 2 = HK$7,934.”

37.  The Master next considered the issue of whether the plaintiff had taken reasonable steps to mitigate his loss.  This issue was not raised in the Answer to the Revised Statement of Damages, but at the assessment hearing, the 2^nd defendant submitted that the plaintiff had not taken reasonable steps to mitigate his loss by not securing full time employment with his present employer.  The plaintiff’s evidence in this regard was that although he had tried, he could not take up full-time employment with the present employer because of the residual pain, and that he had difficulties finding other jobs or finding work to supplement his income owing to the disability in the right dominant hand as well as his limited education background and language abilities.               

38.  The Master rejected as being incredible the plaintiff’s complaint of having pain during work and his account that he could not work full-time as a packing worker.  She, however, accepted it is possible the plaintiff is not working full time in his present employment because he cannot handle the loading and unloading tasks. The Master found that the plaintiff had taken no step to supplement his income, other than following his uncle’s advice to wait for suitable openings.  Nor had he made enquiry about jobs such as cleaning worker which Dr Wong considered suitable for him, or about another part-time employment.  At §§53 and 54 of the Judgment, the Master concluded that the plaintiff failed to take reasonable steps to mitigate his loss:

“53. ... Before the accident, the plaintiff worked 12 hours a day, 26 days a month, i.e. 312 hours every month, not counting the few occasions when he worked on Sundays. With the current part-time job he has, taking the average of 2-5 hours a day (3.5 hours) and 15-20 days a month (17.5 days), he only works approximately 62 hours a month, about 20% of his previous working hours. Even in the busiest of months, the working hours of the plaintiff will only be 100 hours (5x20days), less than one third of his pre-accident working hours. There is a lot of spare time in his hand.

54. A plaintiff has to take reasonable steps to mitigate his loss. For the plaintiff in the present case, who has so much free time for over 2½ years, a lot more explanations as to the difficulties encountered and accounts as to the attempts made from time to time to find other jobs have to be provided. Simply waiting for his uncle and friends to introduce him to other suitable jobs for such a long span of time will not be sufficient, in particular when there is nothing to suggest that enquiry about taking up cleaning work has been made. It is clear from the evidence that the plaintiff has not exhausted reasonable efforts to mitigate his loss.”    

39.  The Master was of the view that the plaintiff could work for at least two times longer than the hours he puts into his current part-time employment.  She held that had the plaintiff taken reasonable steps to supplement his income, his monthly notional earnings would be $12,831.  She explained at §55 of the Judgment: 

“... Even if I am to assume that the plaintiff only works double and not triple of his current working hours, at the rate that he is now paid for his part-time packing work, this means that he can earn HK$7,934 more a month. If the lower rate at the statutory minimum wage of HK$30 per hour is adopted, he can get about HK$1,860[1] extra each month. I shall take the mean of these two figures [(HK$7,934+HK$1,860) ÷2], that is the sum of HK$4,897, as the extra earnings that the plaintiff could get had he taken reasonable steps to mitigate. With this added to the current monthly earning of HK$7,934, the notional current salary of the plaintiff had he taken reasonable steps to supplement his income would be HK$7,934+HK$4,897, i.e. HK$12,831 per month.”

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“[1] Assuming the plaintiff works for the same amount of hours in an average month, the additional working hours will be 62 hours (see paragraph 53 above). The pay for 62 hours at the statutory minimum wage of HK$30 per hour is HK$1,860.”

40.  The monthly notional earnings assessed by the Master being more than the plaintiff’s income at the time of the accident ($10,000), and his notional current salary at the time of trial ($11,500), there is therefore no loss of earnings after the plaintiff returned to work. Nonetheless, the Master considered that some time should be allowed for the plaintiff to take the steps to find additional part-time employment, and allowed nine months from expiry of sick leave for the plaintiff to secure other part-time employment to supplement his income, producing pre-trial partial loss of earnings of the sum of $26,611 (i.e. [½ x (HK$10,000 + HK11,500) – $7,934] x 9 x 1.05).[4]

41.  Mr Sakhrani’s submissions on appeal are that, firstly, the Master did not have proper regard to Dr Wong’s expert opinion that the plaintiff has residual pain and disabilities in his dominant right hand, and that it was not Dr Wong’s opinion that the plaintiff is capable of undertaking the work of a security guard without physical limitation.  It is argued that the Master should not have referred to the earnings of a security guard working full-time under a two-shift system, and the process by which she arrived at the notional earning capacity in full-time work is flawed.  Secondly, Mr Sakhrani submits that the Master was wrong in holding that the plaintiff has failed to take reasonable steps to mitigate his loss. It is pointed out that the defendant has not pleaded that the plaintiff failed to mitigate or failed to make reasonable attempts to find supplemental work. Relying on Froggatt v. LEP International [2002] EWCA Civ 600, he further submits that the 2^nd defendant bears the evidential burden of showing that the plaintiff could and should have found work at a higher pay had he made reasonable attempts to do so.  No such evidence was, however, led.  There is therefore no evidential basis for finding against the plaintiff on his efforts to look for employment after the accident.

42.  Ms Leong supported the Master’s rejection of the plaintiff’s evidence on his post-sick leave income, pointing out that this is a finding of fact.  She also supported the Master’s view that the plaintiff failed to mitigate his loss by only working part-time since returning to work, when there is no medical evidence that he cannot work full-time and he has a lot of spare time in his hand.  It is further submitted that the Master had tried her best to ascertain the plaintiff’s current income and his post-accident earnings had he taken step to mitigate his loss, and that the various notional figures arrived at are not unreasonable.        

43.  I accept that the Master’s rejection of the plaintiff’s evidence on the income from his current job is a finding of fact.  It has not been demonstrated that the Master was plainly wrong.  There is no room to interfere on appeal.

44.  As to the issue of mitigation of loss, I take on board Mr Sakhrani’s complaint that this was not raised in the 2^nd defendant’s Answer to Revised Statement of Damages.  I accept, too, his submission on the law with regard to the evidential burden.  However, I do not believe the issue assumes any real significance in the case.  This is because, independent of the issue, with the rejection of the plaintiff’s evidence on his current earnings, the Master would have to assess what is the income that the plaintiff can reasonably be expected to earn after the accident so as to determine his loss of earnings, if any.  In this context, it is open to the Master to find, as a matter of fact, that the plaintiff is able to work full-time after the accident.  Reading Dr Wong’s report as a whole, I do not think he suggests that the plaintiff’s residual pain and disabilities render him unable to work full-time.  I also do not understand the plaintiff to be really saying that, by reason of the residual pain and disabilities, he cannot work full-time.  The effect of his evidence is only that the present employer will not engage him full-time because he cannot handle the loading and unloading tasks; this is not the same as not having the capacity to work full-time.  In short, the Master’s findings that the plaintiff is able to work full-time after the sick leave expired, and that $6,000 does not represent the plaintiff’s true earning ability is not open to be challenged on appeal.

45.  It seems to me the core issue that arises for determination should have been: Having regard to his residual pain and disabilities, what full-time employment is reasonably open to the plaintiff and what is the income from it.  With this issue resolved, the plaintiff’s post-accident loss of earnings can be ascertained from the difference between (i) the notional income from the alternative employment and (ii) the income that the plaintiff would have earned had the accident not occurred. 

46.  The Master’s approach to assessing the plaintiff’s post-accident earnings, and her method of calculations which involves notional income from further part-time employment and the statutory minimum wage, are, with respect, problematic.  In the first place, her approach involves a lot of assumptions, which is not evidence-based and is unnecessarily cumbersome.  Further, in terms of her calculations, there is no proper basis to make use of the earnings of a full-time job (i.e. full-time male guards working on a two-shift system) to assess the plaintiff’s current monthly income, which is a part-time job.  The mean figure thus arrived at ($7,934) cannot be a true or realistic reflection of what the plaintiff earns on his part-time job.  

47.  The problem is compounded when this mean figure ($7,934) was used to calculate the extra monthly income the plaintiff could have made from additional work to supplement his income, and the notional extra monthly income produced ($4,897) was added to the plaintiff’s notional income from his current part-time employment ($7,934) to arrive at the plaintiff’s notional post-accident monthly income ($12,831). 

48.  That the final figure arrived at ($12,831) is significantly higher than the figure that the Master assessed to be what the plaintiff could have earned but for the accident ($11,500), and also higher than what a security guard working full-time on a two-shift system ($9,867), highlights the problem with the Master’s approach and calculations.  The figure ultimately arrived at does not reflect the reality of the situation for it is rather improbable that the plaintiff would earn more after the accident with the residual disabilities in his dominant right hand.          

49.  In my view, on the basis of the Master’s finding that the plaintiff can work full-time and in the light of Dr Wong’s opinion that he can take up employment as cleaner or security guard, the correct approach is to assess the plaintiff’s post-accident earnings by reference to the earnings from these alternative employments.  In his oral submissions, Mr Sakhrani asked us to adopt the mean of the earnings of a security guard working under a three-shift system and the earnings of a cleaner as the plaintiff’s notional post-accident earnings.  I agree this is appropriate.

50.  Adopting the figures shown in the Quarterly Report of Wages and Payroll Statistics of the Census and Statistics Department published in December 2013, which are the most recent figures on the evidence before the court, the monthly earnings of a security guard working under a three-shift system are $8,261, and those of a general cleaner are $7,431.  The mean figure is therefore $7,846 (i.e. ½ x ($8,261+$7,431).  This compared to the income that the plaintiff would have earned but for the accident ($11,500) produces a monthly loss of earnings of $3,654.  

51.  The plaintiff’s partial loss of earnings for the pre-trial period (i.e. from the plaintiff’s return to work up to trial) including MPF payment will be:

$3,654 x (51 months – 17 months) x 105% = $130,447.80, rounded up to $130,448.  

52.  As to the post-trial loss of earnings, Mr Sakhrani suggested a multiplier of 26.46 in the Notice of Appeal (Ground 14), on the assumption that the plaintiff retires at the age of 65 and following Table 9 of the Personal Injury Tables 2013.  However, given that the plaintiff was 22 years old at the hearing of the assessment of damages, the applicable multiplier according to Table 9 should be 26.11.

53.  Accordingly, the plaintiff’s post-trial loss of earnings, including MPF payment, is:

$3,654 x 12 months x 26.11 x 105% = $1,202,114.85 rounded up to $1,202,115.

54.  For the reasons stated above, I would allow this part of the appeal and make an award for pre-trial partial loss of earnings in the sum of $130,448, and an award for post-trial loss of earnings in the sum of $1,202,115.

Loss of earning capacity

55.  The plaintiff’s claim for loss of earning capacity was put on the basis that he would be at a disadvantage in the labour market because of his injuries and young age, and that he is at greater risk of becoming unemployed or having to cease employment from time to time.[5]  The Master’s reasons for refusing to make an award under this head are (at §62 of the Judgment):

“The plaintiff is a general labourer. He is not tied to working in one particular area or in one particular field. The limitations he faces in seeking employment are not induced solely by the injuries he sustained in the accident, but also due to language barrier. Noting the young age of the plaintiff, the inability of the plaintiff to read, write or speak English or Chinese is a condition that can change in the course of time. Having taken into account all relevant factors, I do not accept that the plaintiff would suffer significant handicap in the labour market. I make no award under this head.”

56.  Mr Sakhrani’s argument on appeal is that the Master failed to appreciate that for the plaintiff, his physical strength and stamina were his best working assets, hence his residual physical disabilities, together with the language barrier, would render him less competitive in the labour market and expose him to greater difficulties in finding work if he were to lose his present or notional employment.  Reliance was placed on Cheung Lee Man v. Chan Wai Wing (unreported) CACV 179/2006, 11 January 2007; and Ansar Mohammad v. Global Legend Transportation Ltd [2011] 2 HKLRD 985, §§26 & 27.

57.  In supporting the Master’s reasoning, Ms Leong pointed to the fact that the plaintiff has been working in his current job for 2½ years by the time of the assessment, and argued there is no evidence of any real or substantial risk of him losing his job, relying on Moeliker v. A Reyrolle & Co Ltd [1977] 1 WLR 132, 142A-C. 

58.  An award under this head is to address the disadvantage which a plaintiff may have in securing further employment should he at some time in the future lose his current employment.[6]  In my view, there is force in Mr Sakhrani’s submission that as a manual labourer, his physical strength and stamina will be the plaintiff’s greatest working asset.  This will be the case even if he were to take up the kind of alternative employment that Dr Wong said he could do, such as security guard or cleaner.  With the residual physical disabilities in his dominant right hand, he is clearly less competitive in the open labour market. 

59.  As to Ms Leong’s point that there is no substantial or real risk of the plaintiff losing his present job, it is to be borne in mind that the plaintiff is a young man in his early twenties with a very long working life ahead, and his present job is part-time in nature.  Looking at the matter realistically, I do not agree that because he has been able to stay with his current part-time job for two or three years, one can say there is no real risk of him losing the employment in future.   

60.  In the circumstances of this case, I consider an award in the sum of $50,000, which approximates six months of the notional post-accident salary, is appropriate.

Conclusion on the assessment of damages

61.  In conclusion, I would assess the plaintiff’s damages at $1,605,574, comprising the following:

(1)	Pain and suffering and loss of amenity		$ 170,000
(2)	Pre-trial loss of earnings
	-  Total loss of earnings	$178,500
	-  Partial loss of earnings	$130,448	$ 308,948
(3)	Future loss of earnings		$ 1,202,115
(4)	Loss of earning capacity		$ 50,000
(5)	Medical and travelling expenses (agreed)		$ 3,911
	Deductions
	-  Employees’ Compensation	$107,400
	-  Cash payment	$ 22,000	($ 129,400)
		Total:	$1,605,574

Costs of the assessment of damages

62.  Before the Master, the plaintiff sought costs against the 2^nd defendant while the latter argued that there was no jurisdiction to do so.  Having considered the decision of Bharwaney J in Kwan Kam Pui v. Fung Man & Ors (unreported) HCPI 18/2012, 30 May 2014, the Master rejected the 2^nd defendant’s position and agreed with Bharwaney J that section 25A and the other provisions in the Employees Compensation Assistance Ordinance, Cap. 365 do not affect or curtail the court’s wide jurisdiction under section 52A of the High Court Ordinance, Cap. 4 to make costs order against intervening parties, such as the 2^nd defendant.         

63.  The Master, however, exercised her discretion against awarding costs against the 2^nd defendant, and ordered instead that the 1^st defendant pays the costs of the plaintiff and the 2^nd defendant.  She gave her reasons in §§76 to 78 of the Judgment as follows:

“76. The reason for the 1^st defendant not taking a more active role in the proceedings is unknown to me, nor is the likelihood of the recovery of the awarded amount from the 1^st defendant. What is clear though is the wrongdoer in this case is the 1^st defendant. If the costs order is made against the Board, the 1^st defendant will be rid of a significant portion of the loss that results from his wrongdoing, a liability that is his in the first place.

77. The Board intervenes in the present proceedings under section 25A(b) of the Ordinance. Unlike a joinder pursuant to section 25A(a) (i) to (iv) of the Ordinance where the chance of recovery of the damages awarded from the employer is rather slim, the position is not as clear for a joinder under section 25A(b). Although the 1^st defendant did not take an active role throughout the proceedings, there is nothing to suggest that he cannot meet the liability that may be found to be his.

78. Reducing the net amount of the award the plaintiff can actually receive because of the deduction that has to be made for costs is an unattractive scenario. That is not however a given when the employer, unlike a section 25A(a)(i) to (iv) situation, can be reached and there is no indication of his financial unsoundness. That being the case, it is my view that allowing the 1^st defendant to benefit from a costs order against the Board is a greater vice that should not be condoned.

64.  Mr Sakhrani argued that the Master erred in her exercise of discretion in that she should not speculate on the 1^st defendant’s ability to pay costs ordered against him, and thereby expose the plaintiff to the risk of not receiving any costs for the proceedings after the joinder of the 2^nd defendant, who was the only party seriously contesting the assessment of damages.  This, in turn, will adversely impact on the amount of compensation that the plaintiff may as a matter of fact receive.

65.  Ms Leong, on the other hand, reminded us of the well established principle that the appellate court will not interfere with a judge’s exercise of discretion in the award of costs unless it was shown he failed to exercise the discretion, or exercised it upon a false principle, or did not exercise it judicially, or the exercise of discretion was demonstrably flawed: Hong Kong Civil Procedure 2016 Vol 1 §62/2/11 (at p.1160).  She submitted there was no basis to interfere with the Master’s decision on costs.  In her oral submission, Ms Leong argued further that, if this court were minded to make costs order against the 2^nd defendant, a separate hearing should be held to determine the issue of jurisdiction.

66.  The 2^nd defendant has not put in a respondent’s notice.  The Master’s decision on the issue of jurisdiction is not engaged in this appeal.  There is no proper basis for us to accede to Ms Leong’s request and to allow the 2^nd defendant to argue this issue on appeal.

67.  As to the exercise of discretion, the starting point is to have regard to the usual rule, which is that costs are to follow event.  Generally speaking, the rule applies equally to a party who intervenes in proceedings.  In this case, the 2^nd defendant joined in as an interested intervener, and has taken an active role in the assessment of damages, including serving an Answer to the Revised Statement of Claim, cross-examining the plaintiff at the hearing and making submissions challenging the plaintiff’s quantification of his claim.  As a matter of principle, the 2^nd defendant is liable to be visited with an adverse costs order, unless there are good reasons not to do so.

68.  The Master’s considerations for not making a costs order against the 2^nd defendant are twofold.  First, it would rid the 1^st defendant of a significant portion of the loss and liability that results from his wrongdoing, a liability that is his in the first place.  Second, the 1^st defendant can be reached, and there is no information of his means as to suggest he has no ability to meet the plaintiff’s costs; he should not be allowed to benefit from an adverse costs order against the 2^nd defendant.

69.  I agree with Mr Sakhrani that the impact of the costs order on the amount of compensation that a plaintiff stands to receive at the end of day is an important consideration in these cases.  It would appear from the Master’s reasoning that her primary focus was on the 1^st defendant’s position.  She had not considered whether, as a matter of principle, the 2^nd defendant should be liable in costs against the plaintiff.  Importantly, too, it would appear the Master only deliberated on which of the two defendants should be ordered to pay the plaintiff’s costs.  It does not seem she had considered making both defendants liable to pay the plaintiff’s costs, which is not an unusual order: see for example the costs order made in Wong Kim Hung v. Wong Wing Kong t/a 613 Decoration Works & Ors (unreported) HCPI 421/2010, 21 August 2013, at §40.  With such a costs order, the plaintiff’s costs position is secured and does not have to depend on the 1^st defendant’s financial ability to pay, on which the Master has no information.  It is then open to the 2^nd defendant to seek contribution from the 1^st defendant, which will avoid the 1^st defendant obtaining an unfair benefit if in fact has the means to pay.

70.  For these reasons, I would allow the appeal against the Master’s costs order, and substitute it with an order that: (1) the 1^st defendant pays the plaintiff and the 2^nd defendant the costs of the assessment of damages, to be taxed if not agreed; (2) the 2^nd defendant pays the plaintiff the costs of the assessment as from the date of its joinder, to be taxed if not agreed; and (3) the plaintiff’s own costs be taxed in accordance with Legal Aid Regulations.

Costs of the appeal  

71.  Finally, on the costs of the appeal, there is no reason to depart from the usual rule of costs follow event.  I would order the 2^nd defendant to pay the plaintiff the costs of the appeal, to be taxed if not agreed, and that the plaintiff’s own costs be taxed under the Legal Aid Regulations.

Disposition

72.  In summary, I would make the following order:

(1) The plaintiff’s appeal is allowed. The Master’s assessment and costs order are set aside.

(2) The 1^st defendant pays the plaintiff damages assessed in the sum of $1,605,574 together with interests.

(2) The 1^st defendant pays the plaintiff and the 2^nd defendant the costs of the assessment of damages, to be taxed if not agreed.

(3) The 2^nd defendant pays the plaintiff the costs of the assessment of damages as from the date of its joinder, to be taxed if not agreed.

(4) The 2^nd defendant pays the plaintiff the costs of the appeal, to be taxed if not agreed.

(5) The plaintiff’s own costs in the proceedings below and in this appeal be taxed in accordance with the Legal Aid Regulations.

 

Hon Barma JA:

73.  I agree.

Hon McWalters JA:

74.  I agree with the judgment of Chu JA.