YUM SIU WAH v. WONG CHI SHING

CACV 330/2021, [2024] HKCA 327

on appeal from [2021] HKCFI 1553

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 330 OF 2021

(ON APPEAL FROM HCPI 473/2018)

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J U D G M E N T

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Hon Barma JA (giving the Judgment of the Court):

1.  This is an appeal by the plaintiff against the decision of DHCJ Laurence Li SC (“the Judge”) dated 2 June 2021[1] (“the Judgment”), by which the Judge (i) awarded damages to the plaintiff assessed in the principal sum of HK$1,479,580 (“the Judgment Sum”) with interest; and (ii) ordered the plaintiff to pay the costs of the defendant, to be taxed if not agreed, with certificate for two counsel in respect of an action for personal injuries brought by the plaintiff against the defendant.

2.  By a Supplementary Notice of Appeal (“SNoA”) filed on 25 April 2022, and issued in substitution of the original Notice of Appeal dated 29 June 2021, the plaintiff seeks to set aside the Judgment and asks this court to reassess and increase the Judgment Sum.  The defendant filed a Supplementary Respondent’s Notice (“SRN”) on 17 August 2022, replacing the original Respondent’s Notice filed on 14 July 2021.  

3.  We heard the appeal on 9 March 2023.  The plaintiff was represented by Mr Kumar Ramanathan SC and Mr Eric Tsoi, and the defendant was represented by Ms Alice Mok SC and Mr Ashok Sakhrani.  At the conclusion of the hearing, we reserved our judgment and indicated that costs of the appeal would be dealt with after our judgment was handed down.  This is our judgment on the appeal.

Background and the proceedings below

4.  The background to the proceedings was set out by the Judge in the Judgment.  It is not necessary for us to repeat it in detail.  It can be summarized as follows.

5.  On 28 June 2015, the motor vehicles of the plaintiff and the defendant collided in a road traffic accident.  The accident resulted in injuries to the plaintiff, who had since January 2012 been employed by Auto Italia Limited (“Auto Italia”) as a salesperson of “super cars” – namely, Ferrari sports cars.

6.  By his Writ dated 4 May 2018, the plaintiff commenced these proceedings against the defendant for damages for personal injuries.  The plaintiff claimed that the injuries caused by the accident to his left index finger and his neck had resulted in his losing his highly remunerative employment as a salesman of super cars. The defendant admitted liability, resulting in interlocutory judgment for damages to be assessed being entered in the plaintiff’s favour on 18 July 2018. The Judge, by the Judgment, assessed the amount of such damages to be the Judgment Sum.

7.  The plaintiff’s initial claim for damages was around HK$33,000,000.00. This figure was reduced by subsequent revisions to the plaintiff’s Statement of Damages.  At the start of the trial on 3 June 2020, the plaintiff filed a Further Revised Statement of Damages in which the damages claimed totaled HK$10,786,842.17, consisting of:

(i)      pain, suffering and loss of amenities (“PSLA”): HK$550,000.00;

(ii)     accrued loss of earnings: HK$3,007,315.06;

(iii)    loss of congenial employment: HK$150,000.00;

(iv)    other accrued special damages: HK$95,580.00; and

(v)     future loss of earnings: HK$6,983,947.12.

8.  Claims for damages for future medical expenses, and for loss of earning capacity, which had appeared in earlier versions of the Statement of Damages, were no longer pursued in the Further Revised Statement of Damages.

9.  By his Answer to the Revised Statement of Damages (filed on 24 September 2019), the defendant denied most of the plaintiff’s claims and suggested that he was only liable to pay damages totalling HK$1,047,982.00 (see Judgment at [3]).

10.  Between [6] and [46] of the Judgment, the Judge summarized the evidence and made his main factual findings on certain key issues.

11.  The plaintiff’s case was that, as a result of the injuries sustained in the accident, he was no longer able to work as a car salesman, and in particular could no longer work as a salesman of super cars.  By the time of the trial, he was working in a back office position (without sales responsibilities) as a senior customer service officer with Glorious Motors Limited (“Glorious Motors”) which dealt in luxury cars (but not super cars), at a substantially reduced income.  This was the basis for his very substantial claim for damages for loss of earnings.

12.  The evidence before the Judge on this issue included expert evidence from orthopaedic medical experts appointed by each party presented to the court in a Joint Medical Report and Supplemental Joint Medical Report.  The experts agreed (see Judgment [8] to [14]) that:

(1)     there was mild subluxation in the plaintiff’s left index finger which caused tenderness and limited movement which could affect his grip and agility, but this could be improved by a surgical procedure (which had a 90% success rate) followed by physiotherapy, leaving some residual limitation of motion; and

(2)     the plaintiff had a neck sprain which caused some limitation to the turning of his neck, but this was partly due to pre-existing degenerative changes, and should not affect him significantly in driving.

13.  The experts did not deal with the extent of the subluxation in the plaintiff’s left index finger (beyond describing it as mild), or its impact (if any) on the plaintiff’s ability to drive (see the Judgment at [15]).  The Judge in any event considered that they were not qualified to express views on the qualities and attributes needed to drive super cars, as opposed to normal or luxury cars, as he did not regard them as having expertise in the driving of super cars.  However, he did accept (and placed weight on) their view that that the plaintiff was able to drive normal cars normally and could be a salesperson of normal cars (see the Judgment at [39]).

14.  The plaintiff also gave evidence himself, and called as witnesses a former customer, and an owner of Ferrari super cars.  Although the Judge took account of the plaintiff’s evidence, he did not find the evidence of the plaintiff’s other witnesses to be of much assistance.

15.  The plaintiff also put in evidence a Discharge Summary arising from visits he made to Queen Elizabeth Hospital between 20 May 2019 and 19 July 2019, which expressed the view that the plaintiff should not drive cars which had not been suitably adapted for his physical limitations.  However, the Judge did not place weight on this, for the reasons he explained at [28] of the Judgment – in particular concerns about the circumstances in which the plaintiff came to seek the assessment, reservations about the fact that the defendant had not been informed about it, and the fact that the doctors involved in the assessment were apparently not made aware of the plaintiff’s intention to use it for the purposes of litigation and thus were not acting as experts for litigation with an awareness of their obligations to the court.

16.  The defendant adduced hearsay evidence from a former supervisor of the plaintiff, and from the human resources manager at the plaintiff’s former employer.  Both gave evidence to the fact that the plaintiff did not lose his employment as a result of his injuries.  However, the judge afforded these statements no real weight.  Video surveillance evidence adduced by the defendant was similarly considered by the Judge to be of little assistance.

17.  Having considered all of the evidence, the Judge accepted the plaintiff’s evidence that he could no longer work as a salesman of super cars, but held that the plaintiff could have worked as a salesman of normal or luxury cars, or found some other suitably remunerative employment.  The Judge did not, however, accept that the plaintiff’s injuries meant that he could only work in a back office position with car dealers.

18.  The Judge then turned to consider the impact of the accident and the plaintiff’s injuries on his earnings.

19.  In relation to his past earnings, in a pre-action letter dated 17 February 2017, the plaintiff’s solicitors had stated that his income in the year preceding the accident was about HK$55,000 per month.  However, the plaintiff also put in evidence a copy of a letter sent to him by the Inland Revenue Department (“IRD”) on 28 June 2018, which set out his income earned in various years of tax assessment.  For present purposes, it suffices to set out the income in the three tax years prior to the accident.  This was as follows:

Year of Assessment	Name of Employer	Period of Employment	Income (HK$)
2012/2013	Auto Italia	1/4/12 - 31/3/13	1,207,858
2013/2014	Auto Italia	1/4/13 – 31/3/14	892,163
2014/2015	Auto Italia	1/4/14 – 31/3/15	736,147

20.  On the defendant’s part, a figure for pre-accident earnings slightly lower than that advanced by the plaintiff in the pre-action letter was put forward.

21.  The Judge concluded that it would be fair to proceed based on the earnings in the year immediately before the accident, and arrived at a figure of HK$600,000.00 for that year, which he then reduced by 10% to account for the impact of taxation on that income, producing a figure of HK$540,000.00 for annual pre-accident earnings (see the Judgment at [56] to [57]).

22.  As for post-accident and future loss of earnings, the Judge noted that neither party had put forward evidence as to what a salesman of luxury or normal cars could expect to earn.

23.  Given the absence of such evidence, coupled with his view that the plaintiff could have done better than take up a back office role at a considerably lower income, and could have been a salesman of luxury cars or taken up some other more remunerative employment, the Judge considered whether he should simply hold that the plaintiff had failed to prove any post-accident loss of earnings, but understandably declined to take this course.  Similarly, he considered whether he should simply proceed on the basis that a car salesman would earn broadly the same amount regardless of whether he dealt in normal, luxury or super cars.  Again, he was understandably reluctant to come to this conclusion without some evidential basis for it. Left with little to go on, the Judge decided that it would be fairest to conclude that there was some limited effect on the plaintiff’s earning ability going forward after the accident, and assessed this with a view to quantifying it by reference to loss of earning capacity percentages estimated by the medical experts.  On this basis, he found that the injury to the plaintiff’s left index finger resulted in a loss of earning capacity of 3% (being the mid-point of the percentages estimated by the respective experts) (see [43] to [45] of the Judgment).  Although the Judge had earlier expressed the view that the plaintiff’s neck injury did not prevent him from being a salesman, the Judge ultimately increased the overall loss of earning capacity estimate to 5% by attributing a further 2% loss of earning capacity to the neck injury, on the basis that it nonetheless had some limited effect (see the Judgment at [59]).

24.  The Judge also found that the plaintiff was unable to work at all for a period of about 12 months, during which he suffered a total loss of earnings.  He therefore allowed one year’s income (which, as noted above, he had assessed at HK$540,000.00 net of tax) in respect of the 12 month period immediately following the accident, i.e. up to July 2016.

25.  The Judge then assessed what he termed “post-recovery” loss of earnings, by assessing such loss at 5% of annual earnings (which, for this purpose, he took to be HK$660,000.00, reduced by 10% to account for the impact of taxation, producing a figure of HK$594,000.00 per annum), and multiplied that by 20 on the basis that the plaintiff was aged 45 in 2016, and could have been expected to retire 20 years later at the age of 65.  This resulted in a figure of HK$594,000.00 (see the Judgment at [61] to [62]).  Based on the above findings, the Judge went on to make the following awards, totalling HK$1,479,580.00, under the individual heads of claim (see Judgment at [47]-[66]):

(i)      for PSLA: HK$250,000;

(ii)     for pre-recovery or “accrued” loss of earnings: HK$540,000;

(iii)    for post-recovery loss of earnings: HK$594,000;

(iv)    for loss of congenial employment: HK$0;

(v)     for other accrued special damages: HK$95,580.

The grounds of appeal

26.  On appeal, the plaintiff only seeks to challenge the Judge’s assessment of his loss of earnings (i.e. the awards of HK$540,000 and HK$594,000).  The grounds of appeal relied upon by the plaintiff are set out in the SNoA, and at the hearing the parties were agreed that there were three main issues for consideration, as follows:

(i)      whether the Judge was right to adopt the figure of HK$55,000 (set out in the pre-action letter of 17 February 2017) as the plaintiff’s pre-accident average monthly earnings (in fact the Judge actually adopted a monthly figure of HK$50,000 (HK$600,000/12)) in order to arrive at the assessed loss of earnings in the “recovery period” of 12 months during which the Judge accepted that the plaintiff was unable to return to any form of work, or whether he should have assessed the plaintiff’s pre-accident income by reference to the average of his post-tax income across his years of employment with Auto Italia prior to the accident, i.e. the income for the years 2012/2013, 2013/2014 and 2014/2015 set out in the table at [19] above (“Issue 1”);

(ii)     whether the Judge had erroneously assessed the plaintiff’s pre-trial loss of earnings by failing (a) to apply the correct level of pre-accident average monthly earnings (which the plaintiff contended should be the average of the three years earnings in the table at [19] above) in calculating his loss of earnings during the 12-month recovery period; and (b) to make any award at all for the balance of the plaintiff’s pre-trial loss of earnings in respect of the period from July 2016 until the beginning of the trial in early June 2020, and by failing to assess this by reference to his correct pre-accident income (to be determined under Issue 1) and deducting therefrom his earnings with Glorious Motors Limited in that period. (“Issues 2(a) and 2(b)”);

(iii)    whether the Judge had erred in assessing the plaintiff’s future loss of earnings (i.e. post-trial loss of earnings) by failing properly to apply the conventional multiplier/multiplicand methodology and making reference to the prevailing Chan Tables (“Issue 3”).

27.  The defendant’s position in relation to these issues was set out in the SRN, as follows:

(i)      as to Issue 1, there was sufficient evidence to support the Judge’s adoption of HK$55,000 as the pre-accident average monthly earnings of the plaintiff (including a letter from Auto Italia stating that his average monthly earnings for the period from June 2014 to May 2015 was HK$54,592.16), and there were other factors (such as the decrease in registration of Ferrari cars in 2016 and the plaintiff’s significantly higher earnings for the year 2012/2013 being attributable to his taking over of contracts of other departing salespeople of Auto Italia) which supported the Judge’s declining to take account of the plaintiff’s earnings for the tax years ending in March 2013 and 2014 respectively;

(ii)     in respect of Issues 2(a) and 2(b), as the plaintiff has not sought to appeal against the Judge’s findings that his recovery period was 12 months and that his earnings with Glorious Motors did not represent his true earning power, the plaintiff cannot now ask this court to reverse those findings and to adopt his earnings with Glorious Motors as the basis for assessing his alleged loss of earnings after the 12-month recovery period; and

(iii)    in respect of Issue 3, the defendant argued that the plaintiff had misunderstood the nature of the Judge’s award of HK$594,000.00, which was not for loss of future earnings but was in fact an award for loss of earning capacity, having regard to the Judge’s use of the loss of earning capacity estimates made by the orthopaedic medical experts, and the references in the Judgment to loss of earning capacity in assessing this head of loss.

28.  We would note, however, that the defendant does not seek to challenge the award of HK$594,000, or the manner in which it was calculated, whatever its true basis may be.

Discussion

Issue 1

29.  The plaintiff contends that the Judge was wrong to adopt the figure of HK$55,000 as a fair representation of his pre-accident monthly earnings, because that figure represented only the average monthly income of the plaintiff at Auto Italia during the 12 months preceding the accident, and was “arbitrary, unfair and erroneous” as it did not reflect the plaintiff’s average earnings during the whole of his employment with Auto Italia prior to the accident.  The plaintiff also complains that the Judge erred in relying (in effect only) on the plaintiff’s statement in the Pre-Action Letter to the effect that during the 12 months before the accident, his average monthly income was “about HK$54,592.00 (subject to discovery)” (which the Judge had rounded up to HK$55,000).

30.  In his submissions, Mr Ramanathan SC pointed out that the “rounded-up” figure of HK$55,000, in any event did not accord with the amount shown in the plaintiff’s last pre-accident tax return (that for the year 2014/2015), in which (as appears from the table at [19] above) the plaintiff earned HK$736,147 which would produce an average monthly income for that tax year of HK$61,345.58. Ms Mok SC did not dispute this, and effectively accepted that the plaintiff’s monthly pre-tax income should be taken to be this amount.

31.  Although if one were to adopt a deduction of 10% for taxation and apply it to the figure of HK$61,345.58 (which was the pre-tax monthly income for the 2014/2015 year of assessment) one would arrive at a figure of HK$55,211, this does not in fact accord with the Judge’s assessment, in which he actually adopted a pre-accident income of HK$600,000 (or HK$50,000 per month) and then went on to reduce it by 10% for taxation to a total amount of HK$540,000 for the 12 month period during which the Judge accepted that the plaintiff could not work and had suffered a total loss of earnings.

32.  Mr Ramanathan went further, and contended that the Judge, having correctly identified that the period over which earnings were averaged could have a significant impact on the pre-accident monthly earnings figure (see [55] of the Judgment), should in fairness have had regard to all three years for which there were tax records relating to the plaintiff’s earnings with Auto Italia prior to the accident.  For the defendant, while Ms Mok SC confirmed (as we have noted) that she did not dispute the base figure of HK$61,345.58 based on the 2014/2015 tax return, she maintained that only that year’s income should be adopted for the purpose of calculating the plaintiff’s pre-accident monthly average earnings, and that the Judge was correct in not applying the average of his income earned throughout his employment with Auto Italia prior to the accident.

33.  The issue which separates the parties is therefore whether the plaintiff’s pre-accident average monthly income should be calculated by reference only to his income earned in the assessment year 2014/2015 or by reference to his income earned over a longer period, which Mr Ramanathan suggests should include all three years (2012/2013, 2013/2014 and 2014/2015).

34.  Mr Ramanathan contends that the Judge should not have simply relied on the Pre-Action Letter, which was made “subject to discovery”, and should have given proper weight to the income proven to have been earned by reference to the tax returns summarized in the table at [19] above. 

35.  Ms Mok, however, contended that the Judge did not merely rely on the Pre-Action Letter, but had considered other evidence such as the fact that the plaintiff’s earnings in the year 2012/2013 were unusually high because that year’s income included commission on contracts completed by the plaintiff which had actually arisen out of sales generated by other agents in earlier years, and also the apparent downward trend in the business of Auto Italia in general (which resulted in its Ferrari dealership eventually being terminated in 2017).  Ms Mok submitted that the Judge was well aware of the “changeable state of car dealership and the unpredictable nature of the employment/income of car salesmen”, and that his adoption of only the plaintiff’s income earned in 2014/2015 as representing the plaintiff’s pre-accident income could not be faulted.

36.  In our view, it was not correct for the Judge in effect to rely only on the 12 month period immediately preceding the accident as being wholly representative of the plaintiff’s pre-accident income, when there was clear evidence in the form of the plaintiff’s tax returns that his income prior to the accident was in fact significantly higher.  While we would accept Ms Mok’s submission that the level of income earned by the plaintiff in the year of assessment 2012/2013 (HK$1,207,858) was due in part to “inherited sales” and thus not properly representative of the plaintiff’s income generating ability (and do not think that the submission in response that, even these sales should be taken into account on the basis that the plaintiff may have played a part in seeing them through, should be accepted), we would accept Mr Ramanathan’s fall back submission that the earnings for the 2013/2014 year of assessment should also have been taken into account.

37.  It seems to us that the Judge should have had regard to the whole of the evidence of pre-accident earnings, and despite Ms Mok’s criticisms of the way in which the plaintiff’s claim had been put forward and evolved during the course of the litigation, we consider that there was clear objective evidence as to the plaintiff’s earning ability in the form of the tax returns for the 2013/2014 and 2014/2015 years of assessment, given that the income in both of those years of assessment appears to have been unaffected by unusual factors such as “inherited contracts”.

38.  Having considered the parties’ submissions and having regard to the evidence, in particular the IRD records, we consider that the plaintiff’s income in the year 2012/2013 may not have been truly representative of his earning ability by reason of various extraneous factors as well as the Judge’s undisputed findings of fact, and therefore the Judge cannot be said to have been plainly wrong in excluding it from his calculation of the plaintiff’s pre-accident average monthly income.  On the other hand, it appears that there was no evidence which showed (nor is there suggestion by the parties) that the plaintiff’s income in the year 2013/2014 was inflated by similar factors, or that it did not for some other reason represent his true earning ability.

39.  It therefore seems to us that the Judge erred in using a figure of HK$600,000 as representing the plaintiff’s annual pre-tax pre-accident earnings.  On the evidence before him (i.e. the tax returns for the two years of assessment we have mentioned), we are satisfied that he should have held such earnings to have been HK$814,155.00 (HK$892,163.00 [2013/2014] + HK$736,147.00 [2014/2015] divided by 2), which results in post-tax annual earnings of $732,739.50 (HK$814,155 x 0.9), applying a 10% deduction for tax (which is not challenged by either party).

40.  We therefore hold that the plaintiff’s post-tax pre-accident average monthly income should have been assessed as HK$61,061.63 (HK$732,739.50 /12), producing an income for the 12 month period during which he was unable to work of HK$732,739.50, in place of the sum of HK$540,000.00 awarded by the Judge.

Issues 2(a) and 2(b)

41.  Issue 2(a) is in effect the same as Issue 1, and has been resolved by our conclusion as to Issue 1 above.  The plaintiff’s loss of earnings for the period of one year after the accident should, in our view, have been assessed at HK$732,739.50, representing a monthly post-tax income of HK$61,061.63.  

42.  As to Issue 2(b), the plaintiff contends that an award should additionally have been made for pre-trial loss of earnings covering the period from the date when the Judge held the plaintiff to have been capable of returning to work, and ending with the date of trial.  The plaintiff further contends that such loss should be calculated by reference to the correct level of pre-trial earnings established under Issue 1, and deducting from that amount the sum of HK$30,000.00 per month, being the plaintiff’s earnings with Glorious Motors, which Mr Ramanathan suggested was the best evidence of the plaintiff’s earning ability.

43.  This argument gives rise to two sub-issues.  First, should an award (additional to that which the Judge has made) be made in respect of “pre-trial loss of earnings” as defined by the plaintiff.  Second, if so, how should that amount be calculated and what should that amount be.

44.  As to the first of these sub-issues, we note that the Judge in his reasoning did not utilise the conventional labels of “pre-trial loss of earnings” and “post-trial loss of earnings”, as is usually done in personal injuries proceedings.  Instead, he divided the loss of earnings claim into a “pre‑recovery period” and a “post-recovery period”.  For the post-recovery period, the Judge simply had regard to the plaintiff’s age at the assumed recovery date in June 2016 and calculated the damages award by reference to the difference between that age (45) and the plaintiff’s retirement age, which the Judge assumed to be 65 (see [61] of the Judgment).  By doing this (coupled with the award made for “pre-recovery loss of earnings”), the Judge did in fact make an award in respect of the loss of earnings he considered the plaintiff to have suffered in the period between the accident and the trial.

45.  We would acknowledge that the Judge’s approach was unorthodox and should not be generally utilized, as the conventional approach has stood the test of time.  There would be some impact at least in terms of interest as special damages (which would include pre-trial loss of earnings) would ordinarily carry interest at a higher rate than general damages, while damages for future losses, such as future loss of earnings generally attract no interest at all[2]. This could be material where the pre-trial loss of earnings is large and the time between accident and trial is long.  However, in this case, given the relatively small amount of the award, and the fact that the Judge simply adopted the full number of years remaining until the plaintiff’s retirement rather than reducing that period by dividing the loss of earnings into a pre-trial portion and a post-trial portion, with the length of the multiplier for the latter ascertained by reference to, for example, the Chan Tables, in accordance with conventional practice, the Judge’s approach is likely to have offset any under-award of interest, and in these circumstances it seems to us that there is no need to intervene in this particular case.

46.  As to the second sub-issue, we consider that this is more conveniently dealt with in the context of Issue 3, to which we now turn.

Issue 3

47.  Ground 3 is advanced on the premise that in making the award of $594,000 (see Judgment at [61]), the Judge was intending to make an award in the nature of future loss of earnings, but that he did so erroneously by failing to apply the traditional multiplier/multiplicand methodology and by failing to have regard to the prevailing Chan Tables.  In particular, it is argued that the Judge erred in having regard to the expert assessments of loss of earning capacity and using these figures as a proxy for loss of earnings.  Mr Ramanathan suggested that in all the circumstances, the Judge should simply have had regard to the plaintiff’s earnings with Glorious Motors as best evidence of the income that he was capable of achieving.  Mr Ramanathan submitted that having regard to the discharge summary in which it was concluded that the plaintiff could only drive cars that had been subject to suitable modifications, the Judge should have found that the plaintiff could no longer work as a car salesman.

48.  Ms Mok, however, submitted that on the basis of the Judge’s references to loss of earning capacity, the award of HK$594,000.00 should properly be understood as an award of damages for loss of earning capacity and not an award of damages in respect of lost (or in this case, reduced) future earnings.

49.  The first material question for this court in relation to Issue 3 is therefore whether the award was made for the plaintiff’s future loss of earnings (as contended by the plaintiff), or for a loss of earning capacity (as contended by the defendant).

50.  We should mention that Ms Mok had indicated in her written submissions that the defendant wished to apply for leave to refer to several paragraphs contained in a decision on costs by the Judge dated 2 July 2021 (“the Costs Decision”) in support of her submission that the Judge had in fact made an award for loss of earning capacity.  However, the Costs Judgment was sealed up by orders of Kwan VP dated 5 and 11 August 2022, against which the defendant did not appeal.  In those circumstances, we took the view, in which Ms Mok acquiesced, that it would not be appropriate for us to re-open the matter.  In addition, it seemed to us, and Ms Mok fairly accepted, that the Costs Decision was unlikely to add anything to the Judgment in respect of the nature of this award of damages, and that it was to the Judgment that we should have regard in determining its nature.  This application was therefore not pursued.

51.  Mr Ramanathan suggests that the defendant’s argument that the Judge had made an award of earning capacity does not stand up to scrutiny.  He points out that the Judge had adopted an approach that applied the traditional multiplier/multiplicand methodology by identifying a multiplier of “20 more years” between the date of recovery and the likely date of the plaintiff’s retirement (at [61]), but then failed to properly complete the calculations by going on to properly ascertain a multiplicand representing the monthly or annual loss of earnings going forward. He further submitted that the Judge’s award clearly had nothing to do with loss of earning capacity, as such an award was in the nature of a one-off payment for the risk of increased difficulty in obtaining fresh employment in the event of the plaintiff becoming unemployed in future, rather than a means of compensating for continuing future loss of earnings.  At the hearing, Mr Ramanathan stated that if the Judge had been of the view that the evidence was so lacking as to lead to the conclusion that no award for future loss was justified at all, and thus refused to make any award for loss of future earnings, he would have accepted that.

52.  Ms Mok on the other hand submitted that given the undesirable state of the evidence, the Judge, who was clearly minded to be somewhat generous to the plaintiff, was in effect conducting a board-brush exercise by awarding a lump sum for loss of earning capacity.  She submitted that the award must have been for loss of earning capacity as the Judge referred to the experts’ estimates of loss of earning capacity (see Judgment at [43(3)]).  Further, as the Judge had no evidential basis to make any finding on loss of future earnings for the purposes of adopting the multiplier/multiplicand approach, he must be taken to have made an award of damages for loss of earning capacity.

53.  We are of the view that reading the relevant parts of the Judgment as a whole (particularly [37] to [44]), the Judge did not have in mind an award for loss of earning capacity in its proper sense, and was seeking to make an award for loss of future earnings by placing a figure on the extent to which the plaintiff’s income should be regarded as having been diminished due to the accident.  We agree with the submissions of Mr Ramanathan, and would add to the points he made that there was (in the latest Statement of Damages) no claim by the plaintiff for loss of earning capacity at all (an earlier claim for this head of loss having been deleted and thus abandoned).

54.  It is clear that the Judge considered that the plaintiff was capable of being a salesman of normal or luxury cars (but not performance or super cars) following his injury.  The Judge clearly placed no weight on the discharge summary, for the reasons which he gave (which was a course he was, in our view, entitled to take).  This therefore means that there is no basis for using the plaintiff’s income with Glorious Motors as the basis for assessing the loss of earnings, as the Judge had held that the plaintiff could and should have done better.

55.  The Judge was therefore trying to ascertain whether he could put a figure on the extent to which the plaintiff’s income was reduced in order to make an award for loss of future earnings.  He drew attention to the deficiencies in the evidence which rendered this task a very difficult one for him, in particular the lack of any evidence as to the income of a salesman of normal or luxury cars.  He summed up what he saw as his options in [43] of the Judgment.  The first two options would have left the plaintiff with nothing. This the Judge was reluctant to do, as he had accepted that the plaintiff could not return to his exact pre-accident employment.  The Judge therefore resorted to the loss of earning capacity figures as a proxy for the difference in earnings.  While one may harbor real doubt as to the appropriateness of this approach, the fact remains that the defendant does not seek in this appeal to challenge the award or its means of calculation.  

56.  For all of the foregoing reasons, we have come to the view that the Judge was intending to compensate the plaintiff for the loss he had suffered by reason of his inability to return to his exact pre-accident employment as a salesman of super cars, which the Judge accepted would have been slightly more remunerative than the employment which he found the plaintiff to be capable of taking up, namely as a salesman of normal or luxury cars.  We therefore conclude that the sum of HK$594,000, as awarded by the Judge at [61] of the Judgment, was for loss of earnings in the period after the plaintiff’s recovery.

57.  However, given that the defendant does not dispute the award of damages or the method by which such damages were to be calculated, it seems to us that it would be appropriate to vary the amount of this award to take account of our conclusion under Issue 1 above that the amount of the plaintiff’s pre-accident income should be taken to be HK$732,739.50 (after allowing for taxation), so that it is increased from HK$594,000.00 to HK$732,739.50 (HK$732,739.50 x 5% x 20 years), and we would therefore allow the appeal under Ground 3 to this extent only.

Disposition and costs

58.  For the reasons given above, we allow the appeal to the extent of increasing the amounts of damages awarded for loss of earnings from HK$540,000.00 and HK$594,000.00 respectively to HK$732,739.50 in each case.

59.  We accordingly make an order that the orders made by the Judge contained in [1] of the judgment entered on 2 June 2021 shall remain undisturbed, save that the Principal Sum be revised to HK$1,811,059.00[3].

60.  We further order that the plaintiff shall give credit to the defendant for any sum(s) received or to be received on account of any employees’ compensation payable to him in the proceedings in DCEC No 823/2017[4] and/or in other related employees’ compensation proceedings.

61.  So far as costs are concerned, the parties were agreed that costs should be dealt with only after judgment was handed down.  Accordingly, we direct that the parties should file their respective submissions on costs within 42 days after this judgment is handed down, with liberty to file submissions in reply within 21 days thereafter.  The court will then decide whether to determine the question of costs on paper, or whether an oral hearing is required, and will notify the parties accordingly.

62.  We thank the parties for their submissions and assistance.