SUEN KUM FUNG KANDY v. TSANG CHAM KUEN AND ANOTHER

cacv 75/2008

in the high court of the

hong kong special administrative region

court of appeal

civil appeal no. 75 of 2008

(on appeal from HCPI NO. 250 of 2005)

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J U D G M E N T

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Hon Le Pichon JA:

1.  This is the plaintiff’s appeal from an order of Master Roy Yu dated 1 February 2008 awarding the plaintiff damages in the sum of $881,123.48 in respect of injuries sustained by her in a traffic accident.  At the conclusion of the hearing judgment was reserved which we now give.

2.  The plaintiff sustained personal injuries when a goods vehicle driven by the first defendant struck from behind the bus in which she was travelling.  The second defendant is the owner of the vehicle.  Liability was admitted.  The plaintiff claimed damages.  The amount claimed as revised at the assessment hearing before the master included the following items which are relevant for the purposes of this appeal:

In relation to those items, the master made the following awards:

Background

3.  The plaintiff suffered a whiplash injury during the collision which occurred on 16 March 2002. She was then aged 46.  She suffered persistent neck pain as a result of the accident.  The master accepted that from the orthopaedic point of view the plaintiff had recovered and was fit to resume work 12 months from the date of the accident.  However he also accepted the evidence of the plaintiff’s orthopaedic expert that there is residual pain which would impact on her work efficiency significantly.

4.  Apart from persistent neck pain, the plaintiff also developed psychiatric symptoms.  She was seen by Dr Bonnie Siu in September 2002 and later referred to a clinical psychologist for psychological treatment.  The master accepted the opinion of Dr Chung, the plaintiff’s psychiatric expert, that the plaintiff suffered from “adjustment disorder with depressed mood”.  The symptoms consisted of “depressed mood, irritability, impatience, feelings of difficulty coping, pessimistic ideas, lack of interest and motivation in activities, tiredness, lack of energy, difficulty concentrating, and sleep problems”.  Dr Chung also opined that the depression was aggravated by the deteriorating marital relationship beginning at the end of 2002, culminating in a divorce in 2004.

5.  Sick leave certificates were for the period from 16 March 2002 to 13 July 2006 during which period the plaintiff remained an outpatient with the orthopaedic clinic.  She was first seen for psychological treatment in May 2004 and thereafter attended 13 treatment sessions, defaulting on 3.

This appeal

6.  The issues that arise relate to the following matters which impinge on the master’s award:

        (1)       whether the accident was a contributing factor to the breakdown of the marriage in 2003;

        (2)       PSLA;

        (3)       the plaintiff’s earnings as at the date of the accident; and

        (4)       the period of incapacity.

It should be mentioned in passing that loss of support had initially also been an issue on the appeal but it was abandoned by the plaintiff in the course of the hearing.

Divorce

7.  A successful challenge on this issue would have an impact on the proper amount to be awarded for PSLA (i.e. issue 2).

8.  At the time of the accident, the plaintiff had been married for 18 years.  Prior to the accident, her marital relationship with her husband had been good.  For some months after the accident her husband was very supportive and took good care of her.  The master accepted that by September 2002 she had developed psychiatric symptoms that brought about a character or personality change.  By the end of that year, her relationship with her husband began to deteriorate.  She had quarrels with her husband even over trivial matters.  Sexual relations ceased altogether by March 2003.  She also suspected that he was having an affair with a lady in Shenzhen.  Her character change also affected her relationship with her son.  Her husband initiated divorce proceedings in early 2004 and the parties were divorced in November of that year.

9.  The master refused to infer that the personality change caused or was a contributory factor to the deterioration in the marital relationship.  His reason was that there was “no direct proof” that the plaintiff’s ex-husband had left her because of the change in her character.  In § 48 of his judgment, the master concluded thus:

“48.      Having considered all the evidence, I am not convinced that the divorce was caused by the change of character of the Plaintiff and or the injury to the Plaintiff.  As such her mood problem worsened by the deterioration of marital relationship is not caused by the accident.”

10.  Given the master’s findings as to the plaintiff’s medical condition that the accident had given rise not only to physical but also to psychiatric symptoms and his acceptance of Dr Chung’s evidence, plainly, he did not reject the plaintiff’s evidence the personality change had an impact on the marital relationship.  Until shortly after the psychiatric symptoms emerged, the marriage had been happy.  It was a stable relationship that had lasted over 18 years.  Having rejected the defendants’ suggestion that the deterioration had been caused by financial reasons, there was no other reason for the breakdown of the relationship other than the personality change given that the deterioration in the relationship occurred shortly after the psychiatric symptoms emerged.  In those circumstances, and in the absence of any evidence of any other reason, the inference is irresistible that the breakdown of the marital relationship was, directly or indirectly, a consequence of the plaintiff’s personality change and depressed mood.  In my view, the master erred in not drawing that inference.

11.  For those reasons, I agree with Mr Sakhrani that the master should have found that the physical and psychiatric symptoms caused by the accident requiring her to seek psychiatric treatment constituted, at the very least, a factor that led to the breakdown of marriage.

PSLA

12.  The master’s award of $400,000 did not take into account the fact that the accident was a contributing factor to the divorce.  Mr Sakhrani submitted that the amount awarded merely reflected the amount injuries of the nature suffered by the plaintiff would have attracted.  He stressed that the breakdown of the marriage has had a tremendous impact on the plaintiff’s mental state and overall well-being and had also affected her relationship with her son and their family life.  While Miss Leung who appeared for the defendants accepted that the breakdown of the marriage was an element that should be taken into account, she submitted that the amount, if any, to reflect that should be a small or token amount.  It was also said that in awarding $400,000, the master had already taken into account the effect of the accident on the plaintiff’s relationship with her son.

13.  Mr Sakhrani’s summary of the plaintiff’s PSLA claim before the master is recorded in § 49 of the judgment:

“Her losses are unique and substantial.  Not only are their (sic) physical and psychiatric consequences of the accident, but also the Plaintiff’s marriage has broken down as a result of these and she has divorced, and her relationship with her son has worsened.  She has become withdrawn.  At her age she is unlikely to ever marry again and there is a risk the absence loss of a close family relationship in the future.  The Plaintiff claims $600,000.”

14.  The precise scope or ambit of the ‘divorce factor’ the master excluded from PSLA is unclear from the judgment.  In the circumstances, the better approach is to assess PSLA afresh.  Given the somewhat unusual circumstances of this case, approaching the matter in the round, and without laying down any tariff of general application, I consider that an award of $500,000 to be appropriate amount.

Notional earnings at the date of the accident

15.  The challenge is to the master’s finding that at the date of the accident the plaintiff was earning $8,000 a month.

16.  The plaintiff was the sales manager of Hilltop Advertising Production Ltd (“HAP”) from 1989 and worked in a similar capacity when Hilltop Designed Contracting Ltd (“HDC”) took over the business of HAP in 2000.  HAP and HDC were small family businesses ran by the plaintiff and her husband.  The evidence showed that the plaintiff did not have a fixed salary but that the companies paid the rent for the matrimonial home, allowed the plaintiff to have the benefit of entertainment expenses, the use of a car, telecommunication expenses and insurance coverage for the home.  In addition, she withdrew cash for her personal use from companies and the amounts depended on turnover.  Prior to the accident she was receiving in cash and in kind the equivalent of $39,734 per month from companies.

17.  The master accepted that the plaintiff worked for the companies, that she did not have a fixed salary and, in part, the benefits she received from the company represented the husband’s contribution to the household expenses.  He held (at § 70) that she was entitled to claim her loss by reference to the remuneration she could earn by working in the companies.

18.  The plaintiff’s claim was not put on the basis that she was earning $39,734 per month but on what a person doing the job she was doing (i.e. a sales manager in the same field) would have been paid.  The plaintiff’s amended statement of damages had particularised those damages as an average monthly sum of $14,724 by adopting the statistics of the Labour Department dated December 2002 and March 2005 for sales persons in companies engaged in the import/export of miscellaneous consumer goods.  In the plaintiff’s closing submissions below, this was revised to $15,675 on the basis that the statistics relating to sales representatives in the printing, publishing and allied industries for March 2002 was the more appropriate given the nature of the business of the companies.  The notional earnings today would have increased to $17,508.

19.  The master’s finding that the plaintiff’s earnings were $8,000 a month at the time of the accident appeared to have been based on (1) the fact that he considered that the only concrete evidence of her income was the statement in an insurance claim form she completed shortly after the accident stating that her earnings were $8,000 a month; and (2) when cross-examined, the plaintiff stated that she recalled having received remuneration of $8,000 a month as a director in the past two years.

20.  Given the master’s findings referred to in § 17 above, the importance he attached to the insurance disability claim form in determining the notional earnings at the date of the accident is difficult to justify.  It was obvious that its accuracy was questionable: for one thing, the description of “secretary staff” as the plaintiff’s position was, at the very least, inaccurate.

21.  The plaintiff did provide an explanation at trial for the $8,000 figure in the claim form: since her entitlement to insurance benefits under the policy was capped at $3000 per month and her earnings were greatly in excess of that figure, her actual earnings would not have made any difference to the insurance payout.  Further, as regards the master’s second reason, it is clear from the transcript and the accounts of the companies that, first, the $8,000 per month as director’s remuneration was referable to the years 1999 and 2000, and not at the date of the accident and, second, HAP’s accounts do not show any payment of directors’ remuneration after the year 2000 and HDC’s first accounts stated that for the period from 22 November 2000 to 31 March 2002 no emoluments were paid or payable to its directors.  The master’s finding was thus contrary to the evidence.

22.  As to the plaintiff’s notional earnings as at the date of the accident, prima facie, the plaintiff’s approach (see § 18 above) has much to commend it.  Support for the salary range sought is supported by the evidence of Mr Hau who gave evidence on behalf of the plaintiff.  Mr Hau had carried on a business similar to that of the companies prior to 2003.  In 2003, he moved his business to China.  His evidence was to the effect that someone like the plaintiff could expect a salary of $10,000 a month in addition to which he would expect her to earn commission in the region of $3000-$4000 per month.  That is more or less in line with the Government statistics.

23.  Proceeding on the basis of the Government statistics, the plaintiff’s loss of earnings to trial would be 17,421 (reflected by the following formula [(15,675 + 17,508) ¸ 2 x 105%]) multiplied by the appropriate number of months which is the next issue to which I now turn.

Period of incapacity

24.  The plaintiff had been granted sick leave certificates until 13 July 2006.  It is common ground that those certificates are not conclusive of the plaintiff’s incapacity.  The master found that the plaintiff was in a position to return to her pre-accident work sometime in late 2004 but that he would allow her a period of nine months to look for a new job.  The plaintiff’s pre-trial loss of earnings was calculated on the basis that the period of incapacity was from 16 March 2002 to 30 June 2005 and that for the next six months thereafter, she would suffer a partial loss of earnings.  In other words, the master considered that she was well enough to start looking for a job as from October 2004.  For the six-month period of partial loss of earnings, the master adopted a figure of $5,000 per month as the plaintiff’s notional earnings.

25.  Mr Sakhrani submitted that the physical and psychiatric symptoms caused by the accident could not be compartmentalised and that looking at the medical evidence as a whole, the master ought to have accepted that the period of incapacity lasted until the expiration of the sick leave certificates on 13 July 2006.  Other than that, he was content with the master’s approach in allowing the plaintiff a nine-month period to look for a new job and for a further period of six months when she would be suffering a partial loss of earnings by taking a more junior position with less pay.

26.  From the orthopaedic point of view it is common ground that a year after the accident she was fit to return to her pre-accident work.  However that is not determinative of the period of incapacity because psychiatric symptoms emerged about six months after the date of the accident.  The master summarised the evidence of the psychiatric experts in §§ 29-40 of his judgment.  It is fair to say that there he summarised the evidence of almost all the medical experts.  The notable exception was the report of Mrs Denise Tsang-Law, a senior clinical psychologist at Tuen Mun Mental Health Centre/Castle Peak Hospital, although there was a passing reference in § 30 to Dr Tsang-Law as one of the treating physicians.  Mrs Tsang-Law recorded in her report that when the plaintiff was first seen by her in May 2004, the plaintiff’s “life was in a total chaos” but with psychological treatment, the plaintiff made “slow but steady progress in the management and improvement of a depressed mood” and by November 2006 the plaintiff’s depressed mood had “lightened up with much motivation for active future planning”.

27.  While there was a reference to Mrs Tsang-Law’s report at § 13 of the judgment, under the section headed “The Injury and Treatment” as set out below-

“13.     According to the report from Mrs Tsang, the Plaintiff received 13 treatment sessions.  Mrs Tsang said in her report dated 15 November 2006 that the Plaintiff still had depressed mood.  But the Plaintiff was making steady progress in the management of her depressive mood.  And she had a better relationship with her son.”

it was not put and considered in its proper context i.e. with all the other psychiatric material.  Further there was no reference to the plaintiff’s life being in “total chaos” as at May 2004.

28.  The master preferred the evidence of Dr Chung over that of Dr Singer and, it seems, also over that of Dr Siu.  The master attached importance to Dr Chung’s opinion that at the time Dr Chung saw the plaintiff in March 2005, he considered that she was mentally fit to return to her pre-accident job although the adjustment disorder had a mild adverse effect on her work efficiency.  At the time Dr Chung saw the plaintiff, Mrs Tsang-Law’s report had yet to be obtained.  Therefore he did not have the advantage of reviewing her report dated 15 November 2006.

29.  While Mrs Tsang-Law did not opine as to when she considered the plaintiff fit to return to work, it is clear from her report that when the plaintiff was first seen by her in May 2004, the plaintiff’s psychiatric condition was such that she could not have been in a fit state to resume her pre-accident work.  It is also plain that improvement in the plaintiff’s psychological condition was achieved through the psychological treatment she was given and, in total, 16 treatment sessions had been scheduled, it seems, between May 2004 and November 2006, a period of 30 months.  That would have meant a session once every six weeks to two months and it is known that the plaintiff attended 13 out of the 16 sessions.

30.  According to the master’s finding of the period of incapacity, he considered that she was in a fit state to return to work by October 2004, that being the commencement of the nine-month period he had allowed for her to find a job.  In so doing, it would appear that the master had not paid any regard to the medical report of Mrs Tsang-Law.  Even on the basis that the plaintiff was in a fit state to return to work before the completion of the 16 treatment sessions, she clearly needed a number of treatment sessions to restore her psychological condition to a sufficiently even keel to enable her to cope, given that her life had been in “total chaos” in May 2004.  Had the master taken Mrs Tsang-Law’s report into consideration in conjunction with all the other psychiatric reports, he could not have come to the conclusion that the plaintiff was in a fit condition to look for work by October 2004.

31.  The question then arises as to the date when the plaintiff was actually fit physically and psychologically to resume work.  As noted above, the master attached importance to Dr Chung’s opinion that the plaintiff was fit to resume work.  Dr Chung saw the plaintiff some 10 months after she was first seen by Mrs Tsang-Law and after she had had several sessions of treatment.  By that date, March 2005, Dr Chung clearly considered the plaintiff fit to resume work.  That is not inconsistent with the plaintiff’s psychiatric condition having improved since she was seen by Mrs Tsang-Law.  By then, 10 months had elapsed and the plaintiff would have already attended a number of psychological treatment sessions.

32.  In those circumstances, I consider that the master ought to have found that the plaintiff was in a fit condition to look for a job commencing 16 March 2005.  Accordingly, the period of incapacity would run from 16 March 2002 to 16 December 2005, a period of 45 months.  Thereafter she would suffer a partial loss of earnings for six months.

Conclusion

33.  For the reasons stated above, the master’s award should be revised in the following respects:

34.  Accordingly, I would order that the master’s award be increased by $607,635.52 to $1,488,759.  I would propose that there be an order nisi of costs in favour of the plaintiff, such costs to be taxed in accordance with legal aid regulations.

Hon Suffiad J:

35.  I agree.

Hon Lam J:

36.  I agree and have nothing to add.

Hon Le Pichon JA:

37.  Accordingly, there will therefore be an order in terms of paragraph 34.