LAM KING TONG v. KAM HUNG CONSTRUCTION (HOLDINGS) LTD AND ANOTHER

HCPI 1144/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES NO. 1144 OF 2003

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J U D G M E N T

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Introduction

1.  The Plaintiff is suing the 1^st Defendant who was his employer in respect of serious personal injuries he sustained in an accident which occurred on 2November 2000. The 1^st Defendant was a subcontractor and the 2^nd Defendant was the main contractor.

2.  They were performing work in relation to foundation and slope maintenance on the retaining wall behind the Pui Ching Middle School at Homantin.

3.  The work being undertaken by the Plaintiff was as a “soil nail drilling plant operator”. 

4.  On the day in question the conveyor belt on the machine which being used malfunctioned.  The Plaintiff attempted to rectify the position by removing soil stuck to the conveyor belt with a pair of pliers.  The machine had not been turned off and his right hand and forearm were caught by the “in running nip” and crushed thus causing serious injuries.

Liability

5.  The Plaintiff gave evidence concerning the circumstances surrounding the accident.

6.  He is an experienced general worker on maintaining slopes.

7.  On the day in question he saw that the conveyor belt needed to be adjusted.

8.  He did not see the foreman Mr Law and decided to attempt to alleviate the problem himself.  When he did so his hand and arm was caught in the machinery.

9.  He said that he had never received instructions from anyone not to try himself to sort out a problem of this nature.

10.  The overriding concern of his employers was to get the necessary work done as quickly as possible.  Certainly he did not consider that it was open to him to switch off the engine of the machine.

11.  On previous occasions when there had been any delays or when the foreman was not satisfied with progress which was being made the Plaintiff would be sworn at.

12.  He had no doubt that he had been expected to do what was necessary to maintain progress.

13.  There is every reason to accept this evidence.

14.  The only evidence to the contrary called by the Defendant was the evidence of Mr T F Tam, an employee of the 2^nd Defendant the main contractor.

15.  He simply said that he urged upon subcontractors the necessity of their being safety conscious and ensuring that adequate steps were taken to achieve this.

16.  He agreed that he had never directly had any conversations with employees of subcontractors on this subject.

17.  In addition to this, the 1^st Defendant was convicted on 11 May 2001 at the San Po Kong Magistracy of offences contrary to the Occupational Safety and Health Regulation, Cap. 509A.  This would certainly indicate that the safety of the site left much to be desired.

18.  We also have the evidence of the Plaintiff that on several occasions when the conveyor belt had needed adjustment either he himself or Mr Law had adjusted it and had not turned off the motor.  I am satisfied that there was not a safe system of work and that the Defendants are guilty of negligence.  This was not seriously in contention.

19.  What was however in contention was the question as to whether the Plaintiff was guilty of contributory negligence.

20.  Miss Leong for the Defendants submitted on the authority of Chan Ming Yat & Youk En Lai, DCPI 201/2003 and Wong Kam Man v Wong Tat Paper Products, HCA 1862/1989 (both unreported) that the Plaintiff should be found guilty of contributory negligence.

21.  What has to be borne in mind is that each case is dependent upon its individual facts.

22.  In the present case, I find as a fact that the Defendants did not have a safe system of work and that the supervision of the workers left much to be desired.

23.  It is pertinent to observe that none of the principle witnesses of the Defendant who could have given direct evidence on their behalf were called as witnesses and no explanation has been given for this lacuna.

24.  It is also relevant to consider the observations made by Fuad VP in Sun Wan Co. v Ng Kam [1988] HKC 358.

“The plaintiff was not performing his task in a dangerous way to save himself trouble.  He was doing it in that way to get on with his employer’s business; in a way, as the judge found, that was condoned and tacitly encouraged by the employer.  There were safe systems available but they were not ones which, in practice, were used.  Indeed, as I have mentioned, the chief foreman himself had employed the same method on the evidence accepted by the judge.  In these circumstances, I do not think that an employer can be heard to say that his employee was being negligent in carrying out the work in that manner.  It seems to me that the approach of Denning LJ in the Court of Appeal hearing of the General Cleaning Contractors case which I have just read is applicable.

The words of Denning LJ to which he referred were as follows:

“At the hearing of the appeal it was suggested that the accident might have been avoided if the man had put in a chock to prevent the bottom sash coming right down as it did.  This was, in effect, a suggestion of contributory negligence.  This was negatived by the judge and I agree with him.  You cannot blame the man for not taking every precaution which prudence would suggest.  It is only too easy to be wise after the event.  He was doing the work in the way which the employers expected him to do it, and, if they had taken proper safeguards, the accident would not have happened.”

25.  These observations are applicable to the present case.  I am satisfied that the Plaintiff should not be held to have been guilty of contributory negligence and that the Defendants were 100% liable for the accident.

Quantum

26.  The Plaintiff was taken to the Queen Elizabeth Hospital where he received treatment as an inpatient.  He was not discharged until 26 November 2000 and further operations were performed upon him after that.

27.  There was essentially agreement between the parties concerning the Plaintiff’s medical condition.  Perhaps the most satisfactory way of describing his condition is to quote from the report of Dr S Y Chun who was instructed by the Defendants:

“Medical history as revealed from medical documents:

He was admitted to QEH on 2 November 2000 because of right forearm crushed injury while at work.

The doctor found that his right forearm and hand was very swollen and deformed; a 5-cm crushed wound over distal forearm with cut muscle and protruding fracture bone; distal circulation satisfactory, movement of digits could not be assessed because of deformity.

Operation of debridement, exploration and plating was done.  There was fracture distal 1/3 radius and ulna, 100% ulna nerve and muscle tear at FDP, median nerve and ulna artery intact.

He had persistent pain and swelling over right hand.  Repeated x-ray showed mild displaced fracture 4^th and 5^th metacarpal bone and scaphoid.  Movement of fingers at little and ring was especially weak.

Open reduction and internal fixation of 4^th & 5^th metacarpals was done on 15 November 2000.  He was discharged on 20 November 2000.

He was admitted again on 26 November 2000 because of persistent pain of right hand affecting his sleep.  Pain team was consulted for pain control.  Clinical psychologist did an assessment on 4 December 2000. He was discharged on 5 December 2000.

He had outpatient physiotherapy and occupational therapy.

He developed stiffness of the MCP joints of right ring and little fingers and persistent ulna nerve palsy.  He was admitted on 15 May 2001 to 16 May 2001 for removal of metal plate from ulna bone, tenolysis of flexor digitorum superficialis and flexor carpi ulnaris tendons.  The ulna nerve repair site was replaced by scar tissue.  Excision of neuroma for 1 cm was done followed by direct re-anastomosis.

He had improvement of flexor tendon function but there was persistent ulna nerve palsy and stiffness of MCP joints of ring and little fingers.

He was to be admitted on 19 April 2002 for removal of implants of ring and little finger and capsulatomy and tendon transfer.”

28.  Dr Chun went on to describe his conclusion as follows:

“All the fractures were reduced and fixed with plates and screws except the scaphoid fracture.  Ulna nerve repair was done.  Wounds were sutured.

After operations he developed Complex Regional Pain Syndrome I (CRPS I) or alternatively called Reflex Sympathetic Dystrophy (RSD).  The hallmark of these syndromes is a characteristic burning pain that is present without stimulation or movement, that occurs beyond the territory of a single peripheral nerve, and that is disproportionate to the inciting event.  The pain is associated with specific clinical findings, including signs of vasomotor and sudomotor dysfunction and later, trophic changes of all tissues from skin to bone.  He was treated by the Pain Clinic with medication.

He developed stiffness of the metacarpal joints of ring and little finger.  He also had persistent ulna nerve palsy.  Then in May 2001 he had another operation of removal of implants on the radius and ulna, release of scarring and adhesion of the tendons, excision of neuroma of the ulna nerve and re-anastomosis of the nerve was done.

On 19 April 2002 he had another operation to remove the implants on the ring and little finger, capsulatomy and tendon transfer operation.

The final operation was done on 28 November 2002 for tendon transplant and release of the metacarpal joints of the hand.  He continued to receive physiotherapy and occupational therapy up to the time of the examination and continuing.

At this examination, all the fractures had united.  There is residual stiffness at the wrist and fingers joints, mild residual signs and symptoms of the CRPS I.  The stiffness at the joints of the fingers may improve further with physiotherapy.  I expect that the further rehabilitation will be completed in 2 months, then further sick leave will not be necessary.  Further sick leave is unlikely to help the patient further and from medical point of view may actually be harmful.

However the major disability is from the ulna nerve palsy which did not showed significant improvement after the excision of the neuroma and re-anastomosis.  The ulna nerve palsy resulted in wasting of the small muscles of the right hand, weakness of handgrip and reduction of sensation on the little and ring fingers.  The right hand function is considerably impaired.

This is permanent, further improvement is unlikely.  No good treatment is available to salvage the situation.

The ulna nerve palsy is 35% impairment of the upper extremity.  The residual CRPS I is 5% impairment of the upper extremity.  The residual stiffness at the wrist is 6% impairment of the upper extremity.  The combined right upper extremity impairment is 42% or equivalent or equivalent to 25% impairment of the whole person.

The loss of earning capacity for EC purpose only is 33%.”

29.  There were problems also in relation to his mental condition.  There is an agreed report from Dr Peter Ho, a psychiatric specialist, the relevant part of which reads:

 “Conclusion

I am of the opinion that Mr Lam had been suffering from depression and anxiety that was related to the consequences of the accident in question.

His depressive symptoms included that of depressive affect and feelings of worthlessness, irritability, impaired memory, tiredness and reduced interest and social interaction, diffidence and low self esteem.

His anxiety symptoms included that of palpitation, nausea and vomiting and general worries.

His psychiatric problem was an understandable and gradual development from the chronic disability leading to his social adversity.

His account was consistent and with that described from his girlfriend.

There were no suggestions that he had exaggerated his disabilities.

Should a percentage figure needed to be given, the per5centage impairment to his whole person due to his psychiatric disability at present was estimated to be about 10% and the loss of earning capacity due to such psychiatric problem at present estimated to be around 5%.

Allowance should be made to the exactness of such figures due to the inherent difficulty to convert disability into a numerical value and the potential variability of psychiatric symptoms.

He might be benefited from attending psychiatric treatment on a regular basis.

The exact period needed would naturally depend on his progress and a provisional estimate would be that of at least two years.

The fee would depend on the individual psychiatrist should be treated in the private sector.

For Mr Lam’s case it is estimated at about two thousand HK dollars a month.

In view of his slow progress with the current6 psychiatric treatment it might be beneficial that he could receive treatment at the private sector.

In general the experience of the psychiatrist directly treating him and the time that could be spent on his assessment and treatment would be more favourable in the private sector.

He could be considered being able to return to his previous employment just from the psychiatric point of view.

However he would encounter some difficulties because of his psychiatric symptoms like the problem with memory and the general depressive mood with impairment of confidence and zest.

The prognosis is considered to be unfavourable in view of the irreversible nature of his physical injury that had affected his dominant hand.

Thank you,”

30.  The effect of all of this can be summarised in this way.  The injury to the Plaintiff’s right hand and arm is a serious injury.  It caused considerable pain over a protracted period of time.  Indeed even now 4 years after the accident he suffers pain and discomfort.

31.  The consequences of this accident are particularly serious in the present case.

32.  The Plaintiff was aged 28 at the time of the accident.  He was only educated up to Form 1.  This means that outside of manual work there are limited employment opportunities open to him.

33.  He is precluded from participating in almost all work of a manual nature.  He is unable to lift any heavy weights and his manual dexterity is severely circumscribed.

34.  What now has to be considered is the amount of the award which should be made in respect of the Plaintiff’s pain suffering and loss of amenities.

35.  A number of cases were cited to me by Miss Leong on this aspect of the matter.

36.  The case which comes closest to the circumstances of the instant case is Tsang Wan Lam v Sun May King Publishing Co. Ltd (unreported) being HCPI 843/2000.  Here Longley DHCJ awarded the Plaintiff $550,000.00 damages under this head.  His plaintiff suffered serious injuries to his hand and arm comparable in many respects to the injuries sustained by the Plaintiff here.  However in that case the Plaintiff did not suffer the psychiatric problems which were experienced in this case.

37.  Having heard very helpful submissions from both counsel, I am satisfied that the correct approach to adopt would be to hold that the damages which should be awarded should be at the top level of damages in the range of “serious injuries” referred to in Lawati-Bhawani Bikram v Ting Kau Contractors (unreported) being CACV 3/20002.

38.  Adopting this criteria I hold that the award under this head will be $600,000.00.

39.  The parties struck an agreement that the daily wage of the Plaintiff at the date of the accident was $550.00 per day and that this translated to a monthly rate of $13,475.00.  Miss Leong submitted that this agreement was a limited agreement and that she was not precluded from contending a lower rate was payable to workers after the occurrence of the accident.  This submission was well founded.

40.  Miss Leong placed reliance upon the evidence given by Mr Tam on behalf of the 2^nd Defendant the main contractor in this connection. 

41.  No one from the 1^st Defendant was called to give evidence on this.

42.  Mr Tam produced a schedule which purported to show the payments which had been made to workers who had been working for subcontractors of the 2^nd Defendant.

43.  It appeared from the schedule that the daily rate which had been payable had been reduced over the period from the time of the accident up to the recent past.

44.  Mr Tam was not in my view a witness who could be relied upon.  He failed to disclose the fact that he was a director and part owner of the 1^st Defendant.  During his evidence, he referred to problems which would be encountered in obtaining evidence from the 1^st Defendant.

45.  He insisted in cross-examination that he had not in any way discussed his evidence with Mr Law, the 1^st Defendant’s foreman.  However Mr Clough for the Plaintiff was able to draw his attention to the fact that whole paragraphs of his written statement were virtually identical with paragraphs appearing in Mr Law’s written statement.

46.  One matter which could not be properly explored was that subcontractors had every incentive to pay low wages and there could be no assurance that the wages of the 2^nd Defendant’s subcontractors paid to their workers accurately reflected to the true going rate.

47.  I did not obtain any assistance from Mr Tam’s evidence.

48.  Mr Clough produced the Government published rates of average daily wages of workers engaged in Government Building and Construction Projects prepared by the Census and Statistics Department over the relevant period.

49.  While the wages were rather higher than those which had been payable to the Plaintiff, they were helpful in demonstrating trends in this field.

50.  What emerges from these statistics is that while there have been some mild fluctuations, it cannot be said that the amount which has been payable to the relevant category of worker is much less than the amount which was payable at the time of the accident.

51.  All of this leads me to the conclusion that the multiplicand which should be adopted to calculate both pre and post trial earnings should be the $13,475.00 figure which was agreed by the parties.

52.  The Plaintiff gave evidence of the attempts he had been making to secure employment after the accident.  He was cross-examined at some length on this by Miss Leong.

53.  I am satisfied that he has encountered real problems in obtaining employment.  Almost all clerical work is unobtainable consequent upon his meagre academic attainments.  He did for a few days obtain a job as a cleaner but he found that even this was beyond his physical capability.

54.  He said that he asked friends to assist him in obtaining introductions to employers but this was largely unavailing.

55.  He also studies newspapers carrying advertisements for jobs.  There are very few jobs available to a person with his physical handicaps and limited education.

56.  One of the issues that remains outstanding is the period of time which should be allowed before the Plaintiff must be deemed to be able to resume employment.

57.  I say this because it is evident from the Revised Statement of Damages that when reference is made to post-trial loss of earnings, the Plaintiff bases his calculations upon his being able even in his reduced condition of earning $4,500.00 per month.  This figure has not been contested and it would if anything appear to me to be on the high side.

58.  However, issue is taken as to when the Plaintiff would be fit to work.

59.  The Defendants argue that he should have been able to start working 3 months after the period of sick leave referred to in the medical report that is 10 July 2003.

60.  Having regard to the severity of the Plaintiff’s injuries and the consequent psychiatric problems, I have no doubt that more time must be allowed.

61.  For one reason, we now know the nature and extent of the difficulties the Plaintiff has encountered in getting a job up to the present time.  I do not believe that these difficulties are the result of insufficient efforts being made to obtain work.

62.  Mr Clough submits that it would be just to allow the Plaintiff a further 2 years from the present date before being required to work again.  The main argument, he advances in support of this submission is that according to Dr Ho he would benefit from a course of psychiatric treatment extending over a 2-year period.

63.  I am not convinced by this argument.

64.  The Plaintiff has not up-to-date been diligent in attending at the Yaumatei clinic where he had been receiving treatment.

65.  One of the answers, he gave in cross-examination might throw some light on this.   When he was asked why he had not followed up some of the appointments he had been given, he said that he did not feel like going out for the follow up treatment.

66.  This may perhaps be partially due to his difficult domestic situation.

67.  He is living with a girlfriend who is visually disabled.  The girlfriend has recently given birth to a baby and it is necessary for the Plaintiff to give a considerable amount of support to the girlfriend in looking after the baby.

68.  Be that as it may, I am doubtful if the Plaintiff would pursue a course of psychiatric treatment even if it was possible for him to undergo this in the private sector rather than going to Government Treatment Centres.

69.  Having given the whole matter careful consideration, I have come to the conclusion that the fairest course to adopt is to hold that the Plaintiff has justified not having a job up to the present time but that it is unreasonable to assume that this state of affairs can be protracted further into the future.  So far as the calculation of post-trial damages are concerned, I hold that the multiplicand must be discounted from the time when this judgment is delivered.

70.  The next question, which has to be addressed, is the multiplier to be applied to the circumstances of this case.

71.  There was not a great deal of difference between the respective counsels on this topic.  Miss Leong argued for 14 years while Mr Clough urged 15 years.

72.  Mr Clough cited in support of his contentions, a passage at page 8 of the judgment of Stone J in Wong Sin Lam v Kuen Fung Construction Ltd & others (unreported)being HCPI 1286/1999.

“48.   The problem in this area, in my view, is not that it is difficult to select a multiplier on the ‘conventional’ basis, but that present-day interest rate/investment conditions render such selection more than usually contentious.  If calculations for future loss, and necessarily therefore choice of a multiplier, are made on the principle that a lump sum is to be provided which, if invested wisely, when taken together with a small drawdown on capital will yield an income stream more or less in line with earnings that otherwise would have been achieved, it is difficult to see how ‘conventionally regarded’ multipliers can still be considered appropriate, in light of the fact that, for example, interest rates on US dollars are now at for below 1% even for very significant sums, and the current yield on 5 Year Treasury bills barely achieves 3%.  It is of course possible to attain higher rates of return, but only at commensurately higher (and no doubt unacceptable) levels of risk.

49.    Against this background, therefore, the implicit assumption within the calculation of conventional multipliers of interest rates of 4-5% patently no longer holds good, which situation formed the background to the House of Lords decision in Wells v Wells [1999] 1 AC 345. wherein investment in index-linked government securities was taken as the benchmark in respect of which the then current discount rate stood at 3%.

50.    Notwithstanding Mr Sarony’s invitation so to do, Mr Strachan has submitted that it is not open to this court to obtain the correct multiplier from the Ogden tables on the basis of an established net return in particular instruments.  Whilst it seems to me that reference to such tables represents the necessary and logical way now to proceed in the prevailing financial conditions, in my view in this contention Mr Strachan is correct, and I am constrained by appellate authority.

51.    In the circumstances, therefore, I propose to address the issue of the appropriate multiplier in a more liberal fashion than hitherto may have been the case, and in this I do not feel unduly influenced by the various authorities to which I have been referred by Mr Strachan in which other courts have selected multipliers of 10 or 11 for male plaintiffs of a similar age to Mr Wong.

52.    Accordingly, after some reflection I have concluded that the multiplier to be applied in this instance as part of the loss of future earnings equation should be fixed at a slightly more generous 14, although I recognize that given the current rates of return which are commercially available for lump sum investment this plaintiff is likely to remain hugely behind the premised yield even on the basis of such enhanced figure.”

73.  While I have considerable sympathy with these views, I am not persuaded that I should depart from the approach which is conventionally adopted in these cases.  I say this because it seems unlikely that the present depressed economic conditions will be unduly prolonged and there is every reason to suppose that more favourable conditions will arise in the future which will justify the present conventional approach.  Having regard to all of the circumstances of this case, I have come to the conclusion that the multiplier to be adopted will be 14 years.

74.  The Plaintiff claims $48,000.00 for future psychiatric treatment.  Miss Leong opposes this and referred me to the test laid down by Master Patrick Chan (as he then was) in Lam Kwong Ting v Ho Yau Yuen [1990] 2 HKC 381 and 385.

“… From the previous cases where the costs of a future operation were awarded as a separate item (as opposed to being a factor for consideration in making an award for general damages), it appears that the court will have to be satisfied with a number of matters.  It must usually be shown that the future operation is on medical advice and is necessary or reasonably required for the purpose of recovery or improvement of the injuries sustained or the relief of persistent pain and suffering.  The plaintiff should also show that the future operation is anticipated or likely to take place in the near or reasonably foreseeable future.  Further, the expenses to be incurred must also be reasonable.  Clearly, the burden is on the plaintiff to show that an award under this head and for the amount claimed should be granted.  Even if the plaintiff fails to do so, the possibility of a future operation will not doubt be taken into account when the court is considering the award for pain, suffering and loss of amenities.”

75.  I am satisfied that this is the correct test.  The Plaintiff has been attending at the Yaumatei Psychiatric Centre and receiving treatment.  Miss Leong proposed a figure of $20,000.00 to cover the cost of this and I consider that this offer was reasonable having regard to the Lam Kwong Ting test.

76.  I summarise the awards made in this judgment as follows:

1.	Pain on suffering and loss of amenities	600,000.00
2.	Pre-trial loss of earnings $13,475 x 48	646,800.00
3.	Pre-trial loss of Mandatory Provident Fund 5% of No. 2	32,340.00
4.	Agreed special damages	19,000.00
5.	Interest at 4% (1/2 current judgment rate) for 4 years on 2-4 inclusive	111,702.00
		1,409,842.00
6.	Post-trial loss of earnings is:
	$13,475-$4,500 = $8,975x12x14	1,507,800.00
7.	Post-trial loss on MPF at 5% on 6	75,390.00
8.	Agreed loss of earning capacity	67,500.00
9.	Psychiatric treatment	20,000.00
		3,080,532.00
	Less employer’s compensation award	(844,915.00)
	Grand total	2,235,617.00
		=========

77.  At the conclusion of the trial, I was informed that there was a problem in relation to the Defendants’ insurance policy.  There were also doubts as to the ability of the Defendants to meet any judgment which may be entered against them.

78.  Searches undertaken by the Plaintiff’s solicitors revealed that some property may be owned by the Defendants and Mr Clough requested me to enter interlocutory judgment against the Defendants so that his instructing solicitors could enter a lis pendens at the Land Registry as a precautionary measure.

79.  I agreed to this and proceeded on the basis that interlocutory judgment was entered with damages to be assessed.  It is this assessment which constitutes the judgment in this case.  The total amount awarded is $2,235,617.00.

80.  I make an order nisi that the Plaintiff will have his costs and costs will be taxed in accordance with the Legal Aid Regulations.