CHAN WAI MING v. LEUNG SHING WAH

CACV 266/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 266 OF 2013

(ON APPEAL FROM HCPI NO. 591 OF 2012)

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Hon Yeung VP :

1.  I have the advantage of reading the judgment of Cheung JA in draft and I agree with it. The cross appeal is allowed and the future loss of earning is increased to $1,765,433 with the costs order set out in paragraph 8.7 hereof.

Hon Cheung JA :

Background

2.  The plaintiff, then 57 years of age, was the passenger of a motorcycle driven by the defendant along Wo Yi Hop Road, Tsuen Wan on 22 October 2010 at about 6.30 p.m.  The defendant said that while he was travelling at about 45 km/hour on the outer lane of the road, a black car suddenly pulled out from the inner lane between two stationary buses and cut into his lane.  This forced him to brake and swerve and caused him to lose control of the motorcycle.  Both he and the plaintiff fell to the ground.  The plaintiff suffered severe head injuries and was in coma for ten days.  He sued the defendant for negligence.  Deputy Judge Seagroatt found the defendant 25% to blame for the accident.  The Judge assessed the plaintiff’s loss at $3,147,492 (particulars see below) (based on $3,148,272 less an agreed deduction of $780) together with interest at 2% per annum on $850,000 from date of writ to judgment and interest at 4% per annum on $731,342 from date of accident to judgment.

1) Pain, suffering and loss of amenities : $850,000

2) Pre-trial loss of earnings/profit : $591,212 (Monthly base figure of $16,113.85 X 37 months (22 October 2010 (accident) to 18 November 2013 (trial))

3) Claim for Rental : $91,630 (up to date of trial)

4) Future Loss of Earning : $1,546,930 (Annual base figure of $193,366.20 X multiplier of 8)

5) Agreed Special Damages : $68,500

The appeal and cross appeal

3.   The defendant appealed.  The plaintiff cross-appealed on quantum.  The plaintiff sought a multiplier of 9.13 instead of 8 for the future loss.  We dismissed the appeal with costs to the plaintiff at the conclusion of the hearing but reserved the judgment on quantum.  The cross appeal raises important principles on how the multiplier for future loss should be ascertained.

Liability

1) The Judge’s decision

4.1   The Judge found against the defendant on the basis that he had not kept a proper look out for the black vehicle which emerged from the inner lane.  The defendant’s evidence was that when he first saw the black vehicle in front of him it was only a metre away from him.

4.2   This is how the Judge addressed the issue :

‘ 11. It is incumbent upon motorists travelling in the outside lane of a carriageway to take account of moving or stationary traffic in the inside lane.  There is always the possibility or a risk of a stationary vehicle in a line of vehicles pulling out of that line into the outside lane in order to make progress or faster progress.  It is not sensible for a motorist travelling in the outside lane in such conditions to discount such possibility simply because the lane in which he is travelling is entirely free from other traffic.  One regularly sees buses, for example, pulling out of a line of vehicles, stationary and moving, in order to move ahead and meet a timetable. He has to take account of all traffic conditions.

…..

13. He said that he could only see the first and last bus as he approached but, at some stage, he must have seen more in order to claim that there were four or five buses there.  In answer to a question from me, he said that he had not seen the gap between two of the buses from which the black car emerged.  He had told the police officer that he was only a metre from the car when it pulled out.  In his evidence, he gave a distance between two features of the courtroom which was agreed to be no less than 5 metres and is probably nearer 7 metres. 

14. If he was only 1 metre away from the car, as he told the police, when he first saw it, and it was in the act of pulling out, he was failing, in my judgment, to keep a proper lookout.  In my judgment, he ought to have seen this car stationary in that gap much earlier.  The very fact that he was unaware of the gap shows that he was not keeping a proper lookout.  He ought to have anticipated that even one of the buses might pull out from the line and if he had noticed the gap, he ought to have been prepared for something to emerge from it.  He ought to have been aware of the presence of the car much earlier. 

15. In my view, he had discounted any of these possibilities. He does not even seem to have considered the possibility that passengers leaving one of the buses might have appeared in the road behind a bus, as passengers sometimes do, looking for an opportunity to cross both carriageways.  His crucial answer confirms this: “This accident would not have happened if I had noticed the car”. 

16. His unpreparedness for a problem created by an emerging vehicle was an indication of a failure to keep a proper lookout.  He was, as I find, just travelling along, albeit at a permitted speed, ignoring what he took to be simply stationary traffic which he thought would remain stationary as if nothing could happen.  He ought to have seen that car much earlier and, had he done so, as he said himself, he could have avoided the accident.’

2) The defendant’s argument

4.3   Mr Patrick Lim, counsel for the defendant, referred to a plan of the location issued by the Survey and Mapping Office of the Lands Department which showed that there was a long sweeping right bend before the bus stop and the site of the accident.  He argued, first, that given the circumstances of the case it cannot be inferred that the defendant ought to have seen a car in the gap at the distance when these factors are taken into account :

(a) This accident happened at dusk around 6:30 pm in October.  Visibility would have been worse than during daytime;

(b) That stretch of road was a straight road prior to the place of the accident and it would make it a lot more difficult for a driver of a moving vehicle in the outer lane to notice a gap between a line of stationary buses, let alone a private car in the gap, at a distance by reason of the lack of angle;

(c) That a private car being narrower than a bus could have been completely masked by the bus behind.

4.4   Mr Lim then argued that the Judge had adopted too high a standard in holding that the defendant ought to have anticipated that a car would suddenly emerge from the gap.  He referred to The Wagon Mound No. 2 [1967] 1 AC 617 and Fardon v. Harcourt-Rivington (1932) 146 LT 391.  He argued that the risks of the black car emerging from the gap at the precise moment and at such a speed that it got into the defendant’s path of travel was a mere possibility and not a real risk and the defendant is not bound to take precautions for mere possibilities by reference to Moore v. Poyner [1975] RTR 127, Davies v. Journeaux [1975] 1 Lloyd’s Rep 483, Kite v. Nolan [1983] RTR 253 and Ng Ching Hung v. Lau Shun Hing CACV 182/1990 (Judgment 5 March 1991).

3) My view on liability

4.5   The defendant is appealing against a trial judge’s finding of fact.  The well-established principle is that the appellant court will not interfere with the finding unless it is plainly wrong.  In my view the defendant has failed to establish that the finding is plainly wrong.

4.6   The location plan was referred to by the Judge himself when he tried to ascertain the position of the bus stop.  Neither the defendant nor Mr Lim referred to the plan.  It was never suggested that the bend would somehow affect the defendant’s vision of what lied ahead of him on his left in the inner lane.  The clear evidence of the defendant was that he could see the first and the last bus that were stationary on that lane.  There was no suggestion of any hidden corner or blind spots where the black vehicle could not have been seen.  The question of visibility because of the lighting condition was also not raised by the defendant at the trial.

4.7   I cannot see how the Judge can be said to be plainly wrong when he held that, in the circumstances of this accident, the defendant ought to have seen the black vehicle in the gap between two buses much earlier than at the time when it emerged to his lane.  If the defendant had not noticed it earlier, he must have failed to keep a proper lookout of the road condition.

4.8   In any event, it was only fortuitous that the black vehicle instead of a bus moved from its stationary position in the inner lane into the outer lane.  The point is simply that the defendant ought to have realised that there were temporarily stationary vehicles on the adjacent inner traffic lane and that precautionary measures may need to be taken because of the real risk (and not a mere possibility) that one of these vehicles might pull out into his outer lane.

4.9   The Moore line of cases which are almost standard authorities cited in cases involving a driver’s failure to keep a proper lookout where a pedestrian suddenly rushed to the defendant driver’s lane, must be considered in their proper context.  Each of the three English cases cited by Mr Lim involved children of very young age running out from the pavement into the path of a moving vehicle.  No liability was established against the driver in Moore and Davies while liability was established in Kite.  These cases were decided on their unique facts.  The same can be said of Ng Ching Hung where a vehicle suddenly appeared in front of the defendant driver.  These cases are not precedents.  It is a timely reminder to repeat the words of Donaldson MR in Kite :

‘ The application of those principles – determining what is an appropriate standard of care – must always depend entirely upon the particular circumstances of the case against the general background of the way in which our society is organised, and any decision applying the general standard to particular facts is unlikely to (one might almost say it cannot) produce a precedent. The doctrine of precedent applies to principles and not to the application of principles to particular facts with the possible exception of a case in which the facts are wholly identical, which is extremely unlikely in most circumstances.’

4.10   This is exactly what had happened in this case.  The Judge had considered the relevant circumstances of the case and come to view that the defendant was 25% to blame for the accident.  He cannot be faulted.

Quantum

5.1   The plaintiff was 57 at the time of the accident and 60 at the time of the trial. The Judge held that the plaintiff’s notional retirement age is 70 and adopted a conventional multiplier of 8.

5.2   In Chan Pak Ting v. Chan Chi Kuen [2013] 1 HKLRD 634 and Chan Pak Ting v. Chan Chi Kuen (No. 2) [2013] 2 HKLRD 1, Bharwaney J tackled once again the difficult but important issue of how to assess the multiplier for future economic loss in personal injury litigation. The choice is between, on the one hand, adopting a conventional multiplier used in decided cases and, on the other hand, assessing the multiplier by reference to actuarial tables after the discount rate has been ascertained by evidence. He reviewed the authorities such as Cookson v Knowles [1979] AC 556, Chan Pui Ki v Leung On [1995] 3 HKC 732 (HC), Chan Pui Ki v Leung On [1996] 2 HKLR 401 (CA), Wells v Wells [1997] 1 WLR 652 [CA], [1999] 1 AC 345 (HL) and Simon v. Helmot [2012] Med LR 394 (PC) on the assessment of future economic loss.  He heard expert evidence on the change of the economic landscape, economic historical investment returns and the structure of the investment vehicles since Chan Pui Ki.  He concluded that the Cookson v Knowles assumption of a net rate of return of 4.5% per annum was no longer valid in Hong Kong, as the defendants in that case had conceded.  He came to the view that the Court should move away from the conventional multiplier approach.  Instead the multiplier for future loss should be calculated by reference to the net rate of return (or discount rate) and actuarial tables.  He held that the discount rate for plaintiffs with future needs should be

1) not exceeding 5 years, minus 0.5%.

2) not exceeding 10 years, 1%.

3) exceeding 10 years, 2.5%.

5.3   There has been a number of first instance decisions such as Lam Chan Hung v. Hang Yue Engineering Ltd. & Ors HCPI 121/2011, Epifanio Candel Arbasto v. Chan King Yun James HCPI 42/2012, Lo Wai Shing v. Lik Sang Engineering Co. Ltd. HCPI 15/2012 and Mohammad Amjad v. John M Pickavant & Co. HCPI 100/2009 which adopted the Chan Pak Ting approach. 

5.4   In the trial below Mr Wong Chi Kwong, counsel for the plaintiff, briefly referred to Chan Pak Ting in his opening written submission and suggested a multiplier of 10.  It was not elaborated again in his closing submission.  Mr Lim did not address the issue.  The Judge did not indicate his view on Chan Pak Ting.  Mr Lim had not advanced any argument that the new approach was wrong.  He merely submitted that the Judge was entitled not to follow Chan Pak Ting and that there is no evidence on the discount rates in this case.

5.5   The parties now agreed that based on Table 11 of the Personal Injury Tables Hong Kong 2013 (Contributors: Professor Chan Wai Sum and Dr Felix Chan, General Editor: Mr Neville Sarony SC), the appropriate multiplier based on the 1% discount should be 9.13 for a man of 60 years of age with a working life of another 10 years.

Conventional multiplier or multiplier based on actuarial table

6.1   Let me try to explain the importance of getting the multiplier right.  Compensation for personal injury is based on the ‘full compensation’ principle.  This means a victim of a tort is entitled to be compensated as nearly as possible in full for all pecuniary losses.  He is not to get a dollar more or a dollar less for his loss.  The Privy Council decision of Simon v Helmot affirmed this principle which has been well established for over a century beginning from, at least, Livingstone v. Rawyards Coal Co (1885) 5 App Cas 25.  Allied with this principle is that the compensation is to be made in a lump sum.

6.2   Compensation by way of damages consists of both past and future loss.  Past loss is easier to ascertain by reference to the actual loss sustained between the date of the accident and trial.  Future loss is ascertained by reference to first, the multiplicand which is the recurrent annual amount (e.g. loss of wages, costs of future care and equipment etc) and second, the multiplier, which takes into account the period for which the loss can be expected to continue.

6.3   Based on the principle of full compensation, in respect of past loss, the delay between the loss and the award can be compensated by an award for interest.  But in respect of future loss, an element of uncertainty is involved.  The victim will receive a lump sum for all his future loss.  Ideally this lump sum will be available for his benefit during his life expectancy.  But what if the inflation is so high as to erode what he can get by way of investment return?

6.4   The authorities in the past proceeded on the basis that the return on the capital sum awarded at today’s value, would more than cater for the future and in fact it would generate a profit, hence a ‘discount’ has to be made on the accelerated payment of the lump sum : see for example, Mallett v McMonagle [1970] AC 166.  In the late 1970’s, the House of Lords in Cookson v. Knowles affirmed this view.  The conventional multiplier approach proceeded on the assumption that a 4.5% discount rate was appropriate.

6.5   The discount rate is a reflection of the interest rate or rate of return from investment.  The assumption has been that the choice of interest rate will always take the form of a discount for the accelerated receipt of the lump sum.  In practical terms, the higher the discount rate the lower will be the multiplier and the lower the discount rate the higher will be the multiplier (Simon v Helmot para 13).  As a corollary the lower the multiplier, the lower will be the final award.

6.6   In 1984, the ‘Actuarial Tables with explanatory notes for use in Personal Injury and Fatal Accident Cases’ by Mr  Michael Odgen Q.C. (‘the Odgen Tables’) was published in the United Kingdom.  The author suggested that the assumed conventional discount rate should not be used.  Instead, a discount rate of between 2.5 and 3.5% was suggested which was based on the then rate of return of investment in the United Kingdom in the form of the Index Linked Government Securities (‘ILGS’).  The appropriate multiplier of an individual plaintiff by reference to his age and life expectancy can be ascertained by reference to the suggested rate and the Odgen Tables.

6.7   However, the judicial thinking at that time in the United Kingdom maintained the conventional approach, see Hodgson v Trapp [1989] AC 807.  Lord Oliver went so far as to say that :

‘ to assess the probabilities of future political, economic and fiscal policies requires not the services of an actuary or an accountant but those of a prophet.’

6.8   As Lord Dyson wryly observed in Simon v Helmot :

‘ 100. ….. No doubt, [Lord Oliver] would have excluded economists as well.’

6.9   My attempt in 1995 (then sitting as a first instance judge) to depart from the conventional approach and adopt a discount rate based on economic data upon which the multiplier would be assessed by the actuarial tables was disapproved by the Court of Appeal in Chan Pui Ki v. Leung On [1996] 2 HKLR 401.  It was held that the Cookson v Knowles conventional approach based on a net return of 4.5‒5% should be maintained.  Litton VP (as he then) held at 420 H that :

‘ Now that the issue has been resolved by our judgment, there should be few occasions in the future when such expert evidence would still be necessary.’

6.10   Shortly after Chan Pui Ki, Hong Kong encountered the first of its many economic setbacks in modern times.  It fell victim to the Asian financial crises which had a lasting and fundamental impact on its economic structure.  The spectacular economic growth Hong Kong previously experienced has since been curtailed.

6.11   In 1998, the House of Lords’ decision in Wells v. Wells [1999] 1 AC 345 marked a fundamental departure from Cookson v Knowles.  It decided that the lump sum award for future loss should be based on the 3.5% return of the ILGS less tax resulting in a figure of 3%.  The multiplier is to be ascertained by reference to this figure.  The House of Lords held that the Ogden Tables should be used as the starting point rather than a check.  It also cautioned departure from the actuarial tables on impressionistic grounds by reference to the range of conventional multipliers (page 379 F-G, per Lord Lloyd of Berwick).

6.12   It should be observed that in United Kingdom, the award of damages is governed by the Damages Act 1996 which allowed, first, damages to be awarded by partial payment instead of a lump sum.  This enables different discount rates to be adopted when payments are made from time to time.  Second, the Lord Chancellor has the authority to prescribe rate of returns.  At the time of the decision in Wells v. Wells, no prescribed rate was introduced by the Lord Chancellor. After that decision, the Lord Chancellor prescribed the rate at 2.5% in 2001.

6.13   In 2003 the Hong Kong economy was further plunged into an abyss by the SARS epidemic.  The eventual recovery was stopped short by the 2008 global financial tsunami which hit Hong Kong like the rest of the world.  The quantitative easing policy which followed means that a low interest rate system is observed in Hong Kong which is already bound by a low interest rate regime because of the peg of the Hong Kong dollar to the US dollar. 

6.14   The review now moves to Guernsey, a British Crown dependency in the English channel which adopts the English common law in tort actions.  Like Hong Kong, it does not have legislation on damage awards.  It faces the same problem of determining the appropriate multiplier due to the low rate of return.  The Privy Council hearing an appeal from Guernsey in Simon v. Helmot reviewed the authorities and decided that the conventional multiplier approach decided in cases like Cookson v Knowles had served its purpose and accepted the Guernsey Court of Appeal’s approach in ascertaining the net rate of return by reference to expert evidence.  The Court adopted a discount rate of minus 1.5% for earning related loss and 0.5% for other losses. 

6.15   The underlining theme in Simon v Helmot is that finding a solution today by reference to economist evidence is not so dependent on surmise and speculation as it was when the issue was being discussed in the earlier cases.  The usefulness of actuary evidence is reaffirmed as actuaries have been predicting age expectancy for many years and have a sound statistical base, derived from population studies, from which to do so.  Most importantly, the conventional approach fails to serve the purpose of providing full compensation to the victim.

Expert evidence heard by Bharwaney J

7.1   Bharwaney J summarised the views of the economists. 

‘ 12. In section 2 of their joint report, they provided background information about the Hong Kong economy from 1995 up to the present time, examining historical data for four key indicators: the Nominal Hong Kong Hang Seng Index from 1978 to 2011; Hong Kong interest rate trends from the 1980s to the present time (using 12-month time deposit rates, in nominal terms, as a proxy), quoting the peak of 15.7% in October 1981, the 4-8% range from 1985 to 2000, the substantial slide thereafter to the recent practically flat level of around 0.16% from 2009 to the present; Hong Kong price inflation trends based on year-on-year percentage change of the composite consumer price index, noting the deflationary effects of the 1998 Asian crisis and the impact of SARS in 2003, and the climb thereafter reaching the 4% per annum level recently; and, finally, the annual growth rates of the gross domestic product (“GDP”) in Hong Kong which is often regarded as the most important economic indicator. Hong Kong enjoyed double digit nominal growth in every year, except 1995, during the pre-1995 period, but has been adversely affected by financial storms thereafter. The first negative growth in 50 years was experienced in 1998. In the last two years, Hong Kong has been experiencing a single digit growth figure. The experts’ review of this economic data led them to conclude, as I did in my decision in September last year, that there had been a substantial change in economic landscape since the judgment of the Court of Appeal in Chan Pui Ki v Leung On in 1996.

……

15. The experts have also referred to the ‘double whammy’ effect in Hong Kong caused by the economic impact of imported inflation from China without a free hand in fixing a higher interest rate in Hong Kong because of the currency peg of the HK dollar to the US dollar.  The Renminbi has been rising against the HK dollar for the past ten years.  Strong internal demand within Mainland China has caused an increase in the price of food and other products in China. A significant amount of food is imported to Hong Kong from China daily.  The rise of the Renminbi against the HK dollar has had a marked impact on consumer price inflation in Hong Kong recently.  The peg is here to stay for a long, long time and the double whammy effect will continue in Hong Kong.

……

17. All these economic indicators, and, particularly, the quantitative easing efforts of major economics, suggest to me that the exceptionally low interest rate regime will continue to last for some time.  In the press release of the Financial Secretary’s Office dated 26 October 2012 in connection with the new measures to curb property speculation, which was widely reported, the Financial Secretary, Mr John Tsang, noted that the US Federal Reserve had extended its pledge to maintain exceptionally low interest rates at least until mid-2015.’

7.2   The Judge further referred to the evidence on the historical investment performance in Hong Kong as of 30 June 2012.

‘ 55. Returning to Table 5.4, one can see that the first column showing the performance for the period of one year from 1 July 2011 to 30 June 2012 showed negative returns in respect of all investment vehicles, and in respect of all benchmarks, except for the Hong Kong Bond Index which showed a growth net of price inflation of 0.8. For the period of 3 years from 1 July 2009, real rates of return in excess of 4.5% was only achieved by the MFR Global Equity Funds at 4.7% and by MSCI Hong Kong. The returns from other investments were less than 4.5%, many returning negative returns including MPF Hong Kong Equity, MPF Hong Kong Dollar Bond and Money Market Funds including MFR Money Market Funds.

56. The picture worsens for the five-year period from 1 July 2007, which, of course, was the result of the financial crisis that occurred in October 2008.  Positive returns were only shown for MPF Global Bond, MPF Hong Kong Dollar Bond, MFR Global Bond Funds, which was the best performer at a positive 2.7%, and the Hong Kong Bond Index, which showed a positive return of 2.3%.  A review of the performance over a period of 7 years showed an improvement of returns, some returns being close to above the 4.5% net rate, namely, MPF Hong Kong Equity at 4.2%, MFR Hong Kong Equity Funds at 6.2%, Tracker Fund at 4.8%, the Hang Seng Index at 5%, and the MSCI Hong Kong at 4.6%. Many returns remained negative although some other returns from other funds were marginally positive.  There was a general improvement across the board in the real rate of return when the period of 10 years and 12 years was considered.’

7.3   He found that the investment structure discussed in Chan Pui Ki which the Court of Appeal held would be able to produce a return of the 4.5‒5% range after deducting price inflation could no longer be achieved in the present economic condition. 

‘ 86. It was clear, when the evidence from the experts was concluded, and even taking the defendants’ case at their best, that the Cookson v Knowles assumption of a net rate of return of 4.5% per annum was no longer valid in Hong Kong, as Mr Badenock QC [counsel for the defendant] so very fairly and very properly conceded.’

7.4   Because the expert evidence did not show much differentiation between price and wage inflation, Bharwaney J chose not to adopt different discount rate for wage and earning loss.  The low rate of wage inflation is a reflection of the economic stagnation Hong Kong has been experiencing.

7.5   Due to different future needs of the plaintiff, Bharwaney J then found different discount rates for the plaintiff with different future needs over a period of time.

Should the new approach be adopted?

8.1   In my view Bharwaney J had correctly addressed the law and facts which amply demonstrate that the assumed 4.5‒5% net return is simply not achievable in present day Hong Kong.  The only issue is whether the decision of this Court in Chan Pui Ki which is binding on him and also on this Court should be departed on the basis that it is plainly wrong : A Solicitor (24/07) v. Law Society of Hong Kong (2008) 11 HKCFAR 117. 

8.2   In discussing how a previous decision is to be regarded as plainly wrong, Li CJ at paragraph 48 held that :

‘ 48. In examining whether a previous decision is plainly wrong, the Court of Appeal is not confined to a consideration of the matters as they stood at the time the previous decision was made. It may take subsequent developments into account. These include subsequent legal developments, including the enactment of relevant constitutional or statutory provisions and the development in jurisprudence in Hong Kong or elsewhere. What is contemplated here is that subsequent developments on the constitutional, statutory or case-law fronts in the relevant area of the law or related areas may have so substantially impaired the previous decision that it should now be regarded as plainly wrong. This situation is different from that which has already been discussed where a previous decision of the Court of Appeal is inconsistent with and overridden by a subsequent constitutional or statutory provision or a subsequent decision of the Court of Final Appeal (see para.40 above).’

8.3   In my view it is not satisfactory that for a topic as important as this one which has a huge impact on the personal injury practice should be left to be decided in the future in a case where the parties chose to adduce expert evidence at trial and have the financial resources to take the matter to appeal.  The parties in Chan Pak Ting who had the benefit of representation by leading specialist counsel from England and Hong Kong and the financial ability to call expert evidence had chosen not to appeal.  Uncertainty will ensure if this Court chooses not to seize the opportunity and decide on this issue.  With the benefit of the statement of principles by the House of Lords in Wells v Wells and the Privy Council in Simon v. Helmot together with clear expert evidence so ably summarized by Bharwaney J, this Court is in as good a position to address this topic. 

8.4   It is recognized that great caution must be exercised before this Court departs from Chan Pui Ki, a precedent which has been followed for nearly 20 years since its decision in 1996.  But since that time, Hong Kong has undergone great change in its economic landscape.

8.5   In my view to hold on to the conventional multiplier approach which is based on the discount rate of 4.5‒5% fails to provide full compensation to the victim because this notional return does not accord with the economic reality of present day Hong Kong.  For my part, I would respectfully depart from Chan Pui Ki and adopt the new approach.

8.6   Accordingly, I would allow the cross appeal and adjust the multiplier so that the future loss of earnings will become :   

$193,366.20 x 9.13 = $1,765,433

8.7   The defendant is to pay the plaintiff the costs of the cross appeal.

Legislative change

9.1   Hong Kong does not have ILGS upon which the return rate may be more easily identified.  In the long term, the only solution to the problem now faced by this Court which is bound to resurface time and again, is to introduce legislation similar to the United Kingdom Damages Act 1996 which allows the authority to prescribe a rate of return from time to time in order to meet changes in the economic condition.  This is a call urged upon Guernsey by the Privy Council and I will repeat a similar call that the legislation should be introduced in Hong Kong without further delay.

9.2   Pending legislative change, Lord Clarke in Simon v. Helmot suggested that the parties should resort more to structured settlements by way of periodical payment orders.  This will ensure different net rate of returns to be taken into account at different times.  He observed that structured settlements in fact were commonly used in the United Kingdom before the Damages Act 1996. In my view this is a matter worth looking into by personal injury practitioners.

Hon McWalters JA :

10.  I agree with the judgment of Cheung JA.