LAU WING KONG v. HUNG WING STEEL ENGINEERING LTD AND OTHERS

HCPI 199/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO. 199 OF 2006

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Dates of Hearing:  13-16 May 2008

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R E A S O N S   F O R   D E C I S I O N

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I.   INTRODUCTION

1.  The Plaintiff in this action, Mr Lau Wing Kong (“Mr Lau”), was injured in an industrial accident which occurred on 12 August 2003.  His left hand was completely amputated from above the elbow by a fallen steel rack (“the Rack”) which he was trying to erect with other co-workers inside a steel core store on an industrial site at Tsz Wan Shan, Kowloon (“the Site”). 

2. Mr Lau brings this action for damages for personal injuries against the 1^st Defendant (“Hung Wing”), which was his former employer. The 2^nd Defendant (“LGL”) was the main contractor responsible for erecting two steel huts and storage racks on the Site.  LGL, in turn, commenced third party proceedings against the Third Party (“Lai Ming”), which was its sub-contractor and which sub-sub-contracted the work to Hung Wing.

3. The parties to the main action were able to reach settlement on liability before the trial commenced.  It was agreed that the Defendants would pay Mr Lau jointly and severally 90% of the quantum as assessed by this Court, while the Defendants as between themselves have agreed to apportion their respective shares of damages and costs payable to Mr Lau, with Hung Wing bearing 75% and LGL bearing 25%.

4. Shortly after the commencement of the trial, the parties were able to agree on the amount of PSLA at $675,000 and special damages at $86,510.  Thus the only remaining issues in the main action were Mr Lau’s claim for loss of earnings and his claim for the cost of fitting and maintenance of prosthesis for his left hand.

5. In the third party proceedings, LGL claimed from Lai Ming full indemnity of or a substantial contribution to the damages and costs it had to pay Mr Lau.  Lai Ming did not have legal representation at the trial and was, with leave of the Court, represented by its director Mdm Wong Kwan Yau (“Mdm Wong”).

6. With the assistance of experienced counsel appearing for Mr Lau (Mr Mohan Bharwaney SC), Hung Wing (Mr Meyrick Wong) and LGL (Mr Dennis Law), and in view of the limited issues in dispute, I felt able to announce my decisions at the end of the trial.  I awarded Mr Lau $3,710,385 (being 90% of $4,122,650) exclusive of interest and before deduction of $1,275,222 already received by Mr Lau by way of Employee’s Compensation payments.

7. As for the third party proceedings, I held that Lai Ming should indemnify LGL as to two-thirds of the amount it had to pay Mr Lau in damages and costs.

8. These are my reasons for coming to the above decisions.

II.  Evidence on Quantum

(A)  Plaintiff’s Evidence

9. The only witness to give evidence on quantum is Mr Lau himself.  I find Mr Lau a credible witness, and I accept his evidence without hesitation.

(B)  Medical Evidence

10. There is no dispute over the medical evidence placed before the Court.

11. Because of the agreement over PSLA, it is unnecessary to set out in detail the very serious injuries suffered by Mr Lau or his treatment and recovery process.  It suffices for me to record that he was given sick leave for a total of 898 days from 12 August 2003 to 15 August 2005, from 26September 2006 to 21 December 2006 and from 6 March 2008 to 22 May 2008.

12. As to Mr Lau’s current conditions, he was assessed by Dr. Chung Siu Yeung and Dr. Jack Wong, specialists in Orthopaedics & Traumatology, on 28February 2006.  Both medical experts agreed that Mr Lau suffers from 62% impairment of the upper extremity, equivalent to 37% impairment of the whole person.

13. The two medical experts also agreed that Mr Lau was unable to return to his pre-injury job.  They agreed that a sedentary type of job, such as telephone operator, stall keeper, or cashier would be suitable for Mr Lau.  However, Mr Lau’s ability to get and keep a suitable job is in dispute.

14. According to Dr Wong, Mr. Lau had great difficulty in handling his daily activities.  He was not capable of performing household chores.  While he was independent in his personal hygiene, putting on clothing, reading and feeding, he could only do so with great difficulty because of a stiff left elbow and weak left hand.

15. Mr Lau is right hand dominant.  The experts accepted, and so would I, that Mr Lau was suffering from the following symptoms which are permanent:

(a)     Various deformities at elbow and claw hand deformity.  A nighttime resting splint and a daytime dynamic splint is necessary to prevent further deformity of the left hand.

(b)    Wasted lower arm (biceps muscle belly) and forearm muscle wasting.

(c)     Wasted dorsal interiossei muscle.

(d)    Severely restricted movement of shoulder, wrist and fingers.

(e)     Inability to make a full fist and reduced handgrip power at grade 4-.

(f)     Decreased sensation below amputation level.

(g)     Circumferential scar of 22 cm long and longitudinal scar of 14 cm long.

(h)     Pain at elbow, worsen with the onset of climate.

(i)      Difficulty in handling his daily activities, which requires the use of both hands because of his stiff left elbow and weak left hand, and he has to resort to using his teeth.  For instance, he is unable to wring or twist a towel and hold a rice bowl, it is difficult for him to clean his right side and to put on clothing, and he is unable to perform any household chores.

(j)      Depressed personality and outlook on life.

16. I accept Mr Lau’s evidence that he is still suffering from these symptoms.

(C)  Pre-Accident Earnings

17. At the time of the accident, Mr Lau was a qualified welder and held the “General Welder, Intermediate Trade Test Certificate” from the Construction Industry Training Authority since May 2002.  He was employed by Hung Wing since May 2003 as an iron worker.  Prior to that, he had been employed in the same type of work by another employer since at least 1998, if not earlier.  That employer ceased business and Mr Lau became employed by Hung Wing.

18. At the time of the accident, Mr Lau was earning $700 per day.  According to the Form 2 completed by Hung Wing after the accident, Mr Lau worked for an average of 23 days a month, with over-time pay of $300 per month, making a total average monthly earning of $16,400 per month.

19. Mr Bharwaney SC, for Mr Lau, relies on the average earnings of Mr Lau over the 5 years before the accident as reported to the Inland Revenue Department, which would be $18,210 per month, for the purpose of calculating pre-trial loss of earnings.

20. In my view, the evidence does not establish that Mr Lau would have earned more than his average earnings at the time of the accident during the pre-trial period.  Indeed, the statistics from the Census and Statistics Department show that between August 2003 and January 2008, the average daily wages of general welder employed in public sector construction projects decreased from $847.50 to $777.90.

21. I therefore accept the Defendants’ contention that pre-trial loss of earnings should be based on $16,400 per month.

III.  HEADS OF CLAIM

(A)  Pre-Trial Loss of Earnings

22. Mr Lau has not been employed since the accident.  The pre-trial period is 57 months.

23. The Defendants contend that full loss of earning should only be given for only 36 months after the accident, ie, up to August 2006, since Mr Lau ought to have been able to find sedate employment as suggested by Dr Wong and Dr Chung.  On that basis, a notional earning of $5,000 per month should be deducted for the 21 months immediately prior to trial.

24. I reject that contention.  Given Mr Lau’s injuries and present conditions, he is, at least for employment purposes, effectively a person with only 1 hand.  He is now over 47 years old, and has no particular skills other than welding which he would not be able to do anymore.  He is, and in my view was during the entire pre-trial period, severely handicapped in the labour market.

25. I am also satisfied that Mr Lau wanted to find employment since 2006 onwards, but was unable to secure any.

26. In my judgment, Mr Lau is entitled to recover full loss of earnings during the pre-trial period on the basis of $16,400 per month.  Pre-trial loss of earnings is therefore $934,800.

27. I also agree that Mr Lau should be awarded loss of MPF benefits at 5% of $934,800, ie, $46,740.

(B)  Future Loss of Earnings

28. Turning to future loss of earnings, Mr Bharwaney contends that Mr Lau’s earnings would have increased with his work experience and qualification as a welder.  I am unable to accept that submission.  Mr Lau had been working in the same field for over 10 years prior to the accident.  There is no evidence to support the claim that his earnings would have increased because of further work experience or qualification to be gain.

29. On the other hand, inflation has re-appeared, albeit somewhat mildly, and there are recent reports of wage increase in different employment sectors.  I am prepared to accept that Mr Lau’s earnings would have increased mildly in the future in line with inflation.

30. On that basis, I would adopt a notional average monthly figure of $17,000 for the purpose of calculating future loss of earnings.

31. In line with their argument in respect of pre-trial loss of earnings, the Defendants contend that a suitable deduction should be made on account of earnings from alternative employment in assessing future loss of earnings.

32. I am not satisfied on the evidence that Mr Lau will be able to secure any gainful employment, even for temporary work, in the future.  As I said, Mr Lau in his present conditions, which I accept are not likely to improve significantly, is seriously handicapped in the labour market.  The only evidence on possible gainful work is Mr Lau’s own evidence that through the Labour Department’s Work Orientation and Placement Scheme, he was offered a temporary job to distribute leaflets, for a few days in a week for 2 hours each time.  The pay offered was only $18 per hour.  There is no evidence on how likely Mr. Lau will be able to find even that kind of work on a secure basis in the future.  In my judgment, the prospect of Mr Lau being able to earn some meager wages from such temporary work is so slim that it can be disregarded in assessing future loss of earnings.

33. In relation to multiplier, Mr Bharwaney on behalf of Mr Lau advocated 11, whereas Mr Wong for Hung Wing and Mr Law for LGL submitted that 9 should be appropriate.  Counsel referred me to a large number of cases, some more recent that the others.  It is unnecessary to go into the details of the cases, which in my view indicate that the appropriate range for multiplier for someone in a similar position as Mr Lau would be around 9 to 11.  I think 10 would be reasonable for Mr Lau.

34. Future loss of earnings is therefore $2,040,000.  There would also be 5% future loss of MPF benefits at $102,000.

(C)  Cost of Prosthesis

35. I turn to the cost of the proposed prosthesis.  The device is recommended by Mr Raymond Ng Kwan Ying, prosthetist and orthotist consultant jointly instructed by the parties. 

36. The recommended prosthesis is an assistive device called “N-Abler III WHO Soft Brace”.  The soft brace fits over the lower arm and palm of the disabled hand.  It has a device near the palm area for fitting various tools which would enable the wearer to engage in a variety of activities including carpentry, gardening, general mechanical work, etc.  There are also kitchen utensils, eating tools and cutlery tools.  The total cost of one soft brace with an almost full set of tools as recommended is US$12,511.86 or $97,592.  There will also be professional charges for fitting the device, at $26,000.  Follow-up and maintenance fee will be $10,000 for every 5 years.  Thus for each set of the device as recommended, the total cost is $133,592 for every period of 5 years.

37. I am satisfied that the proposed prosthesis is reasonably necessary for Mr Lau.  However, I am not satisfied that Mr Lau would need all the tools as recommended by Mr Ng.  In particular, I do not see why Mr Lau would need carpentry tools, cutlery tools, mechanical tools or kitchen utensils, when these tools appear to be designed for using the disabled hand in such activities.  There is also no evidence that Mr Lau used to or is likely to engage in such activities in his daily life.

38. According to the quotation for the device from the supplier, one set of the soft brace with the appropriate accessories including eating utensils and some other miscellaneous tools cost around US$3,000 or $23,400.  I accept that the professional charges for fitting, etc, and maintenance costs are reasonable.

39. Mr Bharwaney accepts that Mr Lau should be entitled to one set of the device every 5 years, as opposed to two sets as originally claimed.  On that basis, each set of the soft brace with the accessories I have mentioned plus the associated professional charges will cost a total of $59,400.

40. For this head of claim, I propose to adopt a life long multiplier of 20, so Mr Lau should be awarded the cost of 4 sets of the prosthesis.  The award under this head is $237,600.

IV. DAMAGES AWARDED AND COSTS

41. Total quantum on a 100% basis is $4,122,650, exclusive of interest:

(1)     PSLA (agreed)                          $675,000

(2)     Pre-trial loss of earnings             $934,800

(3)     Pre-trial loss of MPF                 $46,740

(4)     Post-trial loss of earnings           $2,040,000

(5)     Post-trial loss of MPF               $102,000

(6)     Cost of 4 sets of prosthesis       $237,600

(7)     Special damages (agreed)           $86,510

42. Since the parties agree that Mr Lau should be entitled to 90% of the damages as assessed, the total quantum exclusive of interest is $3,710,385.

43. The parties also agree that interest should be awarded on special damages from the date of the accident to the date of judgment at half prevailing judgment rates and on general damages from the date of the service of the writ to date of judgment at 2% per annum.

44. Finally, Mr Lau has to give credit for ECC payment of $1,275,222 already received by him, with interest thereon from date of payment to date of judgment.

V.  THIRD PARTY PROCEEDINGS

45. LGL’s claim against Lai Ming was originally advanced on the basis that Lai Ming sub-sub-contracted the work to Hung Wing without LGL’s knowledge or consent, and was thus in breach of the express terms of the sub-contract.

46. I accept the evidence adduced by LGL which shows that it had no knowledge that Lai Ming had sub-sub-contracted the work to someone else.

47. However, Mr Law for LGL accepted in the course of the trial that Lai Ming’s breach of the sub-contract probably had no direct causal connection with the accident.

48. The more pertinent question is whether Lai Ming, as the head contractor of Hung Wing by whom Mr Lau was actually employed, was responsible for the accident in any way.

49. On this aspect of the case, one must go back to the circumstances of the accident.

50. Mr Lau’s evidence is that he had been working at the Site since 15 July 2003.  He, together with other co-workers employed by Hung Wing, were led by a Mr Lau Kwok Wah.  Mr Lau did not know to which company Mr Lau Kwok Wah belonged; he was instructed by his boss at Hung Wing, Mr Chan Kam Hung (“Mr Chan”), to go to work at the Site with Mr Lau Kwok Wah.

51. Mr Lau’s evidence is that by around 7-8 August 2003, the core store in question had been erected and the next step was to erect some large steel racks inside.  On the date of the accident, Mr Lau together with his co-workers were instructed by Mr Lau Kwok Wah to erect the Rack inside the core store. 

52. The Rack was a very large and heavy structure.  It measured 1.01 metre wide, 2.74 metres high and 6.6 metres long.  According to information provided to the Labour Department in the post-accident investigation, the Rack weighed some 726.5 kgs.

53. According to the Method Statement submitted by Lai Ming to LGL, lifting work would be carried out by lorry crane.  As for the steel racks, the Method Statement appeared to suggest that the racks would be welded together inside the core store since only welding was mentioned in the Method Statement.

54. In any case, for whatever reason, there was no suitable lorry crane which could enter the core store and, according to Mr Lau, no one had told him or his co-workers how to erect the already constructed Rack inside the core store.  He and his co-workers were left to their own devices.

55. Mr Lau said that one of his co-workers found a chain block from a tool box found on the Site and the group used the chain block to lift up the Rack.  A hook was attached to one end of the chains.  The workers tied a web sling to the Rack and placed the other end of the web sling on the hook to lift the Rack manually.  While they were doing so, the web sling got detached from the hook and the Rack fell onto Mr Lau injuring him.

56. The Labour Department safety officer investigating the accident found that the hook was defective in a number of ways.  In particular, the safety latch was missing and the hook itself was seriously deformed in that it was twisted and the hook opening was widened.

57. According to the evidence adduced by LGL, the chain block and the hook did not belong to it.  They were not colour-coded as would be the case with equipments which had been checked by LGL safety staff to be in good working condition.  I have no reason not to accept this evidence.

58. In the circumstances, it seems to me reasonably clear that the accident occurred because of the failure of Mr Lau Kwok Wah to provide:

(1)     proper instructions to Mr Lau and his co-workers as to the work method to be adopted,

(2)     suitable and safe equipments to lift the Rack, and

(3)     proper supervision to ensure that only proper equipments, such as a suitable lorry crane and lifting gears, would be used.

59. The real question is whether Lai Ming should be responsible for Mr Lau Kwok Wah’s failures.  In this connection, the answer is clear.  According to Mr Lau’s evidence, Mr Chan, the “boss” of Hung Wing, entrusted the supervision of Hung Wing’s workers to Mr Lau Kwok Wah.  Mr Lau Kwok Wah, on the other hand, was the representative of Lai Ming and was specifically appointed safety representative of Lai Ming.  Further, as the sub-contractor of the work, Lai Ming had the duty to ensure that the workers actually deployed to do the work would do so safely with proper equipment, and to provide suitable supervision.  Lai Ming clearly failed to discharge that duty.

60. I have not overlooked a letter signed by Mr Lau and a co-worker on 10 September 2003, ie, about a month after the accident.  That letter, written on Hung Wing’s stationery, stated that Mr Chan had instructed Mr Lau and his co-workers the evening before the accident on the procedure to be adopted for lifting the Rack, and that the workers had failed to follow Mr Chan’s instructions.  The contents of this letter appear to be inconsistent with Mr Lau’s evidence in relation to the circumstances of the accident.

61. Mr Chan did not give evidence at the trial, so there was no evidence as to the provenance of this letter.  Mr Lau, whose evidence relating to the circumstances of the accident was set out in detail in his witness statement, was not asked any question about this letter.  In the circumstances, I place no weight on this letter.

62. Having considered all the evidence and submissions, I have come to the conclusion that as between LGL and Lai Ming, the latter was more to blame for failing to ensure that Mr Lau and his co-workers would adopt a safe system of work and would only use safe equipments to lift the Rack. 

63. In my judgment, Lai Ming should bear two-thirds of the amount of damages and costs payable by LGL to Mr Lau.

VI.  CONCLUSION

64. For the above reasons, I ordered that:

(1)     Judgment be entered in favour of the Plaintiff against the 1^st and 2^nd Defendants jointly and severally in the sum of $3,710,385 with interest on general damages from date of service of the writ to date of judgment at 2% per annum and on special damages from the date of the accident to date of judgment at half prevailing judgment rates, less $1,275,222 already received by the Plaintiff by way of ECC payments with interest thereon.  For the avoidance of doubt, judgment is entered on the basis that the 1^st Defendant was the Plaintiff’s employer.

(2)     The Plaintiff shall have his costs of the action against the Defendants, to be taxed if not agreed.

(3)     The Plaintiff’s own costs are to be taxed in accordance with legal aid regulations.

(4)     As between the 1^st and the 2^nd Defendants, the 1^st Defendant shall be responsible for 75% of the damages and costs payable to the Plaintiff, and the 2^nd Defendant shall be responsible for 25% of the damages and costs payable to the Plaintiff.

(5)     There be an order nisi that there be no order as to costs between the 1^st and 2^nd Defendants.

(6)     The 2^nd Defendant is entitled to be indemnified by the Third Party as to two-thirds of the damages and costs it has to pay the Plaintiff.

(7)     The 2^nd Defendant shall have its costs of the third party proceedings against the Third Party, to be taxed if not agreed.

65. Lastly, it remains for me to thank counsel for their valuable assistance.