CAROLYN DALL v. CHOY YING WAI

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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DECISION

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Application to adduce actuarial evidence

1. The decision is delayed because I had asked the parties to lodge further written submissions after the hearing.

2. The Plaintiff applies for leave to adduce evidence of actuary in this case. The deceased died in a traffic accident on 27^th May 1992 at the age of 33 leaving two dependants, namely, the Plaintiff, his wife, born on 17^th September 1958 and a young daughter, born on 14^th June 1989.

3. The request for leave to call the actuary is to deal with two matters. First, on the multiplier to be used in this case and second, on the valuation of the loss of the benefits provided by the employer to the deceased such as insurance, provident fund and U.K. National Insurance contributions, and other allowances. The issue of house purchase also requires the use of actuary.

General use

4. On the first issue, Mr Pirie who appeared for the Plaintiff, referred to the conventional multiplier of 13 - 14 for a person who died at 33, whereas for a man at 50, the multiplier is 7 - 8. He submitted that there is over-discounting for younger person than older person when the conventional 1/3 discount is taken for vicissitudes of life. He said this is wrong because the uniform discount is not in accordance with the figures contained in the Hong Kong Life Table where it shows that the mortality rate increases when the population becomes older. Hence the discount for vicissitudes of life should not be uniform between different age groups. He submitted that actuarial evidence is required to prove this point and also to cross-check the multiplier used in this case.

5. What the Court of Appeal in Chan Pui Ki v. KMB (Civil Appeal No.263 of 1995) has decided is that the conventional multipliers must be adopted. I tend to agree that the multipliers for young persons or persons of young age have been over-discounted but as the law now stands, the conventional multiplier must be applied in the assessment. In the light of the Court of Appeal decision, change in the law can only be effectively made by way of legislative reform and not by changes in individual cases. To use the actuarial evidence to cross check the conventional multiplier will not serve any useful purpose because even if substantial discrepancy is showed, it is the conventional multiplier and conventional discount that one must apply. I have to refuse Mr Pirie's application for use of actuary on this ground.

Specific valuation

6. As to the second aspect, Mr Pirie submitted that actuarial evidence is needed to value the loss and such evidence was in fact submitted to the Court of Appeal in A.G. v. Chun Yat Nam [1995] 1 HKC 218. Mr Pirie was the counsel in that case. The only comment I wish to make is that Chun Yat Nam was decided before Chan Pui Ki. Likewise, Wong Wai Chun v. China Navigation Ltd [1969] HKLR 471, in which Mr Pirie described the calculation by the judge as one of "actuarial method" was decided before Chan Pui Ki. My decision in Chu Kang Yee & Anor v. Giant Ocean Ltd & Anor [1996] 1 HKC 284, in which actuarial evidence was used in a fatal claim, must be reconsidered in the light of the Court of Appeal decision. I will now turn to the specific items claimed by the Plaintiff.

Provident fund contribution

7. The deceased would contribute 5% of his salary to the provident fund while his employer would contribute 5%. The administration of the fund was in the hands of National Mutual who would distribute the contributions among a number of its own trust funds. Mr Pirie submitted that sophisticated methods of calculation will have to be adopted to ascertain the value of contribution and payment.

8. This is in fact a claim for future loss and it is instructive to refer to Munkman, Damages for Personal Injuries and Death, 10^th ed., at p.69 to see how pension loss is calculated in fatal accidents.

"The present value of a pension has to be calculated in two stages. First it is necessary to find the value at the date of future retirement, estimate life expectancy at that date and take the appropriate number of years' purchase to work out the capital value at that date. Secondly that capital value has to be reduced to its present value. Future inflation should not be taken into account, any more than it is taken into account for loss of earnings, and this is so even if the pension scheme aims to keep up with the cost of living: Auty v. National Coal Board [1985] 1 All ER 930, [1985] 1 WLR 784. Where a man was forced to retire 20 years early, the basic figure for annual pension lost was taken on the basis of what he would have been earning at the date of trial, not an estimate of the rate at retirement age: Mitchell v. Glenrothes Development Corpn 1991 SLT 284."

9. I should not at this stage go into the question of what is or what is not recoverable by the Plaintiff if she had received some form of early death pension. Hence I will not deal with the cases referred by Mr Bharwaney, namely, Dews v. National Coal Board [1988] AC 1, Parry v. Cleaver [1970] AC 1 and Auty v. National Coal Board [1985] 1 WLR 784.

10. The only issue in respect of the provident fund is whether actuarial evidence is required to show the amount of the pension payment to the deceased. As Munkman said, the loss is taken on the basis of what the deceased would have been earning at the date of trial and not an estimate of the rate at retirement age. In my view, the evidence can come from the employer and the pension fund manager in respect of the first stage of calculation. The multiplier will be the conventional multiplier which is used in the calculation of future loss. In respect of the discount under the second stage, reference can be made of the English and local cases. The actual percentage of discount to be adopted will be a matter for the trial of this action.

11. Webster J. in Robertson v. Lestrange [1985] 1 All ER 950 rejected the actuarial discount of the value of the lost pension, but instead adopted a greater discount. Webster J. said this type of discounting was not disturbed in the House of Lords decision of Lim Poh Choo v. Camden and Islington Area Health Authority [1979] 1 All ER 332. Mr Pirie submitted that Webster J. was wrong because this point was simply not argued in Lim Poh Choo. In any even in Mills v. British Rail Engineering [1992] PIQR 130, actuarial evidence was used.

12. In Lim Poh Choo, Lord Scarman described the substantial discount by the judge as being reasonable and must be upheld. I think irrespective of the English position, in the light of the decision of Chan Pui Ki there is no room for the use of actuarial evidence in working out the discount. In Hong Kong there are a number of cases concerning the calculation of loss of pension. They are:

National insurance contribution

13. The same discussion on provident fund contribution applies to this as well.

Other allowances

14. The Plaintiff pleaded that the deceased received other financial benefits such as management bonus, education allowance for the child, medical benefits, travelling and patent incentive bonus. This is an area in which actuarial evidence is not required. The calculation of these allowances is the same as the calculation of any future loss. The evidence will come from the employer on the likely notional earnings and allowances of the deceased. Further, if, for example, the dependants had lost the benefit of medical cover as a result of the death of the deceased, the cost of a comparable medical cover for the dependants can be ascertained from the evidence of an insurance agent or broker. In so far as the claims for life insurance and accident insurances are concerned, the Defendant submitted that the documents discovered by the Plaintiff showed that the deceased was covered for death benefit and personal accident benefit. These benefits presumably were paid out upon the death of the deceased and no further calculation is required. In any event, the valuation of the benefits can come from the same witness I have indicated.

Properties

15. The deceased had interests in a number of properties. First he had a 50% interest in a property jointly owned by him and his mother. His mother died a year after him. Mr Pirie submitted that the deceased would have then had a 100% interest in the property and in order to calculate the value of his reversion at the day of his death, actuarial evidence is required to calculate the probability that he would have to be alive upon his mother's death.

16. I am afraid I do not follow the argument of Mr Pirie. If the deceased was a joint tenant with his mother, then upon his death, his interest would pass to his mother. If, on the other hand, he was a tenant in common, then his share in the property will form part of his estate. In either case this property had nothing to do with the present claim.

17. The Plaintiff had two other properties which were mortgaged and secured by an endowment policies. Mr Pirie submitted that what has been lost is the accumulation of wealth. With respect, these properties again form part of the estate of the deceased. The question of loss of wealth simply does not arise.

18. As I see it, the only relevance of the properties owned by the deceased is to show that the deceased had a pattern of saving. If the Plaintiff is entitled to recover loss of accumulation of wealth, then it can be calculated in the ordinary way and actuarial evidence is not required.

Conclusion

19. In the circumstances, the Plaintiff's application is dismissed with costs nisi to the Defendant.