LAI HON MING v. FONG WAI CHING AND ANOTHER

HCPI994/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO. 994 OF 2001

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J U D G M E N T

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Introduction

1. Pursuant to an order of Master B. Kwan dated 19 April 2002, interlocutory judgment for damages to be assessed was entered for the Plaintiff against the 2nd Defendant. Proceedings were discontinued against the 1st Defendant. The Plaintiff was awarded the costs on liability and discontinuance against the 1st Defendant.

2. The claim arose out of a head-on traffic collision on 7 January 1999 between the Plaintiff's Nissan tractor and a government van driven by the deceased, Chow Wing-yiu. It was a catastrophic crash, as Chow and his four passengers were killed. The Plaintiff sustained personal injuries and his tractor was seriously damaged.

3. When the matter came before me, following renewed negotiations between the parties, considerable portions of the Plaintiff's claims were compromised. These were:

(1)	Damages for pain, suffering and loss of amenities	$200,000
(2)	Loss of earning capacity	$30,000
(3)	Damage to the Nissan vehicle	$110,000
(4)	Medical expenses	$17,878
(5)	Travelling expenses	$4,000
(6)	Bone-setter's fees	$1,500
(7)	Special foods	$5,000

That left at large the claims for financial loss, both accrued and prospective.

Pre-trial Loss of Earnings

4. The Plaintiff gave evidence to advance his claims. He was, and remains, the sole proprietor of Tung Ming Company, a transportation concern registered in the name of his wife, but in reality wholly owned and run by himself. To trade, the Plaintiff would employ his Nissan tractor to collect frozen foods from the Kwai Chung Container Terminal and deliver them to his customers. Each collection and delivery constituted an assignment for which he was paid. Prior to the accident, he would, on some three or four occasions a month, be requested by clients to assist with unloading at destination and be paid between $200 and $500 a time. That was extra income he said he had to forego on account of his injury.

5. Although there was no documentary support for this aspect of his claim and no mention of it in his statement of damages, I am prepared to take this loss into consideration, as I consider the Plaintiff to be an honest and reliable witness, having heard him.

6. It was the defence case, by reference to the profit tax assessments produced for the years 1997/1998, 1998/1999, 1999/2000 and 2000/2001, that the Plaintiff had sustained no financial loss. Except for the year 2000/2001, when the Plaintiff's stated salary drawings were $180,000, in each and every one of the tax years disclosed, the Plaintiff was said to have had annual drawings of $240,000. Trading receipts and fuel costs remained generally similar.

7. In short, the primary contention was that the Plaintiff had suffered no loss of income at all, even during the five months' sick leave period. Alternatively, if some loss did occur, it would amount to no more than $82,901 if the Plaintiff, it was contended, mitigated damages by having his tractor repaired or replaced about one month following the accident and hiring a substitute driver to carry on the business.

8. In this context, it is significant to bear in mind that failure to mitigate had neither been pleaded nor raised prior to the Plaintiff's cross-examination.

9. The Plaintiff was taken by surprise and had little opportunity to address the issue properly.

10. The authorities make it abundantly clear that if a defendant intends to set up a positive case to show that the plaintiff failed to take reasonable steps to mitigate his loss or damage, such an allegation should be specifically raised in the defence with supporting particulars: (Pleadings: Principles and Practice 1990 Edition.)

11. This was patently not done, and the Plaintiff was seriously prejudiced.

12. Consideration of prejudice aside, in view of the Plaintiff's injuries, the reasonable period of sick leave granted, and the fact that he was a one-man business, with the tool of his trade seriously damaged in the accident, the suggestion that he did not take reasonable steps to reduce his loss rings hollow in the circumstances of the case.

13. It is the burden of the defendant to establish failure to mitigate. This the 2nd Defendant has failed to do.

14. During the Plaintiff's five-month convalescence, business was at a standstill. In the tax year of 1998 to 1999, the assessable profits were $279,820. In that period, the Plaintiff was only able to work from 1 April 1998 to June 1 1999, when the accident occurred. When viewing the tax documentation adduced, it is totally unrealistic to simply concentrate on the consistent salary drawings and inferring therefrom that the Plaintiff did not suffer any diminution of salary or earnings. The monthly salary drawings were plainly entered for tax purpose only.

15. The fact remains that when he was laid up he could not and did not accept any assignments, whether they included unloading work or not. For the entire five months, the business generated no income at all. That was the reality. Had he gone about his business in the usual fashion, doubtless trading receipts would have been higher than currently reflected on the papers.

16. I find that his pre-accident receipts were:

$279,820 ÷ 9 months = $31,091 pre-tax.

Profit tax was agreed at 17 per cent. For the five months of sick leave, the Plaintiff's loss is assessed at $129,027.65, namely:

$31,091 x 5 months less 17 per cent tax.

Pre-trial loss of earnings therefore amounts to $129,027.65.

Prospective Loss

17. The Plaintiff said quite categorically that the accident had made it difficult for him to work in the evenings. He was also not able to undertake unloading for clients in return for payment. For the tax year of 1999 to 2000, the Plaintiff worked 10 months. With assessable profits of $285,110 for the period, the average gross monthly income was $28,511, namely:

$285,110 ÷ 10 months.

The average dropped for the tax year 2000/2001. It was $16,531.91 per month with assessable profits standing at $198,383. This figure is obtained by dividing the assessable profits by 12 months. The Plaintiff's average gross monthly income can be calculated thus:

($28,511 + $16,531.91) ÷ 2 = $22,521.45.

His pre-accident income, inclusive of unloading, was $31,091. Prospective loss therefore comes to:

$31,091 - $22,521.45 = $8,569.55 per month gross.

18. The Plaintiff was 33 at the time of the accident and 37 at trial. It is generally agreed that a multiplier of 11 would be appropriate. Future loss of income therefore amounts to:

($8,569.55 x 11 years x 12 months) less 17% profit tax = $938,879.89.

Summary of Awards

20. On general damages there shall be interest at 2 per cent per annum from the date of the service of the writ to the date of judgment and interest at half judgment rate on special damages from the date of the accident to judgment.

21. Additionally, the Plaintiff is awarded the costs of this assessment, taxed if not agreed, with certificate for counsel. The costs order shall be nisi in the first instance, with liberty to apply within 14 days hereof.

22. $250,000 to be paid out to the Plaintiff's solicitors from the court.