OR OI CHEUNG v. SECURICOR HONG KONG LTD AND ANOTHER

HCPI 299/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO. 299 OF 2002

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ASSESSMENT OF DAMAGES

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Background

1. The plaintiff ("Madam Or") claims damages in respect of the death of her son ("C.T. Lue").

2. C.T. Lue was employed as a "Box Carrier" by the 1st defendant, a well-known security company, from April 1998 to the time of his death. His duties included carrying boxes containing jewellery, cash etc. Whilst doing so, he was guarded by other workmates, who carried guns.

3. Shortly before midnight on 19 August 1999, C.T. Lue was travelling as a passenger on board one of the 1st defendant's vehicles. The vehicle was being driven by the 2nd defendant, another of the 1st defendant's employees. The vehicle was involved in a traffic accident. C.T. Lue was injured and, tragically, certified dead soon after the accident. He was 33 at the time.

4. In May 2002, the defendants consented to judgment being entered in favour of the plaintiff, with damages to be assessed.

5. This is the assessment of those damages.

6. I heard evidence from Madam Or and Ms Chan Yee Mei, the Human Resources Officer of the 1st defendant.

C.T. Lue's earnings

7. At the time of his death, C.T. Lue's average earnings were about $13,350 per month. This was made up of base salary, overtime and a performance allowance.

8. At that time, C.T. Lue was also entitled to the 1st defendant's contribution towards the provident fund scheme. This contribution was 6% of his basic salary, that is, $606 per month. On 1 December 2000, the MPF scheme was introduced. Under this scheme, the 1st defendant's contribution would have been 5% of C.T. Lue's salary.

9. C.T. Lue left school when he was 17, after completing Form 3. He was employed as a printing worker on leaving school, until he took employment with the 1st defendant.

10. It appears (although the evidence on this point was equivocal) that his earnings in the printing industry were similar to his earnings with the 1st defendant. He appears to have changed careers for job security (rather than for an increase in salary), given the general decline of the printing industry in Hong Kong in recent years.

11. The evidence indicated that C.T. Lue's earnings, had he continued to be employed by the 1st defendant, would have remained approximately the same, fluctuating above and below the figure mentioned above, as the amount of overtime worked varied.

12. I heard evidence as to the general prospects for advancement with the 1st defendant. The level above Box Carrier within the 1st defendant is "Crew Commander". As the title suggests, the Crew Commander is in charge of a crew which work together. Any promotion would, however, appear to be more a change in status than financial advancement. Ms Chan was unable to tell me precisely how much more a Crew Commander was paid than a crew member, but said that it was only a small amount more.

13. Whether C.T. Lue was promoted to Crew Commander would have depended on his performance, not his seniority. Apparently, some employees are promoted to Crew Commander after a year, but others have not been promoted after 10 years.

C.T. Lue's dependants

14. At the time of his death (in August 1999), C.T. Lue supported his mother (Madam Or), his father and his then unemployed sister Miss Lue Fung Kiu ("F.K. Lue").

15. However, during 2000 (although the evidence was inconsistent as to exactly when), F.K. Lue commenced employment with a factory in the PRC.

16. C.T. Lue's father then died on 24 April 2003.

17. The parties agreed that at the time of his death, C.T. Lue's financial contribution towards the family was $9,400 per month, of which $2,466 was for his father, $2,721 was for Madam Or and $2,126 was for F.K. Lue.

Deductions

18. There was a dispute as to whether two sums of money paid by the 1st defendant to Madam Or (or C.T. Lue's family generally) shortly after the accident should be taken into account in the assessment of damages.

19. In August and September 1999, a representative of the 1st defendant visited C.T. Lue's family and gave them two amounts of money. On 24 August 1999, the family was given $70,000 for "emergency cash (for the purpose of family funeral expenses)." On 1 September 1999, the family was given $144,000 "for the families living expenses." In each case, the 1st defendant agreed that "This sum will not be deducted from the any future compensation."

20. Ms Tsang, for Madam Or, contended that I should take no account of either of these two payments, given the 1st defendant's express stipulation that they would not be deducted from the compensation. The 1st defendant contended that the payments should be taken into account.

21. I will reduce the amount I would have otherwise allowed as reimbursement of funeral expenses by the $70,000 paid on 24 August. That payment was expressly earmarked for funeral expenses. I consider that Madam Or is only able to recover the reasonable expenses she incurred in excess of the earmarked payment.

22. However, I will take no account of the September payment of $144,000. This was not earmarked for any particular purpose. I therefore consider that Madam Or (or the family) should not have to account for it.

The claim

23. Some elements of the claim were agreed. The position is:-

(a) bereavement

This was agreed at $150,000.

(b) dependency claim

The parties were able to agree this, in the following terms

Pre-trial loss of dependency

Father (from 20/08/99 to 24/04/03)	$108,733.84
Madam Or (from 20/08/99 to 10/06/03)	$124,363.41
F.K. Lue (from 20/08/99 to the end of January 2000)	$11,269.28
Post-trial loss of dependency (for Madam Or only)	$195,933.60
Total: $440,300.13

(c) funeral expenses

The revised claim for funeral expenses was $165,654. $123,012 of this was supported by receipts. The balance ($42,642) was not. The un-receipted items consisted of $25,743 for travelling expenses and $16,899 for flowers, paper products and miscellaneous items.

Mr Hung, for the defendants, submitted that $5,000 was a generous allowance for the transport needs which Madam Or described during her evidence. I agree.

Subject to the deduction of the $70,000 I mentioned above, I allow $128,012 under this head. The receipts submitted by Madam Or included receipts for very small items. Given the large amount of receipted items, I disallow the balance (other than the transport) of the un-receipted items.

As I have indicated, I will deduct $70,000 under this head on account of the contribution made by the 1st defendant. I therefore allow $58,012 here.

(d) loss of accumulation of wealth

C.T. Lue was plainly industrious and a diligent saver. By May 1994 (when he had just turned 28) he had saved $160,000, which he used as the deposit for the purchase of a flat (jointly with F.K. Lue) in Tuen Mun ("the flat"). They paid slightly over $1 million. There was no suggestion that they had not made all of the mortgage payments. The monthly mortgage payment has varied over time, in line with the dramatic fall in interest rates since the flat was purchased. In 1995, the monthly mortgage payment was approximately $8,800, of which $7,601 consisted of interest. The interest rate at the time was 10.75%. In 1998, the monthly mortgage payment increased to as much $9,440, of which over $8,000 was interest. The interest rate at that time was 12%. By mid-2001 (the latest figures shown to me), the monthly mortgage payment was $6,835, of which only $3,827 was interest. I have no doubt that the interest component of the monthly mortgage payments would have continued to decline since then.

Additionally, at the time of his death he had savings of just over $120,000.

The flat was bought as an investment. Both C.T. Lue and F.K. Lue continued to live at home after it was purchased. Initially, the flat had been rented out. However, following C.T. Lue's death and F.K. Lue's taking up employment in the PRC, the flat was (from August 2001) vacant. Madam Or gave evidence that she had not attempted to find a new tenant, as this was beyond her. Madam Or was 70 years old when she gave evidence. I have no reason to doubt that had C.T. Lue survived, he would have found a new tenant, albeit that it may have been at a reduced rent.

Section 20(2)(b)(iii) of the Law Amendment and Reform (Consolidation) Ordinance entitles the estate to an award of the accumulation of wealth which C.T. Lue would have achieved by the time that he would otherwise have died. However, these damages "shall be subject to such deduction as the court considers it just to make in the circumstances of any particular case on account of the accelerated receipt of that wealth and in order to avoid over-compensation."

Madam Or's evidence, which I accept, was that C.T. Lue led a healthy, vice free, life. He jogged. He neither drank nor smoke. When he was not working he tended to stay at home, either watching TV or listening to music. He did not have a girlfriend. Those habits were all perhaps not surprising, given the level of his commitments, which left him less than $60 per day to live on.

C.T. Lue therefore falls into the first category identified by Deputy Judge Jones in Ho Pang Lin v Ho Sui On [1994] 2 HKLR 313 at 317. As I have mentioned above, subsequent to C.T. Lue's death, his father died and F.K. Lue, who had been dependent on him, found full time employment. Accordingly, had C.T. Lue lived, his family commitments would have decreased. Ms Cheng, Madam Or's counsel, submitted that C.T. Lue would have been able to increase his savings by the amount which he was no longer required to spend on his dependents. Whilst I am prepared to assume that some of the money no longer required for those commitments would have gone towards savings, I am unable to accept that all the money so freed-up would have been applied to savings. I consider that C.T. Lue simply could not have continued to exist on less than $60 per day. Mr Hung, counsel for the defendants, submitted that I must also take into account the likelihood of C.T. Lue marrying and having children, thus imposing additional financial demands on him (and thus reducing the amount he was able to save). I have taken this into account but in doing so I have in mind the warning as to the limitations of such assumptions given by the Court of Appeal in Kowloon Motor Bus v Ng Kung (CACV 7/83, unreported).

Additionally, as I have already mentioned, the MPF scheme was introduced after the accident. Accordingly, had C.T. Lue lived, he would have needed to fund his contribution to that scheme.

Mr Hung urged me to find that the value of the flat had fallen in recent years, thus reducing the likely accumulation of wealth. However, I make no finding as to this. Although I am aware, of course, that in recent years the value of real estate has declined, dramatically in many instances, no evidence was led as to the value of the flat. Accordingly, I am unable to find whether the flat (purchased, as I have mentioned, in May 1994) is likely to be worth more or less now, than the purchase price. Additionally, of course, I am concerned not with C.T. Lue's accumulation of wealth either at the time he died or now, but rather at the time he would otherwise have died, had it not been for the accident. As to the likely value of the flat in the distant future, I am not able to make any finding.

Doing the best I can, given the uncertainties I have outlined, I find that C.T. Lue would have saved, on average, $6,500 per month. This includes his contribution to the MPF scheme.

As I have mentioned, C.T. Lue was employed in the security industry. Ms Chan gave evidence as to the hazardous nature of that industry. She told me that since October 2002, the 1st defendant has been the victim of three or four armed robberies and that the 1st defendant's staff were injured in the first two of those robberies. One of those staff died as a result of industries he received.

Ms Chan told me that Box Carriers (perhaps because of the risks) normally leave the company between 40 and 50. The compulsory retiring age was 60.

Madam Or gave evidence that she knew the work was dangerous and that if C.T. Lue's financial burden were reduced, she would have asked him to change jobs. She told me that he had told her that he needed to be alert at all times and had said that the job was a difficult one. However, she told me that C.T. Lue had not mentioned wanting to change jobs.

In considering a likely retirement age I bear in mind that C.T. Lue was just short of 32 when he took up employment with the 1st defendant and that prior to that he had been employed in the printing industry for 15 years (although no evidence was led as to whether this was with one employer or several). Although no evidence was led as to the average age of a newly employed Box Carrier, I assume that it was less than the age at which C.T. Lue took up this work. There is also the prospect of promotion. I will therefore proceed on the basis that he would have left the company later than his peers.

In accordance with the Court of Final Appeal's recommendation in Lam Pak Chiu v Tsang Mei Ying [2001] HKLRD 193, I will make a global award under this head, rather than an award calculated using the multiplier/multiplicant approach. This was the approach preferred by Mr Hung, counsel for the defendants.

Under this head I make an allowance of $1,200,000.

This allowance includes elements for:

(i) pre-trial loss. Ms Cheng's figure for this (which I accept) was $189,916.80; and

(ii) loss of provident fund/MPF.

In fixing this figure, I have in mind the principle that I should be conscious of the fact that making an award now means that the estate will receive this money earlier than C.T. Lue would have had he survived. In times of high inflation this is, of course, an important consideration. However, Hong Kong is in a deflationary period. Accordingly, the importance of this factor is currently minor.

I have also had regard to the need to consider expenditure during the retirement years. However, in line with the observations of Bokhary PJ in Lam Pak Chiu (at p204), I make no deduction here.

(e) interest

The parties were agreed that interest on:

(i) funeral expenses and pre-trial loss of dependency should be at half the judgment rate; and

(ii) the bereavement award should be at the rate of 1.411% (the suitor's fund rate),

from the date of death to the date of trial.

I leave it to the parties to calculate the interest. I give liberty to apply if they are unable to agree.

Employee's compensation award

24. The parties are agreed that credit should be given to the defendants for the ECC award of $1,186,126.08.

Costs

25. I make a costs order nisi that the costs of the action (including the assessment of damages) be to the plaintiff, to be taxed if not agreed.

26. I order that the plaintiff's own costs be taxed in accordance with the Legal Aid Regulations.

27. I certify the assessment of damages as fit for counsel.