TO SAI WO v. YIM WAI CHEUNG AND ANOTHER

1987 No.A1149

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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ASSESSMENT OF DAMAGES

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1. The Plaintiff was walking on the pavement at Mount Davis Road on 22nd March 1985 when a motor van driven by the 1st Defendant mounted the pavement and struck the Plaintiff, who sustained serious injuries. At the time the 1st Defendant was driving this motor van in the course of his employment with the 2nd Defendant which was the registered owner of the said vehicle.

2. The Defendants did not file any Defence to the claim and interlocutory judgment was entered by consent on 4th May 1987 with damages to be assessed.

3. At the hearing of the assesement on 25th January 1988 the Plaintiff's Counsel produced a Bundle of 27 Documents including medical reports, sick leave certificates and letters from the Plaintiff's employer. The parties had agreed that the award for pain, suffering and loss of amenities should be $60,000.00. Special damages were agreed at $30,000.00. The only 3 items of damages in dispute between the parties were as follows:

(1)    Plaintiff's past loss of earnings;

(2)    Future medical expenses relating to probable hip replacement operation;

(3)    Plaintiff's future loss of earnings.

4. The first witness called by the Plaintiff was Dr. David Lee, an experienced orthopaedic specialist, who had examined the Plaintiff in early September 1987. Dr. Lee produced his report of this examination, being Document 7 in the Bundle of Documents produced, which gives full details of the injuries sustained by the Plaintiff in this accident and the treatment he received for same. The Plaintiff's injuries included a posterior dislocation of the left hip and a fracture of the left acetabulum. Dr. Lee gave evidence that the Plaintiff complained to him that he felt some ache over his left hip region when he participated in active sports, such as, badminton. It was Dr. Lee's opinion in his report that the Plaintiff stilt had some limitation of hip movement on flexion and adduction and there was some muscle wasting over the left side. Dr. Lee said that these were symptoms of early osteoarthritis of the left hip joint even though there was no evidence of same visible on the X-ray. It was his opinion that in future this degenerative change would deteriorate with a 70% probability that a total hip replacement operation would be required for this weight bearing joint. Dr. Lee assessed the Plaintiff's permanent incapacity as 5%. Dr. Lee estimated that the Plaintiff, who is now 32 years of age, would require the hip replacement operation because of the onset of osteoarthritis in about 20 or so years time when he was in his fifties. He estimated the costs of this operation based on present day cosrs as being $60,000.00. Dr. Lee was an impressive witness and was not shaken in cross-examination by Counsel for the Defendants. There is no hesitation in accepting his evidence and, in particular, as to the Plaintiff's need to have a hip replacement operation in the future.

5. The next witness called was the Plaintiff, who described the minor problems still being experienced from the serious injuries to his left hip. The Plaintiff confirmed he would have the hip replacement operation in the future and that he would prefer to have such an operation in a private hospital rather than in a public hospital.

6. The Plaintiff gave evidence that at the date of the accident he was a Deputy Bank Manager with his employer and that he is still employed in the same capacity. He described being away from his employment on sick leave for about 6 months during 1985 as a result of the injuries he suffered in this accident. The Plaintiff said that as a consequent his end of year increase for 1985 was only $190.00 which was a smaller increase than he had received the previous year, and also less than the average salary increase for other employees in the same position, who received $710.00 as their average salary increase from beginning of 1986. The Plaintiff stated, that his present position is mainly aedentary one and it is not affected by his injuries.

7. In cross-examination by Counsel for the Defendants the Plaintiff stated that he had been employed by his present employer since 1973 and that he was appointed a Deputy Branch Manager of the Bank in 1983. The Plaintiff said that the salary increase at the end of 1986 after a full year was $710.00 and his salary was increase by this amount from 1st January 1987. The Plaintiff confirmed that he was still a Deputy Branch Manager with the Bank receiving a monthly salary of $5,620.00 after deducation of a housing allowance worth $500.00. He stated that his salary increase at the end of 1986 was not larger than the average.increase to compensate for the smaller increase at the end of the previous year - 1985. He confirmed being paid his usual salary for the full period he was away from work recovering from his injuries. The Plaintiff confirmed his monthly salary was $4,910.00 during the 1986 year and $4,720.00 at the date of the accident on 22nd March 1985.

8. The third witness called by the Plaintiff was FUNG Tin-Yiu, the Personnel Manager employed by the Plaintiff's employer. This witness confirmed a letter written by the Bank as to the Plaintiff's monthly salary being $4,720.00 in 1995. He confirmed Plaintiff's salary increase at the end of 1985 as only $190.00 because of the long period the Plaintiff was absent on sick leave. Mr. Fung said that if the plaintiff had not been absent for such a long time he would have received the average salary increase of $820.00 at the end of 1985. Other employees with the Bank of the same rank or grading as the Plaintiff received the full salary increase for that year. The Personnel Manager confirmed that the Plaintiff was $630.00 worse off in salary terms during 1986. This witness stated that the Plaintiff's increase at the end of 1986 was the average increase of $710.00 but that did not compensate him for his earlier loss of salary at the end of 1985. Mr. Fung said the Bank's policy was not to give an employee a larger annual salary increase to compensate for salary losses in earlier years. This witness stated that in normal circumstances and taking into account the Plaintiff's past satisfactory performance he would have received the full average salary increase of $820.00 for employees of his rank at the end of 1985. There was evidence that the salary range for Deputy Managers employed by the Bank was between $4,370.00 and $10,150.00 depending on the employee's past performance and his length of service. Normally a Deputy Manager took approximately 6 years to reach the maximum salary for that rank. Furthermore, a Deputy Manager may be promoted after 5 years to the position of Manager which had a salary range of $5,620.00 to $16,500.00. On promotion an employee only moves to the next salary point above his existing level. Mr. Fung confirmed that the Plaintiff had suffered a $630.00 salary loss since 1st January 1986 which can never be compensated in the future because upon any future promotion he would start on a lower salary level than he would have had if he had received the full salary increase at the end of 1985. The Personnel Manager's evidence was that it normally took a Manager 10 years to reach the maximum level for that rank. He stated that the Plaintiff would be considered for promotion to Manager in 1989. When recalled by Counsel for the Plaintiff this witness confirmed that the Bank's employees received 14 months salary each year so that the Plaintiff's loss of salary applied to 14 monthly salary payments in each year.

9. No evidence was called on behalf of the Defendants.

10. Counsel for the Plaintiff submitted that the evidence of Dr. Daniel Lee could be relied upon to make an award for future medical expenses relating to the hip replacement operation. Mr. W. Lau, Counsel for the Plaintiff, contended that no reduction should be made from the sum of $60,000.00 claimed on the basis that there was only a 70% chance that such an operation would be required. On the other hand Mr. M. Bharwaney, as Counsel for the Defendants, submitted that the Plaintiff was seeking compensation for a contingency in the distant future, that is, in 20 to 25 years time, so that these circumstances militated against the making of a full award of the sum claimed. Mr. M. Bharwaney relied on two House of Lords authorities, namely, Hallett v. McHonagle (1970) A.C. 166 and Davis v. Taylor (1974) A.C. 207 for the proposition that the damages for future medical expenses should be scaled down to reflect that the basis of the award is the value to be given to a contingency which may or may not arise in-the future. It is accepted that this proposition is correct and the damages claimed will be scaled down to 70% of the sum claimed thereby reflecting the same percentage of the contingency arising in the future. On this basis the sum allowed as special damages under this head of future medical expenses should be $42,000.00 (being 70% of $60,000.00).

11. As for the claim for past loss of earnings it is not seriously disputed on the evidence adduced for the Plaintiff that he is entitled to the loss of salary increase since 1st January 1986 for the 2 years 1986 and 1987 on the basies of 14 monthly payments over each year. The parties had settled the sum to be awarded for Plaintiff's loss of earnings in 1986 in the agreed special damages of $30,000.00 so that the award for past loss of earnings only relates to the year 1987. There is clear, uncontradicted evidence that the Plaintiff's monthly salary loss is $630.00 arising from the reduced salary increase he received at the end of 1985 after being absence on sick leave for 6 months recovering from the serious injuries he received in this accident. The award for past loss of earnings during 1987 is therefore: $630.00 x 14 =$8,820.00.

12. Turning to the award for future loss of earnings the evidence adduced shows that this monthly loss of earnings will continue until the Plaintiff reaches the maximum salary level for Managers which could take up to 12 years from his present salary level. This period of 12 years takes into account that it will be at least 2 years before the Plaintiff is likely to be promoted to the rank of Manager. The only real issue is the multiplier to be applied to the monthly loss of earnings. Counsel for the Plaintiff suggested a multiplier of 8 taking account of the Plaintiff's age (32 year's) and that he would be receiving the award for loss of future earnings in a lump sum payment. Counsel for the Defendants submitted that an appropriate multiplier to apply from the date of the assessment was 5 or 6 after taking account of the likely period that the loss of earnings would continue, the discount for a lump sum payment and the usual vicissitudes and contingencies of a working life in Hong Kong. The Master expressed surprise at the hearing to the low multipliers put forward by Counsel for the parties on the basis that a 32 year old male comes within the range where a multiplier of 14 or 15 might be applied to a non-fatal accident. Taking into account the following factors:-

(1)    That the Plaintiff has been awarded damages for past loss of earnings for the 2 years 1986 and 1987; and

(2)    That the Plaintiff is likely to take up to 12 years to reach the maximum salary level for a Manager in his present employment at which time his past loss of salary increase would be eliminated; and

(3)    The usual considerations referred to by Counsel for the parties including a discount for a lump sum payment for loss of earnings in the future;

it is considered that the appropriate multiplier to apply under this head of damages is 9 from the date of this assessment. On this basis the award for future Toss of earnings is calculated to be: $630.00 x 14 x 9 m $79,380.00.

13. A summary of the damages awarded is as follows:-

14. There will be the usual interest at the rate of 2% per annum on the general damages far pain, suffering and loss of and on the pre-assessment loss of earnings from the date the writ was issued until the date of judgment. Interest on the other awards for special damages except the award for future loss of earnings will be at the rate of 3.5% per annum from the date of the accident until the date of judgment. Costs of this assessment to the Plaintiff with a Certificate for Counsel and such costs to be taxed if not agreed.