KAN WAI LING and FAN MEI NA the co administratrices of the estate of KAN SIU HONG, Deceased v. KAN CHI FAI

HCPI 232/2011

[2018] HKCFI 1024

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO 232 OF 2011

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J U D G M E N T

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INDEX

1.  This is an assessment of damages in a fatal accident action brought by the plaintiffs, Ms Kan Wai Ling and Madam Fan Mei Na (“Madam Fan”), who are the co-administratrices of the estate of Kan Siu Hong (“the deceased”). The deceased sustained fatal injuries in a traffic accident that occurred on 11 February 2009 at Lam Kam Road, Pat Heung, New Territories.  By a consent order dated 2 December 2015, interlocutory judgment for damages to be assessed was entered in favour of the plaintiffs against the defendant.

2.  The deceased was born on 25 October 1957 and was 51 years and 3 months of age at the time of his death on 11 February 2009.  He was the sole proprietor of Cheung Hong Engineering Transportation Company (“Cheung Hong”), a business he established in 1985[1]. He was the registered owner of 6 dump trucks and 1 private car at the time of the accident.  The 6 dump trucks were used for the transportation of construction waste which was the business of Cheung Hong.  A substantial portion of the hearing was spent on the issue of the deceased’s earnings from this transportation business.

3.  Claims for loss of dependency were advanced from behalf of the following persons:

(a)  Madam Fan, the former wife of the deceased, who was born on 5 December 1959 and was aged 49 years and 2 months at the time of the accident. She is aged 58 years and 5 months today;

(b)  Ms Kan Wai Ling, the daughter of the deceased, who was born on 22 October 1984 and was aged 24 years 4 months at the time of the accident. She is aged 33 years and 7 months today;

(c)  Mr Kan Ho Chuen, the son of the deceased, who was born on 8 June 1995 and was aged 13 years and 8 months at the time of the accident. He is aged 22 years and 11 months today; and

(d)  Madam Wong Lai Sheung, the mother of the deceased, who was born on 28 July 1934 and was aged 74 years and 7 months at the time of the accident. She is aged 83 years and 9 months today.  

4.  At the time of the accident, Kan Wai Ling worked in the United States and Kan Ho Chuen was studying in the United States.   The length of time that Madam Fan, Kan Wai Ling and Kan Ho Chuen stayed in Hong Kong and in the United States in the years preceding the death of the deceased was the subject matter of inquiry during the hearing. 

5.  The allegation of Madam Fan, that she was cohabiting with the deceased at the time of the accident, was in dispute.  However, it was common ground that she was a dependant of the deceased, being a former wife of the deceased within the meaning of section 2(1)(a) of the Fatal Accidents Ordinance, Cap. 22.  It was also common ground that Kan Wai Ling and Kan Ho Chuen, the daughter and the son of the deceased, were dependent on him at the time of the accident.  The extent of their dependency and that of Madam Fan, and of Wong Lai Sheung, was a matter of some controversy.

6.  Equally controversial was the claim for loss of accumulation of wealth.

7.  Damages for bereavement are agreed in the sum of HK$150,000. Funeral expenses, the cost of a grave at a cemetery in the United States, and travelling expenses have been claimed in the sum of HK$207,661.

Did Madam Fan cohabit with the deceased as husband and wife for at least 2 years before his death?

8.  A dependant within the meaning of section 2(1) of the Fatal Accidents Ordinance, Cap. 22, includes:

“(c) any person who—

(i) was living with the deceased in the same household immediately before the date of his death; and

(ii) had been living with the deceased in the same household for at least 2 years before that date,

as the husband or wife of the deceased;”

9.  It was the plaintiffs’ case that, notwithstanding the divorce of the deceased and Madam Fan, they continued to live together “like a married couple”[2].  Madam Fan also stated in her witness statement:  “[a]lthough I divorced from Kan Siu Hong in 1997, ..., in fact our whole family had been living together and had never lived apart, until our daughter Kan Wai Ling and our son Kan Ho Chuen went to the US for studies in 1998 and 2005 respectively”[3].

10.  Madam Fan obtained a United States Permanent Resident Card (“Green Card”) in February 1998[4].  It became apparent, in the course of her cross-examination, that her application for a Green Card had been made by one, Mr Lam Wai Shing, with whom she had had an affair in 1996 and whom she married in 1997, after her divorce from the deceased[5]. She said in evidence that she married Mr Lam because she loved him[6]. She added that she took her two children to live with Mr Lam in the United States and that they lived as husband and wife[7]. That relationship did not last and eventually she returned to Hong Kong with her son sometime at the end 1998[8]. When it was suggested to her that her relationship with the deceased had broken down, she said: “You cannot say that our relationship has totally broken down because we still had children”[9]. In fact, just as Madam Fan had married Mr Lam in 1997 after her divorce, so did the deceased re-marry. Madam Fan stated in the supplemental witness statement dated 15 March 2013 that the deceased married her sister, Sherry Fan, on 3 June 1997 at the San Po Kong marriage registry in Hong Kong, that they did not hold any wedding ceremony and had never lived together, and that two or three days afterwards, Sherry Fan left Hong Kong and returned to the United States where she applied for the deceased to be granted permission to reside in the United States[10]. Just as Madam Fan divorced Mr Lam, so did the deceased subsequently divorce Sherry Fan. Although the marriage of Madam Fan to Mr Lam and the marriage of the deceased to Sherry Fan, and their subsequent divorces, give the impression that their marriages were marriages of convenience, to enable applications for Green Cards to be issued to Madam Fan and to the deceased, I need not make any findings on this point. In the course of her cross-examination, Madam Fan conceded that, even before, and when Madam Fan was dating the deceased prior to their marriage, her sister, Sherry Fan, actually liked the deceased[11]. She also stated that she did not actually know the deceased had filed an affidavit in support of his petition to divorce Sherry Fan in which he had stated that they had cohabited together in a flat in Waterloo Road[12].

11.  Madam Fan explained that when she returned with Kan Ho Chuen to Hong Kong from the United States at the end of 1998, she sometimes stayed with her relatives and sometimes in the 1^st floor, 313 Shanghai Street subdivided flat that the deceased had rented[13], but which he was then not occupying as he had rented a flat in Ma On Shan that was close to the site where he was working[14]. Eventually, the deceased had to return possession of the Ma On Shan flat and he moved to the Shanghai Street property at the end of 1999, “because there was nowhere that he could move to”[15], and he occupied a room in the front portion of the Shanghai Street flat, which was different from the portion that she was occupying[16]. She did not assert that they were living together there as husband and wife.

12.  Madam Fan stated that this state of affairs continued for about 6 years until she moved into a flat at Room 1206, Fung Yam House, On Yam Estate, Kwai Chung, in October 2005.  The deceased did not move with her and he remained in Shanghai Street[17].

13.  She was asked about her knowledge of where the deceased lived after she had moved out.  She admitted that she did not know when the deceased moved out of the Shanghai Street unit because “[he] did not tell me,”[18]; and she also said that, after she left the Shanghai Street flat, the deceased continued to rent that place “but whether he did go back to stay, I do not know”[19].

14.  Madam Fan started to spend more of her time in the United States after November 2005. The records from the Immigration Department showed that she was out of Hong Kong for 74 days from 11 November 2005, 129 days from 17 February 2006, 12 days in September 2006, and 278 days from October 2006 to July 2007[20].

15.  Subsequently, the deceased moved out of the Shanghai Street subdivided room and, according to Madam Fan, he “frequented” the Fung Yam House flat[21].  Madam Fan again disowned knowledge of where he stayed when he was not in the Fung Yam House flat: when she was not in Hong Kong, she did not know where the deceased stayed during those periods[22]. She also said:

“Q: And when you say he frequented the Fung Yam flat -- House, when he was not staying at Fung Yam House, where was he staying?

A:     I am not sure. I did not follow him.[23]”

16.  There was no evidence that their relationship changed after July 2007 and there was no evidence that they started to live together as husband and wife.  Whilst I accept the evidence of Madam Fan that “[in the two or three years before the accident, we] were cohabiting with each other,”[24], in the sense that they were living in the same premises, I am not satisfied on the evidence before me that they were cohabiting as husband and wife. The evidence that the deceased went out with Madam Fan for “yum cha” and that they had travelled to the United States to visit their children does not lead me to conclude that they were cohabiting as husband and wife.

17.  The fact that counsel for the plaintiff, Mr C K Wong, did not re-examine Madam Fan on this issue prompted the following exchange between us:

“MR WONG: My lord, I have no further questions of Madam Fan.

COURT: Thank you. Mr Wong, I had mentioned to you yesterday that I expected you, in re-examination, if you wish to press your case that her status is that of a cohabitee, to deal with some of that aspect of the evidence.

MR WONG: Yes.

COURT: Now, I’m not pressing you to do it...

MR WONG: Yes, I do appreciate that.

COURT: ... because, as I see it, whether you qualify under one ground or two grounds, you cannot increase your level of dependency.

MR WONG: No, no.

COURT: And as I see this case, of course the Court of Appeal may correct me - but if I were to find that she was not only an ex-wife but also that she was a cohabitee in the sense that she resided with Mr Kan in the same household, as husband and wife, for a period of at least two years prior to his death, it will still not make any difference to me in applying Harris v Empress Motors to this case.

MR WONG: No.

COURT: Because of the fact that there was a household in the US in which she spent a substantial period of time, and there were in fact two households, and so I cannot see how the simplistic mathematical formula of Harris v Empress can apply to this case.

MR WONG: If I may say so...

COURT: Of course I will always give you the opportunity to make final submissions to me, but I am just reassuring you that by not pressing the point on cohabitation, I do not see that you detract from your claims.

...

COURT: So those are the matters to be examined. But of course it seems to be unnecessary to ask intimate and indelicate questions...

MR WONG: Yes, exactly, that’s my point.

COURT:   ...when it does not further your claim.”

18.  In the course of my exchanges with Mr Wong,  I had mentioned that I found it very difficult to apply the percentages in Harris v Empress Motors to assess loss of dependency, given the fact that there were 2  households, in Hong Kong and in the United States, and that I was driven to look for evidence of actual contributions made to the family[25]. I have carefully considered Mr Wong’s final submissions that I should adopt the  percentages in Harris v Empress Motors to assess loss of dependency[26].  I find that I am unable to do so.  In Fung Suen Sim v. Liu Chun Pong, HCPI 896/2007, 23 December 2011,  I had stated that:

“42. In cases such as the present where the most important factor in the calculation of the award is the earnings of the deceased, as opposed to income from other sources, a practice has developed of expressing the annual dependency as a percentage of the annual earnings of the deceased. Percentages have become conventional in cases where the surviving widow had been wholly dependent on her husband and did not use her own income, if any, to support the common household expenditure. This practice was explained and supported by O’Connor L.J. in Harris v Empress Motors [1984] 1 WLR 212 at p.216-217:

“In the course of time, the courts have worked out a simple solution to the ... problem of calculating the net dependency under the Fatal Accident Acts in cases where the dependants are wife and children.  In times past, the calculation called for a tedious enquiry into how much housekeeping money was paid to the wife, who paid how much for the children’s shoes etc.  This has all been struck away and the modern practice is to deduct the percentage from the net income figure to represent what the deceased would have spent exclusively on himself.  The percentages have become conventional in the sense that they are used unless there is striking evidence to make the conventional figure inappropriate because there is no departure from the principle that each case must be decided on its own facts.  Where the family unit was husband and wife, the conventional figure is 33% and the rationale of this is that broadly speaking, the net income was spent as to one-third for the benefit of each and one-third for the joint benefit ... Where there are children, the deduction falls to 25%.”

The reason for the smaller deduction in the latter case is that earnings are presumed to be split four ways in the latter case, rather than three ways, namely, one-quarter for the deceased, one-quarter for the wife, one-quarter for the children, and one-quarter for joint use. Thus, the conventional figures adopted 66.6% of earnings, to assess the dependency of a widow alone, and 75% of earnings, to assess the dependency of a widow and children.”

43.  It is appropriate to adopt these percentages in the present case to reflect, not only the financial contribution made by the deceased to his wife, but also the value of the dependency represented by the savings he would have accumulated for the benefit of his dependants.”

19.  I omitted, in the above citation, a portion of the judgment of O’Connor L.J.[27] which ought to be set out in full as it bears upon the subject at hand:

“Where the family unit was husband and wife the conventional figure is 33 per cent. and the rationale of this is that broadly speaking the net income was spent as to one-third for the benefit of each and one-third for their joint benefit. Clothing is an example of several benefit, rent an example of joint benefit. No deduction is made in respect of the joint portion because one cannot buy or drive half a motor car. Part of the net income may be spent for the benefit of neither husband nor wife. If the facts be, for example, that out of the net income of £8,000 p.a. the deceased was paying £2,000 to a charity the percentage would be applied to £6,000 and not £8,000. Where there are children the deduction falls to 25 per cent., as was the agreed figure in the Harris case.”

20.  This is not a case where there was joint expenditure on rent and meals at home. Yes, the deceased would pay when they went out for “yum cha” or for a meal together[28] but, apart from isolated and occasional joint expenditure of that nature, there was an insufficient joint element in the patterns of expenditure of the deceased, on the one part, and Madam Fan and the children in the United States, on the other part, to enable the application of the formula set out in Harris v Empress Motors.

The Earnings of the Deceased

21.  The business of Cheung Hong was the transport of construction waste for disposal at various dumping sites in Hong Kong primarily using the six 24-ton dump trucks owned by the deceased. The deceased ran his business single-handedly[29] from his home[30]. The turnover in and the income from the transportation business was very substantial.  The total income received by Cheung Hong from 1 April 2006 to 11 February 2009 was HK$21,589,314[31]. What profit was earned from the income that was received was the big question in this case. Mr Lau Dick Pau, a chartered accountant who has worked for more than 40 years in Hong Kong, and Mr Martin Tupila, a chartered accountant specialising in forensic accounting for more than 10 years, were appointed by the parties respectively to review the accounting record and report on the profits earned by Cheung Hong over this period of time.  In their joint report dated 31 March 2015, they agreed that the parties had little knowledge about the business and that the books and records provided to the experts were incomplete and might be unreliable[32].  Madan Fan had stated in her Answer to Interrogatories and in her 2^nd supplementary witness statement that she did not participate in the business of the deceased and that she did not know how much income the deceased had.[33].  I find these statements to be credible. In a further joint statement dated 15 January 2016[34], the experts reiterated that the invoices provided were incomplete and/or inaccurate; that insofar as other expenses could be identified from the bank statements, such as insurance, repairs and maintenance, and licencing fees, these were in addition to the invoices provided; and that there was evidence that some of the invoices provided were settled in cash and, given the nature of the business, that it was likely that other cash withdrawals were used to pay business expenses.

22.  The stark difference between the parties is highlighted by the initial positions taken by the experts: Mr Lau was of the opinion that Cheung Hong earned a profit of HK$5,953,396 over this period of time[35]; Mr Tupila was of the view that Cheung Hong suffered a loss of HK$204,155 over this period[36].

23.  Given the substantial difference between the experts and the time it would take to review their evidence, I drew the parties attention to the relevance of that evidence to the issues before me in this case in these terms:

“COURT: Mr Wong, in the light of my indication to you that I am most unlikely to apply the Harris v Empress method of assessment to this case and that I will be looking at hard evidence of the actual dependencies by way of remittances and by way of payments towards the Hong Kong household and payments to Madam Fan before Mr Kan’s death, is it that critical for us to actually go through the complex exercise of trying to ascertain what was the true income of the business?

MR WONG: It’s still critical.

COURT: Because whatever was the income, whatever was the true profit and loss status of the business, it is clear beyond peradventure that earning $21 million of income in two and a half years was substantially more than was needed to support the family in America and to support Madam Fan in Hong Kong.

MR WONG: My Lord...

COURT: So the only relevance of that would be going towards trying to prove a claim for loss of accumulation of wealth.

MR WONG: Correct.

COURT: But that claim has to be substantially discounted, because of -- and so is the exercise worth it? For two experts to come and give evidence and whether I take the [projection] method[37] or some other method - of course I am most likely to find that their business was profitable. I am most unlikely to find that he earned everything and spent everything on the business, which is Mr Tupila’s situation, which runs contrary to what I sense to be the commonsensical view of the situation.

But between the extreme of Mr Tupila’s situation and perhaps the halfway point that Mr Lau is advocating via the projection method, if you apply the projection method percentages, and then you follow the formula in my decision in Fung’s case and do the arithmetic and discount it for early receipt, are we talking more than a few hundred thousand dollars? Are we even in the range of half a million?

MR WONG: Well, my Lord...

COURT: And in that context, is it really sensible to call two experts? Why not just make an agreement?

...

COURT: No, I’m just only talking about the economics of it, Mr Wong. If we spent so much money on experts just for an award which is unlikely to exceed half a million dollars, is it worthwhile?

MR WONG: My Lord, it depends. Assuming...

COURT: No, I’m just asking you to do the maths.

MR WONG: My Lord, assuming this is merely for discussion, I don’t think there is any dispute between the two accountants, with the papers on hand, Mr Lau said, well, the so-called net profit before the...

COURT: There’s no dispute. The only dispute is whether the unknown withdrawals are business related or partly business related.

MR WONG: Yes.

COURT: That’s the only dispute.

...

COURT: So that’s what I’m asking you to consider, applying the formula in Fung’s case to 2.8 million and to 7 million and see what figures you get, and then reconsider whether it is not better just to make an agreement on that head. Because it seems to me...

MR WONG: My Lord, because...

COURT: ... for a few hundred thousand dollars, to have a...

MR WONG: Thank you very much for your enlightenment.

COURT: Yes.

MR WONG: : And in fact, it’s a very useful discussion, well, I welcome my view...

COURT: And I’m saying that to Mr Sakhrani[38] also.

...

COURT: The difference between the two experts does not impact on the award for loss of dependency. On either view, there was sufficient income for Mr Kan to support his family in the US, and Madam Fan. So it only impacts on the award for loss of accumulation of wealth. If the difference in the award is going to be not very substantial, is it economically sensible to spend a whole day with two experts and again have detailed submissions on a point that doesn’t impact on the final award very substantially? That’s the only point I’m making. ...

24.  Despite this exchange, the parties failed to reach agreement and 2 days were spent on the expert evidence.

25.  Mr Lau had not given expert evidence in any court or tribunal before this occasion.  He has appeared as an advocate for his clients on a number of occasions before the Inland Revenue Board of Review. He was at pains to explain that he was not performing an audit.  He was simply reconstructing the profit and loss account of Cheung Hong for the period from 1 April 2006 to 11 February 2009 based on the turnover and expenses invoices provided to him.  He compared the former to the income deposited into the company’s bank accounts and, applying the methodology set out in his report dated 17 December 2012[39],  he arrived at a turnover amount of HK$20,474,508.17 and profits of HK$5,953,396.48 for the period from 1 April 2006 to 11 February 2009.  At trial, Mr C K Wong for the plaintiff happily accepted the larger turnover amount of HK$21,377,392 arrived at by Mr Tupila in his report[40].

26.  Mr Lau very quickly abandoned his projection method in the course of his cross-examination[41].  It was clear on the evidence that the deceased had grossly understated his income to the Inland Revenue. The profit and loss accounts submitted to the Inland Revenue bore no resemblance whatsoever to reality[42]. By way of example, the profits and loss account for the year ended 31 March 2007 submitted to the Inland Revenue showed gross income of HK$953,205 and expenses of HK$763,492.  Mr Lau’s reconstruction for this period showed gross income of HK$6,774,502 and expenses of HK$4,374,631. I had stated in Fung Suen Sim v. Liu Chun Pong[43]that:

“[Counsel for the defendant] rightly submitted that the court is not necessarily bound by matters stated in a tax return and is required to investigate what the real facts are. The contents of a tax return are admissible evidence and ought to be accepted as correct unless, on the totality of the evidence adduced, the court is satisfied that the true position is otherwise than that set out in those returns. As Reyes J. said in his judgment in the decision of the Court of Appeal in Christopher Gordon Young v Lee Chu (CACV 131/2003, 19 May 2004), at §132:

“In ascertaining damages consequential on a wrong, a Court has to investigate the actual facts.  However tempting, the Court cannot prejudge its assessment of the facts on the basis that a plaintiff derived a significant tax advantage by presenting a certain picture of his affairs in his tax returns and should be held to that picture.  The picture painted in the tax returns may or not have been accurate in its characterization of fact.  The picture cannot bind a judge.  The Court may thus find at the end of the day that the true state of affairs was something other than that depicted in a plaintiff’s returns.  In appropriate circumstances, the Commissioner of Inland Revenue may consider whether or not a plaintiff has wrongly obtained a benefit for which he should be re-assessed to additional tax or penalized in some way.  But that is a decision for the Commissioner.  It does not affect the Court’s investigation of fact.”

§80 of the Inland Revenue Guidelines on the Projection Method[44] stated:

“Where the representative is confident that the taxpayer’s assessable profits have been correctly determined for a particular year of assessment, the relevant figure may be used for the purpose of estimating assessable profits for years where profits have been understated (provided that a more accurate means cannot readily be used).”

No reliance whatsoever could be placed on the utterly false returns that had been submitted to the Inland Revenue.

27.  However, I accept the opinion of Mr Lau that the industry average for similar businesses identified by Mr Tupila was unhelpful.  The deceased ran the business from his home. He did not have to pay office rent nor rental for vehicles as he owned the dump trucks used in the business. He did not even draw a salary for himself[45]. Whilst the industry average for this particular type of business was showing losses[46], the purchase by the deceased of dump trucks between May 2007 and May 2008[47] and the increasing turnover of the business, from HK$6,545,726 for the 12 months ending on 31 March 2008, to HK$7,997,849[48] for the 11 and a half months from 1 April 2008 to 11 February 2009, suggested an expanding profitable business rather than a loss making one.

28.  The cross examination of the experts was wide ranging and covered many aspects of the review they had conducted in their examination of the accounts of Cheung Hong and, in particular, on the business expenses that had been incurred.  In the end, Mr C K Wong agreed to adopt, as a starting point, the profit figure arrived at by Mr Tupila in the sum of HK$7,603,003 for the period in question, as appearing in Figure 1 of his report dated 15 December 2014[49] which I set out below[50]:

Figure 1: Comparative Profit and Loss Account of Cheung Hong for the Review Period

	Note	DPL[51]	JLA[52]	DPL	JLA	DPL	JLA	DPL	JLA
		1 Apr 2006 to 31 Mar 2007	1 Apr 2006 to 31 Mar 2007	1 Apr 2007 to 31 Mar 2008	1 Apr 2007 to 31 Mar 2008	1 Apr 2008 to 11 Feb 2009	1 Apr 2008 to 11 Feb 2009	Total	Total
INCOME
Transportation Service Income	3.2.2 & 3.2.3	6,774,502	6,833,817	5,554,273	6,545,726	8,145,733	7,997,849	20,474,508	21,377,392
Other Income	3.2.4 to 3.2.6	-	93,967	-	56,070	-	61,885	-	211,922
		6,774,502	6,927,784	5,554,273	6,601,796	8,145,733	8,059,734	20,474,508	21,589,314
OPERATING EXPENSES
Insurance	3.3.2 & 3.3.3	-	2,774	5,644	9,262	68,044	66,190	73,688	78,226
Telephone charges	3.3.4 & 3.3.5	-	8,263	-	8,674	-	7,727	-	24,664
Computer Expenses	3.3.6	-	-	250	-	-	-	250	-
Repairs & Maintenance	3.3.7 & 3.3.8	206,830	211,974	335,155	324,979	391,463	292,939	933,448	829,892
Salaries & Wages	3.3.9 to 3.3.12	3,007,535	2,344,057	1,730,640	1,408,199	1,941,478	1,423,894	6,679,653	5,176,150
Vehicle fuel	3.3.13 & 3.3.14	852,799	828,255	1,501,372	1,322,609	2,168,444	2,169,506	4,522,615	4,320,370
Subcontracting expenses	3.3.15 to 3.3.19	292,891	88,370	667,521	862,322	1,249,199	2,497,726	2,209,611	3,448,418
Tunnel fare	3.3.20	13,956	15,811	18,805	20,730	18,916	31,044	51,677	67,585
Parking charges	3.3.21	-	5,950	-	13,600	-	8,000	-	27,550
Landfill charges	3.3.22	-	2,170	-	-	-	-	-	2,170
Sundry expenses	3.3.23	620	5,775	3,290	1,141	6,000	4,370	9,910	11,286
		4,374,631	3,513,399	4,262,677	3,971,516	5,843,544	6,501,396	14,480,852	13,986,311
FINANCE COSTS
Finance charges	3.3.24 & 3.3.25	-	-	-	-	40,260	-	40,260	-
TOTAL EXPENSES		4,374,631	3,513,399	4,262,677	3,971,516	5,883,804	6,501,396	14,521,112	13,986,311
PROFIT FOR THE PERIOD		2,399,871	3,414,385	1,291,596	2,630,280	2,261,929	1,558,338	5,953,396	7,603,003
ADJUSTED PROFIT /(LOSS) FOR THE PERIOD	3.4	2,399,871	(776,530)	1,291,596	610,123	2,261,929	(37,748)	5,953,396	(204,155)

29.  I find as a fact, based on Mr Lau’s and Mr Tupila’s review of the business and other records, that:

(a)  the deceased’s personal expenses had been intermingled with those of the Cheung Hong;

(b)  the personal bank accounts of the deceased were used to pay expenses related to Cheung Hong;

(c)  the deceased has withdrawn cash from Cheung Hong to pay for his personal expenses and settle his credit card bills; and

(d)  cash advances taken out in the name of the deceased through his personal credit cards were deposited into Cheung Hong to maintain its cash flow.

30.  Mr Tupila stated in his report dated 15 December 2014 that:

“2.3.2 I am unable to tell with certainty, which expenses are of a business nature and which are personal as it appears from my analysis that the Deceased has interchangeably used his personal bank accounts and credit cards with those of the Cheung Hong’s. Consequently, I have assumed that all expenses and income are business related unless indicated otherwise from available bank and credit card statements.”

A court of law cannot make findings of facts based on such assumptions. Findings of fact must be evidence based. If there is insufficient evidence to enable a court to make a finding of fact on the issue, it is duty bound to say so.

31.  Although this was the first time Mr Tupila had given evidence in court, he had prepared many forensic accounting reports for court use. The first area of controversy that emerged during his cross examination was the adjustment that Mr Tupila had made to the total income earned during the period in question of HK$21,589,314, being transport service income of HK$21,377,392 and other income of HK$211,922.  He reduced this total amount of HK$21,589,314 by the sum of HK$1,697,845, as shown by the calculations contained in Figure 4 of his report dated 15 December 2014[53]. During this period, he found unidentified deposits from bank statements in the sum of HK$18,524,117 (these are listed in Annexure 10 to Mr Tupila’s report[54])  which he could not match to any transport service fee or income invoices[55]. On the other hand, he was unable to match HK$16,826,272 shown on the transport service fee invoices. Assuming that all income earned by Cheung Hong would have been deposited into one of Cheung Hong’s or the deceased’s accounts, he adjusted the unidentifiable deposits to the sum of HK$1,697,845 (HK$18,524,117 less HK$16,826,272 and less HK$211,922, being the other income that had been earned).

32.  Under cross examination, Mr Tupila said:

“Q. How much do you say had not been given and had been omitted?

A. Well, there’s an additional 1.7 million that hasn’t been provided. And I accept that some of those may be capital in nature, maybe some of that 1.7, or maybe all of that 1.7 is money that was deposited from a loan. I can’t determine that. But this is all additional, all additional information to what was provided in the invoices.

...

Q. Mr Tupila, I just want to clarify and confirm from you that the estimate of 21 million five hundred is for -- you have been through all the sales invoices, you have also looked at the bank accounts and that’s the figure that you agree was the revenue of Cheung Hong during that period.

A. Yes.

Q. I also want to clarify from you, would that have also included personal loans by Mr Kan?

A. Yes. They may form part of the unidentified deposits.

Q. Yes. But of course if it’s personal loans by Mr Kan, it will be capital in nature.

A. Yes.

Q. And should not be counted...

A. I agree.

Q. ...as the income...

A. Yes.

Q. ...of Cheung Hong. But be that as it may, with the invoices which Mr Lau had done, and your calculation, the difference is only about 5 per cent[56], it’s not a significant difference.

A.     Yes, I accept that.  I agree.”

33.  Mr Tupila produced a number of attachments.  Attachment 4 was a schedule showing the utilisation of a loan from Hang Seng Bank taken out by Cheung Hong[57]. There is no suggestion that this loan formed part of the unidentified deposits of HK$1,697,845.  The loan credit of HK$250,000 on 28 September 2006 is not shown on Annexure 10.  Attachment 5 was a schedule showing credit card instalment loan repayments of loans taken by the deceased[58]. The attachment shows that:

(a)  on 1 April 2006, the deceased paid his 5^th of 8 instalments of his loan from AIG Credit Card Company (“AIG”) and that the loan amount and interest due on it was HK$46,666.64 (HK$5,833.33 x 8);

(b)  as soon as he had repaid the last instalment on 1 July 2006, the deceased took out another loan to be repaid in 12 instalments, with the first repayment was 21 July 2006.  The loan amount and interest due on it amounted to HK$48,599.88 (HK$4,049.99 x 12), for which he paid a loan set-up fee of HK$1,890;

(c)  in about December 2006 / January 2007, he took out a third loan from AIG. The loan amount and interest due on it amounted to HK$20,720.04 (HK$3,453.34 x 6) which had to be repaid in 6 instalments, the first on 31 January 2007;

(d)  in about August 2007, he took out a loan from BEA – Visa Card.  The loan amount and interest due on it amounted to HK$52,020 (HK$8,670 x 14) which had to be paid in 6 instalments, the first of which was on 24 August 2007, and he had to pay a handling fee of HK$286 each time he paid an instalment;

(e)  in about October 2008, he took out yet another loan, this time from AIG Finance (Hong Kong) Ltd. which had to be paid in 14 instalments. The 4^th repayment was on 29 February 2008.  The loan amount and interest due on it amounted to HK$49,000 (HK$3,500 x 14) and he had to pay a handling fee of HK$218.40 each time he repaid an instalment.

34.  Mr Lau did not address this particular issue.

35.  I am unable to correlate any of the aforesaid loan drawdown with any unidentified deposits into Cheung Hong’s or the deceased’s bank accounts at or around the dates of the loan drawdowns.  Whilst the deposits of HK$1,697,845, remain unidentified, I find, on a balance of probabilities, that these deposits were income earned by Cheung Hong and that they were not loans that had been raised and paid into the bank accounts.  I will work with round figures from this point.  For these reasons, I am not prepared to reduce the starting point profit figure of HK$7.6m[59] by the amount of the unidentified deposits in sum of HK$1.7m.

36.  More controversial were the further adjustments Mr Tupila had made in respect of the expenses of the business of Cheung Hong.  He found, during the period in question, unidentified withdrawals from the bank accounts in the sum of HK$9,794,534 (these are listed as Annexure 12 to Mr Tupila’s report[60]) which he could not match to any amounts in the various expense invoices.  On the other hand, he was unable to match HK$4,139,892[61] of expenditure from the invoices with withdrawals shown in Cheung Hong’s and the deceased’s bank statements.  Assuming that the only source of funds for the settlement of expenditure would have been one of Cheung Hong’s and the deceased’s bank accounts or credit cards, he adjusted the unidentifiable withdrawals as shown in his Figure 5[62]:

Figure 5: Adjustments to Unidentifiable Bank Withdrawals:

Description	1 Apr 2006 to 31 Mar 2007	1 Apr 2007 to 31 Mar 2008	1 Apr 2008 to 11 Feb 2009	Total
Unidentifiable withdrawals as per bank statements             (A)	3,412,424	2,756,769	3,625,341	9,794,534
Less Unmatched expense invoices:
- Insurance	5,548	6,145	21,205	32,898
- Telephone charges	6,063	5,587	5,523	17,173
- Repairs & Maintenance	172,653	252,337	240,884	665,874
- Salaries & Wages	289,743	383,046	364,910	1,037,699
- Subcontracting expenses	34,090	667,502	1,652,202	2,353,794
- Parking charges	5,950	13,600	6,400	25,950
- Landfill charges	1,163	-	-	1,163
- Sundry expenses	3,630	1,141	570	5,341
(B)	518,840	1,329,358	2,291,694	4,139,892
Adjusted Unidentifiable withdrawals (A) – (B)	2,893,584	1,427,411	1,333,647	5,654,642

37.  In addition to Mr Tupila’s adjustment of HK$5.65m in respect of unidentifiable withdrawals, he also adjusted unknown ATM withdrawals of HK$3,123,901, listed in Annexure 11[63], from the accounts of Cheung Hong and the deceased. As cash payments had been made for some expenses such as salaries and wages and vehicle fuel, Mr Tupila assumed that these cash withdrawals were entirely used for settlement of cash expenses and he treated them as part of Cheung Hong’s expenditure[64].

38.  In the joint report[65], Mr Lau offered his opinion that of this amount of unidentifiable withdrawals of about HK$5.65m, 69 withdrawal transactions appeared to be funds drawn for personal use which he set out in his Appendix 1[66]. These were withdrawals in various rounded amounts each in the sum of or exceeding HK$20,000.  5 of these were each in the sum of HK$100,000 and one in the sum of HK$120,000.  Mr Tupila disagreed with Mr Lau on this point. He said in his evidence in chief:

“I think the assumption that any large round-number transfer must be personal in nature is without any basis, and as we’ve seen this morning, there are other transactions, which are round sum numbers over 20,000, which are clearly business-related expenses. So I would disagree with Mr Lau’s assumptions that any round sum transfer over 20,000 is personal.”[67]

During his cross examination, he gave evidence as follows:

“Q. ... you’ve got about 4.1 million of invoices which have not been settled.

A. Yes.

Q. So you have very fairly deducted 4.1 from the 9.8.

A. Yes.

Q. With a remaining of 5.6 million.

A. That’s right.

Q. And you have also fairly told us, because you were not able to differentiate personal or business, you assumed all were business.

A. Yes.

Q. Assuming of course we are now left in a vacuum, if Mr Kan is alive, of course, we can ask him and then you’ll have the explanation and then you will be able to do the proper assessment.

A. Yes.

Q. But because of that, well, we are left with nothing, out of the 5.6...

A. Yes.

Q. ...Mr Lau said at least 2.8, with his experience - you may have your own idea but, well, we are left with this reckon.

A. Yes, I take your point. I don’t, I certainly don’t agree with Mr Lau that it’s 2.8, I don’t think he can substantiate that, but it must be something, I accept that there are some personal expenses.

Q. And do you agree with me that...

COURT: Looking at a best educated guess, what do you think that would be, I mean, looking at it in the round, out of the 5.6 million?

A. Well, the only -- I mean, it’s impossible to guess.

COURT: You know the documents more than anybody else in this courtroom, even more than Mr Lau.

A. Yes. The only...

COURT: You say it’s impossible to guess.

A. It’s impossible to guess but if you look at all of the statements, and I guess if you do a comparison of what I can identify as being business and what I can identify as being personal, the vast majority of the transactions are business. I don’t know the number off the top of my head but we’re probably talking more than 95 per cent are business. And I suppose you could apply that sort of ratio to the unknown ones. But there’s no scientific way of determining what these unidentified transactions are.

...

Q. But still having looked at all these, you maintain that out of the 5.6 million unidentified withdrawals, and more than 3 million ATM withdrawals, you reckon only 5 per cent was for personal expenses.

A. Well, I’m just saying that based on my...

COURT: He said it’s impossible to guess.

A. Yes.

MR WONG: Then I won’t go through that point.”[68]

39.  I have reached a critical part of my decision making process.  It is clearly wrong to adjust the starting point profit of HK$7.6m by deducting from that amount the total amount of HK$3.1m, being unknown ATM withdrawals, and the total amount of HK$5.65m, being the unidentifiable withdrawals, on the basis that these amounts were used to pay the expenses of the business.  As accepted by Mr Tupila, these amounts were not entirely spend on business expenses, some of these amounts were spent on personal expenses.  However, he stated with some force, that there was no scientific basis to make the determination of how much of these amounts were spent on business expenses and how much on personal expenses.

40.  The decision of the Court of Appeal in Ashcroft v Curtin [1971] 1 WLR 1731, bears on the point in question. I quote from the headnote of that judgment:

     “The plaintiff was a skilled precision engineer who carried on a successful business through a private company, of which he was the active managing director. He kept only rudimentary records and the company’s accounts were unreliable. He was severely injured in a road accident caused by the defendant’s negligence, as a result of which he could not stand noise, suffered from blackouts, vomiting, headaches, loss of balance and became easily tired. His injuries prevented him from working as an engineer and seriously prejudiced him in running the company, which he continued to manage for five years after the accident.

     In an action against the defendant claiming damages for pain, suffering and loss of amenities, and for financial loss based on a decline in the company’s profitability caused by the plaintiff’s impaired efficiency, Donaldson J. awarded £15,500 general damages, of which £5,000 was for pain, suffering and loss of amenities and £10,500 for financial loss.

     On appeal by the defendant: –

     Held, allowing the appeal, that although there was a decline in the company’s profitability after the accident which had been caused by the plaintiff’s injuries, it was impossible in the absence of reliable accounts to quantify it, and accordingly, the claim for financial loss failed (post, pp. 1737F–G, 1738D–E) ...”

...

In his judgment Edmund Davies LJ stated[69]:

     “In a one-man company of this kind, with an actively working managing director of undoubted efficiency, there is a high probability that injuries such as he sustained would not only interfere drastically with the quality of his life, but would also have a damaging effect upon the business which he had created and still controlled. ... Regrettably vague though the evidence is, my conclusion is that it points not only to a decrease in profitability since 1965, but also to that decrease being due to the accident.

     My greatest difficulty is in quantifying the loss. Mr. May submits that the task cannot be performed and that the failure should result in a “nil” award on this aspect of the case. Having rejected the accounts as “largely unreliable,” Donaldson J. is said to have “plucked out of the air” the figure of £1,500 as representing the company’s annual profitability loss. Mr. May says that it cannot be justified and that the consequent award of £10,500 cannot stand. No figure, so it is urged, can replace it.

     That is a conclusion to which I have been frankly loth to arrive, for it does not seem to me to meet the justice of the case. It means that, in the words of Holroyd Pearce L.J. in Daniels v. Jones [1961] 1 W.L.R. 1103, 1109: “ ... arithmetic has failed to provide the answer which common sense demands.” Furthermore, it is a conclusion which Mr. Kidwell submits is not inescapable. He points out that the plaintiff’s uncontradicted evidence is that he would have to pay, on 1969 rates, between £2,500 and £3,000 per annum to anyone of his skill and experience to do similar work. He stresses that the judge’s multiplicand of £1,500 would represent only £2,200 gross, and that by taking as low a multiplier as seven he made, if anything, an excessive allowance for all possible contingencies. But I am very doubtful about the validity of this approach, for if another man had been engaged to do the plaintiff’s pre-accident work, it does not follow that the profits would have gone down by the amount of his salary. On the contrary, I see the force of the observation of Mr. May that , as no other man was in fact engaged, it is irrelevant to consider what would have happened if he had been, for, so far from producing a drop in profitability, his engagement might equally well have led to a realisation of that 10 per cent. increase which Mr. Boulter assumed would have enured but for the accident.

     In Bonham-Carter v. Hyde Park Hotel Ltd. (1948) 64 T.L.R. 177, Lord Goddard C.J., who found it possible to arrive at a conclusion despite the extremely unsatisfactory evidence as to damages, said, at p. 178:

“Plaintiffs must understand that, if they bring actions for damages it is for them to prove their damage; it is not enough to write down particulars, and, so to speak, throw them at the head of the court, saying:  ‘This is what I have lost; I ask you to give me these damages.’  They have to prove it.”

So approaching the matter, the unsatisfactory conclusion to which I have felt myself driven is that, while the probability is that some loss of profitability resulted from the plaintiff’s accident it is quite impossible to quantify it.  Nevertheless I regard it as improbable that the loss would be anything like in the region of £10,500.”

41.  The editor of Munkman on Damages for Personal Injuries and Death (12^th ed.), stated at p.110:

“11.65    Unfortunately the plaintiff in Ashcroft v Curtin [1971] 3 All ER 1208, [1971] 1 WLR 1731, CA had not been diligent in keeping his accounts prior to the accident. Whilst there was no allegation of any wrongdoing, because of the vagueness of the accounts it was impossible for any accountant to calculate the loss suffered. As a result, even though the court conceded some loss must have occurred, no award was made for loss of profit.

11.66    If there are problems with the accounts in an accident claim it may be possible to employ an accountant to update the accounts.  The costs of this will have to be borne by the claimant and therefore it is advisable to retain a separate accountant to the ‘forensic’ accountants used to quantify the loss since the costs of retaining the expert are likely to be recoverable.”

42.  There are limits to taking a broad brush approach.  In McRae v. Chase Intl Express Ltd[2004] PIQR P314, 322, line 36, Newman J said:

“... the basic principle that a claimant must prove his case by evidence capable of supporting the conclusions to which the court is invited to come ... No doubt he had in mind the principles often expressed to the effect that judges must often simply do their best or approach an issue on a broad brush basis, but these principles have limitations. There is a need for evidence and there is a need for an analysis of such evidence; then the judge can make findings of fact by drawing inferences and doing the best he can, but on the evidence which is available.”

Crane J. in Bordin & anr. v. St. Mary’s NHS Trust, No. 1998-B-697 stated at pg. 9:

“But, unlike a jury, a judge must deliver a reasoned judgment and it seems to me that it would be inappropriate for a judge to shelter behind the proposition that he should act like a jury and decline a reasoned approach, if one is available on the evidence.

In so far as there is a reasoned basis which can be found for the assessment, it seems to me appropriate for the judge to use that basis, checking at each stage the reasonableness of the claim and standing back at the end of the calculation to check that there has been no over-compensation. It would be inappropriate to use a “broad brush” artificially to the total, or to do so arbitrarily, ...”

43.  I adopt this approach and ask myself whether I can accept Mr Lau’s opinion that HK$2.82m were personal expenses.

44.  At this point, I address the submissions made by Mr Sakhrani, on behalf of the defendant, regarding Cheung Hong’s cash flow problems.  I accept that Cheung Hong must have had ongoing cash flow problems which caused him to borrow at relatively high rates of interest from 2006 into 2008[70].  However, cash flow problems do not mean that the business was not ultimately profitable when the transportation service income was ultimately received. Indeed, a total of HK$911,638, being transportation service income from the business of Cheung Hong, was paid into the accounts of Cheung Hong and of Madam Fan, after the death of the deceased, from 25 February to 30 April 2009[71]. As stated in §27 above, the purchase by the deceased of dump trucks between May 2007 and May 2008[72] and the increasing turnover of the business, from HK$6,545,726 for the 12 months ending on 31 March 2008, to HK$7,997,849[73] for the 11 and a half months from 1 April 2008 to 11 February 2009, suggested an expanding profitable business rather than a loss making one.

45.  I turn to deal with the more complex submission made by Mr Sakhrani that I should find that only 17.7% of the withdrawals in large rounded amounts of HK$2.82m were made on account of personal expenses and that the balance 82.3% was utilised to settle business expenses.  This submission is based on attachments 2[74] and 3[75] of Mr Tupila’s report.  Attachment 2 showed company expenses paid by the deceased as identified in the deceased’s bank and credit card statements amounting to HK$343,819[76]. Attachment 3 showed deceased’s expenses paid by the deceased as identified in the deceased’s bank and credit card statements amounting to HK$61,000.  The transfers from the respective accounts were 82.3% -17.7% in favour of Cheung Hong.  The simple answer to this submission is that the sample size (HK$343,819[77] and HK$61,000) was too small to provide a reliable  demarcation between company and personal expenses in the total amount of HK$8.75m (being unknown ATM withdrawals in the amount of HK$3.1m and the unidentifiable withdrawals in the amount of HK$5.65m).  Mr Tupila did not support any such demarcation and he expressly stated that there was no scientific way to demarcate between company and personal expenses.

46.  However, Mr Sakhrani submitted that the percentage demarcation was also supported by the tables produced by Mr Tupila called the Peach Table[78]. Table 1 was compiled from the transactions shown on Schedule B1[79] and is made up of withdrawals made right after a intrabank transfer in the total sum of over HK$1.55m.  Immediate utilisation by Cheung Hong of amounts transferred from the deceased’s accounts would suggest that the amounts were being utilised for Cheung Hong’s business purposes, as was accepted by Mr Lau[80].  Likewise, immediate utilisation by the deceased of amounts transferred from Cheung Hong’s accounts would suggest that the amounts were being utilised for the deceased’s personal expenses.  Table 1 showed that the amounts that were transferred from Cheung Hong’s accounts to the deceased’s accounts and then withdrawn shortly afterwards amounted to HK$288,639.70, whereas, the amounts that were transferred from the deceased’s accounts to Cheung Hong’s accounts and then withdrawn shortly afterwards amounted to HK$1,267,059.01.  The former amount was only 18.6% of the total amount of these transfers in the total sum of HK$1.55m.  Whilst this sample size (HK$1.55m) was larger, relative to the total amount of HK$8.75m (being unknown ATM withdrawals in the amount of HK$3.1m and the unidentifiable withdrawals in the amount of HK$5.65m)), I am not persuaded to adopt the percentages of 18.6% and 81.4% as providing a reliable demarcation of personal and company expenses. I reiterate that Mr Tupila did not support any such demarcation and he expressly stated that there was no scientific way to demarcate between company and personal expenses.

47.  I return to the question whether I can accept Mr Lau’s opinion that HK$2.82m were personal expenses.

48.  I can quickly dispose of one submission made by Mr Sakhrani[81]. During his cross examination, Mr Lau said:

“Q.   You said: “Of the $5.6 million unidentifiable withdrawals, 69 withdrawals of $2.82 million appeared to be fund drawn out [for private personal use]”[82], right?

A.     Yes.

Q.     So may I take it, then, that the issue you are now raising is in relation to the 69 withdrawal transactions?

A.     Yes.

Q.     Which you say appeared to be personal, right?

A.     Yes.

Q.     Right. 

A.     Part are personal, yes.

Q.     That’s right.

A.     Yes.”[83]

I did not understand Mr Lau to be saying that part of the HK$2.82m were spent on personal expenses; he was saying that part of the HK$5.65m, namely, HK$2.82m, were spent on personal expenses, which is what he had stated in the joint report.

49.  Mr Lau’s opinion has the support of common sense. People usually make cash withdrawals in rounded numbers for their personal expenses.  Although there were some business expenses in round numbers of, and over, $20,000, the existence of such business expenses does not lead me to reject Mr Lau’s opinion.  I find, on a balance of probabilities, that HK$2.82m out of the unidentifiable withdrawals of HK$5.65m were made to cover the personal expenses of the deceased, including contributions he made to Madam Fan and to his children. HK$2.82m is about 50% of HK$5.65m.  Whilst I accept the evidence of Mr Tupila that there were some business expenses in round numbers of, and over, $20,000, I also find, on a balance of probabilities, that unidentifiable withdrawals in amounts less than HK$20,000 were also made for personal expenses, such that part of the remainder of HK$5.65m was also used for personal expenses. In all likelihood, the total value of withdrawals for personal expenses in amounts less than HK$20,000 was greater than the value of business expenses in round numbers of, and over, $20,000, such that the ratio of 50% that I have adopted is likely to be an underestimate of the amount expended on personal expenses, including contributions made to Madan Fan and to his children. I adopt the same ratio of 50% to find, on a balance of probabilities, that 50% of the unknown ATM withdrawals of HK$3.12m, i.e. HK$1.56m, were made to cover the personal expenses of the deceased, including contributions he made to Madam Fan and to his children.  With these findings, I adjust the starting point profit figure arrived at by Mr Tupila in the sum of HK$7.6m[84] by the sums of  HK$2.82m (being 50% of unidentifiable withdrawals of HK$5.65m) and HK$1.56m (being 50% of  unknown ATM withdrawals of HK$3.12m ) to HK$3.22m.

50.  I turn to deal with the other adjustments made by Mr Tupila and to a concession he had made regarding credit card double counting.  The latter concession was made in a letter from Mr Tupila to the defendant’s solicitors dated 5 February 2016, after the parties had closed their respective cases. The letter contained amendments to his report dated 15 December 2014, and included a replacement Figure 3, as set out below, with the amendments in red.

Figure 3: Adjustments to Profit based on Additional Transactions in Bank and Credit Card Statements:

	Note	1 Apr 2006 to 31 Mar 2007	1 Apr 2007 to 31 Mar 2008	1 Apr 2008 to 11 Feb 2009	Total
PROFIT FOR THE PERIOD (A)		3,414,385	2,630,280	1,558,338	7,603,003
...[85]
LESS:
Unknown ATM Withdrawals	3.4.9	888,473	819,298	1,416,130	3,123,901[86]
Credit card repayment_*	3.4.10	_148,539	_134,844	_49,548	_332,931
Adjusted Unidentifiable Withdrawals	3.4.11	2,893,584	1,427,411	1,333,647	5,654,642[87]
Bank charges	3.4.12	1,733	1,680	4,056	7,469
Insurance	3.4.12	-	54,283	73,316	127,599
Telephone charges	3.4.12	703	381	3,383	4,467
Repairs & Maintenance	3.4.12	-	1,760	3,424	5,184
Licensing fees	3.4.12	560	1,671	10,488	12,719
Miscellaneous & other unknown expenditure	3.4.12	2,243	81,049	153,380	236,672
(C)		3,787,296 3,935,835	2,387,533 2,522,377	2,997,824 3,047,372	9,172,653 9,505,584
...[88]

* Removed to avoid double-counting.

51.  This additional material is, strictly speaking, inadmissible. However, I accept the concession made by Mr Sakhrani, on behalf of the defendant and based on Mr Tupila’s letter of 5 February 2016, that no adjustment is sought in respect of credit card repayments in the sum of HK$332,931.

52.  It remains for me to deal with the other adjustments made by Mr Tupila and the submissions made by Mr C K Wong regarding them, and Mr Tupila’s treatment of hire purchase instalment payments.  

53.  Figure 1, reproduced in §28 above, sets out finance charges, insurance, telephone charges, repairs and maintenance and other operating expenses.  The total expenses amounted to HK$13,986,311 during the period in question.  Mr Tupila also stated in §3.4.12 of his report dated 15 December 2014 that he had identified other bank charges, insurance[89], telephone charges, repairs and maintenance, licensing fees and other miscellaneous expenses[90] for which invoices had not been provided or were not available. I have reproduced these additional expenses from Figure 3 as follows:

	Note	1 Apr 2006 to 31 Mar 2007	1 Apr 2007 to 31 Mar 2008	1 Apr 2008 to 11 Feb 2009	Total
Bank charges	3.4.12	1,733	1,680	4,056	7,469
Insurance	3.4.12	-	54,283	73,316	127,599
Telephone charges	3.4.12	703	381	3,383	4,467
Repairs & Maintenance	3.4.12	-	1,760	3,424	5,184
Licensing fees	3.4.12	560	1,671	10,488	12,719
Miscellaneous & other unknown expenditure	3.4.12	2,243	81,049	153,380	236,672

54.  Mr Wong submitted that the two largest items of these additional expenses, being “insurance (HK$127,599)” and “miscellaneous & other unknown expenditure” (HK$236,672)” ought to be removed: the insurance premium was for life insurance[91], and Mr Tupila accepted that such premia should not be classified as business expenses[92];  and a majority of the miscellaneous items (HK$231,700 out of HK$236,672) were repayment of loans[93]which ought not to be classified as business expenses.

55.  Mr Wong also submitted that the operating expenses shown in Figure 1 ought to be reduced for these reasons:

“Items described as “PCCW-HKT-DDA” in Tupila’s Attachment 2 [CB3/3273]: This item refers to payments of land line phones [CB3/3070,3166-3176].  As Cheung Hong’s telephone contact is the Deceased’s mobile phone number (see generally the records of in Bundles 4 – 6 of CB2), payments of land line phones are not business expenses.  Most of the expenses of land line phones were for calling the USA.

Instalments of hire purchase of dump trucks in Tupila’s Attachment 2 [CB3/3273, 3274]: Instalments for dump trucks are capital in nature and cannot be treated as expenses. 

...

Auto-toll expenses [CB3/3274]: Both Mr. Lau and Mr. Tupila considered auto-toll expenses when compiling their profit and loss figures based on “statements from Autotoll Limited” [CB1C/378 – 381; 433/3.3.20].  As the auto-toll expenses have been deducted, a further deduction of auto-toll expenses in Tupila’s Attachment 2 is double accounting.  Mr. Tupila accepted that if he had already deducted the auto-toll amount and he deducted this amount from the bank statements again, there would be double accounting [T/295N – 296E].

Items in Tupila’s Attachment 6 [CB3/3291]: These items are duplicates.  The item described as “Shing Tak Tyre Poly[94], Hong Kong” can be found at DP Lau’s Report [CB1C/365].  The item of “Crown Motors Ltd – Hino Hong Kong” is a duplicate of Tupila’s Attachment 2 [CB3/3273]”[95].

56.  I accept Mr Wong’s submissions that the land line charges in the total sum of HK$8,524[96] ought to be removed as they were not business expenses.  As Mr Tupila has already conceded the double accounting point by deleting the credit card repayments as business expenses[97], the submission made regarding double accounting of autotoll expenses, and the invoices from Shing Tak Tyre Polytechnic Co. Ltd. and Crown Motors Ltd. - Hino Hong Kong[98], falls away.

57.  I also accept Mr C K Wong’s submissions that the amount of HK$127,599 relating to life and health insurance premia ought to be removed as they were not business expenses. I am satisfied from my perusal of Annexure 7 that the entire list of insurance premia set out therein related to life and health insurance.  Indeed, Mr Tupila appeared to accept that in the course of his cross examination[99].

58.  Mr C K Wong submitted that instalment payments under hire purchase agreements of dump trucks appearing in Mr Tupila’s Attachment 2[100] totalling $257,044[101] and in Annexure 13[102] totalling $547,871 were capital in nature and could not be treated as expenses.  Mr Tupila dealt with this point in his evidence as follows:

“Q. But what do you say to the argument -- well, the argument in relation to instalments as you -- when you repay a capital loan, that’s not an expense of the business, and you don’t disagree with that.

A. All right. Mr Lau is correct, in that a loan is capital in nature. It’s not a revenue and an expense, it’s an asset and a liability. I would agree with that. Mr Lau was also correct in saying that the expense is the interest component of that repayment, and I would accept what he says and agree with what he says.

Q. Does that change the computation of the profit and loss, if you were to therefore classify in that way?

A. The net impact should be 0. And the reason for that is -- well, I need to provide two examples here. For a cash loan, it’s quite simple. There is money going into an account, and there is money going out, which is the repayment. If you take away the interest, the money coming in and the money going out should be the same. So my assumption -- my sort of underlying assumption on my -- in my methodology is that money deposited into business account or the personal account of revenue, I accept that some of that may well have been a deposit from a loan, and if that’s the case, that only needs to be deducted from the revenue. Similarly, on the -- what I consider as an expense, if that’s a repayment of a loan, and in fact, it’s capital in nature, that should also be removed. So the net balance should be zero.

COURT: So it balances out, because you take the same amount from the revenue and expense.

Q. But let me just pick up that for a second. You buy a vehicle on hire-purchase. The capital cost of the vehicle and the loan repayment, the capital part of it, is all to be sucked out of the account, as you just explained.,

A. Right.

Q. But what about the depreciation occasioned by that vehicle? How does one classify that?

A. All right. So that’s my second -- I should finish. I said that there were two examples that I should provide.

Q. Right.

A. The second example is where it’s not a cash loan, and it’s an actual purchase of a vehicle or something else.

Q. Right.

A. In that situation, there is no deposit of money into the accounts, so I wouldn’t have picked up anything which I classified as revenue. So an adjustment needs to be made. Firstly, to take away the expense that I categorised, because it’s a repayment of a loan, it’s not an expense. But there is a further accounting entry that needs to then be added -- adjusted in, which is the depreciation of that asset -- of that fixed asset. And typically, what would happen is, if I have, for instance, a loan, say, I have a hire-purchase over 5 years, I would depreciate the asset over that same life. So any capital repayment that I made would be [matched] by a depreciation of the same amount of that asset. So again, if you are talking about the profit and loss, the effect -- the impact of removing these items would be zero, because you are removing the capital -- you’re removing the repayment of the loan, but your depreciation -- depreciating the asset. And again, the only item that remains is the interest component, and that’s an expense. [my emphasis]

Q. Right. And the last matter...

COURT: But that would only happen over the course of five years.

A. Well, so whatever...

COURT: The impact within the one year would not be -- would be there, right?

A. Well, what the accounting standard sets for -- there is no standard for a hire-purchase, so typically happened as hire-purchase is considered as a finance lease. What the standard says is that the assets needs to be depreciation -- depreciated over a period no longer than the duration of the contract itself. So if the hire-purchase agreement was for three years, it could depreciate the asset over three years. If it was five years, it would depreciate over five years. But what it means is, you’re essentially matching the depreciation with the loan repayment.”[103] [my emphasis]

59.  Mr Tupila has taken a shortcut by treating the instalment payments under the hire purchase agreements as a business expense. These payments are of a capital nature and ought to be removed.  However, if that were to be done, one would need to input the depreciation of the vehicle under hire purchase as a business expense. As it is common to depreciate a vehicle under hire purchase over the same period of time as the hire purchase agreement, treating the instalment payment as the amount of the depreciation achieves the same result and does not affect net profitablilty.

60.  Mr Tupila’s shortcut does not accord with normal accounting principles.  Clauses 28 and 29 of Hong Kong Accounting Standard 17 – Leases (June 2010)[104] state:

“28. ...If there is reasonable certainty that the lessee will obtain ownership by the end of the lease term, the period of expected use is the useful life of the asset; otherwise the asset is depreciated over the shorter of the lease terms and its useful life.

29.   The sum of the depreciation expense for the asset and the finance expense for the period is rarely the same as the lease payments payable for the period, and it is, therefore, inappropriate simply to recognise the lease payments payable as an expense. Accordingly, the asset and the related liability are unlikely to be equal in amount after the commencement of the lease term.”

61.  Mr C K Wong has performed some calculations of what the depreciation ought to be. He has come up with a figure of $339, 291.53[105].  However, these calculations for depreciation have not been addressed by Mr Lau nor put to Mr Tupila. In the circumstances, whilst Mr Tupila’s shortcut is a departure from strict accounting principles, I am prepared to adopt it for our purposes, which is to look at all available documents to reconstruct the profit and loss accounts of Cheung Hong.

62.  Based on the findings that I have made above, I conclude, on a balance of probabilities, that Cheung Hong earned a profit of $2,965,016 over the period in question as set out in the following table:

Adjustments to Profit based on Additional Transactions in Bank and Credit Card Statements:

	Note	1 Apr 2006 to 31 Mar 2007	1 Apr 2007 to 31 Mar 2008	1 Apr 2008 to 11 Feb 2009	Total
PROFIT FOR THE PERIOD		3,414,385	2,630,280	1,558,338	7,603,003
Add: $ 8,524 wrongly deducted as expenses[106]					7,611,527
...
LESS:
That part of Unknown ATM Withdrawals that I have found to have been expended on business expenses					1,560,000[107]
Credit card repayment					332,931[108]
That part of Adjusted Unidentifiable Withdrawals that I have found to have been expended on business expenses					2,820,000[109]
Bank charges					7,469
Insurance					Nil[110]
Telephone charges					4,467
Repairs & Maintenance					5,184
Licensing fees					12,719
Miscellaneous & other unknown expenditure					236,672
Profit for the period from 1 Apr 2006 to 11 Feb 2009					2,965,016
...

63.  The period in question from 1 April 2006 to 11 February 2009 was a period of about 34.5 months.  Dividing the profit of $2,965,016 by this period of time gives an amount of just under $86,000 per month as the monthly profit earned by Cheung Hong. This equates to an annual profit of $1,032,000.

64.  I must express my gratitude to Mr Lau and to Mr Tupila for their assistance which has enabled me to determine this controversial issue.

65.  The annual profit in the amount of HK$1,032,000 has to be reduced on account of tax liability. For the year 2008/09, the basic allowance[111] was HK$108,000 and the children’s allowance[112] was HK$50,000 per child.  Mr Kan Ho Chuen, the son of the deceased, was aged 13 years and 8 months at the time of the accident.  Although Kan Wai Ling, the daughter of the deceased,  was aged 24 years 4 months at the time of the accident,  she had already completed her education and had started work in 2007[113]. Accordingly, the deceased would only have been able to claim one child’s allowance for the year 2008/09, making his total allowance of HK$158,000.  Applying these allowances to HK$1,032,000 reduces the net chargeable income to HK$874,000. Of this amount, HK$120,000 would be charged to tax of HK$8,400 and the balance HK$754,000 (HK$874,000 - HK$120,000) would be charged to tax of HK$128,180, making a total tax of HK$136,580, calculated as follows:

For the years of assessment 2008/09 to 2016/17 inclusive[114]

At the standard rate of 15%[115], the tax on HK$1,032,000 would amount to HK$154,800. In this case, personal assessment would result in less tax being paid.

66.  In addition, pursuant to Schedule 19 of the the Inland Revenue Ordinance, Cap. 112, the amount of tax under personal assessment was reduced by HK$8,000.  The net tax due would be HK$128,580 (HK$136,580 - HK$8,000) and the net income after tax would be HK$903,420 (HK$1,032,000 - HK$128,580) per annum or HK$75,285 per month (HK$903,420/12).

67.  In January 2009, the Composite ConsumerPrice Index stood at 98.8[116].  In January 2015,  the Composite Consumer Price Index stood at 123.1[117]. In January 2016, 2017, and 2018,  the year on year change in the Composite Consumer Price Index was +2.5%, +1.3% and +1.7% respectively[118], which makes the Composite Price Index stand at 128.6 (123.1 + 2.5 + 1.3 + 1.7) in January 2018.  This is an increase of 29.8% from the level in January 2009.  I find that the present notional income of Cheung Hong would have risen by the same percentage to HK$1,339,536 (HK$1,032,000 x 129.8%),  after taking into account inflation since January 2009 and without even taking account of the increase in construction work, and the resultant increase in construction waste,  in Hong Kong since then[119].

68.  As Kan Ho Chuen would be completing his 5-year undergraduate course in Drexel University in 2018,  the deceased could enjoy the basic allowance of HK$132,000 and a child’s allowance of HK$100,000 for the year of assessment 2017/2018[120]. Applying these allowances to HK$1,339,536 reduces the net chargeable income to $HK1,107,536 (HK$1,339,536 - HK$232,000). Of this amount, HK$135,000 would be charged to tax of HK$9,450 and the balance HK$972,536 (HK$1,107,536 - HK$135,000) would be charged to tax of HK$165,311, making a total tax of HK$174,761, calculated as follows:

For the year of assessment 2017/18 and for each year after that year:

At the standard rate of 15%[121], the tax on HK$1,339,536 would amount to HK$200,930. In this case, personal assessment would result in less tax being paid.

69.  In addition, the amount of tax under personal assessment for the year of assessment is to be reduced by HK$30,000[122].  The net tax due would be HK$144,761 (HK$174,761 - HK$30,000) and the post-trial notional net income after tax would be HK$1,194,775 per annum (HK$1,339,536 - $144,761) or HK$99,565 per month (HK$1,194,775/12). The median pre-trial notional net income after tax would be HK$1,049,098 per annum (HK$903,420 + HK$1,194,775/2) or HK$87,424 per month (HK$1,049,098/12).

The Assessment of the Awards for Loss of Dependency

70.  As mentioned in §5 above, it was common ground that Madam Fan and Kan Wai Ling and Kan Ho Chuen, the daughter and the son of the deceased, were dependent on the deceased at the time of the accident.  The extent of their dependency and that of Madam Fan, and of Madam Wong Lai Sheung, the mother of the deceased, was a matter of some controversy.

71.  I have declined to adopt the approach set out in Harris v. Empress Motors for the reasons set out in §§18 to 20 above.  I will assess the awards for loss of dependency by considering the evidence of the contributions made by the deceased to his dependants prior to is death.

72.  It was pleaded in the Re-Revised Statement of Damages[123] that:

“7. At the time of the accident, the Deceased, Fan Mei Na, Kan Wai Ling and Kan Ho Chuen lived together in Hong Kong and US. Kan Wai Ling worked in US and Kan Ho Chuen studied in US. Kan Wai Ling returned to and stayed in Hong Kong together with the family for about 1 month each year. Kan Ho Chuen returned to and stayed in Hong Kong together with the family for about 3 months each year. Fan Mei Na stayed at Hong Kong and at US together with the family for about 9 months and 3 months respectively each year. The Deceased stayed at Hong Kong and stayed at US together with the family for about 11 months and 1 month respectively each year.

8. At the time of the accident, Fan Mei Na was a housewife, Kan Ho Chuen was a student studying in the 8^th Grade in the Middle School in US, and Kan Wai Ling worked as an accountant in US earning about US$56,000 per year before tax. Kan Wai Ling did not contribute to the household expenses of the family.

9. At the time of the accident, the monthly household expenses of the family were as follows:-

Home in Hong Kong
Rent	HK$1,600.00
Water, electricity and gas	HK$500.00
Telephone and internet	HK$300.00
10% of car park and petrol of private car (HK$7,900 x 10%)	HK$790.00
10% insurance of private car (HK$1,130.94 x 10%)	HK$113.09
Food, miscellaneous expenses and entertainment (including dining outside)	HK$20,000.00
	---------------
	HK$23,303.09

Home in US
Mortgage repayment	US$1,180.00
Water, electricity and gas	US$800.00
Insurance	US$41.67
Government rent	US$108.33
	-------------------
	US$2,130.00”

73.  The observations of Lord Goddard CJ bear repeating, particularly in relation to the bald assertion that food, miscellaneous expenses and entertainment (including dining outside) amounted to HK$20,000 per month. He said:

“Plaintiffs must understand that, if they bring actions for damages it is for them to prove their damage; it is not enough to write down particulars, and, so to speak, throw them at the head of the court, saying: ‘This is what I have lost; I ask you to give me these damages.’ They have to prove it.”[124]

74.  Madam Fan became a permanent resident of the United States on 17 February 1998[125]. After her divorce from the deceased in April 1997, she married Mr Lam Wai Shing in May or June 1997 who then sponsored her application for residence in the United States[126]. In her supplemental witness statement, Madam Fan had said that both before and after her divorce from the deceased, they had been living like a married couple.  She made no mention in her witness statements of her marriage to Mr Lam Wai Shing.  Her evidence that the deceased was supporting her while she lived with her husband Mr Lam is difficult to accept[127]. She had moved to the United States in February 1998[128] with her son and daughter and had lived with Mr Lam in New York where her daughter attended school[129].  She subsequently divorced Mr Lam after she had learned, in October 1998, that he was having a relationship with another woman[130].  At the end of 1998, she returned to Hong Kong with her young son[131]. Her daughter remained in the United States and lived with Madan Fan’s parents who took care of her[132].  After Madan Fan returned to Hong Kong with her son, they stayed at the flat in 313 Shanghai Street while the deceased stayed at a rented flat in Ma On Shan[133].  Eventually, the deceased had to return possession of the Ma On Shan flat and he moved to the Shanghai Street property at the end of 1999 “because there was nowhere that he could move to”[134] and he occupied a room in the front portion of the Shanghai Street flat, which was different from the portion that she was occupying[135].  This state of affairs continued until she moved into a flat at Fung Yam House in October 2005[136].  The deceased did not move with her and he remained in Shanghai Street[137].  Madam Fan started to spend more of her time in the United States after November 2005. Subsequently, the deceased moved out of the Shanghai Street subdivided room and, according to Madam Fan, he “frequented” the Fung Yam House flat[138]. 

75.  A summary of the plaintiffs’ closing submissions, based on the traditional approach of assessing the awards for loss of dependency by considering the evidence of the contributions made by the deceased to his dependants prior to his death, is set out below:

“Past Loss of Dependency under Traditional Approach

Broadly speaking, the Plaintiffs’ case is that but for the Accident

(1) The Deceased would have paid for the household expenses in Hong Kong and Philadelphia and family trips until he retires;

(2) The Deceased would have supported Madam Fan in all aspects financially until he retires;

(3) The Deceased would have supported Kan Ho Chuen in all aspects financially until Kan Ho Chuen completed his university education;

(4) The Deceased would have given pocket money to his mother Wong Lai Sheung until she passes away or the Deceased retires.

Below is a summary of recurrent expenses claimed per month in HK$:

Household expenses in Philadelphia and Hong Kong and Madam Fan’s personal expenses	39,917.09
Madam Fan’s air ticket expenses	2,535
Family trip expenses for dependants	1,980
Kan Ho Chuen’s personal expenses	5,356
Pocket money to the Deceased’s mother	2,083.33
Total:	51,871

Further, as the price level has gone up by 26.2%, the monthly past loss of dependency should on average increase by 13.1% i.e. 51,871 x 113.1% = HK$58,666.

In addition, Kan Ho Chuen’s dependency will also include the whole of his tuition fees in Drexel University, which are estimated at US$40,000 per year for 5 years.

Assuming that judgment of this case will be handed down on 11 June 2016, 88 months after the date of Accident, the past loss of dependency will be HK$58,666 x 88 + HK$936,000 ¹⁶ = HK$6,098,608.

¹⁶ By 13 June 2016, it is expected that Kan Ho Chuen has paid 3 years of tuition fees and all related expenses, which add up to US$40,000 x 3 years x 7.8 = HK$936,000. ”

Household expenses in Philadelphia and Hong Kong and Madam Fan’s personal expenses

76.  I shall deal firstly with the claims for household expenses in Philadelphia and Hong Kong and Madam Fan’s personal expenses.  The plaintiffs’ supported these claims on the following basis:

“Household Expenses in Philadelphia and Hong Kong

Madam Fan gave evidence that the monthly household expenses of Fung Yam House was as follows [CBB/119/§22]:

	HK$
Rent	1,600
Water, electricity, gas	300
Telephone and internet	500
Car park and gas for private car	790
Insurance for private car	113.09
Food, grocery and entertainment	20,000
Total	23,303.09

Madam Fan gave evidence that the monthly household expenses of the flat in Philadelphia are as follows [CBB/120/§23]:

	US$
Mortgage repayment	1,180
Water, electricity, gas	800
Insurance	41.67
Tax	108.33
Total	2,130

Miss Kan gave evidence that she did not contribute to household expenses in the Philadelphia home even after she began to work [CBB/134, 135/7].

As there is no challenge that “the Deceased paid for everything financially” [T/7P-U, 12M-P], the household expenses in Hong Kong and Philadelphia and Madam Fan’s personal expenses add up to HK$23,303.09 + HK$2,130 x 7.8 = HK$39,917.09 per month.”[139]

77.  Mr C K Wong conceded, in the course of the cross examination of Madam Fan, that direct payments from the banks accounts of the deceased into the bank accounts of Madam Fan in Hong Kong could not be identified[140]. I do not accept as credible the statement in Madam Fan’s witness statement dated 30 March 2012 that the deceased used to deposit HK$20,000 into her bank account every month for her saving[141]. Madam Fan has made very limited discovery of her bank passbooks, having only produced a bank passbook of Bank of China for the period from 1 February 2001 to 18 December 2002 and a bank passbook of Hang Seng Bank for the period from 14 November 2005 to 15 March 2011. Bank passbooks covering the period from 2003 to 13 November 2005 have not been produced. I have further observations to make below on the failure of the plaintiffs to discover relevant documentary evidence, particularly in connection with their bank accounts in the United States, just as I did in the course of Madam Fan’s evidence[142].  Having found that Madam Fan has made an untruthful statement in her witness statement dated 30 March 2012, I must approach the rest of Madam Fan’s evidence would caution and evaluate it carefully.

78.  The particulars of the household expenses set out in Madam Fan’s witness statement duplicate the same particulars in the Re-Revised Statement of Damages set out in §72 above. Notwithstanding the many discrepancies in her evidence which have been pointed out in the defendant’s closing submissions, I accept the evidence of Madam Fan on the contributions made by the deceased towards the Hong Kong household expenses as credible and I am prepared to assess damages for loss of dependency, based on these contributions, except for her bald assertion that he contributed HK$20,000 per month for food, groceries, entertainment and miscellaneous expenses. I do so, not because I disbelieve Madam Fan that the deceased contributed financially towards her upkeep, but because I find her assertion that he contributed as much as HK$20,000 to be unreliable. There was no breakdown offered of this substantial claim and no explanation of the specific expenses that were incurred every month to make up the sum. This assertion stands out in sharp contrast to the other amounts set out in the table of expenses some of which are recorded with two decimal places, such as the monthly cost of insurance for private car use in Hong Kong of about HK$113.09 and the monthly cost of insurance and tax in Philadelphia in the amounts of US$41.67 and US$108.33 respectively. Whilst I am prepared to accept the contributions made to the household expenses in Hong Kong in the monthly sum of about HK$3,300, I need to look closely at the evidence to ascertain how much the deceased gave to Madam Fan per month towards the cost of food, groceries, entertainment and miscellaneous expenses.

79.  I have already found in §20 above that the deceased would pay when he and Madam Fan went out for “yum cha” or for a meal together[143]. I also accept the evidence of Madam Fan that the deceased would, on occasion, take her to join gatherings with the drivers of the dump trucks and other business associates[144]. Notwithstanding her divorce from the deceased and the subsequent marriage to, and divorce from, Mr Lam, and notwithstanding that they did not live together as husband and wife, I am satisfied that the deceased regarded her as a former wife who would continue to be financially dependent on him. Given his substantial income, he would have had no difficulty supporting her financially. Further, the evidence she gave resonates with a “wife’s” disapproval of the behaviour of her “husband”:

“Q. ...from your husband’s immigration record that he visited China frequently, the mainland China frequently.

A. I did not follow him, I am not sure about that.

Q. You see, his trucking business was based in Hong Kong, wasn’t it?

A. Yes.

Q. Why was he constantly crossing over to the mainland China?

A. He often went back for massaging. If you want to understand more about it, you can ask about -- you can ask other people in the trade, everyone in the trade knows about it, people working in the dump truck industry, construction site workers, who wouldn’t go back for massaging.

Q. And when you say he frequented the Fung Yam flat -- House, when he was not staying at Fung Yam House, where was he staying?

A. I am not sure. I did not follow him.

Q. That begs the question, doesn’t it? Did you never ask him?

A. Well then, he often went to Shenzhen, does it mean that I would have to follow behind him and go to Shenzhen? After massaging, he can spend the night there in Shenzhen, does it mean that I would have to follow him and spend the night there?”[145]

I accept the evidence of Madam Fan that the staff of Cheung Hong considered her to be the wife of the deceased and telephoned her in America with the news of his death[146]. She immediately returned to Hong Kong and did the best she could to collect the receivables of the business from the bosses of Cheung Hong’s business associates who treated her well[147]. They were quite willing to pay those receivables to her and they issued cheques payable to her[148].

80.  I accept the evidence of Madam Fan that the deceased kept cash at both the Shanghai Street flat as well as in the Fung Yam house flat, from which he would make payments to her for her personal and household expenses[149]. However, from mid-2005 onwards Madam Fan spent more time in the United States. From the statement of her travel records, she was away from Hong Kong, travelling by air via the Hong Kong airport, for 828 days out of 1503 days[150], during which period of time the deceased would not have been making any cash payments to her for her personal and household expenses in Hong Kong.  The records show that she left Hong Kong for about two months from July to September 2005, for about two months from November 2005 to January 2006, for about four months from February 2006 to June 2006, for a very substantial period of about nine months from October 2006 to July 2007, for about two months from December 2007 to February 2008, and for about two months from April to June 2008[151]. Looking at the matter broadly, and taking into account the finding I made in §91 below, I find that that the average monthly cash contributions the deceased made to Madam Fan for her expenses on food, groceries, entertainment, including dining outside, and miscellaneous expenses in Hong Kong, for the four years up to the time of his death on 11 February 2009, ought not to exceed HK$10,000 per month. Accordingly, I find that the total average monthly contribution made by the deceased to Madam Fan for expenses incurred in Hong Kong amounted to HK$13,300 (HK$10,000 + HK$3,300[152]) and I award  damages for loss of dependency on this basis.

81.  I should mention that I do not accept the submissions of Mr C K Wong that the deceased made average monthly cash contributions to Madam Fan in the sum of HK$20,000 to cover, not only expenses on food, groceries, entertainment, including dining outside, and miscellaneous expenses, but also the cost of the many trips made by Madam Fan and her children to Shenzhen over this period of time[153].  This claim was not pleaded in the Re-Revised Statement of Damages and Madam Fan did not give any evidence that the deceased’s alleged contributions of HK$20,000 per month included these expenses. What she said, in re-examination, was:

“This $20,000 includes daily household expenses, including expenses on utilities, living expenses, including expenses on breakfast, lunch and dinner, the three meals, and miscellaneous items. And when Kan Siu-hong went to work, when I was alone, I would sometimes go shopping, buying things, going to shopping arcades, meeting my friends, my schoolmates and relatives. This $20,000 is an estimate. And when my children came back to Hong Kong, they would incur expenses on entertainment and transport.”[154]

82.  The evidence Madam Fan gave regarding her financial dependence on the deceased at the time of their divorce in 1997[155] was not of any assistance to me in assessing the children’s and her loss of dependency at the time of the death of the deceased in February 2009.

83.  I turn to consider the claim for loss of contributions to the household expenses in Philadelphia including mortgage repayments, utilities, insurance and government rent in the total sum of US$2,130 per month. Inexplicably, no claim has been made in respect of any contributions towards the cost of food, transport and clothing. The overall preparation of this case on the part of the plaintiff’s solicitors left much to be desired, particularly having regard to the lack of discovery of relevant banking documents and documents to prove the amount of university fees paid. I am minded to think that these claims for the cost of food transport and clothing might have been omitted as a result of an oversight on the part of those preparing this case for the plaintiffs. There is also the distinct possibility that the parents of Madam Fan, who resided in the United States, made contributions to meet the needs of Madam Fan and her children living in Philadelphia. Given the incomplete discovery in this case and the complete failure on the part of the plaintiffs to discover the bank passbooks and accounts in the United States of Madam Fan and Kan Wai Ling, I have insufficient evidence to say any more than that. In any event, I only respond to claims which have been made and not claims which might have been made.

84.  As set out in the agreed chronology prepared by the parties dated 17 August 2016, a property in 2135 Tyson Avenue, Philadelphia, was purchased in April 2003 for US$93,000.  The absence of direct evidence from Madam Fan and scanty discovery of loan agreements entered into makes it very difficult to ascertain how this purchase was funded. A loan statement issued by an organisation called World Savings has been disclosed[156].  This document is dated 13 April 2006 and shows that Madam Fan had an outstanding loan of US$69,249. Whilst it appears to have been a loan taken out to finance the purchase of the Tyson Avenue property, I am unable to make any such finding in the absence of direct evidence. Another loan agreement was made on 10 July 2006[157] when Madam Fan borrowed US$120,000 from another organisation called Countrywide Home Loans with a monthly instalment repayments, spanning 15 years, of US$1,181, which,  rounded off to US$1180,  forms part of the monthly household expenses of the flat in Philadelphia set out in §76 above.  Again, absent direct evidence, I am unable to find whether or not this was the loan taken out to repay the earlier loan from World Savings or whether it was an additional loan taken out by Madam Fan. As at 12 March 2007, the outstanding principal balance owing to Countrywide Home Loans was US$116,326[158].  It appears that the principal balance under this loan was reduced to the sum of US$105, 628 as at 3 May 2009[159].

85.  On 18 January 2016, I had directed the plaintiffs to provide, with their written closing submissions, a schedule of documentary evidence of remittances made by the deceased to the United States; a schedule of transfers made by the deceased to Madam Fan’s bank accounts; and a schedule of receipts and other documentary evidence that had been disclosed to prove the contributions made by the deceased to the alleged dependants.  Despite the plaintiffs’ refusal to disclose and produce bank statements of accounts maintained by Madam Fan and her daughter, Kan Wai Ling,  I am satisfied, from the schedules produced pursuant to my direction, that there is sufficient evidence, from the money exchanges, and the remittances to these bank accounts in the United States, that were made by the deceased, to establish that Madam Fan and his children were dependent on his financial contributions towards their expenses incurred in the United States.

86.  Mr C K Wong submitted, in the plaintiffs’ closing submissions that[160]:

“Lack of evidence of fund transfer in the USA

30. There was also a complaint of lack of evidence that funds from the Deceased were exchanged for use in the USA. However:

(1) Remittance slips showed that from 12 January 2005 to 3 February 2009 i.e. in 4 years, US 86,500 was remitted to Miss Kan and Madam Fan. The records are summarized below⁷:

Date	Recipient	Amount (USD)	Reference
12/01/2005	Kan Wai Ling	50,000	[CB3/1272]
23/07/2005	Kan Wai Ling	5,000	[CB3/1273]
12/12/2005	Kan Wai Ling	2,000	[CB3/1274]
24/03/2006	Kan Wai Ling	8,000	[CB3/1275]
02/09/2006	Kan Wai Ling	3,000	[CB3/1187]
07/11/2006	Kan Wai Ling	3,500	[CB3/1188]
23/09/2008	Kan Wai Ling	5,000	[CB3/1144, 1180]
13/11/2008	Kan Wai Ling	5,000	[CB3/1145, 1181]
03/02/2009	Fan Mei Na	5,000	[CB3/1146, 1182]
	Total:	86,500

(2)         It is not the Plaintiffs’ case that all the funds from the Deceased for use in the home in Philadelphia were transferred by remittance. Madam Fan said that the Deceased:

“exchanged the money and handed it to me. If he did not have the time, he would either give me the cash and told me to exchange it to US dollars or he would transfer money into my Hang Seng Bank account and I would directly go to Hang Seng Bank to exchange the money into US dollars. In any event, for the deposit and withdrawal into and from my account, it was money given to me by him.”

(3)         The bold and underlined sentence in the above quote is supported by evidence.  By comparing Madam Fan’s travel records (as summarized in [CB3/3066-1]) and records of Hang Seng Bank, in 9 out of 12 occasions which Madam Fan travelled overseas via airport, various sums of HK dollars were exchanged for USD shortly before the dates of departure⁸:

Date	Amount exchanged	Departure date
04/04/2005	USD 2,000 [CB3/1206]	12/07/2005
??/11/20059	USD 5,000 [CB3/1207]	11/11/2005
13/02/2007	USD 3,000 [CB3/1208]	17/02/2007
16/02/2007	USD 2,000 [CB3/1207]	17/02/2007
10/09/2007	HK$ 15,580 ~ USD2,000 [CB3/903]	18/09/2007
17/09/2007	HK$ 27,293 ~ USD 3,500 [CB3/903]	18/09/2007
15/12/2007	HK$ 15,610 ~USD 2,000 [CB3/904]	21/12/2007
03/07/2008	HK$ 77,570 ~USD 10,000 [CB3/904]	07/07/2008
26/08/2008	HK$ 35,176.50 ~USD 4,500 [CB3/905]	09/09/2008

The above exchange adds up to USD 34,000 in addition to bank remittances identified above.  As Cheung Hong was not engaged in any foreign business, this sum was obviously exchanged for the purpose of use in the home in Philadelphia

(4)         In addition to the further entries, there is ample evidence that Madam Fan withdrew substantial amount of cash (in HKD) shortly before her overseas trips.  The only reasonable inference is that the cash was withdrawn for the purpose of the overseas trips:

Date	Amount withdrawn (HK$)	Departure date
13/02/2006	32,000 [CB3/903]	17/02/2006
20/12/2007	17,000 [CB3/904]	21/12/2007
03/07/2008	106,000 [CB3/904]	07/07/2008
08/09/2008	12,000 [CB3/905]	09/09/2008

(5)         Thus, insofar as the Defendant complained that Madam Fan was lying about fund given to her by the Deceased for use in the USA, the complaint is unjustified:

(a)   The available records show a total of USD 120,000 was exchanged / remitted in the 4 years before the Accident.  This translates to USD 2,500 per month.

(b)   Thus, Madam Fan’s evidence that “If [the Deceased] did not have the time, he would either give me the cash and told me to exchange it to US dollars or he would transfer money into my Hang Seng Bank account and I would directly go to Hang Seng Bank to exchange the money into US dollars.” is truthful and honestly made.

(c)   The only remaining question is whether the statement “[the Deceased] exchanged the money and handed it to [Madam Fan]” is believable.  However, it is reasonable that sometimes Madam Fan would be responsible for exchanging USD (and there is evidence that she did this before 9 out of 12 flight trips), and sometimes the task was done by the Deceased. There is nothing inherently improbable in Madam Fan’s evidence.

(d)   Importantly,the single largest expense item denominated in USD is household expense of the Philadelphia home (USD 2,130 per month).  The remittance (on average at least USD 2,500 per month plus cash brought to the USA) is more than sufficient to support the Philadelphia home.

⁷  This table is prepared in accordance with paragraphs 5 and 6 of the directions of the Court on 18 January 2016.

⁸  This table is prepared in accordance with paragraphs 5 and 6 of the directions of the Court on 18 January 2016.

⁹   While the date of transaction was not shown, the transaction was done on or before 14 November 2005, because it was not shown in Madam Fan’s passbook, the first entry being 14 November 2005 [CB3/903].”

87.  Mr Sakhrani produced a similar schedule which he attached to his reply closing submissions as Annex II.  He agreed that remittance slips from 12 January 2005 to 3 February 2009 had been disclosed in the total amount of US$86,500, as set out in the table which I have replicated in §86(1)above. With the exception of one item, he also agreed with Mr C K Wong’s table, which I have replicated in§86(3)above, showing money exchanges from Hong Kong dollars to US dollars.  The total amount of Hong Kong dollars exchanged amounted to US$34,000.  Mr Sakhrani, rightly, did not agree with the entry in that table dated 3 July 2008 in the sum of US$10,000, for the reason that the relevant entry showed that foreign currency had been exchanged into Hong Kong dollars and then deposited into Madam Fan’s account, rather than the other way around[161].

88.  I do not agree with Mr Sakhrani’s submissions that a monthly average should be taken of the remittances and money exchange transactions from September 1998 to the time of death of the deceased in February 2009[162]. The best evidence to look at to assess this item of loss is to look at the remittances and money exchange transactions from 2005 to the time of death of the deceased in February 2009.  I have reviewed the remittance slips and the bank statements and bank passbooks identified in the above tables.  The remittances set out in the 1^st table were all made from the bank account of the deceased. Mr Sakhrani submitted that it was unfair to include the remittance of US$50,000 made on 21 January 2005 when no direct evidence had been adduced in respect of the purpose of this remittance. I do not agree with the submission.  Taking an average must mean taking an average of all remittances, big and small. I have determined that the 4 years and 2 months preceding the death of the deceased was the most appropriate period to use to assess the claims for loss of dependency.  Having made this decision, it is not right, as a matter of principle, to single out and exclude any specific remittance in the absence of specific evidence that the particular remittance was not made by way of contribution to dependants but was made, for example, for the purchase of a capital asset.

89.  The 2^nd table lists out the money exchange transactions when Hong Kong dollars was exchanged for US dollars.  The source of the funds came from the bank account of the deceased in respect of the 2 transactions in February 2007.  Cash was paid for the money exchange transaction in April 2005.  The other exchange transactions listed were funded from Madam Fan’s Hang Seng bank savings account.  I accept the submissions that Mr C K Wong made in respect of the source of funds for these money exchange transactions.  I am satisfied on the evidence that the deceased had provided the cash to be converted into US dollars in order that Madam Fan could take the US currency with her to the United States to pay for the household expenses in Philadelphia.

90.  Disregarding the US$10,000 transaction in July 2008, the other remittances and money exchange transactions, spread over a period of 4 years and 2 months (or 50 months), were of the total value of US$110,500.  Dividing this amount by 50 months produces a monthly average of US$2,210, which is in excess of the monthly amount of US$2,130 claimed as household expenses of the flat in Philadelphia, as set out in §76 above.  I am satisfied that I ought to award the latter amount of US$2,130 per month (or HK$16,610, at the rate of HK$7.8 = US$1), as loss of dependency in respect of the contributions of the deceased towards the household expenses of the flat in Philadelphia.  My award, in full, of the plaintiffs’ claim for loss of dependency of US$2,130 per month is not to be taken as a finding of fact that the remittances and money exchanges from the deceased, amounting on average to about US$2,130 per month, was in fact expended to make mortgage repayments and to meet the other expenses listed in §76 above. Clearly, there were other needs such as Kan Ho Chuen’s additional expenses, which I have dealt with in §§97 and 98 below, which might have been met from the remittances and money exchanges from the deceased. I will grant liberty to the plaintiffs to apply to me in due course to apportion my total award in respect of pre-trial and post-trial loss of dependency as between the various dependants.  The award of loss of dependency of HK$16,610 per month is in addition my award of loss of dependency of HK$13,300 per month as loss of dependency in respect of the contributions of the deceased towards the expenses incurred in Hong Kong[163].  The total amount I allow under this head of claim is HK$29,910 (HK$16,610 + HK$13,300).

91.  Having made these findings, and this award, I need not make a decision on the other disputed matters raised in Mr C K Wong’s submissions set out in §86 above in respect of this particular claim.  However, as these matters might impact on the other claims for loss of dependency, I shall proceed to deal with them. I do not agree with the submission contained in §86(4) that, as regards the further entries set out in the table in that sub-paragraph, there was ample evidence that Madam Fan withdrew substantial amount of cash in Hong Kong dollars shortly before her overseas trips and that the only reasonable inference was that the cash was withdrawn for the purpose of the overseas trips.  As Mr Sakhrani cogently submitted, and which submission I accept, it is reasonable to infer that money exchanged into US dollars and withdrawn from the account, shortly before Madam Fan’s return to the United States, was withdrawn for the purpose of being expended in the United States.  The amounts withdrawn, shown on the table in §86(4) above, had been withdrawn in Hong Kong dollars and, on one occasion, US dollars was specifically deposited into the account to be exchanged into Hong Kong dollars and then withdrawn in Hong Kong dollars. The only reasonable inference to draw from these withdrawals is that the monies withdrawn was to be expended in Hong Kong. I am satisfied, however, that the source of these funds was the deceased. The total amount withdrawn in the course of the 3 years from 2006 to 2008 was the sum of HK$167,000, which amounts to an average annual sum of HK$55,667, or a monthly sum of HK$4,638. I rely on this evidence to support my finding in §80 above.

92.  I proceed to deal with the remaining items of claim for damages for loss of dependency set out in §75 above, namely:

Madam Fan’s air ticket expenses	2,535
Family trip expenses for dependants	1,980
Kan Ho Chuen’s personal expenses	5,356
Pocket money to the Deceased’s mother	2,083.33

Air tickets and family trip expenses

93.  The plaintiffs’ claims in respect of our air ticket expenses and family trip expenses are set out in Mr C K Wong’s submissions in these terms:

“Family Trips and Flight Tickets

43. Madam Fan travelled outside Hong Kong via airport for 13 times from 2005 till the day of Accident [CB3/3066-1]. She explained that the trip in October 2005 was a vacation trip to Taiwan [T/76C – F]. This is consistent with Madam Fan’s evidence that she travelled between the USA and Hong Kong about 3 times every year on average. Madam Fan explained that the air ticket expenses were about US$3,900 per year i.e. US$1,300 per round trip [CB1B/120/26]. This translates to HK$3,900 x 7.8 / 12 = HK$2,535 per month.

44. Madam Fan also gave evidence that the family travelled 2 times on average every year, and spent around US$500 per person per trip (including tour fee, tour guide fee and meals during the trips and general spending), which was paid by the Deceased [CB1B/120/25]. In this connection, from 20 December 2006 to the date of Accident, the Deceased had 6 trips by flight, and was absent in Hong Kong for 81 days [CB3/3060-1]. Madam Fan also explained that those trips were to Washington, Boston, and Niagara Falls [T/76A – C].

45. The only complaint made by the Defendant was that “this cannot even be true because Mr. Kan Siu-hong did not go to the US twice a year and the immigration records show that.” [T/75B – 77F], and the evidence appears to be that the Deceased did not leave Hong Kong in 2003 and 2004 [T/75S – U]. Such complaint was made without regard to the fact that Kan Ho Chuen went to Philadelphia to further his studies in July 2005. Plainly, the circumstances before and after 2005 are different.

46. The amount the Deceased paid for the three dependants in relation to family trips per month is US$500 x 2 trips x 3 dependants / 12 = US$250 or HK$1,980 per month.”[164]

94.  The Re-Revised Statement of Damages is very poorly drafted and difficult to navigate. The averments making these claims are contained in §12 and §13(b)[165].  Mr Sakhrani rightly pointed out that no claims had been advanced for the cost of family trips in China or other parts of Asia. Further, no evidence was adduced why the cost of these trips, that were pleaded originally in the sum of US$300 per person in the Statement of Damages[166], was increased to the sum of US$500 person in the Re-Revised Statement of Damages[167]. Whilst I accept the submissions of Mr C K Wong and award damages for loss of dependency in respect of the cost of family trips that was paid by the deceased, I only do so on the basis of the cost being US$300 per person, assessed as follows: US$300 x 3 dependants x 2 trips per year / 12 = US$150 or HK$1,170 per month.

95.  I also allow as damages for loss of dependency the claim made by Madam Fan that the deceased paid for her air fares to and from the United States at a cost of about US$1,300 per round-trip. The summary of the trips Madam Fan made in and out of Hong Kong airport[168], and not counting the short trips of less than 2 weeks which were likely to have been trips within Asia, shows that in the 4 years from 2005 to 2008,  Madam Fan made 8 trips to and from the United States, which was approximately 2 trips per year.  On that basis, I assess and award damages for loss of dependency for loss of the contributions made by the deceased towards her air fares as follows: US$1,300 x 2 x 7.8/12 = HK$1,690 per month.

Total loss of dependency for household expenditure in Hong Kong and Philadelphia, air tickets and family trip expenses

96.  In §66 above, I had found that, at the time of his death, the net income after tax of the deceased was HK$903,420 per annum or HK$75,285 per month (HK$903,420/12). This income was sufficient to support his contributions towards Madam Fan and his children in the total sum of HK$32,770 per month (HK$29,910[169] + HK$1,690 + HK$1,170).  In §67 above, I found that the present notional net income after tax of the deceased would have risen by 129.8% to HK$1,339,536 (HK$1,032,000 x 129.8%), after taking into account inflation since January 2009.  I apply the same percentage increase to the loss of dependency of Madam Fan and Kan Ho Chuen to find that their loss of dependency today would be HK$42,535 per month (HK$32,770 x 129.8%). In §69 above, I found that the post-trial notional net income after tax would be $1,194,775 per annum or HK$99,565 per month (HK$1,194,775/12) and that the median pre-trial notional net income after tax would beHK$1,049,098 per annum (HK$903,420 + HK$1,194,775/2) or HK$87,424 per month (HK$1,049,098/12).  I find that the median pre-trial loss of dependency would be HK$37,653 per month (HK$32,770 + HK$42,535/2). On this basis, I award damages for pre-trial loss of dependency to Madam Fan, Kan Wai Ling and Kan Ho Chuen for the pre-trial period from the date of the death on 11 February 2009 to the date of judgment, a period of about 9.25 years, in the total sum of HK$4,179,483 (HK$37,653 x 12 months x 9.25 years). Ms Kan Wai Ling, the daughter of the deceased, was aged 24 years 4 months at the time of the accident.  She is aged 33 years and 7 months today.  She started work as an accounting associate in January 2007[170].  In the Re-Revised Statement of Damages, it is averred that Kan Wai Ling would have ceased to be dependent on the deceased by the end of August 2011.  I do not see any reason why the deceased would have reduced his contributions towards the household expenses in Philadelphia or stop paying the expenses of their family trips after Kan Wai Ling ceased to be dependent. As stated in §90 above, I will grant liberty to the plaintiffs to apply to me in due course to apportion my total award in respect of pre-trial and post-trial loss of dependency as between the various dependants.

Claim in respect of Kan Ho Chuen’s personal expenses

97.  Mr Kan Ho Chuen, the son of the deceased, was aged 13 years and 8 months at the time of the accident.  He is aged 22 years and 11 months today.  In addition to his share of the contributions of the deceased towards household expenses in Hong Kong and Philadelphia, and family holiday expenses which I have awarded above, Kan Ho Chuen also claims the following additional losses of dependency in the Re-Revised Statement of Damages[171]:

“

(i)	Air fares between US and Hong Kong	US$1,500.00 per year (or US$125.00 per month)
(ii)	School trips	US$500.00 per year (or US$41.67 per month)
(iii)	School activities	US$1,000.00 per year (or US$83.33 per month)
(iv)	Shoes	US$75.00 per month
(v)	Pocket money	US$250.00 per month
(vi)	Internet and mobile phone	US95.00 per month
(vii)	Glasses	US$200.00 per year (or US$16.67 per month)
		---------------------------------
		US$686.67 per month       ”

98.  He supported these claims in his witness statement dated 30 March 2012[172]. He gave evidence explaining that every year and every now and then he would come back to Hong Kong and his father would give him a lot of money in Hong Kong dollars to spend; and that, in the United States, money would be given to him through the hands of his mother.[173] No claims had been advanced by the plaintiff’s solicitors in respect of Kan Ho Chuen’s loss of spending money that his father used to give him, in Hong Kong dollars, to spend during his stay in Hong Kong. Insofar as Kan Ho Chuen claims loss of the contributions the deceased made to him via his mother, that must be considered in the apportionment exercise of the award I have made in respect of the loss of contributions towards the household expenditure (including expenditure on Kan Ho Chuen’s needs) that were incurred in Philadelphia. Given the incomplete discovery in this case. and the complete failure on the part of the plaintiffs to discover the bank passbooks and accounts in the United States of Madam Fan and Kan Wai Ling, I have insufficient evidence before me to enable me to make any award in favour of Kan Ho Chuen, that is additional to the award I have already made in favour of all 3 dependants in §90 above.

99.  In September 2013, Kan Ho Chuen commenced his studies in a 5-year undergraduate programme in Mechanical Engineering at Drexel University in the United States[174].  In his supplemental witness statement dated 4 December 2015, Kan Ho Chuen stated that he changed his studies in 2015 to study Marketing and International Business.  The University offered a 5-year “Co-Op Programme”, meaning that university tuition was combined with periods of working outside.  Being a 5-year programme, he would graduate in September this year. He claims the following additional loss of dependency in the Re-Revised Statement of Damages[175]:

“(b) The expenses for studying in the University are about US$40,000 per year (including tuition fees, textbooks, food and other miscellaneous expenses). The average monthly expenses are US$3,333.33. Besides, Kan Ho Chuen is interested in photography and he spent on average about US$27,333.33 per year on photography (including the photography equipments and travelling and related expenses spent on taking photographs at various places of the world). The average monthly expenses about US$2,277.78.”

100.  Kan Ho Chuen supported these claims in his 2 witness statements but, apart from 1 tuition statement from Drexel University for 2013 showing fees of US$37,504 and a scholarship of US$8,702[176], no other statements or receipts have been produced for these very substantial  claims for tuition fees and the cost of supporting his interest in photography and related expenses.  I remarked, in the course of his evidence, how easy it must be to get a statement from the university’s bursary of the university fees paid and how astonished I was that this was not done.

101.  I am pleased to note, having regard to the complete absence of any documentary proof to support the very substantial claims being made in respect of photography and related expenses, that Mr C K Wong has not made any submissions in his closing submissions to support these claims. Even if he had, I would have dismissed these claims outright on the ground that I was not satisfied on the evidence adduced that these expenses had been incurred.

102.  No evidence was led as to who paid for the fees for Kan Wai Ling when she was at university.  Evidence that the deceased had done so would have been cogent evidence from which one could infer that the deceased would also have paid for Kan Ho Chuen’s university fees when he became old enough to enter university. Notwithstanding the absence of such evidence, I find that the deceased would have paid Kan Ho Chuen’s university fees had this accident not occurred. Kan Ho Chuen lived with him for a longer period of time then his elder daughter, Kan Wai Ling. Kan Ho Chuen returned to Hong Kong in late 1998 and lived here until September 2005, when he started to study in Philadelphia[177]. Even so, he returned to Hong Kong during his summer holidays and the deceased made many family trips together with Ho Kan Chuen[178].  I have heard no evidence that he was estranged from his son, or that the deceased did not care for his son and did not have the affection for his son that a father would naturally have for his own son.

103.  Some further documentation was discovered before written closing submissions were exchanged.  Mr C K Wong submitted, in his closing submissions[179], that:

“50. For the year 2013 – 2014, the tuition fee was US$37,540.01. After deducting US$8,702 of scholarship, the net amount paid was US$28,838.01 [CBB/233].

51. As to the other academic years, the tuition fee structure is as follows [CB3/3225-3229]:

2014 – 2015	US$35,310 + US$3,160 = US$38,470
2015 – 2016	US$32,300 + US$3,160 = US$35,460
2016 – 2017	US$29,764 + US$3,160 = US$32,924
2017 – 2018	US$44,646 + US$2,370 = US$47,016
	US$153,870

52.    The account activity schedule of Kan Ho Chuen obtained from Drexel University is now available[CB3/3222-3224].  The total amount charged from August 2013 to February 2016 is US$119,859.41 (including US$593.05 being late payment fee)...

...

53.    On 29 May 2015, there was a subtraction of US$17,655 from ENGRFTUG Tuition and a subtraction of US$790 of ENGRFTUG University Fee. These sums might have been deducted because Kan Ho Chuen transferred to business major.  Therefore these two sums should be reduced from the total amount charged. The net fees charged by Drexel for the 2 1/2 years is therefore

US$119,859.41 – US$17,655 – US$790 = US$101,414.41.

54.    If we further exclude the late payment fee of US$593.05, the total fees charged by Drexel is US$100,821.36.  The schedule covers a period of around 2.5 years. Therefore, on average Kan Wai Chuen’s fees at Drexel has been about US$40,000 a year.

55.    There was a debate of to what extent Kan Ho Chuen’s tuition fees were covered by scholarship and grants.  However, the right question to ask is not what has actually been paid, but the best estimate of Kan Ho Chuen’s university tuition fees and other expenses at the time of death: see Wong Wai Hang, supra.

56.    It is common sense that some USA universities offer more scholarships than others.  There is no reliable evidence, let alone guarantee, for the Deceased to assume that any part of Kan Ho Chuen’s tuition fees would be covered by scholarship.  Thus, if Kan Ho Chuen received scholarship, the Defendant should not benefit from Kan Ho Chuen’s ability; likewise, if Kan Ho Chuen performs poorly and has to retake courses in university (and hence pays more tuition fees) than an average undergraduate, or incurred late payment expenses because he did not make payments punctually, the Defendant similarly should not be penalized by Kan Ho Chuen’s inability.

57.    It has been pleaded in the Re-Revised Statement of Damages that the expenses for studying in the University are about US$40,000 per year (including tuition fees, textbooks, food and other miscellaneous expenses) [CBA/14/23(b)]. The estimated claim matches with the account activity schedule of Kan Ho Chuen.  The expenses of textbooks, food and other miscellaneous expenses are not shown in the schedule.  It is submitted that the estimate of US$40,000 a year is an accurate one and a conservative estimate on the part of the Plaintiffs.”

104.  Instead of resolving the dispute, the account activity schedule appears to have raised more controversy.  In his closing submissions, Mr Sakhrani stated[180]:

“17. At the time of writing this submission, on 1^st March 2016 the Plaintiffs’ solicitors disclosed a 3-page Account Activity from Drexel University in respect of the charges and payments on behalf of Kan Ho Chuen [CB3/3222-4]. These show:

(a) August 2013 – May 2014:

the total tuition and other fees : US$39,231.33

check (sic) payments: -US$3,380.32

loans: -US$9,401

refund disbursement: US$1,088.89

grants/scholarship, etc: -US$25,625

unaccounted for shortfall: -US$1,193.90

(b) August 2014 – July 2015

the total tuition and other fees : US$42,648

tuition payment plan: -US$5,756

loans: -US$6,432

refund disbursement: US$2,198.97

grants/scholarship, etc: -US$20,917

unaccounted for shortfall: -US$11,741.97

Plainly, the Court was misled into thinking that the university document for the academic year 2013 at [CBB/182] indicated the tuition fees and scholarships or grants for that year, the latter being substantially lower than shown in the Account Activity. The former document gave a false picture and it is unlikely that FMN did not know this.

18.       These new documents also show the significance of the co-op programme for the payment of tuition fees. In the academic year 2013-2014, he paid tuition fees three times, and in the academic year 2014-2015 he did not pay tuition fees for the Fall and Winter quarters (he only paid university fees), and he paid tuition fees only in February and May 2015, namely Spring and Summer, clearly he took a co-op for one, possibly two quarters. The document at [CB3/3225] states that tuition fees are only paid for the quarters when one attends classes, i.e. that the co-op programme is designed so that one pays the same tuition fees as in four-year programmes without co-op, i.e. for 3 quarters in an academic year.”

105.  Let me state at the outset that I strongly disagree with the submission that the right question to ask is not what was actually paid but the best estimate, at the time of death of the deceased, of Kan Ho Chuen’s university tuition fees and other expenses.  On this point, there is no better statement of principle than that contained in McGregor on Damages, 20^th Ed., at §40-037, where it is stated:

“1. CHANGES BEFORE THE DECISION OF THE COURT OF FIRST INSTANCE

There is today universal acceptance of the sensible and realistic rule that trial courts must look at the position at the time of their judgments and take account of any changes of circumstances which may have taken place since the injury was inflicted. This applies both to change which increases the claimant’s loss and to change which diminishes it.”

Mr C K Wong quoted from the decision of Hunter J, as he then was, in Wong Wai Han v. Kowloon Motor Bus Co. (1933) Ltd. [1985] 2 HKC 132 at p.134I that “[w]e have to assess what might have been: and what can be seen at the trial since death, may substantially be influenced by the death itself.” That statement of principle is irrefutable: it applies to the situation where, for example, a child of the deceased drops out of university because the loss of his father’s contribution towards his fees prevents him from carrying on his studies - the fact that he has dropped out of university does not prevent him from claiming damages for loss of the contributions his father would have made towards those university fees had his father not been killed.  It does not apply to the present case where the child has been awarded a scholarship to cover part of those fees. Even if he were alive today, the contribution Mr Kan would make towards Kan Ho Chuen’s university fees would be in the reduced amount of such fees. However, I agree with the submissions of Mr C K Wong that the student loans taken by Kan Ho Chuen ought not to be deducted from his claim for damages for loss of dependency[181]. I have found[182] that that the deceased would have paid Kan Ho Chuen’s university fees had he not been killed by this accident. I also find that, if the deceased were alive and was paying Kan Ho Chuen’s university fees, Kan Ho Chuen would not have needed to take out any student loans.

106.  I agree with Mr C K Wong’s calculations that the amount charged this university fees from August 2003 to February 2016 was just over US$100,000, after deducting late payment fees and refund of tuition fees, probably on account of Kan Ho Chuen switching from mechanical engineering to a business major. The period in question was about 2.5 years and the activity report shows that on average Kan Ho Chuen’s fees at Drexel were about US$40,000 per year. The following table is a table of grants and scholarships made to Kan Ho Chuen that I have extracted from the activity report:

Description	Date	Amount(US$)
Pell Grant	29-JAN-2016	1.00
PHEAA Grant	16-SEP-2015	1,446.00
Pell Grant	14-SEP-2015	1,031.00
DU Endowed Grant	14-SEP-2015	2,450.00
Summer PHEAA Grant	28-JUL-2015	1,337.00
Pell Grant	16-JUN-2015	1,270.00
DU Endowed Grant	16-JUN-2015	2,750.00
A J Drexel Scholarship	16-JUN-2015	4,500.00
Pell Grant	25-MAR-2015	317.00
DU Endowed Grant	25-MAR-2015	2,750.00
A J Drexel Scholarship	25-MAR-2015	4,500.00
Pell Grant	23-MAR-2015	953.00
Pell Grant	23-JAN-2015	1,270.00
Pell Grant	23-JAN-2015	1,270.00
Federal Seog Program	22-MAY-2014	367.00
Federal Seog Program	22-MAY-2014	366.00
Federal Seog Program	22-MAY-2014	367.00
Pell Grant	25-MAR-2014	1,881.00
Early FAFSA Award	25-MAR-2014	334.00
DU Endowed Grant	25-MAR-2014	2,034.00
A J Drexel Scholarship	25-MAR-2014	3,000.00
PHEAA Grant	25-MAR-2014	1,454.00
Pell Grant	02-JAN-2014	1,882.00
Early FAFSA Award	02-JAN-2014	333.00
DU Endowed Grant	02-JAN-2014	2,033.00
A J Drexel Scholarship	02-JAN-2014	3,000.00
PHEAA Grant	02-JAN-2014	1,454.00
PHEAA Grant	14-NOV-2013	1,454.00
Pell Grant	17-SEP-2013	1,882.00
Early FAFSA Award	17-SEP-2013	333.00
DU Endowed Grant	17-SEP-2013	2,033.00
A J Drexel Scholarship	17-SEP-2013	3,000.00
Total:		53,052.00

The total value of the grants and scholarships over this period of 2.5 years was US$53,052, or an average of US$21,220 per year.  I assess the cost of Kan Ho Chuen’s education at Drexel University for the period of 5 years from September 2013 to the summer of 2018 to be US$18,780 per year (US$40,000 – US$21,220) or HK$146,484 per year (US$18,780 x 7.8).

107.  In §69 above, I found that the median pre-trial notional net income after tax of the deceased would be HK$1,049,098 per annum or HK$87,424 per month (HK$1,049,098/12).  I find that had he lived, the deceased would have had sufficient income to contribute the sum of HK$146,484 per annum to pay for Kan Ho Chuen’s university fees in Drexel from 2013 to 2018, in the total amount of HK$732,420 (HK$146,484  x 5 years), in addition to the other contributions he made to Madam Fan and his children as I have found in §96 above.

Claim on behalf of Madam Wong Lai Sheung, mother of the deceased

108.  The plaintiffs no longer pursue a claim for damages for loss of dependency in respect of the deceased’s alleged contributions towards the parents of Madam Fan. Mr C K Wong’s submissions only contain submissions regarding the claim in respect of the loss of dependency of the mother of the deceased,  Madam Wong Lai Sheung.  The defendants contest this claim because “nothing was said about the state of health of the deceased’s mother today.”[183]  The parties have a continuing obligation to the court up to the time that judgment is delivered to check and ensure that statements contained in pleadings, such as a Statement of Damages, continue to be true and accurate.  If there has been an event or an occurrence which detracts from the truth of any claim pleaded in the Statement of Damages, it is the obligation of the party concerned to withdraw or amend such claim.  There is been no withdrawal or amendment of this particular claim in these proceedings.

109.  The parties did not examine any witnesses in respect of this claim at trial.  They were probably too preoccupied on the other and more complex issues raised in the proceedings. I accept the evidence of Madam Fan that the deceased would meet his mother about 10 times every year and would give her HK$2,000 to HK$3,000 every time he met her[184], amounting to about HK$25,000 per annum (HK$2,500 x 10).  Madam Wong Lai Sheung was born on 28 July 1934.  She was aged 74 years and 7 months at the time of the accident and is aged 83 years and 9 months today.  I find that, but for his death, the deceased would have continued to gives sums of money to his mother, for as long as she lives, in the total sum of about HK$25,000 per annum.  I find that he would not have increased these payments to his mother on account of inflation but would maintained the payments at or about this level.  No evidence has been adduced of any increasing needs on her part.  On the other hand, as she grew older, she would probably spend less and less on herself.  I award pre-trial loss of dependency to her at the rate of HK$25,000 per annum for the period from the date of death on 11 February 2009 to the date of judgment in the total sum of HK$231,250 (HK$25,000 x 9.25 years).

Summary of the awards for pre-trial loss of dependency

110.  The following is a summary of the awards I make in this action for pre-trial loss of dependency:

(a)  the pre-trial loss of dependency of Madam Fan, Kan Wai Ling and Kan Ho Chuen in the sum of HK$4,179,483[185];

(b)  loss of the deceased’s contribution towards the university fees of Kan Ho Chuen in the sum of HK$732,420[186]; and

(c)  the pre-trial loss of dependency of Madam Wong Lai Sheung in the sum of HK$231,250[187].

Post-trial loss of dependency

111.  The deceased was born on 25 October 1957 and was 51 years and 3 months of age at the time of his death on 11 February 2009.  If he were alive today, he would be 60 years and 6 months old. The Re-Revised Statement of Damages contained inconsistent averments: in §22(a) it was assumed that the deceased would have worked until the age of 65 but in §29(c) it was averred that, but for the accident, the deceased would have retired when he reached 70 years of age. I permitted Mr C K Wong to open his case on both scenarios without requiring a further amendment of the Re-Revised Statement of Damages.

112.  In Fung Suen Sim v. Liu Chun Pong HCPI 896 of 2007, 23 December 2011, I had stated:

“The multiplier

45. I turn to consider the appropriate multiplier to be adopted in the present case. It is common ground that the multiplier should be adopted by having regard to the age and health of the deceased and, in particular, to the date when he would likely have retired if the accident had not occurred. The age and health of the plaintiff is also relevant. At the time of death, the deceased was 58 years old. The plaintiff is now 61 years old and there is no doubt that she would live much beyond the likely retirement date of the deceased.

46.    It is also common ground that I should apportion that multiplier, if it exceeded the pre-trial period, between the pre-trial and post-trial period.  There is ample authority to support this approach : Pritchard v J. H. Cobden Ltd [1998] Fam. 22, Corbett v Barking, Havering and Brentwood Health Authority [1991] 2 QB 408 and White (Administratrix of White, deceased) v ESAB Group (UK) Ltd (11 January 2002, unreported, QBD).  There has been much criticism of this practice.  It has been said that the discount for early receipt of the damages, implicit in the calculation of the multiplier, should only apply to future losses from the date of trial or date of assessment and that the effect of a choice of multiplier from the date of death is that the discount is applied to pre-trial losses, which ought not to be discounted for early receipt, there be no early receipt of such losses.  However, the point was not taken and I say no more about it.”

Knauer v. Ministry of Justice

113.  At the time of trial, the parties were aware that an appeal was going to be heard in the UK Supreme Court on whether or not the multiplier in a fatal accidents action should be assessed as at the date of trial. It was anticipated that the judgment of the UK Supreme Court would be handed down before the parties returned to make their closing submissions. That case was Knauer v. Ministry of Justice [2016] UKSC 9, [2016] A.C. 908 and the joint judgment of the Supreme Court, delivered by Lord Neuberger and Lady Hale, was given on 24 February 2016. In that case, a widower appealed directly to the Supreme Court, pursuant to a certificate granted by the judge, against a decision on the damages he had been awarded for future loss following the death of his wife. The widower's wife had died from mesothelioma aged 46, having contracted it from being exposed to asbestos during her employment by the respondent ministry. The ministry admitted liability in the widower's claim brought under the Fatal Accidents Act 1976. The damages assessed included a multiplicand for the value of the income and services lost as a result of the wife’s death. The judge held that the multiplier was to be calculated from the date of death rather than the date of trial, following the House of Lords' decisions in Cookson v Knowles [1979] A.C. 556 and Graham v Dodds [1983] 1 W.L.R. 808. The issues were (1) whether the Cookson and Graham approach properly reflected the principle of full compensation; (2) if not, whether the instant court should depart from that approach, applying the Practice Statement (HL: Judicial Precedent) [1966] 1 W.L.R. 1234.

114.  The UK Supreme Court held that calculating damages for loss of dependency upon the deceased from the date of death, rather than from the date of trial, meant the claimant suffered a discount for early receipt of the money when in fact the money would not be received until after trial. That resulted in under-compensation in most cases. The current approach in fatal accidents cases involved taking a multiplier as at the date of death and then deducting from it the time which elapsed between death and trial. That mixed up a calculation based on properly considered actuarial principles with an arbitrary arithmetical deduction. The Law Commission in their report on Claims for Wrongful Death[188] had recommended that, as in personal injury cases, actuarially calculated multipliers should be used for calculating future losses in fatal accident cases from the date of trial. Cookson and Graham had been decided in a different era, when the calculation of damages for personal injury and death had been nothing like as sophisticated as it had become. The approach at the time, relying on the intuition of the barristers and judges in the cases, was wholly unscientific. The Ogden tables had not existed when the cases had been decided. Wells v Wells [1999] 1 A.C. 345 had laid to rest any doubts about using the tables in the courts. While the Supreme Court should be very circumspect before exercising its power to depart from previous decisions of the House of Lords or the Supreme Court, there had been a material change in the relevant legal landscape since the two House of Lords decisions, namely, the use of actuarial tables to calculate future losses in personal injury and fatal accident cases. The application of the reasoning in those decisions was illogical and resulted in unfair outcomes. Accordingly, the Supreme Court would exercise its power to depart from those decisions.

115.  Not surprisingly, Mr C K Wong, in the plaintiff’s closing submissions, submitted that I ought to follow the decision of the UK Supreme Court in Knauer v. Ministry of Justice, adding that, since my decision in Chan Pak Ting v. Chan Chi Kuen (No.2) [2013] 1 HKLRD 1, Hong Kong courts have applied the Personal Injury Tables Hong Kong (“the Chan Tables”), which are based on the Ogden tables. He submitted that there was no reason for Hong Kong not to adopt the approach of the Supreme Court such that from now on the multiplier should be assessed as at the date of trial and not at the date of death[189]. Mr Sakhrani, in the defendant’s closing submissions, conceded that the defendant did not contend that Knauer v. Ministry of Justice should not be applied in Hong Kong[190]. I have conducted my own researches to ascertain whether there is any Court of Appeal decision in Hong Kong, which would be binding on me, which has followed the decision in Cookson v Knowles [1979] A.C. 556 or Graham v Dodds [1983] 1 W.L.R. 808 that the multiplier in a fatal accident case should be ascertain as at the date of death. Although the Court of Appeal in Hong Kong has applied the decision in Cookson v Knowles [1979] A.C. 556 on the discount rate to be adopted in calculating multipliers[191], there is been no decision of our Court of Appeal on the issue in question, namely, whether the multiplier in a fatal accident case ought to be ascertained as at the date of death or as at the date of trial. As I am not bound by higher authority, I am free to follow the UK Supreme Court’s decision in Knauer v. Ministry of Justice, which is persuasive authority. I consider that decision to be correct and I have no hesitation following it. Therefore, I shall ascertain the multiplier to be adopted in this case by having regard to the notional age of the deceased, had he lived, as at the date of this judgment.

116.  Although the defendant did not contend that Knauer v. Ministry of Justice should not be applied in Hong Kong, Mr Sakhrani went on to submit in the defendant’s closing submissions[192] that:

“47. It does appear, however, that a discount should be taken to the pre-trial loss to represent the chance that the deceased might not have survived to-date due to natural causes and, additionally, that he might not have been able to maintain his contribution for the whole of the pre-trial period because of the losses and/or inadequate profits of his business, requiring the family to borrow money again, as it had done from World Savings and again in 2006 in the sum of US$120,000, see above.

48.    Of the two discounts mentioned above, the former discount due to the risk of natural death or disability might well be very small, but it is respectfully submitted that the latter discount due to the losses or inadequate profits of the business should be more significant and also the poor industry averages at the material time. Doing the best one can, and having regard to the Great Recession in 2008 it is respectfully submitted that a discount of 25% should be taken to the dependencies in assessing the pre-trial loss of dependencies.”

Having regard to the findings I have made in connection with the profits earned by the deceased from his dump truck transport business and the continuing profitability of the business, I see no basis for making the discount that has been sought by the defendant. It is accepted that the discount due to the risk of natural death or disability might well be very small in the pre-trial period from the date of death and the date of the judgment which, in this case, is 9.25 years. Table E of the Ogden Tables[193] is a table showing the factor by which the pre-trial damages should be multiplied in a fatal accident case to allow for the likelihood that the deceased would not in any case have survived to provide the dependency for the full period to the date of trial. In the case of a deceased male aged 50[194] and where the pre-trial period is 9 years, the factor is 0.98. If a similar table were to be produced based on the Hong Kong Life Tables, it is likely to show an even smaller discount factor, given the higher life expectancy in Hong Kong, such that the reduction would be de minimus. For these reasons, I decline to apply any discount to my assessment of the award for pre-trial loss of dependency.

The multiplier to be adopted in this case to assess post-trial loss of dependency

117.  As I had said in my decision in Fung Suen Sim v. Liu Chun Pong,[195]  the multiplier should be adopted by having regard to the age and health of the deceased and, in particular, to the date when he would likely have retired if the accident had not occurred.  The age and health of the dependants claiming post-trial loss of dependency was also relevant.  The deceased was 51 years and 3 months of age at the time of his death on 11 February 2009.  If he were alive today, he would be 60 years and 6 months old.  Madam Fan is aged 58 years and 5 months today and there is no doubt that she would live much beyond the likely retirement date of the deceased.

118.  In Fung Suen Sim v. Liu Chun Pong[196], I had concluded that the probabilities were that the deceased in that case would have continued his occupation as a sole proprietor of his wholesale vegetable business and would have carried on his business until he reached the age of 70.  His pre-accident lifestyle was such that I could not conceive of any reason why he would stop working, in order to pursue other activities, unless he had to stop by reason of ill health or business losses. I had found that the outlook for his business was very positive and continued to remain positive.  I noted in that case that I had not received any evidence that would have led me to conclude that he was unlikely to remain healthy up to the age of 70.  I found particular assistance from the decision of O’Connor J, as he then was, in Davies v Whiteways Cyder Co Ltd [1975] 1 Q.B. 262 before reaching that conclusion.  In that case, Mr. Davies was killed in a traffic accident in 1971 when he was 55 years old.  He was a successful businessman.  Until 1963, he owned and ran a family business.  In that year, the business was taken over.  He then started a partnership with a Mr. Phillips to build houses and to sell them.  In assessing the appropriate multiplier, O’Connor J had regard to age of health of Mr. Davies, the age of health of Mr. Phillips, and the age of the business. Mr. Davies enjoyed excellent health prior to the time of his death.  He was an active man and highly enjoyed the business in which he was engaged, which was carried out from his home.  O’Connor J was of the view that it was highly improbable that he would have wanted to retire before he reached the age of 70.   He also held that the probability was that the business would have remained profitable for a long time to come. 

119.  The deceased in the present case also carried out his dump truck transport business from his home. Cheung Hong employed drivers to operate the dump trucks. The deceased did not himself drive the dump trucks. I have already found that his business was profitable and I have assessed his notional net of tax income today to be HK$1,194,775 per annum or HK$99,565 per month (HK$1,194,775/12)[197].  Cheung Hong had purchased a dump truck in 2007 and 2 more dump trucks in 2008[198]. I have no basis to find that his business would not have remained profitable. His habit of often travelling to Shenzhen for massages[199] would not have prevented him from working until the age of 70.  I accept the evidence of Madam Fan[200] and find that, prior to his death, the deceased was in good health and lived a normal life. He did not smoke or drink. He was a hard-working person, cheerful and helpful, and he was well liked by his friends and business colleagues who liked to work with him. I have no basis to conclude that he was likely to become healthy before the age of 70 years. I find that, but for his untimely death, the probabilities are that the deceased would have continued to carry on his dump truck transport business for a further 9.5 years until he reached the age of 70.

120.  Table 11 of the 2016 Chan Tables provides multipliers for loss of earnings to pension age 70 for males. As the deceased would have been 60.5 years of age today, the period of future loss would be less than 10 years in respect of which a discount rate of 1% would be appropriate[201]. At that discount rate, Table 11 provides multipliers of 9.17 for a male aged 60 and 8.31 for a male aged 61.  The median of the 2 multipliers is 8.74 (9.17 + 8.31/2), which I adopt in the present case to assess post-trial loss of dependency for Madam Fan and Kan Ho Chuen.

Post-trial loss of dependency of Madam Fan and Kan Ho Chuen

121.  In §96 above, I had found that the loss of dependency of Madam Fan and Kan Ho Chuen today would be HK$42,535 per month. Applying that amount to the multiplier of 8.74 produces a post-trial loss of dependency of HK$4,461,071 (HK$42,535 x 12 months x 8.74), which I award in favour of Madam Fan and Kan Ho Chuen.

122.  I find that Kan Ho Chuen will remain dependent on the contribution of the deceased towards the household expenses in Philadelphia up to the end of August 2018. I do not see any reason why the deceased would have reduced his contributions towards the household expenses in Philadelphia or would have stopped paying the expenses of their family trips after Kan Ho Chuen ceased to be dependent.  The quantum of Kan Ho Chuen’s post-trial loss of dependency can be determined when application is made to apportion the various awards for loss of dependency between Madam Fan, Kan Wai Ling and Kan Ho Ching.

Post-trial loss of dependency of Madam Wong Lai Sheung

123.  Just as I took judicial notice of the Consumer Price Indices published by the Census and Statistics Department in Fung Suen Sim v. Liu Chun Pong[202] so too do I take judicial notice of the Hong Kong Life Tables published by the Census and Statistics Department.  The current expectation of life for females is 87.3 years[203]. A female aged 83 is expected to live another 10.24 years and a female 84 is expected to live another 9.62 years[204]. The calculation of the expectation of life is explained on p.5 of the publication and takes into account the risk of earlier death.  I find that Madam Wong Lai Sheung, who is aged 83 years and 9 months today, is likely to survive another 10 years.  As the risk of earlier death is already taken into account in the calculation of expectation of life, it is appropriate to refer to Table 28 of the Chan Tables, being the table of multipliers for pecuniary loss for term certain, to ascertain the appropriate multiplier to apply.  For a term of 10 years, the table produces a multiplier of 9.52 at the rate of return of 1%,  which is the appropriate rate of return for a duration not exceeding 10 years[205]. Accordingly, I award damages for post-trial loss of dependency to Madam Wong Lai Sheung in the sum of HK$238,000 (HK$25,000 x 9.52).

Summary of the awards for post-trial loss of dependency

124.  The following is a summary of the awards I make in this action for post-trial loss of dependency:

(a)         the post-trial loss of dependency of Madam Fan and Kan Ho Chuen in the sum of HK$4,461,071[206]; and

(b)        the post-trial loss of dependency of Madam Wong Lai Sheung in the sum of HK$238,000[207].

The Award for Loss of Accumulation of Wealth

125.  At the time of his death on 11 February 2009,  the deceased had net assets worth almost HK$860,000 (excluding the value of the dump trucks owned by him and the insurance policies taken out by him[208]) as set out below:

Although he was legally obliged to do so, there is no evidence that the deceased made any contributions to the Mandatory Provident Fund (“MPF”).

126.  The assets listed above have not been lost by his untimely death. They form part of his estate. What has been lost is the net wealth he would have accumulated, from the date of his actual death until the date of his natural death, had the accident not occurred. Although a substantial part of the assets listed above came from the receivables of Cheung Hong, those receivables would contribute towards the accumulation of his wealth, as much as his bank deposits would. I find that the deceased accumulated wealth during his 24 years of working life, since he established Cheung Hong in 1985 up to the time of his untimely death in February 2009[210], and that he would have continued to do so, had the accident not occurred.

127.  In Fung Suen Sim v. Liu Chun Pong[211], I proposed a new method of assessing this award which has since been adopted in a number of fatal accident cases[212].  The starting point is to have regard to the likely savings the deceased would have made, from the time of death to the time of his retirement, had the accident not occurred. In §69 above, I found that the post-trial notional net income after tax of the deceased would be HK$1,194,775 per annum or HK$99,565 per month (HK$1,194,775/12) and that the median pre-trial notional net income after tax would be HK$1,049,098 per annum or HK$87,424 per month (HK$1,049,098/12).  There is no evidence in this case that the deceased actively pursued some savings plan or investment plans. He used his personal bank accounts and Cheung Hong’s bank accounts interchangeably. Where there is no established pattern of savings but the evidence clearly shows that the deceased would likely have made some savings from his income, which is the present case, the courts should adopt a savings rate of 10% of such income to assess this head of claim. There is ample authority to support this approach which was reviewed by the Court of Final Appeal in Lam Pak Chiu & Anors v Tsang Mei Ying and So Sau Lin (Administratrices of the estate of To Shing Chiu, deceased) [2001] 1 HKLRD 193 at p. 207:

“(i) Chan Yuk Yin v. Chan Cheung Wan (where Nazareth J awarded $154,860 by adopting a multiplier of 15, which was not disputed, and a multiplicand of 10 percent of earnings);

(ii) Cheung Yuk Shiu v. Registrar General [1990] HKLY 514 (where Master Chan awarded $194,675 by adopting a multiplier of 16 for a man who died aged 19 and a multiplicand of 10 percent of earnings);

(iii) ...

(iv) Wong Mee Wan v. Kwan Kin Travel Services Ltd [1993] HKLY 473 (where Mayo J awarded $153,000 by adopting a multiplier of 17 for a student who died aged 18 and a multiplicand of 10 percent of estimated earnings); and

(v)     Ho Wun Chau & Another v. Chan Chuk Mui [1997] 3 HKC 666 (where Master Cannon awarded $100,800 by adopting a multiplier of 14 for a man who died aged 34 and a multiplicand of 10 percent of earnings).”

128.  Applying a savings rate of 10% of pre-trial median notional net of tax earnings of HK$1,049,098 per annum would produce savings, over the pre-trial period of 9.25 years, of HK$970,416 (HK$1,049,098 x 10% x 9.25 years). Applying a savings rate of 10% of post-trial notional net of tax earnings of HK$1,194,775 per annum would produce savings, over the post-trial period of 9.5 years up to the notional date of retirement at age 70, of HK$1,135,036 (HK$1,194,775 per annum x 10% x 9.5 years). On the above basis, I conclude that he would have saved HK$2,105,452 (HK$970,416 + HK$1,135,036) at the time of his natural retirement at the age of about 70. These savings would grow, during the period he was accumulating his savings, as well as during the period, after his retirement, when he would have stopped saving. 

129.  As I stated in Fung Suen Sim v. Liu Chun Pong[213], it is inappropriate to use a multiplier to assess his notional savings over this period of time.  The award under this head of claim is not a lump sum award to represent the loss of a future continuing stream of income, which has to be discounted, on account of accelerated receipt, by the use of a multiplier.  The above assessment has to be made in order to assess the total notional accumulation of wealth from the time of death to the time of notional retirement, including any likely growth of these accumulated savings from investment returns.  Once this amount has been assessed, the next stage is to determine whether this accumulated wealth would grow, or be depleted, by the time of natural death.  If there is a net balance at the time of natural death, this net balance, which is a future loss sustained by the estate of the deceased, must be discounted for accelerated receipt.  However, this discount is a discount for the accelerated receipt of a future lump sum loss rather than for the loss of a future continuing stream of income.

130.  In Fung Suen Sim v. Liu Chun Pong[214] I had stated:

“The current practice is to assess multipliers, and discounts for accelerated receipt, on the assumption that prudent investments made of the damages awarded to victims of torts would yield an annual return of 4.5% per annum (see Cookson v. Knowles [1979] AC 556 and Chan Pui Ki (an infant) v. Leung On [1995] 3 HKC 732). Where a court finds that the deceased would, but for the accident, have accumulated wealth from the date of his death to the date of his natural retirement and that he would have invested the wealth he accumulated, then, in order to be consistent with the current practice, it is only right that the court should assume that such investments would yield a similar rate of return of 4.5%. Although I have not attempted to make detailed calculations in this regard, I am probably not much off the mark in assessing the assumed return on savings to have augmented the accumulated fund to about HK$1,300,000.”

I was off the mark to assess the accumulated fund to be about HK$1,300,000 as my re-calculations, using Excel software, show. These calculations are attached as Annex 1 to this judgment.

131.  The discount rate was reduced to 2.5% for future losses in excess of 10 years by my decision in Chan Pak Ting v. Chan Chi Kuen (No. 2) [2013] 2 HKLRD 1. In Bibi Bushra and Nabela Qoser, the co-administrators of the estate of Khalid Mehmood, deceased v. Method Building and Engineering Works Ltd (in liquidation) & Ors. [2014] 3 HKLRD 21,  I observed that[215]:

“In Fung Suen Sim, the personal representative and administratrix of the estate of Lung Kai Hon, deceased v. Liu Chun Pong & Anor., HCPI 896/2007, 23 December 2011, I held that the claim for loss of accumulation of wealth, a remnant of the abolished lost years’ claim, was unlikely to yield a very high award, even in cases where the deceased was likely to accumulate substantial savings on account of the fact that he was a high income earner and lived frugally. In that case, I assessed the award for loss of accumulation of wealth based on a rate of return, net of inflation, of 4.5% per annum. If the net rate of return of 2.5% per annum, assessed in Chan Pak Ting v. Chan Chi Kuen & Anor. [2013] 2 HKLRD 1, is taken to make the assessment, the award may be even lower.”

132.  I set out in Annex 2 to this judgment my calculations, using  Excel software, to show the rate of growth of the deceased’s notional savings at the net rate of return of 2.5%, which I adopt in the present case, and which Wilson Chan J adopted in his recent judgment in Chung Sui Cheong v. Tsang Wai Hung HCPI 1058 of 2015, 3 November 2017[216]. These calculations show that the accumulated savings would have grown to HK$2,742,082 at the date of notional retirement at age 70.

133.  I now turn to consider what would happen to this fund during the years from the date of notional retirement at age 70 to the date of natural death.  The current expectation of life for males is 81.3 years[217]. A male aged 51 is expected to live another 31.84 years to the age of 82.84 years[218]. Taking 83 years as the likely age of natural death of the deceased, I have no doubt that a substantial part of the accumulated wealth would have been depleted, during the post-retirement period of 13 years, on account of his personal expenditure which would exceed the assumed rate of return of 2.5% per annum on the accumulated fund. 

134.  I have assessed that he would be saving about 10% of his net after tax income up to the time of retirement.  I found that the post-trial notional net income after tax of the deceased would be HK$1,194,775 per annum or HK$99,565 per month.  This would leave a balance of 90%, or HK$89,609 per month, for his personal expenses and contributions to his dependants. His post-trial contributions to his dependants amounted HK$42,535 per month[219] and HK$2,083 per month (HK$25,000/12 months)[220], a total of HK$$44,618, or about 50% of HK$89,609, leaving the balance 50%, i.e. HK$44,805 per month (HK$89,609 x 50%) or HK$537,660 per annum, as his personal expenses,. His expenses after retirement are likely to be reduced by about one-third to about HK$30,000 per month, or about HK$360,000 per annum, as he would probably curtail his expenditure after retirement to preserve his savings.  This amounts to about 13% of his accumulated savings at the time of retirement of HK$2,742,082.  Reducing this sum of HK$2,742,082 by 13% per annum, and increasing the balance by the assumed rate of return of 2.5% per annum, will result in a net reduction of the accumulated savings by 10.5% per annum.  The fund, therefore, will reduce to about HK$648,306 in 13 years’ time, being the period of time between the notional date of retirement and the date of natural death. 

135.  I set out in Annex 3 to this judgment, my calculations, using Excel software, to show that the value of the accumulated fund at the time of natural death would be HK$648,306.

136.  This remaining net balance on the notional date of death would then have to discounted for accelerated receipt of 22.5 years from the date of natural death to the date of judgment.  Table 27 of the Chan Tables 2016 shows a discount factor of 0.5809 for a term certain of 22 years at the discount rate of 2.5%. It shows a discount factor of 0.5667 for a term certain of 23 years at the discount rate of 2.5%. I adopt a discount factor of 0.57 (i.e. a discount of about 43%), being the median of these 2 values, as the appropriate discount factor to apply for this length of time. Applying this discount factor to the accumulated fund at the time of natural death produces the sum of HK$369,534 (HK$648,306 x 0.57), as shown in Annex 3 to this judgment.

137.  On the basis of the above assessment, I award the sum of HK$369,534as the loss of the net accumulation of wealth in favour of the estate under the provisions of LARCO. This case again demonstrates that this remnant of the abolished lost years’ claim is unlikely to yield a very high award[221].

138.  Before I leave this area, I ought to confess that I was, indeed, off the mark in Fung Suen Sim v. Liu Chun Pong to award HK$450,000 as damages for loss of net accumulation of wealth, but only slightly. I set out in Annex 4 to this judgment, my recalculations, using Excel software, which show that my award should have been HK$436,623. These miscalculations were picked up by the parties concerned, who had appealed against my judgment and, in a respondent’s notice, contended that the award for the loss of net accumulation of wealth should be less than the amount I had awarded. I understand that the parties eventually reached a settlement and the appeal was not pursued.

Other Claims and Interest

139.  Damages for bereavement are agreed in the sum of HK$150,000.  I award this amount to the children of the deceased, Kan Wai Ling and Kan Ho Chuen, to be divided equally between them, pursuant to the provisions of section 4(1), (2)(b) and (4) of the Fatal Accidents Ordinance, Cap. 22.  I also award interest on this amount at the rate of 8% per annum from the date of death to the date of judgment[222].

140.  I accept the evidence of Madam Fan that the funeral and related expenses amounted to HK$140,496 (being funeral costs), US$2,420 (being the cost of travel to Hong Kong from the United States for her and her children) and US$6,191 (being the cost of the graveyard in the Greenwood Cemetery in the United States where he was buried)[223].  I find that these expenses were reasonably incurred and I award this head of claim, totalling HK$207,661[224], in full.  I also award interest on HK$207,661 at the rate of 8% per annum from the date of death to the date of judgment[225].

141.  I award interest on damages for pre-trial loss of dependency at the rate of 4% per annum from the date of death to the date of judgment.

142.  No interest is awarded on damages for loss of net accumulation of wealth which is an award to compensate for future loss.

Summary of the awards made

143.  The following is a summary of the awards I make in this action:

(a)  Damages for bereavement in the sum of HK$150,000 and interest thereon[226];

(b)  Damages for funeral expenses in the sum of HK$207,661 and interest thereon[227];

(c)  Damages for pre-trial loss of dependency of Madam Fan, Kan Wai Ling and Kan Ho Chuen in the sum of HK$4,179,483[228];

(d)  Damages for loss of the deceased’s contribution towards the university fees of Kan Ho Chuen in the sum of HK$732,420[229];

(e)  Damages for pre-trial loss of dependency of Madam Wong Lai Sheung in the sum of HK$231,250[230];

(f)  Interest on damages for pre-trial loss of dependency awarded in §§(c), (d) and (e) above[231];

(g)  Damages for post-trial loss of dependency of Madam Fan and Kan Ho Chuen in the sum of HK$4,461,071[232];

(h)  Damages for post-trial loss of dependency of Madam Wong Lai Sheung in the sum of HK$238,000[233]; and

(i)  Damages for loss of net accumulation of wealth in the sum of HK$369,534[234].

Costs

144.  I make a costs order nisi that the defendant pays the costs of the action to the plaintiff.

Liberty to apply

145.  I grant liberty to the plaintiffs to apply to me within 42 days to apportion my total award in respect of pre-trial and post-trial loss of dependency, and interest thereon, as between the various dependants.

146.  I cannot conclude my judgment without thanking counsel for their assistance in this difficult case.

Annex 1

Annex 2

Annex 3

Annex 4