CHAN KAM v. STANDARD CHARTERED BANK HONG KONG TRUSTEE LTD.

HEADNOTE

    Employees compensation : partial and permanent incapacity : relationship between section 7 and section 9. On facts special circumstances showed appellant's actual incapacity to be permanent.

    Increased minimum figures in section 7 apply only to accidents occurring after date of amendment.

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J U D G M E N T

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Hunter, J.A. : (giving the judgment of the court)

1. On 29th October 1985 the appellant, then aged 72, was employed by the respondent bank as a building caretaker at their premises Hong Ying Building, Nathan Road. He apparently had occasion to reprove a group of youths. He was attacked, and in consequence fell from the top to the bottom of some stairs. He sustained two serious injuries: a fracture of the neck of the left femur, and the fracture of the right os calcis. The latter has healed comparatively well, but the former required prosthetic replacement of the left hip. This has very seriously impaired his mobility.

2. He was first assessed for Employee's Compensation on 12th December 1986. The terms of this are not known. On 12th October 1987 the appellant made application for compensation to the District Court. On 9th November the first assessment was reviewed, with the result that his injuries above described were held to have given rise to a permanent incapacity, and his loss of earning capacity was assessed at 20%. On 21st November the appellant was examined by Dr P A L Horsfall echo gave a report dated 3rd December 1987.

3. On 25th January 1988 the application came before H H Judge W Wong in the Hong Kong District Court. At the outset leave was given to amend the application to include an appeal against the reassessment of 6th November under section 18(3)of the Employees' Compensation Ordinance (Cap 282) (The Ordinance). All the material facts were agreed except the effect which the injury had had upon the appellant's earning capacity. Upon this the evidence put before the judge was entirely documentary, namely the certificate of review of assessment dated 6th November which gave the result and no reasons, and Dr Horsfall's report. It is necessary to refer to the principal parts of this.

4. Having recited the history of the injury and the treatment the doctor concluded :

"He has peen totally incapable of returning to work because of the persistent problems detailed below".

The details which follow are:

"Present symptoms Mr Chan complains of persistent pain in the left hip especially on walking and at night when he turns in bed. He needs support when walking and has difficulty in squatting down. He also has to be assisted by his daughter in taking a bath ....Occupation At the time he was injured Mr. Chan was a watchman in a building in Kowloon. Part of his job was to walk around inspecting the common areas and he also had to do things like changing the light bulbs and sweeping the stairs we worked 14 hours per day".

The report proceeds to enumerate the range of movements of the left hip by comparison with the right and to conclude that those in the left hip had been reduced by about 50%. It continues:

"Permanent functional impairment It is common knowledge that elderly patients very often fall far short of a complete recovery from an injury, when a younger person would regain almost perfect function after a similar injury. In Mr Chan's case he is left with persistent pain in the hip and restriction of movement at the left hip joint with some muscular weakness. It is highly unlikely that improvement will occur and the present condition must be accepted as permanent. Hip movements are reduced by about 50% ....

Loss of earning capacity In practice this poor old man will never work again and viewed thus his loss of earning capacity is 100%. Of course the working life of a man of 71 years is limited and total loss of earnings must be much less than in a younger man with the same physical impairment.

Presumably the Employee's Compensation Board worked on the thesis that there 25% impairment of the lower limb and the full rating for loss of a whole loser limb is 80% so that in Mr Chan's case it is therefore 20%. This is reasonable, but takes no account of the fact that as a result of the injuries Mr Chan has, for practical purposes, been almost totally incapacitated for work.

Temporary incapacity Mr Chan was given sick leave for about 13 months but as stated above he has in fact remained permanently unfit to return to work".

5. The doctors were agreed that no further improvement in the appellant's condition could be expected and that his existing condition must be regarded as permanent. The issue was whether the injuries had given rise to what the ordinance calls "partial" or "permanent incapacity" whether in the words of the definitions in section 3 the incapacity was such as to "reduce" the appellant's "earning capacity present or future in any employment which he was capable of undertaking at" the time of the accident: or whether it had "incapacitated" him for any such employment". The trial judge concluded that it was partial; confirmed the assessement; and granted compensation calculated upon the basis of a 20% impairment. From this award the appellant now appeals.

6. Before this court Mr Graham for the appellant urged us to adopt and apply the opinion of Dr Horsfall, conclude that this was a section 7 case of "permanent total incapacity"; and to award the sum calculated thereunder. Conversely Mr Hingorani for the respondent urged us to follow and approve the approach followed by the trial judge who had proceeded under section 9. It is, we think, convenient to test the position initially undet that section.

7. The issue of partial versus total incapacity was essentially a question of fact which the judge had to decide on the comparatively limited evidence before him. In effect he preferred the conclusion represented by the assessment to the view of Dr Horsfall, for, two reasons.

8. First he noted that in reaching its conclusion the Assessment Board enjoyed the assistance of a labour officer. The Board had given no reasons. In the absence of such reasons the judge concluded that "it would be impossible for me to say that the board erred". He concluded that the Board's assessment was "fair" and that "the Board had taken all the circumstances into consideration".

9. We cannot agree with this approach which stultifies the appellate process. Where no reasons are given, a court can only judge an assessment by tesing the validity of its conclusions against the total available evidence. It cannot speculate about the advice tendeed by the labour officer. So viewed this assessment appears to be made, as Dr Horsfall inferred, under section 9(1) applying the first schedule percentages. This leads to the conclusion that the Board either found no special circumstances to exist, or gave no weight to any such circumstances. It is the correctness of this that is in issue.

10. On the facts, the judge himself seems to have reached the same conclusion. There was no challenge, by way of cross-examination or otherwise, to the accuracy or reliability of Dr Horsfalls opinion. Indeed the judge accepted it. But he interpreted it to mean that

"the applicant's loss of earning capacity was based on the fart that the applicant was 72 years of age at the time of the accident rather than on the injury or any special circumstances .... In the present case if the applicant could not resume work it was due more to his advanced age than the injuries suffered".

11. Again we cannot agree. The doctor was doing no more than assessing the impact of these particular injuries upon this man, a process which mirrors the duty of the court. In our opinion, the doctor is clearly saying that this appellant had been at the age of 72, capable of working as a watchman. This capacity had not been destroyed by senility or pure advancing years, but by the effect of these serious injuries upon him.

12. We therefore cannot agree with the conclusion that the judge reached upon the evidence. We must make our own assessment, and are in as good a position as he was to do so. We start with section 9, and are minded to agree with the doctor's inference as to basis of the Board's assessment i.e. that it was made under section 9(1). This leads us to section 9(1A). Are there special circumstances here which show that the appellant's actual loss of earning capacity is considerably greates than the 20% produced by any basic ordinance calculation? Because if there are, the true loss must be ascertained proportionally to a "permanent total incapacity" calculation based on section 7.

13. We accept the doctor's opinion that gravely impaired mobility precluded further employment as a night watchman. But was the appellant "capable of undertaking" any other employment at the time of the accident, so that the availability of this should be considered now. On this there was no direct evidence. But it is not difficult to infer from the doctor's report that her view of the appellant was, that by reason of his education and background, he was only capable of being employed as a night watchman. None knew the appellant's pre-accident capacity better than the respondents. If they considered this wrong it could have been easy for them to lead evidence to challenge it. We therefore agree with the doctor's conclusion that the effect of these injuries upon this appellant has been to bring about a "total incapacity" within the meaning of the ordinance. It follows that both a section 7 and a section 9(1A) calculation produce the same result, because the appellant's special circumstances require us under the latter, to take 100% of the former figure.

14. The basic total impairment figure calculated under section 7(1)(c) is HK$95,199.84. This gives rise to a problem under section 7(2). At the time of the accident the minimum figure here was HK$92,000. From lst January 1986 to 31st December 1987, the period during which both assessments were made, the figure was HK$114,000. Since 1st January 1988, when the matter has come before both courts, it has been HK132,000. Each increase was made by Legal Notice under section 48A. Very unfortunately neither the Ordinance nor the Notice give any indication as to the legislative intent; and in particular whether the new minima are to apply in relation to accidents occurring after the new date, or to assessments or awards male after those dates. We can only repeat and echo the regrets of the Privy Council voiced in identical circumstances in Ogden Industries Pty Ltd v Lucas⁽¹⁾ at p 131E.

15. Having carefully considered the matter we have concluded that the normal presumption against giving retrospective effect to legislation prevails, so that the relevant date is the date of the accident: see Clement v Davies⁽²⁾, Lucas case (supra) and Yew Bon Tew v Kenderaan Bas Nara⁽3). Upon the happening of this accident on 29th October the appellant's right to claim, and the respondent's obligation to pay compensation "in accordance with the provisions of this Ordinance" accrued under section 5(1). Both matters prima facie accrued in the terms of the Ordinance as it then stood. Notwithstanding the warnings given in Lucas⁽¹⁾ at pp 128, 129, the absence of the happening of any event after 28th October, which affected the appellant 's entitlement to claim, renders the position here indistinguishable in principle from that in Clement v Davies⁽²⁾.

16. It follows that the basic section 7(1)(c) calculation is not affected by the minimum in section 7(2), operative at the date of the accident. When appropriate sums for interest and medical expenses are added in, the agreed total section 7(1)(c) calculation is HK$104,680. This appeal must therefore be allowed and this figure substituted for that awarded by the trial judge.

17. In handing down this judgment we make an Order nisi that the Respondent pays the appellants costs here and below.

(1) [1970] AC 113

(2) [1927] AC 126

(3) [1983] 1 AC 553