O LAI KAM v. LAW TIN WAN AND OTHERS

HCPI777/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO. 777 OF 2005

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R U L I N G

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1. In this matter, the parties have reached a settlement of the plaintiff’s claim.  The amount of the settlement sum was agreed to be $614,545, with credit being given to an amount of $364,545 being moneys already paid to the plaintiff in respect of employee’s compensation in DCEC No. 934 of 2004.  The amount of the employee’s compensation was paid to and received by the plaintiff before the Writ in the present action was issued.

2. Therefore the net amount payable to the plaintiff for this settlement comes to $250,000.

3. The full terms of the settlement agreed between the parties are contained in a Consent Summons dated 28^th November 2006.

4. However, in settling this claim, the parties were not able to agree the scale of costs upon which the plaintiff’s costs of the action was to be taxed, whether High Court or District Court scale, and that one outstanding disputed issue was left for the court to rule on, which I now do.

5. This claim was brought by the plaintiff claiming damages for personal injuries sustained by him at work in a construction site on 2^nd September 2002 when the plaintiff, employed by the 1^st or alternatively 3^rd defendant as a plumber, fell from a ladder while carrying a heavy metal pipe of about 60 lbs to be fitted, and in the process injured his back.

6. There is no dispute that the acid test in determining the scale of costs to apply when a personal injuries claim is settled for less than the amount of the District Court jurisdiction, is whether the plaintiff has a reasonable prospect of recovering an amount in excess of the District Court jurisdictional limit at the time when the Writ was issued, ignoring all questions of contributory negligence not admitted by the plaintiff in his Statement of Claim.

7. In the present case, the jurisdictional limit of the District Court when this Writ was issued was $1 million.

8. For the purpose of this application, the plaintiff submits that there was such a reasonable prospect.  On the other hand, the defendants submit that there was not.

9. Focusing in on the substance of their arguments, there is no dispute that upon the medical evidence available in this case, the award for pain suffering and loss of amenities would be in the region of $350,000.

10. It is also not disputed by the defendants the plaintiff’s claims of $66,000 for loss of earnings capacity and some $18,000 special damages.

11. What is disputed between the parties for present purposes relating to the scale of costs to be applied concerns only the loss of earnings, and in that respect, it is only a limited aspect of which they differ on.

12. It is common ground that the plaintiff’s pre-accident monthly earnings based on his average earnings with the defendants for the eight months prior to the accident comes to $14,179.  It is also not disputed that the plaintiff was paid a daily wage of $650 before the accident.  Therefore his pre accident monthly earnings work out to be roughly 22 working days per month.

13. It is the plaintiff’s case that after having been given sick leave up to January 2005, the plaintiff was ultimately able to secure alternative employment in November 2005 as a contract worker with the Hong Kong Post earning $7,090 for the first year of the contract.  Thereafter, his contract was renewed in November 2006 with an increase of $450 bringing his monthly salary up to $7,540.

14. Based on that, the plaintiff submits that his pre-trial loss of earnings in this case should be calculated on full loss of earnings for the sick leave period and thereafter on the difference between his pre accident earnings and what he was able to earn as a contract worker with the Hong Kong Post.  On this basis the plaintiff works it out to be $572,284.

15. As for future loss of earnings, the plaintiff submits that the same multiplicand as for partial loss of pre-trial earnings should be used applying a multiplier of 10.  On that basis, the plaintiff calculates the future loss of earnings to be $1,294,794.

16. On such basis of calculation, the plaintiff says that there was a reasonable prospect of the plaintiff recovering more than the amount of District Court jurisdictional limit and therefore High Court scale of costs should be applied.

17. On the other hand, the defendants submit that the plaintiff is under a duty to mitigate his loss including his loss of earnings.

18. Based on the medical report of Dr. Richard Poon, the orthopaedic expert instructed by the plaintiff, dated June 2005, in which Dr. Poon states that the plaintiff, given the condition of his injured back, would still be able to resume his pre-accident job as a plumber, but with the qualification that the plaintiff would be advised not to carry heavy pipes or objects over 20 kg in weight, it is the defendant’s contention that the plaintiff would have been able to earn considerably more than the $7,090 and even with the increase of $450 after one year had the plaintiff attempted to secure work as a plumber after his sick leave period, granted that there was a limitation upon his carrying heavy objects.

19. The defendants further rely on the fact that nothing in the witness statements of the plaintiff show that the plaintiff had even attempted to secure employment as a plumber after his sick leave period had expired.

20. It was submitted by the defendants that earning statistics show that the plaintiff could have earned around $13,000 odd as a maintenance technician for building estates, in which case the plaintiff’s loss of earnings would only be about $1,000 odd per month.

21. Moreover, the defendants also rely on earnings statistics to show that in 2005 plumbers were being paid a daily wage in excess of $800.

22. On the defendants calculations based on the possible earnings of a maintenance technician for a building estate, the defendants say that the plaintiff’s loss of earnings pre trial would be in the region of $447,806; and that his future loss of earnings, even applying a multiplier of 10 would be in the region of $86,074.

23. As such it is argued by the defendants that the plaintiff had no reasonable prospects of recovering in excess of $1 million when the Writ was issued in this case, given that the plaintiff had already pocketed the sum of $364,545 being the employee’s compensation before the Writ was issued in this case.

Decision

24. I am unable to accept the submission of the plaintiff that the plaintiff had a reasonable prospect of recovering an amount in excess of the District Court jurisdiction when the claim was started for the following reasons.

25. Firstly, the submission that the loss of earnings of the plaintiff should be calculated as being the difference in the pre-accident earnings of the plaintiff and the plaintiff’s earnings as a contract worker of the Hong Kong Post, wholly ignored the opinion of the plaintiff’s expert, Dr. Richard Poon that the plaintiff should be able to return to his pre-accident work as a plumber although with some limitations as to carrying heavy weight.

26. That opinion of Dr. Poon, coupled with the government statistics that a plumber in 2005 was able to earn a daily wage of over $800 and the fact that there is no evidence by the plaintiff that the work of a plumber must necessarily involve the carrying of weights over 20 kg, thereby rendering it impossible for him to return to his pre-accident work, would indicate that the plaintiff had failed to mitigate his damages by seeking work as a plumber, possibly with another employer and possibly at some reduced salary.  That however was not the plaintiff’s case and there is no such evidence coming from the plaintiff to that effect.

27. In the absence of such evidence, I am unable to accede to the suggested method of calculating loss of earnings in the way submitted by the plaintiff.

28. Furthermore, looking at this case as a whole, the fact that the plaintiff has seen fit to accept in settlement the net amount of $250,000 (after deducting the amount of employee’s compensation) would lend much weight to the submission by the defendant as to the likely outcome of this case if it went to a full trial on quantum.

29. In this respect, all that I have been told by the plaintiff’s counsel as to why the plaintiff had seen fit to accept only such a small amount by way of settlement (if his contention that the plaintiff had a good prospect of recovering an amount in excess of $1 million even after credit for the employee’s compensation had been given) was that it was a decision of the plaintiff against the legal advice given to him.  No satisfactory reason had therefore been advanced as to the acceptance of the settlement by the plaintiff.

30. Litigants and their solicitors should be well aware that although the acid test for deciding the scale of costs to apply (already stated above in this Ruling) makes no mention of the settlement amount, in the absence of any satisfactory explanation, the amount settled is still one of the factors which the court can take into account in determining whether there was a reasonable prospect of the plaintiff to recover an amount in excess of the District Court jurisdiction in any given case.  Needless to say the circumstances in each case may vary depending on its facts.

31. For the reasons given, I do not accept that in this case the plaintiff had a reasonable prospect of recovering an amount in excess of the District Court jurisdiction of $1 million and the District Court scale of costs would be the scale upon which the costs of the plaintiff’s action would be taxed.

Costs

32. I have already heard submissions from both sides as to the costs of this hearing depending on how I were to rule in this matter.

33. There would accordingly be a cost order that the costs of this hearing be paid by the plaintiff to the defendant and that those costs are to be on the High Court scale.  The Plaintiff’s own costs to be taxed in accordance with Legal Aid Regulations.