WONG CHI HANG v. LING SIU CHING AND ANOTHER

HCPI 562/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO 562 OF 2013

______________________

______________________

________________________

J U D G M E N T

________________________

BACKGROUND

1.  In this action the plaintiff claims damages for personal injuries suffered as a result of a road traffic accident (‘the Accident”) on 24 July 2010, on the Kwun Tong bound carriageway of the Lung Cheung Road flyover, near to Ping Shek Estate, Kowloon. 

2.  At the time of the Accident, the plaintiff was driving a tow truck with a private car on tow.  His tow truck was hit by a medium goods vehicle (“MGV”), which was approaching from the opposite direction.  The cab of the tow truck was crushed on the driver’s side by the MGV.

3.  As a result of the Accident, the plaintiff suffered fractures to his 4^th and 5^th ribs; laceration to his liver; a closed fracture of the right femoral shaft; an open fracture to his right fibula; a closed trimalleolar fracture of the right tibia and an avulsion fracture of the right anterior tibial spine.

4.  He was hospitalised from 27 July 2010 to 25 August 2010, during which time he had four surgical operations including the placement of nails, pins and screws to repair the extensive damage to his right leg. Although he started physiotherapy in October 2010 and occupational therapy in September 2011, he subsequently had further surgery to remove implants up to May 2014 and is still undergoing corrective surgery and physiotherapy five years after the Accident.  Further surgery is scheduled for November 2015.

5.  It is accepted that the plaintiff has been left with a significant disability in his right lower limb and will have residual pain in the affected areas for the rest of his life.

6.  The plaintiff was also diagnosed with adjustment disorder and PTSD, suffering from depression, anxiety, low mood irritability, insomnia, frequent flashbacks and nightmares.  He is still on anti depressant medication. Although his mental health has improved, further psychiatric treatment and medication is required.

ISSUES

7.  There has been agreement as to liability and judgment has been entered against the 1^st and 2^nd defendants with damages to be assessed.

8.  This matter was listed as a two day hearing for the assessment of damages.  As a result of discussion between the parties the only issues which remain to be decided are pre and post‑trial loss of earnings.

Pre-trial loss earnings

9.  The plaintiff is now a man of 39 years of age and is married with a small child.  He was a tow truck driver at the time of the Accident.  He gave evidence and appeared to be an honest and credible witness accepting criticism of his accounting records where it was due. 

10.  At the time of the Accident he was self‑employed.  He had originally been a construction worker but in 2005 he had set up a tow truck business.  His work came directly from private customers but also from contacts in the garage and towage business.  If work came from the latter two sources, he may on occasion pay a 10% commission on monies earned as a result, but this was not a hard and fast rule. 

11.  The plaintiff maintains that he earned an average net monthly income of $25,000 in 2010 up to the date of the accident. 

12.  There are no formal business records.  The plaintiff had not registered his business or employed an accountant.  He had not paid tax or MPF.  In support of his contention that his earnings averaged $25,000 per month in 2010, he has provided his record books for 2006 to 2010.  They are fairly primitive sets of accounts, which clearly show a system of recording developing over time.  He accepted in evidence that they are far from perfect and that items may have been mistakenly left out of his records both in respect of income and expense.  It was never suggested to him however that they were false nor that any item which was recorded in his record books was deliberately added to inflate his income.  Mr Wong, on behalf of the plaintiff, also submits that this figure takes into account the depreciation on the only business asset ie the tow truck, which had been purchased in 2005 for approximately $200,000. 

13.  Reading the records as a whole, they appear to be an honest attempt to record income less commission and the normal expenses of the towage industry.  Where any single item has been mistakenly unrecorded, I find that it is does not significantly affect (either way) the overall figure which I am asked to estimate as his average monthly income as at July 2010 of $25,000. 

14.  I can also see that his records show that in recent years he had regularly worked seven days per week.  Days off each week were an exception and not the rule.  Accordingly, I accept the suggested figure which was calculated by the plaintiff of $25,000 per month, taking into consideration the fact that he did not pay MPF and had not registered his business nor had he submitted any tax returns. 

15.  The plaintiff submits that between 2010 and 2015 his business would have grown at least at the level of the CPI which was then standing at 5%. However, as Ms Tsang, for the defendants, pointed out, he was not a civil servant nor in employment.  He was self‑employed.  The profitability of his business would have been dependent upon many different factors including the fact that it was relatively newly established.  The average growth of his business in the period 2005 to 2010, according to his records, was approximately 3%.  Doing the best I can, and given the relevant CPI, plus the evidence of both PW1 and PW2, Mr Man, I find a sensible growth rate between 2010 and 2012 to be 4%.  This is the figure I will use for the period of sick leave.  However between 2012 and 2015, I find that the growth rate of the business would have increased to 5% per annum. 

Sick leave

16.  The plaintiff was granted sick leave up to 24 July 2012.  The parties agree the sick leave figure of 24 months and I consider the agreed three months extra to look for suitable employment is acceptable, which takes us to 24 October 2012.  That leaves 33 months between that date and trial.

17.  The plaintiff is therefore entitled to full loss of earnings from 24 July 2010 to 24 October 2012.  That amount is calculated at $26,013.33 (being the median of the earnings between 2010 and 2012 at 4% growth) x 27 which is $702,359.91.

Pre‑trial loss of earnings after 24 October 2012

18.  Between 24 October 2012 and the date of trial, I consider that the plaintiff’s business would have grown at a slightly greater rate again. I come to this decision based upon the CPI and upon the evidence of PW2 Mr Man, who was also in the same industry.  I note that his business was more established than that of the plaintiff and used a different business model but there are similarities, which I have taken into account.  He gave evidence that between 2010 and 2015 his business grew at the rate of 40%.  The inflation rate over the same period was 24.5%.  I therefore consider a rate of growth of 5% per annum appropriate for the 33 months remaining up to date of trial. Using the median monthly figures for 2013, 2014 and 2015 this figure amounts to $29, 835.26 per month. 

19.  The next issue is whether the plaintiff is entitled to full or partial loss of earnings after 24 October 2012 for the 33 months up to the date of trial in July 2015.

20.  According to the joint medical report of Dr Lau and Dr Tio dated 19 February 2014, the plaintiff had surgery on the 24, 26, 29 July and 9 August 2010.  He had further surgery on 5 March and 18 June 2012 at which time the remaining right distal tibia posterolateral screw, right fibula rush pin and right femur intramedullary nail and locking bolts were removed.  There remained a partially retained screw in the distal tibia.

21.  According to a medical report dated 28 February 2015 by Dr Lok of United Christian Hospital (“UCH”), the plaintiff complained of persistent ankle pain which showed degenerative osteoarthritis and debridement surgery to relieve that condition is due to take place in November of this year.  He also gave evidence of a significant problem with his right knee.

22.  He was first seen in the pain clinic on 9 July 2012 when he had persistent right ankle, knee and hip joint pain and a standing tolerance of 10 minutes.  At the date of their report in February 2014, the plaintiff complained of residual pain in his right hip, thigh, knee, distal leg, ankle and left anterior chest with multiple tender spots and significant stiffness of the right ankle joint.  He had pain in his right distal leg and proximal tibia if he stood for over 10 minutes or walked three to four steps. He could walk for only half an hour before he required a break. 

23.  The plaintiff first received occupational therapy on 28 September 2011 but was discharged in March 2012 because of the pending surgery in that month.  He received further occupational therapy in June 2012, when it was noted that his stair climbing performance and lifting capacity had deteriorated due to much worsened pain post surgery. 

24.  He also received physiotherapy from the Orthopaedic and Traumatology Department of UCH.  The First course was between 28 October 2010 and 1 February 2012.  The second course was in April 2012 when it was noted he was due to have further surgery for the removal of an ankle implant on 18 June 2014. The records available to me show that he was in significant pain during 2013 and receiving treatment to reduce the pain as well as medication.  He was still taking trazodone and lorazapam in January 2014

25.  The plaintiff was first seen by a psychiatrist in October 2010 up to January 2014 and was diagnosed with adjustment disorder with post traumatic stress symptoms.  He was provided with psychological counselling and anti depressant, anti anxiety and neuropathic pain medication including pregabalin, propranalol, fluoxine, trazodone and lorazepam.  The plaintiff was also seen by a clinical psychologist 6 times from August 2012 to June 2013

26.  The records available to me show significant depression in 2013. I have no records past that date.  He will continue to have mild residual psychiatric symptoms for the rest of his life.  He will need ongoing psychiatric help on a four to six weekly basis for the next one to two years. 

27.  He is still an out‑patient at the orthopaedic, pain and psychiatric clinics at UCH. 

28.  Given that he has been undergoing further surgery, physiotherapy and rehabilitation in that period and has further surgery yet to come, I do not believe he could have found permanent employment of any kind in the 33 weeks up to date of trial.  This is borne out by the fact that he qualified as a security guard during that period but could find no employment as such and that he tried and failed to qualify as an electrician.  He also tried and failed to obtain a job as a shampoo boy at several garages.  Any employment he could have found would inevitably have been sporadic and on a part time basis only. I am therefore not prepared to deduct any significant amount for reduced earning capacity in respect of the 33 months.  The average figure I am prepared to deduct given all of the circumstances is $3,000 per month. 

29.  Accordingly, I award damages for pre trial loss of earnings between 24 October 2012 to date of trial in July 2015 at $29,835.26 per month (taking into account an annual rate of growth of 5% between 2012 and 2015) less $3,000, which amounts to $26,835.26 per month x 33 which equals $885,563.58.

30.  The total sum for pre‑trial loss of earnings is therefore $702,359.91 plus $885,563.58 which amounts to $1,587,923.49.

Future loss of earnings

31.  This was a business in its infancy.  The plaintiff had only been an effective self employed tow truck driver from 2006.  I accept that his business would have gone from strength to strength given the evidence of PW2, Mr Man, who was in the same line of work and whose own business had flourished since 1998. 

32.  Mr Man gave evidence that in 2010 he earned approximately $25,000 to $35,000 per month with a gross monthly turnover in the region of $40,000.  This was more than the plaintiff, but of course the plaintiff’s business was far less well established at that stage.  Mr Man said that he had the same type of expenses as the plaintiff, for although he was a Director of Flip Flop Towing Co Ltd (“Flip Flop”), he owned his own tow truck and took work from the company in the same way that other self employed tow truck drivers did.  In other words, he did not receive a salary or other form of remuneration from Flip Flop. 

33.  Mr Man gave evidence that since 2010 the minimum wage regulations had come into force and he found that self‑employed work had increased significantly as a result.  He says he now earns some $45,000 to $50,000 per month after expenses.  Although he did not say when the relevant legislation came into effect, I notice that he did say the number of self employed drivers available to Flip Flop was 10 in 1998, 14 in 2010 and 18 now. I therefore conclude that there had been an increase in available work since 2010 up to date.  I have also taken into account the fact that Mr Man’s business would have gone from strength to strength as his reputation in the market grew and that it was well established by 2010, whereas the plaintiff’s business was relatively new in the market. 

34.  The plaintiff’s state of health both physically and mentally precludes him from returning to his tow truck business as a driver.  There is no dispute as to that.  Dr Lau suggests that he could have returned to work as a chauffeur or taxi driver.  However, given the number of hours that such employment would warrant using his weakened and at times painful right ankle and knee joint, I consider that suggestion to be unreasonable.  I prefer the opinion of Dr Tio who opines that the plaintiff would have difficulty driving for more than an hour at a time.  I have ruled out the possibility of future employment as a driver.

35.  The plaintiff told the court that he had qualified as a security guard since the Accident but had been unable to find work as such.  He had also tried to gain employment as a shampoo boy and as a messenger but had been unsuccessful.  Given his educational background, lack of English and physical and mental condition, it is clear beyond per adventure that the only employment reasonably available to the plaintiff on a full time basis would be one which required a truly sedentary occupation such as a car park attendant or security guard in a residential as opposed to commercial premises and which would not require long working hours or anything other than minimal walking. Accordingly, I estimate that the appropriate rate of remuneration would be close to the minimum wage in the order of just $8,000 per month.

36.  I accept the evidence of PW2, Mr Man but allow for his greater experience and standing in the industry and find that the plaintiff could have earned $40,000 net per month if he had not suffered this accident given that his work ethic showed that he was prepared to dedicate up to seven days per week to his business and took very little time off. 

37.  I have asked for and considered written submissions as to any profits tax liability and I accept, taking into account all that has been submitted by both parties, that the likely annual tax figure would be approximately $16,900 per year. 

38.  I further find, in the absence of any evidence to the contrary, that but for the accident the plaintiff would have worked until at least 65 years of age before switching to lighter work.  Accordingly I find that he has suffered partial loss of earnings from July 2015 to the age of 65 which is 36 years and in my view attracts a multiplier of 18.77.  Therefore, $40,000 less $8,000, ie 32,000 per month x 12 x 18.77 amounts to $7,207,680.  Less the profits tax liability of $16,900 per annum x 18.77 which is $317,213 which amounts to $7,207,680 minus $317,213 which is $6,890,467.

39.  I therefore award the sum of $6,890,467 for future loss of earnings.

Special damages

40.  The plaintiff claims the following special damages:

i.	Medical expenses	$21,551
ii.	Future medical expenses	$6,000
iii.	Travelling expenses	$3,000
iv.	Tonic food	$20,000
v.	Damage to property	$25,000
	Total:	$75,551
		==========

41.  These items were agreed in writing on 14 July 2015 and I award the same as special damages.

42.  The parties also agreed, at the same time, the figure for PSLA of $480,000 and Loss of Earning Capacity of $60,000.

Summary

43.  Taking into account that which has been agreed by the parties and my findings above, a summary of my award is as follows:

	PSLA	$480,000.00
	Pre trial Loss of Earnings	$1,587,923.49
	Special Damages	$75,551.00
	Loss of Earning Capacity	$60,000.00
	Future Loss of earnings	$6,890,467.00
		$9,093,941.49
		===============

CONCLUSION

44.  There will be judgement for the plaintiff against the 1^st and 2^nd defendants for the total sum of $9,093,941.49 as set out above.

45.  I award interest at 2% per annum on general damages for PSLA, from the date of service of the writ to the date of judgement, and at 4% per annum on pre‑trial loss of earnings and other special damages from the date of the Accident up to the date of judgment.

46.  There will be an order nisi for the costs of the action to be paid by the defendants to the plaintiff, which are on a party‑and‑party basis and taxed under the appropriate Legal Aid Regulations.