SIU YUK LIN AND ANOTHER v. YEUNG SAI CHOW

1983 No. 2103

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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ASSESSMENT OF DAMAGES

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1. On the 12th October 1981 Mr. Ho Kwok Wang was travelling as a passenger in a private car driven by his colleague Mr. Hui Wai Tang along Tuen Mun Road towards Yuen Long when a collision occurred between that vehicle and another, owned and driven by the Defendant, which was proceeding in the opposite direction. As a result, Mr. Ho suffered extensive injuries from which he died shortly afterwards.

2. Letters of administration were granted to the Plaintiffs on 8th July 1982 and these proceedings were commenced by them on 21st February 1983 claiming damages under the Fatal Accidents Ordinance, Cap. 22 (FAO) for the dependants of the deceased, and under the Law Amendment and Reform (Consolidation) Ordinance, Cap. 23 (LARCO) on behalf of the estate of the deceased.

3. On 4th April 1985, judgment by consent was entered against the Defendant with damages to be assessed.

4. It is not in dispute that, at the date of his death, Mr. Ho Kwok Wang was aged 45 years, was married to Madam Siu Yuk Lin and had two children, namely Albert Ho, born on 7th August 1966, and Jane Ho Lai Kuen, born on 14th August 1968.

5. It is further not in dispute that Mr. Ho was a sergeant in the Royal Hong Kong Police Force, attached to the Narcotics Bureau.

6. However, it is contended by Mr. Barretto on behalf of the Plaintiffs, that the evidence shows that the deceased would have been promoted to the rank of Station Sergeant by 1st April 1983 at the latest, had he not died, and that he would today be earning the appropriate salary and allowances for that rank, and additionally, an allowance under the Government Home Purchase Scheme and Overseas Education Allowance for his son Albert.

7. It is conceded by Mr. Yu on behalf of the Defendant that Mr. Ho would have been in receipt of the Home Purchase Allowance, but the other matters remain in dispute.

8. Seven witnesses were called on behalf of the Plaintiffs, and an agreed bundle of documents are submitted.

9. Madam Siu Yuk Lin gave evidence and said that she is now aged 39 years and was married to Mr. Ho in 1970. She said that at the date of his death he was earning a little over $5,000 per month, including allowances, and this was supported by salary statements, for the nine months prior to his death, in the agreed bundle of documents. She said that Mr. Ho was very hard working and had no hobbies on which he spent money, his only personal expenses being his daily lunch and some cigarettes, which she estimated at $500 per month, although she conceded that she had no records on other evidence to support this figure. Madam Siu said that each month Mr. Ho gave her $3,000 for food and household expenses and in addition he was responsible for major household purchases such as furniture and electrical appliances, as well as paying rent for their police quarter of $130.50 per month, Widows and Orphans Contributions of $130.00 per month, water charges of $7.00, school fees for the children of about $100 per month, telephone monthly bills of about $30.00 and electricity about $110.00, and about $450.00 per month on entertainment for the family.

10. With regard to Mr. He's savings from income, Madam Siu said that he save about 10% of his income, but that this varied between $300 to $500. At the date of his death he had two savings accounts, and some shares and loan stock, altogether then worth a total of $75,694.00. He had also paid a deposit on a flat of $27,200.00 in July 1981 which they had intended to pay for by way of a mortgage loan over 15 years, the monthly payments being covered until his retirement by an allowance under the Government Home Purchase Scheme. As a result of Mr. Ho's death, Madam Siu said that she was unable to proceed with the purchase of the flat, which would have been ready for occupation at the end of 1987, thereby incurring further legal costs on re-transfer of $4,050.00.

11. Madam Siu further said that she and her husband had intended sending their son Albert somewhere else to study, and apply for Overseas Eduction Allowance to help meet the cost. She said that they discussed sending him to Canada only, not the United Kingdom, and that they had first considered it in 1980 but that nothing had come of it.

12. Albert Ho gave evidence and said that he was now aged 18 years and has just completed Form 5. He intends to continue his studies and go abroad to do so if funds are available. He said that there was discussion about his going abroad while his father was alive and although he was not sure what the discussions were about, he knew that his parents intended to send him to further his studies in another country, and he thought this would be in 1982. He admitted that his school results here were not very good and that only one application had been made to a school abroad, in 1983, to a school in Toronto, but that had not been pursued as the funds were not than available.

13. Inspector Tsang Wai Hung of the RHKP gave evidence and produced a statement in which he stated that Mr. Ho was a most conscientious, very capable and extremely diligent officer who had worked under him in the Narcotics Bureau Surveillance Section since June 1980. He said that Mr. He worked very long hours, always receiving the maximum Additional Duty Allowance, now called Disciplined Services Special Allowance(DSSA), and in the course of his career had received 2 Commissioner's Commendations, 15 Commanding Officer's Commendations, 6 Magistrate's Commendations, in addition to the Colonial Police Long Service Medal, and the Long Service Travel Award. He was of the opinion that Mr. Ho would have been promoted to Station Sergeant in April 1983 when two posts at that rank were created in the Surveillance Section, as the two sergeants who were promoted were about the same age but not as diligent as the deceased. He said that Mr. Ho had been in the police since 1955 and had been promoted to Sergeant in 1971. He had been recommended for promotion to Station Sergeant in 1981, but not selected, however Inspector Tsang was certain that Mr. Ho would have been a logical choice in 1983. Inspector Tsang also gave evidence that if Mr. Ho were still a sergeant, he would be earning now a basic salary of $6,455 plus $1,842 DSSA, but if he had been promoted, he would be on the Station Sergeant scale which starts at Point 30 on the pay scale, $6,650, rising to a maximum on Point 37 of $8,015 per month.

14. Mr. Ho Wing Chiu, William, gave evidence and stated that he was Senior Executive Officer in charge of the H.K. Government Home Purchase Scheme, and he confirmed that Mr. Ho would have been granted a monthly allowance of up to $3,000 to pay the instalments on his mortgage for a period of 115 months initially, i.e. to retirement, and if he continued his employment beyond retirement, would have received the allowance up to a maximum of 10 years. He would have received either the actual mortgage instalment or $3,000, whichever was the less, and would also have been eligible for a loan to cover the down payment, repayable over 10 years at a rate of interest one or two per cent below prime.

15. The next witness was Mr. Tsui Yiu Lung who said that he was the Executive Officer in the Personnel section of the Royal Hong Kong Police dealing with matters relating to condition of service. He said that Mr. Ho would have been eligible for overseas education allowance if his son was in a recognized college in the United Kingdom. If granted, the allowance would have been ￡2,238.00 per academic year from 1st September 1982, ￡2,400 from 1st September 1983, and ￡2,580.00 from 1st September 1984. The allowance is payable in respect of children up to the age of 19 years, but at the date of his death Mr. Ho had made no application.

16. Mr. Tsui also said that the date of his death Mr. Ho was earning a basic salary of $4,440 per month and receiving a plain clothes allowance of $55. Per month and additional duty allowance of $865 per month. If he had not been promoted his basic salary would have been $5,100 per month from 1st April 1982, $5,360 from 1st April 1983, $5,910 from 1st April 1984, and $6,455 from 1st April 1985. He said that the average increase was about 9 to 10 per cent each year. He said that the normal retiring age was 55 although there was a good chance of a further contract beyond that age. With regard to DSSA, he said that this was introduced on let June 1985. Prior to that additional duty allowance had been paid at a fixed rate of $15.85 per hour up to a maximum of 56 hours.  DSSA is calculated at the rate of 1/210 of monthly salary per hour of duty, up to a maximum of 60 hours.

17. Mr. Lee Hok See gave evidence and said that he was a Senior Accounting Officer in the Pensions division of the Treasury. He said that if Mr. Ho had been promoted in 1983, he would today be a Point 32 of the pay scale, receiving a basic salary of $7,040.00 per month. He agreed that for the past 13 years Civil Service Salaries have increased by an average of 9 to 10 per cent a year, and he then made a number of calculations, firstly based on the assumptions (a) that Mr. Ho would have been promoted in 1983, and (b) that the level of salaries would continue to increase at 9% per year, and said that at the normal date of Mr. Ho's retirement in June 1991 he would have been earning $13,442.00 per month and be entitled to a commuted pension gratuity of $376,374.00 and a pension of $80,651.00 per annum. If he had not been promoted, his entitlement if retiring in 1991 would be a commuted pension gratuity of $180,740.00 and a pension of $38,730.00 per annum; and if he had been promoted but was retiring today at point 37 he would receive a lump sum of $223,420.00 and a pension of $48,090 per annum. The maximum pension is 66% of final salary and the commuted pension gratuity is calculated at 14 times 25% of the full pension, the reduced pension thereafter being 75% of the full pension. He also said that if medically fit Mr. Ho would have a good chance of re-employment on retirement for up to two contracts of two years. There would be various options open to him in that case in respect of his pension and gratuity, the most favourable being taking the lump sum gratuity, and the reduced pension and accepting re-employment on contract but without further gratuity. He said that most people opt for taking the lump sum pension gratuity in any event.

18. The only other witness was Mr. Mak Shiu Kwai a statistician with the Census and Statistics Department, who gave evidence that according to the latest edition (November 1983) of the Demographic Trends in Hong Kong 1971-1982, and the working tables therein, the life expectancy of a Chinese male aged 45 in 1981 was 37 years.

19. This is clearly a case where the FAG award and the LARGO award will merge and I therefore propose to deal only with the lass to the estate of the deceased under LARGO.

The Lost Years Claim

20. This is a somewhat unusual case in that, the deceased being a Government servant, detailed figures are available, and precise calculations can be made, in respect of the deceased's prospective earnings, had he lived up to the date of trial, subject to (a) the rank he would hold and (b) what allowances he would received.

21. As to (a), it has been argued by. Mr. Barrettes that the evidence shows that it is a certainty that Mr. Ho would have been promoted to the rank of Station Sergeant by 1st April 1983, and he urges me to disregard Mr. Who's failure to be promoted in 1981 and the length of time since his promotion to Sergeant in 1971, in the light of Inspector Tsang's evidence of his ability and diligence, and the fact that posts of Station Sergeant were created in Mr. Ho's section in 1983, when he would only be in competition with the other members of the section who were less able. Mr. Yu on the other hand says that the failure to be promoted in 1981 is significant and allowance should be made for the probability that he would not be promoted. He said that the chance of promotion must be evaluated and referrred me to the case of Davies v. Taylor [1974] AC 207 and to Attree v. Baker & Anr., The Times, November 18, 1983.

22. I accept Mr. Yu's submission that a chance such as this must be evaluated and an allowance made according to the percentage of probability. However, on the evidence before me I am satisfied that that percentage is so close to 100% that Mr. Ho would have been promoted to Station Sergeant by 1st April 1983, that I find that promotion to be a certainty. I am also satisfied that Mr. Ho would have continued to earn the maximum additional duty allowance in the sum of $1005.90 per month to 31st May 1985 and then at the relevant DSSA rate - plus other allowances, but I do not include here overseas education allowance or home purchase allowance which I shall consider separately.

23. The total loss of earnings therefore from the date of death to date of trial is as follows :-

November 1981 to March 1982 - 5 months

24. From this figure tax must be deducted to arrive at net income. Mr. Barrette has suggested an overall rate of 8.6%, but on the assumption that Mr. Ho would have been in receipt also of home purchase allowance and overseas education allowance. While I accept, as does Mr. Yu on behalf of the Defendant, that home purchase allowance would be payable, I find the evidence in respect of overseas education allowance unsatisfactory.

25. Although both Madam Siu and her son Albert gave evidence of discussions about his education and of an "intention" to send him abroad, there was no evidence that any steps had been taken in this direction less than a year before, I am asked to believe, the overseas education would have started, no application had been made for the allowance, the discussions had only involved education in Canada, when the Civil Service Regulations produced by the Plaintiffs make it quite clear that the allowance is only payable for schools in the United Kingdom, and there is no evidence as to the cost of such schools in the United Kingdom and how Mr. Ho would have been able to afford the balance of the cost over and above the allowance. I am therefore of the view that this allowance would not have formed part of Mr. Ho's income and I disregard it from the point of view of calculating income and thus the overall tax that would have been payable.

26. I accordingly assess the likely tax rate at rather less than Mr. Barretto's figure of 8.6% and consider a proper rate to be 8% giving tax payable of $23,582.60, leaving a net income of $271,200.90, from date of death to trial.

27. It follows from my findings above as to the deceased's rank at the date of trial that the loss of earnings from today will be $9,106.00 per month. From this again must be deducted tax. Mr. Barretto has suggested a rate of 9.7% but I consider this too low. The rates of tax and allowances are a matter of public record, and it is a simple calculation taking a monthly salary as above, adding $2,965.00 being the agreed home purchase allowance, to arrive at an annual taxable income of $143,772.00. After deduction, of personal allowances for a family of four of $54,500.00, tax at the current rates comes to $17,318.00, or $1,443.16 per month. The net future loss of earnings is therefore $7,662.84 per month.

28. It is agreed on behalf of both parties that the average multiplier for a man of 45 in Hong Kong is 13, and this is the multiplier that Mr. Yu urges me to adopt. However, Mr. Barretto has rightly pointed out that, on the evidence, this is not a case of a man whose income ends with his working life, but one who would continue to receive a substantial income by way of pension until his normal date of death. There is insufficient evidence in this case to say that the deceased would have extended his working life beyond the normal retirement age of 55, although this option would have been open to him, but it is clear that at the date of death he could have looked forward to nearly 10 years on full pay to retirement and then, a further 20 years at least, on the evidence of life expectancy in Hong Kong, in receipt of a pension, albeit a reduced pension if he exercised his right to take a commuted pension gratuity. I think a proper multiplier therefore in this case is 14.

29. Loss of earnings are therefore assessed as follows:

30. From the evidence of Madam Siu it is apparent that Mr. Ho spent little on himself, his only personal expenses amounting to no more than $500.00 per month. As he worked long hours 6 days a week, his share of the joint expenses out of the contribution he gave to his wife of $3,000.00, would be less than¼; indeed Mr. Yu has suggested 1/8, or $375.00 per month, and, added to his other monthly expenses at the date of death, together with the balance of income unaccounted for after normal expenditure and savings, has conceded that at that date, the proportion of the available income solely attributable to Mr. Ho was not more than 30%. I feel therefore that it is appropriate to take a free balance for the period from death to trial of 70%, giving a sum of $189,840.63. It is a reasonable assumption that as the children became independent and Mr. Ho and his wife had only themselves to support his personal expenses and share of the joint expenses would increase, particularly after retirement when it is unlikely he could continue to save from income at the same rate of 10%. I accordingly consider that the post-trial free balance should be 55%, or $518,391.12.

Loss of Gratuity

31. It has been submitted that the estate of the deceased has further suffered the loss of the commuted pension gratuity which Mr. Ho could have received on retirement. I accept on the evidence that a gratuity was payable and that it is likely that Mr. Ho would have accepted the option of taking it with a reduced pension thereafter. One cannot speculate to what use he would have put the sum so received, although it is reasonable to assume that in addition to providing additional maintenance for himself and his wife in their old age, his proven habit of saving and investment would have led him to retain a proportion with his savings.

32. Although a number of alternative methods of calculating the likely gratuity have been put forward by both counsel, I see no reason to use any figure other than that I have already found would have been Mr. Ho's basic income today, namely $7,040.00 per month or $84,480.00 per year. The full pension would be 66% of this figure, or $55,756,80 and the commuted pension gratuity 14 x 25%, which is $195,149.80. Mr. Barretto has submitted that the loss to the estate should be assessed at half the total gratuity and I think that in this case that is right.

33. The loss to the estate of the gratuity is therefore $97,574.40.

Loss of Flat and Home Purchase Allowance

34. It has been conceded that the deceased would have applied for and received an allowance from January 1982 under the Government Home Purchase Scheme. The evidence shows that this allowance would have been the amount of monthly repayments of the mortgage loan from Wayfoong Finance Ltd. of $2,965.00 per month, the total loan being $200,000.00 repayable by 180 instalments. The allowance under the Government scheme however was only payable for 10 years, or until retirement, whichever was the sooner. On the evidence here I think it is right to assume that it would have been payable to the normal retirement date i.e. June 1991, a total of 115 months, during which he would have received $340,975.00. The total payments under the mortgage however would have been $2,965.00 ×180 = $533,700.00, being principal and interest o over the whole period. As the loss to the estate only consists of that part of the allowance which related to payment of principal I calculate this as that proportion of the original mortgage loan that the allowance bears to the total repayment i.e. :

35. The only other evidence as to loss arising from the necessity of re-transfer of the property concerned was as to the legal costs involved which amounted to $4,050.00 and which I also accept as a loss to the estate. There was no evidence as to whether the deposit of $27,200.00 had been forfeited and I therefore propose to ignore it.

36. Loss of expectation of life has been agreed at a figure of $20,000.00 and funeral expenses at $445.00.

Summary

37. It has been agreed between the parties that credit will be given for the sum of $168,000.00 employee's compensation received and $89,077.50 by way of death gratuity.

38. There will be interest on the special damages at the rate of 5.6% p.a. from the date of death until judgment and on the general damages at the rate of 2% p.a. from the date of service of the writ of judgment. There will be no interest on the post-trial loss nor on the loss of gratuity.

39. I will hear Counsel on the question of costs.