WONG HOI CHUNG v. LKK TRANS LTD

cacv 116/2004

in the high court of the

hong kong special administrative region

court of appeal

civil appeal no. 116 of 2004

(on appeal from DCEC no. 153 OF 1999)

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REASONS FOR JUDGMENT

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Hon Rogers VP:

1.  This was an appeal from a judgment of HH Judge C B Chan given on 23 March 2004.  The judge was hearing an application under the Employees’ Compensation Ordinance, Cap. 282 (“the Ordinance”) first of all to extend the period of entitlement to periodic payments, secondly for compensation under section 9 of the Ordinance, amongst other sections, and thirdly to appeal, pursuant to section 18 of the Ordinance, against the Certificate of Review of Assessment of the Commissioner for Labour dated 21 February 2001.  The judge found that the applicant had suffered a 90% loss of earning capacity and held that the applicant was entitled to the sum of HK$1,138,233.38 together with interest.  The respondent appealed to this court.  At the conclusion of the hearing of this appeal this court dismissed the appeal with reasons to be given in writing.

Background

2.  The applicant was injured in an accident at work on 29 April 1997.  At that time he was 43 years old.  He had worked as a delivery worker and on the occasion of his accident he fell from the back of a lorry.  The medical evidence shows that he was suffering from avascular necrosis in his hips.  As far as his right pelvis was concerned it was in its early stages but he fell on his left side and he suffered a subchondral fracture of the femoral head of his left hip.  This, as the judge found, was a serious injury.  The judge said that the injury had impacted on the degeneration caused by the avascular necrosis and in causing the fracture in the manner it did it had aggravated as well as accelerated the progress of the necrosis.  The applicant received extensive treatment.  As part of that, in July 1998, he was operated on in an attempt to rescue the femoral head.  The operation was a rotational osteotomy over the base of the femoral neck.  The treatment which the applicant received was only partially successful to the extent that by 1999 the applicant still required a pair of crutches to walk.  Although he returned to work in early 2000 it became apparent that despite the fact he was given light jobs he could not carry out work such as cleaning work nor painting, nor could he do registration of documents nor the collection of vouchers.  As a result, he was dismissed in March 2002 and has remained unemployed.

3.  It should also be noted that it is reported that in early 2001 he was complaining of severe pain in his right hip and by April 2001 an x-ray showed that he had advanced avascular necrosis in his right hip and there was significant collapse of the femoral head of that hip.

4.  There is a suggestion that the applicant’s condition may be ameliorated, albeit, perhaps to a limited extent, if he were to have a hip replacement.  The judge held that the question of what the condition would be if the applicant had a hip replacement was irrelevant for the purposes which she had to consider because, if paid for privately, such an operation was expensive.  Not only would those expenses not be recoverable under the Ordinance but there was no evidence that the applicant would be able to have the operation at public expense.

5.  On 2 December 2000 the applicant was assessed by the Employees’ Compensation (Ordinary Assessment) Board to have suffered 40% loss of earning capacity permanently and on 21 February 2001 the Employees’ Compensation (Ordinary Assessment) Board by Certificate of Review of Assessment assessed the applicant to have a 60% loss of earning capacity on a permanent basis.

The judgment below

6.  The major point taken by the respondent in the court below in resisting the claim for compensation in respect of permanent partial incapacity under section 9 of the Ordinance was as to the matter of causation.  Relying on the fact that the applicant suffered from avascular necrosis in the hips it was said that the applicant’s incapacity was due to his pre-existing condition and that although the injury might have accelerated the time at which that condition would render the applicant incapacitated, by the time of the hearing the applicant was in the position where he would have been in any event. 

7.  The judge dismissed this argument, which relied heavily upon the opinion expressed by the doctor engaged by the respondent that the subchondral fracture and collapse of the left femoral head was probably brought forward by about three years.  In criticising that statement the judge rightly pointed out that the doctor had not stated any basis or ground for such an assumption and the judge gave her own reasons for not accepting the hypothesis which had been put forward.  In my view for the reasons which been given by the judge she was perfectly entitled not to accept that hypothesis, particularly in view of the fact that, despite her invitation, the doctor in question, as well as the other doctors who had given statements, was not called to give evidence.

8.  Having held that the accident was the cause of the applicant’s injury and that without a hip replacement the applicant suffered a 100% loss of earning capacity the judge went on to hold that he had very little capacity to work and awarded compensation on the basis of a 90% disability.

This appeal

9.  On this appeal, Mr Bharwaney, who appeared on behalf of the respondent took causation as his major point on the appeal.  It was similar to the point taken in the court below.  Before considering the argument in any detail, it is necessary to refer to the basis upon which compensation is awarded under the Ordinance.  The Ordinance, as has been said on many occasions, is there to provide a simple method for compensation for workers who have been injured in the course of their employment.  Section 10 of the Ordinance provides for compensation where there has been temporary incapacity, whether that be total or partial, which has resulted from any injury suffered at work.  In contrast section 9 of the Ordinance provides for compensation where there has been an injury which has caused permanent partial incapacity.  The compensation under section 10 of the Ordinance can be made by periodical payments or by a lump sum, calculated having regard to the probable duration and probable changes in the degree of the incapacity.  Again, in contrast, under section 9 the compensation is a one-off payment.  It is unnecessary, for present purposes to consider the basis of calculation of the payment.

10.  Importantly for the purposes of this case, section 10(5) of the Ordinance provides for a cut-off date for periodical payments upon the occurrence of which the employee is deemed for the purposes of the Ordinance to be permanently incapacitated.  That section reads:

“(5)An employee who has received periodical payments under this section for a period of 24 months from the date of the commencement of the temporary in capacity or for such further period being not more than 12 months as the Court may allow in any particular case shall no longer be entitled to periodical payments under this section but shall be deemed to have suffered permanent incapacity and the provisions of section 7 or 9, as the case may be, shall apply to the employee.”

11.  Thus, after a maximum of 36 months of periodical payments, a person who has suffered an injury at work is deemed to have suffered a permanent incapacity, whether that be total or partial.  After that he is treated, for the purposes of compensation under the Ordinance, as being entitled to be assessed as permanently incapacitated.  This case is concerned with a permanent partial incapacity. 

12.  The initial matter raised by Mr Bharwaney, on this appeal was that the entitlement to compensation under the Ordinance had to be determined as at the date that the court was hearing the case.  However, that argument must clearly be wrong.  Under section 9 of the Ordinance the employee is entitled to compensation when he has suffered permanent partial incapacity and under section 10(5) the permanence is deemed to exist once he has received a maximum of 36 periodical payments.  His entitlement to the lump sum in respect of his incapacity is thus crystalised in accordance with the deeming provision.

13.  On that basis, what the court has to consider is whether the employee suffered an injury at work as a result of which he is incapacitated.  In this case, there was a clear finding by the judge that that was so.  The Ordinance takes no account of the fact that the injury might be more severe as a result of a pre-existing condition nor is there any basis in the Ordinance for taking account by way of apportionment or otherwise of any congenital defect or injury or disease received or contracted before the accident, as is now the case under the Regulations in the United Kingdom.

14.  In respect of this argument counsel sought to rely on what was said by Romer J in Old v Furness, Withy & Co. Ltd. 49 Ll.L.L. Rep 210 at page 215 that the court should take into account whether the incapacity resulting from the accident had ceased by the date of the award.  However, as the judge below explained in more detail, the Workmen’s Compensation Act 1925 was markedly different from the Ordinance.  In particular, it only provided for payments on a continuing basis and there was provision for making further applications if circumstances changed.

15.  Nor was reference to the case of Fu Kwong Woon v Chau Woon & Another [1992] 1 HKC 562 of any use in this matter.  In so far as it constitutes authority, it is simply an illustration of an instance where a court considers it appropriate to cross check its assessment of what the current levels of pay might be by reference to the current market levels.

16.  In any event it seems to me that it had not been established on the evidence that by April 2000 the avascular necrosis would have caused the applicant to be suffering the disability which he suffered at the time of the hearing below. 

17.  The next point taken by Mr Bharwaney was that the assessment should have been made on the basis that the applicant had a good right leg whereas in fact he did not.  There are two answers to this. 

18.  The first is that it has not been shown that the applicant’s right hip had deteriorated to the point where there had been a collapse of the femoral head by the relevant date namely three years after the date of the accident.  That is the date when the periodic payments would have ceased and the applicant would have been deemed to have suffered a permanent partial disability.  The second point is that even if the applicant’s right hip was by that date causing him significant problems, nevertheless the injury caused by his accident was a cause of the disability and he is therefore entitled to compensation.

19.  The final point made by Mr Bharwaney was that the applicant should have had, or should be taken to have had, a hip replacement operation.  In those circumstances it was said that his disability would have been minimal and that he could have undertaken other work.  Again this argument appears to me to be unsustainable.  Not only is it wrong to assess the applicant on the basis that he would have had an operation which he had not had, but even if he had had such an operation the question then arises as to what employment he could have undertaken.  In respect of the first point the Ordinance does not allow for making an allowance in respect of some mitigation which the applicant might but did not undertake.  As already noted there is no provision in the Ordinance for the making of payments to the applicant in respect of costs incurred in such an expensive operation.  In this context Mr Bharwaney sought to rely on an unreported decision of HH Judge Scriven in Tsui Mon Kit v E Man Construction Co. Ltd.  That decision appears to me to be of no authority whatever, as the judge appears to have made some reduction in the compensation payable without any authority, whether statutory or otherwise to do so.

20.  There is also the clear finding of the judge in paragraph 82 of the judgment where, for sound reasons, she held that the applicant was not suited for a sedentary job because he did not have the necessary skills.  The practical realities of that are that the applicant did attempt to work but lost his job because he could not do the sort of things that even a sedentary job entailed.

Hon Hartmann J:

21.  I agree.

Hon Reyes J:

I.    Introduction

22.  On 29 April 1997, while working for LKK, Mr. Wong fell from the back of a lorry and hurt his left hip.  Following the injury, Mr. Wong could no longer carry heavy weights as before.  He could not resume his former job of delivery worker.  Further, because he has only been educated to Primary 6 level in the Mainland, leaving school at the age of 11, Mr. Wong can do little else.

23.  Mr. Wong sued LKK under the Employees’ Compensation Ordinance (Cap.282) (ECO).  On 23 March 2004 Judge C. B. Chan awarded him compensation of $1,138,233.38 plus interest on the basis that his injury had resulted in a permanent 90% loss of earning capacity.  LKK appeals against that award.

24.  Before the accident, Mr. Wong had been suffering from avascular necrosis of both hips.  LKK contends that, even without the accident, by 2000 or 2001, Mr. Wong would have found himself in the same condition that he was in after the accident.  LKK says that the accident only accelerated the inevitable collapse of Mr. Wong’s left hip.  Accordingly, Mr. Wong’s present incapacity cannot (LKK argues) be attributed to the accident.  If so, there should be no liability on LKK’s part to compensate Mr. Wong for permanent partial incapacity under ECO s.9.

25.  The question before this Court is whether LKK is right.

II.    Background

26.  ECO s.10(5) provides:-

“An employee who has received periodical payments under this section for a period of 24 months from the date of the commencement of the temporary incapacity or for any such further period being not more than 12 months as the Court may allow in any particular case shall no longer be entitled to periodical payments under this section but shall be deemed to have suffered permanent incapacity and the provisions of section 7 or 9, as the case may be, shall apply to the employee.”

The reference to ECO s.7 concerns compensation for permanent total incapacity, that to ECO s.9 for permanent partial incapacity.

27.  Judge Chan (at Judgment §27) noted that, for 36 months following his accident, Mr. Wong received periodical payments under ECO s.10 for temporary incapacity caused by his injury.  It followed from ECO s.10(5) that Mr. Wong was to be deemed as having suffered permanent incapacity.  Wong’s injury only giving rise to partial incapacity, Judge Chan then assessed compensation under ECO ss.9(1) and (1A).

28.  ECO s.9 provides as follows:-

“(1) Subject to subsection (1A), where permanent partial incapacity results from the injury the amount of compensation shall be:-

...

(b) in the case of an injury not specified in the First Schedule, such percentage of the compensation which would have been payable in the case of permanent total incapacity as is proportionate to the loss of earning capacity permanently caused by the injury in any employment which the employee was capable of undertaking at that time:

Provided that:-

(i) ...

(ii) in the case of injury not specified in the First Schedule, the loss of earning capacity permanently caused by such injury shall be assessed as a percentage having regard so far as possible to the scale of percentages specified in that Schedule and to the Note thereto.

(1A)Where:-

(a) permanent partial incapacity results from an injury or a combination of injuries (whether or not specified in the First Schedule); and

(b) the percentage of the loss of earning capacity specified or assessed in relation to that injury or combination of injuries in accordance with subsection (1) would be substantially less than the percentage of the loss of earning capacity permanently caused by the injury or injuries in the special circumstances of the employee, including without limiting the generality of the foregoing:-

(i) the nature of the injury or injuries in relation to the nature of his former usual employment; and

(ii) his qualifications, previous training and experience,

the amount of compensation shall be such percentage of the compensation which would have been payable in the case of permanent total incapacity as is proportionate to the loss of earning capacity permanently caused by the injury or injuries in any employment which, having regard to those special circumstances, the employee was capable of undertaking at that time.”

29.  The Employees Compensation (Ordinary Assessment) Board on review put Mr. Wong’s loss of earning capacity at 60%. 

30.  Judge Chan thought that this was too low.  She examined Mr. Wong’s special circumstances (at Judgment §82).  She thought that the success of any hip operation was “uncertain” and the prospects of Mr. Wong being able to return to gainful work afterwards were “minimal”.  She stressed that Mr. Wong “has no career skill other than that of a delivery worker”.  Further, Mr. Wong’s “education level would not enable him to take up new career training”. 

31.  The Judge concluded, applying ECO s.9(1A) that Mr. Wong’s actual loss of earning capacity as a result of his injury was accordingly greater than 60%.  She assessed the loss at 90%.

III.    Discussion

32.  Mr. Bharwaney (appearing for LKK) contends that Judge Chan erred in 3 principal ways:-

(1) She should have (but did not) consider whether Mr. Wong’s incapacity was due to his injury or his necrosis.

(2) In any event, she ought to have assessed Mr. Wong’s incapacity on the basis that only his left (and not his right) hip had been injured by the accident.

(3) At the very least, she ought to have factored in the possibility that Mr. Wong’s incapacity could be alleviated by a hip operation.

A.    Causation

33.  Mr. Bharwaney argues that Judge Chan was wrong.  He says that all ECO s.10 does is to terminate periodical payments for temporary incapacity after 36 months.

34.  Although Mr. Wong is “deemed to have suffered permanent incapacity,” ECO s.10(5) (Mr. Bharwaney submits) does not say anything about treating Mr. Wong’s incapacity as “resulting from” his injury.  The Court still has to assess whether incapacity was caused by his injury or an independent event, such as Mr. Wong’s necrosis.  If the permanent incapacity was not the result of injury, but of a pre-existing disease, LKK should not (Mr. Bharwaney reasons) bear the costs of disablement.

35.  Mr. Bharwaney observes that in the UK, under the Workmen’s Compensation Acts (WCA), compensation was not payable unless caused by the accident at work.  Mr. Bharwaney invites the Court to follow the UK in this respect.  He accepts that the WCA have been repealed by new legislation in England and that there are significant differences between the schemes implemented by the WCA and ECO.  But there are also similarities in wording between the WCA and ECO.  Mr. Bharwaney says that these similarities must have been intentional, so that the former can serve as a guide to understanding the latter.

36.  I am not persuaded by Mr. Bharwaney’s argument.

37.  ECO s.10(5) is clear.  Upon expiry of a maximum of 36 months, the partially incapacitated employee who has been receiving periodical payments as a result of his accident is deemed to be permanently injured.  In that case, ECO s.9 “shall apply” to the employee.  That plainly means that the partial incapacity is to be treated as if it were a permanent condition resulting from the injury such that ECO s.9 applies.

38.  There would be little point in the deeming provision otherwise.  If the only objective of ECO s.10(5) was to stop periodical payments, it would have been more straightforward to have said so expressly.  The deeming provision is only apposite if the legislative intent was to make ECO s.7 or 9 automatically applicable in respect of the workplace injury.

39.  That is sufficient to dispose of Mr. Bharwaney’s main point.  But in deference to his argument, I shall briefly comment on some of his supporting submissions.

40.  First, I do not think that jurisprudence on the WCA is any safe guide to the interpretation of the ECO. 

41.  As Judge Chan pointed out (at Judgment §26), there are “marked differences in the intention and purpose behind the two Schemes of Compensation”.  In particular (at Judgment §21), the Judge stated:-

“[i]t seems ... that the UK Workmen’s Compensation Scheme is enacted in the background of UK Government social security and the provision of unemployment benefit that exists for workers in the United Kingdom.  This may explain why there is no provision for lump sum compensation for permanent total or partial incapacity.  In Hong Kong, our situation in social benefits is not the same in Hong Kong.”

42.  Assume that Mr. Bharwaney is right that, under the WCA, to qualify for compensation, an employee must show a causal link between his injury and incapacity.  The UK employee who cannot establish causation under the WCA, may nonetheless receive benefits for his partial or permanent incapacity from some other scheme within the UK social security umbrella.  Without a detailed study of the whole, I do not see how the operation of only a part of the UK system can serve as a reliable platform for construing the ECO. 

43.  Case law on the WCA can at best be indicative of the correct approach in Hong Kong.  It cannot be compelling.  Ultimately, the ECO must be read in light of local circumstances and needs, not those of the UK.

44.  Second, the evidence does not establish that Mr. Wong would inevitably have suffered his present incapacity, by reason of his necrosis, regardless of the accident.

45.  At the hearing, the Court asked Mr. Bharwaney to identify the evidence on which he relied as showing that Mr. Wong’s incapacity was the result of disease rather than injury.

46.  Mr. Bharwaney first pointed to a Physiotherapy Progress Report Form.  This (he said) indicated that physiotherapy had stopped around 14 April 2000 after 89 sessions spread over about 1½ years.  He submitted that this was likely because the onset of necrosis rendered further sessions pointless.

47.  Mr. Bharwaney bolstered his reading of the physiotherapy report by reference to a remark by Mr. Wong recorded by Dr. Lau Hoi Kuen (LKK’s medical expert).  Mr. Wong is said to have told Dr. Lau that “he started to have pain in his right hip at about the end of the physiotherapy programme”.

48.  The pain in the right hip (Mr. Bharwaney says) must have been due to necrosis, since only the left hip was injured in the accident.  Given pain in the right hip and given that necrosis is likely to have proceeded symmetrically, one can assume (Mr. Bharwaney reasons) that, even without the accident, there would also have been pain in the left hip.  If so, Mr. Bharwaney concludes that the right and left hips would both have been incapacitated anyway.

49.  Mr. Bharwaney then referred the Court to the following comments of Dr. Lau:-

“(2) The alleged accident could have brought forward the occurrence of the subchondral fracture of the femoral head.

(3) But as been well demonstrated by the several changes of the right femoral head in the x-rays taken in the past few years, the subchondral fracture and the collapse of the femoral head would have anyway occurred even without the alleged accident.

(4) Assuming that the AVN [avascular necrosis] process in his hips would run the same natural course, the alleged injury to the left hip may be considered as having brought forward the onset of the subchondral fracture and collapse for about 2 to 3 years.

....

(10) In conclusion, Mr. Wong has genuine disability of both lower limbs and he cannot return to work again as a delivery worker.  But the basic pathology (AVN) in his left hip should have existed before the alleged incident on 29 April 97.  Even without the injury to his left hip in the alleged accident, progressive collapse and subchondral fracture of the left femoral head would have occurred at about mid 99 to early 2000.  The alleged accident could at the most have brought forward the onset of the collapse of the subchondral fracture by about 2 to 3 years.”

50.  Finally, Mr. Bharwaney referred the Court to the following comments in a joint report by Dr. Lau and Professor P. C. Leung (Mr. Wong’s medical expert):-

“(6) Dr. Lau agrees with Prof. Leung that the alleged accident could have enhanced the pre-existing avascular necrosis of the left femoral head by bringing forward the occurrence of the subchondral fracture and the collapse of the femoral head.

(7) Dr. Lau, in trying to quantify the effect of the alleged injury to his left hip on the pre-existing avascular necrosis of the femoral head suggests using the right hip as a model for comparison.  This is based on the assumption that the avascular necrosis process in both hips would run the same natural course.  It has been shown by serial x-rays taken in the past few years that subchondral fracture and collapse of the femoral head had occurred in the right hip even without any history of injury.  The alleged injury to the left hip may be considered as having brought forward the onset of the subchondral fracture and collapse of the left femoral head for about 3 years.

(8) Prof. Leung and Dr. Lau agree that the avascular necrotic process of Mr. Wong’s right hip is unrelated to the subject accident.

....

(10) There has also been progressive collapse of his right femoral head in the past few years.  His right hip has become painful since Jan. 2001.  The pain and stiffness of his right hip is very severe at present.”

51.  It will be apparent that the evidence relied on by LKK consists largely of assumption, conjecture or assertion on Dr. Lau’s part.

52.  The Judge examined the medical evidence in careful detail.  She was unconvinced.  She was especially critical of Dr. Lau’s premise that the eventual collapse of Mr. Wong’s left hip, even if the accident not occurred, could be inferred from the debilitation of Mr. Wong’s right hip.

53.  At Judgment §50, she observed:-

“Dr. Lau did not state any basis or ground for such assumption.  At another part of his report he stated that it was logical.  It would seem to me a matter of common sense that the progression of avascular necrosis of each hip would be independent of each other.  The basis for the assumption is not stated.  In my view it is mere speculation without basis.  The onus of proof related to this rests on the Respondent who asserts the defence that the avascular necrosis of the left hip would have progressed at the same pace as that of the right hip....  I find that the aforesaid assertion of Dr. Lau that the progression of the avascular necrosis of the Applicant’s left hip would be the same as that of the right hip, is without basis and I do not accept it.”

54.  Indeed, the Judge continued, it was more likely that the injury to the left hip exacerbated the wasting of the right hip, due to Mr. Wong placing less weight while moving, on the left leg (which would be in pain) and more on the right (which would not be as painful). 

55.  The Judge stated (at Judgment §50):-

“Further, common sense would dictate that the progression of the avascular necrosis of the right hip could not have been unaffected by the injury in the left hip and its effect.  Common sense would show that greater stress and tension would have been exerted on the right hip as a result of pain in the left hip and the gait of the Applicant walking with the pain.  This would no doubt be aggravated by the shortening of the left leg although the Applicant was given special shoes with a raised heel for the left leg and this would no doubt have compensated the effect of the shortening of the left leg.  For these reasons, I could not accept the opinion of Dr. Lau that the progression of the avascular necrosis of the left hip would have been at the same speed as the progress of avascular necrosis of the right hip.”

56.  I agree with the Judge. 

57.  I do not see any answer by LKK to her criticism.  The best that Mr. Bharwaney could offer by way of a reply was that, being injured, Mr. Wong was unlikely to do much walking and thus would not be exerting significant stress on his right leg.  That may or may not be the case.  On the material before the Court, it is pure hypothesis.  There is no substantive consideration of the matter by Dr. Lau.

58.  Thus, even if (despite the deeming provision in ECO s.10(5)) there remains in law a need to show causation under ECO s.9, the facts do not support LKK’s case.  The evidence does not show a likelihood that Mr. Wong’s incapacity stemmed from necrosis rather than injury.  I do not think that it can be said that, regardless of his fall from the lorry, Mr. Wong would have ended up in the same condition as he found himself in 2000 or 2001.

59.  Third, in support of his case that subsequent events, such as the likely effect of necrosis, should be taken into account under ECO s.9, Mr. Bharwaney suggested that the contrary position would lead to absurdity.  He postulated the situation of an employee who died just before the case assessed his benefit under ECO s.9.  It would be absurd then, Mr. Bharwaney submitted, not to take account of the death and to award compensation to the employee’s estate.

60.  Mr. Bharwaney relied on Fu Kwong Woon v. Chau Woon and another[1992] 1 HKC 562 to make his point.  The question there was how an employee’s compensation for permanent partial incapacity should be determined under ECO s.9(1A).  Was one entitled to assess percentage loss of earning capacity by reference to facts prevailing at the time of the accident or at the time of the hearing?

61.  Judge Downey held that the Court could consider facts prevailing at the time of assessment.  He said (at 58B-E):-

“The court must determine the loss of earning capacity caused by the injury or injuries at the time of the accident.  It does not follow that its assessment of that loss must only be based on evidence of actual and notional earnings at the date of the accident.  Indeed, in many of the case in the past, evidence of such notional earnings was simply not before the court.  That was the situation in the Hong Kong Mills case [[1981] HKLR 556].  The Court of Appeal arrived at a loss of earning capacity of 50% by accepting the medical evidence that the employee had lost half the use of a leg above the knee and by adding an allowance for his back injury.  The court came to its conclusion on the basis of the evidence available at the hearing and by deriving some assistance from the first schedule.  Of course, that case was not decided before the enactment of s.9(1A) opened the door to a consideration of factors going beyond the arbitrary figures in the first schedule and, the actual and notional earnings at the date of the accident because it requires the court to have regard to the special circumstances of the employee.”

62.  I frankly do not see any absurdity in the Court awarding compensation to the employee’s estate in the scenario posited by Mr. Bharwaney. 

63.  More concretely, I do not think that Fu Kwong Woon helps Mr. Bharwaney.  All that Judge Downey was saying is that, when assessing loss of capacity as at the time of the accident, it is permissible to consider the difference between what an applicant is earning at the time of assessment and what he could have been earning then in his former employment. 

64.  Fu Kwong Woon concerns the assessment of percentage loss of capacity under ECO s.9(1A).  Judge Downey was not addressing the different question whether later events should be taken account in determining entitlement to (or liability for) compensation under ECO s.9 in the first place.

65.  In light of the foregoing, Mr. Bharwaney’s primary ground of appeal fails.

B.    Assessment

66.  Mr. Bharwaney argues that, in any case, the Judge ought to have assessed Mr. Wong’s loss of capacity on the basis that his right hip was healthy.  This is because only the left hip was injured by the accident, not the right.

67.  I disagree with Mr. Bharwaney.

68.  As mentioned above, the Judge thought it was likely that the injury to the left hip exacerbated the poor condition of Mr. Wong’s right hip.  There was no evidence to the contrary.  In those circumstances, I do not see why the Judge should have assumed that the debilitation of the right hip was unrelated to the injury to the left hip and should be ignored in an assessment of loss of earning capacity.

69.  In my view, the Judge was entitled under ECO s.9(1A) to take account of her view that the injury to the left hip took the necrosis “beyond its natural course” and affected Mr. Wong both as to his left and right hips.

70.  Accordingly, Mr. Bharwaney’s second ground of appeal also fails.

C.    Operation

71.  The loss of earning capacity assessed by the Judge (Mr. Bharwaney submits) should have taken account of the possibility of improvement in Mr. Wong’s condition through a hip replacement operation.

72.  For this, Mr. Bharwaney relies on Tsui Hon Kit v. E. Man Construction Ltd. and others EC Case No.152 of 1984.  There the employee suffered from 100% incapacity.  But it was argued that an operation might, if successful, improve his condition and only leave him with a 25% to 40% loss of earning capacity.  The employee refused to undergo the operation.  The employer said that was unreasonable.

73.  Judge Scriven accepted that he could not impose any duty to mitigate on the employee.  He also acknowledged that, unless the ECO provided for a reduction of compensation, no reduction could be made.  Nonetheless, he confessed to having some sympathy with the employer.

74.  In the end, Judge Scriven held (at pp.8-9):-

“Whilst I accept as true the Applicant’s protestation in cross-examination that he was not refusing the operation to enhance his claim, I did not observe him to be as the Doctors had said, extremely demonstrative of his symptoms, and the conclusion I have come to is that there should be [some?] median between the extremes of the total permanent disability now suffered by the Applicant and the ameliorated position Dr. Hodgson prognosticates to follow an operation.....  At the moment [the Applicant’s incapacity] is 100%, and what I propose to do is to hold that his actual and permanent incapacity is partial and allowing for the uncertainty of surgery and the vagaries of this labour market that the permanent incapacity is in fact 75%.  I so find.”

75.  I do not think that Mr. Bharwaney is right.  There is no provision for reducing compensation under the ECO on the basis of a potentially beneficial operation. 

76.  I do not understand the basis on which Judge Scriven concluded as he did.  Having stated that no reduction could be made unless allowed by the ECO, he proceeded arbitrarily to reduce the employee’s compensation by 25% without reference to any statutory provision.

77.  The result was that the 100% incapacitated employee only received compensation for 75% loss of capacity.  To improve his condition to the latter level of incapacity, the employee would have to undergo, against his wishes, an operation of uncertain prospect.  Further, the employee would have to find the money to pay for the uncertain operation. 

78.  If the operation failed, the employee would be considerably worse off.  He would have lost 25% of the compensation due under the ECO and he would have lost the money which he put into the uncertain and unwanted operation.  Whatever sympathy the Judge might have felt for the employer, I do not believe that his approach was fair to the employee or within the terms of the ECO.

79.  Mr. Bharwaney’s third ground of appeal consequently fails.

IV.    Conclusion

80.  In the circumstances, I agreed that the appeal should be dismissed.  Mr. Wong was awarded the costs of the appeal, such costs to be taxed if not agreed.