LAM PUI YIN v. WAH ON ENGINEERING LTD AND ANOTHER

HCPI 766/2016

[2020] HKCFI 601

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO 766 OF 2016

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BETWEEN

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JUDGMENT

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Background

1.  According to the Statement of Claim of the plaintiff filed herein on 11 July 2016, the plaintiff met an accident at work on 3 April 2014.  He was then in the course of employment with the 1^st defendant as a scaffolding worker, working at the scaffolding at the external wall facing Flower Market Road on 3/F, 60 Flower Market Road, Mong Kok, Hong Kong.   And the 2^nd defendant is the principle contractor to the 1^st defendant. 

2.  Before the accident, the plaintiff was dismantling the truss out of the scaffolding at the said external wall.  While he was dismantling the outermost ledgers, one of the supporting brackets towards the plaintiff’s location and including the bracket which the plaintiff sat on detached causing the plaintiff to fall from the third floor to the ground floor.  He sustained injuries. 

3.  The plaintiff claims that the accident is caused by the negligence of the 1^st and/or 2^nd defendant and brought this action to recover his loss.   The plaintiff has obtained interlocutory judgment on liability against the 2^nd defendant. 

4.  The 1^st defendant has filed a defence on 7 November 2016.  By a Contribution Notice dated 18 October 2017, the 1^st defendant claims contribution and/or indemnity from the 2^nd defendant.  In the Statement of Claim of the 1^st defendant file for the purpose of the Contribution Proceedings, it claims that the accident was caused by the negligence of the 2^nd defendant.   The 1^st defendant claims at paragraph 5 –

“5. Pursuant to the provisions of the Civil Liability (Contribution) Ordinance, Cap. 377, the 1^st defendant claims to be entitled to a full indemnity and/or contribution from the 2^nd defendant in respect of any sum including costs which the plaintiff may recover against the 1^st defendant or such amount as may be found by the Court to be just and equitable.”

5.  The 1^st defendant further claims against the 2^nd defendant in its Statement of Claim “such costs as the 1^st defendant may incur in defending the plaintiff’s claim against the 1^st defendant and in prosecuting the 1^st defendant’s claim for an indemnity and/or contribution against the 2^nd defendant.” 

6.  The 2^nd defendant has failed to file and serve the defence to the claim of the 1^st defendant in the Contribution Proceedings, notwithstanding direction has been given.   As a result, default judgment has been entered against the 2^nd defendant in favour of the 1^st defendant in the Contribution Proceedings.  

7.  On 15 November 2018, the plaintiff and the 1^st defendant came to final settlement in the Main Action between them by way of a Tomlin Order.   The 1^st defendant has to pay the agreed damages to the plaintiff in the sum of $1,380,400.   The settlement sum is to be satisfied by credit being given to the Employees’ Compensation paid by the 1^st defendant to the plaintiff in DCEC 2377/2015, and payment out of the sanctioned payment in the sum of $700,000 together with a further payment of $100,000 to the plaintiff through the Director of Legal Aid. 

8.  Further, the 1^st defendant has also paid the plaintiff his costs of this action agreed at $170,000.   The 1st defendant has also paid the plaintiff his costs in DCEC2377/2015 agreed in the sum of $52,000. 

9.  Having reached settlement with the plaintiff, the 1^st defendant seeks to recover full indemnity of the damages it paid to the plaintiff and all the legal costs.   He continues with the contribution proceedings and the sole issue before this Court is assessment of damages, namely, the contribution or indemnity that the 2^nd defendant has to pay the 1^st defendant. 

10.  As default judgment has been entered against the 2^nd defendant for the 1^st defendant on 16 January 2019 on liability, I do not have to deal with any issue on liability.  The application before me today is to assess the loss and damage which the 2^nd defendant should indemnity the 1^st defendant. 

The case of the 1^st Defendant

11.  The case of the 1^st Defendant has been pleaded in its said Statement of Claim filed for the Contribution Proceedings.  As the 2^nd defendant has not filed the Defence, and default judgment on liability having entered, it is taken that the facts set out in the Statement of Claim in the Contribution Proceedings has been admitted by the 2^nd defendant.

Quantum of the Plaintiff’s claim and discussion on reasonable damages

12.  A summary of the plaintiff’s loss and damages as claimed in the Statement of Damages has been summarised by Mr Ng, counsel for the 1^st defendant in his skeleton submission –

PSLA	$500,000
Pre-Trial Loss of Earning w/ MPF	$725,270
Post-Trial Loss of Earning w/ MPF	$1,474,200
Loss of Earning Capacity	$156,000
Special Damages	$2,805
Less : Advance Payment	($580,400)
Total =	$2,277,155
Plus interest

13.  The 1^st defendant and the plaintiff reached settlement by the said Tomlin Order dated 15 November 2018.   The settlement term is without prejudice to the 1^st defendant’s claim against the 2^nd defendant for contribution. 

14.  For assessing the loss of the 1^st defendant, Mr Ng concedes that this Court is not strictly bound by the settlement sum and retain the discretion to disallow any sum that is excessive.   And the 2^nd defendant is absent in this assessment, the burden rest on the 1^st defendant to satisfy this Court that the settlement sum is reasonable and not excessive. 

15.  The 1^st defendant called one witness.  The plaintiff further relies on the medical reports disclosed by the plaintiff in the main action and the joint medical expert report adduced by the parties. 

16.  The witness called is Mr Hung Kam Wah.   Part of his evidence concerns the liability issue which I do not have to consider.   He said the plaintiff had taken out an employee compensation case against the 1^st defendant which had been settled by payment of $580,400 and further costs of $52,000.   Further, the current action has been settled by a further payment of $800,000 to the plaintiff with costs agreed at $170,000. 

17.  Since his evidence is not contested, I accept the payment in his evidence.   And there is no evidence to suggest that the settlement is not bona fide.   The remaining question is whether the settled amount is reasonable. 

18.  I now turn to the submission of Mr Ng on the reasonableness of the settlement sum.   In his submission, he also refers to the joint medical report adduced in Court prepared by Dr Lie Wai Hung Chester and Dr Ho Ching Lun Henry dated 29 December 2016 and various medical reports from treating hospital which has been disclosed in the main action. 

19.  From the medical reports, the plaintiff suffered from “closed fracture of left distal tibia and fibula bone”.  After the accident, the plaintiff was admitted to Queen Elizabeth Hospital.  He was admitted to the orthopaedic and traumatology department for treatment including operation for closed reduction and fixation with intramedullary K-wire and locking plate.  He was discharged on 11 April 2014 and continue with out-patient treatment at the orthopaedic and traumatology department until 25 July 2015.  He also received outpatient physiotherapy and occupational therapy treatment in Kwang Wah Hospital until mid-2015. 

20.  On the issue of reasonable award for PSLA, Mr Ng refers me to a number of judgements including :

a. Sui Leung Ching v Professional Scaffolding Engineering Co Ltd & Others HCPI 70/2003 (unreported, 2^nd November 2004)

b. Tamang Tikaram v Tong Kee Co Ltd HCPI 19/2013 (unreported 1^st April 2005)

c. Yuen Wai Chun v Chan Wing Pui [2019] HKCFI 1521

d. Lau Yiu v Anwell Building Construction Co Ltd HCPI 1062/2002 (unreported 3^rd December 2003)

21.  I do not go into the details of each case which has been succinctly summarised in the written submission of Mr Ng.  Mr Ng further submits that the claim by the plaintiff at $500,000 is on the high side and a reasonable estimate would be $400,000.  I agree. 

22.  The second claim by the plaintiff is on loss of earning.  On his pre-trial loss, it can be further divided into two periods, that when he cannot work at all, and that he could return to some form of work before the notional trial date.  As there is no trial for the main action, I agree with Mr Ng to use the notional trial date in the Statement of Damages, namely, 2 October 2016, 30 months from the date of accident. 

23.  According to the Statement of Damages filed by the plaintiff, he was given intermittent sick leave of a total of 588 days from 3 April 2014 to 11 November 2015.  The sick leave certificates have been included in the Assessment Bundle.  It is well established legal principle that this Court is not bound by the sick leave certificates to find that the plaintiff could not work for the whole period. The plaintiff has not given evidence today and the best evidence to assist me is from the joint medical expert report. 

24.  Dr Lie agrees that the sick leave granted is appropriate.  Dr Ho opines that the period of 1 year’s sick leave is reasonable.  And Mr Ng is prepared to accept the period of one year as the reasonable sick leave period when the plaintiff has no earning and earning capacity at all.  I would rule that the reasonable sick leave for the plaintiff shall be one year. 

25.  Mr Ng submits that there should be a 3months’ period for the plaintiff to look for new employment, making his total period of nil-earning at 15 months.  I accept this is a reasonable assessment. 

26.  According to the plaintiff’s Statement of Damages, he claims that he could not resume his pre-accident work, namely a scaffolding worker at construction site.  And due to his disability, the plaintiff remains unemployed.  But for the purpose of this claim, the plaintiff claims in the Statement of Damages while he is unemployed, he would only claim his loss of earning after the sick leave as if he could return to some kind of work in construction site earning $13,000.  I shall come to his earning later.  The experts’ opinion would assist this Court to consider the reasonable working capacity of the plaintiff after sick leave. 

27.  Dr Lie opines that at the examination, there was obvious left ankle stiffness and mild left ankle weakness.  He could not return to work as a scaffolding worker who needed to work at height.  He may be able to work in an environment that does not require to work at height, does not require to have prolonged walking or standing for 30 minutes, without lots of stairs walking or squatting and with a lower manual work demand. 

28.  Dr Ho also opines that the slight reduced left ankle movement and reduced muscle mass leading to mild weakness of the left lower limb would affect his ability and safety when working at heights and when repeated climbing is required.  He further opines that the plaintiff has no significant difficulty working in other positions at a construction site such as traffic controller (banksman), machine operator, general cleaner etc. He could also work in other types of jobs such as petrol station attendant, car park attendant, car washer etc. 

29.  From the expert evidence, it can be concluded that the plaintiff could not return to work as scaffolding worker in construction site.  And there is no difference in their view that the plaintiff has ankle stiffness, and mild weakness of the left lower limb.  It is reasonable for the 1^st defendant to accept that the plaintiff has partial loss of earning capacity after the sick leave period.  

30.  There is no evidence as to the earnings of other types of work in a construction site that the plaintiff may perform, as the plaintiff has not given evidence as to what work he could perform.  To assess his loss of earning, the best this Court could do is to start with his pre-accident earning as a scaffolding worker and give a discount on his earning. 

31.  The plaintiff claims his pre-accident earning at $26,000/month.  According to the evidence of Mr Hung Kam Wah, the accident happened on the first day of employment.  The daily wages of the plaintiff was $1300/day. 

32.  Mr Ng refers to the Form 2 filed in this action.  Initially, it is said that the plaintiff has a monthly earning of $21,600 per month.  It has later been revised to $26,000 per month on the basis of a similar worker. 

33.  It is not unfair to assess the earning of the plaintiff at $26,000, which represent 20 days of work per month.  Hence I accept the submission of Mr Ng to take the plaintiff’s pre-accident earning at $26,000 per month. 

34.  Mr Ng invited me to adopt the figure of $13,000 as the monthly loss of the plaintiff after sick leave period.  While I have no other figure, I bear in mind that a scaffolding worker is a skill worker and entitled to higher wage.  It is not unreasonable for the defendants to accept a loss of earning between 35 - 50% assuming that he could work at the construction site as a general labourer. 

35.  In conclusion, I accept the calculation of Mr Ng that the pre-trial loss would be $614,250.  And in the alternative, assuming that he only suffered a loss of income at 35%, the pre-trial loss would be as follow -

[($26,000 x 12) + ($26,000 x 3) + ($26,000 x 35% x 15)] x 1.05 = $557,936.40

36.  The plaintiff was 46 at the notional trial date.  Assuming his retirement age at 65, the multiplier for further loss according to the Chan’s Tables would be 14.79.  Mr Ng submits that the loss of earn since the date of notional trial date shall be $2,422,602. Which I agree. 

37.  Assuming again that the plaintiff only suffer loss of 35% of his monthly earning, his loss would be [$26,000 x 35% x 12 x 14.79] x 1.05 = 1,695,821.40. 

38.  The 1^st defendant agrees that the claim for loss of earning capacity may not succeed and I do not take it into account for this assessment.  I also agree with Mr Ng that the claim for special damages for $2,805 being medical and travelling expenses should be taken into account as reasonable damages. 

39.  According to the calculation of Mr Ng, the recoverable damages before taking into account the settlement sum in the related DCEC action would be around $3,439,657.00.  And if I use the lower loss of earning based on 35% loss of earning capacity as herein above mentioned, the loss would be around $2,656,562.80.  In either cases, the settlement sum is much lower and must be reasonable. 

40.  I would assessment the loss of the 1^st defendant at the settlement sum of $1,380,400.  While part of the damages is paid by setting off the related DCEC settlement sum, the overall damages paid by the 1^st Defendant to the plaintiff has not been reduced. 

41.  The 1^st defendant also paid the plaintiff’s costs in the agreed sum of $170,000 for this Action.  I note that at the time of the settlement, substantial work has been done for this action and judging from the pleading filed by the plaintiff, the expert opinion obtained, I find it reasonable for the 1^st defendant to settle the costs at $170,000.  

42.  Mr Ng submits in his written submission that the costs should be $222,000.  As mentioned above, part of the legal costs, $52,000 is in fact legal costs agreed and paid to the plaintiff in the related DCEC action.  This is not costs in this action. 

43.  In the supplemental submission of those instructing Mr Ng, the 1^st defendant accepts that this is not costs of this action, but submits that it is recoverable.  There are decided cases confirming that it is recoverable under the Civil Liability (Contribution) Ordinance, referring to a judgment by Mr Justice Andrew Cheung, as he then was, given in Ko Kam Wai v Sze Hak Fung & Another HCPI 292/2005.  I agree. 

44.  Mr Ng also referred to paragraph 5 of the Statement of Claim.  It is submitted that the reference to “any sum including costs which the plaintiff may recover against the 1^st defendant …” is wide enough to cover all costs paid in relation to the accident. 

45.  The 1^st defendant is bound by the pleading and I shall assess the loss according to the pleaded case.  I accept the submission that the wording is wide enough to cover any sum paid as damages or costs by the 1^st defendant and related to this accident. But as a reminder, it is always better drafting to have the precise case pleaded to save any argument.     

46.  In summing up, I grant an order that -

A. The 2^nd defendant do indemnify and pay the 1^st defendant the sum of $1,380,400 with interest at judgment rate from 16 January 2019 until payment;

B. The 2^nd defendant do indemnify and pay the 1^st defendant the further loss and damages being costs paid to the plaintiff at the total sum of $222,000 with interest at judgment rate from 16 January 2019 until payment; and

C. The 2^nd defendant do pay the 1^st defendant’s costs in defending the plaintiff’s claim and the costs of this Contribution/Indemnity Proceedings to be taxed if not agreed with certificate for counsel for the assessment.