CHAU CHIN TO CHADOW v. WING FUNG FINANCIAL GROUP LTD

CACV 196 /2017

[2018] HKCA 573

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 196 OF 2017

(ON APPEAL FROM HCPI NO 163 OF 2015)

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REASONS FOR JUDGMENT
AND DECISION ON COSTS

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Hon Kwan JA (giving the Reasons for Judgment and Decision on Costs of the Court):

1.  This is the defendant’s appeal against the assessment of damages in a personal injuries action given by Master J Wong on 1 August 2017 after a three‑day hearing in June 2017. The master assessed damages in the total sum of $1,351,292, made up of pain and suffering ($250,000), loss of past earnings and mandatory provident fund ($177,825), loss of future earnings ($834,624), loss of earning capacity ($70,872) and special damages ($17,971). After deducting employees’ compensation received by the plaintiff in the sum of $189,799, the net amount of damages the defendant is entitled to receive is $1,161,493. This appeal is concerned only with one item of the assessment, namely, the loss of future earnings.

2.  At the conclusion of the hearing, we allowed the appeal and set aside the award for loss of future earnings.  We have heard submissions on costs.  These are the reasons for our judgment and our decision on costs.

Background

3.  The plaintiff was employed by the defendant as a warehouse clerk.  He was educated up to secondary level, with fair command in English.  His work with the defendant, though mainly sedentary (60%), required some weight lifting (20%).  He sprained his back at work on 2 May 2012 when he was repeatedly lifting boxes of coins.  He was then aged 27.  He brought this action on 17 February 2015.  By consent, interlocutory judgment on liability was entered for him on 31 March 2015, leaving damages to be assessed.

4.  The relevant background matters are taken from the master’s judgment and non-controversial evidence.  All the medical reports were adduced without calling any of the makers, including the joint report of one expert witness on each side.  The only factual witnesses called to testify were the plaintiff and Lui Siu Kong, who is an operation manager of the defendant and the plaintiff’s direct supervisor at the time.  The master found the plaintiff not a reliable witness and that Lui’s evidence was straight-forward and unshaken during cross-examination.  Where there was conflict between the two, the master accepted Lui’s evidence.

5.  Six days after the plaintiff injured his back, he visited the Accident & Emergency Department of the Prince of Wales Hospital.  The medical findings were that there was mild tenderness over the right low back and the X‑ray of the lumbar sacral spine was “unremarkable”.  He was given four days’ sick leave.

6.  Thereafter, he consulted hospitals and clinics for the injury and took a few days of sick leave every month for the next six months.  In July 2012, he was given physiotherapy treatment including electrotherapy, back mobilization and strengthening exercises.  After about four months of treatment, he found there was 70 to 80% improvement and so he resumed working.  The physiotherapy report noted that “range of motion of his low back was improved with residual pain” and treatment was stopped after the session in mid‑November 2012.  He did not take sick leave in November and December 2012.

7.  However, starting from November 2012, the defendant arranged for the plaintiff to carry some gold bars.  There was conflict between Lui and the plaintiff how many gold bars he was required to carry each time at about the end of 2012.  Although the master preferred Lui’s evidence and found that the plaintiff was only required to carry about five kg of gold bars for a short period like five to ten minutes at each delivery[1], the master did not appear to have rejected the plaintiff’s evidence that thereafter he felt increasing back pain[2].

8.  From January to March 2013, the plaintiff resumed taking a few days of sick leave every month.  He had an examination by MRI and the report dated 4 March 2013 revealed early desiccated change at the L5/S1 disc and the disc height had diminished, and there was a focal protrusion of disc noted at the right posterolateral recess, indenting onto the thecal sac.  The findings were that there was early degeneration with focal disc protrusion conducted at the L5/S1, without causing nerve root impingement or spinal stenosis.  No other neurological complication or degenerated disc disease was noted.

9.  In May 2013, physiotherapy treatment was resumed for five months, at the end of which the plaintiff found there was 70% improvement but there was still residual pain over his low back.

10.  According to the sick leave certificates produced in evidence, 693 days of sick leave were granted in total to the plaintiff intermittently in the pre-trial period.

11.  On 14 May 2014, the Employees’ Compensation (Ordinary Assessment) Board assessed the plaintiff to have permanent loss of earning capacity caused by the low back injury at 2% and 405 days of sick leave were recorded at the time of the assessment on 30 April 2014.

12.  When the plaintiff came in to work for the defendant for a few days each month near the end of 2014, he was only asked to do paper work and there was nothing else for him to do.  The plaintiff resigned from his job with the defendant on 22 November 2014, stating in his resignation letter that he was unable to handle his work as a warehouse clerk due to his injury.

13.  On 17 November 2014, the plaintiff attended an examination conducted jointly by his medical expert Dr Fu Wai Kee and the defendant’s expert Dr Ho Ching Lun Henry.  According to the joint medical report dated 29 December 2014, his clinical picture was compatible with the diagnosis of soft tissue injury of back and it was due to the accident of 2 May 2012.  Both experts agreed that he does not need further treatment, that he has reached maximal medical improvement, and that there is no need for examination by other medical specialists.  MRI lumbar spine revealed just minor disc protrusion with no neural compression.

14.  The experts differed as to the prognosis and the working capacity of the plaintiff.

15.  Dr Fu opined that the plaintiff’s current impairments will persist and he may have on and off pain that may require orthopaedic treatment on a need‑to basis.  And the plaintiff will have difficulty in lifting heavy objects.  Dr Fu believed the plaintiff can go back to his original duty but the working efficiency will be reduced.  The plaintiff is prone to have injury again if he performs manual lifting so he should avoid this kind of activity.  If this cannot be arranged, he should shift to lighter duties such as cashier or car park attendant.  Dr Fu assessed the impairment of the whole person and loss of earning capacity both at 4%.

16.  Dr Ho opined that the prognosis is good and the plaintiff should have recovered well without significant back symptoms.  His lifting capacity should be “little affected”, “assuming he adopts the correct lifting techniques and is watchful of his back posture”.  Dr Ho opined that the working capacity should be “little affected” and that the plaintiff is fit to return to his pre-accident job as a warehouse clerk with no restriction.  He assessed both the impairment of the whole person and loss of earning capacity at not more than 1%.

17.  After the plaintiff resigned from his job with the defendant, he did a variety of jobs, some of them part‑time jobs, earning just $7,642 over a period of more than two years.  He had worked as a packaging worker for an online delivery company, an inspector in checking mobile phones sent for repair, a site foreman, a statistician and a telebet services assistant.  These jobs lasted from a few days to several months at most.  He had not actually worked as a cashier or carpark attendant.

The claim for future loss of earnings

18.  In the revised statement of damages, the claim for future loss of earnings was made on the basis that the plaintiff is unable to resume his pre‑accident job as a warehouse clerk and on the assumption that he is able to work as a cashier or car park attendant, earning around $8,500 a month.  The plaintiff would sustain a loss of $3,352 per month and adopting a multiplier of 23 years, this would give a claim of $971,409.

19.  In the answer to the revised statement of damages, the defendant relied on Dr Ho’s opinion on the plaintiff’s working capacity and asserted that if the plaintiff does not resume his pre‑accident employment or other similar work, he would be failing to mitigate his loss.  Further, it was specifically denied, on the assumption that the plaintiff is able to work as a cashier or car park attendant, his future loss of earnings would be $3,352 per month.  The defendant pleaded that even on this assumption, the plaintiff has no established loss of earnings.

The assessment of the master

20.  As mentioned earlier, the master did not find the plaintiff a reliable witness.  He found the plaintiff’s descriptions of serious disabilities and restrictions in movement directly contradicted by the joint expert report and the surveillance evidence.  He refused to accept the plaintiff’s case of his disabilities, which he found exaggerated[3]. The master accepted the opinion of Dr Fu regarding the prognosis and working capacity of the plaintiff[4], but did not give reason why Dr Fu was preferred over Dr Ho.

21.  As for the plaintiff’s psychological problem, the master found that the psychiatric symptoms allegedly suffered were not caused by the accident or his employment with the defendant but were due to the personal problems of the plaintiff[5].

22.  The master was not satisfied that the plaintiff has discharged his duty to mitigate his loss[6].

23.  The master awarded pre‑trial loss of earnings on the basis that a total of 405 days of sick leave certified by Employees’ Compensation (Ordinary Assessment) Board is appropriate[7], notwithstanding Dr Ho’s opinion that a maximum of three months leave sick should be adequate.  He also awarded $70,872 being six months’ wages for loss of earning capacity, to compensate the plaintiff for any disadvantage in the labour market or higher chance of losing his job in future[8]. There is no appeal from the damages awarded under these heads.

24.  For future loss of earnings, the master reiterated his findings that the plaintiff was not a reliable witness, that his psychological problem was not caused by the accident, and that he has not discharged the burden to mitigate the loss.  Notwithstanding those findings, the master considered there was other evidence that was important to have regard to.  He referred to the “joint medical expert evidence to support the injury suffered by the plaintiff” and the evidence of Lui who confirmed that the defendant only asked the plaintiff to do paper work and gave no further job to him when he resumed working.  He therefore decided to award future loss of earnings in principle as suggested by the plaintiff, but adopted a lower multiplier of 20 years (reduced from 22.17) to reflect the plaintiff’s failure to mitigate his loss.  He arrived at the amount awarded being ($11,812 - $8,500) x 12 x 20 x 1.05 = $834,624[9].

This appeal

25.  Ms Flora Cheng, who appeared for the defendant on appeal and below, took a number of points on appeal in support of the defendant’s case that no award should be made for future loss of earnings.

26.  Firstly, she submitted that the decision to award future loss of earnings is inconsistent with other findings of fact of the master, namely, that the plaintiff was not a reliable witness, that the psychological problem was not caused by the accident or his employment with the defendant, that the plaintiff has not discharged his duty to mitigate his loss, that the plaintiff had exaggerated the extent of his disabilities, and that the agreed diagnosis of Dr Fu and Dr Ho was just soft tissue injury of the back and a minor disc protrusion with no neural compression.

27.  Secondly, she submitted that the master adopted the opinion of Dr Fu on the prognosis and working capacity of the plaintiff without giving reason why Dr Fu should be preferred over Dr Ho.

28.  Thirdly, the master made an arbitrary reduction in the multiplier from 22.17 to 20, with no evidential basis that the plaintiff would suffer a monthly loss of ($11,812 - $8,500) for the next 20 years.  He erred in adopting the figure of $8,500 suggested by the plaintiff’s counsel as what the plaintiff should be regarded as capable of earning, when there was no evidential basis for this figure and had failed to consider the evidence adduced by the defendant of advertisements for vacancies of similar jobs published by the Labour Department.

29.  Fourthly, the award of future loss of earnings is inconsistent with the reasoning and decision to allow only 405 days of sick leave as against the claim of 693 days of sick leave.  Further, the award is inconsistent with the master’s view that the impact of the injury upon the plaintiff is not significant, in that only six months’ wages were awarded for loss of earning capacity.

30.  To justify an award of $834,624 on the basis of a monthly loss of $3,352 per month for 20 years, the plaintiff would need to establish two things: firstly, whether the injuries and disabilities sustained are such that he is unable to resume his pre‑accident work as a warehouse clerk; and secondly, whether he would suffer any loss of earnings, whether this be $3,352 per month or such other sum as assessed, assuming that he has to take up other employment as postulated, such as that of a cashier or a carpark attendant.

31.  On the pleadings, the defendant specifically denied that the plaintiff would suffer any loss of earnings even if he were unable to resume working as a warehouse clerk.  The plaintiff alleged in the revised statement of damages that the monthly earnings of a cashier or a carpark attendant would be around $8,500.  However, no evidence was adduced by the plaintiff to substantiate this.

32.  Mr B K Ho, who appeared for the plaintiff throughout, submitted that $8,500 was a concession made by the plaintiff that he would be able to earn this amount if he had been working as a cashier or carpark attendant as Dr Fu had recommended.  And it was for the master to decide, having regard to all the evidence, whether the figure of $8,500 as conceded by the plaintiff was reasonable and just.

33.  Mr Ho pointed out it was not suggested or put to the plaintiff in cross-examination that the figure as conceded was too low or unreasonable to give the plaintiff a chance to deal with this.  He contended that the defendant’s counsel should have raised this at trial and not remain silent and it is too late to raise this on appeal.

34.  It is incumbent on the plaintiff to establish that he would suffer loss of earnings assuming that he has to take up employment as a cashier or carpark attendant owing to his injuries and disabilities.  His legal advisers ought to have known from the answer filed by the defendant that this is a matter in issue.  The concession made by the plaintiff in the revised statement of damages was of little consequence as this was not accepted by the defendant.  He was not relieved from the obligation of proving his case on this particular issue.  Positive evidence should have been adduced by the plaintiff to support his case that he would suffer a monthly loss of $3,352 assuming that he has to take up other jobs.

35.  Instead, the plaintiff took the passive stance of leaving it to the master to find on all the evidence that his concession of earning $8,500 a month was reasonable and just, choosing to adduce no evidence of his own.  The available documentary evidence before the master does not support his case.

36.  The defendant had adduced 21 advertisements on job vacancies published by the Labour Department in March 2017 (three months before the hearing) to show that the earnings of a cashier and building attendant (though not of a carpark attendant) would be higher than $8,500 and match the earnings of a warehouse assistant or keeper.  Those documents were in the assessment bundle.  So there was no element of surprise to the plaintiff and his legal advisers.  Whether the plaintiff was cross-examined on the conceded figure of $8,500 or any of the advertisements is immaterial.  If the plaintiff was asking the master to find on all the evidence whether his concession was reasonable, that must include the advertisements, which were not challenged in any way by the plaintiff at the hearing.  There is no unfairness to the plaintiff, nor is it too late for this issue to be raised on appeal.

37.  Mr Ho sought to play down the evidential value of the advertisements on appeal.  Of the advertisements for a cashier, he pointed out that one was in a fast food outlet requiring the handling of menu and promoting products, and three others required one year’s experience.

38.  The requirement of one year’s experience is very short and cannot be regarded to have much significance in light of a multiplier of 20 years.  Further, not every position of a cashier required any experience, as borne out by the advertisements placed before the court.

39.  The available evidence is plainly insufficient to support the plaintiff’s case he would suffer a loss of earnings if he is unable to resume his pre‑accident work as a warehouse clerk.  For this reason alone, the award for future loss of earnings must be set aside and the appeal allowed.  We do not find it necessary to consider the other grounds of appeal, which may impact on the other essential matter the plaintiff has to establish, namely, that the injuries and disabilities he sustained are such that he is unable to resume his pre-accident work as a warehouse clerk.

40.  We would just make two observations in light of the other grounds of appeal.

41.  First, where there is disagreement between the medical experts engaged by the parties as revealed in the joint expert report, the parties should seek a direction from the court prior to the trial, either at the Check List Review Hearing or the Pre‑Trial Review, whether the experts should attend for cross-examination.  They should put forward for the consideration of the court the reasons why the experts should or should not give oral evidence.  Other than the underlying objectives in Order 1A rule 1 of the Rules of the High Court, the court would take into account matters such as the importance of the disagreement to the core issues before it, whether it is necessary to resolve the disagreement, and if so, whether this could be done without hearing oral evidence.

42.  Second, where the evidence of one expert is preferred to that of another, reasons should be given in the judgment, particularly if this would have a material bearing to the findings or conclusion of the court.  Adequate reasons need not be elaborate.  It would suffice if the reasons set out succinctly why the court is persuaded to accept the views of one expert and not the other.  Where the court has resolved the conflict between the experts without hearing oral evidence, there is all the more reason that the court should explain why it has adopted a particular view.

Costs

43.  As a result of the setting aside of the award for future loss of earnings, the total amount of damages awarded to the damage is reduced to $516,668.  After deducting employees’ compensation received by the plaintiff, the net amount of damages he is entitled to receive is reduced to $326,869.  The plaintiff has legal aid for the assessment before the master and in this appeal.

44.  After we allowed the appeal, it was revealed to us that the defendant has made sanctioned payment into court.  The amount paid into court takes into account the sum of $189,799.88 paid by way of employees’ compensation and is in addition to employees’ compensation.  There were five notices of sanctioned payment, dated 11 March 2015 ($230,000 inclusive of interest), 20 April 2015 (increased to $275,000), 7 August 2015 (increased to $325,000), 30 September 2015 (increased to $400,000) and 26 November 2015 (increased to $500,000).

45.  The plaintiff has failed to beat the 4^th sanctioned payment of $400,000 as the net amount of damages he is entitled to receive is now reduced to $326,869.  This attracts costs consequences as he has failed to do better than the sanctioned payment.  Pursuant to Order 22 rule 23(3) of the Rules of the High Court, the court may order the plaintiff to pay any costs incurred by the defendant after the latest date on which the payment could have been accepted without requiring leave of the court.  Under rule 23(4), the court may order costs to the defendant on the indemnity basis.  Rule 23(5) provides that the court shall make the orders aforementioned unless it considers it unjust to do so.  Rule 23(6) sets out some of the circumstances the court may take into account for the exercise of the discretion in rule 23(5), and this includes the terms of the sanctioned payment, the stage in the proceedings at which it was made, the information available to the parties at the time it was made, and the conduct of the parties with regard to the giving or refusing to give information for the purpose of enabling the payment to be evaluated.

46.  There is no dispute that the defendant should have the costs of the appeal as the successful party.  We make an order accordingly.

47.  As for the costs below, in view of the sanctioned payment, Mr Ho has not resisted the order sought by Ms Cheng that the plaintiff should be liable for costs as from the date of the 4^th sanctioned payment.  The defendant has not sought costs on indemnity basis.  We were provided with a form of order regarding the costs below for which there is no dispute and the court is invited to make.  It is acknowledged that the plaintiff is only liable to costs up to his legal aid contribution and he has no personal liability for costs.

48.  We do not think it would be unjust to order the plaintiff to pay costs in this situation.  The 4^th sanctioned payment beat the net amount of damages by quite a margin.  It was made at a fairly early stage of the proceedings, before the revised statement of damages was filed.  We are not aware of any circumstances, such as the information available to the plaintiff at the time, or the conduct of the defendant with regard to the giving or refusing to give information, that would make it unjust to order the plaintiff to bear costs as from the date when he could and should have accepted the sanctioned payment.  We are mindful that in light of the costs incurred by the defendant in the assessment hearing which took three days and the first charge of the Director of Legal Aid on property recovered, ultimately the plaintiff may not receive anything from the net amount of damages in view of the costs order in favour of the defendant.

49.  We make the following order in relation to the costs below and other consequential orders:

(1)   the defendant is to pay the plaintiff’s costs of this action up to the date of the 4^th sanctioned payment being 30 September 2015, thereafter the plaintiff is to pay the defendant’s costs of this action on the High Court scale, to be taxed on a party and party basis if not agreed;

(2)   the net amount of damages awarded to the plaintiff including interest be paid out to the plaintiff through the Director of Legal Aid; and

(3)   the balance of the sanctioned payment with any interest accrued be paid out to the defendant and money already paid to the Director of Legal Aid be paid out to the defendant through its solicitors.

50.  We further order that the plaintiff’s own costs here and below be taxed in accordance with the Legal Aid Regulations.