CHAU TIM KWAI v. HO KEUNG AND OTHERS

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES LIST

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JUDGMENT

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Introduction

1. This is a claim for damages for personal injuries. The accident which gave rise to the claim occurred on 2nd December 1992. The Plaintiff was a passenger in a light goods van travelling along Tai Po Road. The van was being followed by a coach. As the vehicles were going downhill, the coach's braking system failed. As a result, the coach collided with the rear of the van, and the Plaintiff was seriously injured in the ensuing accident. The principal issue in the case is which of the Defendants, if any, are liable to the Plaintiff.

2. The 1st Defendant ("D1") was the driver of the coach. He is said to have been either (a) the agent of the 2nd Defendant ("D2") or (b) the employee of D2 or the 3rd Defendant ("D3"). Accordingly, D2 or D3 are said to be vicariously liable for such negligence as is found against D1. In addition, the 4th Defendant ("D4") was the registered owner of the coach at the time. D3 is said to have hired the coach from D4, and therefore to have been responsible for its maintenance and repair. Alternatively, D3 is said to have been D4's agent for the maintenance and repair of the coach. If that is correct, D4 is said to be vicariously liable for any negligence or breach of statutory duty on the part of D3 in connection with the maintenance and repair of the coach. In the light of these allegations, it is necessary to consider carefully, in addition to the circumstances of the accident, the nature of (a) the relationship between D1, D2 and D3, and (b) the transaction between D3 and D4.

3. D3 did not file a Defence to the Plaintiff's claim. Accordingly, on 19th June 1996, judgment in default of defence was entered against him for damages to be assessed. He was notified of the date for the trial of the action, but he has not attended the trial. The other 3 Defendants gave evidence, as did the Plaintiff. Those three Defendants were unrepresented, and I wish to pay tribute to each of them for their courtesy to the court and the respect they showed for it.

The nature of the relationship between D1. D2 and D3

4. In the light of the evidence, I find the facts to be as follows. In the latter part of 1992, D3 asked D2 if he knew anyone who was prepared to work as a driver taking workers to their place of work in the morning. D1 was a friend of D2, and so D2 spoke to him about the matter. They decided to work as drivers for D3. The arrangement which they reached between themselves was that D2 would have first option to drive the workers on a particular day, and that D1 would only drive the workers if D2 chose not to. They were each paid $150.00 by D3 for each day they drove. The money was paid to D2, who would pay D1 his share of it. The route which they did was from Kwun Tong to Kau To San. The coach they used (which was the one D1 was driving at the time of the accident) was provided by D3.

5. Towards the end of November, D3 told D2 that the employer of one group of workers would no longer be using his services. D3 told D2 to get in touch with a Mr. Ling, who would be paying D2 for his driving from 1st December. In due course, D2 spoke to Mr. Ling. Mr. Ling knew that D2 had been sharing the driving with D1 in the past, and he told D2 that D1 and D2 would be driving a new route from Mongkok to Kau To San from 1st December. He also wanted them to drive the evening session as well. He said that he was willing to pay $8,200.00 a month in all for both sessions. D2 reported to D1 what Mr. Ling had told him. D1 and D2 agreed not to take on the evening session, and D1 told D2 that he would leave D2 to decide what they should do about the morning session. D2 informed Mr. Ling that he and D1 would not be doing the evening session, but that they were prepared to drive the new morning route.

6. Accordingly, from 1st December, D2 regarded himself as working for Mr. Ling. On 1st December, he drove the new route from Mongkok to Kau To San for Mr. Ling in a different coach provided by Mr. Ling. He assumed that D1 would be available when he was not.

7. It so happened that later that day the company for whom D2 worked full-time changed his starting hours in the morning, with effect from 2nd December, from 9:00 a.m. to 8:00 a.m. He would therefore not be able to work for Mr. Ling in the mornings for the time being. Accordingly, that afternoon he telephoned D1 to ask him to take over the new route for the time being. That was when D2 discovered for the first time that D1 had been engaged by D3 to take workers to work on another contract altogether. That route was from Mongkok to Tsing Yi, and D1 had begun driving that route on 1st December in the coach which he and D2 had regularly driven in the past. He was therefore unable to drive the Mongkok-Kau To San route for D2 on 2nd December.

8. D2 reported his problem to Mr. Ling. Mr. Ling told him to speak to D3. D2 spoke to D3 late on the evening of 1st December. D3 was prepared to release D1 from driving the Mongkok-Tsing Yi route (so that D1 could stand in for D2 on the Mongkok-Kau To San route using the coach provided by D3) if D2 could find someone with a coach to drive the Mongkok-Tsing Yi route in place of D1. D2 was able to find someone to do that, and therefore at about 5:00 a.m. on 2nd December, he telephoned D1 and told him that (a) D3 had agreed that D1 did not have to do the Mongkok-Tsing Yi route that day, and (b) D1 would do the Mongkok-Kau To San route that day instead. Those were the circumstances in which D1 came to be driving the coach on 2nd December.

The events of 2nd December

9. On the morning of 2nd December, D1 and D2 went to collect the coach. In the light of the evidence, I find the facts to be as follows. D2 made a cursory inspection of the coach. That included checking the foot brake by switching the ignition on and making the coach move forward. When he depressed the foot brake, the coach stopped. D2 then drove the coach with D1 as his passenger to Mongkok, where D2 got off and a number of workers got on. D1 drove off and collected the rest of the workers elsewhere. He then drove to Kau To San by a route which he had not driven as a relief driver before. He was driving along Tai Po Road when he saw the light goods van ahead of him. Its brake lights were on. As I have said, the vehicles were travelling downhill at the time. D1 stepped on the foot brake, but there was no response. He collided with the van, and was himself seriously injured.

10. The reason why there was no response from the brakes was because the nearside rear brake was not working. To use the words of the report prepared on the coach by a motor vehicle examiner employed by the Department of Transport as a result of his inspection of the coach two days after the accident, that was "because of lack of adjustment/maintenance". D1 was subsequently acquitted of careless driving, but he was convicted of the offence of using a motor vehicle on the road when its foot braking system had not been maintained in good and efficient working order and was not properly adjusted.

The transaction between D3 and D4

11. In the light of the evidence, I find the facts to be as follows. The coach which was involved in the accident was manufactured in 1979. D4 was the registered owner of it at the date of the accident. He had acquired it in about 1989, and had insured it in his name. Since he was using the coach for the commercial carriage of passengers, he had obtained a passenger service licence for the coach, which was also in his name.

12. Some time in 1992, he agreed to sell the coach to D3 for $60,000.00. D3 took delivery of the coach. He had had the coach for at least a few months before the accident. D3 also intended to use the coach for the commercial carriage of passengers, and he needed to have a passenger service licence in his own name. However, it was believed that it would take some months for D3 to obtain a passenger service licence. Accordingly, it was also agreed between D3 and D4 that until a passenger service licence could be issued in D3's name, D3 would hire the coach from D4 for $1,000.00 a month and be responsible for its maintenance and repair.

13. On these facts, I find that D4 was not merely the registered owner of the coach at the time of the accident, but was the actual owner as well. Although he had agreed to sell the coach to D3, the effect of the agreement that the coach would be hired to D3 until the issue of the passenger service licence in D3's name was that the transfer of the ownership of the coach would be deferred for the time being. That is entirely consistent with the facts that at the date of the accident

and that by the date of the accident no application had been made to the Department of Transport to transfer the registration of the coach from D4 to D3.

14. I should add that D4 claimed that D3 had actually paid him the purchase price of $60,000.00 for the coach. I am sceptical about that claim, but I need make no finding on the matter, because even if D4 had paid D3 the purchase price of $60,000.00 for the coach, the effect of D4 hiring the coach to D3 until a passenger service licence in D3's name had been issued would still have been to defer the transfer of the ownership of the coach for the time being.

The liability of D1

"The driver ... of a vehicle is bound to use reasonable care to keep it under proper control. This involves a duty to use reasonable care to keep the vehicle in a roadworthy condition, so that proper control can be exercised. There is no absolute duty in tort to keep the vehicle in proper condition": Charlesworth & Percy on Negligence, 9th. ed., para. 9-254.

D1's liability turns on the extent of a driver's duty to use reasonable care to keep a vehicle in a roadworthy condition when the vehicle is not his and he has only been engaged sporadically to drive it. In my judgment, it is expecting far too much of a driver in those circumstances to require him to check with either the owner of the vehicle or the person who engaged him whether the vehicle has been regularly maintained or to conduct a physical examination of the vehicle himself - unless, of course, there is something about the vehicle or the circumstances of his engagement which should have alerted him to the possibility that the vehicle had not been properly maintained or that it was defective in some way. In the present case, there was nothing about the vehicle or the circumstances of D1's engagement which should have alerted him to either of these possibilities.

15. Since the nature of the Plaintiff's case against D1 is that D1 drove the coach when he knew or ought to have known that its brakes were not working properly (and variations on that theme), I find that D1 did not in fact know that the brakes were not working properly. Since there were no factual basis on which it could be said that he ought to have known that they were not working properly, I find that D1 was not negligent. Since negligence is the only cause of action now relied on against D1, it follows that the Plaintiff's claim against D1 must be dismissed.

The liability of D2

16. The negligence alleged against D2 is that he caused or permitted D1 to drive the coach on the morning in question when he, D2, knew or ought to have known that its brakes were not working properly. On the findings of fact I have made, I accept that D2 caused or permitted D1 to drive the coach that morning, but (like D1) whether D2 was negligent turns on the extent of his duty, in the particular circumstances of the case, to keep the coach in a roadworthy condition. He had (like D1) merely been engaged to drive the coach in the past, and his role on the morning in question had simply been to find someone to drive the coach. In my judgment, it is expecting too much of D2 to have required him to check with D3 whether the coach had been regularly maintained, or to conduct a physical examination of the coach himself - when there was nothing about the coach, or the circumstances of his engagement in the past, which should have alerted him to the possibility that the coach had not been properly maintained or that it was defective in some way. I find that D2 did not in fact know that the brakes were not working properly, and since there was no factual basis on which it could be said that he ought to have known that they were not working properly, I find that D2 was not negligent.

17. Since negligence is the only cause of action now relied on against D2 (apart from his vicarious liability for D1), and since no question of vicarious liability for D1 arises because of my finding that D1 was not negligent, it follows that the Plaintiff's claim against D2 must be dismissed.

The liability of D3

18. The liability of D3 has been established by default, but on the evidence the liability of D3 has also been proved. D3 permitted the coach to be driven on the morning in question, and in view of the fact that he had been hiring the coach for some time, the extent of his duty to keep the coach in a roadworthy condition was very different from that of D1 and D2. His duty was to take such steps as a prudent long-term hirer would take to keep the coach in a roadworthy condition. That involved at the very least causing the coach to be properly maintained. The fact that the coach was not properly maintained, and that it was that lack of maintenance which caused the brakes not to be in proper working order, meant that D3 had failed to discharge his duty of care to other road users. For that reason, D3's liability to the Plaintiff has been proved.

The liability of D4

"The owner of a vehicle must take such steps as a prudent owner would take to keep his vehicle in a proper state of repair, maintenance and adjustment": Charlesworth & Percy, op. cit., para. 9-255.

Mr. Johnson Lam for the Plaintiff argued that D4 was in breach of his duty of care. However, the only basis on which the liability of D4 is pleaded (apart from vicarious liability for D3) appears from paras. 9 and 9A of the Amended Statement of Claim. Para. 9 is no longer pursued, and para. 9A does not arise in view of my finding that D4 was still the owner of the coach at the date of the accident. It is therefore not open to the Plaintiff on the pleadings to argue that D4 was negligent. The only ground on which liability can be established against D4 is on the basis that he was vicariously liable for D3's negligence.

19. However, even if it had been open to the Plaintiff to argue that D4 had been negligent, I would have rejected that claim. The extent of the obligation on the owner of a vehicle to take reasonable care to keep it in a roadworthy condition depends on the particular circumstances of the case. Take the case of the owner of a vehicle who lets it on hire. One extreme is a finance company, which hires the vehicle to a "purchaser" over a long period, with an option to the "purchaser" to purchase the vehicle for a nominal sum at the end of the period. It would be absurd to treat the finance company, simply because it continued to be the owner of the vehicle, as under an obligation to take reasonable care to keep the vehicle in a proper state of repair. The other extreme is a car rental company which hires the vehicle to users for short periods. It would equally be absurd to treat the car rental company, simply because of the contract of hire, as no longer under an obligation to take reasonable care to keep the vehicle in a proper state of repair. Accordingly, when a vehicle is let on hire, the obligation of the owner to take reasonable care to keep the vehicle in a proper state of repair depends on the circumstances of the hire. The hire of the coach by D4 to D3 in the present case was for a substantial period, and pending the completion of the purchase of the coach by D3. In my view, the circumstances were such that D4 was, for the time being, no longer under an obligation to take reasonable care to keep the coach in a proper state of repair.

20. I turn, then, to consider whether D4 could be said to be vicariously liable for D3's negligence. Mr. Lam argued that D3 must be treated as D4's agent, on the footing that D3 had agreed to be responsible for the maintenance and repair of the coach. I cannot accept this argument. It may be that D4 had "entrusted" the responsibility for maintaining and repairing the coach to D3, but that did not make D3 D4's agent in connection with the maintenance and repair. If there was no obligation on D4 to maintain and repair it, no question of D3 assuming responsibility to maintain and repair it on D4 's behalf can arise. It follows that the Plaintiff's claim against D4 must be dismissed.

The quantum of the Plaintiff's claim

21. Pain, suffering and loss of amenities. The Plaintiff was born in August 1941. He is now 57 years old. He sustained an injury to his head in the accident. He was rendered unconscious, and only regained his consciousness once he had been taken to the Prince of Wales Hospital. He had cuts on both his ear lobes and on his left forearm. But his principal injuries consisted of multiple fractures to his pelvis, his left thigh, his left medial femoral condyle, and his left shoulder blade.

22. The fracture to his shoulder blade was treated "conservatively", by which was meant, I think, that no surgery was carried out. However, on 4th December 1992, an operation was carried out to fix the fractures to his pelvis, thigh and femoral condyle with screws and interlocking nails. He was transferred to the Cheshire Home, Shatin, on 6th January 1993, and was discharged on 13th January. Initially, he could only walk with a pair of crutches, but in June he substituted them for a walking stick. Since August 1993, he has been able to do without the walking stick. For several months after his discharge from hospital, he continued to attend the hospital as an out-patient for physiotherapy. He now walks with a slight limp.

23. From the neurological point of view, the Plaintiff experienced dizzy spells. They lasted for an hour or two, and could occur as often as once or twice a day. Although his evidence was that he still experiences dizziness occasionally, he did not complain of dizziness when he was recently examined for the purposes of an up-to-date medical report for this case. His complaints then were that he tired easily, and still had headaches from time to time. He was assessed as having a 2% disability, and a 2% loss of earning capacity, as a result of his head injury.

24. From the orthopaedic point of view, the Plaintiff still experiences a measure of pain after a period of activity. After standing for 10 minutes or so, his thigh starts to hurt. After squatting for 10 minutes or so, pain begins to develop in his thigh and the lower part of his back. After walking for 15 minutes or so, his hip begins to hurt. And after sitting for 30 minutes or so, the area around his pelvis begins to ache. In addition, he cannot lift his left arm as much as he could before the accident, and whereas he used to be able to pick up relatively heavy objects with his left arm, he can now only do so using both arms. As a result, he was assessed as having a 16% disability, and a 17% loss of earning capacity, as a result of these symptoms.

25. In my judgment, the Plaintiff's injuries fall into the "serious injury" category of injuries identified in Lee. Ting Lam v, Leung Kam Ming [1980] HKLR 657, described at p. 659 as "those cases where the injury leaves a disability which mars general activities and enjoyment of life, but allows reasonable mobility to the victim, for example, the loss of a limb replaced by a satisfactory artificial device, or bad fractures leaving recurrent pain." The current guideline for an award for pain, suffering and loss of amenities for injuries in this category is $400,000.00 - $540,000.00 (see Chan Pui Ki v, Leung On [1996] 2 HKLR 401). The Plaintiff's injuries were at the lower end of this range, and in my view the appropriate award to make for the Plaintiff's pain, suffering and loss of amenities is $425,000.00.

26. Loss of earnings. Prior to the accident, the Plaintiff ran a fish stall in Shatin with the help of his wife. He was the sole proprietor. There were some differences between (a) the Plaintiff's witness statement and (b) his evidence in court as to the various figures from which he calculated what his monthly net profit from his stall had been prior to the accident. I find that his net profit from his stall was in the region of $20,000.00 a month. As a result of the accident, he had to close the stall down, and he did not work again until October 1995 when he began helping on his son's stall. That is what he still does, and he has been receiving sums in the region of $2,000.00 a month from his son for the help he has given him.

27. However, it is accepted by Mr. Lam that the Plaintiff has a residual earning capacity of about $5,000.00 a month. If he has that earning capacity now, I think that he would have had an earning capacity once he had reached the stage when he could not expect any further significant improvement in his physical condition. I think that the Plaintiff would have reached that stage 18 months after the accident, and I propose to treat him as having had a residual earning capacity of $4,000.00 a month from then, increasing to $5,000.00 a month by now.

28. I estimate that before the accident the Plaintiff's net profit from his stall would have increased to $22,000.00 a month by June 1994, and to $27,000.00 a month by now. Accordingly, taking into account what the Plaintiff could have earned had he mitigated his loss properly, I assess his lost earnings up to the beginning of this month as follows:

Accordingly, I award the Plaintiff the sum of $1,318,000.00 lost earnings up to today.

29. I turn to the Plaintiff's loss of future earnings. I do not think that the Plaintiff would have worked much beyond the age of 60 had he not been forced by the accident to give up his fish stall. Since he is now 57 years old, he would have had another 3 years working life in front of him. I propose to take a multiplier of 2. Accordingly, I assess the Plaintiff's future loss of earnings as ($27,000.00 - $5,000.00) x 12 x 2 = $528,000.00.

30. Special damages. In the light of the evidence, I award the Plaintiff the sum of $12,530.00 by way of special damages. The calculation is as follows:

Conclusion

31. For these reasons, there must be judgment for the Plaintiff against D3 in the sum of $2,283,530.00 (the aggregate of the sums of $425,000.00, $1,318,000.00, $528,000.00 and $12,530.00). I award interest on the sum of $1,330,530.00, being the aggregate of the Plaintiff's special damages and the award for loss of past earnings, from the date of the accident at half the average rate of interest payable on judgment debts over the period from the date of the accident. I have not calculated what that average rate is. I shall assume that the average rate is 4.5%, but I give the parties liberty to apply within 21 days of the handing down of this judgment if this assessment is inaccurate to a significant degree. In addition, the Plaintiff is entitled to interest on the sum of $425,000.00 awarded for pain, suffering and loss of amenities at the rate of 2% from 30th November 1995 when the writ was issued.

32. Although the Plaintiff has succeeded in his claim against D3, his claims against the other Defendants have been dismissed. Moreover, since judgment on his claim against D3 was given in default, I do not see why D3 should be saddled with the whole of the Plaintiff's taxed costs. In my view, the order nisi which I should make as to the Plaintiff's costs is (a) that D3 should pay to the Plaintiff the Plaintiff's taxed costs of the action up to 19th June 1996 when judgment in default of defence was given against D3, and those of the Plaintiff's taxed costs thereafter incurred in proving the quantum of the Plaintiff's claim, and (b) that there be no order as to the balance of the Plaintiff's costs. As for the costs of D1, D2 and D4, I appreciate that D1 and D2 would have had some legal costs before they decided to represent themselves. However, it would not have been possible for the Plaintiff's solicitors to make an informed judgment as to the Plaintiff's chances of success against them until after they ceased to be represented. In the circumstances, the order nisi which I make in relation to the costs of D1, D2 and D4 is that there be no order for their costs.