CHENG SHIU LING AND ANOTHER v. HUI WAI HUNG AND ANOTHER

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

------------

-----------------

JUDGMENT

-----------------

1. The plaintiffs sue both as administrators for the estate of the deceased and for her dependants under the Fatal Accidents Ordinance. The case falls under the old legislation as the deceased was killed in a traffic accident on 23rd October 1986. Liability was admitted by the defendants and interlocutory judgment was entered on 3rd November 1988, pursuant to which damages fall to be assessed at this hearing.

2. Much was agreed, and I appreciate the co-operative approach of both counsel. Evidence was adduced by two hearsay notices, the contents of which were incorporated into the plaintiff's bundle and agreed by the defence in that form. Insofar as certain items of funeral expenses remained untranslated, Mr. Ismail helpfully agreed that the expenditure had been incurred, whilst disputing that it was recoverable.

3. I turn first to the claim of the deceased estate, known conventionally as the LARCO claim. The usual award in the sum of $30,000 for loss of expectation of life has been agreed and is duly made. The lost years claim has also been agreed on the basis of a post-accident multiplier of 15. Complex calculations on the free balance in the context of pooled family income have resulted in an agreed award of $403,170 under this head. For the minority interests this is approved.

4. The amount recoverable by the estate as funeral expenditure is partially disputed, as the defendants admit liability for $17,750 only of the $23,000 claimed. The disputed balance represents food and refreshments for the mourners and $25 for a spirit tablet.  Mr. Ismail cited several cases in support of his arguments and I find these persuasive. Funeral expenses are accordingly awarded in the sum of $17,750.

5. The residuary estate available for distribution will include the awards for funeral expenses and for loss of expectation of life. The total of $450,920 falls for distribution amongst the husband and the two children according to section 4(3) of the Intestates' Estates Ordinance, cap. 73.

6. The award to the husband will accordingly be of $50,000 with interest at 5% per annum thereon from death to payment and a half share in the balance. The residue thereafter is equally divided between the children.

7. Approximating the husband's interest entitlement at 5¼ years, and compounding it at 5% over that period produces interest of $11,535. His total share of the estate is therefore:

8. The shares of the two children each represents one half of their father's share in the residue after allowance for his statutory $50,000 plus interest. This will amount to $97,346.25 each. Awards are duly made of these respective sums.

9. I now turn to the claims of the dependants under the Fatal Accidents Ordinance, which are substantially disputed.

10. At her death the deceased worked at home as a seamstress, doing outwork for a garment factory. That she worked at home the better to care for her children is undisputed, and this factor provokes a claim for loss of services as part of the dependency. I shall address this point in due course, after considering the purely financial aspects of the dependency claims.

11. Counsel have agreed the financial dependency of the husband and two children in terms of each having a pro-rated loss of the deceased's net contribution to the family earnings pool. The multiplier has been agreed at 15 and the agreed awards are in the sum of $87,004 each to the three dependants. Insofar as I am particularly concerned with the minority interests, I am satisfied with the correctness of the principles applied and confirm the awards.

12. The statement of claim particularised as dependants the mother, and grandmother of the deceased's husband, who both live in the family home. Their dependency under the Fatal Accidents Ordinance was disputed by Mr. Ismail at the earlier hearing and Mr. Pritchard has not made submissions on the point. Mr. Ismail's conclusion would appear to be correct, and awards are not made.

13. The deceased has other relatives in China who are particularised as her father, mother, grandmother and younger brother. The plaintiffs seek a dependency award on their joint behalves of $20,000 based on evidence in a declaration by the parents of the deceased, made in China and legalised at the British Embassy in Peking. Whilst disputing neither the provenance of this declaration nor the fact of the remittances declared therein, Mr. Ismail submits that they fail to prove a dependency.

14. The declaration, which appears at page 26 of the plaintiff's bundle, states that an average of $4,000 per year was received from the deceased since 1978. Particular sums of varying amounts and totalling $18,500 are also declared to have been received on five occasions from February 1984 to January 1986. Mr. Ismail however argues that these payments were irregular, were not apportioned between each dependant, and were anyway from the family pool rather than from the deceased's own earnings. He asks the court to find that the relatives in China had no more than a "mere speculative possibility of benefit" within the finding to that effect in Barnett v. Cohen [1921] 2KB 461.

15. I would not disagree with the prirciple emerging from Barnett v. Cohen and from the cases discussed therein by McCardie J. in his judgment. The circumstances however concerned the death of a 4-year old boy and the arguable likelihood that the father had lost a reasonable expectation of pecuniary benefit by his death. To find such a possibility speculative is unsurprising, and of little help in the present case where actual pecuniary advantage has apparently been received for a number of years.

16. There arises the further question whether the deceased herself actually provided these funds, or merely remitted them, perhaps using the family pool of income as Mr. Ismail suggests.

17. Mr. Pritchard has deducted $800 per month for personal expenses to calculate the deceased's net median contribution to the family pool of income for dependency purposes. This deduction of $800 is stated to include the contributions to China.

18. However in calculating the free balance for the lost years claim, Mr. Pritchard has deducted only $600, which sum is stated to exclude the contributions to China. Inevitably, he must assess the China contributions at $200 per month on average.

19. The figures for both the lost years claim and the purely financial dependencies of the husband and children were accepted by Mr. Ismail in agreeing the respective awards. Had the discrepancy of $200 for the China contributions not been included in the deceased's personal expenses, her net contribution to the Hong Kong dependencies would be correspondingly increased. In these circumstances and considering the evidence of the declaration, I readily accept that $200 per month was appropriated by the deceased for her family in China. It is a reasonable sum, it accords with the probabilities, and it accords with the figures accepted by Mr. Ismail in the context of the Hong Kong dependencies.

20. It is moreover inconsequential that the support can be continued by the remaining Hong Kong relatives. A dependency award is founded not on need or legal entitlement, but on the actual fact of support prior to death. I find that the payments in the declaration at page 26 of the plaintiffs' bundle were payments for the support of the China relatives; I find also that on average the deceased probably allocated $200 per month towards those payments. In the circumstances, the China relatives are entitled to awards.

21. As to the quantum, Mr. Pritchard seeks a global sum of $20,000 for the four China relatives together. He did not seek to justify this approach, either mathematically or otherwise, and I cannot accept it on that basis. Without contrary evidence, the probability is that the contributions were divided equally amongst the recipients at an average level of $50 per month each. Awards should therefore be on this assumption, coupled with individual multipliers for each beneficiary.

22. As pleaded, the four China dependants, with their respective ages at date of writ and relationships to the deceased, are:

The writ was issued almost exactly two years after death, and I shall accordingly assume respective ages of 56, 54, 89 and 20 in awarding post-accident multipliers. In the case of the grandmother, the unusually high multiplier will of course reflect the fact that she has already survived four of the five years awarded. The multipliers will be 9, 10, 5 and 15 respectively.

23. Applying these multipliers to the equal shares of $50 per month each to the four China dependants, the awards will be:

These sums are duly awarded, and I note that the total of $23,400 is close to the global figure suggested by Mr.Pritchard.

24. I now consider the husband's claim for loss of the deceased's services in looking after the children. This is not disputed in principle, but the divergence on quantum is considerable. It has long been established that the award should represent the pecuniary value of even gratuitous services likely to have continued but for the intervening death. Moreover, it has been more recently recognised that replacement services need not actually be purchased for the right to compensation to arise.

25. It is Mr. Pritchard's position that the level of compensation should relate initially to the cost of providing a full-time servant. He suggests a gradual decrease in the level of attention required as the children get older, and proposes a reduced multiplier to reflect this factor. Mr. Ismail submits that an award to cover a part-time servant would suffice, considering the assistance available in the home from other family members prior to the death.

26. It is pleaded and undisputed that the deceased's employment as an outworker enabled her to look after the children at home whilst still working. It is similarly pleaded and uncontroverted that the deceased did all the domestic cooking and housework in addition to her work as a seamstress. Moreover it is pleaded that she took her son to and from school everyday and assisted with his homework. The daughter had not at the time of the writ commenced school, but I infer as a probability that she would have had no less attention than her brother.

27. The domestic services provided by the deceased evidently extended throughout the day. Even when she was working at her factory work, she was available to the children in case of need. It is evident and indeed pleaded that this very availability was the reason why she chose to work at home.

28. I find it unrealistic effectively to regard the deceased as a part-time mother whose services are susceptible to evaluation against the cost of a part-time amah. She was a full-time mother who worked in addition and was available even when working. The realistic conclusion is that only a full-time amah could adequately compensate for the domestic services provided by the deceased.

29. In reaching this decision I do not accept the relevance of the finding in favour of a part-time amah in Lee Ping Tim v. Wong Kin Foon [1978] HKLR 347. The point of distinction is that the deceased in that case actually worked at the factory; she did not do outwork from home, and the services lost were hence much less. Moreover, some of the children were considerably older and one was assisting in household duties.

30. Neither do I find that the possibility of pre-accident assistance from the husband and mother in law should reduce the compensation level to that of a part-time amah. Such assistance, usually out of working hours, occurs in many families and often whether or not an amah is employed. It is the mother's actual contribution which sets the level of compensation, and that I find to be full-time. That gratuitous services provided post-accident are equally not to be counted in reduction of the award was conclusively established by the English Court of Appeal in Nay v. Hughes [1975] 1 QB 790.

31. Mr. Pritchard suggests a median cost for a full-time amah at $3,000 per month, based on $2,500 at death and $3,500 currently. Mr. Ismail argues the current level at $3,000 per month, but seems to adopt a median of $3,000 in calculating the 50% cost for part-time help at $1,500 per month. I take judicial notice that the current minimum level of basic wage for immigrant domestic help is $3,000 per month, to which must be added food, lodging and statutory insurance. In the circumstances I accept that the current overall cost would not be less than $3,500 per month and accept the median at $3,000.

32. In deciding the multiplier, I note that the children's ages at their mother's death were respectively just 3 and one year 9 months. From this I assume an average dependency of around 17 years, which discounted by 40% for early purchase would give a multiplier of 10.2.

33. I accept however the principle recently expressed in Spittle v. Bunney [1988] 1 WLR 847 that the nature of the deceased mother's services would change as the children grew older. Hence the need for full tine attention would gradually lessen until, perhaps by early teens, it would be part-time only. To reflect this factor, there should he a further reduction in the multiplier, although not large owing to the extreme youth of the children at their mother's death.

34. Also to be considered in assessing the multiplier is the possibility of the husband's remarriage. At 34 he is still comparatively young and this possibility cannot be excluded. It is however impossible to quantify, particularly as there has been no evidence. I therefore hold it in the judicial balance, but at no great weight. Bearing all these factors in mind, I award a post-accident multiplier of 9. This also accords with the Court of Appeal's award of a multiplier of 9 to the children in Hay v. Hughes, when they were respectively aged 4½ and 2½ at the mother's death. The greater age of the children in that case serves to offset the absence of the re-marriage factor, as the father was killed in the accident.

35. Applying this multiplier to the median cost of domestic help to trial gives an award of:

whilst the post-trial award on the balance of the multiplier applied to the actual current cost of domestic help yields:

The toal award is accordingly $353,000, which will be to the widower.

36. There remain for consideration the awards following the principle in Mehmet v. Perry [1977] 2 All ER 529 for the loss of the personal attention of a wife and mother, as distinct from that of a housekeeper. These awards, which will be to both the husband and the children are disputed by Mr. Ismail only as to quantum. He suggests $8,000 for the husband and $5,000 for each child, whereas Mr. Pritchard argues for $20,000 and $15,000 each respectively.

37. Mr. Ismail argues, correctly if I may say so, that the Mehmet v. Perry award should be limited by the need to avoid overlap with the cost aspect of the award for loss of services. With extremely young children however, I find the loss of the personal attention of the mother to be more significant and the overlap correspondingly much less.

38. Whilst the level of this award was modest in Mehmet v. Perry itself, it has been less so in other cases. Regan v. Williamson [1976] 2 All ER 241 proceeded Mehmet v. Perry but was followed by the judge in the latter case in accepting the entitlement to the award now mooted. Watkins J. in Regan v. Williamson increased the dependency for the children for the loss of their mother's personal attention by 60% over the purely financial loss, although on rather different facts. In considering both these cases in the Hong Kong case of Lam Nai Yau v. Lee Shu Choi HCA 915 of 1978, the court awarded a further 45% over the cost of services to cover the factor of personal attention. The comments of Watkins J. in Regan v. Williamson in this context bear quotation, as they are apposite to the present case:-

"So I begin the calculation of the figure of dependency with the sum of £12.50 per week. This, however, covers but a part of the loss of services. What about all those hours in the evening and during the weekends when no substitute service is available. In my judgment, they require to be taken into account. In so doing I recognise the difficulty of reaching conclusions without the assistance of clear guidelines. I am aware that there are good and bad mothers. It so happens that I am concerned with a woman who was a good wife and mother. I propose for the foregoing reasons to raise the dependency figure to £20 a week."

39. Facts of course differ, but I am persuaded in this case to a more generous approach to the children than that submitted by counsel. Indeed the modesty of the award to the children in Mehmet v. Perry was attributed by the judge to the plaintiff husband's full-time attendance at home as housekeeper. Such is far from the case here, and moreover all but one of the children in Mehmet were much older and the two eldest assisted the father at home.

40. Considering the extreme youth of the children at the accident date and the much lower overlap factor, I award $40,000 each for the loss of their mother's personal attention. Again differing with counsel, I consider that the husband's award should be lower than that for the children and this will he $15,000.

41. Whilst the award to the children is considerably higher than that argued even by Mr. Pritchard, it is not out of context with its precedents. The 60% add on factor for loss of personal attention in Regan v. Williamson and the 45% in Lam Nai Yau compare well to the 27% in this case. Even in Mehmet v. Perry, which I clearly distinguish on its facts, the additional factor amounted to over 17% of the award for the bare cost of lost services.

I will set out the various awards to the beneficiaries on the intestacy and to the dependants. They are referred to as pleaded by their relationship to the deceased:

LARCO (The lost years, funeral expenses and loss of expectation of life)

FAO (The dependency, including loss of services)

The Husband

The Son

The Daughter

42. Finally I turn to the issue of merger between the LARCO and FAO awards. I had initially considered compensation for loss of services, although part of the dependency award, to be different in kind from the award for loss of financial support and consequently not liable to merger. Logically, this is tenable, insofar as the award for support originates from the free balance of savings defining the LARCO award for the lost years, and duplication would be manifestly unjust. The award for lost services on the other hand is unconnected in origin with the deceased's notional savings for the lost years claim, and hence less obviously susceptible to merger.

43. Unfortunately, this view will not survive a close reading of the authorities, which relate ultimately to Lord Campbell's Act of 1846, the precursor to our own Fatal Accidents Ordinance of 1889. The principle applied in assessments under the English Fatal Accidents Acts has always been one of bringing into account all benefits received from the death in assessing the aggregate loss of the dependants. So much was this the case that even insurance payments on death were brought into account until statutorily excepted by the Fatal Accidents (Damages) Act of 1908.

44. That this principle of account is wide enough to cover the compensation to dependants for loss of services is not left in doubt by the House of Lords in Davies v. Powell Duffryn Collieries [1942] AC 601. Although not specifically in issue, this alone would not entitle me to distinguish claims for loss of services from the broad statements of principle handed down by five Lords of Appeal, and earlier by three Lords Justices.

45. The principle was summarised in the Court of Appeal by Luxmoore L.J. ([1941] 1 KB at 530) in the following terms:

"The only ground on which any interest taken by a dependant in the estate of the deceased can be ignored in assessing the damage suffered by him or her under the Fatal Accidents Acts is that such interest is excepted by statute from consideration as, for example, the interest in the deceased's life insurance policies."

The House of Lords affirmed this principle in full measure and I respectfully adopt it in espousing Mr. Ismail's submission to that effect. Accordingly the loss of services award to the dependants will abate with that for loss of support to the extent of their benefit as beneficiaries of the estate.

46. The awards revised on merger will therefore be:

LARCO

These awards will carry interest at 5% per annum from death to the date of this judgment. For simplicity, this will include both the award for loss of expectation of life, which would normally attract 2%, and that for funeral expenses, which as a disbursement would otherwise attract a commercial rate.

FAO

These awards will carry interest at the rate of 5% per annum from death to the date of this judgment.

47. The awards will therefore total:

48. There will be an order for costs to the plaintiff, with a certificate for counsel, and the plaintiff's own costs will be taxed under the Legal Aid Regulations.