ASHOK G. C. v. KAM KEE CONSTRUCTION WORKS LTD AND ANOTHER

cacv 244/2006

in the high court of the

hong kong special administrative region

court of appeal

civil appeal no. 244 of 2006

(on appeal from HCPI NO. 691 of 2004)

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J U D G M E N T

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Hon Rogers VP:

1.  This was an appeal by the plaintiff in respect of an award of damages made by the master on 29 March 2006 when he heard the assessment of damages.  At the conclusion of the hearing of this appeal judgment was reserved.

Background

2.  The plaintiff suffered an accident at work on 16 October 2001 when he was 38 years old.  By the time of the assessment of damages he was 43 years old.  For the purposes of this appeal it is unnecessary to consider the extent of his injuries.  It suffices to say that he had an injury to his back but the master, relying on the medical evidence, did not accept that there were injuries to his right knee, right thumb or right great toe, as the plaintiff alleged.  Indeed, there was surveillance evidence which indicated that the plaintiff was probably exaggerating the effect of his injuries.  As a result the master awarded the sum of $180,000 in respect of pain, suffering and loss of amenities and there was no challenge to that on this appeal.

3.  The master awarded the sum of $158,400 in respect of loss of earnings in the period from October 2001 until September 2002 when the plaintiff had sick leave and the sum of $156,240 in respect of the 42 months from October 2002 until March 2006 when the assessment took place.  However, in respect of the latter amount he had reduced the award by 40% because the plaintiff was suffering from a pre-existing degeneration of the disc which was bulging at the L4/5 level.  It is accepted that there had been no symptoms of this prior to the accident but it was said, on the basis of the medical evidence to which I shall turn later, that this would have caused the plaintiff difficulties in the future.  The master also added 5% as the MPF entitlement.  In respect of future loss of earnings the master awarded a total sum of $515,592 which, again, had been discounted by 40% for the same reason.  Furthermore, the award in respect of loss of earning capacity which was put at $100,000 was likewise reduced to $60,000 for the same reason.

4.  In making the reduction of 40% because of the pre-existing degeneration of the L4/5 disc the master referred to “the general principles stated in Chan Kam Hoi v Dragages et Travaux Publics [1998] 4 HKC 523”.  He did not analyse what he understood to be those principles nor did he specify all the matters he took into account but he did say that he took into account all the circumstances and that the residual back pain was contributed to by the pre-existing lesion and degenerated bulging L4/5.

5.  The Chan Kam Hoi decision to which the master referred was a decision of this court.  The appeal centred upon the assessment of damages as part of the judgment on a trial which included the trial as to liability.  The trial judge had on that occasion only taken a period of 3½ years as the appropriate multiplier for future loss when the plaintiff had been 53 years old at the date of trial.  He done so because he had taken the period of 12 years as the appropriate multiplier which he applied from the time of the accident when the plaintiff had been 45 years old.  On appeal the multiplier was adjusted to 5 years but to be applied from the date of assessment.  In giving judgment, Mortimer VP indicated that the multiplier of 7 might have been more appropriate for a man aged between 53 and 54 but because of the nature of the plaintiff’s work that figure was reduced.  On the appeal in that case the court allowed the deduction of 45% because of the pre-existing degeneration but in doing so adjusted a 75% figure which the judge had taken in respect of the loss of earnings but not in respect of pain, suffering and loss of amenities.  At page 529 Mortimer VP said:

“Where a pre-existing condition is likely to lead to disability and loss in the absence of the injury for which the plaintiff is entitled to recover, the usual method of assessing the recoverable loss is to take account of the risks by an appropriate assessment of general damages.  The pre-trial loss of earnings may also be reduced if the risks during the years concerned is sufficiently high.

When calculating the damages for future loss of earnings, a reduced multiplier is usually the most accurate way of giving effect to the findings on the medical evidence.  This is particularly so when a plaintiff’s working life is likely to be limited by a pre-existing condition as in this case.”

6.  The court did not, in that case, alter the reduction of damages by 45% in respect of the pre-trial loss.  From what the judge had said it would appear that in that case the plaintiff’s pre-existing injury would not appear to have been likely to have caused the plaintiff any difficulty at least until the trial but, most probably, afterwards.  Thus in that case this court had retained the overall percentage reduction applied to the total damages, both pre-trial and post-trial loss, even though the circumstances might not have warranted it.

The medical evidence

7.  The medical evidence in this case consisted of two joint medical reports by specialists in both orthopaedics and traumatology.  Neither of the doctors were called to give oral evidence.  Both doctors agreed that the plaintiff had a pre-existing spondylosis lesion which the injury which he sustained had rendered painful.  The plaintiff’s doctor said in the first report that had it not been for the accident the plaintiff would probably have remained symptom free for at least 5 to 10 years.  In the second report, made in December 2004, he said:

“For the degenerated bulging L4/5 disc, it is expected to cause significant residual low back pain with exacerbation from time to time upon heavy exertion, provided he will refrain from performing heavy manual work and avoid to sustaining further injury.”

8.  Further down he went on

“As discussed in the previous joint report, if he did not have the above-mentioned pre-existing conditions, he would probably have recovered from the back contusion much better with minimal residual pain.  If he had not sustained a back contusion injury, his too-relatively mild pre-existing condition would probably remain symptom-free for at least another 5 years.”

9.  In my view there was insufficient evidence that the pre-existing condition would have caused difficulty prior to the date of the assessment of damages.  There was, however, on the plaintiff’s doctor’s own evidence, clear evidence that the pre-existing condition was likely to cause the plaintiff difficulty in the future.  On the basis of the plaintiff’s own doctor’s assessment in the second report, that would have been sometime after 2008-9.  That likelihood was something which, clearly, the master was entitled to take into account in calculating the possible damages.  In the first report, in 2003, the plaintiff’s own doctor had indicated that the plaintiff was likely to suffer from his pre-existing degeneration within 5 to 10 years, that would imply that in 2003 the doctor had thought that by 2013 the plaintiff would be suffering from his pre-existing injury even if there had been no accident.

10.      By reducing the amount of post-trial loss of earnings by 40%, the master effectively applied a multiplier of 6.6 years as opposed to the 11 years which he considered appropriate for an otherwise previously healthy man.  Taking into account the fact that the assessment took place in 2006, on a rough and ready basis that would take the matter to sometime around 2013.  Looked at it in isolation, it could be said that that would have been generous since the later report had reduced the trouble free period.  When one takes into account that in 2004 the plaintiff’s own doctor had put the likely trouble free period as 5 years that would only be a period of 3 years from the date of assessment.  Hence when looked at from the period of post-trial loss of earnings the master’s award was certainly generous and on the high side.

11.  In relation to the pre-trial loss of earnings when taken in isolation it may be said with some justification that there was no sound medical evidence to show that the pre-existing degeneration would have caused the plaintiff difficulties in the period up to trial.

12.  If the master had followed the formula quoted in paragraph 5above I consider that he would not have reduced the pre-trial loss of earnings and he would have taken a multiplier of 6 years in respect of the post-trial loss and not applied any percentage discount.  However what the master did was to make a global reduction of 40% following what was actually done in the Chan Kam Hoi case.  As a logical process that was not correct, but the master considered he was following principles laid down in that case.

13.  If the master had taken a multiplier of 6 years for the post-trial loss and had not applied a percentage reduction, the figure for post-trial loss of earnings, on my calculation, would have been $468,720.00, taking into account the 5% MPF.  That is approximately $22,000 less than the figure given.  In respect of the pre-trial loss the figure would be $273,420 and the total for the pre-trial period would be $439,740.00.  In other words nearly $110,000 more.

14.      Since these figures give an overall difference of about $88,000, that is sufficient on the amount involved to warrant this court interfering with the award.  Since the master had followed what was done in the Chan Kam Hoi case and what he thus considered were the principles emerging from that case, he arrived at his conclusion by applying a lower percentage over the whole pre-and post-trial period.  Since I consider that the calculation should be on the basis of what was said in the Chan Kam Hoi case rather than what was actually done, I would alter the amount arrived at by the master by applying the principle which I consider is the appropriate principle.  Approaching the matter as one of the manner in which the damages are calculated, I do not consider it would be correct to alter the amount for the pre-trial period without also adjusting the amount for the post-trial period.  I would therefore adjust the amounts awarded as follows:

“The total award is
PSLA	$180,000
Pre-trial loss of earnings	$439,740
Post-trial loss of earnings	$468,720
Loss of earning capacity	$60,000
Special Damages	$5,000
	$1,153,460
LESS  ECC	($304,365.32)
	$849,094.68”

15.  I would therefore made an order accordingly and make an order nisi of costs in favour of the plaintiff.

Hon Le Pichon JA:

16.  I agree.

Hon A Cheung J:

17.  I agree.