CHAU CHIU SHAN v. YAU TAT SHIING AND ANOTHER

IN THE COURT OF APPEAL

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J U D G M E N T

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Fuad, V.P.:

1. This is an appeal by the Defendants against the Order made by Master Chan on 15th January 1988 on assessing damages in an action brought by the Administratrix of the estate of a Police Constable who died on 23rd July 1983 as result of the injuries he received on 14th July 1983 through the negligent driving of a car owned by the 2nd Defendant Company, and driven by the 1st Defendant. There were claims on behalf of the estate of the deceased under the Law Amendment and Reform (Consolidation) Ordinance, Cap.23 and on behalf of his dependants, his father and mother, under the Fatal Accidents Ordinance, Cap.22.

2. The appeal challenges the Master's award in relation to the "lost years" which he assessed at $502,241.81.

3. The Master arrived at this sum after finding on the evidence that the mean figure of the deceased's earnings during the "lost years" would be $5,737.50 per month. There is no challenge to this part of the assessment. What is suggested is that the Master was not justified by the evidence in concluding that the "free balance would be 57.78% of the deceased's earnings.

4. The Master stated his award for the lost years under the Law Amendment and Reform (Consolidation) Ordinance in this way: $5,737.50 x 57.78% x 151.5 months (204 - 52.5 months) = $502,241.81. Mr. Bleach before us, I think rightly, abandoned the contention that the multiplier used was too high. As regards what I will call the available surplus, the Master noted that Counsel for the Plaintiff had urged upon him the proposition, on the evidence and the figures he relied upon, that the free balance" of the deceased's monthly earnings should he assessed at 61.93%, and that Counsel for the Defendants had suggested that 46% would be the right percentage. Before us, Mr. Bleach said that the proper percentage should be 44.7%

5. The Master then went on to say that he accepted that the deceased had started to save up his money shortly before his death. Between 28th April 1983 and the date of his death in July 1983, the deceased had managed to accumulate savings in the sum of $2,286.75 (or an average of $762.25 per month) in the savings account he had opened for saving his earnings From his other savings account it could be seen that between November 1982 and April 1983, apart from withdrawing $1,500.00 per month for his contribution to the family expenses, he usually used up all his money. That was the account into which his salary would be paid. There was no evidence that he spent any further money on his family or any other person apart from his monthly contributions of $1,500. Thus, the Master said, apart from his savings and his family contribution, his spending pattern was to use up the rest of his income on himself (including tax liability) He found tha $350,00 out of the $1,500.00 he contributed, to the family pool was for his own upkeep ($5 x 30 days deducted from $2,500 00 ÷ 5 for having only 1 meal at home). In the premises the free balance was $1,912.25 ($762,2.5 + $1,500.00- $350.00). This was 57.78% of his average earnings over the relevant period.

6. The Appellants say, by their Notice of Appeal that the Master had erred in applying the savings figure to the "free balance" equation because:

(a) there was no, or no sufficient, evidence of savings or a pattern of savings on the part of the deceased to justify the Master's approach; ,

(b) the evidence showed that the deceased had only started saving in April 1983 and the Master had, failed to consider or take into account the fact that the deceased had not saved any money during the preceding 18 months.

7. In The Personal Representatives of the Estate of Wong Sai Chuen v. Tam Mei Chun [1983] H.K.L.R. 331, applying the House of Lords decision in Gammell v. Wilson, (1982). A.C. 27, the Court of Appeal stated what the correct approach was by a trial judge in assessing the free balance. I will not take time in reading what the Court of Appeal said but the passage I have in mind is at p.338 of the report of the judgment given by the former Chief Justice, between letter B and D.

8. In my judgment, the most useful case on the difficult problem of assessing the right amount for the lost years is to be found in the decision of the English Court of Appeal (which came after the Hong Kong case) in Harris v. Empress Motors Ltd., Cole and Another v. Crown Poultry Packeri Ltd. [1984] l W.L.R. 212. It seems to me, with respect that O'Connor L.J. correctly analyzed the state of the authorities and, in referring to the two leading House of Lords cases on the subject, he concluded that the propositions that were relevant could be summarised in this way - I quote from p.228 of O'Connor L.J.'s judgment. He said:

"I return to the two decisions in the House of Lords. In my judgment three principles emerge: 1. The ingredients that go to make up 'living expenses' are the same whether the victim be young or old, single or married with or without dependants. 2. The sum to be deducted as living expenses is the proportion of the victim's net earnings that he spends to maintain himself at the standard of life appropriate to his case. 3. Any sums expended to maintain or benefit others do not form part of the victim's living expenses and are to he deducted from the net earnings."

9. O'Connor L.J. cited a passage from pages 78 to 79 of Lord Scarman's speech in Furness and Another v. B. & S. Massey Ltd. [1982] A.C. 27 where he had said:

"The problem in these cases, which has troubled the Judges since the decision in Pickett's case [1980] A.C. 136 has been the calculation of the annual loss before applying the multiplier (i.e. the estimated number of lost working years accepted as reasonable in the case). My Lords, the principle has been settled by the speeches in this House in Pickett's case. The loss to the estate is what the deceased would have been likely to have available to save, spend, or distribute after meeting the cost of his living at a standard which his job and career prospects at time of death would suggest he was reasonably likely to achieve. Subtle mathematical calculations based as they must be on events or contingencies of a life which he will riot live, are out of place: the judge must make the best estimate based on the known facts and his prospects at me of death. The principle was rusted by Lord Wilberforce in Pickett's case at pp.150-151."

10. The assessment of the appropriate sums to award for the lost years has troubled the Courts for many years, ever since the House of Lord decided that such an award was proper. As a result of Gammell v. Wilson [1982] A.C. 27, Parliament in the United Kingdom enacted legislation to the effect that no damages may be awarded for loss of income in relation to any period after a person's death, by the Administration on of Justice Act of 1982. Awards earnings during the lost years will no longer form a part of the, law of Hong Kong where the cause of action accrues after 1st November 1986, as a result of the amendments made to s.20 of the Law Amendment and Reform (Consolidation) Ordinance, Cap.23 by Ordinance No.40 of 1986.

11. Mr. Bleach's main attack upon the learned Master's decision was that he was not justified, on the evidence, in concluding that the deceased was likely to continue saving at the rate shown by the evidence that he had been saving only since April 1983. That is to say that an established pattern of savings had not been shown and that the Master's overall figure had been inflated by this wrong approach. He cited a case which he suggested would be of assistance, the judgment delivered by another Division of this Court on 15th October 1987 in Yu Bik Chu and Yan Lai Fone v. Yu Fai Lok and Kowloon Motor Bus Company, Civil Appeal No.90 of 1987 (as yet unreported). With respect, for my part I do not find that case of assistance for it can be distinguished. There, there was insufficient evidence that the funds which were paid into the savings account were truly savings.

12. I will not say that there is nothing in Mr. Bleach's contentions about the savings figure found by the Master. However, I am not persuaded applying the Hong Kong authority which I have mentioned and Harris v. Empress Motors Ltd. that t the sum he reached as being the free balance upon which to base the award for the lost years was so high that this Court could properly intervene. It is clear that it is an extraordinarily difficult task to do justice in matters of this kind between the estate of the deceased person and the person who caused his death, but as Lord Scarman pointed out in Furness, subtle mathematical calculations are out of place the judge has to do the best he can. I am not able to accept that on the evidence before us (and in this matter we are in a good position as the Master was) that 57.78% was the wrong percentage to apply for the assessment of the free balance. It was indeed a high percentage, but in all the circumstances of the case, as I read the evidence, we are not entitled to interfere

13. For these reasons I would dismiss this appeal.

Yang, C.J.:

14. I agree and have nothing that I could usefully add.

Hunter, J.A. :

15. I also agree.