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Li Ka Wai And Another v Hospital Authority

Judgment Cited authorities 10 Cited in Precedent Map Related
Vincent
Judgment Date16 October 2012
Year2012
Citation[2013] 1 HKLRD 634
Judgement NumberHCPI671/2007
Subject MatterPersonal Injuries Action
CourtHigh Court (Hong Kong)
HCPI235/2011 CHAN PAK TING v. CHAN CHI KUEN AND ANOTHER

HCPI 235/2011, HCPI 671/2007
& HCPI 228/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO. 235 OF 2011

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

BETWEEN
CHAN PAK TING Plaintiff

and
CHAN CHI KUEN 1st Defendant
CHAN YIU FAI JOE 2nd Defendant

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

AND

PERSONAL INJURIES ACTION NO. 671 OF 2007

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

BETWEEN
LI KA WAI (A Minor)
by his mother and next friend		 Plaintiff
SO YUET WA

and
HOSPITAL AUTHORITY Defendant

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

AND

PERSONAL INJURIES ACTION NO. 228 OF 2010

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

BETWEEN
YUEN HIU TUNG (A Minor)
by her grandmother And Next Friend YIP HEI SIU		 Plaintiff

and
HOSPITAL AUTHORITY Defendant

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

(HEARD TOGETHER)

Before : Hon Bharwaney J in Chambers (Open to Public)
Dates of Hearing : 17 and 18 September 2012
Date of Decision : 18 September 2012
Date of Reasons for Decision : 16 October 2012

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

D E C I S I O N

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

1. On 7 March 2012, the Privy Council in Simon v Helmot[1] upheld the decision of the Court of Appeal of Guernsey which held that the net rate of return in Guernsey, to be used to calculate the multiplier for future losses that were not earnings related, was 0.5%, and that the net rate of return for calculating earnings related elements of future losses was a negative rate of -1.5%. These rates of return resulted in substantially higher multipliers being adopted, and a substantial increase in the damages awarded, than multipliers adopted by reference to the assumed rate of return of 4.5%, which arises from the approach of the House of Lords in Cookson v Knowles[2] and followed by our Court of Appeal in Chan Pui Kee v Leung On[3]. Like Hong Kong, the law of damages for personal injuries in Guernsey is based on common law principles. Like Hong Kong, Guernsey does not have a Damages Act that enables the Lord Chancellor to fix the net rate of return.

2. The decision of the Privy Council in Simon v Helmot provided the impetus to the plaintiffs in the captioned actions to make application before me for leave to adduce actuarial and economic evidence to test whether the Cookson v Knowles assumption of a net rate of return of 4.5% remains valid in Hong Kong. Similar applications were also made by the plaintiffs in HCPI 381/2011, HCPI 900/2011 and HCPI 664/2009. I directed all the applications in all these cases to be heard before me on the 17 and 18 September 2012. For various reasons, the plaintiffs in HCPI 381/2011, HCPI 900/2011 and HCPI 664/2009 decided not to participate at this hearing and to await my decision before proceeding further.

3. On 17 and 18 September 2012, I heard submissions from Mr Michael Ozorio SC, leading Ms Christina Lee for the plaintiff in HCPI 235/2011, and Mr Kumar Ramanathan SC, leading Mr Samuel Chan for the defendant in the same action. Mr Ozorio SC also appeared for the plaintiffs in HCPI 671/2007 and HCPI 228/2010, as did Mr Ramanathan SC for the defendants in those actions. After hearing submissions from senior counsel, I granted leave to the plainitffs to adduce actuarial and economic evidence. I was persuaded that sufficient evidence had been adduced before me to demonstrate that there had been a substantial change in the economic landscape, since decision of the Court of Appeal in Chan Pui Kee v Leung On in 1996, such that I should permit economic evidence to be adduced to test whether the Cookson v Knowles assumption of a net rate of return of 4.5% remains valid today.

4. I also make the following orders and directions:

(1) There be a trial of the following preliminary issue in the captioned cases :

Whether, having regard to economic developments from 1995 up to the present time, the Cookson v Knowles assumption of a net rate of return of 4.5% remains valid in Hong Kong and, if not, what is the net rate of return based upon which multipliers ought to be assessed and awarded.

(2) Leave is granted to the parties to serve and adduce the expert report of Professor Chan Wai Sum (“Professor Chan”) and the defendants’ nominated expert (to be identified within 7 days) on the interpretation of historical data of the investment returns, net of inflation, of various investment vehicles from 1995 to date hereof and in that regard :

(i) there be a without prejudice meeting between the experts within 21 days (i.e. on or before 8 October 2012);

(ii) the experts prepare a signed joint report within 14 days (i.e. on or before 22 October 2012) thereafter setting out :

(a) the investments vehicles that have been considered and the risks, if any, of investing in such vehicles;

(b) the net rate of return of such investment vehicles from 1995 to date hereof and for the last 3 years, 5 years, 7 years, 10 years and 12 years;

(c) the net rate of return of combinations of such investment vehicles from 1995 to date hereof and for the last 3 years, 5 years, 7 years, 10 years and 12 years;

(iii) the experts should set out in their joint report the areas on which they have a common opinion and the areas on which they disagree; and in respect of the latter, setting out the expert’s view on the area in question, his reasons in support of such view and his reasons for opposing the contrary view;

(iv) the experts should refrain from offering any opinion on future economic developments but may identify and refer to current economic conditions which may impact on future economic developments.

(3) The trial of the preliminary issue shall take place before the PI Judge on 6 November 2012, 7 and 16 November 2012 also reserved.

(4) The trial of HCPI 228/2010 be adjourned to commence on 8 November 2012 (8 days reserved).

(5) There be a callover hearing before the PI Judge in Chambers on 30 October 2012 at 10 am (1 hour reserved).

(6) Costs of this application reserved to be determined at the conclusion of the trial of the preliminary issue, with certificate for 2 counsel.

(7) The plaintiffs’ own costs in HCPI 671/2007 and HCPI 228/2010 be taxed in accordance with the Legal Aid Regulations.

(8) Liberty to apply.

The award of damages for future loss and expenses

5. The primary principle in the law of damages is that, in the case of torts, the court ought to assess an award of damages as would place the victim of the tort in the same position as he or she would have been had the tort not occurred. In the case of pre-trial losses caused by the tort, this is fairly easy to accomplish and only requires proof, on a balance of probabilities, that the losses were sustained, and the expenses were reasonably incurred, as a result of the tort. In the case of a tort that results in future loss and expenses, the trial judge must do his best to estimate the amount of that future loss and expenditure. The desire for finality has produced a system of awarding damages which requires the trial judge to assess and award one lump sum representing the best estimation of these future losses and expenses. The problem with this approach is that the future may unfold in a way that makes the lump sum award either too little or too much : too little, if, for example, the award is exhausted by increased expenditure; and too much, if, for example, the plaintiff’s actual life turns out to be much shorter than estimated at the time of trial. These weaknesses in the system of lump sum awards prompted the Pearson Commission to propose, by a majority, in 1978 that the court should in general make their awards in the form of periodical payments in respect of future pecuinary loss caused by serious and lasting injury and that the periodical payments should be subject to later revision when there was a material change in circumstances[4].

6. This has now become a reality in the UK with the passage of section 2(1) of the Damages Act 1996 which was fortified by new provisions enacted by section 100 of the Court Act 2003. In the UK, the courts are empowered to make periodical payments that last the actual life time of the injured plaintiff; the payments can vary in accordance with the rise (or fall) of retail price indices; and, in the case of periodical payments to cover the costs of future care, the periodical payments can be varied in accordance with earnings related inflation, which may rise at a higher rate than price inflation and which can be ascertained by reference to earnings data such as that provided by the “Annual Survey of Hours and Earnings : Occupational Earnings for Care Assistants and Homecarers”, commonly referred to as ASHE 6115. The court may not make a periodical payment order unless it is satisfied that the continuity of payment is reasonably secure. Whilst a Hong Kong court might, in future, be tempted to accept the invitation of Lord Clarke in Simon v Helmot[5] to develop the common law to provide for periodical payments, absent statutory intervention, the law of Hong Kong, as it now stands, is that the court must assess damages once and for all in a lump sum save in those cases that qualify for an award for provisional damages.

7. By reason of the fact that a lump sum award is made at the time of trial to compensate for a continuing stream of income, to be earned in the future, and a continuing stream of expenditure, to be incurred in the future, the law has developed a number of tools to assess the proper award to be made.

8. The first and, probably, most important of these is the discount of the lump sum award that has to be made in respect of income and expenditure that would only arise in the future. If,...

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