WONG WAI CHUN v. THE CHINA NAVIGATION CO LTD

IN THE SUPREME COURT OF HONG KONG

APPELLATE JURISDICTION

CIVIL APPEAL NO.3 OF 1969

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BETWEEN
	WONG WAI CHUN, Administratrix of the Estate of Cheung Chung Wai deceased.	Plaintiff (Respondent)
	AND
	THE CHINA NAVIGATION CO. LTD.	Defendant (Appellant)

Coram: Hogan, C.J., Blair-Kerr, J. and Huggins, J.

Date of Judgment: 17 September 1969

 

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JUDGMENT

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Hogan, Chief Justice:

The Facts

1. On the 5th July, 1966, Mr. Cheung Chung Wai, hereinafter called the 'deceased', a steerage/deck passenger on the s.s. 'Taiyuen', which was docked in Manila, went ashore with his friend, Mr. Wong. They returned and took lunch in their cabin at about 1 p.m. The deceased then left the cabin to purchase some postcards at the purser's office. The hatches were open as cargo was being loaded or unloaded. The deck, in the vicinity of the hatches on the side where the cargo was not being worked, was encumbered with hatch covers etc. Apparently the deceased, like others before him, traversed these obstacles successfully on his way to the purser's cabin but on the way back he slipped, fell into the open hold and was killed. Mr. Wong, hearing the commotion, came out and after learning what had happened got his camera and took photographs which have been extremely helpful in showing the condition of the deck at the time.

2. The deceased had left Hong Kong in February, 1966, in order to take a degree in a University in Sydney, Australia. Apparently his English was not good enough and he decided to return to Hong Kong without completing his studies. He left Sydney on the s.s. "Taiyuen" on the 16th June and travelled via Brisbane and Port Moresby where, according to Mr. Wong, cargo had been handled without causing the hazards which allegedly led to the accident in Manila.

3. Action for negligence was brought by the widow and administratrix of the deceased. The defendants denied that they were negligent and claimed that the accident was due to the sole negligence of the deceased. As an alternative, they relied on suicide by the deceased. They also relied on the conditions of carriage attaching to the ticket issued to the deceased under which the deceased would have waived any right of action against the defendants in respect of any loss, damage or injury whether fatal or otherwise, howsoever and wheresoever caused. In addition, they denied dependency.

4. The plaintiff was, however, successful in the court below and the trial judge awarded damages of $115,200 of which $12,000 went to the plaintiff as administratrix under the Law Reform (Miscellaneous) Provisions Ordinance and the balance of $107,200 was apportioned as follows:-

"To the widow Wong Wai Chun	$92,200.00
To Cheung Chow	5,000.00
To Cheung Kwan	5,000.00
To Cheung Ding	5,000.00

Grounds of Appeal

5. The defendants have appealed on four grounds, expressed as follows:-

"1.	That the learned Judge erred in law in holding that the doctrine of Volenti non fit injuria did not apply.
2.	That the learned Judge erred in law in holding that the Defendant did not do all that was reasonably sufficient to bring to the attention of the deceased the exemption clause in the Conditions of Travel.
3.	That the learned Judge erred in law in not deducting from the aforesaid sum of $101,920.00 amended to $119,200.00 awarded as damages the moneys which formed the deceased estate and had come into the hands of the Plaintiff upon his death and intestacy.
4.	That the learned Judge erred in law and in fact in awarding an excessive sum by way of damages."

The First Ground of Appeal

6. The judge dealt very briefly with the issue raised by the first ground of appeal; devoting to it no more than the following paragraphs:-

"As to the first ground, was the deceased himself negligent? I find as a fact that the defendants had allowed the hatches and beams to be stacked on the deck in such a way that the only through passage way was as was described by Mr. Wong and shown in the photographs. There was no other way along the deck other than by climbing over the piled up hatches. It was said in evidence that the deceased was returning to his cabin from the purser's office which is in the stern of the ship. He had a right to be there on the deck and in manoeuvring his way past the hatches must have stood on the coaming of the hold in order to get passed them. I do not think that in the circumstances that it was negligent of him to step up on to the coaming.

The case of Merrington v. Ironbridge Metal Works⁽¹⁾ was relied upon it being suggested that the doctrine of volenti non fit injuria applied. With respect I do not think that that doctrine does apply. There is no evidence here that the deceased was 'volens'. In the words of Mr. Justice Hallet in that case there was not 'a real consent to the assumption of the risk without compensation'".

Argument on first ground: volenti non fit injuria

7. In arguing that this conclusion was wrong, counsel for the appellant has gone much more deeply into the facts and the relevant law. As to the former, he contended that the plaintiff took an entirely unjustified risk in seeking to cross the deck when the hatches were being worked. He placed much reliance on a notice at the purser's office which asked the passengers to keep away from the hatches "while work is in progress". Counsel arguing that, in the circumstances, the risk which the deceased voluntarily chose to incur far exceeded the convenience which he was seeking to satisfy, referred to paragraph 85 of Clerk & Lindsell on Torts (12th Edition), which says, inter alia:-

"The question primarily is whether the plaintiff knew of a risk and then submitted himself to it. The emphasis, therefore, is upon the knowledge of the plaintiff: 'if the defendants desire to succeed on the ground that the maxim volenti non injuria is applicable they must obtain a finding of fact that the plaintiff voluntarily and freely with full knowledge of the nature of the risk he ran impliedly agreed to incur it'. Therefore, there must be both knowledge and consent."

8. The quotation in this passage is from the Privy Council opinion in Letang v. Ottawa Electric Railway Co.⁽²⁾ on which counsel also relied. As a statement of the substance of that opinion, the passage leaves something to be desired. It does not appear to bring out with sufficient clarity the nature of the consent required.

9. In delivering the opinion of the Board, Lord Shaw of Dunfermline said:-

"As Bowen L.J. expressed it in Thomas v. Quartermaine⁽³⁾: 'The maxim, be it observed, is not 'scienti' non fit juria, but 'volenti'. It is plain that mere knowledge may not be a conclusive defence ...... The defendant in such circumstances does not discharge his legal obligation by merely affecting the plaintiff with knowledge of a danger ...... Knowledge is not a conclusive defence in itself. But when it is a knowledge under circumstances that leave no inference open but one, namely, that the risk has been voluntarily encountered, the defence seems to me complete.'".

10. A little later Lord Shaw said:-

"The law of Canada and England seems to be summed up in the leading proposition to Wills J.'s judgment(3a): 'If the defendants desire to succeed on the ground that the maxim volenti non fit injuria is applicable, they must obtain a finding of fact that the plaintiff freely and voluntarily, with full knowledge of the nature and extent of the risk he ran, impliedly agreed to incur it.'".

11. This would seem to imply not merely the necessity of knowledge and consent but a consent that is not constrained or forced by a choice between avoiding the risk and satisfying a legitimate need.

12. Counsel also relied on paragraph 91 of Clerk & Lindsell on Torts (12th Edition), which is in the following terms:-

"There exists at common law a positive duty not to permit the existence of a danger in a place to which there is an absolute right of access, such as a highway, or a market-place, and in such case notice to the plaintiff, however ample, and however clearly it may bring home the extent of the danger to his mind, does not get rid of the duty towards him so as to give a defence on the ground of volenti non fit injuria. He is entitled, in preference to foregoing the exercise of his rights, to run the risk which the defendant's wrongdoing has occasioned, provided that the risk be not so serious as to be altogether out of proportion to the benefit to be secured.".

13. I think counsel's main purpose here was to equate the facts of the present case to the sentence last quoted but the earlier part of the paragraph is somewhat remote from the circumstances of the present case; as indeed was Merrington's case⁽¹⁾ to which the judge referred and where the injury was suffered by a fireman who was under a duty to go to the scene of the fire and could not therefore be described as "volens".

14. More apposite was counsel's reliance on the observation of Bramwell, L.J. in Lax v. The Corporation of Darlington⁽⁴⁾, where a cow was injured in the market place by a spiked railing put up by the defendants. This case must, however, be approached with some care because of the limited ground on which it was decided in the Court of Appeal. Brett, L.J., who gave the leading judgment stressed that it was the purpose of the parties to leave one question only to the jury: ... whether the defendants, as the owners of the market, were under any liability to those who brought their cattle there to have the market not in a dangerous state for the reception of cattle." This, he decided, was:-

"... wholly independent of the defendants having the franchise of the market; they are in a position of owners of land receiving cattle on their land for the purpose of affording, amongst other things, standing room for the cattle in consideration of a payment made to them, and I cannot doubt myself upon the most ordinary principles of law, that inasmuch as they receive payment for that standing, they are prima facie under the liability of affording a place which is not dangerous for the purposes for which the payment is made.".

15. Having stressed that that was the only question left to the jury he went on:

"I do not doubt that although the defendants are primary liable as I have stated, yet if the plaintiffs themselves were guilty of an unreasonable want of care in the mode in which they put their cattle into the place destined for them, or if the plaintiffs wilfully and purposely undertook a risk and danger which was fully known to them, under those circumstances, notwithstanding the primary liability of the defendants, it would be right in point of law to say the plaintiffs had contributed to the loss, or that they were the sole cause of the damage to their cow. But it seems to me that no such question could be raised against the plaintiffs, unless there was evidence to support it, and unless the parties desired that such a case should be left to the jury.".

16. It would seem therefore that the observations in the case must be viewed against the background of the narrow basis on which it was tried or decided. Observations about contributory negligence or voluntary assumption of risk by the plaintiff would appear to be obiter.

17. Bramwell, L.J. put his decision thus:

"The defendants did not warn the plaintiffs, and the jury have found that the place was dangerous, and therefore there is, in my opinion, a prima facie case against them, not upon any ground of negligence or misfeasance, but simply upon this ground, that they have not done their duty to their customer in apprising him that there was danger in his accepting their invitation and allowing him to come to their ground for a profit to themselves.".

18. I do not find that statement entirely easy to follow; whilst the case may have been decided on the basis of contract rather than on tort, a distinction which is not, I think, material in our case, I would have thought that negligence was a factor, and as for apprising the plaintiff of the danger, as the plaintiff had been taking his cattle regularly to the site and the spiked railing around a statue had apparently been there for some two or three years one would have thought that the plaintiff must have been deemed to have been aware of it.

19. Bramwell, L.J. want on to say that if the Appeal Court had before them the question whether the plaintiffs incurred the loss through their own fault he should have had great misgivings "whether the plaintiffs were entitled to recover, because, if they knew the amount of the danger and chose to risk it, it is their own fault, they are volunteers; and in my opinion the defendants ought not to have been made liable to them in that case.".

20. He continued: "I do not want to go into the matter at any length, but I think there is an important principle involved in it - a principle as to which there are continual mistakes made and great injustice done. We have an exemplification of it in the common case of a passenger by a railway.". He went on to say that such a passenger if carried beyond the platform was not entitled to damages if injured in trying to get out but should let himself be carried on and subsequently sue the Company for not being taken to where he wanted to go. The Lord Justice continued:

"I have no doubt of the good sense of that; I have not a misgiving of it, and I cannot agree to a great deal of what was said in the case of Clayards v. Dethick⁽⁵⁾.".

21. In that case a cab proprietor who had stables in a mews from which the only access to the street was a long, narrow passage, led one of his horses along this passage, which had been obstructed by the opening of a trench by the defendants. The horse fell into the trench and was injured. The danger was obvious and there was evidence that a warning had been given but the case was left to the jury and the cab proprietor succeeded. Lord Denman C.J. had left it to the jury to say whether the defendants had been guilty of negligence and then observed⁽⁵⁾:-

"that it could not be the plaintiff's duty to refrain altogether form coming out of the mews merely because the defendants had made the passage in some degree dangerous: that the defendants were not entitled to keep the occupiers of the mews in a state of siege till the passage was declared safe, first creating a nuisance and then excusing themselves by giving notice that there was some danger; though, if the plaintiff had persisted in running upon a great and obvious danger, his action could not be maintained.".

22. Lord Bramwell continued⁽⁴⁾:-

"It was there asked, 'Was the cabman bound to stay in all day?' Bound! Bound to whom? ...... Why, of course, he was not bound, because there was nobody to say to him 'you shall.' But if he chooses to go out with an obvious danger before him, he must take the consequences. Suppose a man is shut up in the top room of a house unlawfully, is he bound to stay there? He is not bound to do anything of the kind; he may jump out if he likes to run the risk of breaking his neck or his limbs; ........ but if he runs the risk of getting out and breaks his neck, the person who shuts him up is not guilty of manslaughter; and if he breaks his leg, he ought not to have any right of action against that person, although he was not bound to stay there. Then there was another expression used, which I cannot help thinking was an unfortunate one. It was this: 'What would a prudent man do?' ....... It is not ... a question of prudence.".

23. Cotton, L.J., concurred with the judgment of Brett, L.J.

24. These observations by Bramwell, L.J. would seem to lend support to the argument of defence counsel but they do not appear to have had the concurrence of other members of the court and they were, as I have said, obiter. Moreover, they are in conflict with the more recent and more authoritative House of Lords decision in A.C. Billings & Sons Ltd. v. Riden⁽⁶⁾ to which we were not referred and where Lord Reid as well as Lord Somervell of Harrow, relied on Clayards v. Dethick⁽⁵⁾, after counsel for the respondent there had said: "Despite what Bramwell, L.J. said in Lax v. Darlington Corporation⁽⁴⁾, the law was properly stated in Clayards v. Dethick."⁽⁵⁾.

25. Having also referred to the judgment of Cockburn, C.J. in Thompson v. North Eastern Railway Company⁽⁷⁾ Lord Reid said⁽⁶⁾:-

"The conclusion to be drawn from these cases appears to me to be that there is no magic in giving a warning. If the plaintiff knew the danger, either because he was warned or from his own knowledge and observation, the question is whether the danger was such that in the circumstances no sensible man would have incurred it or, in other words, whether the plaintiff's exposing himself to the danger was a want of common or ordinary prudence on his part. If it was not, then the fact that he voluntarily or knowingly incurred the danger does not entitle the defendant to escape from liability.".

That would seem to sum up the current view of the law on this matter.

26. The case is, I think, particularly useful both in its exposition of the law and in not only a superficial but a substantial resemblance to the more significant facts of this case. In the Billings' case⁽⁶⁾ contractors had obstructed the entrance to a house, with results somewhat similar to those that followed in our case. Mrs. Privett, the occupier of the house, had invited the plaintiff to come in and had indicated to her a route by the adjoining house which had been suggested by the contractor's workman and which passed by an unfenced sunken area where the plaintiff on her return journey slipped and hurt herself. She knew the area well but dealing with the question whether, by accepting the invitation to come in, with knowledge of the difficulties and dangers attendant on the route, and her subsequent action in returning by the same route later that night, she had disabled herself from recovering, through the principle of volenti non fit injuria, or had diminished her rights by contributory negligence, Lord Reid said⁽⁶⁾:-

"...... when the respondent was invited to come in her only alternatives were to come in as she did or go away; and ...... when she had come in, her only alternatives were to go out by the route she took or to stay the night where to go out by the route she was .......

I think that the first question to ask is whether the respondent acted reasonably in accepting Mrs. Privett's invitation and taking her advice to go the way she did. That must depend on whether the knowledge of the route which she then had ought to have made it clear to her that she would incur a degree of risk which a reasonable person in her position would not have incurred - in other words, whether a reasonable person with her knowledge would have declined the invitation and gone home. There was no urgency about her visit, she only happened to be passing when she was invited to come in. The reason why I first consider whether she acted reasonably in going in is that if she was unreasonable in going in she cannot found on there being some urgency to get out again so as to entitle her then to incur some greater degree of risk. I agree with Hallett J. that the question is not whether she realized the danger but whether the facts which she knew would have caused a reasonable person in her position to realize the danger. But in considering what a reasonable person would realize or would do in a particular situation we must have regard to human nature as we know it, and, if one thinks that in a particular situation the great majority of people would have behaved in one way, it would not be right to say that a reasonable man would or should have behaved in a different way. A 'reasonable man' does not mean a paragon of circumspection.".

27. Latter in his speech Lord Reid said⁽⁶⁾:-

"The next question is whether, if she acted reasonably in going in, the fuller knowledge of the route which she gained on the inward journey made it unreasonable for her to try to go out the same way. Now, there was some urgency about making the return journey, for otherwise she would not get home. Here it is relevant to consider the attitude of the other people in the house when she left, Mrs. Privett, her son, and Mr. Brown. They all knew the route. Mrs. Privett's son offered to accompany the respondent but she said she could manage. It did not occur to any of them that she should not go or that she should not go alone. I find it very difficult to assume that they were all unreasonable people in letting her go alone, and I think that only a minute proportion of ordinary people put in the respondent's shoes and faced with the choice of staying the night or taking the route she did, would have chosen to stay the night. But I think that most people would have been more careful than she was. She would certainly have been wiser to take the son's offer, and I agree with the finding that there was contributory negligence on her part in not taking enough care when she left the house, but I cannot find that in seeking to return by this route she acted unreasonably or so negligently as to lead to the conclusion that her accident was caused entirely by her own fault.

It is sometimes said that when a visitor goes on, knowing the risk, the test is whether he was free to choose or acted under some constraint. My difficulty about that test is that freedom is a word which has come to have very different meanings for different people. If this test leads to the same answer as the question whether, in all the circumstances, the visitor acted reasonably, well and good. But if not, I think that, in cases like the present, reasonableness is the better test and is more in accordance with principle. The defendant is bound to take reasonable care, but he is entitled to expect that a visitor will behave in a reasonable manner. I leave aside cases where children are concerned.

In my view, the accident was caused partly by the danger of the route and partly by the respondent's own negligence."

28. The question whether the suit must fail because the deceased being "free" to choose, consented to take the risk of crossing the deck by a route which, as in the Billings' case⁽⁶⁾, proved to be dangerous is, I think, illustrated and answered by the concluding remarks of Lord Somerville in that case.

29. He said:-

"Denning L.J., in his judgment, cited and applied a statement of his own in Slater v. Clay Cross Co., Ltd.⁽⁸⁾:

'Knowledge of the danger is only a bar where the party is free to act on it, so that injury can be said to be due solely to his own fault ...... Where knowledge of the danger is not such as to render the accident solely the fault of the injured party, then it is not a bar to the action but only a ground for reducing the damages.'

I think the words 'free to act' in the context may be ambiguous. The plaintiff was 'free' to stay the night in No.25 but the learned judge did not mean that her freedom to do this meant that the accident was due solely to her own fault. There may be many cases where a plaintiff is 'free' in one sense to avoid the risk altogether but where it would be reasonable to run the risk. When the plaintiff has full or partial knowledge of the danger the question must always be: Was the injury, in all the circumstances, including the plaintiff's knowledge, due solely to his own negligence or was it due solely to the negligence of the defendant or was it due to the negligence of each?".

Decision on First Ground of Appeal

30. Applying the test of "acting reasonably in running the risk" enunciated in this case, it seems to me that, in the circumstances in which he found himself, the deceased did not act unreasonably in exercising his "freedom to choose" by crossing the deck to the purser's office and returning by the same route. There was certainly no greater measure of compulsion or constraint on the plaintiff in the Billings' case⁽⁶⁾ to do what she did and take the route which she took than there was on the deceased, who, according to the evidence, had no other way of obtaining egress and ingress to his cabin.

31. The defendants have not raised the issue of contributory negligence on this appeal but have requested a reversal of the judge: finding and the dismisal of the suit on the ground of volenti non fit injuria. I would not allow the appeal on this ground.

32. Before leaving this ground I would add that it is somewhat disturbing, in this case, to find that some of the ship's officers had prepared and put before the court sketches which, in their presentation of the state of affairs on the deck at the time of the accident, were at variance with and more favourable to the defendants than the pictures taken immediately after the incident by Mr. Wong. Without these pictures it might have been difficult for the deceased's presentatives to have shown how encumbered the deck was at the actual time and the difference between these pictures and the sketches prepared by the ship's officers cannot pass without comment.

The Second Ground of Appeal

33. Turning to the second ground of appeal, the relevant part of the judgment in the court below reads as follows:-

"We now come to the third point which I think is the strongest point in favour of the defence i.e. that the defendants are exempt from liability because of the conditions of the contract of carriage made between the defendants and the deceased.

The ticket of the deceased, or rather that part of the ticket which is retained by the passenger was exhibited to the court. On one side are various particulars such as the passenger's name, the date of sailing, the ports of embarkation and disembarkation and the fare etc. On the back the following words appear in English with a Chinese translation underneath:

'This ticket is issued subject to the company's terms and conditions of carriage which may be read in the office of principal agents-in each port.'

There is no reference on the face of the ticket to the words appearing on the back of the ticket.

When a passenger purchases a ticket of this class from the defendants he is issued with a document which is in 4 parts one of which he retains which is named the passenger's counterfoil. No where in that document are 'the company's terms and conditions of carriage' set out.

However also exhibited was a document headed 'The China Navigation Co. Ltd. Conditions and Terms under which all deck and steerage passengers are carried'. There follow 9 numbered paragraphs. The whole document is in English with a Chinese translation below.

34. The first paragraph reads as follows:-

'The acceptance of a ticket shall be taken as conclusive evidence that neither the passenger nor any other person shall have any right of action whatsoever against the owners, their managers and agents, in respect of any loss, damage, injury, whether fatal or otherwise, inconvenience or delay to the passenger or his baggage or other property howsoever and wheresoever caused.'

The defendant's case is that these conditions and the conditions I have quoted in particular are incorporated as terms of the contract of carriage of the deceased by reason of the clear words appearing on the ticket.

The question that the court has to ask itself in cases of this nature is did the defendant take reasonable means to give notice of the conditions to the plaintiff, here, the deceased. This emerges clearly from Watkins v. Rymill⁽⁹⁾ where those very words are used by the court.".

35. The judge then quotes from Lord Haldane's speech in Hood v. Anchor Line⁽¹⁰⁾ and proceeds:

"My attention has also been drawn to Cockerton v. Naviera Aznar⁽¹¹⁾ which again was a case with facts very similar to the facts of the present case.

Here the defendants discharged the onus of proving that they took reasonable steps to draw the attention of the deceased to the conditions which I have set out above. It is a question of fact.

In Cockerton's case⁽¹¹⁾ and also in Hood v. Anchor Line⁽¹⁰⁾ the passenger received a ticket with the actual conditions printed on it. They did not read them or know of their existence but the court held in each case that they were binding on them. It may well be asked what can the Shipping Company do than hand to an intending passenger the conditions under which the company will carry him. Two specimen tickets were put in evidence in this case of other shipping companies each of which had the conditions printed as part of the ticket. But that was not so so far as the present case is concerned.

Is it enough therefore merely to tell an intending passenger that there are conditions and to leave it to him to find out what they are?

In Watkins v. Rymill⁽⁹⁾ the facts were as follows. The plaintiff was the owner of a vehicle and the defendant maintained a repository for the sale on commission of such vehicles. The plaintiff took his vehicle to the repository and left it to be sold receiving in exchange a printed receipt on which it was stated that sales of vehicles deposited were subject to 'the conditions exhibited on the premises'. On the premises were exhibited printed conditions in conspicuous places.

It was held that the plaintiff was bound by those conditions despite the fact that he never read the receipt and was ignorant of the conditions.

What are the facts of the present case? The deceased had not travelled by sea before. He had left Hong Kong for Australia by air, but this was his first sea voyage. There were no conditions printed on the ticket itself only the warning and that on the back of the ticket, not on the front. Attention was not drawn to what was on the back of the ticket. That his English may not have been very good is not material because the words printed on the back of the ticket were in Chinese as well as in English.

There is no evidence of where he purchased the ticket, whether it was from 'the office of the principal agents of the defendants' in Sydney. Nor is there any evidence that the conditions of carriage a copy of which has been exhibited was either posted up or readily available at the place where the ticket was purchased i.e. where the contract was made.

The defendant called a witness from a travel agency who said that a copy of the conditions was available at the office where she worked in Hong Kong. She also said that in some offices they were exhibited. However she admitted that she had no knowledge of any ticket office in Sydney.

All that is known therefore is that this warning on the back of the ticket was given to the deceased. I do not think that that is enough. In Watkins v. Rymill⁽⁹⁾ it was proved that the conditions in question were conspicuously displayed for all to see. In the absence of some evidence that the conditions were readily available or conspicuously displayed at the placed where the contract was made I do not think that the defendant has discharged the onus of proof placed upon him (sic).

Therefore I do not think that the defendant can rely upon the condition and so avoid liability."

36. Counsel for the appellant opened his attack on this part of the judgment by stressing that the words "this ticket is issued subject to ......." do not necessarily appear on the back of the ticket, of which the portion issued to the passenger was in three parts not four, as found by the judge. It is not known whether the ticket when issued was folded or open. If open, the words would have appeared on a portion of the ticket which might have been facing the passenger; if folded, the words might have been inside the folds or on a page which, again, was facing the passenger: all depending on how it was folded. There is no direct evidence as to the form or manner in which it was given or handed to the passenger. I think the very most one could say is that the probabilities, slender in any event, would seem to be that it was folded with these words on the inside.

37. Before turning, however, to the more difficult problem presented by the apparently conflicting passages in the extract just quoted from the judgment it will be convenient to set out now the main feature of the argument advanced for the defendants.

38. Counsel first referred to Nunan v. Southern Railway Co.⁽¹²⁾ as indicating the proper approach to a problem of this kind when tried by a judge sitting alone. Swife, J., who sat in that case by consent of the parties without a jury, said:-

"A number of cases were cited to me to show how the Courts had dealt with the question of fact to be determined in this case in various circumstances. I have examined those cases for the purpose of ascertaining in what way a jury should be directed to approach the consideration of such a question of fact if the matter had been one to be decided by them. I am of opinion that the proper method of considering such a matter is to proceed upon the assumption that where a contract is made by the delivery, by one of the contracting parties to the other, of a document in a common form stating the terms upon which the person delivering it will enter into the proposed contract, such a form constitutes the offer of the party who tenders it, and if the form is accepted without objection by the person to whom it is tendered this person is as a general rule bound by its contents and his act amounts to an acceptance of the offer to him whether he reads the document or otherwise informs himself of its contents or not, and the conditions contained in the document are binding upon him; but that if there be an issue as to whether the document does contain the real intention of both the parties the person relying upon it must show either that the other party knew that there was writing which contained conditions or that the party delivering the form had done what was reasonably sufficient to give the other party notice of the conditions, and that the person delivering the ticket was reasonably sufficient to give the other party notice of the conditions, and that the person delivering the ticket was contracting on the terms of those conditions: see hereon Parker v. South Eastern Ry. Co.⁽¹³⁾, Watkins v. Rymill⁽⁹⁾, Richardson, Spence & Co. v. Rowntree⁽¹⁴⁾, Hood v. Anchor Line, Ltd.⁽¹⁰⁾ and Gibaud v. South Eastern Ry. Co.⁽¹⁵⁾."

Counsel passed from this statement of principle to the case of Thompson v. London, Midland & Scottish Railway⁽¹⁶⁾, on which he placed particular reliance as showing that, although the question of notice or no notice was a question of fact, and therefore primarily for determination by a jury, a Court of Appeal would not hesitate to intervene if it thought that the decision of the jurors was perverse through having come to a decision which was not open to them on the evidence. He added for good measure that the defendants here are in a stronger position than in Thompson's case⁽¹⁶⁾ because the journey was longer and more likely to be subject to conditions.

39. Strictly speaking Thompson's case⁽¹⁶⁾, does no more than show that the evidence there adduced was, perhaps surprisingly, deemed incapable of supporting the finding of the jury and that where there is insufficient evidence to support the findings of fact made by a jury that finding will be set aside but when one of the questions to be considered by a tribunal is whether the steps undoubtedly taken by a party were "reasonably sufficient" to give notice of the introduction of a term into a contract, one inevitably introduces an element of judgment and opinion which tends to lead the individual or body responsible for expressing an opinion to look, not only at their own knowledge of everyday life, but at the conclusions which have been reached by others when faced with this question in circumstances more or less similar to those under consideration.

40. Consequently it is not surprising that the defendant should rely on Thompson's case⁽¹⁶⁾ as indicating not only the readiness of a Court of Appeal to interfere but also as an illustration of facts which were thought sufficient to saddle a traveller with knowledge of a condition exempting a carrier from liability. This approach would gain greater weight from the observations of Blackburn, J., who, when dealing, in Harris v. Great Western Railway Co.⁽¹⁷⁾, with the question whether a railway company was protected by an exemption clause on a cloak-room ticket, referred to an earlier decision of the House of Lords (Henderson v. Stevenson⁽¹⁸⁾) as binding on the lower tribunal and said:-

"...... I make no distinction between the decision on the principle of law, as applicable to this case, and the principle on which the Lords drew the inference from the facts. I think the same inference should be drawn from the same facts, or facts which are in substance the same.".

As against that we have the observations of Lord Keith and Lord Somervell of Harrow, in the later House of Lords case of Qualcast (Wolverhampton) Ltd. v. Haynes⁽¹⁹⁾, where Lord Somervell, when dealing with the question of what is reasonable care in a negligence action, said:-

"Now that negligence cases are mostly tried without juries, the distinction between the functions of judge and jury is blurred. A judge naturally gives reasons for the conclusion formerly arrived at by a jury without reasons. It may sometimes be difficult to draw the line, but if the reasons given by a judge for arriving at the conclusion previously reached by a jury are to be treated as "law" and citable, the precedent system will die from a surfeit of authorities.".

So although Thompson's case⁽¹⁶⁾ is an interesting illustration of the view taken of particular facts by a Court of Appeal in England 40 years ago, one must be careful of giving it any greater authority.

41. In that case, the plaintiff, who was illiterate, had purchased through her niece, who could read, an excursion ticket for travel by train on the following day at half the ordinary fare. The train did not pull into the platform properly and in trying to alight the plaintiff was injured. The ticket had on the face of it the printed words "For conditions see back". On the back appeared "Ticket issued subject to the conditions, etc., in the company's time tables, etc." The exempting condition on which the railway company relied was in the time table of which apparently only one copy was available in the booking office upon payment of a fee. The case was tried by a Commissioner sitting with a special jury. The Commissioner thought that the question whether the company could rely on the exempting condition was a legal matter for him to decide and entered judgment on it for the railway company but, as a matter of precaution, had taken the opinion of the jury on whether the company had taken reasonable steps to bring this condition to the notice of the plaintiff. In the Court of Appeal the judges clearly took a view of the facts different from that of the jury and, relying heavily on the circumstance that it was an excursion at a reduced price and that the condition was not unreasonable, swept aside any question of the plaintiff's illiteracy by fixing her with the niece's capacity to read, and said that "as a matter of law" the evidence could not support the jury's finding of fact and upheld the Commissioner's action in entering judgment for the company.⁽¹⁶⁾

42. Whether this approach was entirely consistent with the judgment of the House of Lords in Hood's case⁽¹⁰⁾ and whether what was really a question of fact became one of law merely by saying that the evidence did not support the jury's finding might well be open to question, and in so far as there is any departure from the approach reflected in Hood's case⁽¹⁰⁾ the former must prevail as being a decision of the House of Lords. In it Viscount Haldane said:-

"My Lords, the question on this appeal is of the nature of those in which the boundary line between law and fact is not of an abstract or definite character. There is a large and varied class of cases where the legal duty of a member of society to his neighbour cannot be laid down a priori or without examining the special circumstances of the situation. The duty in these instances is ascertained by a standard which depends, not on mere general principles fashioned by the jurist, for no such general principles can provide for all the concrete details of which account must be taken, but on the opinion of reasonable men who have considered the whole of the circumstances in the particular instance and can be relied on to say how, according to accepted standards of conduct, a reasonable man ought to behave in these circumstances towards the neighbour towards whom he is bound by the necessities of the community to act with forbearance and consideration. When the law takes cognizance of duties imposed by such social standards it usually refers questions relating to them to a tribunal which is one of fact rather than of abstract legal principle. In cases where the question is whether there is alleged to have been negligence, such as entitles the party injured by it to a remedy from a Court of Justice, we are familiar with this procedure, and I think that it is really embodied in the practice adopted by our jurisprudence in the other kind of case that is now before us. Where there is a jury the question is really one of fact for the jury, and the function of the judge is simply to see that the proper question is considered by them, a question which must, up to the point at which it is put, to some extent depend on certain general principles which belong to jurisprudence.

My Lords, I agree that the appellant here was entitled to ask that all that was reasonably necessary as matter of ordinary practice should have been done to bring to his notice the fact that the contract tendered to him when he paid his passage money excluded the right which the general law would give him, unless the contract did exclude it, to full damage if he was injured by the negligence of those who contracted to convey him on their steamer. Whether all that was reasonably necessary to give him this notice was done is, however, a question of fact, in answering which the tribunal must look at all the circumstances and the situation of the parties. On this question even your Lordships sitting here are a tribunal of fact far more than of law, and what we have to do as lawyers is no more than to see that we have shaped for ourselves the question of fact to which I have referred. If this is borne in mind I think that it explains decisions which are not really divergent.".

He then considered the three important cases which had been summed up by Lord Finlay L.C. in his earlier speech as follows⁽¹⁰⁾:-

"Out of the many authorities bearing upon the point I think it necessary to refer to three only - Henderson v. Stevenson⁽¹⁸⁾, Parker v. South Eastern Ry. Co.⁽¹³⁾ and Richardson, Spence & Co. v. Rowntree⁽¹⁴⁾. The first of these cases is a decision of this House that a condition printed on the back of a ticket issued by a steamship packet company absolving the company from liability for loss, injury, or delay to the passenger or his luggage was not binding on a passenger who has not read the conditions and has not had his attention directed to the conditions by anything printed on the face of the ticket, or by the carrier when issuing it. The second and the third of these cases show that if it is found that the company did what was reasonably sufficient to give notice of conditions printed on the back of a ticket the person taking the ticket would be bound by such conditions.".

43. Viscount Haldance then turned to the facts of the particular case before him where. Mr. Hood had reserved accommodation for a voyage from New York. In response to an enquiry from the steamship company he sent his clerk, Mr. May, with a cheque for the ticket which was handed to the clerk in an envelope but neither the clerk nor Mr. Hood read the ticket or had any knowledge of its contents, although the envelope had the following words printed in capitals "Please read conditions of the enclosed contract" and the conditions were set out in the body of the ticket.

44. Viscount Haldane continued⁽¹⁰⁾:-

"No doubt the burden of proof lies on the respondents to show that they did all that was reasonably required in order to bring this condition to the notice of Mr. May, who represented the appellant in the transaction. Have they shown that they did all that could be required reasonably under the usages of proper conduct in such circumstances? I think the Courts below, sitting as a tribunal of fact rather than of mere law, have properly decided that they have. It is true that Mr. May did not look at the envelope closely or refer to the condition. He took the contract away and put it in a safe, and ultimately gave it to the appellant, who did not read it either. But I am of opinion that the real question was not whether they did read it, but whether they can be heard to say that they did not read it. If it had been merely a case of inviting people to put a penny into an automatic machine and get a ticket for a brief journey, I might think differently. In such a transaction men cannot naturally be expected to pause to look whether they are obtaining all the rights which the law gives them in the absence of a special stipulation. But when it is a case of taking a ticket for a voyage of some days, with arrangements to be made, among other things, as to cabins and luggage, I think ordinary people do look to see what bargain they are getting, and should be taken as bound to have done so and as precluded from saying that they did not know.

The question is not whether the appellant actually knew of the condition. I have no doubt that he did not. The real question is whether he deliberately took the risk of there being conditions in the face of a warning sufficiently conveyed that some conditions were made and would bind him. If he had signed the contract, he certainly could not have been heard to say that he was not bound to look. The common sense of mankind which the law expresses here would not permit him to maintain such a position. And when he accepted a document that told him on its face that it contained conditions on which a long he would be permitted to make a long journey across the Atlantic on board the steamer, and then proceeded on that journey, I think he must be treated according to the standards of ordinary life applicable to those who make arrangements under analogous circumstances and be hald as bound by the document as clearly as if he had signed it.".

This speech seems to me to sum up the manner in which the question now before us should be approached. If the passenger knew that the carrier was offering him transport on condition that liability was excluded or limited he was bound by that condition. If the carrier had taken steps reasonably sufficient to give him notice that such a condition formed part of their contract then the passenger was equally bound even if he did not know the terms of the condition because he had not availed himself of the opportunities open to him of ascertaining the terms. What is reasonably sufficient notice in any given case is to be determined as a matter of fact in the light of its own particular circumstances, which, within limits, may include the personal characteristics of the passenger or his agent.

45. These principles would seem to invite consideration - though on occasion the invitation appears to have been ignored - of the physical conditions under which the contract is made e.g. someone purchasing a railway ticket on a busy day at a busy terminal might be less readily expected to acquaint himself with all the terms and conditions printed on the ticket proferred to him at a ticket office than another individual reserving accommodation in the more leisurely circumstances that normally surround the booking of accommodation for an ocean voyage or, until recently, transport by air. In the former case it might be more essential to draw attention to special conditions by bills or posters prominently displayed than in the latter, but hard and fast rules have not been laid down and the value of decisions on other facts would seem to be limited to informing an opinion as to what is and what is not reasonable.

46. In this connection one must not overlook the problem faced by a carrier who is anxious to do whatever is essential to introduce a limiting condition into his contract. If he obtains a signature from his passenger accepting a limiting condition, that would be an end to the matter, but, possibly through the desire of carriers, in conditions of competition, not to introduce features which might have an unduly deterrent effect on customers, efforts to meet the difficulty in this way do not appear to have been generally adopted.

47. It is against the background of the principles just mentioned that one must look at a decision such as that of Cockerton v. Naviera Aznar S.A.⁽¹¹⁾, on which counsel for the defendant has in this court and in the court below placed much reliance. This was a decision at first instance and clearly the trial judge, Streatfeild, J., did not see himself as departing in any way from the principles already adumbrated by decisions of greater authority, nor did he see himself as concerned with anything but a simple question of fact. At an early stage in his judgment he said:-

"Although my attention has been drawn to a large number of decided cases, to some of which I shall refer, as to the principles to be applied, I shall not refer to them in detail since the issues before me are purely factual. And I agree with Mr. Gibson, for the plaintiffs, that cases decided on their own facts are not necessarily precedents for other factual cases and do not create law, and in that sense are not authorities. (See the remarks of Lord Justice Pickford in the case of Cooke v. T. Wilson. Sons & Co., Ltd.(20)).".

48. It would seem that the passage he had in mind from the judgment of Pickford, L.J. in Cooke's case⁽²⁰⁾ was the following:-

"Richardson,Spence & Co. vs. Rowntree(14) lays down the oprinciple which settles the questions which are to be left to the jury in the ordinary case. Everything after that becomes a question of fact in each particular case. No doubt we generally go through all these cases, but we always come back to that opinion.".

49. Later, after quoting, as I have done, at length from Lord Haldane's speech in Hood's case⁽¹⁰⁾, Streatfeild, J. said again:-

"From this it will be seen that the question is entirely one of fact. The same principle runs through the 'Railway cloakroom ticket cases'."

50. One must bear this in mind when considering his later comments on which counsel has laid much stress, including the statement that⁽¹¹⁾:-

"...... there must be few people booking sea or air passages who do not know, and indeed all should know, that such conditions are, at least, likely to contain restrictions on or exemptions from liability on the part of the transport company.".

51. When making that observation Streatfeild, J. no doubt had in mind the passenger traffic on the Atlantic with which he was dealing. Indeed he subsequently stressed that Mr. Cockerton was a man of mature years, a businessman, a man of intelligence and a fairly experienced traveller, occupying first class accommodation. Whether the knowledge which he was prepared to impute to such a traveller should be imputed with equal readiness to a steerage passenger in East Asia is certainly open to question. Moreover, if one were to be guided by what had been adjudged reasonable notice in earlier decisions, the observation must in any event be regarded as obiter in the sense that it was not necessary to sustain the decision in the case before him, where the facts bore a marked similarity to those in Hood's case⁽¹⁰⁾, since there was in the left hand bottom corner of the ticket a notification that it was issued subject to terms and conditions set out in another part of the ticket where the exempting condition was to be found.

52. I return then to the difficulty of interpreting the paragraphs already quoted from the judgment in the lower court. Does the paragraph beginning "Here the defendants ..........." refer to the facts in the case of Cockerton v. Naviera Aznar⁽¹¹⁾, which had just been mentioned or does it refer to the facts of the case at hearing before the judge? Taken in isolation, the words appear to be directed to the latter purpose. The word "Here" is more apt to describe the case at hearing and there is the additional and very cogent factor that there was no "deceased" in Cockerton's case⁽¹¹⁾.

53. On the other hand, the position of the paragraph, in the middle of the judge's examination of the earlier cases, would seem to suggest that he is concerned with the facts of the case which has just been mentioned, that of Cockerton⁽¹¹⁾; the word "Here" being used somewhat ineptly to refer to that case and the word "deceased" being merely a slip: the judge having used it when he really intended the word "passenger". This could be the more likely because the words were interchangeable in the case before the judge. The form of the paragraph also points in this direction; the finality of the words "discharged the onus of proving"; as if the judge was recounting something in the past which had been definitely determined; and the concluding sentence "It is a question of fact": all of which were apt to describe the conclusion and approach in the Cockerton's case⁽¹¹⁾. He treated the case of Watkins v. Rymill⁽⁹⁾ in the same way.

54. This view is strongly reinforced by the paragraph beginning "What are the facts in the present case?" If the judge had already found the facts and drawn from them the conclusion set out in the earlier paragraph, it would seem extraordinary at this point in his judgment to turn round and ask himself what were the primary facts in issue before him.

55. Any other conclusion would also mean that the judge having, at an early stage, said that there was one question to be answered "Did the defendants take reasonable means to give notice of the conditions to the plaintiff?" answered it almost at the start of his analysis, and then went on to examine other cases and the primary facts of this one; ending with the statement that the defendants had not discharged the onus of proof placed upon them which, on this interpretation, would appear to be a flat contradiction of what had been said at the earlier stage.

56. In addition to the passage beginning "Here", there is the further statement that the "warning on the back of the ticket was given to the deceased" but this could mean merely that there was a warning or notice on the back of the ticket which was put into the hands of the deceased. To interpret it as meaning that adequate notice had been given to the deceased would seem inconsistent with the rest of the paragraph and the general tenor of this part of the judgment.

57. For these reasons, I would be disposed to think, as the defendants apparently thought when drafting their grounds of appeal, that the paragraph beginning "Here" referred to the facts of Cockerton's case⁽¹¹⁾ and that the judge's finding on the issue before him was that the defendants "did not do all that was reasonably sufficient to bring to the attention of the deceased the exemption clause in the conditions of travel".

58. If the judge so found, I would not interfere with his finding. There may be some uncertainty as to whether the notice about conditions was or was not on the face of the ticket when handed to the passenger but in the absence of positive evidence that it was on the face, I don't think it could be presumed in favour of the company that this was so, and, if the notice was inside or on the back of the ticket, I would have thought it open to the judge to find this insufficient to bring the exempting condition to the notice of the passenger. It is a question of fact, and one cannot, I think, say it is perverse to hold that a note of this kind inside or on the back of a ticket is, in the absence of additional cogent factors, insufficient. Half-way through the case, however, when the matter had been canvassed from the Bench, counsel for the defendants sought to alter his approach, by contending that the paragraph beginning "Here" referred to the facts of the present case and that the judge had found against the plaintiff at this point but had gone on to hold that, notwithstanding notice to the deceased, the absence of evidence that the conditions were displayed in the Sydney office of the company precluded the defendants from relying on the exemption clause. Counsel argued that his ground of appeal was sufficiently wide to cover this interpretation and to challenge the conclusion thus expressed but agreed, in answer to a question from the court, that its form might readily have misled the plaintiff and, consequently, this ground of appeal should be treated as subject to any notice of cross-appeal or notice of a desire to support the judgment on other grounds, which might be deemed a prerequisite to admitting argument from the plaintiff that such a finding was not justified on the facts.

59. Apart from the presence of the word "Here" and the word "deceased", this view of the judge's language could, perhaps, be supported by the manner in which questions on this issue have, on occasions, been put to juries in England; e.g. in the case already mentioned of Cooke v. T. Wilson, Sons & Company Limited⁽²⁰⁾, where the question was whether the wife of the British Commercial Attache at Petrograd was bound by a condition exempting the carrier from liability, which appeared on the face of a ticket she had purchased for a voyage from Hull to Archangel, during the course of which the vessel was sunk by an enemy mine through the negligence of the ship's Captain. The plaintiff gave evidence that she collected her ticket in a hurry, got into a cab and, because of the jolting, did not look at the ticket until they stopped at a swing bridge when, she said, she glanced at the ticket, saw that it gave the name of the wrong ship - a matter of no importance to the case - and read no further. In the court of appeal, Phillimore, L.J. said:-

"She thus says that all she knew about the ticket is that she had got a ticket, which she had been told she would have to get before she went on board; that it was partly in writing and partly in print; and that it had the name of the ship mistakenly stated as the 'Eskimo'; and we must take it that that is all that she knew, or allowed herself to know, or made herself know, about it.".

60. He went on to say, placing much reliance on the decision of the House of Lords in Richardson Spence & Co. v. Rowntree⁽¹⁴⁾, that, in such circumstances, the questions proper to be left to the jury were as follows:-

"1. Did the plaintiff know that there was writing or printing on the ticket?

2. Did the plaintiff know that the writing or printing on the ticket contained the conditions relating to the terms of the contract of carriage?

3. Did the defendants do what was reasonably sufficient to give the plaintiff notice of the conditions?".

61. He held that in the case before him it was wholly unnecessary to put the first question as the plaintiff had said that she knew there was printing and writing on the ticket and "she was a woman of intelligence and education" and that it was only if the jury said "No" to the second question that the third question would arise.

62. Apparently, the trial judge, Darling, J., had left these three questions to the jury. In effect, the first was answered "Yes" and the second and third were answered "No". Phillimore, L.J. said that that verdict could stand only if both those negatives were correct and he and his fellow judges, although acknowledging that it was a question of fact, came to the conclusion that the answer to the third question should have been "Yes" and on that basis gave judgment for the the shipping company. The first question is presumably designed to guard against the possibility of somebody never having an opportunity to see what was on the ticket or not having the capacity to know what it was, which as Neville, J. pointed out in Cooke's case⁽²⁰⁾ had, perhaps unfortunately, come to replace the more satisfactory test of what would be needed by normal people of normal education and normal capacity.

63. Whilst the judge in the present case appears to have put only one question explicitly to himself, it may be that in the subsequent paragraphs, he somehow had in mind the questions put by Darling, J. and that the paragraph beginning "Here" was intended to be an affirmative answer, as in Cooke's case⁽²⁰⁾, to the first question and the concluding paragraph was intended to be a negative answer to the others.

64. The precise value of dividing the questions in this way and seeking to probe the plaintiff's state of mind and knowledge by this means is not immediately apparent to me - the two questions contemplated in the cases of Parker⁽¹³⁾ and of Hood⁽¹⁰⁾ seem to me preferable - but if this be the true explanation of the judgment in the present case, I would be disposed to doubt the validity of the answer given to the first question. That is, however, immaterial as I would see no reason to interfere with the judge's finding on the remaining issues, which was in favour of the plaintiff.

65. I do not think that the language of the judgment is reasonably capable of the alternative construction which, counsel for the appellant has sought to put upon it, i.e. that having, in effect, answered at least two out of the three questions in favour of the defendants, the judge then went on to find that in the absence of evidence as to the availability of the conditions in the Sydney office the defendants could not, because of breach of warranty, condition or otherwise, make out their defence. Had I been satisfied that this was the proper meaning, I would not have thought the judge justified, on the evidence before him, in answering the questions in the affirmative, quite apart from any query as to whether, in the absence of evidence that the "conditions" were available in the Sydney office, the defendants proved that the "conditions" relied upon were incorporated in the contract.

66. In saying this, I neither ascribe to the words "see back" the "mystic significance" mentioned by Professor Hughes in the Law Quarterly Review⁽²¹⁾, nor do I overlook the view expressed by Phillimore, L.J. in Cooke's case⁽²⁰⁾ when he said that Stephen v. International Sleeping Car Company⁽²²⁾ showed "that it does not necessarily matter whether the conditions are on the back or on the face of the ticket.", whilst adding that." if they are on the back, it may require more to draw the attention of the person who is to be carried to "it". Taking account of the comparatively inconspicuous position of the notice in this case and the extremely tenuous evidence adduced as to what was likely to have occurred when the ticket was purchased, I doubt if the defendants could properly be regarded as having discharged the burden of proof resting on them. They were, presumably, in some difficulty, because the death of the deceased could have hampered their efforts to demonstrate with any certainty the circumstances prevailing when the ticket was sold, but one might reasonably have expected some more cogent evidence on this point than that produced from the travel section of an associate in Hong Kong; the representative of which claimed no knowledge of the ticket office in Sydney where apparently the ticket was purchased. If one adopts the view of Phillimore, L.J. that rather more is required to draw the attention of the customer when the words pointing to conditions do not appear on the front of the ticket it would be difficult to say that more was revealed by the evidence in this case.

The Third Ground of Appeal

67. The third ground of appeal refers to the estate of $10,171.00 left by the deceased, including cash, household goods and effects, jewels and funds at the Hong Kong Bank. On the appeal counsel for the defendants indicated that only the sum of $9,971.00 at the Bank need be considered and that the defendants were not seeking the deduction of the whole of this sum but merely something to allow for the acceleration in the benefits flowing from this amount which the death of the deceased had brought to the dependants. This would appear to adopt the view expressed in the textbook on the Quantum of Damages by Kemp & Kemp⁽²³⁾:-

"Where a sum has been paid to a dependant solely by reason of the death, the whole sum is to be taken into account. But, in our submission, if the payment or part thereof was likely to have been made to the dependant at some future date in any event, the dependant's benef it as the result of the death is not the whole amount of such payment but the value of the acceleration of that payment plus the certainty of its receipt. In such a case it would be wrong to take the whole amount of the payment into account.".

68. Later the authors say:-

"There is no universal rule that all money received from the deceased's estate by a dependant must be deducted in full from his damages. Each case must be determined upon its particular facts. We submit that in every case the deduction to be made is the amount, if any, by which the dependant has on balance received a benefit when he came into possession of the money on the deceased's death.".

69. They go on, however, to question whether a widow who gets her husband's life's savings at an early stage is not likely to be worse off than if the death had occurred later when his accumulated earnings would probably be much larger - particularly in the case of a professional man with high potential earnings.

70. A similar theme is pursued in the textbook on Damages for Personal Injuries by John Munkman⁽²⁴⁾, where the author suggests that when the husband supports his family mainly from his earnings and investment income plays little part, it is frequently left out of account in fixing the datum figure for loss of support which is usually based on earnings, and that, in such circumstances, there is no warrant for making any deduction on account of the accelerated receipt of the investments. The author goes on:-

"In general the facile practice which prevailed some years ago of making automatic deductions for the value of property inherited is falling into desuetude. The courts are taking the common sense view that the family as a whole enjoyed the benefit of the father's property before the death, and it is not some new and countervailing benefit which has come to them for the first time: while on the other hand they have lost completely the benefit of his earnings on which the claim is really based. Thus Willmer, L.J., said in Daniels v. Jones(25), that he did not agree that

'the value of the estate is to be set off pound for pound against the loss of income as a matter of precise arithmetical calculation ... the reality ... is that (the family) were enjoying the benefit of it almost as much before the death of the deceased as they do now.'

In Kassam v. Kampala Aerated Water Co. Ltd.(26), where an Indian trader and his wife were both killed in the same accident so that all the property came to the children, the Privy Council has given an even stronger lead. Lord Guest said on the question of set-off:

'This is a highly speculative matter, and having regard to the anticipated savings which might reasonably have been expected to be made by the deceased if he had lived, no deduction ought to be made on the score of accelerated benefit, as these two figures very largely cancel out.'".

71. In the present case, counsel for the respondent contends that the figure given for the estate should in any event be reduced by $2,695.00, the amount which the judge, for no good reason, deducted from the figure allowed for funeral expenses and also by the cost of taking out Letters of Administration which he put at $1,000.00. He would also have included the cost of the coffin and of bringing the deceased's body from Manila, but counsel for the defendants indicated that his clients were seeking no remuneration for the money they had spent on these items.

72. Clearly the amount involved in this ground of appeal is very small and when due weight is given both to the argument that the family as a whole would probably have enjoyed the benefit of this money just as soon as and just as readily as the widow and children did through his death and to the possibility of the deceased having accumulated a much larger sum if he had lived, I do not think any deduction should be made on account of this small amount in cash left by the deceased.

The Fourth Ground of Appeal

73. Turning to the fourth ground of appeal, we come to a more difficult question.

74. The deceased was 36 at the time of his death, the widow 34 and the three sons aged 8, 7 and 3. The deceased graduated in chemical engineering at the Tsing Hua University in China in June 1952. He came to join his wife, who was already in Hong Kong, in 1963 and became a partner with a brother in the Kowloon Well Digging Company. As such his average income was said to be $2,000.00 per month of which he gave his wife for household expenses $1,300 - $1,400 per month. The deceased then went to Australia to secure a Master's degree. Thereafter he sent her small sums by way of presents but his mother paid her, she said, several hundred dollars a month and she got a job as manageress of a hostel which was the main source of support for the family. The husband apparently had a part time job as a demonstrator in the university in Sydney but whatever this brought in went to support himself.

75. The judge thinking the deceased's prospects of substantial earnings in the future were, in view of his qualifications, good, assessed the dependency at $600.00 per month and in calculating damages used a multiplier of 16 years which gave him a capital sum, under the Fatal Accidents Ordinance, of $115,200.00, from which he deducted the sum of $8,000.00 awarded under the Law Reform (Miscellaneous Provisions) Ordinance.

76. Counsel has attacked the multiplier of 16 as being too large, claiming indeed that it is amongst the highest, and he directed our attention both to the tables appearing in Kemp's book⁽²³⁾ already mentioned and to the judgment in Leung Tai-ah v. Chan Tak-wan and another⁽²⁷⁾ where Scholes, J. spoke of 15 as "the highest conventional multiplying figure" and Mills-Owens, J. said:-

"it appears to be clear, and indeed it is not disputed, that in England a multiplier of 15 is commonly the maximum. A perusal of cases noted in Current Law in the years 1960 and 1967 indicates an average figure of about 12 in the case of a plaintiff of the respondent's age at his (sic) date of trial (34-35 years). (In Fatal Accident cases, more often, the average figure is nearer 15, and in one or two cases exceeds 15)."

In that case, however, the judges were dealing with a claim in respect of injuries by a man who had always worked as a coolie or fisherman "earning his living by the strength of his muscle". Presumably they would have had in mind the type of award which in Kemp's book is put in Table 1^(23a) as being typical of "the ordinary case of a workman with steady earnings", although even there the multiplier appears to have gone as high as 17 - 18 years on occasions.

77. In Table 3^(23b) which deals with a workman who has good prospects of future promotion and/or increased earnings, a category which would appear to come closer to that of the deceased, multipliers have been as high as 21 and 22.

78. I also note that in the recent case of Mallett v. McMonagle⁽²⁸⁾ where the deceased was a machine operator and was killed at the age of 25, Lord Diplock in the House of Lords said:-

"Accepting, as would be appropriate for a deceased who would have been 27 at the date of the assessment, 16 years purchase as the multiplier ...".

Whilst the 1968 Current Law Year Book shows that an assistant foreman with the Port of London Authority, aged 39, with little prospect of further promotion was awarded a multiplier of 15, (Cole v. Official Solicitor⁽²⁹⁾) and the same figure was applied to a female aged 37 who at the time of her death was working as a school mistress (Grzelak v. Harefield and Northwood Hospital Management Committee⁽³⁰⁾).

79. In all the circumstances I do not think that the figure of 16 in the present case should be regarded as excessive so as to require alteration, quite apart from any question as to whether the assessment of the dependency at $600.00 per month was not, in relation to a young man with the prospects of the deceased, a very low figure on which to calculate the loss.

80. Turning, however, to the overall figure awarded, counsel contended that it is clearly excessive because the basis of damages should be that when due allowance is made for capital and income the sum awarded would expend itself at the end of the dependency: in other words that the recipients should not expect to get the same income during dependency that they would have had if the deceased had remained alive and, in addition, a capital sum which would survive the dependency: this means, of course, that the compensation should be determined on an annuity basis rather than that of income from capital.

81. He claimed to find support for this approach in Leung Tai-ah's case⁽²⁷⁾ where the Full Court reduced the figure for damages because Scholes, J. thought that the capital sum awarded would if invested in good securities in Hong Kong yield not only more than the estimated loss but would in that case leave the plaintiff at the end of his working life with his capital intact. Mills-Owens, J. concurred in the reduction, partly it would seem because in allowing for interest at the rate of 7% per annum the income would have exceeded the annual loss sustained without resort to capital, though he also mentioned other matters.

82. In cases such as this, where one is trying to assess what the dependents of the deceased might have expected to receive in the future had he continued to work one is, of course, faced with a number of speculative factors including the depreciation of money and the consequent tendency of wages and salaries to rise over the years. In Leung Tai-ah's case⁽²⁷⁾, Mills-Owens, J. expressed the view that the latter should be taken into account in fixing the annual loss of earning capacity and not in determining the multiplier. The essential point, of course, is that account should be taken of it; whether that account be reflected in the figure adopted for the basic annual loss or in the multiplier being of relatively minor importance. As for inflation, Lord Diplock in the case of Mallett v. McMonagle⁽²⁸⁾ already mentioned said that he thought the only practicable course for the courts was to leave out of account the risk of further inflation on the one hand and the high interest rates reflection the fear of it and capital appreciation, which were its consequences, on the other. He said that in estimating the amount of annual dependency in the future, money should be treated as retaining its value at the end of the judgment and interest rates appropriate to times of stable currency such as 4 to 5% should be adopted.

83. In Leung Tai-ah's case⁽²⁷⁾ both judges drew attention to the higher rates of interest normally prevailing in Hong Kong. It does not appear, however, that they made any allowance for the element of additional risk reflected in those higher rates, which currently - if only transiently - seem, indeed, to have been overtaken by rates elsewhere.

84. In the recent case of Martin v. Stirk⁽³¹⁾ Willis, J. said: "(he) had to take into account the decline in the purchasing power of money - per Lord Pearson in Wooding v. Wooding⁽³²⁾". It is not, however, altogether clear from the report whether this allowance for depreciation was confined to the inflation which had already occurred or was projected also into the future.

85. Whether one follows Lord Diplock in ignoring future inflation whilst adopting, to compensate for it, a lower rate of interest, or makes a more direct allowance for the depreciation of value of money it would seem very doubtful whether a current dependency, which is assessed at $600.00 per month today, can be said to be over-compensated by a capital sum which, if invested at 8% per annum would produce about $768.00 per month and leave the capital sum intact, when these figures are set against what a man with the qualifications of the deceased would be likely to earn and provide for those still dependent on him in 10 or 20 years' time.

86. There is no indication that the judge took account of these factors, inflation and the tendency of earnings to rise, when he adopted his multiplier and a figure of $600.00 per month for the basic loss. The indications are that he did not. If he did then the figure of $600.00 per month would appear much too low. The judge did mention that the deceased at the time of his death was a potential rather than an actual breadwinner but, in the absence of any express reference to inflation and the rising tendency in earnings amongst the factors which influenced him in selecting the figure of $600.00 per month, I do not think they played a part in his calculations. Consequently it would be appropriate to give them weight in deciding whether we should follow the judges in Leung Tai-ah's case⁽²⁷⁾ by reducing the sum awarded because it would give the dependents an income and the use of capital resources in excess of that which they might legitimately have expected to receive from the father had he lived. When due account is taken of these factors I do not think the overall figure excessive, although it might well have been better if the judge had taken them into account when assessing the basic loss and calculated the sum required to make this good, whether by annual payment or otherwise, in a form which would not appear to confer on the dependents pecuniary benefits greater than those necessary to compensate for that loss during the period of dependency.

87. In reaching this conclusion, I have taken account of the argument that to support the judgment on these grounds would not give adequate weight to o.59 r.6 which requires the respondent to serve notice if he intends to support a judgment on grounds other than those expressed in the judgment. It seems to me that counsel for the respondent is right in his contention that this particular ground of appeal raises in a broad manner the issue whether the award is excessive and that counsel is free to defend the assessment in a manner no less broad.

88. I would dismiss the appeal with costs.

 

 

Representation:

A. J. Sanguinetti (Johnson, Stokes & Master) for the Appellant (the Defendants)

H. C. Miu (K. F. Wong & Co.) for the Respondent (the Plaintiff)

 

 

(1) (1952) 2 A.E.R. 1101.

(2) (1926) A.C. pp.725, 730, 731.

(3) 18 Q.B.D. 685, 696, 697.

(3a) 21 Q.B.D. 220, 223, 224.

(4) (1979) 5 EX. p.28, 33 - 36

(5) 12 Q.B. 439, 442.

(6) (1958) A.C. 240, 247.

(7) (1862) 2 B. & S. 106, 114-115.

(8) (1936) 2 Q.B. 264, 271.

(9) (1883) 10 Q.B.D. 178

(10) (1918) A.C. 837

(11) 1960 (2) Lloyds 450

(12) (1923) 2 K.B.D. 703, 707

(13) (1877) 2 C.P.D. 416

(14) (1894) A.C. 217

(15) (1920) 3 K.B. 689

(16) (1930) 1 K.B. 41

(17) (1876) 1 Q.B.D. 515, 528.

(18) 2 Session Reports (H.L.) 71.

(19) (1959) 2 W.L.R. 510, 515, 518.

(20) (1915) 85 L.J. (K.B.) 888 at 896.

(21) (1931) L.Q.R. 462.

(22) (1903) 19 T.L.R. 621

(23) 2nd Ed. Vol.2 pp. 8, 11, 12.

(23a) Kemp & Kemp on Quantum of Damages 2nd Ed. Vol.2, p.35.

(23b) Kemp & Kemp on Quantum of Damages 2nd Ed. Vol.2, p.42.

(24) 3rd Ed. p.135.

(25) (1961) 3 All E.R. 24 at p.31.

(26) (1965) 1 W.L.R. 668.

(27) (1968) H.K.L.R. p.224.

(28) Times 12th February, 1969.

(29) Para.1190 (1968) C.L.Y.

(30) Para. 1197 (1968) C.L.Y.

(31) The Times, 16th May 1969.

(32) The Times, 17th October 1967.

 

IN THE SUPREME COURT OF HONG KONG

APPELLATE JURISDICTION

CIVIL APPEAL NO. 3 OF 1969

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

BETWEEN
	WONG WAI CHUN, Administratrix of the Estate of Cheung Chun Wai deceased.	Plaintiff (Respondent)
	AND
	THE CHINA NAVIGATION CO. LTD.	Defendant (Appellant)

Coram: Hogan, C.J., Blair-Kerr, & Huggins, JJ.

Date of Judgment: 17 September 1969

 

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

JUDGMENT

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

 

Huggins, J:

1. I agree that this appeal should be dismissed.

2. As to the doctrine of volenti non fit injuria I think the passages cited from A.C. Billings & Sons Ltd. v. Riden⁽¹⁾ show that in this type of case what one has to consider is whether a man of ordinary intelligence and courage would have done what the injured person has done. In considering that question the proper factors are the extent and imminence of the danger, its obviousness or any warning which has been given and any pressure there may have been on the injured person to assume the risk. In all the circumstances of this case it seems to me that although the deceased voluntarily assumed some risk it was a risk which any reasonable person might have assumed and therefore the learned judge was justified in holding that the doctrine did not apply.

3. The main issue on the appeal has been whether the appellants can rely upon the sweeping disclaimer of all liability which they seek to read into the contract of carriage. They rely upon a note on the ticket issued to the deceased and upon the company's conditions therein referred to. We have heard a lengthy argument as to the principles to be applied and my Lords have reviewed most of the authorities. As I entirely agree with their conclusion I shall be as brief as I can but there are one or two things I feel compelled to say concerning this not very satisfactory branch of the law.

4. With reference to contracts alleged to contain special terms limiting a carrier's liability Sir Frederick Pollock said in his book on Contracts (13th Ed.) at p.41:

"In dealing with cases of this class the general principles governing the formation of contracts have steadily to be borne in mind".

While it may be convenient to describe a contract as an agreement which carries the sanction of the law Lord Elden pointed out in Kennedy v. Lee⁽²⁾:

"I do not mean ...... that I am to see that both parties really meant the same precise thing, but that both actually gave their assent to that proposition which, be it what it may, de facto arises out of the terms of the correspondence".

We should, therefore, be concerned to ascertain what as a matter of fact were the terms of carriage to which the parties gave their assent.

5. However, any review of the reported cases quickly shows that the attempts of juries and judges at first instance to apply common sense principles and practical experience to the "ticket" cases have been repeatedly frustrated, despite occasional protest from academic writers and frank admissions by some appellate judges that the law was becoming artificial. It has, indeed, become completely divorced from reality and one has to look hard to recognise "the general principles governing the formation of contracts" which Sir Frederick Pollock said should be borne in mind. This is particularly unfortunate in view of Lord O'Hagan's observation in Henderson v. Stevenson⁽³⁾:-

"When a company desires to impose special and most stringent terms upon its customers, in exoneration of its own liability, there is nothing unreasonable in requiring that those terms shall be distinctly declared and deliberately accepted".

6. Originally I embarked upon my own detailed analysis of the cases but in the end I decided that it would serve no useful purpose. The English courts have seen fit to base themselves upon the assumption that the majority of persons who enter into certain types of contract know that conditions are likely to be imposed by the other parties, that such conditions will be set out in a ticket and that such conditions will be likely to contain restrictions on liability. They have therefore held that everyone ought to be deemed to know that such conditions are likely to be imposed: see, for example, Cockerton v. Naviera Aznar S.A.⁽⁴⁾ and Parker v. South Eastern Railway Co.⁽⁵⁾. While I confess to grave doubts whether the initial assumption was justified even in England and although it was manifestly unnecessary to make any such artificial rule on the ground of business convenience, I think it must be accepted that all the English courts save the House of Lords are now bound to enforce this rule. Whether the courts of Hong Kong are so bound is a very different matter and I wish to reserve that question for consideration should occasion arise. Anyone who thinks that in the Far East the majority of persons who enter into these types of contract know that conditions are likely to be imposed and that such conditions will be set out in a ticket is living in a dream world of his own.

7. In the present case I am prepared to assume that the principles propounded in Parker v. South Eastern Railway Co.⁽⁵⁾ and approved in Richardson, Spence & Co. v. Rowntree⁽⁶⁾ are applicable, but that does not conclude the matter. Those principles were laid down in the following terms at p.423:

"...... if the person receiving the ticket did not see or know that there was any writing on the ticket, he is not bound by the conditions; ... if he knew there was writing, and knew or believed that the writing contained conditions, then he is bound by the conditions; ... if he knew there was writing on the ticket, but did not know or believe that the writing contained conditions, nevertheless he would be bound, if the delivering of the ticket to him in such a manner that he could see there was writing upon it, was, in the opinion of the jury, reasonable notice that the writing contained conditions".

I will assume that the deceased in this case knew there was writing on the ticket. There is no evidence he knew or believed the writing contained conditions. What is reasonable notice for the purpose of the third question is a question of fact: Cooke v. T. Wilson, Sons & Co. Ltd.⁽⁷⁾ It is, however a question upon which appellate courts have been so ready to impose their own views that it has in practice become very nearly a question of law. In all the cases cited to us where conditions relating to carriage have been held to be binding the ticket, which has commonly been assumed to be intended to be the contract itself rather than merely a receipt or evidence of the contract (of. Chapelton v. Barry U.D.C.⁽⁸⁾ and per Lord Hatherley in Henderson v. Stevenson⁽³⁾ at p.479), has borne on its face some clear reference to the existence of the conditions sought to be relied upon. Henderson v. Stevenson⁽³⁾ and Sugar v. L.M.S. Railway Co.⁽⁹⁾ are typical examples. If I may say so without disrespect I entirely agree with Lord Cairns when he said in Henderson v. Stevenson⁽³⁾ at p.475:

"It seems to me that it would be extremely dangerous, not merely with regard to contracts of this description, but with regard to all contracts, if it were to be held that a document complete upon the face of it can be exhibited as between two contracting parties, and, without any knowledge of anything beside, from the mere circumstance that upon the back of their document there is something else printed which has not actually been brought to and has not come to the notice of one of the contracting parties, that contracting party is to be held to have assented to that which he has not seen, of which he knows nothing, and which is not in any way ostensibly connected with that which is printed or written upon the face of the contract presented to him".

A case may arise in which it is shown that attention has been directed to the conditions without there being any reference on the face of the ticket but there is in the present case no evidence of any attempt so to direct the attention of the deceased. The ticket issued to him was in triplicate. The documents were taken from a book in which, at least at the time when they were prepared, they would appear to have been folded in what I may describe as concertina form. We do not know how they were handed to the deceased but we are entitled to assume that he would concern himself only with the original, marked "passenger's counterfoil". Nothing on the face of that counterfoil gave any indication that there was a warning on the back of it to the effect that the ticket was issued subject to conditions. Even applying the principles of Parker v. South Eastern Railway Co.⁽⁵⁾, therefore, it has not been shown that reasonable notice was given.

8. It is unfortunate that the form of the judgment in the court below is such that we have had to spend much time trying to ascertain what the learned judge actually decided. At first I was inclined towards a conclusion different from that which has commended itself to my Lords because I based my interpretation more upon the grammatical construction of the judgment than upon its content. However, it is clear that the paragraphing of the judgment as a whole is somewhat haphazard and I am now persuaded that when the learned judge said "Here the defendants discharged the onus of proving that they took reasonable steps to draw the attention of the deceased to the conditions which I have set out above" he was referring to Cockerton v. Naviera Aznar S.A.⁽⁴⁾, despite the fact that there was no deceased in that case. What I still find difficult to understand is this passage referring to the present case:

"All that is known therefore is that this warning on the back of the ticket was given to the deceased. I do not think that that is enough. In Watkins v. Rymill⁽¹⁰⁾ it was proved that the conditions in question were conspicuously displayed for all to see. In the absence of some evidence that the conditions were readily available or conspicuously displayed at the place where the contract was made I do not think that the defendant has discharged the onus of proof placed upon him".

I do not stop to inquire whether when he said "this warning ...... was given to the deceased" the learned judge meant "this document with the warning on it was physically conveyed to the deceased" or "the warning was brought to the attention of the deceased". Why did he think the warning was not enough? In the same paragraph he refers to the absence of evidence that the conditions of carriage were readily available or conspicuously displayed at the place where the contract was made and this strongly suggests that he thought the absence of such evidence was sufficient reason for saying the warning on the ticket was not enough. It seems to me totally irrelevant to inquire whether the conditions were available at the place where the contract was made, or at the office of the principal agents of the appellants in Sydney. The words "which may be read at ......" were at the most a representation that a copy of the conditions was available for inspection at the place indicated. It was not a representation upon which the deceased appears to have relied, whether it was true or not. What he assented to, if he assented to any written conditions, were "the company's conditions" and in my view the company's conditions have been sufficiently identified by production of a copy from the Hong Kong office. If the learned judge was saying that the conditions in the ticket were not binding solely because there was no evidence that they could in fact be seen for the asking, or if he read the notice on the ticket as though it said "This ticket is issued subject to the company's terms and conditions of carriage as exhibited in the office of principal agents in each port" (the last part of the sentence identifying the version of the company's terms and conditions to be applied), I think he was wrong. Nevertheless if he found that the warning on the ticket was, even apart from the absence of evidence that the conditions were to be seen for the asking, sufficient to show that the acceptance of the ticket without protest indicated assent to the company's terms and conditions of carriage I think that also was wrong, for it was not justified by the evidence. Accordingly whether he reached it for the right or the wrong reasons I think his conclusion that the conditions were not binding on the deceased was correct.

9. I also agree with the decision which my Lord the Chief Justice has reached concerning the third ground of appeal and I have nothing to add thereon.

10. As to the fourth ground of appeal it is said that 8% is a proper rate of interest to allow in Hong Kong and that if the award of $115,200 were invested at that rate it would produce an annual income of $9,216. That exceeds by $2,016 the annual loss of support by the dependants as calculated by the learned judge and it would not therefore be necessary to draw upon the capital sum in order to produce the sum required to compensate for that loss of support. The result would be, counsel argues, that at the end of the period of notional dependency the capital would remain untouched and would constitute a profit in the hands of the dependants. I agree that that cannot be right. However, I share my Lords' view that the assessment of the dependency at only $600 p.m. was too low. If one takes Mr. Justice Blair-Kerr's figure of $1,000 p.m. (and I think it is probably about right) the annual income will not be sufficient to compensate for the annual loss of support. Indeed the table calculated by Mr. Justice Blair-Kerr shows the award to be, if anything, slightly on the low side. In saying that I do not overlook the fact that the capitalised dependency must, on the authorities, be discounted in respect of the sundry contingencies which may reduce the actual loss of the dependants. I share the anxiety expressed by Lord Justice Denning in Nunn v. Cocksedge Ltd. referred to in Kemp & Kemp's ...(illegible) on the Quantum of Damages in relation to a discounting for the possibility of the widow's remarrying, and that is not the only contingency which I think may be overweighted with resulting injustice to the dependants. I certainly would not be prepared to adopt a standard figure, whether of 20% or any other percentage, as applicable in all cases and in my view the decision of this court in Leung Tai-ah v. Chan Tak-wan⁽¹¹⁾ should not be regarded as authority for so doing. The circumstances of each case ought to be considered. No accurate forecast can in the nature of things be made and it may not be desirable to attempt to draw up a list of the contingencies which may be material. When life expectation tables are used they themselves take account of the risk that a deceased himself might die from other causes. It would need evidence of special risk to justify a further discounting. Where the deceased's working life is taken as the guiding factor any risk arising from his state of health must be allowed for. The state of health of the dependants will always be material. In the present case there was no evidence of any particular contingency which involved appreciable risk and I would see no justification for discounting at more than 10% at the very outside. I think 5% would be a fairer figure. In the circumstances I would not interfere with the assessment of the learned judge.

 

17th September, 1969.

 

 

(1) 1958 A.C. 240.

(2) (1817) 3 Mer. 441, 451.

(3) (1875) 2 Sc. & Div. App. Cas. 470, 481.

(4) (1960) 2 Lloyds Report 450

(5) (1877) 2 C.P.D. 416, 422

(6) (1894) App. Cas. 217

(7) (1915) 85 L.J. K.B.888

(8) (1940) 1 K.B. 532

(9) (1941) a All E.R. 172

(10) (1883) 10 Q.B.D. 178

(11) 1968 H.K.L.R. 224

 

IN THE SUPREME COURT OF HONG KONG

APPELLATE JURISDICTION

CIVIL APPEAL NO.3 OF 1969

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

(On Appeal from Original Jurisdiction Action No. 792 of 1967)

 

BETWEEN
	WONG WAI CHUN, Administratrix of the Estate of Cheung Chung Wai deceased.	Plaintiff (Respondent)
	AND
	THE CHINA NAVIGATION CO., LTD.	Defendants (Appellant)

Coram: Hogan, C.J., Blair-Kerr and Huggins, JJ.

Date of Judgment: 17 September 1969

 

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

JUDGMENT

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

 

Blair-Kerr, J.:

1. I agree that the appeal should be dismissed. As regards the first ground of appeal in paragraph 4 of the statement of claim it was pleaded that timbers and such like articles had been

"piled up ------ on the deck blocking all the passage ways which made it impossible for a passenger to get through except up the pile and getting down or else by going through a narrow gap between the edge of the hatch and the pile of timbers at the risk of falling down the hatch --------------------------------------------------------------."

These allegations of fact were denied by the defendants, who pleaded that the deceased was negligent in climbing on to the hatch-coaming when it was obviously unsafe so to do; and pleaded further in the alternative that the deceased jumped from the hatch-coaming and threw himself into the cargo hold.

2. The extent to which passage to and fro along the starboard deck had been obstructed was a vital question for the trial judge's decision. Therefore, it is surprising that the plaintiff's legal advisers consented to an order that the evidence of the ship's officers should be taken de bene esse before the Registrar. Having regard to the pleadings, it must have been obvious to the parties that the trial judge might be faced with conflicting testimony. In the result the trial judge found no difficulty in resolving the issues of fact on this aspect of the case; but in this he was assisted to a considerable extent by the excellent photographs taken by Mr. Wong immediately after the deceased had fallen into the hold. But for that, the trial judge might have had very considerable difficulty in weighing the uncorroborated evidence of Mr. Wong with a transcript of the evidence of the ship's officers (Mr. Watson-Jones, Mr. Wilson and Mr. Newman).

3. If witnesses who may be able to testify in regard to important issues of fact are about to leave the Colony, it seems to me that it is desirable that their evidence should, if possible, be recorded before the judge who will be trying the case.

4. The sketch plan produced in evidence by the ship's officers was prepared by the Chief Officer (Mr. Wilson) and the second officer (Mr. Newman). It purports to show the state of affairs on the port and starboard sides of the deck adjacent to No. 2 hold at the material time. According to the sketch, hatches and beams obstructed a relatively small proportion of the deck and it purports to indicate that there was ample room for a person to walk along the starboard side of the deck.

5. Mr. Watson-Jones (the fourth officer) said he actually saw the deceased fall and he testified that the sketch prepared by Wilson and Newman was accurate.

6. The state of affairs as shown in the photographs can not possibly be reconciled with the sketch. It is not a case of the sketch being rough and the photographs being more accurate. Clearly the sketch was carefully drawn by Wilson and Newman. If the state of affairs on the starboard side of the hold had been as is shown in the sketch, this would have lent support to the view expressed by Watson-Jones that the deceased climbed up on the coaming and jumped down into the hold because at the spot where the deceased admittedly fell, there was, according to the sketch, about 12 feet of open unobstructed deck; and, in these circumstances, there would have been no need for the deceased to climb up on the coaming unless he had decided to behave in a very foolhardy way or intended to commit suicide.

7. The defendants did not question Wong's allegation that he took the photographs immediately after the accident and the learned judge found no difficulty in accepting the photos as accurate and rejecting the sketch. Clearly, the sketch is a grossly misleading document. It was prepared by Wilson and Newman when they were unaware that Wong had taken photographs of the scene. Newman was confronted with the photographs after he had produced the sketch in evidence; and one wonders if he would have had the temerity to produce the sketch at all if he had known that Wong had taken photographs. Be that as it may, it is difficult to resist the conclusion that the sketch was prepared by these ship's officers with a view to misleading their principals, or the Court, in any subsequent inquiry into the question of negligence on their part.

8. The trial judge found that it was impossible for a person to pass between the piled-up hatches and the ship's rail. He also found that the hatches were greasy and slippery. He rejected the suggestion of suicide; and found that at one stage the deceased must have stood on the coaming while he was manoevering his way along the narrow space between the piled-up hatches and the hold.

9. Before this court, the defendants did not challenge these findings of fact. Indeed these findings were the basis for the defendants' submission that the learned judge should have also found that the deceased voluntarily chose to incur a risk which was out of all proportion to the convenience which he was seeking to satisfy, namely, to return to his cabin; and that consequently the action should have been dismissed because the principle volenti non fit injuria applied.

10. There was a notice in the purser's office which read: "Please keep clear of hatches while work is in progress". But the only route to the deceased's cabin was along the starboard side of the deck by No. 2 hold. It would have been foolish for him to have attempted to approach his cabin by walking along the port side where loading operations were actually in progress. The notice in the purser's office gave no indication as to the probable duration of loading operations. It would be pointless to speculate as to what action the ship's officers might have taken if the deceased had protested to them that they had obstructed the starboard deck; and if, as frequently happens, loading was scheduled to continue until the ship sailed, the choices open to the deceased would appear to have been (1) to attempt to negotiate the obstruction or (2) to remain on the after-deck or in some lounge (if such was available to him) for an indefinite period.

11. It must be presumed that the deceased knew of the danger involved. He had successfully negotiated it on his way to the purser's office. But as Lord Somervell said in the Billings⁽¹⁾ case:

"There is ...... a further question as to whether, although knowing of the danger, he acted reasonably, in all the circumstances, in taking the risk which he did take. If so, he was not negligent although there was an accident."

In any view the greet majority of men of the same race and way of life as the deceased would have acted in precisely the same way as the deceased. I do not see how it can be successfully argued that he acted so unreasonably or so negligently as to lead to the conclusion that his death was caused entirely by his own fault; and I entirely agree that the facts of this case do not warrant the application of the doctrine of volenti non fit injuria.

12. As regards the second ground of appeal, I think that some reference might be made to Henderson v. Stevenson⁽²⁾. The pursuer Henderson was a Lieutenant in the 18th Royal Irish Regiment. On 14th July, 1871, he was a passenger on one of the defenders' steamers. While on a voyage from Dublin to Whitehaven the steamer was wrecked off the Isle of Man as a result of the negligence of the defenders' agents; and Henderson instituted proceedings for damages for the loss of his luggage. He had paid his fare at the defenders' Dublin Office and in return he had obtained a ticket on the back of which was printed:

"This ticket is issued on the condition that the company incur no liability whatever in respect of loss, injury or delay to the passenger or to his ...... luggage whether arising from the act, neglect or default of the company or their servants ...... It is also issued subject to all the conditions and arrangements published by the company."

The following notice was also inserted in time bills issued by the defenders and hung up in their booking office:

"The ..... company give notice that they carry passengers, passengers' luggage ..... on the following conditions only namely ...... that the company ...... are not liable for any loss of or damage to passengers, passengers' luggage ... arising from ...... any act neglect or default whatsoever of the company, or their agents or servants ...... it being an express condition that the passengers ...... undertake all risks whatsoever."

13. There was nothing on the face of the ticket directing attention to the condition appearing on the back of it; and the trial judge accepted the pursuer's evidence that he had not read this condition. There was no evidence that he had seen the notice in the time bill in the office, or that he had had his attention directed to it.

14. In the course of his judgment the Lord Chancellor (Lord Cairns) said⁽²⁾:-

"On the face of the ticket which was handed to him there are letters indicating the name of the Steam Packet Company, and the words "Dublin to Whitehaven". If the matter ended there that would clearly be evidence of a contract on the part of the Steam Packet Company to carry the person to whom the ticket was named, in consideration of the money which he had paid to them, from Dublin to Whitehaven, and to use all reasonable care ...... Is the mere fact of handing a ticket of this kind to an intending passenger, at the time that he pays his fare, sufficient to hold him affected by everything which is printed on the back of the ticket that, even without seeing or knowing what is printed on the back, he is to be held to have contracted in the terms indicated upon the back of the ticket?"

The Lord Chancellor's view was that this question should be answered in the negative. At p.75 he said:-

"It seems to me it would be extremely dangerous, not merely with regard to contracts of this description, but with regard to all contracts, if it were to be held that a document complete upon the face of it, can be exhibited as between two contracting parties, and without any knowledge of any thing besides, from the mere circumstances that upon the back of that document there is something else printed which has not actually been brought to and has not come to the notice of one of the contracting parties, that contracting party is to be held to have assented to that which he has not seen, of which he knows nothing and which is not in any way ostensibly connected with that which is printed or written upon the face of the contract presented to him. I am glad to find that there is no authority for such a proposition ................ The question in this case does not .......... depend upon any technicality of law or upon any careful examination of decided authorities. It appears to me to be a question simply of common sense."

The second concurring judgment was delivered by Lord Chelmsford who. at p.76, is reported as having said:-

"The Lord Chief Justice in the case of Young v. the South Eastern Railway Company (Law Reports, 4 Queen's Bench, 544) which has been referred to, thought himself bound by the authorities to hold that, when a man takes a ticket with conditions printed on it, he must be presumed to know the contents of it, and must be bound by them .................. Assent is a question of evidence, and assent must be given before the completion of the contract. The company undertakes to convey passengers in their vessels for a certain sum. The moment the money for the passage is passed and accepted their obligation to carry and convey arises. It does not require the exchange of a ticket for the passage money, the ticket being only a toucher that the money has been paid. Or, if a ticket is necessary to bind the company, the moment it is delivered the contract is completed, before the passenger has had an opportunity of reading the ticket, much less the endorsement."

The third concurring judgment was delivered by Lord Hatherley who, at p.77, said:-

"I agree with the observation that was made by my noble and learned friend who has just preceded me, that the money having been paid and the ticket having been taken up, a contract was completed upon the ordinary terms of conveyance for himself and his luggage, unless it can be made out that he had entered into any special contract to the contrary. A ticket is in reality in itself nothing more than a receipt for the money which has been paid. Of course, terms may be imposed by the carriers, and parties may agree to such terms in derogation of their rights."

15. In Hood⁽³⁾, Lord Haldane said:-

"In Henderson v. Stevenson⁽²⁾ what this House seems to me to have considered was only the particular question of fact which arose in the circumstances of that appeal."

On many other occasions judges have emphasised that the court was not laying down any new principle of law but merely deciding the case before it on its own facts. For example in Cooke v. T. Wilson, Sons & Co., Ltd.⁽⁴⁾ Pickford L.J. said:-

"...... I wish to guard myself against it being supposed that in entering judgment for the defendants here we are doing anything contrary to, or casting any doubt upon, any of the principles laid down in the cases to which we have been referred".

(One of the cases referred to was Henderson v. Stevenson⁽²⁾). Pickfold L.J. continued:-

"I also wish to guard myself against it being supposed that we are deciding principle, or, indeed, anything that can be of service in any subsequent case. We are deciding a question of fact upon the circumstances of this case, and that is all. That is really all that a great many of the cases to which we have been referred decides. .......... no doubt we generally go through all these cases but we have always come back to that opinion."

In Cooke⁽⁴⁾ Phillimore L.J. when referring to Stephen v. International Sleeping Car Co.⁽⁵⁾ said:-

"It is a case which decides that it does not necessarily matter whether the conditions are on the back or on the face of the ticket. If they are on the back, it may require more to draw the attention of the person who is to be carried to them; or, on the other hand, they may be on the face and yet the person to be carried may not know, and may not have sufficiently told of the conditions.”

This passage has to be read in the light of the facts in Stephen's⁽⁵⁾ case. Stephen had been handed a ticket on the face of which appeared not only the condition relied upon by the carrier but also some 22 advertisements. Although the condition was headed "avis important" the judge found that there was nothing to invite close inspection or to lead the possessor of the voucher to draw the inference that it contained terms of the contract he was making; that the plaintiff "could not be taken intelligently to have agreed to the terms printed"; and that the defendants did not take sufficient means to inform him thereof.

16. On appeal to the King's Bench Divisional Court, Henderson v. Stevenson⁽²⁾ was very much in the mind of counsel for the defendants who submitted that it was "not necessary to prove notice of a condition except when the condition was on the back of the ticket, and that a condition appearing on the face of the ticket was binding". It was in the light of that submission that Lord Alverstone said that it was

"obvious that the suggested distinction between the front and back of the ticket was not conclusive. It was a question of fact in each case as to what the contract was .......... where there was a contest as to whether the conditions were known it was not sufficient to show that it was printed in a mass of other printed matter".

In stating that if the conditions are on the back of the ticket it may require "more" to draw the attention of the person who is to be carried by them, Phillimore L.J. presumably meant that if the carrier did not give the intending traveller any other documents containing conditions of travel and failed to draw his attention to any conditions, or a notice to the effect that the carrier was contracting subject to limiting conditions, the least the carrier could do would be to put some words on the face of the ticket such as "for conditions see back" which the courts might deem a sufficient notice to the intending traveller that the carrier was contracting on certain conditions.

17. In Cooke's⁽⁴⁾ case the words "Passenger contract" appeared on the face of the ticket at the top. Then followed the words:

"......... is entitled, subject to the conditions hereof, to one .......... class berth in .........."

The actual condition relied upon by the carriers appeared on the face of the ticket in small but clear type. It was not mixed up (as in Stephen's⁽⁵⁾ case) with other conditions or advertisements; and the Court found no difficulty in coming to the conclusion that the carriers (defendants) had done what was reasonably sufficient to give the plaintiff notice of the conditions.

18. In this appeal our attention was not directed to any case in which the courts have held that a carrier who did nothing more than hand an intending traveller a ticket with conditions on the back of the ticket and nothing on the face of the ticket to indicate that there were conditions on the back, had discharged the onus of proof placed upon carriers who choose to contract in this way. Indeed in Sugar v. London Midland and Scottish Railway Co.⁽⁶⁾ the words "for conditions see back" had been originally printed on the front of the ticket; but the date had been stamped on these words in such a way as to obliterate them. In an action for damages for personal injuries sustained by the plaintiff by reason of the defendants' negligence, Lord Caldecote, C.J, held that by reason of the obliteration of the words "for conditions see back" the defendants had not done what was reasonably sufficient to give the plaintiff notice of the conditions governing the carriage of passengers. In his judgment Lord Caldecote said:-

".......... all these cases proceeded upon the view which is now quite clearly established .......... that a contract of a rather artificial nature between a railway company and a passenger can be made in this rather artificial manner by giving notice on the ticket and calling the passenger's attention in a reasonable way to the conditions on the ticket and in the time-tables of the company. Henderson v. Stevenson⁽²⁾ was decided many years ago and ........ it was a case decided on its special facts. Let me say here that each case must depend upon its facts."

19. The approach of Swift J. in Nunan v. Southern Railway Co.⁽⁷⁾ was somewhat different to the approach of Lord Chelmsford and Lord Hatherley in Henderson v. Stevenson⁽²⁾. He applied the principle that where a document in common form is tendered by one party and accepted by the other, it constitutes the terms of an offer made by the party tendering it. In Thompson v. L.M.S. Railway Co.⁽⁸⁾ the Master of the Rolls (Lord Hanworth) adopted the same approach. I confess that I find great difficulty in seeing how this principle can be applied universally to all "ticket" cases. What is "the document in common form" in such cases? Sometimes, negotiations take place between intending travellers and the carrier in the course of which the traveller is handed documents which, in one way or another, give him ample notice, before he pays his fare, of the fact that the carrier is only prepared to accept him as a passenger on their own terms. Indeed, it is arguable that in some cases there is a concluded contract before the ticket is delivered. In other cases the intending traveller (as in the case of Henderson⁽²⁾) simply calls at the carrier's office and says in effect: "May I have a ticket to .......... please." The booking-clerk says: "That will be ..........". The money is paid and the ticket is immediately delivered to him. The ticket may have the condition relied upon by the carrier printed on the front, or on the back; if on the back, there may or may not be any reference on the front to what is written on the back; the wording on the back may not give the actual terms of the condition; all that may appear is some general reference to the fact that the intending passenger is being conveyed subject to certain conditions; and there may or may not be a reference to the means open to the traveller to acquaint himself with the terms of those conditions.

20. But even if we accept that in all cases the ticket constitutes the "offer", as Professor Hughes says⁽⁹⁾:-

"An offer results in a contract by acceptance. An acceptance embraces conditions which are known, or as to which knowledge can be imputed to the acceptor. Knowledge is imputed to the acceptor where he has failed to avail himself of reasonable means of acquiring that knowledge, the reasonableness of the means having reference, not to the circumstances of the offeror, but to the purpose of bringing home to the mind of the acceptor the conditions of the contract. To hold an acceptor otherwise bound is to impose conditions upon him as the effect of a unilateral notice, not a bilateral contract."

Having said that:

"The history of this class of case is transient contact with reality followed by judicial refuge in fictitious inferences from fact,"

the learned author goes on to say:

"...... it has never been explicitly recognised that those contracts are a class by themselves ...... It is idle to scorn suggestions as to what companies might do: a working basis would soon have been found had the courts not taken refuge in fictitious inferences from fact but applied genuine objective standards in testing means of knowledge ...... far too much attention has been paid to the ticket, e.g. the words 'see back' have acquired a mystic significance. The true question is: Have adequate means been taken of affording knowledge beforehand ........ "

21. In regard to the learned author's reference to the mystic significance which the words "for conditions see back" have acquired in ticket cases, it is hardly surprising that the courts have considered the presence or absence of such words on the front of the ticket to be a matter of some importance in deciding whether the carrier has done what is reasonably sufficient to give the passenger notice of the conditions, more especially in cases where the carrier has done nothing to draw the attention of the intending passenger to those conditions except to hand him a ticket with a notice of some kind printed on the back of it.

22. What then are the facts in this case? All we really know is that this was the deceased's first sea voyage and that he purchased his ticket from the defendants' Sydney office. There was no evidence that the deceased had any communication with the defendants' agents prior to the purchase of the ticket. There was no evidence that he was handed any document other than his ticket or that his attention was drawn to any conditions of travel or whether such conditions were even available for inspection in the Sydney office; and we have no reason to think that the payment of the passage money and the handing over of the ticket were not more or less contemporaneous events.

23. A specimen ticket was produced in evidence in the lower court. It is in four parts and it was clearly torn out of a book of such tickets. On each of the four parts there are printed the following words:-

"	K No. 38001
	Port .......... 19
	The China Navigation Co. Ltd.
	Steerage/Deck passage Ticket
	Name ...............................................
	From .................... to .......................
	SS/MS .............................................
	Sailing ...............................................
	Fare ................................................."

The four parts are headed respectively "Office Counterfoil", "Ship's Counterfoil", "Wharf Counterfoil" and "Passenger's Counterfoil". On the passenger's counterfoil there are written in red ink the words: "This portion must be retained".

24. If the four parts are folded and carbon papers are inserted between each, the particulars (name, fare etc.) if written on the passenger's counterfoil, would be copied on to the other three parts. This appears to have been the manner in which the particulars were written on the deceased's ticket in the Sydney office.

25. Presumably the office counterfoil was retained by the defendants' agents in Sydney and the other three portions were handed to the deceased - at least it was assumed, on the hearing of the appeal, that the deceased would have been required to surrender the wharf counterfoil to someone on the wharf at Sydney and to surrender the ship's counterfoil on the gangway of the ship.

26. On the reverse side of the passenger's counterfoil and ship's counterfoil there were printed in English and Chinese the words:

"This ticket is issued subject to the company’s terms and conditions of carriage, which may be read in the office of principal agents in each port”.

Those words did not appear on the wharf counterfoil, and there was nothing on the front of the passenger's counterfoil and ship's counterfoil to draw attention to what was written on the reverse sides.

27. If, after the carbons had been removed by the booking clerk, the three parts of the ticket, still folded, were torn from the office counterfoil and handed to the deceased, the-front of the passenger's counterfoil and the back of the ship's counterfoil would have been visible.

28. On receiving a ticket, a passenger's first reaction is: "Have I been given a ticket which will enable me to travel to where I want to go?" The deceased would, naturally, have read what was on the front of the passenger's counterfoil in order to check that he had been given a ticket enabling him to travel to Hong Kong. There was nothing on the front of the ticket to draw his attention to what was written on the back; and his interest in the ticket probably ceased from that moment.

29. The situation, in my view, is very similar to that which obtained in Henderson v. Stevenson⁽²⁾ and Sugar v. London Midland & Scottish Railway Co.⁽⁶⁾. There was nothing on the front of the passenger's counterfoil to draw the deceased's attention to the fact that there were conditions of travel; and having regard to the fact that the defendants, so far as the evidence goes, took no other steps of any kind with a view to drawing the deceased's attention to the fact that there were conditions of travel, I do not think that, in the circumstances of this case, they discharged the onus which admittedly rested upon them.

30. When the trial judge stated: "Here the defendants discharged the onus ...........", in my view he was referring to Cockerton's⁽¹⁰⁾ case. There are, however, two other passages in his judgment which call for scrutiny. The two passages read as follows:-

(1)	"Is it enough therefore merely to tell an intending passenger that there are conditions and to leave it to him to find out what they are.
(2)	All that is known therefore is that this warning on the back of the ticket was given to the deceased. I do not think that that is enough .......... In the absence of some evidence that the conditions were readily available or conspicuously displayed at the place where the contract was made I do not think that the defendant (s) (have) discharged the onus of proof placed upon (them)."

It is arguable that in these passages the judge is saying in effect: "I find as a fact that the deceased was aware of the terms of the warning notice on the ticket; but that is not enough to justify a court of law holding that the defendants have discharged the onus placed upon them".

31. In fatal accidents cases it is seldom that the court is given evidence which would justify the court asking itself the question: was the deceased actually aware of the limiting conditions? Or was the deceased actually aware that there were conditions of some kind. There might be evidence to justify this. For example, if a carrier called a booking clerk to testify that he drew the passenger's attention to the warning notice on the back of he ticket and saw him read it and said that he discussed with the passenger the implications of the notice and thereafter the passenger paid his fare and accepted the ticket, if the court accepted such evidence it would be fully justified in finding that the passenger actually knew of the warning notice on the back of the ticket. But, ordinarily, in fatal accident cases the only material question is: Did the carrier do what was reasonably sufficient to give the passenger notice of the conditions and of the fact that the carrier was contracting on the terms of those conditions, so that the passenger (if he had not died and had been in a position to give evidence) would have been estopped from saying that he was not aware of the conditions and was not aware of the fact that the carrier was contracting on those conditions. In other words, that the passenger shut his eyes to the obvious.

32. In this case, the judge did ask himself that question. He answered it in the negative; and I can see no reason why this court should reverse his finding. I do not think that, in the two short passages which I have quoted, the judge was making a finding that the deceased actually knew what was on the back of the ticket. I agree, of course, that if he did find that the deceased knew of the warning notice on the back of the ticket, there was no point in him then asking himself the further question whether the defendants had done what was reasonably sufficient to give the deceased notice that they were contracting with him on their own terms. As the decisions stand, there is authority for the view that notice of the fact that there are conditions should ordinarily be sufficient to put an intending traveller upon his guard so that he should either find out for himself what the conditions are or be deemed to have bought "a pig in a poke". But in this case if it is felt that the judge has found that when the contract was made the deceased was aware of the warning notice on the back of the ticket, then it is open to this court to reverse that finding; and in my view we should do so. This court is in as good a position as the trial judge was in a matter of this kind. The state of the deceased's mind at the moment when he entered into the contract with the defendants is an inference of fact. This does not depend upon anything said by a witness during the trial of the action. All the trial judge had before him was the ticket purchased by the deceased; and that is really all this court has to go on.

33. I agree with what the learned President has said in regard to the third ground of appeal; and I have nothing to add. I also agree that there is insufficient ground to justify this court interfering with the trial judge's estimate of loss of future earnings, namely, $115,200. But in my view the dependancy should have been fixed at a figure considerably higher than $600 per month.

34. As regards the tables of awards on pages 35/43 of Kemp & Kemp, the multipliers given were, for the most part, obtained by the learned authors by simply dividing the award by the annual value of the dependancy. At page 19, the authors say:-

"Judges rarely reveal their mental calculations so that one does not know how many years purchase they took originally and by what sum they discounted the resulting lump sum. But, by dividing their final assessment of damages by the annual value of the dependancy, one can reach a multiplier."

35. In his textbook on damages, Munkman deals with the two approaches which the courts have adopted in estimating loss of future earnings; and at p.46 he says:-

"................ there are two methods of calculation. If the calculation is to be in terms of 'earning capacity', the estimated figure of annual earnings lost must be capitalised by multiplying it by a convenient multiple, say 7 to 15 years' purchase. This multiple is not the actual number of years for which the plaintiff would have worked: although described as so many 'years;' purchase', it is just an arithmetical factor selected by good judgment, usually with the help of annuity tables, as being about right. Contingencies are best taken into account in fixing the multiple. Thus if a plaintiff is elderly and could not have expected to work for much longer, the multiple will be low. If, on the other hand, the calculation is to be in terms of 'actual future earnings', then the estimated annual earnings are multiplied by the number of years for which the plaintiff might have gone on working: a deduction is then made to bring the total to its present value, at the same time allowing for contingencies ................ if annuity tables are used to convert actual future earnings into their present value, the result will be the same as in the capitalisation method."

36. The learned author deals further with the second method of calculation at page 54, thus:-

"First, if incapacity is for life, the Registrar-General's tables of expectation of life ................. show the expectation of. life of a man or woman at a given age ......... The expectation of life is that of the average man, and must yield to medical evidence that the plaintiff's expectation is shorter. Thus, within the life expectation, the court must decide on the expectation of working life, usually shorter ......... Secondly, there are annuity tables. These are very simple in principle, founded ultimately on the compound interest or present value formula

P_n = P_o (1+x/100) ⁿ

where p_o is the initial capital invested at x% and p _n is the capital at compound interest at the end of n years. Thus we can tell what sum is required now, at a given rate of interest, to produce a specified annual sum at the end of 1, 2, 3 ................. n years, and either by summation or more complex formulae, construct tables which show the price now of an annuity of (say) £100 for 10 years at 5% interest. The price is expressed as a multiple (so many year's purchase) of the annual sum. That is how 'year's purchase' comes to be used.

Two cautions are necessary. First the tables are on the basis of a definite rate of interest. At the present time (1965) about 5% seems to be appropriate (A high rate of interest means, of course, that the annuity costs less and you take a smaller number of years' purchase ................................................"

37. In this case, the deceased was aged 36 at the time of his death. According to the Registrar General's tables of expectation of life (Vide Kemp and Kemp Vo1.2 p.310) the deceased's expectation of life was 34.67 years, i.e. barring accidents, he would normally have expected to live until the middle of his 71st year.

38. His wife was 34; and, according to the tables (Kemp and Kemp p.312) her expectation of life was 40.91 years, i.e. barring accidents, she would normally have expected to live until nearly 75 years of age.

39. The judge adopted the so-called 'capitalisation' method. I would, myself, prefer that some attempt be made to estimate the deceased's actual future earnings, i.e. Munkman's second method. In doing so, as Munkman says (p.54), there is no reason why, in cases not tried by a jury, the court should not take judicial notice of any actuarial aids available; Unfortunately, annuity tables are not available; but by use of the formula given by Munkman it is possible to construct a table showing the value in 1966 of an annuity for any number of years.

40. There was no evidence that the deceased was other than a normal healthy man; and I see no reason why we should not assume that, barring accidents, he should not have continued working till he was 65, i.e. from 1966 to 1995. What we have to ascertain is the value in 1966 of an annuity of $7,200 for 29 years. This involves using Munkman's formula to discount each annual payment. For example, using the formula to calculate what sum invested in 1966 at 5% compound interest would produce $7,200 in 1966, we have the following:-

$7200 = P_o (1+5/100)²⁹

P_o is the sum invested in 1966 at 5% compound interest for 29 years which eventually produces $7,200 in 1995. A similar calculation is necessary in respect of each sum of $7,200 payable in each of the years 1967/1994. No calculation is necessary in respect of 1966.

41. I have done three lots of 29 calculations. The first lot of calculations are based on the assumption that the plaintiff would have received $7,200 each year during the period 1966/1995; and to get the 'present value', or rather the 1966 value, of each of those payments I have discounted each of the payments of $7,200 at 5% compound interest. In the second lot of calculations, the annual payments remain the same; but in 'discounting' them to their 1966 value, I have made the calculations on the basis of 8% compound interest. In the third lot of calculations, the annual dependancy is increased to $1,000 per month or $12,000 per year; and in 'discounting' these annual payments I have again used the figure of 8% compound interest.

42. The results of the calculations are as follows:-

	No. of years	$7,200 annually discounted at 5% compound interest	$7,200 annually discounted at 8% compound interest	$12,000 annually discounted at 8% compound interest
0	(i.e. 1966)	$7,200	$7,200	$12,000
1	(1967)	$6,857	$6,667	$11,110
2	(1968)	$6,530	$6,173	$10,290
3	(1969)	$6,219	$5,716	$9,528
4	(1970)	$5,923	$5,293	$8,822
5	(1971)	$5,640	$4,901	$8,170
6	(1972)	$5,371	$4,538	$7,565
7	(1973)	$5,116	$4,203	$7,053
8	(1974)	$4,872	$3,891	$6,486
9	(1975)	$4,639	$3,603	$6,004
10	(1976)	$4,419	$3,336	$5,562
11	(1977)	$4,208	$3,089	$5,510
12	(1978)	$4,007	$2,861	$4,768
13	(1979)	$3,817	$2,649	$4,416
14	(1980)	$3,635	$2,453	$4,089
15	(1981)	$3,461	$2,272	$3,786
16	(1982)	$3,297	$2,103	$3,505
17	(1983)	$3,140	$1,947	$3,246
18	(1984)	$2,990	$1,803	$3,006
19	(1985)	$2,847	$1,670	$2,784
20	(1986)	$2,712	$1,546	$2,577
21	(1987)	$2,583	$1,432	$2,386
22	(1988)	$2,460	$1,326	$2,210
23	(1989)	$2,343	$1,227	$2,046
24	(1990)	$2,231	$1,137	$1,895
25	(1991)	$2,124	$1,053	$1,755
26	(1992)	$2,023	$ 975	$1,625
27	(1993)	$1,927	$903	$1,504
28	(1994)	$1,835	$836	$1,393
29	(1995)	$1,748	$774	$1,290
		--------------	--------------	--------------
	Total:	$116,174	$87,577	$146,021
		=========	=========	========

The total of column 1 is the price in 1966 of an annuity of $7,200 for 29 years discounted at 5% compound interest. If we divide $116,174 by $7,200 we get 16, i.e. the 1966 price of the annuity expressed as a multiple of $7,200 (the annual payment) is "16 years' purchase".

43. The trial judge also used 16 as his multiplier; and reached almost exactly the same figure as I did by the method of discounting 'actual future earnings' to their present value. But it is important to note that the multiplier (i.e. 16 years' purchase) assumes that interest rates are 5%. If interest rates go up to say 8%, lower multipliers (i.e. smaller numbers of years purchase) are required to achieve the same result. This is illustrated by the figures in the second column. There the total of the various sums invested at 8% compound interest is $87,577, i.e. the price in 1966 of an annuity of $7,200 for 29 years discounted at 8% is only "12 years' purchase". ($87,577 divided by $7,200 gives the figure 12.) It is apparent from the above calculations that the so-called multipliers in the tables on pp.35/43 of Kemp and Kemp presuppose that interest rates shall remain in the region of 5%, and that they are of very little guidance in a territory such as Hong Kong when interest rates are considerably higher.

44. The purchasing power of the dollar will almost certainly decrease during the next ten years or so; and, in all probability, prices and incomes will increase very considerably; and it seems to me that $600 per month is much too low a figure to fix as the dependency in this case. I have not calculated what the 'present value' of an annuity of $9,600 per year ($800 per month) for 29 years would be; but if a "multiplier" of 12 is used, the figure $115,200 is again obtained. If, on the other hand, it is felt that $1,000 per month ($12,000 per year) would have been a more realistic figure to fix as the dependency, the results of my calculations (using MunKman's second method) are shown in column 3 of the above calculations. This shows that the present value of an annuity of $12,000 for 29 years discounted at 8% is $146,021, i.e. 12 years' purchase.

45. The above calculations make no allowance for what the text-book writers call the chances and uncertainties of life, that is to say the possibility of the widow remarrying, the chances that she or the deceased might, in 5 years' time, have fallen in front of a bus, or that he may have died of an appendicitis or become blind and so on. It does not appear that the trial judge discounted his original figures in any way.

46. I do not think that in this case too much weight should be given to such contingencies. The deceased's profession could not be described as a hazardous one; and, so far as the evidence goes, he was a normal healthy man. As regards the possibility of the plaintiff remarrying, there is no evidence that she has in fact done so; and as Kemp and Kemp say (p.20):-

"...... too much weight must not be given to the chances of remarriage."

In Nunn v. Cocksedge Ltd. (a case which does not appear to be reported but which is cited in Kemp and Kemp at.p.21.) Denning L.J. is reported to have said:-

"...... it seems to me that the judge must have reduced his figure far too much on that account. After all, she has not remarried. She is not even engaged to be married. Two years have passed since the accident; and it is entirely an element of chance whether she will remarry or not. How sad it would be if, as the years passed by, she did not remarry, and yet her compensation had been cut down by the court so drastically on the footing that she would."

47. On reconsideration, it may be that the year 1966 should be excluded from the above calculations. The deceased did not have a job to return to in Hong Kong; and it is somewhat unrealistic to suggest that he would have been in a position to contribute $7,200 or any higher sum towards the maintenance of his family in 1966. If therefore no account is taken of the year 1966, the totals of the above three columns are reduced from $116,174, $87,577 and $146,021 to $108,974, $80,377 and $138,821 respectively.

48. If I had been trying this case, I would probably have fixed $1,000 as the dependency and discounted 29 annual future payments of $12,000 on the basis of 8%. The 'present value' of the annuity would have been somewhere in the region of $138,000 (or approximately 12 years purchase). Then I would probably have discounted this figure to allow for possible contingencies. In LEUNG Tai Ah v. Chan Tak-wan and Another⁽¹¹⁾ the Full Court considered that the figure obtained by multiplying the estimated annual loss of earnings by 14 should be discounted by 20%. It is not clear to me what contingencies this was intended to cover. If $138,821 is discounted by 20%, the result is $110,400, which is remarkably close to the trial judge's estimate. But even if I had discounted the $138,821 to some higher figure such as $120,000 or even $125,000 that would not justify my recommending that the judge's estimate of $115,200 be interfered with. As Greer L.J. said in Flint v. Lovell⁽¹²⁾:-

"In order to justify reversing the trial judge on the question of the amount of damages, it will generally be necessary that this court should be convinced either that the judge acted upon some wrong principle of law, or that the amount awarded was so extremely high or so very small as to make it, in the judgment of this court, an entirely erroneous estimate of the damage to which the plaintiff is entitled."

49. In LEUNG Tai-Ah⁽¹¹⁾ the plaintiff was 33 years of age; and his connsel submitted that the court should assume that his working life would have continued for another 30 or 35 years. But the Full Court did not express any view as to the probable length of the plaintiff's working life. Counsel were agreed that the probable loss of future earnings was $380 per month, i.e. $4,560 per year. Scholes J. said (p.232):-

"In my view a fair and reasonable sum for general damages for loss of future earnings would be $51,092 calculated by using a multiplier of 14 and discounting by 20% or 1/5th as was done in the case of Ferguson v. Durastic Ltd. and Another⁽¹³⁾. That amount invested at 7% would give a return of $3,576 per year (the annual estimated loss being $4,560) and $298 per month calculating to the nearest dollar."

50. Since drafting this judgment I have managed to obtain the use of certain mathematical tables. Assuming that the plaintiff in LEUNG Tai Ah⁽¹¹⁾ would have continued working till he was 65 (i.e. 32 years) according to these tables the "present value" of an annuity of $4,560 for 32 years discounted at 7% is $57,668, i.e. 12.6465 years' purchase. If this sum is discounted by 20% (as was considered appropriate by the Full Court in LEUNG Tai Ah⁽¹¹⁾) the result is $46,135.

51. On the other hand, if we assume an interest rate of 8%, the present value of the annuity is $52,143 (or 11.4349 years' purchase); and if this sum is further discounted by 20%, the result is $41,715.

52. Having re-read the judgments in LEUNG Tai-ah⁽¹¹⁾, I am more convinced than ever how unsatisfactory it is in Hong Kong to use the multipliers shown on pp.36/43 of Kemp and Kemp. Everything depends on what is considered a proper rate of interest. If 5% is considered suitable, then the multipliers in Kemp and Kemp may be some guide; but not if the rate of interest is 7% or higher. In any event it seems to me that Munkman's second method is a much more satisfactory method of calculation, i.e. to make a genuine attempt to estimate loss of future earnings over the whole period of the deceased's working life and then discount that amount actuarily to its 'present value', thus arriving at the correct number of years' purchase. The present value may then be further discounted to take account of the vicissitudes of life and any unusual features disclosed by the evidence.

53. I agree, of course, that if the annual interest on the award, invested at current rates, is more than the annual dependency, there is something wrong with the calculations. Capital and interest should be exhausted over a period which bears some relation to the deceased's working life.

 

 

(W.A. Blair-Kerr) Puisne Judge

 

17 SEP 1969

 

(1) (1958) A.C. p.240 at p.265.

(2) (1875) Session Reports (H.L.) 4th Series, Vol.II, pp.71.

(2) (1875) Session Reports (H.L.) 4th Series, Vol.II, pp.73 and 74.

(3) (1918) A.C., p.837 at p.844.

(4) (1916) 85 L.J. K.B. at p.896.

(5) (1903) 19 T.L.R. p.621.

(6) (1941) 1 AER p.172

(7) (1923) 2 K.B. 703

(8) (1930) 1 K.B. 41

(9) (1931) 47 L.Q.R. p.460.

(10) (1960) 2 Lloyds Reports p.450.

(11) (1968) H.K.L.R. p.224

(12) (1935) 1 KB 354 at p.360

(13) (1951) 1 Lloyds Reports 324.