Case Detail

DCEC 713/2009

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES' COMPENSATION CASE NO. 713 OF 2009

____________

IN THE MATTER OF AN APPLICATION

BETWEEN
	TSANG CHIU TUNG	Applicant
and
	陳創成經營成記水喉渠務工程	1st Respondent
	GAR WING HUNG KEE CONSTRUCTION COMPANY (a firm) (家榮雄記建築公司)	2nd Respondent
____________

Coram: His Hon Judge Leung in chambers (open to public)

Date of hearing: 14 January 2011

Date of decision: 24 January 2011

DECISION ON COSTS

1. For injury at work in 2007, Tsang (the Applicant) claimed compensation against his employer (the 1^st Respondent) and the principal contractor (the 2^nd Respondent) pursuant to the Employees’ Compensation Ordinance, Cap.282. By consent, judgment was entered in 2009 against the Respondents for compensation to be assessed. After trial, I handed down my judgment on assessment of compensation on 25 November 2010.

2. In summary, the compensation was assessed as follows:

	Section 9 compensation	HK$ 77,616
	Section 10 compensation	HK$ 295,680
	Section 10A compensation	HK$ 3,500
	Total:	HK$ 376,796

3. Giving credit to the amount already received by Tsang from the Respondents in the total sum of HK$288,288, I made a net award of HK$88,508 with interest.

4. I made a nisi order that the Respondents should also pay Tsang’s costs of the assessment proceedings. Costs shall be taxed, if not agreed, with certificate for counsel. Tsang’s own costs shall be taxed according to legal aid regulations.

5. Parties were given 14 days to apply for variation of the costs order; or the same should become absolute. The Respondents did so by way of summons dated 9 December 2010. By consent, the summons was amended and directions were given for the filing of affidavits subsequently.

The amended summons

6. By the amended summons, the Respondents ask to vary the costs order nisi as follows:

(1) that Tsang be deprived of the costs in relation to unsuccessful parts of:
(a) the issues about whether he could resume his pre-accident job and rely on the Hong Kong Paper Mills formula for calculating the loss of earning capacity and his claim under section 9 of the Ordinance; and
(b) his claim for entitlement for periodical payments be extended beyond 24 months under section 10(5) of the Ordinance, and/or Tsang do pay the Respondents’ costs as are attributable to the defence of those issues and claims by Tsang;
(2) further or in the alternative, Tsang do pay the Respondents’ costs incurred after the date of their 2^nd sanctioned payment made on 7 August 2010, or after the without prejudice settlement offer on 9 August 2010, or otherwise after a date to be adjudged by the court to be just and appropriate, or on any basis and/or at any interest rate as the court sees fit;
(3) further or in the alternative, and without prejudice to the above, there be no order as to costs from the date of the 2^nd sanctioned payment made by the Respondents on 7 August 2010 or the without prejudice settlement offer on 9 August 2010 or any other date as the court sees fit;
(4) any other orders on costs of assessment proceedings as the court adjudges just and appropriate; and
(5) the costs of the application be to the Respondents and Tsang’s costs be taxed in accordance with the Legal Aid Regulations.

The Respondents’ major contentions

7. Mr Jim for the Respondents highlighted 10 features of the present case which I think boil down to the following main contentions:

(1) Tsang managed to recover only marginally more than the sanctioned payments and definitely less than the amount of the Respondents’ written offers. It was unreasonable for Tsang to refuse to settle and to press ahead with the assessment proceedings.
(2) Tsang had raised and pursued unnecessary and improper issues during the trial that had significantly prolonged the trial and increased the legal costs.

The court’s discretion as to costs

8. O.62, r.3 provides that:

“If the Court in the exercise of its discretion sees fit to make any order as to the costs of or incidental to any proceedings (other than interlocutory proceedings), the Court shall, subject to this Order, order the costs to follow the event, except when it appears to the Court that in the circumstances of the case some other order should be made as to the whole or any part of the costs.”

9. O.62, r.5 sets out the special matters to be taken into account in exercising the discretion:

“(1) The Court in exercising its discretion as to costs shall, to such extent, if any, as may be appropriate in the circumstances, take into account-
(aa) the underlying objectives set out in Order 1A, rule 1;
(a) [not applicable]
(b) any payment of money into court and the amount of such payment;
(c) [not applicable]
(d) any written offer which is expressed to be “without prejudice save as to costs” and which relates to any issue in the proceedings, but the Court may not take the offer into account if, at the time it is made, the party making it could have protected his position as to costs by means of a sanctioned payment or a sanctioned offer under Order 22;
(e) the conduct of all the parties;
(f) whether a party has succeeded on part of his case, even if he has not been wholly successful; and
(g) any admissible offer to settle made by a party, which is drawn to the Court’s attention.
(2) For the purpose of paragraph (1)(e), the conduct of the parties includes-
(a) whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue;
(b) the manner in which a party has pursued or defended his case or a particular allegation or issue;
(c) whether a claimant who has succeeded in his claim, in whole or in part, exaggerated his claim; and
(d) conduct before, as well as during, the proceedings.”

The sanctioned payments and without prejudice offers

10. This is a monetary claim where liability has been admitted. Where there is payment into court, the relevant event is whether the claimant succeeds in recovering more than the payment: see Wong Ching Wan v AS Watson & Co Ltd [2007] 4 HKLRD 362 at 370.

11. Prior to the trial, the following events took place:

	15/7/2010	The Respondents made the 1^st sanctioned payment in the sum of HK$70,000 (on top of previous payments)
	28/7/2010	Without prejudice offer of additional HK$20,000 on top of the 1^st sanctioned payment (on top of previous payments)
	7/8/2010	The Respondents made the 2^nd sanctioned payment in the sum of HK$20,000, making the total of HK$90,000 (on top of previous payments) in court
	9/8/2010	Without prejudice offer of HK$150,000 (inclusive of the sanctioned payments) plus costs, non-negotiable and open for acceptance until 5 pm on 11/8/2010
	12/8/2010	Without prejudice offer of HK$210,000 (inclusive of the sanctioned payments) plus cost, open for acceptance until 3 pm the following day
	25/8/2010	Without prejudice offer of HK$340,000 (inclusive of the sanctioned payments) plus costs excluding counsel fee, open for acceptance until 3 pm
	25/8/2010	Case warned for trial to begin on 26/8/2010

12. The net award of compensation inclusive of interest turned out to HK$99,652.73. It managed to beat the 2^nd sanctioned payment by a margin of slightly less than HK$10,000.

13. O.22, r.23 stipulates the costs consequences where the plaintiff fails to do better than sanctioned offer or sanctioned payment:

“(1) This rule applies where a plaintiff-
(a) fails to obtain a judgment better than the sanctioned payment; or
(b) fails to obtain a judgment that is more advantageous that a defendant’s sanctioned offer.
(2) The Court may by order disallow all or part of any interest otherwise payable under section 49 of the Ordinance on the whole or part of any sum of money awarded to the plaintiff for some or all of the period after the latest date on which the payment or offer could have been accepted without requiring leave of the Court.
(3) The Court may order the plaintiff to pay any costs incurred by the defendant after the latest date on which the payment or offer could have been accepted without requiring the leave of the Court.
(4) The Court may also order that the defendant is entitled to-
(a) his costs on the indemnity basis after the latest date on which the plaintiff could have accepted the payment or offer without requiring leave of the Court; and
(b) interest on the costs referred to in paragraph (3) or subparagraph (a) at a rate not exceeding 10% above judgment rate.
(5) Where this rule applies, the Court shall make the orders referred to in paragraphs (2), (3) and (4) unless it considers it unjust to do so.
(6) In considering whether it would be unjust to make the orders referred to in paragraphs (2), (3) and (4), the Court shall take into account all the circumstances of the case including-
(a) the terms of any sanctioned payment or sanctioned offer;
(b) the stage in the proceedings at which any sanctioned payment or sanctioned offer was made;
(c) the information available to the parties at the time when the sanctioned payment or sanctioned offer was made; and
(d) the conduct of the parties with regarding to the giving or refusing to give information for the purpose of enabling the payment or offer to be made or evaluated.
(7) The power of the Court under this rule is in addition to any other power it may have to award or disallow interests.”

14. Sub-rule (5) above makes clear that the costs orders adverse to the plaintiff under this rule shall be made if this rule applies. This happens if the situations under sub-rule (1) exist. Sub-rule (6) exists for the purpose of sub-rule (5), i.e., when a prima facie case exists for making adverse costs against the plaintiff. Sub-rule (6) does not otherwise come into play independent of sub-rule (1).

15. As Tsang managed to obtain a net award plus interest that exceeds the sanctioned payments, sub-rule (1) is not satisfied, and the basis for making the adverse costs order under this rule against the plaintiff does not exist. This cannot be changed by purporting to consider all the circumstances of the case under sub-rule (6).

16. Mr Jim cited Tsoi Hak Kong Herbert v Kok Wai Chun & Ors, HCA 4/2006 (9 June 2009). But that case was really about the effect of the plaintiff’s sanctioned offer governed by O.22, r.24. In relation to O.22, r.23, Mr Jim cited Lau Chi Keung v Wong Wai Kei & Anor, DCPI 1846/2008 (22 June 2010) in support.

17. In Lau Chi Keung, damages together with interest amounted to HK$452,922.80. It managed to beat the sanctioned payment of HK$450,000 by a margin of about HK$3,000. The plaintiff was nevertheless deprived of his entitlement to part of his costs incurred after the sanctioned payment.

18. Referring to the English case of Charm Marine Incorporated v Elborne Mitchell (22 July 1997), the learned deputy judge in Lau Chi Keung considered a possible qualification of the strictly arithmetical rule in comparing the award and the payment into court by some de minimus principle. The court was of the view that the qualification, if it exists, would apply only in absolute, not relative terms.

19. But in both Charm Marine Incorporated and Lau Chi Keung, the court actually refused to find that a few thousand dollars is negligible for the de minimus qualification, if it exists, to operate against the plaintiff. Therefore, even assuming that the de minimus principle exists, it does not assist the Respondents here as the margin whereby the sanctioned payment was beaten can hardly be categorised as negligible in the present case.

20. Mr Jim argued that the margin of slightly less than HK$10,000 would not have been worth the fight for Tsang, had he taken into account his irrevocable costs after taxation.

21. In my view, if this argument is accepted, the defendant could somehow legitimately factor in such discount in coming up with a sanctioned payment; and yet could expect the protection of O.22, r.23. Once such discount factor gets in the way, the simplicity of reference to the event of whether the amount recovered beats the amount of the sanctioned payment under O.22 would go.

22. Mr Jim also argued that the very fact that the sanctioned payment was beaten by a narrow margin is merely one but not the sole governing criterion. Again, he borrowed assistance from Lau Chi Keung. The learned deputy judge there apparently agreed with the court in Carver v BAA plc [2008] 3 All ER 911, which was a post-CPR case in England, where the court decided to look at the matter in the round and to decide whether it was unjust to order the defendant to pay the plaintiff’s costs, though the sanctioned payment is beaten. The learned deputy judge held that the circumstances of Lau Chi Keung gave rise to special circumstances justifying departure from the usual rule that a successful claimant is entitled to all his costs from the losing party.

23. Whether the approach in Lau Chi Keung should be adopted, it was the finding of special circumstances in that case that caused the learned deputy judge to depart from the usual rule as to costs, notwithstanding that the sanctioned payment was beaten by the award. Are there special circumstances in the present case?

24. The Respondents placed heavy emphasis on their without prejudice offers made since the 2^nd sanctioned payment. They argued that it was unreasonable for Tsang to reject those offers, which would have exceeded the amount he turned out to recover after trial.

25. Mr Au-yeung put it bluntly that without prejudice offer has no place in the consideration, where the defendant could and should have made payment into court for the purposes of O.22 and O.62, r.5(1)(d). What Mr Au-yeung submitted is in line with the authoritative statement of the principle by the Court of Final Appeal in Ming An Insurance Co (HK) Ltd v Ritz-Carlton Ltd (No.3) (2009) 12 HKCFAR 745 at 750F-752F.

26. Ming An was decided prior to the CJR. At that time, O.62, r.5(1)(d) provides that in exercising the discretion as to costs, the court shall take into account any written offer which is expressed to be “without prejudice save as to costs” and which relates to any issue in the proceedings; but the court shall not take the offer into account if, at the time it is made, the party making it could have protected his position as to costs by means of a payment into court under Order 22.

27. Mr Jim emphasized the change of wordings of O.62, r.5(1)(d) brought about by the CJR. The court now “may not”, instead of “shall not”, take into account without prejudice offer, if at the time it is made, the party making it could have made a sanctioned payment under O.22. Mr Jim suggested that what used to be mandatory prohibition has been relaxed. Whether without prejudice offer would be taken into account is now a matter of discretion of the court.

28. In support, Mr Jim referred to the post-CPR English cases of Codent Limited v Lyson Limited [2005] EWCA Civ 1835 (8 December 2005) and The Trustee of Stokes Pension Fund v Western Power Distribution [2005] EWCA Civ 854 (11 July 2005). The English court is apparently prepared to equate the effect of without prejudice offer to Part 36 payment under the CPR, when considering the discretion as to costs.

29. Mr Au-yeung acknowledged the change in wordings of O.62, r.5(1)(d) after the CJR. Nevertheless he submitted that what the final court stated in Ming An remains valid, and the court should refrain from departing from that. He gave 2 main reasons.

30. First, a new rule, r.3(2), was specifically introduced to O.22 as a result of the CJR which provides that:

“where an offer by a defendant involves a payment of money to the plaintiff, the offer must be made by way of a sanctioned payment.”

31. The introduction of new rule leaves no room for any doubt about the exclusive manner in which an offer to pay money must be made by the defendant to the plaintiff. The offer must be made by way of a sanctioned payment under O.22.

32. The new rule is also unique in the local jurisdiction. Whilst provision equivalent to O.22, r.3(1) exists in the CPR in the UK (i.e., r.36.3(1)), there is no equivalent provision of the new local O.22, r.3(2) in the CPR. On this basis, Mr Au-yeung urged for caution before the court here considers applying the relatively lax attitude of the English court towards equating the effect of written offer to Part 36 payment in exercising the discretion as to costs as demonstrated in Codent Limited and The Trustees of Stokes Pension Fund.

33. Second, accepting what was submitted on behalf of the Respondents would effectively open a backdoor to the defendant, who would be able to take advantage of the sanctioned payment provisions without having to act in accordance with them. This is particularly unjust in the present case, in terms of the very limited time open to Tsang to accept the various without prejudice offers, as opposed to the statutory period of 28 days for accepting a sanctioned payment without leave of the court.

34. In this regard, whilst accepting that a written offer should usually be treated as having the same effect as a Part 36 payment, the court in The Trustees of Stokes Pension Fund still expected the written offer to be made on terms that it would be open for acceptance for at least 21 days (i.e., as long as the period within which a Part 36 payment may be accepted without permission of the court).

35. In my view, Mr Au-yeung’s arguments are valid. I agree with him.

36. Mr Jim also referred to what the final court said in Ming An about the exception of open offer. Open offer, which could be made known to the court, is tantamount to concession by the defendant. That open offer could be taken into account should not be surprising. Yet, the offers made by the Respondents were not open offers. The exception is irrelevant for the present purpose.

37. The Respondents also criticise Tsang for failing to provide quantification of his claim or evidential support. I would have understood, had the Respondents sought to explain their inability or difficulty in coming up with a sanctioned payment sufficient to meet the likely award: see Ford v GKR Construction Ltd [2000] 1 WLR 1397 at1403D-G cited by Mr Jim. But the fact was that the Respondents managed to and did offer to pay an amount after the 2^nd sanctioned payment that would have exceeded the award.

38. Had the Respondents made that offer by way of further sanctioned payment, as O.22, r.3(2) requires, the situation would have been completely different. In that event, this court would have had to consider whether it would be unjust in all the circumstances of the case pursuant to O.22, r.23(5) and (6) to make an adverse costs order against Tsang.

39. Within the current legal framework, the event in the present proceedings was that Tsang managed to recover more than what the Respondents had properly offered to pay. Unless there are other circumstances, including what is discussed below, justifying the departure from the general rule, costs of these proceedings should still follow such event.

Conduct of the claim

40. The general rule that costs should follow the event does not cease to apply simply because the successful party raises issues or makes allegations on which he fails. But where that has caused a significant increase in the length or costs of the proceedings, he may be deprived of the whole or part of his costs: see Wang Din Shin v Nina Kung, CACV 460/2002; CACV 67/2003 (19 April 2005) at para.39. Instances of such conduct are also set out in O.62, r.5(2) for the purpose of r.1(e) (above).

41. A major contention on behalf of the Respondents is that Tsang had raised and pursued unnecessary and improper issues during the trial that had significantly prolonged the trial and increased the legal costs. Those issues included:

(1) whether Tsang could resume his pre-accident job;
(2) whether the court should exercise discretion to extend Tsang’s entitlement to periodical payments in excess of 24 months;
(3) whether the Hong Kong Paper Mill formula should be adopted in assessing Tsang’s loss of earning capacity; and
(4) in respect of the above issues, whether Tsang has exaggerated his case.

42. In Active Base Limited v Roderick Hohn Sutton and Desmond Chung Seng Chiong, Joint and Several Liquidators of Moulin Global Eyecare Holdings Limited, in Liquidation, HCCW 470/2005 (17 October 2008), Kwan J (as she then was) explained (at paras.10-11) what an “issue” is for this purpose:

(1) Where the party who has been successful overall has failed on one or more issues, particularly where such issues have occupied a significant amount of hearing time or led to the incurring of significant expense, the court may in its discretion order a reduction in the award of the costs to him.
(2) An issue for this purpose must be something so distinct or separate in itself that the decision of it constitutes an “event”. It is not the case that lack of success in any specific argument of itself attracts a costs sanction. It is only if it is possible to isolate an issue in the case in that it can properly be said it is unnecessarily pursued as having no bearing on the real questions in the suit that it would be proper to deprive the successful party of all costs of that issue, otherwise a more general assessment should be made.
(3) Unless discrete points can safely be isolated and can be shown to have led to wastage of time and costs, the practice of the court is not to engage in any “filleting” of cases according to the success or failure of the disparate issues which, when taken cumulatively, constitute the dispute to be judged.

43. Kwan J concluded that the courts here have not adopted the approach of more readily departing from the principle that costs should follow the event and making separate costs orders to reflect the outcome of different issues.

44. In the present case, no assessment has been made by the Medical Assessment Board (“MAB”) in respect of Tsang’s loss of earning capacity. This court had to make its own finding of such loss in order to assess the section 9 compensation. At the end of the day, I found the percentage loss of earning capacity which was neither party’s suggested percentage.

45. For the purpose of determining the section 10 compensation, this court had to find the period of temporary incapacity. Tsang applied for extension of his entitlement to periodical payments beyond 24 months from the date of the accident pursuant to section 10(5). However, the Respondents argued that the appropriate sick leave should be about 17 months or at most the statutory basic maximum of 24 months. At the end of the day, whilst I rejected Tsang’s application for extension of his entitlement, I did not accept the Respondents’ primary case in respect of the sick leave period.

46. In accordance with the principles discussed above, the alleged incapacity to resume pre-accident job, the applicability of the special formula and the application under section 10(5) by Tsang cannot said to be separate and distinct from the dispute in respect of his temporary and permanent incapacity. The fact that this court found against him on those questions does not mean that they were improperly or unnecessarily raised or pursued issues for the present purpose of considering costs.

47. I am not convinced that the evidence that was relevant and necessary for determining the dispute in respect of Tsang’s capacity to work would have materially differed from what was adduced. Nor do I find that the length and thus the costs of these proceedings have significantly increased as a result of Tsang’s contentions.

48. Mr Jim submitted that there was a strong likelihood that, but for exaggeration, the claim would have been settled at an early stage and with modest costs. He also criticised Tsang for refusing to negotiate. In support, Mr Jim referred to the English case of Yvonne Hazel Painting v University of Oxford [2005] EWCA Civ 161 (3 February 2005).

49. It should be noted that the 10 features of the present case that Mr Jim highlighted in his submission seem to have followed closely those highlighted by counsel in Yvonne Hazel Painting. But in that case, the central issue was overwhelmingly that of exaggeration. Even the claimant’s counsel accepted (see para.26) that his client had been deliberately misleading in the course of the claim. The fact that the exaggeration was found to be both intentional and fraudulent affected the court’s assessment of the costs in a very important way. I do not think the exaggeration by Tsang reached that degree of fraudulent conduct.

50. I am not satisfied that any material part of the proceedings and thus costs has been wasted, which could have been saved but for any issue raised improperly or unnecessarily by Tsang.

Order

51. The costs order made on 25 November 2010 is made absolute. The Respondents’ application is dismissed. Following such event, Tsang shall have the costs of and occasioned by this application. Costs shall be taxed, if not agreed, with certificate for counsel; and Tsang’s own costs shall be taxed in accordance with the legal aid regulations. I still give leave to the parties to submit further* on the costs of and occasioned by this application within 14 days; or the costs order shall become absolute.

	Simon Leung
	District Judge

*limited to not more than 2 pages in length

Mr Herbert AU-YEUNG instructed by Messrs W K To & Co for the Applicant upon the assignment by the Director of Legal Aid

Mr Jacky JIM instructed by Messrs So, Lung & Associates for the 1^st and the 2^nd Respondents

DCEC 713/2009

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES' COMPENSATION CASE NO. 713 OF 2009

____________

IN THE MATTER OF AN APPLICATION

____________

BETWEEN
	TSANG CHIU TUNG	Applicant
and
	陳創成經營成記水喉渠務工程	1st Respondent
	GAR WING HUNG KEE CONSTRUCTION COMPANY (a firm) (家榮雄記建築公司)	2nd Respondent
____________

Coram: His Hon Judge Leung in court

Date of hearing: 26-27 August; 21 September 2010

Date of judgment: 25 November 2010

ASSESSMENT OF COMPENSATION

1. For injury at work on 12 July 2007, Tsang (the Applicant) claims compensation against his employer, Shing Kee (the 1^st Respondent) and the principal contractor, Hung Kee (the 2^nd Respondent), pursuant to the Employees’ Compensation Ordinance, Cap.282.

2. Shing Kee and Hung Kee consented to judgment on liability with costs on 7 September 2009. This is to assess the compensation.

The accident, injury and treatment

3. On the day in question, Tsang was a casual plumber employed by Shing Kee working in a building at Shing Tak Street, Kowloon City. Hung Kee was the principal contractor of the site. In the course of using a portable grinder-cum-saw provided by Shing Kee to cut a steel bar, the blade rebounded towards Tsang’s face. Tsang jerked his head backwards but failed to avoid the blade.

4. Despite an apparently different description of how the accident happened in Form 2 filed by Hung Kee, there is no real dispute in this respect; and Mr Jim for both Respondents also adopted the above description of the accident in his submission.

5. After the accident, Tsang was sent to Kwong Wah Hospital. There was a deep laceration measuring 11 cm in length on the left face of Tsang from the medial eyebrow down to the lower lip. There was no other injury to the other parts of the body. The open wound was explored under local anaesthesia.

6. Tsang complained about headache. CT scan showed fracture of the nasal bone but no intracranial haemorrhage, fracture or hydrocephalus. Nor was there neurological problem or injury to the eye.

7. Tsang also complained about neck pain. X-ray showed cervical spondylosis. He was given physiotherapy for the neck pain.

8. The facial stitches were removed 7 days later. Another 2 days later, Tsang was discharged from the hospital.

9. Tsang was followed up by the surgery and the orthopaedic departments of the hospital. He had been given physiotherapy until mid-April 2008 when his progress became static. When the surgery department of the hospital saw Tsang in mid-August 2008, the facial scar had healed well and his eyelid function was normal. The next follow up was a year later.

10. Tsang has also been referred to the psychiatry department of the hospital where he was diagnosed to suffer from adjustment disorder. In early September 2008, Tsang started to consult the mental health centre of Castle Peak Hospital where the diagnosis was revised from adjustment disorder to post-traumatic stress disorder.

11. The orthopaedic department of Kwong Wah Hospital gave Tsang sick leave up to 5 September 2008. This was followed by sick leave from Castle Peak Hospital until 4 December 2008. Sick leave from the neurosurgery department was given from 11 December 2008 onwards. Tsang’s sick leave continued until late June this year, reaching a total period in excess of 1,000 days.

Tsang’s evidence

12. At the time of the accident, Tsang was 42 years old and had been a plumber for 20 years. In his statement dated October 2009, Tsang still complained about multiple symptoms, including:

(1) frequent headache and dizziness;
(2) numbness in the left forehead;
(3) poor concentration;
(4) headache and dizziness after thinking, concentrating, listening noises;
(5) neck pain;
(6) no strength and numbness in the left arm;
(7) poor sight in the left eye;
(8) persistent insomnia;
(9) bad temper; and
(10) frequent flashback of the accident.

13. Due to the multiple symptoms mentioned above, he claims to be unable to return to his pre-accident job. The fact was that he has remained jobless since the accident.

Medical expert opinion

14. Medical expert evidence in various disciplines was adduced, including that from the orthopaedic, neurological and psychiatric experts as well as plastic surgeon.

Plastic surgeon

15. The parties jointly instructed Dr Otto Au to examine Tsang on 23 November 2009. Dr Au produced his report dated 12 December 2009. The doctor observed a long scar extending from Tsang’s left medial eye brow crossing downward to include his left upper eyelid, left cheek and left upper lip. Photographs of the scar on the face of Tsang taken at the time were annexed to the report.

16. The doctor said much in his report, which I will further refer to below. At this juncture, it suffices to distil from the report what the doctor was in a position to say. He opined that the cosmetic impairment as a result of the scar amounts to 2% of the whole person.

Neurological

17. Tsang was examined by neurological experts, Dr David Chin and Dr Edmund Woo on 26 November 2009. They produced their joint report dated 5 December 2009.

18. The experts conducted various tests including the mental state examination. They noted that Tsang did not have any head injury as a result of the accident. He had no loss of consciousness or post-traumatic amnesia. Nor was there radiological evidence of any parenchymal brain damage. He had no neurological disability or impairment.

19. The experts agreed that the sick leave and treatment from the neurological perspective were appropriate. No further treatment or regular evaluation would be necessary. From the neurological perspective, Tsang should be able to return to his pre-accident job with no loss of earning capacity.

Orthopaedic

20. Tsang was examined by Dr Johnson Lam and Dr Arthur Chiang in December 2009. The two orthopaedic experts produced their joint report dated 27 December 2009.

21. The experts noted the lapse of time before the record of Tsang’s complaint about neck pain. However they agreed that this could be because of the mild degree, the pain could be un-noticed at the early stage. They agreed that the neck condition is consistent with the mechanism of injury in the accident.

22. Based on the medical records and findings during the examination, the experts confirmed the diagnosis of soft tissue injury to the neck. However the degree should not be too severe.

23. The experts also agreed that the treatment was appropriate and further treatment would not be necessary. Though Tsang still complained about persistent neck pain, objective examination revealed no muscle wasting. There was subjective complaint about numbness involving the left upper limb; but objective examination suggested that the area of alleged numbness did not correspond to any dermatomal or neural distribution. Some residual neck pain was probable but the degree should be mild. There was no neurological deficit either. The prognosis for the neck injury is good. Permanent impairment of the whole person from the orthopaedic perspective is 1 to 2 %.

24. In practical terms, the experts believed that activities that cause severe stress to Tsang’s neck (e.g., frequent flexion or extension) may cause discomfort or even pain to the neck. But the overall effect should be mild. Tsang should be independent in activities of daily living.

25. The experts recorded the job description and physical demand of his pre-accident job according to Tsang as well as the findings of the occupational therapist. The experts agreed that considering his neck injury, Tsang should be able to return to his pre-accident job with reduced capacity. Dr Chiang opined that such reduction in capacity would likely to be very mild. Dr Lam suggested that as an alternative, Tsang should be able to work in other jobs requiring light to medium physical demand on the neck, such as salesman and watchman.

26. Dr Lam opined that the sick leave given by Tsang’s treating doctors was appropriate. Dr Chiang opined that sick leave given by the orthopaedic specialist clinic up to 5 September 2008 was appropriate.

Psychiatric

27. Tsang was examined by Dr Benjamin Lai in January 2010. The doctor gave his psychiatric expert report dated 11 February 2010.

28. Dr Lai noted from the government hospital medical reports that Tsang developed psychiatric symptoms including insomnia, headache, irritability, anxiety, low mood and poor concentration after the accident. During the examination, similar symptoms were found. Dr Lai explained that these were symptoms in response to stressors including the accident, the associated physical disabilities, the inability to resume working and the financial issue.

29. Dr Lai disagreed with the government psychiatrist who last categorised Tsang’s case as one of post-traumatic stress disorder. He opined that Tsang’s clinical features only satisfy the diagnostic criteria of adjustment disorder with mixed anxiety and depressed mood under the DSM-IV classification system.

30. Tsang is currently suffering from a mild degree of psychiatric symptoms and the side effects of medication. Dr Lai advised a further course of psychiatric treatment for a year and the medication could cease ultimately. Continuing psychiatric treatment and persistent side effect of medication were not expected. 5 to 6 sessions of psychological treatment were also recommended.

31. Dr Lai opined that if the physical disabilities are of a less degree, the stressors would have less impact on Tsang. Tsang should also have a less degree of depressed mood and associated symptoms. Based on Tsang’s normal pre-morbid personality, absence of vulnerability factor to the development of psychiatric illness and the mild degree of physical disability, the doctor opined that Tsang would likely suffer only mild residual psychiatric symptoms after the further treatment recommended.

32. Tsang’s permanent disability due to his psychiatric condition is likely to be in the mild range. His levels of impairment are likely to be compatible with most useful functioning. Mentally Tsang has no problem in self care and is independent in activities of daily living. He may continue to have some anxiety and apprehension of further accident. Further psychiatric treatment than what was recommended above is not expected.

33. The severity of permanent psychiatric impairment falls in the range of 4 to 6% of the whole person. Mentally Lai is believed to be capable of resuming his pre-accident work with possibility of impairment of his work tolerance and efficiency.

34. The government psychiatrist had given sick leave to Tsang for 3 months from 5 September 2008. Dr Lai opined that sick leave for 6 to 12 months from that date would have been reasonable.

Loss of earning capacity

35. Tsang claimed that his pre-accident job required him to transport, install and dismantle single-handedly various kinds of pipes and accessories. They were heavy with most of them over 60 lbs and some up to 200 lbs each. He was also required to work at height and therefore he had to climb scaffold and ladder at work. According to him, he has become unable to meet these job demands.

36. Mr Jim suggested that it is against common sense to expect that a plumber would and could transport a 200-lb pipe manually and single-handedly. In court, Tsang was reluctant to accept such suggestion.

37. According to Chan of Shing Kee, a plumber could not transport a pipe weighing so much single-handedly. The plumber had to have help or to use a pulley or a rope for transporting the pipe vertically. However, he did not deny the possibility that for work in building consisting of 2 to 3 storeys, pulley might not be installed, considering the time, progress and cost. Chan did not claim to be able to tell the practice of the other employers. He agreed also that in the process of aligning the sections of the pipe during installation, plumbers had to somehow manually hold the pipe.

38. Considering the evidence of Tsang and Chan, whilst I believe Tsang somehow exaggerated the extent to which he was required to transport and to install pipes and accessories at the weight alleged, I am prepared to accept that his pre-accident work did involve a certain amount of heavy manual labour.

39. Is Tsang unable to meet such physical demands of his pre-accident job? Mr Sham referred to the orthopaedic experts’ opinion that Tsang could handle most of his pre-accident duties. He submitted that Tsang is therefore unable to perform his full duties as a plumber. He also referred to the orthopaedic experts’ conclusion that Tsang should be able to return to his pre-accident job but with reduced capacity. He cited Khan Amar v Cheung Ying Construction Engineering Limited & Anor, CACV 153/2006 (5 June 2007) in support.

40. Khan Amar was a personal injury case. The plaintiff there was a construction site worker. The medical expert report in that case stated that the plaintiff there should be able to return to his pre-accident job as a construction site worker but with reduction in efficiency at work. Light to moderate manual work was also recommended as alternative. The Court of Appeal held that “with reduction in efficiency at work” meant that whilst the plaintiff might be able to work in some capacity on a construction site, he was not as able as a worker as before his accident.

41. Mr Sham stressed that one should not loose sight of the physical demand of the pre-accident job. He is right; and I think that explains the decision of the Court of Appeal in Khan Amar. In that case, it was essential to consider not merely whether the plaintiff was able to work in some capacity in a construction site, but more particularly whether he was in a position to return to the type of more physically demanding work that he had been doing prior to the accident (see paras.51-53 of the judgment). I do not propose to differ from that approach in the present case.

42. Were the orthopaedic experts in the present case aware of the physical demand of Tsang’s pre-accident work as a plumber? I think so. They agreed that Tsang should be able to return to his pre-accident job with mild reduction in capacity. In coming to such a conclusion, they had referred to the occupational therapist report which was dated 9 October 2009. In both reports, the particulars of the physical demand of the work that Tsang had been doing prior to the accident were noted.

43. The occupational therapist too recorded Tsang’s subjective complaint about persistent pain over multiple sites including his neck and numbness of the left upper limb. He complained of neck pain when extending or turning his head. He projected poor grip power and lifting capacity of his left arm. He also reported low sitting and walking tolerance.

44. In May 2008, the occupational therapist found no obvious limitation on the movement ranges of his neck and four limbs, despite Tsang’s complaint. In June 2008, Tsang felt no subjective improvement; but objective assessment revealed improved strength of his left arm and good control of neck and four limbs. His attendance and level of participation in occupational therapy was said to be poor in June and July 2008; and Tsang even defaulted in attending treatment since 22 July 2008.

45. Reading the occupational therapist report and the joint orthopaedic expert report together, one can easily see the discrepancy between the subjective complaint of Tsang about his disability and the objective assessment. In particular, the complaint about the left upper limb weakness, which was said to limit his capacity to handle the heavy duties and tools in his pre-accident work, was basically not substantiated by objective findings.

46. As mentioned above, the orthopaedic experts agreed that activities that cause severe stress to the neck may cause discomfort or even pain. By those, the experts were specifically referring to frequent flexion or extension of the neck. In saying that Tsang should be able to handle most of the duties as a plumber, the exception that the experts specified was the very occasional demand of carrying 200 lb by one person over the shoulder. Though it was not strictly up to them to say, the experts could not help expressing reservation about how reasonable such exception would be. I hold the same view.

47. Unlike what happened in Amar Khan or what Mr Sham suggested, the occupational therapist and the experts in the present case did appreciate the physical demand peculiar to Tsang’s pre-accident work when they gave their opinion. I give full weight to such evidence.

48. In court, Tsang disagreed with the orthopaedic and psychiatric expert opinion when it came to the question of whether he should be able to return to his pre-accident work. When asked, he explained that he wanted to be cured before finding any work. By that, he meant at least when he would feel less frequent headache. At one point, he seemed to suggest that a recent scan revealed something in his brain.

49. There is no medical evidence in support of Tsang’s alleged inability to work at all as a result of the alleged headache. In fact, according to him, he has received during his follow up at the hospital over the past 2 years was nothing more than prescription of vitamin, sleeping pill and painkillers.

50. Considering all the evidence, I reject the suggestion that Tsang is not capable of returning to his pre-accident job.

51. Before moving on to another topic, I need to say something about the expert report of Dr Au, the plastic surgeon, in the present case. The doctor did not confine himself to expressing his opinion on the cosmetic condition of Tsang and its impact, if any, on Tsang’s daily life and working capacity. Instead, the doctor made findings on the other physical and psychological conditions as well as their causative link to the accident. The doctor went further to recommend further treatment on such basis.

52. The doctor also expressed his opinion on Tsang’s working capacity: Tsang should be able to perform light office work or any work which would not require much manual labour or in an environment without excessive noise. In quantitative terms, he doctor assessed the loss of earning capacity to be 8%. Tsang’s ability to handle manual labour and to tolerate noise can hardly be associated with his cosmetic condition. Obviously, it was really his observation about Tsang’s physical and psychological condition.

53. It matters not whether the doctor sought to be comprehensive, if he is not in a position to give opinion evidence other than from a plastic surgeon’s perspective. I place no weight on such opinion, insofar as the same falls into the disciplines of the other relevant experts in the present case.

54. Seeing Tsang in court, I find that the scar on his face is barely visible. Considering Tsang’s age and work background, I am not convinced that any such cosmetic impairment has any impact on his working capacity at all.

Pre-accident income

55. The daily wage rate of HK$700 is agreed. But there is serious dispute as to the number of working days. Tsang claims on average 24 working days in a month whereas it was suggested on behalf of Shing Kee and Hung Kee that Tsang used to work on average 6 to 7 days per month.

56. Pursuant to section 11(1), the monthly earnings of an employee at the time of the accident shall be those for the month immediately preceding the date of the accident; or the rates per month at which the employee was remunerated during the previous 12 months or any lesser period, whichever calculation is more favourable to the employee.

57. By the time of the accident, Tsang had worked at the building in question for 6 days. Shing Kee had employed Tsang for about a week on a previous occasion a year ago. Nevertheless Mr Sham suggested that section 11(1) might still apply in the case of Tsang. I do not agree. Both subsections of the section apply in case the employee was employed during the relevant period by the same employer being sued. The same is true in respect of subsections (1A) and (1B), which Mr Sham also relied on.

58. Due to shortness of the time during which Tsang had worked for Chan, it is impracticable to compute the rate of remuneration of Tsang at the date of accident by reference to section 11(1) of the Ordinance. Section 11(2) provides that in such case:

“…… regard may be had to the average monthly amount which, during the 12 months previous to the accident, was being earned by a person of similar earning capacity in the same grade employed at the same work by the same employer, or, if there is no person so employed, by a person of similar earning capacity in the same grade employed in the same class of employment and in the same district.” [Emphasis added]

59. For a person who has worked in the same field in Hong Kong for the past 20 years before the accident, Tsang himself could also be such a person for the purpose of the last limb of section 11(2). The disputes lies in what Tsang used to earn on average during the last 12 months from his job as a plumber.

60. Mr Jim highlighted the lack of documentary proof in this respect from Tsang. This is true. However, Mr Jim went on to submit that the pre-accident monthly income should be calculated by finding essentially the average monthly amount of deposit in Tsang’s bank account. He said the result came down to about 6 days of work or HK$4,200 per month.

61. Such calculation is bound to be wrong. It is simply not established that Tsang used to deposit all, if any, of his earnings into the account. Even the entries in the bank passbook tend to show the contrary. It could be seen that the intervals between deposits in the bank account were often for months, sometimes over half a year. It is beyond imagination that Tsang had no work or earnings whatsoever during those periods.

62. His statement contains not much detail of his pre-accident income. In court, he said he was paid cash and seldom banked them in. He normally started to find work before the current job was completed. He was rarely out of work for an entire month or any long time. Prior to working for Shing Kee, he had worked for other employers for almost a month at Po Lam Chuen, Tseung Kwan O, and for 12 to 14 days in a site at Pik Uk. Tsang also mentioned, for the first time, that occasionally he had contracted work on his own. But this happened only once or twice a year.

63. Chan of Shing Kee told from his experience that there would be days on which the plumbers might have to stop work to accommodate the other work on site. Having said that, he agreed that all being taken into account, 22 to 23 working days would be a reasonable average per month.

64. Chan of Hung Kee gave evidence. He had no personal knowledge about the terms of employment between Shing Kee and Tsang. But it was his firm that filed Form 2. After the form was first filed, the Labour Department apparently requested Hung Kee to provide the missing information about the average number of working days per month of Tsang. Hung Kee indeed did so and reported 22 days in their second form.

65. In court, Chan of Hung Kee accepted that it was his staff who filed the forms. When asked whether he believed that his firm managed to provide such information only after some enquiry made with Shing Kee, he answered in the affirmative. Though Chan of Shing Kee was not really examined on this when he gave evidence, I see no basis for Hung Kee to make up a number on their own in their answer to the specific enquiry by the Department.

66. This was followed by Tsang’s notice of request for work injury compensation in 2008 and 2009. According to Tsang, he filled in the notice on the basis of the information that the Department had received and hence average 22 working days per month and monthly income of HK$15,400.

67. Considering the available evidence and seeing the witnesses testify, I find that the average number of working days per month was 22; and hence the average monthly income was HK$15,400, for the purpose of section 11(2) of the Ordinance in the present case. In his submission, Mr Sham was apparently prepared to accept this as his bottom line.

Section 9 compensation

68. Tsang has never been assessed by the Employees’ Compensation (Ordinary) Assessment Board.

69. Mr Sham submitted that special circumstances exist in the present case that warrants the application of the formula in The Hong Kong Paper Mills formula in assessing the loss of earning capacity. On this basis, he submitted that the loss is almost 60%. In view of the discussion of the loss of earning above, the basis for this proposition necessarily falls away.

70. In his submission, Mr Sham also suggested that the bottom line of the loss of earning capacity in the present case should be 13% to 16%. This is effectively the aggregate of the percentage loss assessed by the various medical experts, namely, 8% by Dr Au; 4-6% by Dr Lai; and 1-2% by Dr Lam and Dr Chiang. Mr Jim also referred to such quantitative assessment and suggested 5%.

71. I remind myself of the need to approach these percentages with caution, even if they are admissible evidence. As discussed above, I do not accept that Tsang suffers any loss of earning capacity as a result of his cosmetic impairment. So goes the percentage assessed by Dr Au in any event. At the end, I think 7% should fairly reflect the loss of earning capacity suffered by Tsang.

72. The section 9 compensation will be: HK$15,400 x 72 x 7% = HK$77,616.

Section 10 compensation

73. Tsang has been given sick leave by Kwong Wah Hospital since the accident in July 2007 up to late June this year, amounting to over 1,000 days. Sick leave given up to 5 September 2008 was given in respect of his neck pain.

74. Since September 2008, Tsang has attended psychiatric consultation at the Castle Peak Hospital. Sick leave for his psychiatric condition was given up to early December 2008. He could not continue his sick leave but had to go to Tuen Mun Hospital, where he was given 1 day of sick leave for his neck pain.

75. A week later, he started to obtain sick leave in respect of his neurological problem until January this year. The rest of the sick leave until late June this year was given in respect of his psychiatric condition.

76. According to Dr Chiang, the sick leave in respect of the orthopaedic aspect of Tsang’s condition up to 5 September 2008 was reasonable. The orthopaedic experts found no neurological deficit in Tsang. Both neurological experts opined that Tsang suffered from no neurological impairment and did not endorse the sick leave given by the neurosurgery department of the hospital. However, the experts suspected that Tsang was affected by his psychiatric symptoms; and the psychiatric expert did opine that sick leave of 6 to 12 months from early September 2008 should be reasonable in Tsang’s case.

77. In the circumstances, the medical evidence suffices to support a period of 24 months of sick leave from the date of the accident, in respect of which compensation is payable pursuant to section 10 of the Ordinance. The question is whether periodical payments should still be payable in respect of the sick leave in excess of the 24-month period. Section 10(5) gives the court the discretion to do so up to a maximum period of another 12 months.

78. Mr Sham referred to Choy Wai Chung v Chun Wo Construction & Engineering Co Ltd [2001] 2 HKLRD 803 and emphasized the presumption under section 10(2). However, the circumstances in Choy Wai Chung (illustrated at 806E; I) are not repeated in the present case. I have no intention of limiting the discretion under section 10(5), which the appellate court in Choy Wai Chung did not approve.

79. I believe the discretion is unfettered, subject perhaps to the consideration of all the circumstances of the case. The presumption under section 10(2) does not change that.

80. In considering the exercise of the discretion, the court has to consider all the circumstances of the case. Tsang’s evidence impresses me that short of being passive about his sick leave, he was conscious about continuing the sick leave. In view of the evidence, including those specifically discussed above, I refuse to exercise the discretion in favour of Tsang.

81. The section 10 compensation should therefore be: HK$15,400 x 4/5 x 24 = HK$295,680.

Section 10A compensation

82. The medical expenses are agreed at the sum of HK$3,500.

Summary

83. In summary, the compensation as assessed is as follows:

	Section 9 compensation	HK$ 77,616
	Section 10 compensation	HK$295,680
	Section 10A compensation	HK$ 3,500
	Total:	HK$376,796

84. Credit has to be given to the amount already received by Tsang from Shing Kee and Hung Kee in the total sum of HK$288,288. The net award would be HK$(376,796 – 288,288) = HK$88,508.

85. The compensation carries interest at half judgment rate from the date of accident until today.

Order

86. Shing Kee and Hung Kee shall pay compensation to Tsang in the sum of HK$88,508 with interest as aforesaid. Interest from today until full payment shall run at the judgment rate. Besides the costs of this Application until judgment on liability, Shing Kee and Hung Kee shall also pay Tsang’s costs of these assessment proceedings. Costs shall be taxed, if not agreed. For clarity, I certify the engagement of counsel. Tsang’s own costs shall be taxed according to legal aid regulations. Parties have 14 days to apply for variation of the costs order; or the same shall become absolute.

	Simon Leung
	District Judge

Mr Walker SHAM instructed by Messrs W K To & Co for the Applicant upon the assignment by the Director of Legal Aid

Mr Jacky JIM instructed by Messrs So, Lung & Associates for the 1^st and the 2^nd Respondents

TSANG CHIU TUNG v. 陳創成經營成記水喉渠務工程 AND ANOTHER

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