KOWLOON MOTOR BUS CO (1933) LTD v YICK KWOK KEUNG & ANOR
– [1991] 2 HKC 632
DISTRICT COURTDEPUTY DISTRICT JUDGE MOHAN BHARWANEYACTION NO 2846 OF 199117 October 1991
- Tort — Road accident — Contributory negligence — Collision between two vehicles on highway — Duty of driver in front to give warning before stopping — Nature of warning which ought to be given
- Tort — Damages — Repair and loss of use of bus — Method of assessing loss of use — Delay in effecting repairs — Effect of failure to mitigate loss on multiplier — Standing charge cost method of assessment
The plaintiff’s bus driven by its employee was travelling in the slow lane of Tuen Mun highway heading towards Yuen Long slightly after noon on 18 April 1989. Another bus in front of the plaintiff’s bus stopped in response to the direction of a police officer. The plaintiff’s employee stopped accordingly and gradually. A lorry of the second defendant driven by the first defendant, which was following the plaintiff’s bus, failed to stop in time and collided with the rear of the plaintiff’s bus.The defendants alleged contributory negligence as there was no warning given by the plaintiff’s employee. The plaintiff claimed damages for repair and loss of use of the vehicle on the basis of a ‘standing daily cost charge’.
Held, granting the plaintiff’s claim:
- The first defendant had failed to keep a proper lookout and failed to keep a safe distance from the plaintiff’s vehicle in front of him to enable him to stop in time to prevent a collision.
- The plaintiff’s driver was not contributorily negligent. A driver who is decelerating and bringing his vehicle to a gradual stop is under no duty to give any warning over and above that provided by his illuminated brake lights. In any case, on a balance of probabilities, the first defendant would not have seen or reacted in time to any further warning.
- The plaintiff had an obligation to mitigate loss. To allow the damaged bus to be idle for 40 days was too long although the period of 26 days taken for the repair work was not excessive. A total multiplier of only 56 days was allowed.
- The claim for depreciation was based on the average life of an operational bus. The plaintiff permitted 13% of its fleet to be on standby at any one time. The claim must be discounted to reflect the longer life of a standby bus. An adjustment of the claim for depreciation based on a 15-year lifespan would be fair in the circumstances. Once this adjustment was made, the standing charge cost method of assessment provided, on the evidence available, a fairer and reasonably stable measure of calculating damages for loss of use, as compared to the interest on capital and depreciation measure. Birmingham Corp v Sowsbery [1970] RTR 84 ; (1969) 113 SJ 877 applied. Kowloon Motor Bus Co (1933) v A-G default (A791/84, unreported) distinguished.[1991] 2 HKC 632 at 633
Cases referred to
Birmingham Corp v Sowsbery [1970] RTR 84 ; [1969] 113 SJ 877
Kowloon Motor Bus Co (1933) v A-G (A791/84, unreported) default
Kowloon Motor Bus Co (1933) v Ho Kwok Man (VCJ 6219/86, unreported) default
Other legislation referred to
Road Users Code p 41
Action
This was a claim by the plaintiff for damages suffered as a result of a traffic accident. The defendants alleged contributory negligence on the part of the plaintiff. The facts appear sufficiently in the following judgment.DEPUTY DISTRICT JUDGE MOHAN BHARWANEY
The plaintiff brings this action against the defendants to recover damages suffered as a result of a traffic accident, which occurred shortly after noon on 18 April 1989, on the Yuen Long bound carriageway of Tuen Mun Road, near Tsing Lung Tau. There is no dispute that the plaintiff’s omnibus (the bus), registration no DG 316, sustained damage on that occasion when the front of a goods vehicle (the goods vehicle), registration no DU 7492 , owned by the second defendant and driven by his servant or agent, the first defendant, collided with the nearside rear of the bus. The issues on liability are whether the collision was caused or contributed to by the negligence of the first defendant and, if so, whether there was any contributory negligence on the part of the plaintiff’s servant who drove the bus at the material time. I proceed to resolve the question of liability before dealing with quantum.Liability
The scene
The accident occurred on the inside or slow lane of a three lane carriageway. At the material time, the road surface was dry and the weather was fine. Visibility was good. No sketch plan of the locus in quo had been prepared nor were any photographs of the scene produced. The driver of the bus, Shum Cheong Shun, who gave evidence, drew a rough sketch of the scene of the accident, which he produced (P-3). This showed that there was a left hand bend in the carriageway before it straightened out. Mr Shum did not describe this bend as being either gentle or sharp. The sketch depicts the bend as being slightly more marked than a gentle bend. The first defendant, Ying Kwok Keung, who also gave evidence, acknowledged the presence of the left hand bend in the road but did not describe how marked or sharp it was. Mr Shum did say that there were trees to the left of the bend which apparently did not obscure his view of the part of the carriageway after the bend. Having regard to this evidence, I find, in the absence of a proper sketch or photographs, that the curvature of the road was similar to that[1991] 2 HKC 632 at 634depicted in the rough sketch drawn by Mr Shum. I also accept the evidence of Mr Ying and find that the carriageway was level at the bend in the road but started to run slightly downslope thereafter.
The plaintiff’s version
Mr Shum gave evidence that, at the material time, he had been driving his bus on the inside lane following another bus, a Victory model bus also belonging to the plaintiff company (the Victory bus), at a speed of about 55 to 60 km/h. The distance between the two buses was about 40 feet, about the length of a bus. When he was negotiating the bend in question, he noticed a traffic policeman come out from the shoulder of the road on the left hand side of the inside (or slow) lane and signal the Victory bus to stop. The bus in front did so and Mr Shum stopped his bus as well. He did not stop his bus abruptly. He stopped his bus ‘naturally’ and so did the Victory bus in front of him. Eight to ten seconds after he had stopped his bus and engaged his handbrake, he heard a bang from the rear of his bus and felt his bus shake. He looked in his rear view mirror and saw the defendants’ goods vehicle. After ascertaining that no one had been hurt, he alighted from his bus and saw the driver of the goods vehicle clearing away glass fragments of his broken windscreen. He also saw a small white police car in front of the Victory bus and a private car in front of the police car. The police car was flashing a blue light which he had not seen before he had stopped his bus. He did not know why the policeman stopped the Victory model bus nor the reason why the private car was stationary at that part of the road. All the vehicles had come to a stop in the straight section of the road, as depicted on his rough sketch. After ascertaining that nobody in the bus and in the goods vehicle had been injured, the policeman told him and the driver of the goods vehicle that it was dangerous for the vehicles to remain stationary at that location and suggested that they drive the vehicles to another safer place if they wished to further discuss or settle the matter.Under cross-examination, Mr Shum said that he had seen the policeman signal the Victory bus to stop before his own bus, DG 316, had negotiated the left hand bend. He, therefore, prepared to slow down and to stop his bus. He did so by not accelerating when he negotiated the bend and by braking when his bus was at the end of the bend. When his bus had come to a complete stop, it was eight feet behind the stationary Victory bus. He had looked at his three rear view mirrors all along the journey on Tuen Mun highway and did so when he braked to stop his bus but he did not see the defendants’ goods vehicle. He did not see any vehicle before he negotiated the bend and could not see any when he was inside the bend. He did not pay attention to the vehicles in the other two lanes. He agreed with the suggestion that the collision occurred within a few seconds, a very short period of time, after he had completely stopped his bus.[1991] 2 HKC 632 at 635
The defendants’ version
Mr Ying gave evidence that he had been driving the goods vehicle along the middle lane of the Yuen Long bound carriageway of Tuen Mun Road. As he was negotiating a left hand bend, he saw vehicles behind him so he indicated and cut into the slow lane. He drove at a speed of about 55 to 60 km/h in fourth gear. His braking system was normal. Before he cut into the slow lane, he did look but did not see any vehicle in front on the slow lane. However, he saw the plaintiff’s bus in front of his vehicle after he had cut into the slow lane. The distance between them was about 40 feet. Suddenly the bus stopped abruptly. He immediately applied his foot brakes but was unable to avoid a collision. The bus driver did not give any indication before he stopped the bus but he saw that its brake lights were lit. After the collision, he alighted from his vehicle and only saw two vehicles stopped at the scene, his vehicle and the other bus, and he saw one police officer there. He explained that he had changed lanes in order to give way to vehicles behind him and he clarified that his vehicle had completely entered the slow lane before he started to negotiate the left hand bend.Under cross-examination, Mr Ying said that he was sure that he saw a bus in front to his left and passing traffic on his right before he cut into the slow lane. The distance between his vehicle and the bus in front was at least 40 feet or more before he changed lanes. The distance between them was reduced to 35 to 40 feet as he changed lanes, probably because the bus reduced speed in order to negotiate the bend. He reduced the speed of his vehicle as well, in order to negotiate the bend and, then, after he had entered the bend, he accelerated a little and maintained that speed. Before the collision, he did not lose sight of the bus at any time. Their respective speeds were about the same. He disagreed with the suggestion that his vehicle had been too close to the bus in front and pointed to the far end of the court room (some 60 feet away) as representing the distance between them. He could not avoid a collision because the bus stopped abruptly. On seeing its braking lights and seeing that it suddenly reduced speed and the distance between them getting shorter, he applied his footbrakes immediately but could not avoid a collision, in fact it happened so suddenly. He said that it was possible that there were more vehicles stationary at the scene after the collision than he had mentioned during his evidence in chief, indeed, he saw a motorcycle there.
Findings
I was impressed by both witnesses and I found them both to be truthful. In so far as there were differences between their testimony, such as the presence of a motorcycle at the scene, I find the recollection of Mr Shum to be more reliable. In so finding, I do not conclude that Mr Ying deliberately told me lies but that his recollection of the number of stationary vehicles and the presence of the motorcycle was less reliable and probably mistaken.[1991] 2 HKC 632 at 636He was, of course, further back from those stationary vehicles. In addition, Mr Ying’s confirmation regarding the presence of the police officer at the scene supports Mr Shum’s testimony in that regard.I find that Mr Shum drove his bus in the manner and at the speed he described in the witness box and, that he saw a police officer walk out from the shoulder of the road to the inner lane, in the straight section of the carriageway after the left hand bend, and signalled the Victory bus to stop. Mr Shum had noticed the policeman before his bus started to negotiate the left hand bend in the road. The fact that the officer was willing to place himself in a position of some hazard, posed by the oncoming Victory bus, leads me to infer that he was some distance away from the Victory bus. I find that the Victory bus stopped gradually and that Mr Shum’s bus did so as well. Although he stopped some eight feet behind the Victory bus, I find merit in the submissions advanced by Mr Wong on behalf of the plaintiff that Mr Shum could have stopped his bus further back if he had wished to do so. I accept his evidence that he slowed down and stopped, firstly, by not pressing the accelerator when he negotiated the bend and, then, by braking when the bus approached the end of the bend until it came to a halt. Above all, I find that there was no emergency braking on the part of the bus, indeed, there is no suggestion on the evidence, and definitely not on the part of Mr Ying, that he heard the sound of screeching brakes or any other loud sound likely to be emitted by a double decker bus under emergency braking.The collision with the goods vehicle occurred in the straight section of the road after the left hand bend, some seconds after the bus had come to a halt and after Mr Shum had engaged the hand brake. It is clear to me that Mr Shum’s statement and demonstration of the time lapse was at best an approximation, albeit, an honest one and I am unable to be more precise in my finding regarding this time lapse.I also find that Mr Ying drove his goods vehicle in the manner and at the speed he described in his evidence. There is no suggestion of excessive speed in this case nor do I find any excessive speed on the part of either driver. I find that Mr Ying saw the bus in front of him in the slow lane before he changed lanes. His initial position in the middle lane and the presence of the bus in the slow lane in front of him would have obscured and, in my finding, did obscure his view of the police officer in front.I find further that the distance between the bus and goods vehicle closed because the bus decelerated as it negotiated the bend. Mr Shum said he did so and Mr Ying believed that to have been the case. Although the distance between the vehicles closed, I do not find that Mr Ying failed to keep a safe distance from the vehicle in front of him when he first changed lanes to follow the bus.Both witnesses gave similar estimates of the distance between his vehicle and the one in front, namely, about 40 feet. In Mr Ying’s case, this[1991] 2 HKC 632 at 637distance was further reduced by a few feet for the above reason. A review of the table of stopping distances set out on p 41 of the Road Users Code (the Code) suggests, at first blush, that a distance of 35 to 40 feet is unsafe for a speed of 55 to 60 km/h — that table gives a stopping distance of 35 metres (or about 110 feet) for a speed of 60 km/h. However, the table, although providing a useful measure for assessing a vehicle’s ability to stop in time to avoid colliding with a stationary obstruction, does not assist much when one considers what is a safe distance between moving vehicles — the vehicle in front does not stop instantaneously and the time it takes to stop will provide a cushion enabling the following vehicle to stop as well, providing, of course, that the driver of the latter keeps some distance to enable him to react and stop in time. Given present traffic conditions, modern efficient braking systems and the demands for an efficient use of our congested roads, I cannot conclude that a driver is necessarily negligent if he fails to maintain the overall stopping distance set out in the table at p 41 of the Code. The gap should never be less than the thinking distance of the following driver because, then, he would be unable to avoid a collision with the vehicle in front if it stops suddenly. How much longer the gap should be must be relative to the quality of the view ahead and of the lookout kept by the following driver; a driver who is alert and poised to react can get closer to the car in front than one whose attention is diverted, for example, by the majestic scenery or a conversation with his passenger. Even so, a gap of about 40 feet (or 12.5 m) at a speed of 60 km/h is, prima facie, insufficient and, therefore, evidence of negligence as it is less than the thinking distance of 15 metres provided by the table at p 41. There was no suggestion that Mr Ying’s thinking distance was less than this because his reactions were faster than the average driver’s reactions.However, I bear in mind the fact that it is notoriously difficult for witnesses, giving evidence in court many months and even years later, to accurately estimate distances and I find that Mr Ying had initially maintained a safe distance from the bus in front. I am supported in this finding by Mr Ying’s demonstration, in court, of the distance between the two vehicles which suggests a distance of about 60 feet (or about 19 m). Whatever may have been the actual distance, I find that Mr Ying maintained and continued to maintain a safe distance from the bus in front when he changed lanes to follow it, albeit, that the distance between them closed somewhat for the reason that the bus decelerated as it negotiated the bend.Unfortunately, the distance between the vehicles closed even further for the reason that Mr Ying, on his own admission and which I accept, accelerated a little after his vehicle entered the bend. This had the effect of closing the distance even further because there was no corresponding acceleration on the part of the bus.[1991] 2 HKC 632 at 638I find that Mr Shum had then or soon thereafter commenced braking. The unfortunate coincidence of these events and of the matters set out below was the belief, honestly and genuinely held by Mr Ying, that the bus stopped so abruptly that he was unable to avoid a collision despite emergency braking on his part when he first realized what was occurring. I have already found that Mr Shum did not stop his bus abruptly or suddenly. It follows that Mr Ying’s belief was mistaken. That mistaken belief, I find, arose from a failure on his part to appreciate that not only was the bus not accelerating out of the bend but that it had, in fact, commenced braking.That failure, in turn, arose from a failure on his part to keep a proper lookout and resulted in Mr Ying accelerating and further closing the gap between the vehicles to such a distance that he could not react in time to avoid a collision. Even if I were wrong regarding this latter conclusion, namely, that he failed to keep a safe distance from the bus in front, he certainly failed to keep a proper lookout, for the speed at which he was travelling and given the distance that he was in fact maintaining from the bus in front of him, either one failing or the other or a combination of both led to the subsequent failure to avoid a collision. In so driving the goods vehicle, Mr Ying departed from the standard of a reasonably prudent driver. I find that if he had kept a proper lookout initially or if he had increased his alertness when he further closed the distance between him and the bus, he would have been able to avoid the collision. His negligence caused or materially contributed to the collision and I find Mr Ying liable and the second defendant vicariously liable to the plaintiff in damages.
Contributory negligence
Was Mr Shum in any way negligent and, if so, did any negligence on his part cause or materially contribute to the collision? I have already found that he stopped his bus gradually. In those circumstances, was he under a duty to warn vehicles following him of his intention to slow down and stop, over and above the obvious indication from his illuminated brake lights? Mr Shum said that he first saw the goods vehicle after the collision. I accept that evidence. However, I do not accept his further evidence that he looked at his three rear view mirrors when he commenced to brake. He may have looked at his rear view mirrors now and then along the journey on Tuen Mun Road but I find that he did not do so when he commenced braking as otherwise he could not have failed to notice the presence of the goods vehicle behind him. I have already found that Mr Ying was not driving at an excessive speed. It follows that this is not a case of a speeding vehicle suddenly and unexpectedly arriving at the scene. Whether he looked or not is however, not relevant to this issue because even if he did not look, he could not have failed, as a reasonable driver, to anticipate the presence of vehicles behind him on that busy highway. The question, therefore, is whether or not he should have done more than just brake and rely on his brake lights to warn vehicles likely to be following him. It was[1991] 2 HKC 632 at 639suggested that he should have switched on his hazard warning lights or his left indicator light. I reject that suggestion as being unreasonable and as placing an unreasonable burden on the Hong Kong motorist. Even if there was evidence to show that the bus was equipped with hazard warning lights, and there was none, I find that a driver who is decelerating and bringing his vehicle to a gradual stop, even on a busy highway such as Tuen Mun Road, is under no duty to give any warning over and above that provided by his illuminated brake lights.Even if I have erred on this point, I find that a failure on the part of Mr Shum to warn those behind him, by the use of hand signals or by switching on his left indicator light, did not cause or materially contribute to the collision because as I have already found, Mr Ying was not keeping a proper lookout and, on a balance of probabilities, would not have seen or reacted in time to such warning.There may well be a duty on the driver of a leading vehicle on a high speed highway such as Tuen Mun Road to give special warning, by a blast of his horn for example, over and above that provided by his illuminated brake lights if he intended to make a sudden emergency stop. But that was not the case here.A similar duty may also arise on the part of the leading driver, even if he intended to stop gradually, if he looked in his rear mirror when he commenced to brake (as a reasonably prudent driver would do) and saw that the following vehicle was very close behind him. That also was not the case here because if Mr Shum had looked in his rear view mirrors (or some of them) when he commenced braking, he would have seen the goods vehicle some distance behind him and certainly not close enough to his bus as to alert him to the need to give special warning. I find support for this finding in the evidence of Mr Shum, which I accept, that the collision occurred some seconds after he had already brought the bus to a halt and had engaged its handbrake. Even if I were wrong to make such positive findings, the onus of this issue is on the defendants and they have failed to satisfy me, on a balance of probabilities, that he would have been alerted to the need to give special warning had he looked in his rear view mirrors when he commenced braking.In the event, I find that there was no contributory negligence on the part of Mr Shum that caused or materially contributed to the collision.Quantum
The plaintiff claims damages for the cost of repairs to the bus ($29,802.02), a survey fee of $320 paid to Roger Houghton Motor Surveys Ltd and damages for loss of use of the bus ($37,180). The total amount claimed is $67,302. There is no counterclaim in respect of damage to the goods vehicle.[1991] 2 HKC 632 at 640
Cost of repairs and survey fee
I am satisfied on the evidence and in the absence of evidence from the defendants that the sum of $29,802.02 was reasonably incurred in repairing the damage caused by the collision and that it was reasonable to obtain the services of motor surveyor and to pay the fee claimed. I reject the rather astonishing suggestion made by Mr Kong, on behalf of the defendants, that Mr Raymond Lee, of the motor survey company, although qualified to assist me on the reasonableness of the amount of repair costs claimed by the plaintiff, was not an expert on the question of whether such work was reasonably necessary to repair the damage caused by the collision. Mr Lee is a Member of the Institute of Damage Surveyors (MIDS) and an Associate Member of the Institute of Motor Industry (AMIMI). He has 13 years experience in motor survey work. He surveyed the bus in question before confirming the correctness of the plaintiff’s vehicle repair report and adjusting the amount claimed to $29,802.02, which I award to the plaintiff under this head of claim together with $320 in respect of the survey fee.
Damages for loss of use
There is no doubt that a company such as the plaintiff, which offers franchised bus services and maintains a standby facility to ensure that there is no disruption to such services, is just as entitled to claim damages for loss of use as a claimant who hires a replacement vehicle during the period when repair works are carried out to his damaged vehicle and claims the amount of hire charges as damages for loss of use. The controversy in this case centered on, firstly, the multiplier to be used in assessing such a claim and secondly, the multiplicand.
Multiplier
The plaintiff claims damages for loss of use over a period of 65 days. The collision occurred on 18 April 1989. Mr Lee surveyed the bus and sent his report by 26 April 1989, which I find to be a reasonable period of time within which to do so. Mr Tsang, an assessor in the repair department of the plaintiff, received authorization to commence repairs on 27 April 1989. The actual repairs commenced a month later, took 26 days and were completed on 21 June 1989. I am satisfied on the evidence of Mr Lee and Mr Tsang and, indeed, the same was conceded by Mr Kong for the defendants that 26 days was a reasonable period of time within which to complete repairs.There is no doubt that there is, in law, a duty on the plaintiff to mitigate its loss by repairing the damaged bus as soon as reasonably possible. There is a ‘duty’ in the sense that the defendants are not liable for such loss of use which the plaintiff could reasonably have avoided by commencing repairs on the bus in question earlier than it in fact did. The question of fact I have to decide on the[1991] 2 HKC 632 at 641whether the plaintiff acted reasonably in commencing repairs one month after receiving Mr Lee’s report or rather since the onus of the issue is on the defendants, whether the defendants have proved that the plaintiff had acted unreasonably.In seeking to discharge this onus, they rely on the fact that the bus sat idly for a month and on the absence of any cogent evidence or explanation from the plaintiff why this was so. Mr Tsang’s explanation for the delay was that there was a shortage of manpower. I understood his evidence to be that there were sufficient workers to carry out the daily assigned work but not enough to cope with extra work. Why this was so was left unexplained. I was impressed by the submission of Mr Wong, on behalf of the plaintiff, that the plaintiff sought to strike a balance between hiring too many workers and leaving them idle and increasing overheads on the one hand and being understaffed on the other hand. However, no evidence was adduced on this matter and there was no evidence that the plaintiff had sought to strike such a balance.On the evidence, the repair work took 26 days but only commenced on 27 May 1989, some 40 days after the collision. I am satisfied, on the evidence and in the absence of explanation from the plaintiff, that any period in excess of 26 days within which to commence repairs, even taking into account the period of time required to have the bus surveyed, was excessive and that the plaintiff had acted unreasonably when it failed to commence repairs within 26 days from the date of the collision. I, therefore, only allow a multiplier of 52 days for the claim in respect of loss of use. In truth, there is very little evidence available to me to arrive at this conclusion but I think the defendants can justifiably point to the fact that the repairs only took 26 days and assert that it was unreasonable, in the absence of any or any proper explanation, for the plaintiff to wait longer than that to commence repairs on the bus.
Multiplicand
Miss Doris Lau Kwun Kan, the financial planning and costing manageress of the plaintiff, gave evidence and proved to my satisfaction that the daily standing charge cost to the plaintiff of the replacement bus was as follows:
(a) Interest on capital value. This was ascertained by applying the best lending rate prevailing during the replacement period (divided by 365
days) to the capital value, which was the written down value after depreciation, of the replacement bus. This exercise produced a daily interest charge of $152.
(b) Depreciation. This was calculated on a daily basis by taking the original purchase price of the replacement bus and depreciating the same on a straight line basis over ten years. This exercise (cost divided by ten years divided by 365 days) produced a daily figure of $189.
(c) Licence fee. The daily cost of the annual licence fee of the replacement[1991] 2 HKC 632 at 642
bus was obtained by dividing the annual licence fee by 365 days to produce $13.
(d) Insurance.A similar exercise on the annual cost of fire and third party insurance on the replacement bus produced a daily cost of $59.
(e) Overhaul. Instead of claiming the average cost of maintaining the fleet which would have included maintenance costs for ordinary wear and tear, a running expense and not a standing charge cost, the plaintiff restricted its claim to the average cost of the annual overhaul of the whole fleet made compulsory by the relevant regulations. An annual overhaul is required for each vehicle before it can obtain a certificate of roadworthiness. In addition, a major overhaul is required every four to five years in order to obtain a certificate of fitness for buses of a certain age. About one-fifth of the fleet undergoes this major overhaul every year. About 87% of the whole fleet was on the road on average, 13% being either on standby or undergoing maintenance. The daily cost was calculated by taking the actual expenditure of the compulsory overhaul of the whole fleet incurred in the year of the collision (omitting therefrom any element of daily maintenance) and dividing that amount by the total number of licensed buses and by 365 days to produce a daily cost of $311.
The total daily cost of the standby facility amounted to $724.The plaintiff only claims a daily cost of $572, omitting from its claim the sum of $152 being the daily interest on the depreciated capital value of the replacement bus, although Lane J, as he then was, had allowed damages for loss of use of a bus in Birmingham Corp v Sowsbery [1970] RTR 84 based on the daily standing cost charge, a figure which included ‘no running charges but does include a sum for expenses on capital’ (at p 85).Nevertheless, the claim of $572 a day, based on the standing daily cost charge, yields a higher award than the more conventional measure for such claims, namely, interest on capital and depreciation. The latter method, taking the above figures, produces a daily multiplicand of $341 and is considerably less than the plaintiff’s claim. It, therefore, falls to me to consider which measure I should select to assess this head of claim.Lane J in the Sowsbery case preferred the measure based on the standing cost charge since ‘the standing cost basis of calculation does not suffer, as the other method does, from possible fluctuations in capital value and interest rates’ (at p 87). According to Lane J, the latter method did not provide fair compensation at times of low interest rates and was better suited to a long-living chattel like a ship than a bus which depreciated rapidly.Hunter J, as he then was, in Kowloon Motor Bus Co (1933) Ltd v A-G (A791/84, 16 July 1984, unreported), preferred to award damages based on interest on capital and depreciation, as I understand his judgment, largely because there was no clear[1991] 2 HKC 632 at 643cost charges were in that case; the figures proffered for depreciation and maintenance being averages over the whole fleet of which a very small percentage was at any one time off the road on standby (at p 9). Those figures had to be reduced to reflect the lesser need for maintenance and lesser depreciation of a standby facility. In the absence of better evidence, Hunter J thought his proper course was ‘to stick to what I know, stick to an interest and depreciation calculation’. He found justification for doing so from the fact that the rise in interest rates had almost certainly closed the gap which existed between these two methods of computation.The observations of Hunter J do not apply with equal force here. The claim made in the present case in respect of overhaul costs eliminates running maintenance costs and there is no suggestion that the plaintiff was inefficient in permitting 13% of its fleet to be on standby or undergoing maintenance at any one time. However, the claim for depreciation was based, as I understood the evidence, on the average life of an operational bus. This must be discounted to reflect the longer life of a standby bus. An adjustment of the claim for depreciation based on a 15 year lifespan would be fair in the circumstances. Once this adjustment is made, and I am prepared to do so, the standing charge cost method of assessment provides, on the evidence available to me, a fairer and reasonably stable measure of calculating damages for loss of use, and is the one I adopt in the present case.The same measure was adopted by Scriven DJ in Kowloon Motor Bus Co (1933) Ltd v Ho Kwok Man & Anor (VCJ 6219/86, 4 April 1987, unreported). His reason for so doing was that the claim in the case before him related to a damaged bus whereas the claim before Hunter J was a total loss claim. With respect, that distinction, in my view, is not a valid basis for choosing one measure over another. The claim for loss of use was similar in both cases; in one, the standby bus was used until the damage was repaired, in the other, the standby bus was used until a replacement bus became available. In these circumstances, the measure of the cost of the standby facility ought to be the same in both cases.The adjustment to the claim for daily depreciation reduces the multiplicand to$509 (a 15 year lifespan produces a daily depreciation of $126 [$189 x 365 days x 10 years ÷ 15 years ÷ 365 days] which is $63 less than the amount claimed). I award damages for loss of use in the total sum of $26,468 ($509 x 52 days).
Total award
There will be judgment for the plaintiff for the sum of $56,590.02 and interest thereon at the rate of 10% pa from 21 June 1989, the day the bus was repaired to today.
Raymond Leung