LEE TIN YEUNG v. CHIU CHOW ASSOCIATION SECONDARY SCHOOL AND OTHERS

LEE TIN YEUNG v. CHIU CHOW ASSOCIATION SECONDARY SCHOOL AND OTHERS

Damages for loss of earnings must be calculated on after-tax income by conducting two separate tax assessments—one on the hypothetical pre-injury income and one on the actual or notional post-injury income—applying tax allowances separately; the defendant receives credit for tax the plaintiff would have paid on pre-injury income while the plaintiff receives credit for tax applicable to his notional post-injury income.

Citation
LEE TIN YEUNG v. CHIU CHOW ASSOCIATION SECONDARY SCHOOL AND OTHERS
Parties
Plaintiff: LEE TIN YEUNG; 1st Defendant: CHIU CHOW ASSOCIATION SECONDARY SCHOOL; 2nd Defendant: CHIU CHOW ASSOCIATION BUILDING (PROPERTY HOLDING) LIMITED; 3rd Defendant: LAU KI CHIT and CHOI CHEUNG KOK (on behalf of themselves and other members of THE MANAGEMENT COMMITTEE OF CHIU CHOW ASSOCIATION SECONDARY SCHOOL); 4th Defendant: The estate of LIU LIT FOR, deceased (supervisor of CHIU CHOW ASSOCIATION SECONDARY SCHOOL)
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
6 February 2003
Case Number
HCPI201/1999
Procedural Posture
Personal Injuries Action / Ruling on Tax Liability (court of First Instance, Hearing 6 February 2003)
Outcome
Court recalculated after-tax losses and awarded specified pre-trial and future loss amounts.
Legal Topics
Loss of Earnings, Tax Liability in Damages, Notional Earnings, Assessment of Damages, Post Accident Income
Source Language
EN
Tort Personal Injury Taxation Damages Loss of Earnings Tax Liability in Damages Notional Earnings Assessment of Damages +1 more

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Parties

LEE TIN YEUNG

Plaintiff

CHIU CHOW ASSOCIATION SECONDARY SCHOOL

1st Defendant

CHIU CHOW ASSOCIATION BUILDING (PROPERTY HOLDING) LIMITED

2nd Defendant

LAU KI CHIT and CHOI CHEUNG KOK (on behalf of themselves and other members of THE MANAGEMENT COMMITTEE OF CHIU CHOW ASSOCIATION SECONDARY SCHOOL)

3rd Defendant

The estate of LIU LIT FOR, deceased (supervisor of CHIU CHOW ASSOCIATION SECONDARY SCHOOL)

4th Defendant

Procedural Posture

Personal Injuries Action / Ruling on Tax Liability (court of First Instance, Hearing 6 February 2003)

Legal Issues

  1. 1 Whether damages for loss of earnings should be calculated on pre-tax or after-tax income
  2. 2 Whether the defendant should receive credit for tax the plaintiff would have paid on pre-injury income
  3. 3 How to treat tax on notional post-injury income when assessing compensation

Ratio Decidendi

Damages for loss of earnings must be calculated on after-tax income by conducting two separate tax assessments—one on the hypothetical pre-injury income and one on the actual or notional post-injury income—applying tax allowances separately; the defendant receives credit for tax the plaintiff would have paid on pre-injury income while the plaintiff receives credit for tax applicable to his notional post-injury income.

Court Disposition

Court recalculated after-tax losses and awarded specified pre-trial and future loss amounts.

Orders

  • Pre-trial loss of earnings assessed at $1,019,705.44.
  • Future loss of earnings assessed at $394,578.30.