Asia Shahid t/a International Business Point (Hong Kong) v. China Ping an Insurance (Hong Kong) Co Ltd

HCA 373/2022

[2023] HKCFI 1296

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 373 OF 2022

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D E C I S I O N

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Introduction

1.There is before me the hearing of the Plaintiff’s appeal against the order of Master Alexander Tang dated 18 January 2023. As succinctly explained by Mr Justin Ismail who appeared before me on behalf of the Plaintiff and made eloquent and able submissions on its behalf submitted, the action concerns a straightforward insurance claim. The Plaintiff insured her goods against fire under a fire insurance policy taken out with the Defendant, an insurance company. A fire subsequently destroyed the Plaintiff’s goods within the insured period. The Plaintiff lodged a claim with the Defendant, which was considered but rejected. The Plaintiff therefore commenced proceedings on 13 April 2022.

2.After the filing of its defence on 18 October 2022, the Defendant issued a summons to strike out the Plaintiff’s claim on the ground that it was time-barred for reason of limitation period as prescribed under the said policy. The summons went before the Master who gave judgment in favour of the Defendant and struck out the Plaintiff’s claim. By this appeal, the Plaintiff is arguing that the defendant’s limitation defence:

“When considered against the totality of the acts and communication between the parties over the relevant period, is plainly untenable, as a result of which it would neither be just nor appropriate to strike out the plaintiff’s claim.”

3.The following clauses under the policy are of particular relevance:

“Paragraph 8. Forfeiture of benefits. All benefits under this policy shall be forfeited:

(e) in respect of any claim made and rejected if an action or suit be not commenced within 12 months after such rejection;

(g) in respect of any claim after the expiration of 12 months from the happening of the damage, unless such claim is the subject of pending legal action or arbitration.”

4.In the present case, the Plaintiff promptly made claim for property loss arising out of the above fire incident on 19 July 2018. By the letter from the Defendant’s solicitors (C&P) dated 21 February 2020, they were instructed to:

“Give you formal notice which we hereby do that your claim arising out of the fire incident on 19 July 2018 is declined by our client. Our client is not obliged nor under any duty or policy and liability to indemnify your alleged loss.”

5.At the hearing before me, the focus was therefore rightly on clause 8(e) as in the present case, a claim had been made and rejected and therefore, on its face the insured party had 12 months after such rejection to lodge proceedings. But as explained above, the proceedings were not issued before 13 April 2022. And therefore, on its face, the benefits under the policy have been forfeited subject to an argument which I will come to below.

Legal Principles

6.Mr Ismail drew attention to the decision of Deputy High Court Judge Lam, as Lam PJ then was, in Kanson Crane Service Company Ltd v Bank of China Group Insurance Company Limited [2003] 3 HKC 602. In that context, the insurer sought to strike out the Plaintiff’s claim on the basis that the claim was time-barred by reason of the limitation clause. His Lordship held:

“I agree with Mr Bharwaney that in a case where it is clear that a defendant would rely on a limitation defence and it is plain that the plaintiff could not overcome such plea, the court can strike out the claim on the basis that it is frivolous, vexatious and an abuse of the process of the court.”

7.He, of course, cautioned that whilst the power to strike out existed, it was well-established that only in plain and obvious cases should the court exercise its power to do so. The claim must be obviously unsustainable, the pleadings unarguably bad, and it must be impossible, not just improbable, for the claim to succeed before the court would strike it out. There should be no trial on affidavits and disputed facts should be taken in favour of the party sought to be struck out.

8.All in all, so long as the statement of claim disclose some cause of action or raise some question fit to be decided by court, the mere fact that the case was weak and not likely to succeed was no ground for striking-out.

9.He further drew attention to the decision of the Court of Appeal in Sealegend Holdings Ltd v China Taiping Insurance Hong Kong Company Limited and Others (unreported, 18 September 2015).

10.A number of issues had to be determined by the Court of Appeal, including whether or not there had been a common mistake and whether or not there had been an agreement to relinquish, which are not of relevance here but more to the point for present purposes, he relied on the following dicta by Kwan VP at paragraphs 39 to 42, where the Court of Appeal held:

“39. I do not propose to deal with the arguments on waiver and estoppel at length. If the claim should not be struck out as I have reasoned and the action is to proceed to trial, it seems to me that the plaintiff should be allowed to rely on waiver and estoppel as well.

40. The main argument of the defendant is that there was no unequivocal conduct that could be relied on as conveying a promise not to enforce the relinquishment agreement, citing Fortisbank SA v Trenwick Internaitonal Ltd [2005] 1 Lloyd’s Report 464 at paragraph 30(ii). Ms Ho argued forcefully that if the conduct relied on (such as entering into communications with various parties regarding the handling of the claim, instructing PNA to investigate the cause of the damage) was capable of more than one explanation, such conduct would be equivocal. And mere silence and inaction, particularly in the case of the 2^nd and 4^th defendants, are of their nature equivocal.

41. Mr Coleman urged us to look at the totality of the acts and communications over a five-year period, which have been helpfully set out in the plaintiff’s chronology. I also took into account that a true analogy could not be drawn with the cases relied on by Ms Ho, in which the pleas of waiver and estoppel were raised unsuccessfully to counter a limitation defence. The mere fact that a party has continued to negotiate with the other party about the claim after the limitation period had expired, does not necessarily mean that the time bar would not be relied on if the negotiations break down. But what we have here is an agreement to relinquish a claim, and there is no room to revive or reopen the claim once the agreement was struck. It raises the question whether the expensive follow-up inquiries over the five-year period could be regarded as unequivocal representation by the defendants that they could would not rely on the agreement to relinquish.

42. I am not required to come to a definite view on the merits of the plaintiff’s case on waiver and estoppel. Suffice it to say I do not think it is obviously unsustainable. I do recognise the plaintiff may have a weaker case against the 2^nd and 4^th defendants, who had a more passive role throughout. But, as mentioned earlier, if the plaintiff’s claim against the 2^nd and 4^th defendants is not to be struck out on the basis of common mistake, it is not of any moment that part from running a case of waiver and estoppel against the 1^st defendant, the plaintiff should also be permitted to advance a similar case against the 2^nd to 4^th defendants.”

11.I have borne in mind that this is a striking-out application and not a trial. Therefore, one should be circumspect before exercising such power. I have also borne in mind that this is not one of those cases where there is directly contradicting evidence from the deponents. What the deponents have done is in essence exhibit correspondence between themselves or through their agents. And therefore, to some extent the court would be in a better position to assess the same than if there had been affidavit evidence of events contradicting each other as to what has been said orally, for example.

12.A number of authorities were cited by the parties. I hope I shall be forgiven if I do not cite all of them. One of the cited decisions in this context, although it concerned statutory limitation rather than contractual limitation, is the decision of the English Court of Appeal in Ace Insurance SA‑NV v Surendranath Seechurn (unreported, 6 February 2022):

17. It is probably unnecessary for the purposes of this judgment to explore what differences, if any, there may be between estoppel by representation, promisory estoppel, estoppel by convention, waiver or what Chitty on Contract paragraph 3–080 calls "forbearance in equity”. It may still be controversial whether or not "all these can now be seen to merge into one general principle shorn of limitations”, as Lord Denning M.R. suggested in Amalgamated Investments and Property Co. Ltd. v Texas Commerce International Bank [1982] Q.B. 84 , 122 but counsel have not invited us to enter into that debate and I do not propose to do so. Since the essence of the claimant's case is that the course of correspondence contained some assurance by the defendant not to raise a limitation defence, it seems to me that it is most likely to be a case of promisory estoppel for there is no representation of existing fact and no shared assumption supporting an estoppel by representation or by convention respectively. Both counsel agree that the judge was correct to apply, as the locus classicus , the decision in Hughes v Metropolitan Railway Co. (1877) 2 App. Cas. 439 , and it is worth quoting fully from the speech of Lord Cairns at p.488:—

"… it is the first principle upon which all Courts of Equity proceed, that if parties who have entered into definite and distinct terms involving certain legal results — certain penalties or legal forfeiture — afterwards by their own act or with their own consent enter upon a course of negotiation which has the effect of leading one of the parties to suppose that the strict rights arising under the contract will not be enforced, or will be kept in suspense, or held in abeyance, the person who otherwise might have enforced those rights will not be allowed to enforce them where it would be inequitable having regard to the dealings which are thus taking place between the parties.”

18. Subsequent authorities serve to highlight some of the important elements. First, the promise (or representation) must be clear and unequivocal. In Woodhouse Ltd. v Nigerian Produce Ltd. [1972] A.C. 741 , 755, Lord Hailsham of St. Marylebone L.C. said:—

"But, on the assumption that there was [an ambiguity in the crucial exchange of letters] I agree with the Court of Appeal that such cases as Low v Bouverie [1891] 3 Ch. 82 and Canadian & Dominion Sugar Co. Ltd. v Canadian National (West Indies) Steamships Ltd. [1947] A.C. 46 are authority for the proposition that, to give rise to an estoppel, representation should be clear and unequivocal, and that, if a representation is not made in such a form as to comply with this requirement, it normally matters not that the representee should have misconstrued it and relied upon it.”

In Low v Bouverie [1891] 3 Ch. 82 , 106, Bowen L.J. had said that:—

"… an estoppel, that is to say, the language upon which the estoppel is founded, must be precise and unambiguous. That does not necessarily mean that the language must be such that it cannot possibly be open to different interpretations, but it must be such that it will be reasonably understood in a particular sense by the person to whom it is addressed.”

Addressing that passage, Lord Hailsham said in Woodhouse Ltd. v Nigerian Produce Ltd. at p.770:—

"I am satisfied that, in the second sentence of the above quotation, the meaning is to exclude far-fetched or strained, but still possible, interpretations, whilst still insisting on a sufficient precision and freedom from ambiguity to ensure that the representation will (not may) be reasonably understood in the particular sense required.”

Later at p.757 he said:—

"Counsel for the appellants was asked whether he knew of any case in which an ambiguous statement had ever formed the basis of a purely promisory estoppel, as contended for here, as distinct from estoppel of a more familiar type based on factual representation. He candidly replied that he did not. I do not find this surprisingly, since it would really be an astonishing thing if, in the case of a genuine misunderstanding as to the meaning of an offer, the offeree could obtain by means of the doctrine of promisory estoppel something that he must fail to obtain under the conventional law of contract.”

19. The speech of Lord Cross of Chelsea is interesting for the contrast he drew between estoppel by representation and a promisory estoppel. He said at p. 767:—

"Even if one assumes that a man who makes a representation of fact which he reasonably interprets in one way but which the representee reasonably interprets in another may in some circumstances be bound by the interpretation placed on it by the representee, it surely cannot be that a man who in response to a request for an indulgence which he reasonably interprets in one way makes an unenforceable promise as to his future conduct which the other party reasonably interprets in a sense different from that intended can be in a worse position than if the request for an indulgence had been an offer to contract and the granting of the indulgence an acceptance of the offer.”

20. The promise may be made by conduct or may be implied, but mere inactivity is not normally sufficient. In Allied Marine Transport Ltd. v Vale Do Rio Doce Navegacao S.A. [1985] 1 W.L.R. 925 , 937 and 941 Robert Goff L.J. said:—

"It is well settled that that principle [of equitable estoppel] requires that one person should have made an unequivocal representation that he does not intend to enforce his strict legal rights against the other; yet it is difficult to imagine how silence and inaction can be anything but equivocal.

…

But silence and inaction are of their nature equivocal, for the simple reason that there can be more than one reason why the person concerned has been silent or inactive.”

21. It is, in my judgment, important to emphasise that the unequivocal unambiguous promise or representation has to be that the party did not intend to enforce his strict legal rights. That point is demonstrated by Republic of India v India Steamship Co. (No. 2) [1998] A.C. 878 . There the question was whether there was a waiver or estoppel which would defeat the defendant's contention that the proceedings in the English Court should be struck out pursuant to section 34 of the Civil Jurisdiction and Judgments Act 1982 by reason of the plaintiff's already having obtained judgment in an overseas court, Cochin. Dealing with the defence of estoppel by convention, Lord Steyn said at p. 914:—

"But in order to establish an estoppel by convention the plaintiffs had to prove that the defendants evinced by their conduct that they were content that the taking of a judgment in Cochin would not prejudice the resolution of other proceedings on their merits, that is, that in future proceedings no plea or defence on the basis of a judgment in Cochin would be raised whatever the outcome of the proceedings in Cochin.”

Dealing with the plea of estoppel by acquiescence, Lord Steyn said at p. 915:—

"It is overwhelmingly probable, as both sides accepted, that until after the judgment in Cochin was handed down neither side gave any thought to the implications of that judgment on any further proceedings. Both sides were in ignorance of the potential consequences of a judgment in Cochin. There were no special circumstances which could even arguably have required the defendants to put the plaintiff on their guard as to the risk flowing from the taking of a judgment in Cochin. The defendants also did nothing by conduct or silence which could have led the plaintiffs to think that the plaintiffs could safely take a judgment in Cochin without any risk of a plea or defence in any further proceeding.”

The same principle will apply here.

22. The point arose directly in Hillingdon Borough Council v A.R.C. Ltd. (No. 2) [2000] 3 E.G.L.R. 97 , a case drawn to our attention by Mr Stuart-Smith but to which unfortunately the judge was not referred. In that case, like this, the parties continued to negotiate the settlement of the claimant's right to compensation before and after the claim became statute barred. Dealing with the plea of estoppel by convention, Arden J., giving the judgment of the Court of Appeal, said:—

"A shared assumption is not, on the authorities, sufficient to establish an estoppel unless it is communicated. It follows that if, in this case, there was no shared assumption to the effect that A.R.C. had a valid claim that was not time-barred, there could be no communication by H.L.B. that they were making any such assumption. It also follows from what we have said above that the communication required would, in any event, be not simply that A.R.C. had a valid claim, but also that H.L.B. would not take any defence that might be open to them on the basis of a statutory limitation period.”

23. Dealing with the question of promisory estoppel she said:—

"… A.R.C. would have to satisfy the court that there was some clear and equivocal representation by H.L.B. to A.R.C. that its claim was a valid claim, and, in addition, that H.L.B. would not rely upon any statutory limitation defence.”

24. It is common ground that the promise or representation must be made intending to affect the legal relations between the parties and the promisee or representee must rely upon it and alter his position.

13.At paragraph 26 of Ward LJ’s judgment, after reviewing the law, he concluded that the relevant questions were these:

“(i) Is there a clear, unequivocal, unambiguous and unconditional promise by the insurers that they will not raise the defence that the action is statue barred. The focus has to be on whether or not they were giving up that right.

(ii) The promise must be construed objectively, not subjectively. The question is whether the correspondence can reasonably be understood to contain that particular promise. It does not matter what Mr Seechurn thought it meant, nor does it matter what a layman might have thought, as Mr Shaw contends, unless, of course, that layman is a passenger on the Clapham omnibus.

(iii) The third question is whether Mr Seechurn relying on the promise, altered his position to his detriment or whether it would be inequitable or unconscionable not to hold the insurers to their promise.”

14.These are in essence the matters that I have looked at and Mr Ismail agreed with me that this is the prism through which I have to identify the issues before me. Although he of course reminded me that in this context the representation could be made by conduct or may be implied from even inactivity, although inactivity would not normally be sufficient (see paragraph 20 of Seechurn above).

15.It would appear that although the principles which apply in this area are not of themselves controversial, it is the application of them on particular facts which can sometimes prove to be problematic in identifying whether a particular situation is on one or the other side of the line. And therefore, whilst those authorities are helpful in identifying those principles, limited reliance could be had by simply trying to identify similarity or dissimilarity of factors because this is a multi-factor exercise.

16.Before leaving Seechurn, I should also refer to paragraph 54 of his Lordship’s judgment, where on the facts he concluded:

“I find nothing in the correspondence which justifies finding that there was any promise to that effect or anything at all like that effect. To say that the door was open to further negotiations or even to point out that the proceedings could be stayed pending medical examination, did not in my judgment, carry any implication that a limitation defence would not be taken. As Lord Steyn observed in Republic of India, there was no duty on the defendant’s solicitor to warn of this impending fall of the guillotine. Further, as the authorities make clear, silence or inaction are by their nature equivocal. Although the test is whether the letters objectively construed contained the necessary promise, expressed or implied...”

17.The approach of Lord Steyn when delivering the advice of the Privy Council in Super Chem Products Limited v American Life and General Insurance Company Limited & Ors. [2004] UKPC 2 is also instructive:

“21. It will be convenient to consider in the first place the issues of waiver and estoppel in the context of the time bar in the stock policy. It is common ground that the insured never asked for an extension of the limitation period and that the insurers never volunteered an extension of time. The insured relied in support of its pleas on conduct. Depending on the nature of the conduct that is, of course, a tenable position. The insured enlisted the doctrines of waiver and estoppel. Somewhat tentatively it was also suggested that the insurers could be debarred by election from raising a time bar. Election is more appropriately applicable where a party has a right to choose between two things. The Board considers that in the present context the insured must establish either a waiver or an estoppel. If the insured fails to do so, election cannot assist. The concepts of waiver and estoppel have often been explained. Generally, waiver is of a unilateral character: it involves giving up something. Estoppel by representation is bilateral in character and it focuses on the impact on the representee. This is, of course, an extremely general statement. But it is sufficient for present purposes since it is common ground that waiver and estoppel can only be established, in the circumstances of the present case, if the insurers made a clear and unequivocal representation to the insured that they would not rely on the time bar. If the insured cannot establish such a clear and unequivocal representation both pleas must fail...

23. Secondly, insurers are entitled to investigate liability and quantum at the same time and to negotiate about both at the same time, and often prudence will require them to do so. Moreover, the mere fact that a party has continued to negotiate with the other party about the claim after the limitation period had expired, without anything being agreed about what happens if the negotiations break down, cannot give rise to a waiver or estoppel (see Hillingdon London Borough Council v ARC Limited (No. 2) [2003](2000?) 3 EGLR 97, at paragraph 104, per Arden LJ). Nothing in the exchanges in the present case is therefore capable of creating a representation that the time bar would not be relied on. Thirdly, there is nothing to show that the insurers knew whether a protective writ had been issued or not. It is therefore impossible to say that their silence signified that they would not be relying on the time bar. It is further clear that in this case the insurers did nothing to raise an expectation in the mind of the insured that the time bar would not be relied on.”

18.In Fortisbank SA v Trenwick International Limited and Others (unreported judgement by Gloster J, as her Ladyship then was, 14 March 2005, at paragraph 30(vi)), her Ladyship held:

“A representee who is unaware that the representor had a particular right is unlikely to understand the relevant representation to mean that the representor will abandon any particular right in the absence of an express representation (see HIH Casualty and General Insurance (supra) per Tuckey LJ).”

19.As I have explained above, whilst the principles are well‑established and set out in the Seechurn decision, the application of it can sometimes give rise to complications. In the context of winding‑up procedure, Harris J in Re Leco Watch Case Manufactory Limited [2015] 2 HKLRD 87 considered what would happen in a case where the limitation defence was not advanced until the liquidator filed evidence in opposition to the application. After citing Seechurn, his Lordship held as follows, at paragraph 17:

“It would be unrealistic to expect a conversation between laymen about repayment of an undocumented loan to involve a discussion about causes of action and limitation periods. It seems to me that the correct approach to the question of whether the necessary promise or representation was made involves assessing whether or not what was said is reasonably understood as a promise that the borrower would pay at a later date and, therefore, by necessary implication the borrower was foregoing any right he otherwise had at the time or in the future to dispute the obligation to pay but for the promise or representation he had made. In my view here, in dealings between laymen, a lender asks for repayment and he is asked to wait for longer, as oppose, for example, to simply being told that the borrower cannot pay at the moment, he is not(?) asking the lender not to claim against him and, as Ma J (as he then was) observes in Eugene Chuang v Kevin Ho [2002] 4 HKC 245, that must reasonably be taken to include the possibility of legal action. That is sufficient to constitute a representation that he will not rely on any limitation defence that might otherwise have been available as a consequence of the passing of time since the date when the loan was made. Time will begin to run from the date of the promise or, if there have been a series of promises, the last of those promises is made. Considered in this way and having regard to the fact what was said arose in the context of conversations between two men, where a long‑term business relationship and who it is reasonable to assume and probably have used polite language, in my opinion, the applicant’s evidence is, although not clear‑cut, sufficient to establish the necessary representation.”

Evidence

20.In the context of the present type of analysis, like in other areas of law, context is important and so is the language used. Before I go to the communications between the parties which are said to give rise to the waiver or estoppel, it is worth setting out how the Defendant replied to the contractual time bar point. At paragraph 5 subparagraph (2) of its Reply, it pleaded that the Defendant:

“Has waived its right to rely and/or is estopped from relying on the alleged clauses 8(e) and 8(g) of the conditions of the policy in light of the conduct on the parts of the defendant and the loss adjuster as its agent.”

21.At paragraph (d), it went on to plead that the Defendant through C&P continued to respond to the Plaintiff’s correspondence and review the Plaintiff’s claim in 2021 and 2022 by which conduct the Defendant represented that it had continued to treat the Plaintiff’s claim as an on-going, live claim. At paragraph 5(3), the Plaintiff pleaded in its Reply that:

“In the premises, China Ping An has represented to the plaintiff by word and of conduct on its own part and/or on the part of its agents and/or solicitors that the plaintiff’s claim continued to be ongoing, live and under review at least until 25 February 2022. In reliance of China Ping An’s representation, the plaintiff would help commencing legal proceedings. China Ping An has therefore waived its right to rely and/or is stopped from relying on the (time limits).”

22.At the hearing before me, the Plaintiff identified two periods where there had been activity in correspondence between the parties. The first period was until 21 February 2021, where on its face the benefit under the policy would have been forfeited and the period thereafter until the writ was issued.

23.Insofar as the first period is concerned, one sees that on 27 April 2020, KCL & Partners on behalf of the Plaintiff expressly referred to the denial of liability by the Defendant and indicated that the Plaintiff “intends to take out an action against your insurer client and the insurer broker for the value of the total loss because of the fire.”

24.A number of documents were then sought on 5 May 2020, where C&P on behalf of the Defendant replied by simply stating that they were taking client’s instructions and would revert when they were in a position to do so. As they do in many other replies on behalf of the Defendant, it was stated that:

“In the meantime, nothing herein shall be construed as admission of liability, waiver, estoppel on our client’s part nor shall prejudice our client’s rights and position in the above matter or in your client’s request.”

25.KCL then followed up on 28 May, on 10 June and 4 August 2020, where they say that it had already been three months and had had nothing, and therefore requested the documents within the next seven days.

26.On 13 August 2020, KCL followed up on their earlier requests and referred to the Personal Data (Privacy) Ordinance and further pointed to the possibility of seeking pre-trial discovery under Order 24, rule 7A of the Rules of the High Court in order to compel the Defendant to disclose relevant documents which had been requested. The first “substantive” reply insofar as this area is concerned to be provided by the Defendant through C&P was on 17 August 2020, where a number of documents under 24 categories had been provided.

27.It is apparent on the face of the letter that more documents would have to be provided in due course since it mentioned it was awaiting the insurer client providing it with further outstanding documents in relation to the policy.

28.On 20 November 2020, 30 November 2020 and 28 December 2020, as well as 6 January 2021, KCL on the Plaintiff’s behalf made further requests and in particular sought an agreement as to whether or not if the matter were to progress further, it should be dealt with by arbitration or by way of court proceedings.

29.This would appear to constitute the totality of the correspondence in the first period, ie up to 21 February 2021, where the contractual time bar prima facie applied. After that date, there is further correspondence emanating from Technic Essential claim adjuster, who was acting on behalf of the insured as the insurance adjuster, and there is some argument about what I will call the substantive rights and wrongs of the parties, but the question of the time bar was not dealt with by anyone.

30.On 22 October 2021, C&P wrote to Technic Essential claim adjuster, referring it to their letter of 31 May 2021, and sought to engage in particular on its arguments about the Buildings Department’s enforcement policy and whether or not the client was a sub‑tenant of the warehouse and therefore have or did not have certain legal duties under the Buildings Ordinance. In other words, it was engaging with the adjuster on the so‑called merits of the Plaintiff’s claim but not a word was uttered about the contractual time bar.

31.As it had done before, the last two paragraphs of their letter reserved certain rights and in particular provided:

“For the avoidance of doubt, nothing herein shall be construed as admission, concession, waiver, or estoppel on the part of my insured client regarding any other issues, if any nor shall prejudice my insurer client’s position under the policy.”

32.On 8 February 2022, C&P wrote to Technic Essential claim adjuster. It referred to the fact that it understood that the Plaintiff obtained legal opinions and insisted that it had a meritorious claim, therefore:

“To facilitate further discussion, we hereby invite you to enlighten us and set out for our consideration that comprehensive legal arguments were the full supporting facts which your client relies upon so that we may in a better position to advise our insurer client and take their instructions on the matter. We hereby cordially propose to hold a without prejudice meeting with your doctor Wilson Cheung and our firm to further discuss and understand the parties’ respective stances on the caption matters including legal arguments which your client relies upon.”

33.On 8 February 2022, Messrs Cocking & Co (the present solicitors of the Plaintiff) had replaced KCL and asked for the Defendant’s confirmation within the next seven days that the Defendant agreed to resolve the dispute between the respective clients by means of court proceedings, failing which, they would commence arbitration proceedings against the Defendant without further notice.

34.On 15 February 2022 and on 18 April 2022, C&P simply wrote back setting out that they were taking instructions and would revert and asked the Plaintiff to withhold commencing legal proceedings pending their reply. In that context, it should be mentioned that it is in reply to the earlier letter of 8 February, where the main issue appears to be whether or not the matter should be litigated or arbitrated. In fact, this is made clear by Messrs Cocking & Co’s letter on 24 February 2022, where it is stated:

“You have not explained why this has taken you more than two weeks to come back to us on two simple matters, namely whether you have instructions to accept service of proceedings, and whether your client agrees to resolve dispute between parties by means of court proceedings.”

35.Finally on 25 February 2022, C&P wrote to Messrs Cocking & Co, in the following terms:

“We refer to your letter dated 8 February 2022. We are instructed that our insurer client is open to resolving the caption matter amicably. However, if your client is minded to commence proceedings, our insurer client takes the view that the caption matter should be dealt with by the courts rather than through arbitration.”

36.I have not set out in their totality all of the relevant matters which the Plaintiff prays in aid for present purposes and which have been conveniently and succinctly set out in paragraph 13 of Mr Ismail’s submissions. I have considered those matters which I have not set out here.

Discussion

37.Having regard to the evidence as explained above the Plaintiff submitted that the Defendant’s action had led the Plaintiff to believe that her claim was valid and subsisting, in the sense of being “live, ongoing under review” even well after the limitation period had expired, in other words, the Defendant elected to reject the claim on grounds other than limitation. Another way of putting the Plaintiff’s case is to say that the Defendant has by that correspondence committed itself to defend the claim other than by relying on limitation.

38.Mr Ismail submitted that it would be a rare case in the insurance context that an insurer would expressly state that it would not rely on a limitation period, making it practically impossible for those with insured loss to overcome it and therefore, the ability to establish such representations would often be implied or by necessary implication based on the action or the conduct of the parties, and that would produce a fairer and more just result.

39.Drawing a parallel with the Sealegend case, the Plaintiff is effectively suggesting that if one looks at the totality of the conduct of the Defendant, that arguably (bearing in mind this is a striking-out rather than a trial) could be regarded as an unequivocal representation that it would not rely on clause 8(e) of the policy.

40.Having regard to the correspondence between the parties, the language used, and the background of the parties, I am unable to see that there is a reasonable argument to the effect that a “clear, unequivocal, unambiguous and unconditional promise” had been made by the Defendant in the present case that it would not raise the contractual time bar defence.

41.I consider like Ward LJ did in the Seechurn case “that this is the most unfortunate for the claimant”. It is not apparent on the evidence before me whether or not the Plaintiff’s earlier solicitors had or had not identified a contractual time bar clause and whether they had or had not put him on guard. This is simply a matter for which there is no evidence before me. But one obviously has a degree of sympathy towards the insured party in a claim such as the present.

42.The authorities are clear that there is no positive duty on a party to identify the clause clearly, but bearing in mind that these are insurance policies and insurers are regulated, it is a matter for the relevant regulator to consider whether or not, when rejecting an insurance claim, it should be put under a positive regulatory duty to identify the date by which legal proceedings (whether arbitration or court) should be commenced, failing which, the benefits under a particular policy would be forfeited. But that is not a matter that I can resolve before me.

43.Therefore, with some regret, I dismiss the Plaintiff’s appeal.

(Submissions re costs)

44.So all in all, I will assess on a gross sum basis the costs of this hearing at HK$80,000.

Mr Justin Ismail, instructed by Cocking & Co LLP, for the plaintiff

Ms Sally S Y Wong, instructed by Chong & Partners LLP, for the defendant