Tsui Fok Wong v. London Star Insurance Co Ltd

HCA000684/1979

Judgment against insurer under Section 10(1) of Motor Vehicles Insurance (Third Party Risks) Ordinance, Cap. 272 - Rate of interest.

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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Coram: Rhind, J. in Court

Date of Judgment: 28th April 1980

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JUDGMENT

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1. This present action hinges solely on the narrow factual issue of whether Mr Ho Kam Hung (PW4) was the defendant company's insured under its motor vehicle third party insurance policy No. P/C/10078/76 on 21st January 1977 when Mr Ho Kam Hung's vehicle, Registration Number AP7197, to which that policy related, injured the plaintiff in a road accident. The basis on which the plaintiff claims that Ho Kam Hung was the defendant's insured is that Ho Kam Hung was the transferee of the benefit of the policy at the material time.

2. Provided it can be thus established that Ho Kam Hung was the defendant company's insured, it is common ground that the plaintiff must succeed in the present action which seeks to render the defendant company liable, as an authorised insurer under the Motor Vehicles Insurance (Third Party Risks) Ordinance Cap. 272, to satisfy a judgment which the plaintiff obtained against Ho Kam Hung on 22nd May 1978 in H.C. Action 513/78 for personal injuries arising from the accident. That judgment was for the sum of $130,740 together with interest as therein set out and together with costs.

3. It is common ground that this policy No. P/C/10078/76 relating to the vehicle AP7197 was issued by the defendant company to Mr Chan Chor Kui in August 1976, its expiry date being August 1977. It is common ground, too, that the benefit of this insurance policy was transferred to Szeto Kam On (PW3) on 25th January 1977.

4. According to the plaintiff's case, the transfer of that benefit to Szeto Kam On was via Ho Kam Hung who had himself been the transferee of the policy from Chan Chor Kui on 28th December 1976. Not so, says the defendant company : the transfer of the policy was direct between Chan Chor Kui and Szeto Kam On without any intermediate transfer to Ho Kam Hung.

5. If the plaintiff can prove that intermediate transfer to Ho Kam Hung, it means that Ho Kam Hung would have been the defendant company's insured on 21st January 1977, with the result that plaintiff will succeed in the present action.

6. The evidence called for the plaintiff could be described as falling into two categories. In one category there was the evidence of Ho Kam Hung (PW4) and Szeto Kam On (PW3) who purported to tell from their own personal recollection what happened in relation to the transfer of the insurance policy. The other category comprised officers of the Transport Department who were able to report what the official records showed.

7. Just on the strength of the evidence of PW3 and PW4, I would have been prepared to dispose of the case in plaintiff's favour. Each of that pair impressed me as trying to tell the truth to the best of his ability, and I accepted their evidence as substantially true.

8. It will be recalled that it is common ground that the policy (P/C/10078/76) was transferred to Szeto Kam On (PW3) on 25th January 1977. I accept the truthfulness of all PW3 told me about Ho Kam Hung (PW4) arranging the transfer of the benefit of the insurance on vehicle AP7197 to him on that day i. e. 25th January 1977 which was when PW3 bought AP7197 from PW4. A faint-hearted attempt was made by the defence to suggest that the transfer might have been of a policy other than P/C/10078/76, but, in the circumstances of the present case, such a suggestion is fanciful. If PW3 is telling the truth - as I am sure he is - then the only conceivable policy of which he took a transfer from PW4 was Policy No. P/C/10078/76. PW3 saw PW4's name on the policy, and he also saw the defendant company's name "London Star" on it. That the whole transaction of transferring the policy from PW4 to PW3 was done with the defendant company's full blessing is vouchsafed, according to PW3's evidence, by the fact that in due course he received the transferred policy by post with his own name on it.

9. The mechanics described by PW3 of effecting this transfer of the policy were wholly credible. The building (Woo Sze Sang) to which he and PW4 went to arrange the transfer houses the defendant company's sub-agent, The American United Insurance Company Ltd.

10. What possible motive PW3 might have for lying on any of his evidence completely eluded me.

11. PW3 and PW4 afforded each other mutual corroboration.

12. PW4's evidence completed the chain of transfers of the policy so as to show that he became the transferee of the policy from Chan Chor Kui on the 28th December 1976 which was also the date he became registered owner of AP7197.

13. PW4 furnished a certain amount of fodder for the defence when it emerged that he had made some errors on dates and times. For example, he claimed to have attended at the Transport Office to change the ownership of the car on the afternoon of 28th December when the official records show clearly it was the morning, and he said he renewed the vehicle licence two days later, whereas the records clearly show it was the same day.

14. Those errors on time and dates did not cause me to doubt PW4's honesty, only his accuracy. Getting a car registered and licensed is not a particularly big event in a man's life, and I saw no significance in discrepancies on these matters when testifying three years later.

15. As one would expect with witnesses like PW1 and PW2 from the Transport Department, they told the truth according to the best of their ability in a disinterested fashion. Their evidence established that on the 28th December 1976 Ho Kam Hung registered with the Transport Department as the new owner of vehicle AP7197, and that on the same day he re-newed the vehicle licence for AP7197. The documentary evidence (P2, P3 and P4) they produced supported them in this conclusion.

16. Unfortunately, the application form which Ho Kam Hung would have used to re-new the vehicle licence had been routinely destroyed by the Transport Department at the end of three years, but PW2's evidence made it sound fairly likely that PW2 would have seen that form before it was destroyed and from it he had gleaned that Ho Kam Hung was insured by the defendant company.

17. PW2 also explained how as a matter of inference one could tell that Ho Kam Hung must have had third party insurance at the time he re-newed the vehicle's licence. The renewal of the licence was in Ho Kam Hung's name and the Department would not have effected a re-newal unless there was third party insurance in the same name.

18. At this point it might be as well to say that if Ho Kam Hung must have produced evidence of third party insurance to the Department for the purpose of re-licensing, it is fanciful to suppose that third party insurance was other than the defendant company's policy P/C/10078/76. Ho Kam Hung had just bought the vehicle from Chan Chor Kui so that nothing could be more natural than to take over his third party insurance, and if Ho Kam Hung was covered by third party insurance from a company other than the defendant company, there seems no reason why Ho Kam Hung should not admit that.

19. It was contended for the defence that PW2 was not entitled to give evidence about his Department's practice as at 28th December 1976 because he did not join the Department till March 1977. Perhaps that would affect the weight of what he said, but there was nothing to suggest that the Department's practice might have changed during the three months or so before his arrival. In any event, the plaintiff was not forced to fall back on evidence of general practice in the present case because there was the specific evidence of Ho Kam Hung himself on how he had had to produce his third party insurance documents to the Department for the renewal of the vehicle licence. Earlier I have indicated I am satisfied that the benefit of defendant company's policy P/C/10078/76 was transferred to Ho Kam Hung. I am sure that the documents Ho Kam Hung presented to the Department related to that policy P/C/10078/76 of which he was transferee.

20. The sole evidence relied on by the defendant company was the oral testimony of its manager, Mr Anthony Chan, DW1.

21. According to DW1, the defendant company's records had shown that the policy was transferred directly from Chan Chor Kui to Szeto Kam On but those records had been lost so that they were unavailable to show to the court.

22. Even if DW1 was telling the truth, the conclusion I would have reached in the light of all the evidence in the case would still have been the same, namely that Ho Kam Hung was the transferee of the policy from 28th December 1976 to 25th January 1977. The only reasonable way to reconcile such evidence for the defendant company with the other evidence in the case was on the basis that there had been an administrative error on the part of the defendant company whereby the transfer of the policy to Ho Kam Hung had been omitted from its records. Any entry in its records showing the transfer to have been direct from Chan Chor Kui to Szeto Kam On could only have been a mistake.

23. That the defendant company could be less than infallible on the administrative side could be discerned from DW1's claim that it could even lose its records on one of its policies giving rise to litigation - in the very case before me it had lost its records on Policy No. P/C/10078/76.

24. The plaintiff having satisfied me that Ho Kam Hung was the transferee of the policy at the material time, it follows that the plaintiff is entitled to judgment against the defendant company for the sum of $130,740 awarded in H.C. Action 513/78 together with interest as set out in the judgment and together with the costs of that action. The plaintiff is also awarded costs in the present action.

25. The judgment in H.C. Action 513/78 was given on 22nd May 1978 and makes explicit provision for the payment of interest up to that date. My order so far requires the defendant company to pay the interest arising under those explicit provisions.

26. The question remains what interest the defendant company should be liable to pay for the period subsequent to 22nd May 1978.

27. There can be no doubt that the defendant company has to pay plaintiff interest at the rate of at least 8% per annum with effect from the 22nd May 1978 to the date of payment on the sum of $130,740 for which judgment was given in H.C. Action 513/78. That results from the combined effect of S.10(1) of Cap. 272 which provides that the "insurer shall..... pay to the persons entitled to the benefit of the judgment any sum payable thereunder in respect of the liability, including any amount payable in respect of costs and any sum payable in respect of interest on that sum by virtue of any law relating to judgments" and S.49 of the Supreme Court Ordinance, Cap. 4 which results in what is known as the "statutory rate" on judgment debts for the period under consideration.

28. Interest at a higher rate than 8% can presumably only be awarded if the plaintiff can take advantage of the provisions of S.48(1) and (2) of the Supreme Court Ordinance which are as follows:

29. As the plaintiff's claim is for a judgment debt on which interest is payable as of right at the statutory rate of 8% by virtue of the provisions of S.49 of The Supreme Court Ordinance, he is not entitled to seek interest at any higher rate as he falls within the exclusionary provision of S.48(2)(b) of The Supreme Court Ordinance.

30. Limiting the plaintiff to interest at the rate of 8% per annum is a conclusion I reach reluctantly because he has wrongfully been kept out of his money by the defendant company and 8% per annum is less than a realistic rate of interest for the period since 22nd May 1978.

31. Insofar as interest on the sum of $130,740 since the 22nd May 1978 is concerned, the defendant company is ordered to pay that at the rate of 8% per annum and the defendant company is also ordered to pay interest at the same rate on the taxed costs in H.C. Action 513/78, computed from the date of the Taxation Certificate.

Representation:

Mr F. Eddis (Peter C. Wong & Co.) assigned for plaintiff

Mr P. Chan (John Ip & Co.) for defendant