Lam Charn Yung v. Axa China Region Insurance Co (Bermuda) Ltd
Read the full judgment text of DCCJ 1522/2004 on BabelCite. This District Court judgment was delivered on 3 April 1998.
1. In 1998, the Plaintiff discovered she had breast cancer and underwent mastectomy with chemotherapy/radiotherapy. Her unfortunate situation draws sympathy, but on careful consideration her claim against the Defendant must fail.
Cited by 1 case · Cites 1 case
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DCCJ1522/2004 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CIVIL ACTION NO. 1522 OF 2004 ------------------------ BETWEEN
------------------------ Coram: H H Judge Marlene Ng in Court Date s of Hearing: 8th, 9th and 10th January, 2007 Date of Handing Down Judgment: 1st March, 2007 ------------------------ JUDGMENT ------------------------ I. Introduction 1.In 1998, the Plaintiff discovered she had breast cancer and underwent mastectomy with chemotherapy/radiotherapy. Her unfortunate situation draws sympathy, but on careful consideration her claim against the Defendant must fail. II. Background 2.Since 1991 the Plaintiff worked as an employed estate agent and 2 years later started her own estate agency. She could read/write Chinese, but was illiterate in the English language. In the course of running her agency, the Plaintiff handled a lot of Chinese documents in relation to the sale and purchase of properties, and knew the importance of disclosure of information and of the need to ascertain the contents of legal documents (eg contracts) before signing. She would only sign English documents offered to her by persons she trusted. 3.Madam Ng Yin Ping (“Madam Ng”) was an insurance agent of National Mutual Insurance Company (Bermuda) Limited (“National Mutual”) since 1st November 1989 and her present position with the Defendant (formerly known as National Mutual) is “高級理財顧問”. In December 1994, the Plaintiff through Madam Ng purchased “價值二百萬元之定期人壽保險” (“1st Policy”). 4.The 1st Policy did not have an investment or savings element, so in/about January 1996 the Plaintiff through Madam Ng converted it to a life policy in the basic sum of US$20,000.00 (or HK$156,000.00) with guaranteed dividends (“2nd Policy”). 5.By 1997 the Plaintiff was separated from her husband and they divorced in 1999. She obtained custody of her 2 teenage sons. 6.As regards the Plaintiff’s health/medical condition, she recovered from umbilical hernia in 1990 after treatment/operation by Dr Lam Kin Fai (“Dr Lam”). She also regularly attended the Family Planning Association of Hong Kong (“FPA”) for gynaecological checkups. 7.Prior to the Plaintiff’s visit to the FPA on 24th September 1996 (“24/9/96 FPA Visit”) to check her intrauterine contraceptive device (“IUCD”), there was more than 1 occasion when she felt breast “脹痛” or “谷住”, but such discomfort would pass after a while. At the 24/9/96 FPA Visit, the Plaintiff told the doctor at the FPA she had occasional right breast “脹痛” and “谷住咁”. The doctor physically examined her breast as well as inter alia her abdomen, thyroid, heart and nipple. The FPA’s record of the 24/9/96 FPA Visit noted that the Plaintiff’s abdomen, thyroid and heart were “NAD” (ie no abnormality detected) and her nipple was “normal”, but left the items “breast” and “chest” blank with the following specific remarks :
By a letter dated 31st December 1998 to the Plaintiff’s former solicitors, the FPA explained the 24/9/96 FPA Remarks as follows :
By a further letter dated 9th January 1999, the FPA explained that the 24/9/96 FPA Remarks “indicate that the client complained of breast pain. Physical examination by the clinical staff detected mild tenderness, but the presence or absence of right breast lump was uncertain”. The FPA’s record of the 24/9/96 FPA Visit showed that the next appointment date was 20th November 1996. 8.On 3rd January 1997, the Plaintiff revisited the FPA (“3/1/97 FPA Visit”). The FPA’s record of the 3/1/97 FPA Visit contained the following remarks :
9.On 17th February 1997, the Plaintiff revisited the FPA in relation to contraceptive matters. There was no record to show that she turned up for the next appointment on 27th March 1997. The Plaintiff did not visit the FPA to recheck her breast prior to her Application (see below). 10.In the meantime, the Plaintiff was concerned over the situation of her young sons should they lose their single mother. On 8th March 1997 the Plaintiff through Madam Ng signed and submitted an application (in English and in Chinese) to National Mutual to insure her life for the basic sum of US$100,000.00 with supplementary benefits (“Application”). 11.Madam Ng helped the Plaintiff fill out Part I (but not Part II) of the Application. Part II was for applicants who did not have to undergo medical examination. Here, the proposed insured amount exceeded National Mutual’s specified upper limit of US$90,000.00, so National Mutual required the Plaintiff to undergo medical examination by its appointed doctor. In the circumstances, Madam Ng did not have to (and did not) ask about the Plaintiff’s health/medical condition. The Plaintiff confirmed under cross-examination that the contents of the Application were correct. 12.On 8th March 1997, the Plaintiff attended a medical examination by Dr Chan Cho Yin (“Dr Chan”), a doctor appointed by (and hence an agent of) National Mutual to medically examine insurance applicants. According to the Plaintiff, the examination took 10 odd or 15 minutes (“Dr Chan’s Examination”). Dr Chan could not remember how long it took. 13.During Dr Chan’s Examination, the Plaintiff inter alia answered questions from Dr Chan who filled out National Mutual’s Medical Part II Application Form (“Medical Form”). The Medical Form was signed by the Plaintiff and Dr Chan. The relevant questions and answers of the Medical Form were extracted as follows :
There was no record of the 24/9/96 and 3/1/97 FPA Visits, the Plaintiff’s complaint of breast pain or the advice from the doctors of the FPA in the Medical Form. 14.Dr Chan also carried out physical examination of the Plaintiff and completed a Medical Examiner’s Report (“ME Report”) on the reverse of the Medical Form in which he recommended the Plaintiff for insurance. Dr Chan and his nurse did not physically examine the Plaintiff’s breast. 15.The Application contained on its first page the following “IMPORTANT NOTE” in English and in Chinese (“Important Note”) :
16.Both the Application and the Medical Form contained a declaration inter alia as follows (“Declaration”) :
17.Upon acceptance of the Application, National Mutual issued a life policy dated 19th March 1997 with inter alia a supplement entitled “Living Insurance Plus Supplement (LI Plus) Form No.S-12” (“Supplement”) attached (collectively, “Policy”). In consideration of the premiums paid and to be paid by the Plaintiff (ie yearly premium of US$2,060.00), National Mutual agreed to insure her life as aforesaid and to pay her a benefit (“Benefit”) as defined in the Supplement if the Plaintiff was diagnosed as suffering from a major illness as defined in the Supplement. 18.Under the clause entitled “Benefit” in the Supplement, it was provided inter alia that “…… [National Mutual] will pay the [Benefit], subject to the terms below, if the [Plaintiff] has been diagnosed as suffering from a major illness. The benefit is payable to [the Plaintiff] if the policy has not been assigned ……” There is no dispute that the Benefit payable under the Policy was US$100,000.00. 19.In/about October 1997, the Plaintiff applied to Cigna Worldwide Insurance Company (“Cigna”) for an insurance policy. She submitted an application form dated 22nd October 1997, attended medical examination by a doctor appointed by Cigna and signed on the relevant medical questionnaire. During the examination, the nurse of Cigna’s appointed doctor physically examined the Plaintiff’s breast. 20.Cigna issued a “Gold Medal Plan Unit Linked Policy” in favour of the Plaintiff (“Cigna Policy”). By the Cigna Policy, Cigna agreed to insure the Plaintiff’s life for US$200,000.00 and to pay her supplementary benefits including inter alia “Living Care Protector” of US$50,000.00 if the Plaintiff was diagnosed as suffering from a major disease as defined therein. 21.The premium payable for the Cigna Policy was lower than that for the Policy, so the Plaintiff planned to cancel the Policy after the expiry of the period covered by the annual premium she had already paid. 22.On 10th March 1998, the Plaintiff visited the FPA. She informed the doctor at the FPA there was “腫脹” in her right breast. The doctor physically examined her breast and found a lump. The FPA’s record of this visit contained the following remarks : “M375 inserted on 3/1/97.lmp on 24/2.no c/o. pvs done today.pv thread seen. Pe ? mass at Rt breast.adv mammogram”. The doctor at the FPA referred the Plaintiff to “西區化驗所” for investigation. 23.When the Plaintiff returned to the FPA on 2nd April 1998, the doctor told her she was suspected to have breast cancer and referred her to Sai Ying Pun Jockey Club Clinic’s surgical unit. The FPA recorded such visit as follows : “LMP 21/8/98. Mammogram/US showed a 3.5cm mass in R breast upper outer quadrant. FNA suspicious of malignancy. Explained to pt & HB-refer to SYP surgical unit”. 24.The Plaintiff first attended Queen Mary Hospital (“QMH”) on 3rd April 1998. QMH later confirmed she had carcinoma of right breast and recommended surgical intervention with chemotherapy. The Plaintiff was worried over the delay for the suggested surgery, so she consulted Dr Lam who arranged for her to have a mastectomy on 29th April 1998 at St Paul’s Hospital. She was then referred back to QMH for chemotherapy and radiotherapy. 25.It was common ground that the Plaintiff’s carcinoma of right breast fell within the definition of “major illness” in the Supplement. After the mastectomy, the Plaintiff notified National Mutual of her condition. On/about 12th May 1998, the Plaintiff signed and submitted a claim form (in English and in Chinese) for the Benefit which was filled out by Madam Ng on her behalf (“Claim Form”). The Claim Form was extracted inter alia as follows :
26.Upon receipt of the Claim Form, National Mutual made enquiries. QMH’s reply to National Mutual’s questionnaire on the Plaintiff’s medical condition dated 8th July 1998 (“QMH Questionnaire”) was extracted as follows :
27.By a memorandum dated 14th May 2005 (“QMH Memorandum”), QMH confirmed that “[the] presence of right breast mass for one year was the history given by the patient herself and there was no exact date given of her discovery of the mass. ……” 28.Further enquiry led to the following extracted answers by the FPA in National Mutual’s questionnaire (“FPA Questionnaire”) :
29.On 10th September 1998, the Plaintiff visited the FPA (“10/9/98 FPA Visit”). The FPA’s record of this visit contained the following remarks :
30.On the following day (ie 11th September 1998), the Plaintiff returned to the FPA (“11/9/98 FPA Visit”). The FPA’s record of this visit contained the following remarks :
31.On 25th September 1998, National Mutual rejected the Plaintiff’s claim and rescinded the Policy on the ground of material non-disclosure, and sent a cheque to refund the premiums to the Plaintiff. 32.The Plaintiff lodged a claim with Cigna for the supplementary benefit under the Cigna Policy. In October 1998, Cigna paid such benefit being the equivalent of US$50,000.00 to the Plaintiff. 33.On 19th January 1999, the Plaintiff’s former solicitors wrote to National Mutual denying that the Plaintiff’s right breast lump was detected on 24th September 1996. “As the right breast lump did not come to the knowledge of [the Plaintiff], it is not [her] intention not to disclose such information to [National Mutual]”. The Plaintiff’s former solicitors took the view that the Policy was still valid and refused the refund of premium. 34.On 29th January 1999, National Mutual wrote to the Plaintiff’s former solicitors to reiterate that the FPA confirmed the Plaintiff “had a history of right breast tenderness and she had been advised to have follow-up recheck and further diagnostic test taken. These facts, however, had not ever been disclosed by [the Plaintiff] to [National Mutual] when the [Policy] was first underwritten. If such consultation history, as well as advice for re-check of the breast and taking of mammogram, were disclosed by [the Plaintiff] whilst applying for the [Policy], the policy would not have been issued as applied for.” National Mutual maintained its decision to reject the Plaintiff’s claim and offered to refund the premiums paid under the Policy. 35.On 3rd October 2002, the Plaintiff’s friend Madam Chu helped her draft a letter to the Defendant to urge the Defendant to re-consider her claim (“2002 Letter”). The 2002 Letter was extracted as follows :
36.After reviewing the claim, the Defendant maintained its decision. III. Plaintiff’s claim 37.The Plaintiff claimed that wrongfully and in breach of the Policy the Defendant failed/refused to pay her the Benefit. She claimed for the sum of US$100,000.00 and interest thereon. IV. Defendant’s defence 38.The Defendant claimed that :
V. The law 39.A contract of insurance is based on the principle of utmost good faith (ie uberrimae fidei), which means that the insured has a duty to disclose all facts known to him but not to the insurer which are material to the insurer’s appraisal of the risk (MacGillivray on Insurance Law 10th ed, paras.17-1 – 17-8 and Lai Chui Kar Poa Helen v American International Assurance Co (Bermuda) Ltd [1985] 2 HKC 689, 692G). 40.It is unnecessary for the insurer to show that (a) any non-disclosure or misrepresentation by the insured was fraudulent or negligent or (b) the insured knew the information in question was material. An innocent non-disclosure or misrepresentation is sufficient to vitiate the policy (Lai Chui Kar Pao Helen’s case (supra at p.694C)). The insured’s opinion as to materiality is irrelevant so that if he fails to disclose a material fact because he does not think it is material, there is still material non-disclosure (MacGillivray (supra) at paras.17-37 – 17-38). VI. The issues 41.Mr Wong, counsel for the Plaintiff, and Mr Lam, counsel for the Defendant, both agreed the principal issues were as follows :
42.Mr Wong confirmed the Plaintiff would not rely on the alternative defence that the Defendant and/or its agent had waived the Plaintiff’s breach of her duty to disclose and her misrepresentations to the Defendant or on the argument of non est factum. VII. Witnesses (a) Plaintiff’s witnesses 43.The Plaintiff gave evidence. Mr Wong decided not to call the Plaintiff’s medical expert Dr Louis Chow. (b) Defendant’s witnesses 44.The Defendant called 4 witnesses :
(c) Credibility of witnesses 45.In assessing witnesses’ credibility, the court should consider the totality of the witnesses’ evidence against the documentary evidence, inferences based on inherent improbabilities and/or undisputed facts (see the principles set out by Chung J at paragraph 12 of Star Glory Investment Ltd v Kai Tua (H.K.) Technology Ltd & ors HCA3523/2002 (unreported, 13th August 2005)). 46.I am unimpressed by the Plaintiff’s evidence. There were inherent inconsistencies in her 3 witness statements, the 2002 Letter and her viva voce evidence (see below). When confronted with such inconsistencies and with discrepancies between her case and the contemporaneous documents, the Plaintiff tried ineffectually to brush aside the “errors” either by saying she was mistaken (“攪錯”) or by blaming others. I find the Plaintiff’s evidence evasive, self-serving and unreliable. 47.Indeed, the purport of the Plaintiff’s evidence suggested that (a) the doctors of the FPA and QMH made up some of the remarks in the medical records for the 24/9/96 and 3/1/97 FPA Visits and in the answers to the QMH Questionnaire and (b) Dr Chan made up answers to the questions in the Medical Form without asking the specific questions stated therein. I find such suggestion improbable and unlikely, particularly as the FPA, Dr Chan and QMH had no plausible reason or incentive to do so. 48.On the other hand, Madam Ng gave evidence in a clear and straightforward manner that was consistent with the contemporaneous documents. I find her honest and reliable. There is also no plausible reason to doubt Dr Chan’s evidence as supported by the contemporaneous Medical Form which he and the Plaintiff signed. 49.Although Mr Shek did not personally underwrite or supervise the underwriting of the Policy, his own underwriting practice coincides with the opinion evidence of Mr Chan who was an expert on insurance and underwriting practice. Mr Chan had a wealth of experience and gave evidence in an impartial and measured way that lent weight to his opinions. I am satisfied his views represented those of a prudent insurer. (d) Mr Chan’s expert status 50.Mr Wong sought to challenge Mr Chan’s expert status, but I upheld his expert status at the trial. I now set out my reserved reasons. 51.Mr Chan has worked in the insurance field since 1976. He started as an executive trainee for Sun Hung Kai Insurance Co, Ltd and became a supervisor of Taikoo Royal Insurance Co Ltd, marketing and technical manager of Marsh and McLennen Inc, manager and chief executive of Hang Lung Bank/Loyalty Insurance Co Ltd, assistant general manager of Summit Insurance (Asia) Ltd, chief executive and managing director of Min Xin Insurance Co Ltd, deputy managing director of HIH Insurance (Asia) Ltd, vice president of American International Underwriters Ltd, and the chief executive and managing director of Union Faith Insurance Services Ltd in a career that spanned 30 years. 52.Mr Chan explained it was not professionally required for underwriters to read courses on underwriting, but there were courses in the market for further education purpose. Work experience was what counted, but Mr Chan had read most insurance-related courses. Indeed, he sat for and passed examinations for 9 papers (including those on life/accident insurance, underwriting, risk management/assessment and claims) within 6 years to gain his chartered insurance qualification. Mr Chan has been an associate of the Chartered Insurance Institute UK since October 1982. Although there were other diploma examinations on underwriting, they were again not professional requirements. Mr Chan’s evidence is supported by Mr Shek’s evidence that examinations were not a must and insurance companies did provide on the job training for underwriters. 53.Mr Chan explained he had experience (particularly from 1984 to 2001) in underwriting critical illness insurance, including underwriting decision-making, risk appraisal, acceptance of risk and the terms/rates on such risk, reinsurance decision-making and claims/settlement. Although Mr Chan worked at management level, he was required to make underwriting decisions when the proposed insured amount exceeded a certain limit. But he would not be involved in downline underwriting procedure, eg checking documentation on issuance of insurance policies. From 2001 to 2005, he was in charge of the claims department of American International Underwriters Ltd. 54.Mr Chan also explained that underwriters operated on the basis of an underwriting guideline which set out the standard practice for inter alia (a) refusing proposals for particular types of insurance, (b) special requirements for accepting certain types of insurance, (c) reinsurance, (d) exclusions from insurance coverage, (e) handling different levels of insured amounts and (f) some management concepts, but there was flexibility for staff to report special or suspicious features to their superiors or even further up the management chain. Between 1984 and 2001 Mr Chan received many such reports and was personally involved in making underwriting decisions. 55.Although Mr Chan said the Supplement (ie accident/health or medical insurance) could be issued by life or non-life/general insurance companies since it did not have any investment feature, the Policy (inclusive of the Supplement) included life insurance and would normally be handled by life insurance companies. Mr Chan agreed Sun Hung Kai Insurance Co, Ltd, Summit Insurance (Asia) Ltd, Min Xin Insurance Co Ltd and HIH Insurance (Asia) Ltd were all non-life/general insurance companies. But he explained (and I on balance accept) there was no substantial difference between the underwriting concept/philosophy for life and non-life insurance. Indeed, he said underwriting policy had not changed from 1997 to the time of trial. 56.In light of Mr Chan’s professional qualifications and work experience described above, I have no hesitation in concluding that he is an expert in insurance and underwriting practice. VIII. Whether the Plaintiff was in possession of relevant information? (a) Plaintiff’s breast pain 57.There is no dispute the Plaintiff had breast pain prior to the 24/9/96 FPA Visit. She admitted there was more than 1 occasion of breast pain, but was unsure exactly when it started. Although she could not remember clearly, the Plaintiff’s impression was between the 24/9/96 and 3/1/97 FPA Visits “無乜點痛”. 58.However, in paragraph 4 of her 2nd witness statement of June 2005 (“Plaintiff’s 2nd Statement”) the Plaintiff recalled “當時[the Plaintiff]回答[the doctor at QMH]右邊乳房在一年多前[ie 1 odd year before she first attended QMH on 3rd April 1998]已覺痛 ……” (see also the Plaintiff’s complaint of breast pain in 1997 at the 3/1/97 FPA Visit (paragraph 71 below) and in relation to the QMH Questionnaire (paragraph 110 below)). So it seemed her breast pain lasted into 1997. Mr Wong’s written closing submissions acknowledged the Plaintiff “felt breast pain from time to time”. I accept on balance the Plaintiff had occasional breast pain in 1996 and 1997 that was significant enough for her to raise it with the doctors at the FPA during the 24/9/96 and 3/1/97 FPA Visits. (b) 24/9/06 FPA Visit 59.There is no dispute the Plaintiff complained of breast pain when she attended the 24/9/96 FPA Visit. I find on balance she knew the physical examination by the doctor at the FPA elicited mild tenderness of her breast and the presence or absence of right breast lump was uncertain. She was advised to recheck breast after her next menstrual period. 60.The Plaintiff claimed that after physically examining her breast, the doctor of the FPA told her “無嘢” and said her right breast “脹痛” was due to normal reaction prior to menstruation, so she felt reassured. As seen below, I find such evidence inherently unreliable. 61.First, the Plaintiff gave evidence that she told the doctor at the FPA during the 24/9/96 FPA Visit (and he recorded in the 24/9/96 FPA Remarks) “last menstrual period 12/9/96”. But she stated in paragraph 1 of the 2002 Letter that she was having her menstrual period during the 24/9/96 FPA Visit. Under cross-examination, the Plaintiff at first said she was unclear when she had her last menstrual period, but later said she could not be having her menstrual period during the 24/9/96 FPA Visit otherwise her IUCD could not be checked. She claimed she might have misspoken (because she was emotionally upset with National Mutual for refusing to pay the Benefit) or Madam Chu might have misheard her at the noisy restaurant where they met, which resulted in the “error” in the 2002 Letter. 62.I find the Plaintiff was not having her menstrual period during the 24/9/96 FPA Visit, which finding supported the accuracy of the 24/9/96 FPA Remarks as a whole. I reject the Plaintiff’s explanation for the “error” in the 2002 Letter. In my view, the “error” was probably given by the Plaintiff to support the assertion in the same paragraph of the 2002 Letter that “a complaint for [her] breast pain was neutral”. 63.Secondly, the Plaintiff gave evidence that she did not have any breast pain during the 24/9/96 FPA Visit and she felt no pain when the doctor physically examined her breast. Yet the 24/9/96 FPA Remarks recorded “mild tenderness”, which meant mild soreness sensed on being touched. There was no satisfactory explanation why the doctor at the FPA would make up such reference in contemporaneous medical records. The Plaintiff’s suggestion that it would be painful when one pressed with sufficient force on any part of the body even if there was nothing wrong was beside the point. In my view, the record of “mild tenderness” by the doctor at the FPA in the 24/9/96 FPA Remarks was based on the Plaintiff’s response to his physical examination of her breast. 64.Thirdly, the FPA’s record of the 24/9/96 FPA Visit of “NAD” (ie no abnormality detected) or “normal” for physical examination of the Plaintiff’s abdomen, thyroid, heart and nipple coincided with the Plaintiff’s recollection of the results of such physical examination and which in turn bolstered the overall accuracy of the FPA’s record including the 24/9/96 FPA Remarks. Although the doctor at the FPA physically examined the Plaintiff’s breast, he left the items “breast” and “chest” blank in the FPA’s record of the 24/9/96 FPA Visit, which underlined the implausibility of the Plaintiff’s assertion that such doctor told her there was no problem. If there were no problem, the doctor at the FPA had no reason not to put down “NAD” or “normal” for these 2 items. 65.Fourthly, the Plaintiff confirmed that the doctor at the FPA did say (as recorded in the 24/9/96 FPA Remarks) the thread of the IUCD was seen and advised “rrr” (ie removal replacement and reinsertion) of the IUCD in November to December 2004, which again underlined the accuracy of the 24/9/96 FPA Remarks. 66.Fifthly, the 24/9/96 FPA Remarks stated the presence or absence of right breast lump was uncertain. The Plaintiff did not dispute the authenticity of the FPA records, and there was no plausible reason to doubt their accuracy or for the doctor at the FPA to make up such records in 1996. I find it incredible that such doctor would tell the Plaintiff there was no problem with her breast but at the same time record the 24/9/96 FPA Remarks. 67.Sixthly, I find on balance the doctor at the FPA would have mentioned his physical examination findings to the Plaintiff (see paragraphs 79-84 below) since (a) there was no plausible reason to withhold such information and (b) he had to explain why the Plaintiff should recheck her breast after the next menstrual period. I reject the Plaintiff’s evidence that the doctor told her there was no problem with her breast and her breast pain was nothing more than normal reaction prior to menstruation. It is particularly so when the doctor advised rechecking of the breast after her next menstrual period. 68.Seventhly, as explained above, the doctor at the FPA recorded in the 24/9/96 FPA Remarks that the Plaintiff was advised to “recheck breast after next period” (see also paragraph 7(1) of the Amended Defence and paragraph 8 of the Plaintiff’s 1st witness statement of November 2004 (“Plaintiff’s 1st Statement”)). But when the Plaintiff gave evidence, she said the doctor told her there was no problem with her breast and she could recheck after a few months (ie 3-4 months) or any time if there was a problem. The Plaintiff further claimed the doctor did not specifically say it was to recheck her breast, and she even suggested it was to recheck her IUCD. 69.I disagree that the doctor told the Plaintiff she could recheck in a few months. The next appointment date noted in the FPA’s record of the 24/9/96 FPA Visit was 20th October 1996 which was consistent with the advice by the doctor to the Plaintiff to recheck her breast after her next menstrual period. On the other hand, the 24/9/96 Remarks gave a separate follow up in respect of the Plaintiff’s IUCD (ie “Advise removal replacement reinsertion in November – December 1996”). I have no doubt the doctor specifically advised the Plaintiff to recheck her breast, which naturally followed his finding of uncertain presence or absence of right breast lump. (c) 3/1/97 FPA Visit 70.The Plaintiff visited the FPA on 3rd January 1997. I find on balance she knew the doctor at the FPA found no definite mass on rechecking her breast, but advised her to have a mammogram (which she refused) and to recheck breast after 3 months. I reject the Plaintiff’s inherently unreliable evidence concerning the 3/1/97 FPA Visit. 71.First, the letter from the Plaintiff’s solicitors to the FPA dated 10th September 2005 stated that “[according] to our instructions, [the Plaintiff] did complain of breast pain during her regular check-up at your clinic on …… 3rd January 1997”. In paragraph 8 of her 3rd witness statement of November 2005 (“Plaintiff’s 3rd Statement”), the Plaintiff stated she told Madam Chu she informed the doctor during the 3/1/97 FPA Visit she felt right breast pain. But when she gave evidence, the Plaintiff said she did not tell the doctor so. The Plaintiff under cross-examination sought to explain that in her mind’s eye she thought that on 3rd January 1997 the doctor at the FPA would have been aware of her earlier complaint on 24th September 1996 of breast pain. I find this implausible since the Plaintiff’s 3rd Statement (which contents she accepted to be correct) made specific reference to the 3/1/97 FPA Visit. 72.In the end, the Plaintiff said that due to lapse of time she could not remember (a) whether she told the doctor during the 3/1/97 FPA Visit she had breast pain and (b) what was written in the Plaintiff’s 3rd Statement. She even said that although the Plaintiff’s 3rd Statement was her statement, she just “順便咁講” since she did not expect to be cross-examined on these matters at the trial. This speaks quite loudly of the Plaintiff’s evasiveness and willingness to tailor what she said for her own purpose. I reiterate my findings in paragraph 58 above. 73.Secondly, there is no dispute that the physical examination by the doctor at the FPA of the Plaintiff’s breast yielded the following results : “no definite mass” (硬塊), which reflected the overall accuracy of the 3/1/97 FPA Remarks. 74.Thirdly, the Plaintiff gave evidence that the doctor at the FPA said “無嘢”. When she asked the doctor why her breast “谷住痛”, he explained it was most probably normal reaction prior to menstruation. She then took the initiative to ask whether the FPA could offer any further diagnostic testing. The doctor said the FPA did not offer (and there was no need for) mammogram, but if she was worried, she could have (and it was her right to have) a mammogram by a private clinic. The Plaintiff asked how much it would cost. The doctor said it would cost about HK$1,000.00 odd. The Plaintiff recalled telling the doctor that if he had examined her and there was no problem, she would not spend money to have a mammogram. The doctor replied it was up to her to decide, but confirmed that he had physically examined her breast and there was no problem. The Plaintiff did not consider there was anything serious and concluded there was no need for a mammogram. 75.I find the Plaintiff’s above evidence inherently unreliable and unconvincing. I further find it strange/improbable that she took the initiative to request further diagnostic testing when on her own case the doctors at the FPA reassured her twice during the 24/9/96 and 3/1/97 FPA Visits there was no problem with her right breast and her breast pain was merely normal reaction prior to menstruation. 76.Indeed, the Plaintiff’s own evidence hinted that she was in fact not that confident. First, on the doctor’s physical examination, the Plaintiff said inter alia “我想可能模唔到，我個心咁想，你話我無嘢，…… 不如照下 ……”. This showed that she did not entirely trust the doctor’s physical examination, which did not sit well with her purported reliance on his opinion of “no problem” when she decided not to have a mammogram. Further, the Plaintiff agreed she might have said something that caused the doctor to think that she was worried and wanted further diagnostic testing. But she did not elaborate what worried her. Still further, in respect of the doctor’s advice during the 3/1/97 FPA Visit to recheck breast after 3 months, she said “佢懷疑你有事叫你來檢查唔奇”, which also plainly showed that as at the 3/1/97 FPA Visit the Plaintiff knew it was not a matter of “no problem”. 77.The Plaintiff claimed that she (like any other female) would have had a mammogram or attended medical consultation if she were told she had a medical problem. She further claimed she would not have been so foolish as to risk her life by refusing testing/treatment. But there is clear evidence from the Plaintiff herself that she was concerned over the cost of having a mammogram on a private basis. This was corroborated by the FPA Questionnaire which noted that the Plaintiff refused to have a mammogram “because costly & client felt no need”. There is no need for me to make findings on the Plaintiff’s reasons for not having a mammogram, but the aforesaid analysis suggested her refusal was unsurprising. I accept that the Plaintiff refused the doctor’s advice to have a mammogram. The use of the word “refuse” by the doctor in the 3/1/97 FPA Remarks (which was repeated in the FPA Questionnaire) was specific. In my view, the Plaintiff could only have refused the mammogram if the doctor advised or suggested it in the first place. Had the Plaintiff casually suggested further diagnostic testing because it was free of charge, there was no reason for the doctor at the FPA to make up the record in 1997. 78.Fourthly, the Plaintiff claimed she could not remember when she was asked to return for rechecking, but she already admitted in her pleadings that it was after 3 months. She also accepted that the doctor at the FPA advised her to recheck because “佢懷疑你有事叫你來檢查唔奇”. But I reject her evidence that she thought it was her usual annual gynaecological checkup. The 3/1/97 FPA Remarks specifically stated the Plaintiff was advised to recheck breast after 3 months and there was no reason to doubt the accuracy of such records. Further, the 3/1/97 FPA Remarks gave another date for gynaecological follow up (ie “1st iud fu 14/2/97”) and the Plaintiff indeed revisited the FPA on 17th February 1997 concerning contraceptive matters. In my view, the Plaintiff plainly knew rechecking after 3 months was for her breast, which meant that as at 3rd January 1997 the doctor regarded the investigation concerning her breast as incomplete. In such circumstances, the doctor at the FPA would hardly have mentioned to the Plaintiff there was no problem. (d) Plaintiff’s knowledge 79.I find on balance the doctors at the FPA made the findings and observations as recorded in the 24/9/96 and 3/1/97 FPA Remarks. There was no plausible reason to doubt the accuracy of such records. 80.In 1998 when National Mutual was unwilling to pay the Benefit on the ground of non-disclosure of material information in relation to the 24/9/96 and 3/1/97 FPA Visits, the Plaintiff attempted in vain to challenge the accuracy of the FPA’s medical records. 81.The Plaintiff claimed the FPA’s records did not reflect what the doctors at the FPA told her and requested Madam Ng to accompany her to visit the FPA. Madam Ng also recollected such visit. Although Madam Ng gave evidence 8 years after the event without the assistance of any written record, I have no doubt she recalled the visit. She was an experienced insurance agent, and it was the first and only time she visited the FPA. At that time National Mutual declined to pay the Benefit and the Plaintiff had mentioned to Madam Ng several times that she only went to the FPA for gynaecological checkups and not for medical consultations. I find such features were significant enough for Madam Ng to remember the visit. 82.During the visit, the Plaintiff and Madam Ng were received by inter alia Dr Fan of the FPA. The Plaintiff claimed she asked why the doctors at the FPA told her she had no problem but recorded she had cancer. She gave evidence that she requested the FPA to match their records to what they had told her, which was tantamount to asking the FPA to change its records, but the FPA refused (see the 10/9/98 and 11/9/98 FPA Remarks in relation to the Plaintiff’s 10/9/98 and 11/9/98 FPA Visits). Madam Ng recalled (and I on balance accept) the Plaintiff complained to Dr Fan that National Mutual declined to pay the Benefit because of the way the FPA’s records were written and Dr Fan replied that the FPA had written to National Mutual in a manner as favourable to the Plaintiff as possible and refused to amend the FPA’s records. 83.In light of the aforesaid analysis, I have no doubt the FPA’s records were accurate and reflected what passed between the doctors at the FPA and the Plaintiff. 84.I find on balance the doctors at the FPA told the Plaintiff of their findings at the 24/9/96 and 3/1/97 FPA Visits. Indeed, Dr Fan of the FPA wrote to the Defendant’s solicitors on 14th October 2005 to say that “[normally] [the FPA] would inform clients of any abnormal findings but otherwise [it] would not go into detail about each item if there were no obvious abnormalities. Further, the doctor’s comments under the “Remarks” section are a record of what was noted and had generally been discussed during the consultation”. Whilst I accept the 24/9/96 and 3/1/97 FPA Remarks were not verbatim records and Dr Fan was not the attending doctor, I find the 24/9/96 and 3/1/97 FPA Remarks to be reliable evidence of what the Plaintiff knew. The words “c/o” (complained of), “adv.” (advise), “explained”, “refuse” in the 24/9/96 and 3/1/97 FPA Remarks by themselves suggested there was verbal interaction between the Plaintiff and the doctors at the FPA. Further, there was no satisfactory countervailing evidence to contradict Dr Fan’s statement as to the usual practice of the FPA. (e) Defendant’s arguments 85.Mr Wong suggested there was no duty to disclose because by 3rd January 1997 the Plaintiff only knew there was no abnormality in that (a) there was no definite mass, (b) she was in good health, (c) she was to recheck after 3 months and (d) she had occasional mild right breast pain prior to 24th September 1996. I disagree because such suggestion glossed over a number of facts known to the Plaintiff (see paragraphs 80-84 above). As will be seen below, a definite diagnosis of carcinoma or a confirmed detection of breast mass was not the test for materiality. 86.Mr Wong relied on the FPA’s answer to question 11 of the FPA Questionnaire (ie “Before breast mass was detected, patient was in good health”) to say that the Plaintiff knew she was in good health. But the answer must be considered carefully in the entire context of the FPA Questionnaire. Question 3 asked for the results of all the Plaintiff’s regular gynaecological checkups at the FPA. The FPA labelled the first 3 attendances in 1991-1993 as “NAD” (ie no abnormality detected), but treated the 24/9/96 and 3/1/96 FPA Visits differently by giving particulars in relation to the Plaintiff’s breast as set out in the 24/9/96 and 3/1/97 FPA Remarks. Further, question 5(a) asked for the date of first consultation in respect of the Plaintiff’s history of cancer of breast. The FPA gave as its answer “24th Sep. 1996”. Plainly the Plaintiff was not in absolute good health at least to the extent that the FPA regarded her as having complaints or symptoms pertaining to her breast and advised her to recheck or have diagnostic test. IX. What did the Plaintiff disclose during Dr Chan’s Examination? 87.It is common ground that the Plaintiff did not disclose to Dr Chan or Madam Ng the information she knew in relation to her breast from the 24/9/96 and 3/1/97 FPA Visits. I accept on balance she told Dr Chan she had regular gynaecological checkups at the FPA. But apart from such disclosure, I find the Plaintiff’s evidence in relation to Dr Chan’s Examination unreliable. (a) Who suggested Dr Chan’s Examination? 88.Paragraph 2 of the Plaintiff’s 3rd Statement stated that when she applied for the Policy in March 1997 “[the Plaintiff ]曾向[Madam Ng]要求保險公司安排醫生替[the Plaintiff]驗身。[The Plaintiff]之所以作出此要求純粹是想趁機接受免費身體檢查。[Madam Ng]聽罷只是說會替[the Plaintiff]作出安排。[Madam Ng]並沒有向[the Plaintiff]解釋身體檢查之意義，也沒有提供任何有關身體檢查的文件(如醫療問卷等)給[the Plaintiff]閱讀或作解釋”. Further, Madam Chu on behalf of the Plaintiff wrote in paragraph 3 of the 2002 Letter that “…… [the Plaintiff] had no reason to keep aside any information on [her] health. Otherwise, [the Plaintiff] would not have requested for a pre-medical examination before purchasing the [Policy]”. 89.However, when the Plaintiff gave evidence, she admitted she knew that unless the insured amount was below a certain limit, most insurance companies would require the applicant to undergo a medical examination. She further admitted Madam Ng told her National Mutual required her to attend a medical examination and she had no problem since it would be free of charge. Such evidence was consistent with Madam Ng’s evidence that National Mutual required Dr Chan’s Examination because the proposed insured amount exceeded the specified upper limit of US$90,000.00. 90.The Plaintiff tried to explain away the inconsistency by claiming that in the Plaintiff’s 3rd Statement she was referring to her request for medical examination for the 1st Policy in 1994. But given the explicit reference to the Policy in the Plaintiff’s 3rd Statement, such explanation was lame and evasive. In relation to the 2002 Letter, the Plaintiff acknowledged Madam Chu must have written down what the Plaintiff told her, so the Plaintiff was constrained to say she might have made a mistake (“搞錯”). In the end, the Plaintiff admitted Madam Ng suggested and she agreed to Dr Chan’s Examination (“…… 佢都要求我，我都無所謂咁”). I agree with Mr Lam that the Plaintiff’s attempts to explain the inconsistency were manifestly inept. (b) Purpose of Dr Chan’s Examination and the Medical Form 91.Paragraph 7 of the Plaintiff’s 3rd Statement stated that “無論[Dr Chan]或[Madam Ng]都從沒向[the Plaintiff]解釋[the Medical Form]將會成為[the Plaintiff’s Application]其中一部份。” The Plaintiff further pleaded in paragraph 11 of the Reply that she did not know either the purpose or content of the Medical Form. 92.But when she gave evidence, the Plaintiff admitted she knew the purpose of a medical examination was for the insurer to find out whether the applicant had any health/medical condition, and if there was the insurer might refuse the application or grant the application but exclude certain diseases or require a higher premium. Although the Plaintiff claimed to be unsure of the relationship between the Medical Form and the Application, she knew the completion of the medical examination questionnaire was to provide the insurer with information about the applicant’s health/medical condition and the applicant was required to sign the same to confirm the contents were correct. In short, the Plaintiff admittedly knew the purpose and broad content of the Medical Form, ie it was for risk appraisal by National Mutual vis-à-vis her Application. 93.The Plaintiff was unable to give any satisfactory explanation for the above inconsistency. I bear in mind that the Plaintiff had prior experience of medical examination and completion of the medical examination questionnaire (which was in similar format to the Medical Form) in relation to her application for the 1st Policy. I find her suggestion that she did not know the purpose of Dr Chan’s Examination and the Medical Form specious. (c) Dr Chan 94.Dr Chan could not remember when National Mutual appointed him to be one of its doctors to medically examine applicants for insurance policies, but he believed he received an appointment letter together with a set of General Guidelines for Medical Examiners (“Guidelines”) when so appointed. He believed he read the Guidelines when he first received them to check for fee adjustment and prohibited conduct, but he would not remember all the detailed contents of the Guidelines or constantly re-read them thereafter. He was unsure whether he followed the Guidelines closely. After all, he was a medical examiner appointed by various insurance companies each with its own questionnaire and guidelines. Dr Chan said (and I accept) his practice was to follow the medical examination questionnaire instead of the guidelines. 95.By the time of trial, Dr Chan had no recollection of the Plaintiff or Dr Chan’s Examination due to the lapse of time. His only record of Dr Chan’s Examination was the Medical Form, and he prepared his letter of 30th December 2004 to the Defendant’s solicitors (“Dr Chan’s Letter”) and gave evidence on such basis. Although he was not too sure of the practice he adopted for medical examinations for National Mutual in 1997 (because he had since read various continuing medical education courses to upgrade his practice), he remembered certain significant matters as discussed below. 96.Upon careful consideration, I find Dr Chan’s evidence believable and reliable. Though he had been in 1997 and still was at the time of trial National Mutual’s medical examiner, the discussion below showed there was no plausible reason for him to misrepresent or omit asking the Plaintiff Questions 4d, 5h, 6b, 8b and 10b. (d) Disclosure of breast pain? 97.Paragraph 6 of the 2002 Letter stated inter alia that during Dr Chan’s Examination she “explained the situation on the medical consultation of [her] breast pain found in [her] period with no definite mass” and Dr Chan believed it was normal. 98.Then in Dr Chan’s Letter Dr Chan said he routinely recorded information disclosed to him by applicants relating to questions in the standard Medical Form. Dr Chan believed the Plaintiff did not tell him of any disorder of the breast since he ticked “no” for Question 10b. Had the Plaintiff told him she had medical consultations of breast pain in her period with no definite mass, he would have ticked “yes” and recorded the details in the section titled “Details of “Yes” Answers” in the Medical Form. Dr Chan’s Letter went on to say Dr Chan did not believe he said during Dr Chan’s Examination the breast pain was normal. After all he was not the applicant’s attending doctor, and usually/ routinely he would not comment on the applicant’s disclosed health/medical condition and would merely record it in the medical examination questionnaire without comment. He said he adopted such approach for National Mutual’s medical examinations. 99.Next, the Plaintiff repeated his assertion in the 2002 Letter in paragraph 10 of the Plaintiff’s 1st Statement by stating she disclosed toDr Chan and the doctor appointed by Cigna to conduct medical examination that she had right breast pain but the FPA doctor told her “沒有大礙”. 100.But in paragraph 6 of the Plaintiff’s 3rd Statement, the Plaintiff’s Reply and her viva voce evidence, the Plaintiff insisted she only told Dr Chan and the doctor appointed by Cigna that she visited the FPA for checkups, but did not disclose she had right breast pain or “脹痛”. The Plaintiff also asserted that Dr Chan did not ask her whether she had tenderness or discomfort in her breast. The Plaintiff explained that she told Madam Chu she had informed the doctor at the FPA she had some breast pain, but was reassured after physical examination when the doctor said there was no problem, so she did not tell Dr Chan. 101.The Plaintiff’s explanations on such inconsistencies were unconvincing. First, she claimed to be unsure about what Madam Chu wrote in the 2002 Letter. Secondly, she suggested Madam Chu might have misheard her at the noisy restaurant where they met. Thirdly, she suggested she might have been unclear in her explanation to Madam Chu. In paragraph 8 of the Plaintiff’s 3rd Statement she said “事實上，[the Plaintiff]當時是告訴[Madam Chu][the Plaintif]曾告訴[the FPA]的醫生(即於一九九七年一月三日之檢查期間)[the Plaintiff]感到右邊乳房脹痛而[the FPA]的醫生用手按過[the Plaintiff]之乳房後證實沒有問題。[The Plaintiff]當時所指的只是於投保前曾向[the FPA]之醫生提及右邊乳房感到脹病而[the FPA]之醫生用手按[the Plaintiff]之乳房後告訴[the Plaintiff]沒有問題。[The Plaintiff]當時所指的醫生並非[Dr Chan]。” Fourthly, she explained that Madam Chu might have failed to accurately reproduce what she heard. In the end, the Plaintiff admitted she did not exactly know why there was such “error” in the 2002 Letter. 102.In respect of the similar “error” in the Plaintiff’s 1st Statement about 2 years later, the Plaintiff at first said she did not understand why there was such “error”, but later suggested she might have given mistaken information to her solicitors because she was then emotionally upset about the Defendant’s refusal to pay the Benefit. I do not accept such excuse. She read the Plaintiff’s 1st Statement in Chinese before signing. Her unreliability is highlighted by her evidence that she only discovered the “error” during cross-examination when in fact she already stated in paragraph 5 of the Plaintiff’s 3rd Statement that she carelessly missed the “error” in the Plaintiff’s 1st Statement drafted by her solicitors when she checked the contents. The Plaintiff was therefore constrained to say she realised the “error” when she re-read and was explained the Plaintiff’s 1st Statement just before she prepared the Plaintiff’s 3rd Statement. 103.Mr Lam put forward a very attractive explanation for the aforesaid inconsistencies, ie the Plaintiff advanced a lie in the 2002 Letter and the Plaintiff’s 1st Statement because she feared her breast disorder was a material condition which she failed to disclose to National Mutual, so she tried to say she disclosed it to Dr Chan, but when Dr Chan categorically denied it in Dr Chan’s Letter, she realised her story could not hold water and changed it. 104.It is unnecessary for me to find that Dr Chan’s Letter prompted the Plaintiff’s change of case. It is sufficient for me to find (and I do on balance find) the Plaintiff’s explanations to be inherently unbelievable, which finding reflected the overall unreliability of her evidence in relation to the whole of Dr Chan’s Examination. Mr Lam in his written closing submissions asked the rhetorical question of how Madam Chu could have written down the “erroneous” assertion in the 2002 Letter unless the Plaintiff told her so. He also rightly pointed out that the Plaintiff’s solicitors could not have copied the “error” in the 2002 Letter in preparing the Plaintiff’s 1st Statement because the former mentioned nothing about Cigna. I find that the Plaintiff’s various assertions must have come from the Plaintiff herself who was prepared to say what suited her purpose at any particular time and to change her case when it was perceived to be her advantage. 105.The Plaintiff claimed she told Dr Chan she attended regular gynaecological checkups at the FPA, which was not recorded in the Medical Form. Dr Chan frankly agreed it was possible that the Plaintiff might have told him about this but he would not have regarded it as important to record in the Medical Form. Regular gynaecological checkups were not unusual. But such disclosure by the Plaintiff did not absolve the non-disclosure of the matters in relation to the Plaintiff’s breast referred to in the 24/9/96 and 3/1/97 FPA Remarks which she knew. (e) ME Report 106.The Plaintiff claimed that after a brief physical examination (ie measuring her pulse rate, blood pressure, height, weight, and asking her to squat down and stand up, etc) Dr Chan began to ask her questions about her health/medical condition. However, I prefer Dr Chan’s evidence that consistent with his medical training it was his practice in 1997 to ask the medical history first before carrying out any physical examination. In fact the ME Report was on the reverse of the Medical From, so (as Dr Chan explained and I accept) it was not possible to flip over and fill out the front and reverse pages at the same time. My finding in this respect served to weaken the Plaintiff’s overall credibility in relation to Dr Chan’s Examination. X. Miscellaneous findings of fact affecting the Plaintiff’s credibility (a) Claim Form 107.The Claim Form stated the first doctor consulted by the Plaintiff for her carcinoma of right breast was Dr Lam, but in fact it was the doctors at the FPA and QMH who diagnosed her carcinoma and Dr Lam was the one who performed the mastectomy. The Plaintiff claimed she did not tell Madam Ng (who filled out the Claim Form on her behalf) that the first doctor she consulted was Dr Lam. I am prepared to accept in this instance there might have been a misunderstanding between the Plaintiff and Madam Ng because Madam Ng gave evidence that she asked the Plaintiff for the name of the doctor who treated her for carcinoma of right breast. But I am unimpressed by the Plaintiff’s assertion that it was unimportant to her how the Claim Form was filled out and that it was enough that National Mutual ought to pay her the Benefit. 108.I agree with Mr Lam that the Plaintiff was not being truthful in the Claim Form in relation to the particulars of the discovery of her carcinoma of right breast (ie the Plaintiff discovering the tumour during a bath in mid-April 1998). Although the Plaintiff blamed Madam Ng for erroneously completing the Claim Form, there was no plausible reason for Madam Ng to conjure up such story. I reject the Plaintiff’s evidence in this respect. (b) QMH Questionnaire 109.The QMH Questionnaire stated the mass at the Plaintiff’s right breast had existed for a year and the QMH Memorandum clarified that such history was given by the Plaintiff herself although she did not provide an exact date of her discovery of the mass. 110.The Plaintiff on the other hand denied she ever told the doctor at QMH the above. She explained in paragraph 4 of the Plaintiff’s 2nd Statement that when she first attended QMH on 3rd April 1998, the doctor asked when she started to have right breast pain. She replied (a) she had right breast pain (and not tumour) more than a year ago, (b) she all along attended checkups at the FPA, (c) the doctor at the FPA confirmed during the 3/1/97 FPA Visit her right breast did not have any problem or any mass/tumour, and (d) she firmly believed her breast pain was due to normal reaction prior to menstruation (as informed by the doctors at the FPA). The Plaintiff said she did not know why the doctor at QMH stated in the QMH Questionnaire her breast mass had existed for a year, but he might have misheard or misunderstood her answer or she might have been unclear in her reply to his question. 111.There is no need for me to make any specific finding as to the exact date of discovery of the Plaintiff’s breast mass. But I agree with Mr Lam that this incident again demonstrated her readiness to say that someone else got it wrong when the evidence was not in her favour. I note that the QMH Questionnaire stated there was “slight increase in size” of the mass. There was no reason for the doctor at QMH to conjure up such assertion. (c) Cigna 112.I place no weight or reliance on the payment of the benefit of US$50,000.00 by Cigna. The Plaintiff did not lead any evidence as to what Cigna knew when it made the payment. I also bear in mind the Plaintiff’s evidence that (a) the nurse of the medical examiner appointed by Cigna physically examined the Plaintiff’s breast and (b) the Plaintiff initially claimed she told Cigna’s medical examiner she had breast pain (see paragraph 99 above). 113.I further note that until she was confronted under cross-examination with the record of her registration as Cigna’s insurance agent from 5th January 1998 to 23rd February 2001 in the Insurance Agents Registration History downloaded from the website of the Hong Kong Federation of Insurers (“Insurance Record”), the Plaintiff did not disclose she was Cigna’s insurance agent at the material time. The Plaintiff admitted under cross-examination she became Cigna’s insurance agent after she purchased the Cigna Policy. The Plaintiff claimed she only worked as such for a few months (ie less than a year) because once she was diagnosed with cancer in March/April 1998 she no longer returned to the office. However, the Plaintiff was unable to satisfactorily explain why she was registered as Cigna’s insurance agent until 2001. She at first said the Insurance Record was wrong, but later even said she did not have a proper registration because she had not graduated from her studies or taken the relevant examination. 114.But it is at least clear from the above that the Plaintiff had been stingy with information in relation to Cigna, so the bare fact that Cigna paid the benefit under the Cigna Policy had little probative evidential value. (d) Motive 115.Mr Lam submitted (and I agree) there was no need for me to make any findings in relation to the Plaintiff’s motives because the Defendant did not pitch its case on the basis of fraud. It is sufficient and I do find that the Plaintiff’s evidence was unreliable and self-serving and did not sit well with the contemporaneous documents. XI. Whether any information not disclosed by the Plaintiff was material? (a) Law 116.An applicant for insurance policy is to disclose such facts as a prudent insurer might have treated as material. The insurer is entitled to repudiate liability wherever he can show that a fact within the knowledge of the applicant was not disclosed, which according to current insurance practice, will have affected his judgment of the risk (Lambert v Co-operative Insurance Society Ltd [1975] 2 Ll R 485, 487-489 and Lai Chui Kar Poa Helen’s case (supra at p.694C-D)). 117.Materiality centres on whether the circumstance will have an effect on the mind of the prudent insurer in estimating the risk, not on what a reasonable man or reasonable applicant thinks. Further, a fact may be material although, if disclosed, it would not have led the prudent insurer to decline the risk or stipulate an increased premium. It is enough that he will rightly take it into account in coming to his decision (MacGillivray (supra) at para.17-35 and Pan-Atlantic Insurance Co Ltd & anor v Pine Top Insurance Co Ltd [1995] 1 AC 501, 516H-516A, 538C-D, 550C-D). 118.Materiality is a question of fact that “rests on the judge’s own appraisal of the relevance of the disputed fact to the subject matter of the insurance; it is not something which is settled automatically by the current practice or opinion of insurers. Thus the materiality of an uncommunicated fact may be so obvious that it is unnecessary to call any expert evidence to establish this point. …… Where, however, the court is unsure of the materiality of a given fact, it is usual to call expert evidence from persons engaged in the insurance business in order to assist the court on making its decision” (MacGillivray (supra) at paras.17-40 – 17-42 and The Ming An Insurance Co (HK) Ltd v Chan Man Dun & anor HCMP2437/2004, Deputy High Court Judge Fung (as he then was) (unreported, 8th February 2005) at para.32). (b) Mr Shek’s evidence 119.It is true Mr Shek did not personally underwrite the Policy and was not even with National Mutual in 1997. He gave his views based on his knowledge and professional expertise as applied to the information available to the Defendant. Since no leave has been granted for adducing his evidence as expert evidence, I do not accept it as such. As seen below, I find that the physical findings and doctor’s advice in relation to the Plaintiff’s breast which she knew were obviously material and in this respect I also draw assistance from Mr Chan’s expert evidence. Mr Shek’s evidence on his own approach as an individual underwriter merely provided additional comfort for the conclusions which I have drawn on other evidence. (c) Obvious materiality 120.I consider it obvious (and the Plaintiff also admitted to a large extent – see discussion in paragraphs 89 and 92 above) that the purpose of Dr Chan’s Examination was to ascertain the Plaintiff’s up-to-date health/medical condition that would enable National Mutual to appraise the risk. 121.I also consider it obvious in the context of the Policy that the Plaintiff’s undisclosed (a) history of occasional breast pain, (b) 24/9/96 and 3/1/97 FPA Visits in relation to the doctor’s physical examinations and medical advice in relation to her breast, (c) mild tenderness of breast at the 24/9/96 FPA Visit, (d) uncertain presence/absence of right breast lump, (e) advice by the doctor at the FPA to have a mammogram and her refusal thereof, and (f) advice by the doctor at the 3/1/97 FPA Visit to recheck breast after 3 months were material information that would have influenced a prudent underwriter in deciding whether to accept or refuse the risk or to accept the risk on what terms/rates. 122.The threshold test is whether the prudent insurer will rightly take these facts into account and on such test the materiality of the aforesaid facts is in my view obvious. The aforesaid facts relating to the Plaintiff’s breast went beyond regular gynaecological checkups by the FPA and beyond unqualified/ absolute “normal” results that would not have affected the underwriting decision. 123.I particularly bear in mind the Supplement dealt with insurance coverage for critical illness and plainly there was a need for relevant information in relation to the applicant’s health/medical condition. The materiality of the aforesaid facts is also reflected in the nature of the questions in National Mutual’s standard Medical Form, which questionnaire was required to be completed by insurance applicants and which the Plaintiff knew would be used by National Mutual for risk appraisal. 124.Mr Shek, Dr Chan and Mr Chan unanimously considered the information in the 24/9/96 and 3/1/97 FPA Remarks ought to be disclosed. Indeed, Dr Chan regarded such information as “positive symptoms” which he would have recorded in the Medical Form had he been made aware of them. Dr Chan also said that since the doctor at the FPA advised the Plaintiff to recheck breast after 3 months, he might have recommended National Mutual to follow up by a gynaecologist. Mr Wong suggested I should not rely on Dr Chan’s evidence in determining what the prudent insurer would do. I do not see why not when his evidence merely supported what I have concluded to be plain and obvious. (d) Mr Chan’s evidence 125.Mr Lam submitted in his written closing submissions (and I agree) that the court had available the evidence of Mr Chan which established materiality beyond peradventure. Mr Lam noted the Plaintiff was given ample opportunity but failed to adduce contrary evidence on underwriting industry practice. 126.Mr Chan said that when one applied for an insurance policy similar to the Policy, factors like the applicant’s health history, his/her family health history, age, gender, habits such as smoking/drug taking etc were regarded by the prudent underwriter as material information that required full disclosure for assessing whether to accept the risk pertained or on what terms and rates for that particular risk. To assess the risk and to process the applicant’s application, the prudent underwriter would also rely on (a) the report/information regarding the applicant’s medical history and existing health/medical condition by the doctor appointed by the insurance company to medically examine the applicant and (b) the full and frank disclosure of information by the applicant in the completed insurance proposal form. Subject to the information disclosed by the applicant and the report from the appointed medical examiner, the insurance company might or might not write to the doctors/clinics attended by the applicant for further details on his/her health. 127.Mr Chan explained that once the underwriter had all the available information, he would assess the risk and decide whether to accept the coverage, the level of premium and/or whether to include specific exclusion clauses in the insurance policy. For insurance products such as medical or critical illness insurance, all pre-existing medical condition or illnesses would be excluded as the objective of insurance was to provide risk protection for unexpected and fortuitous events and not pre-existing medical symptoms or illnesses incidental or related to the said symptoms. This was so even if the appointed medical examiner was unable to spot or unveil the said symptoms during the medical examination. 128.Mr Chan said the scope of disclosure turned on the history and severity of the condition and whether the applicant had sought medical treatment. Some insurance companies required disclosure of the applicant’s medical history for the past 3 to 5 years and in rare cases up to 10 years. If the doctor’s diagnosis was a clean bill of health, there would be no duty to disclose since it would not affect the underwriting decision. This explained why an applicant would not have to disclose every common cold or stomach ache. If no diagnosis was given, the insurance company would normally write to the relevant treating doctor for medical records/report for consideration. If the diagnosis was uncertain, the insurance company could write to the applicant’s treating doctor for medical records/report, and if it was still not satisfied it could require the applicant to be examined by his own doctor or by a doctor appointed by the insurance company. Any such further information would be taken into account by the prudent insurer. 129.Consistent with Dr Chan’s view that he would not have recorded regular gynaecological checkups in the Medical Form, Mr Chan said normally insurance companies would not follow up on regular medical checkups unless it transpired the applicant had a particular condition, illness or problem (eg the applicant had certain diagnostic tests or was on regular medication). But if the applicant failed to give a clear “yes” or “no” answer or detailed particulars in lieu thereof in the medical examination questionnaire, the insurance company would insist a proper answer be given before proceeding with risk appraisal. 130.Against the above underwriting policy, Mr Chan considered the Plaintiff’s undisclosed breast pain, mild tenderness of the breast, FPA’s advice to have a mammogram (and her refusal) and/or possible presence of a right breast lump were all material information that would have influenced a prudent underwriter in deciding whether to accept the risk or on what terms/rates on that risk. Had such information been disclosed, Mr Chan said a prudent insurer would have asked the Plaintiff to attend a general medical practitioner or specialist for advice on her subjective breast pain, the possible cause of the said symptoms and the chance of malignancy before deciding whether or not to accept the policy and on what terms/premium. 131.Mr Chan said it was unnecessary to disclose a regular follow up appointment by the FPA, but the doctor’s advice to the Plaintiff during the 3/1/97 FPA Visit to recheck breast after 3 months was different. It constituted material information requiring disclosure since the FPA obviously considered there was a need to follow up on the Plaintiff’s breast condition. But Mr Chan agreed that this item was relatively less important than the other “material information” requiring disclosure discussed above. XII. Whether the Plaintiff’s answers in the Medical Form constituted misrepresentations? 132.I agree with Mr Lam’s submission that the Plaintiff’s answers in the Medical Form were clearly misrepresentations. By omitting relevant information the answers were rendered false and misleading. 133.The Plaintiff stated in paragraph 5 of the Plaintiff’s 3rd Statement that Dr Chan asked her questions and at the same time filled in the English Medical Form, but when the Medical Form was translated to her by her solicitors, she realised Dr Chan did not translate in detail or ask her every question in the order set out in the Medical Form. The Plaintiff pleaded that Dr Chan did not ask Questions 4d, 5h, 6b, 8b and 10b. 134.The Plaintiff claimed Dr Chan asked her whether she suffered from any major disorder such as cancer, lung, kidney, heart, respiratory, mental, diabetes or blood disorders/diseases, to which she answered in the negative. Dr Chan asked whether the Plaintiff had any problems or diseases, and she told Dr Chan she had nasal allergy. Dr Chan asked about her family members and whether her parents were still alive. The Plaintiff replied her mother was still alive. Dr Chan asked the Plaintiff whether she had been hospitalised or undergone any surgery. She replied she had an operation for umbilical hernia by Dr Lam at St Paul’s Hospital, and identified Dr Lam and Dr Leung Yan as her previous treating doctors. 135.The Plaintiff claimed that (a) she answered these questions truthfully/honestly, (b) no abnormality of her right breast was found in any earlier medical examination and she believed the doctors at the FPA who said her breast pain was normal reaction prior to menstruation, and (c) it was unnecessary to inform Dr Chan of her right breast pain or the fact she had mentioned it to the doctors at the FPA. 136.On balance I prefer Dr Chan’s evidence and find that the Plaintiff did not give full and accurate answers to Dr Chan. Although Dr Chan could not remember the details of Dr Chan’s Examination, he believed it was his usual practice to ask the applicant for his/her identity card to fill in the name and identity card number on the medical examination questionnaire. Then, to avoid any omission, he would follow and ask the applicant the questions as set out in the medical examination questionnaire. He would not tick “yes” or “no” without asking the relevant question. He would find a way of communication to make the applicant understand the question and give the answer. It was Dr Chan’s clear evidence (and I accept) that he would have written down in the medical examination questionnaire any “positive symptom” disclosed by the applicant. 137.It was the Plaintiff’s contention that she disclosed all she knew to Dr Chan, and what she did not know she could not disclose, so there was no non-disclosure on her part. Such argument was premised on the Plaintiff’s claim that she was told there was no problem with her right breast. But I have found that the doctors of the FPA did not tell her so, and she knew the results of the physical examination by the doctors at the FPA on 24th September 1996 and 3rd January 1997. The Plaintiff also refused a mammogram and was advised to recheck breast after 3 months. It was common ground that Dr Chan had not been informed of such facts, which I regard to be material information that should have been disclosed. So irrespective of the questions and answers in the Medical Form, the Plaintiff in discharging her duty of utmost good faith (which National Mutual reminded the Plaintiff by the bilingual Important Note in the Application) would have to disclose these facts. 138.Additionally, I find on balance the Plaintiff misrepresented her answers to the questions on the Medical Form put to her by Dr Chan. 139.First, the Plaintiff gave evidence admitting that whilst Dr Chan asked her questions he ticked “yes” or “no” and wrote on the Medical Form. I find this to be more consistent with Dr Chan having asked the specific questions as set out in the Medical Form than putting broad questions to the Plaintiff and then filling out the Medical Form. 140.Secondly, the Plaintiff admitted under cross-examination it was fair to say she did not know whether Dr Chan accurately or fully asked her all the questions in the Medical Form, and she was unable to give any concrete reason for saying Dr Chan did not do so apart from her personal feeling that he asked the questions in a quick and cursory manner during a brief medical examination. 141.Thirdly, the “yes” box was ticked for Questions 4d and 5h in the Medical Form and further information in relation to the Plaintiff’s operation for umbilical hernia was written in the section for “Details of “Yes” Answers” specifically for inter alia Questions 4d and 5h. I find on balance Dr Chan must have asked Questions 4d and 5h in order to elicit such answers. However, in respect of Question 4d, the Plaintiff failed to disclose she had been advised to have (and she refused) a mammogram. Mr Wong gave no grounds for his submission that such question was immaterial and I reject such contention. In respect of Question 5h, whilst there was no definite diagnosis of cancer or tumour at the material time, the Plaintiff did not mention the uncertainty over the presence/absence of right breast lump as at 24th September 1996. Even though the doctor at the FPA found no definite mass as at 3rd January 1997, he recommended rechecking breast after 3 months. These were material facts that ought to have been disclosed. 142.The “yes” box was ticked for Question 6d in the Medical Form and further information in relation to the medical examination for the 1st Policy was written in the section for “Details of “Yes” Answers” specifically forQuestion 6b. In fact, the Plaintiff admitted she could not remember clearly whether Dr Chan asked Question 6b. She said she told Dr Chan what she knew (ie the umbilical operation by Dr Lam, her nasal allergy and her ordinary gynaecological checkups at the FPA). But the Plaintiff failed to disclose the physical examination of her breast by the doctors at the FPA during the 24/9/96 and 3/1/97 FPA Visits as a result of her complaints of breast pain (in contra-distinction to regular gynaecological checkups), and that she was twice advised to recheck her breast. 143.The “no” box was ticked for Question 8b in the Medical Form. The Plaintiff claimed her impression was that Dr Chan did not ask her this question although he did ask whether she had tumour or cancer and whether she had any operation. I find on balance Dr Chan did ask such question. In light of the uncertainty of the presence or absence of right breast lump and the advice to recheck breast after 3 months despite no definite mass, in my view the Plaintiff’s breast condition ought to be disclosed as a condition that “may” impair her health. 144.Question 10 of the Medical Form (“Question 10”) was as follows :
However, the Plaintiff claimed Dr Chan only asked a broad question (ie whether she suffered from any “女人病”) instead of the specific questions in Question 10 and she answered in the negative. It is hard to see how, say, pregnancy could be regarded as “女人病” or why Dr Chan would have made up the “no” answer (ie the Plaintiff was not pregnant) without asking the specific question. Whilst Dr Chan frankly said he could not remember whether he asked the Plaintiff whether she had any “女人病”, I prefer his evidence that he disliked such generic term and that he believed he asked the Plaintiff the specific questions in Question 10. I agree with Mr Lam that Plaintiff’s failure to disclose the material information as set out in the 24/9/96 and 3/1/97 FPA Remarks relating to the Plaintiff’s breast (which the Plaintiff knew) rendered the answer to Question 10b misleading. 145.Fourthly and more importantly, the Plaintiff’s evidence that Dr Chan did not ask her the specific questions on the Medical Form was contradicted by paragraph 11 of the Plaintiff’s 1st Statement (which the Plaintiff confirmed to be correct) as follows :
When confronted with the above, the Plaintiff evasively said it was better to ask Dr Chan than to ask her whether he asked her all the questions on the Medical Form. She did not offer any or any satisfactory explanation why she said she answered Questions 4d, 5h, 6b, 8b and 10b. 146.Fifthly, there was no dispute that after Dr Chan completed the Medical Form, he asked the Plaintiff to sign thereon without explaining the contents of the Medical Form or why it was necessary for the Plaintiff to do so. The Plaintiff signed the same and Dr Chan also signed. However, she admitted she knew the Medical Form was required by National Mutual for its use and when she signed the Medical Form she “基本上” knew its broad content. XIII. Whether National Mutual was induced by the non-disclosure or misrepresentations to issue the Policy? 147.There is no dispute that the insurer must prove he was induced by the non-disclosure or misrepresentation to enter into an insurance contract on terms which he would not have accepted if all the material facts had been made known to him (St Paul Fire and Marine Insurance Co (UK) Ltd v McConnell Dowell Contructors Ltd & ors [1996] 1 All ER 96, 108a-f). As regards the test for inducement for actionable misrepresentation, Halsbury’s Laws of England 4th ed (Reissue) Vol.31 para.771 at pp.476-477 states as follows :
148.Although Mr Shek gave evidence that National Mutual was induced to issue the Policy, he was not the person in charge of underwriting at National Mutual at the material time. Mr Lam submitted that his evidence was based on his general experience and it could be readily inferred that Madam Leung who was then in charge would have acted in the same way. I am not prepared to stretch Mr Shek’s evidence to the extent suggested by Mr Lam. 149.However, I agree with Mr Lam that the Defendant could pray in aid the presumption of inducement arising from the nature of the uncommunicated material information and the evidence of Mr Chan (which was consistent with that of Mr Shek). 150.In MacGillivray (supra) at para.17-28, it was said that “[where] the materiality of the undisclosed matter is obvious it may justify the court in presuming that the underwriter was induced, but this evidential presumption which may be rebutted by contradictory evidence adduced by the assured. It is most useful where for good reason an underwriter cannot be called to give evidence and other underwriters on the risk have given satisfactory evidence that they were induced by the non-disclosure” (see also St Paul Fire and Marine Insurance Co (UK) Ltd’s case (supra at p.112a-j)). 151.Here I have found that the materiality of the undisclosed matters was obvious (see paragraphs 121-123 above) and Mr Chan gave evidence that if the underwriter had been told about the undisclosed material information in respect of the 24/9/96 and 3/1/97 FPA Visits, he would have called for further information and in all probability either refused the risk or accepted it on different terms. In my view, a prudent insurer would have carried out further investigations either with the Plaintiff and/or the FPA or sought independent medical or gynaecological opinion/tests in relation to the Plaintiff’s breast condition before risk appraisal. But National Mutual accepted the Application without any relevant enquiries. I also accept on balance Mr Shek’s explanation as to why Madam Leung was reluctant to give evidence, ie she was working for a competitor. I therefore accept that a presumption arose in favour of the Defendant that National Mutual was induced by the Plaintiff’s non-disclosure and/or misrepresentations to issue the Policy on the terms it did. The Plaintiff did not adduce any contradictory evidence to displace such presumption. In my view, the Defendant has on balance discharged its burden of proof. XIV. Conclusion 152.In the circumstances, the Plaintiff has failed to establish her case against the Defendant and her claim is dismissed. There is no reason why costs should not follow event. I therefore grant a costs order nisi that the Plaintiff do pay the Defendant’s costs of the action (including all costs reserved, if any) to be taxed if not agreed with certificate for counsel. There shall be legal aid taxation of the Plaintiff’s own costs.
Representation: Mr Colin Wong instructed by Messrs Cheung, Chan & Chung for the Plaintiff Mr Godfrey Lam instructed by Messrs Clyde & Co for the Defendant | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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