Shishir Kothari t/a Ko Jewels Trading Co v. Gilman & Co Ltd
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IN THE SUPREME COURT OF HONG KONG (APPELLATE JURISDICTION) CIVIL APPEAL NO. 48 OF 1971 (On appeal from O.J. Action 1915 of 1970) ________________________
________________________ Coram: Briggs, Huggins & Leonard, JJ. ________________________ JUDGMENT ________________________ Huggins, J.: 1. For my part I would have been sorry to see this appeal decided on a pure point of pleading, but I think Regina Fur Company v. Bossom 1958 2 Ll. R. 428 indicates the rule to be applied in a case where an insurer disputes a claim upon a policy. The general rule is that in the absence of a plea of fraud a defendant is entitled to challenge the evidence adduced on behalf of the plaintiff provided that the challenge does not have the effect of setting up an affirmative case of fraud. What I think the rule amounts to in a case such as this is that it is proper for counsel to suggest that no robbery has taken place and that, even if it has, the assured did not have on the premises the goods which were alleged to have been stolen. That would be proper although, if no robbery had taken place, the assured must know that it has not taken place and therefore necessarily committed fraud when he lodged a claim based on the occurrence of a robbery. However, the allegation that he knew there had been no robbery is implicit from the circumstances and is not an affirmative allegation by the insurer. Similarly, one can challenge the extent of the loss without setting up an affirmative case that the assured knew such a loss had not taken place. The line is obviously a very fine one but it is important because a party ought not to make a positive allegation of fraud unless he has evidence to support it. It would be unjust to allow him to suggest in cross-examination that his opponent has been guilty of fraud when the opponent has had no warning that he will have to meet such an allegation. The learned judge in the court below made it clear that he understood the Appellants to be setting up an affirmative case of fraud. Their counsel has on the appeal sought to persuade us that no such affirmative case had been set up and that, in consequence, the judge approached the case on a wholly wrong basis. We do not, unfortunately, have any note of the submissions of counsel and we are left to deduce the purpose of the questions put to the Respondents in cross-examination. The learned judge said:
From other observations made in the course of his judgment I get the impression that he thought counsel was directly attacking the integrity of the Respondent and suggesting that he had falsified his books in order to support a spurious claim by establishing that his business was genuine. Having read again the shorthand note of the cross-examination of the Respondent I am bound to say that at first sight I find nothing there to justify the suggestion that the Respondent was setting up an affirmative case of fraud. I say “at first sight” because there is nothing in the cross-examination to show that the books of account (as distinct from the stock books) formed any basis of the Respondent’s claim. Most of the cross-examination was directed to an analysis of the books of account. However, examination of the note of the examination-in-chief shows that these books were adduced by the Respondent’s counsel as part of his case and it should have been assumed that they were relied upon in support of the claim. There is no doubt that in cross-examination it was suggested that these books had been falsified and it follows that there was an affirmative allegation of fraud. Indeed, counsel for the Respondent frankly admits that he had (as he now says inadvertently) stated during the taking of the evidence of a witness de bene esse:
2. The substantial issue on the appeal is whether we can properly set aside the findings of fact that the robbery took place and that goods valued at a figure in excess of $200,000 were stolen. I have much sympathy with the view expressed by Leonard, J. as to the difficulty of believing the Respondent’s story. While I do not attach much weight to the evidence that the cords were said to be without knots when seen by Inspector Ferrige, the evidence of the wounds on the Respondent has caused me greater anxiety. I have, however, come to the conclusion that the finding of the learned judge ought not to be disturbed. His comment on the fact that Dr. Ong was not given an opportunity to examine the Respondent shows that he appreciated the importance of the evidence as to the injuries. It is, perhaps, unfortunate that Dr. Ong was not called and asked whether he could express any opinion, upon the strength of the photographs and reports, as to whether the injuries were consistent with the story told by the Respondent. He might have said that he could not do so, but then it must be remembered that it is upon the strength of the photographs and reports that we are being asked to say that they were inconsistent with the Respondent’s story. 3. We were taken through the account books at some length and I might have been more critical of the manner of keeping them than was the learned judge. I would certainly differ from him when he said he was satisfied “that the books were in fact made up by the plaintiff from time to time as he stated in his evidence”. I think the evidence is overwhelming that they were not so made up. Nevertheless, as the learned judge suggests, one-man traders (and, indeed, others) are often lax in their book-keeping and the fact that the books were made up at a later date does not necessarily indicate that they were made up with fraudulent intent. I would agree that the books do not show that the Respondent was not “carrying on a genuine business”, but it seems to me that they do raise a doubt whether a trader with such unbusiness-like methods could have obtained so large a stock of gems, even allowing for credit. The learned judge had the advantage of seeing the Respondent in the witness-box over a period of three days and formed a favourable impression of him. Whatever he thought of the books it was still open to the judge to believe the Respondent’s explanation that all his available cash was not in his bank accounts and his explanation of the many dishonoured cheques. 4. As to the evidence relating to the circumstances of the alleged robbery I think the learned judge was not bound to attach weight to the evidence of the caretaker that he did not see anyone dressed like the alleged assailants going up or down or to assume that the cook-boy was seen in the lift at the ground floor within a short time of his leaving the flat to go to the market. But what is the effect of the Respondent’s giving false evidence about the time of making up the books? Briggs, J. has said that perjury is fraud. Undoubtedly it is fraud to seek the support an insurance claimed with perjured evidence which has some relation to the claim itself (see Reg. v. Boynes (1843) 1 Car. & K. 65 where the assured produced a forged certificate) but if the books in the present case were accurate does it matter when they were made up? In Yuill v. Yuill 1945 1 All E.R. 183 Lord Greene, M.R. said at p.189:
However, a trial judge’s view does not necessarily lose all its value and one must bear in mind the function of this Court upon an appeal by way of re-hearing: see Coghlan v. Cumberland 1898 1 Ch. 704. The collateral issue upon which I believe that the Respondent lied was itself collateral to the collateral issue whether the business he carried on was “genuine”. I have considered the evidence with the most anxious care and am not persuaded that the learned judge came to a wrong conclusion upon the main issue of fact. Accordingly I also would dismiss the appeal. 23rd November, 1972. |