Chao Kam Yau v. Dah Sing Life Assurance Company Ltd
Read the full judgment text of DCCJ 3737/2012 on BabelCite. This District Court judgment was delivered on 29 December 2014.
1. This is an appeal against a master’s decision.
Cites 2 cases
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DCCJ3737/2012 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CIVIL ACTION NO 3737 OF 2012 --------------------
-------------------- DECISION -------------------- Introduction 1.This is an appeal against a master’s decision. 2.By its notice of appeal dated 11 November 2014, the 2nd defendant appeals against the decision of Master D Ho (the “Master”) dated 29 October 2014 whereby the Master dismissed the 2nd defendant’s summons dated 25 August 2014. 3.The application, whereby the 2nd defendant seeks to strike out paragraph 10 of the statement of claim (under O 18, r 19 (1)(b) and (1)(c) RDC), as well as certain paragraphs of the plaintiff’s own witness statement, is now brought before me, on appeal, by way of a re-hearing de novo. 4.I did not have the benefit of considering the reasons given by the Master below as it was accepted that such evidence was not available for this hearing. Nevertheless, this did not affect in any way the exercise of my discretion in hearing the appeal. Background 5.The claim brought by the plaintiff is one for fraudulent misrepresentation against the defendants. The statement of claim (“SOC”) filed on 24 October 2012 seeks reimbursement of medical and other expenses from the 2nd defendant under a medical insurance policy (the “policy”), which the 2nd defendant rejected. The SOC is pleaded in a straightforward manner. 6.More particularly, the allegation is that the 1st defendant, who was an insurance agent of the 2nd defendant, made a representation to the plaintiff at the time of the latter entering into the policy, that he had answered all the questions that qualified him to be insured under the policy (the “Representation”). 7.The plaintiff later underwent medical treatment and sought reimbursement of these expenses from the 2nd defendant under the policy. This was rejected on the basis that the plaintiff had failed to disclose important information concerning his medical condition. 8.The plaintiff alleges that he had answered all the questions that he had been asked under the guidance of the 1st defendant (paragraph 6 of the SOC), but if the reimbursement sought was being rejected, this was because the Representation made by the 1st defendant was false in that all questions had, in fact, not been asked. The plaintiff adds that the Representation was made fraudulently, in that the plaintiff knew it was false or was reckless, not caring whether it was true or false. 9.As a result of the false Representation, the plaintiff seeks reimbursement of the amount of medical fees incurred, namely HK$124,218.70, plus return of the premium paid by the plaintiff for the policy and a sum under cash reward, alternatively damages (as set out in the prayer). It is alleged that “the 2nd defendant, as the employer of the 1st defendant, is liable to (sic) the misrepresentation of the 1st defendant” (paragraph 15 of the SOC). 10.The action (including the defence filed as well as all case management directions, including discovery and exchange of witness statements) has proceeded on the basis of the plaintiff’s pleaded claim and it is evident that the relief sought arises from the cause of action pleaded, namely fraudulent misrepresentation. The 2nd defendant’s position 11.Mr Jose Remedios, counsel for the 2nd defendant, argues that paragraph 10 of the SOC (“Paragraph 10”) offends against the normal rules of pleading in that it is wholly irrelevant to the claim and plays no part in any of the issues in dispute or to the relief sought by the plaintiff in this action. Paragraph 10 reads:-
12.Similarly it is argued by the 2nd defendant that the witness statement of the plaintiff, which will be the evidence that he proposes to tender at trial, contains a number of paragraphs namely 7, 9, 10, 11, part of 12, 13, 14, 19 (iv), 23, 24, 26, 27 and 28 (the “Objectionable paragraphs”) which are similarly irrelevant. The 2nd defendant’s position is that the Objectionable paragraphs speak to Paragraph 10 and both must be struck out/ expunged under the rules, as they are inter-linked. The plaintiff’s position 13.Mr Foster Yim, counsel for the plaintiff, resists the appeal and seeks to uphold the decision of the Master. He argues that Paragraph 10 is neutral in itself. He further takes three points:-
Legal principles 14.I was informed by counsel that the following legal principles were not disputed:-
Delay 15.I deal first with delay. 16.It is not disputed that the summons was only issued on 26 August 2014, some 22 months after the SOC was filed. It is, however, evident that the summons was only issued after the witness statements were exchanged on 26 March 2014. 17.Whilst it is clear from the rules that any application to strike out should be made early in the proceedings, it is certainly not a rigid principle: see HK Civil Procedure 2015, at 18/19/3. 18.Whilst Paragraph 10 was, undeniably, pleaded from the outset and the defendants, undeniably, could have applied to strike it out much earlier it was conceded by Mr Yim that Paragraph 10, on its own, does not go to any particular issue presently pleaded (my emphasis). It is also conceded by Mr Yim that, on the face of the SOC, it is not connected to the relief sought. On my analysis, it is a paragraph that sits on its own within the pleading. 19.Whether Paragraph 10 could have been struck out on its own is a moot point but, at that stage of the proceedings, it was simply an irrelevant fact that had been pleaded, but harmless as far as the claim was concerned. On its own, I agree that it is neutral. This was also accepted by the 2nd defendant. 20.The concern arose upon the 2nd defendant’s review of the plaintiff’s witness statement exchanged on 26 March 2014, in particular the Objectionable paragraphs. It became apparent that, by the back door, the plaintiff sought to give considerable narrative, within the Objectionable paragraphs, to Paragraph 10, a previously isolated fact. 21.Whilst I deal with the substantive application below, when read together with the Objectionable paragraphs, it is evident that only at the stage of the exchange of witness statements did Paragraph 10 substantially change from a neutral fact to one with added colour. As a result, the summons was issued. 22.O 18, r 19 (1) RDC permits an application to be made at “any stage of the proceedings”. I agree with Mr Remedios that context was brought to Paragraph 10 only by the Objectionable paragraphs. The summons was issued within a reasonable period thereafter. 23.For the above reasons, I do not accept that there has been any unwarranted delay in issuing the summons. The application Irrelevancy 24.As to the substantive application, Mr Remedios submitted that both Paragraph 10 and the Objectionable paragraphs should be struck out/ expunged as they are “wholly irrelevant to the issues in dispute between the parties and to the cause of action brought by P against D1 and D2”. 25.The plaintiff’s basis for resisting a strike out of the Objectionable paragraphs is stated in Mr Yim’s skeleton submission: “(they) form part and parcel of the dealings between P and D1 (who was the employee of D2) hence it cannot be said that it is clear on the face that they are irrelevant.” As stated, it is also contended that Paragraph 10 is neutral in itself. The pleaded case 26.The first consideration is the content and ambit of the case pleaded against the 2nd defendant. 27.I have set out above a summary of the claim (paragraphs 5 to 10 above). From the pleadings, it was accepted by counsel that the issues for trial are as follows:-
28.It was contended by Mr Yim that an argument arises out of issues (4) and (5) above, which is founded in equity. I deal with this below (paragraph 34 onwards). Paragraph 10 29.As I have observed, Paragraph 10 is isolated within the SOC. That the beneficiary of the policy was stated to be the son and not the friend of the plaintiff, does not appear to have any relevance to the pleading itself. 30.It is noted that the SOC pleads only one representation (the Representation) at paragraph 7, the falsity of which is pleaded at paragraph 9, namely that the 1st defendant did not ask all the questions that the plaintiff needed to answer. It is alleged that the 2nd part of question 22 in the policy was not known to the plaintiff, namely “whether he or his family have been told to have (sic) any disease”（獲告知患有任何疾病）. 31.It is on the basis of the Representation that the plaintiff goes on to seek relief. 32.During the course of the hearing, Mr Yim suggested that the Representation was not as specifically pleaded, but “part of the sequence of conduct of the 1st defendant”. However, it is clear that the SOC does not go so far. The claim for fraudulent misrepresentation has been brought in respect of one Representation, not a sequence of conduct of the 1st defendant. If such a sequence of conduct was intended to be included, the SOC should have been so particularised. Yet, the SOC as originally pleaded remains the plaintiff’s case. 33.Admittedly, Mr Yim was put into a difficult position whereby, on a legal aid brief, he was not involved with drafting the SOC, nor does he know whether he will be the trial counsel. However, this is not something that can have any bearing on how I consider this appeal. The equity argument 34.The plaintiff’s equity argument, submitted by Mr Yim, is as follows. Mr Yim contends that issues (4) and (5) above are founded on equitable principles in that there arises the issue of “clean hands” on the part of the defendants. He continued by saying that the relevant conduct of the 1st defendant was set out at paragraph 12 of the witness statement (within the Objectionable paragraphs) and, if established, would bar the 2nd defendant from rejecting the claim and avoiding the policy, presumably on a lack of clean hands basis. Thus, both Paragraph 10 and the Objectionable paragraphs were relevant. 35.He further attempted to read the claim for a liquidated sum of HK$124,218.70 (prayer (1) of the SOC) as seeking specific performance on the part of the 2nd defendant to repay the money. 36.In spite of Mr Yim’s submission, I note that neither the equity argument nor equitable relief sought form part of the plaintiff’s pleaded case. The only references in relation to contracts uberrimae fidei (as raised in issue (4)) were made by the 2nd defendant in the defence (paragraph 11(2) onwards) where it pleads that a duty was owed by the plaintiff to the 2nd defendant under this principle, which it is alleged that the plaintiff has breached. 37.It is notable that the plaintiff has not filed any Reply to answer these points. Notwithstanding implied joinder of issue, the plaintiff now appears to be presenting a positive case in equity (by Mr Yim’s submissions) which has not been pleaded. 38.Further, the question of “clean hands”, being such a wide concept within the law of equity, has not been defined or particularised by the plaintiff. As stated, it is not appropriate for the plaintiff to introduce the same by way of witness statements in the way proposed or by way of submissions from the Bar table. 39.Similarly, the pleaded claim does not seek equitable relief, such as specific performance. To read such into prayer (1), which seeks payment of a liquidated sum, is misconceived. 40.It has already been accepted by Mr Yim that Paragraph 10 is unrelated to the pleaded claim. It is plain and obvious to me that it plays absolutely no part in any of the issues in dispute or to the relief sought by the plaintiff. 41.Whilst, as a standalone paragraph, it may not have been worth striking out as it does nothing in relation to the plaintiff’s pleaded case, Paragraph 10 must now be considered in light of the Objectionable paragraphs which were introduced later in the proceedings. 42.Paragraph 10 is irrelevant to the claim. Applying Knowles v Roberts, I accept that it is unnecessary and embarrassing under O 18, r 19 (1)(b) RDC and I so decide. 43.I, therefore, do not need to deal with O 18, r 19 (1)(c) RDC, which was Mr Remedios’ fallback position. The Objectionable paragraphs 44.As to the Objectionable paragraphs, which the plaintiff suggests are part and parcel of the conduct and dealing between the plaintiff and 1st defendant, I have dealt above with the evidence sought to be tendered in relation to them. 45.It is trite law that in respect of witness statements, the following provisions are relevant:-
46.The question is whether the Objectionable paragraphs are “material to the issues in dispute and the relief claimed”: Vastco Textile Ltd (supra). 47.I have considered the Objectionable paragraphs as well as the relevant law on this topic. For the reasons stated above, they do not have any bearing on the relief sought nor do they go to any of the issues to be determined at trial on the current case. Whether the information contained in the Objectionable paragraphs were indeed part and parcel of the dealing between the plaintiff and the 1st defendant has no current bearing on whether they fall within the ambit of information that should be contained in the witness statements in relation to the pleaded case. It must be remembered that this is evidence intended to be produced on behalf of the plaintiff at trial but, presently, have no relevance to the pleadings. 48.From the analysis and reasons stated above, I consider that the Objectionable paragraphs are also irrelevant and I so decide. Tactics 49.Strictly speaking, I do not need to consider the final point raised by the plaintiff, namely that tactically it does not need to reveal the relevance of the Objectionable paragraphs at this stage. 50.With respect, there has been some misunderstanding. 51.At the outset of the hearing, it appeared that Mr Yim was intending to reveal the plaintiff’s tactics to be adopted at the upcoming trial in order to answer Mr Remedios’ submissions. I reminded Mr Yim that this was certainly not being urged by the court nor, did it seem, by the 2nd defendant. The focus, I stated, was to deal with the relevancy of Paragraph 10 and the Objectionable paragraphs from the perspective of the application. As well as any other grounds sought to be put forward in resisting the application. I have dealt with these above. 52.Whatever may be the tactics of the plaintiff at trial, it is trite law that a defendant must know the case it has to meet in order to properly prepare for the trial. The question is why it should be incumbent on the 2nd defendant to devote time, costs, expenses and considerable effort in having to deal with matters that are not relevant to the claim and are not material to the issues in dispute, but which the plaintiff wishes to put forward at trial. That is neither the purpose of pleadings nor witness statements. Neither Paragraph 10 nor the Objectionable paragraphs are relevant, as I have decided. They are also immaterial to the plaintiff’s pleaded case and the issues in dispute. 53.It is common for a party’s claim to evolve after pleadings are closed. New instructions emerge and further legal advice is obtained. Parties may change their view of their case, such that the pleadings trail behind. If the revisions to their case are sufficiently relevant to the point where a new issue or particulars will be relied on, the proper way to introduce amendments is not directly, by way of evidence in the witness statements, but in the pleadings. It is only from the pleadings that a party can know what case it has to meet and what issues are sought to be determined at trial. That the SOC has not been amended sends the message, on a practical level, that the plaintiff’s case has not changed. Conclusion 54.The appeal is allowed. The Master’s decision of 29 October 2014 is accordingly set aside. 55.I order that Paragraph 10 be struck out and the Objectionable paragraphs be expunged from the witness statement. The plaintiff is to re-file and serve an amended SOC and amended witness statement, in accordance with this order, within 14 days. No additional directions have been sought by either party. 56.Costs of the appeal, including of the hearing as well as the costs incurred before the Master, are to be paid by the plaintiff to the 2nd defendant, to be taxed if not agreed. I also grant a certificate for counsel. 57.The plaintiff’s own costs are to be taxed in accordance with Legal Aid Regulations. 58.Finally, I thank both counsel for their assistance to the court.
Mr Foster HC Yim, instructed by Wan & Co, assigned by the Director of Legal Aid, for the plaintiff Mr Jose Remedios, instructed by Keith Lam Lau & Chan, for the 2nd defendant | ||||||||||||||||||||||