ING LIFE INSURANCE CO (BERMUDA) LTD v. IP KAM WING

DCCJ 18717/2001

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 18717 OF 2001

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JUDGMENT

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1. This is an application for assessment of damages pursuant to the order of H.H. Judge Lok as a result of an O. 14 summons taken out by the Plaintiff.

2. The Plaintiff claims under 2 heads i.e. in respect of $52,301.76 being debts incurred by the Defendant's down-line agents and $128,565.83 being debts incurred by the Defendant.

3. On or about 1/2/99 the Defendant signed an Individual Agent's agreement with the Plaintiff and a guarantee income agreement in which the Defendant would be entitled to a guaranteed income of $480,000 for the 1st year of his contract. That amount could be paid by 12 monthly instalments and debited to the Defendant's commission account. The said agreement was terminated on 1/6/2001.

4. In March and July 1999 the Plaintiff appointed Tsui Tin On Anthony and Mui Sui Man Sara as the Defendant's down-line agents. As such the Defendant was entitled to an override commission for business solicited by them.

5. The Defendant signed 2 Appointment and Application Forms, one for Tsui and the other for Mui. In the application forms the Defendant guaranteed that should Tsui and Mui fail to earn sufficient commission to reimburse the Plaintiff for payments advanced, the Plaintiff should reimburse the Plaintiff the balance of the amount advanced by the Plaintiff to them.

6. The only issue in respect of the Defendant's personal debt is whether the advancement of $40,000 by the Plaintiff to the Defendant in January 99 was a guaranteed income. The calculation of the Defendant's personal debt during his employment with the Plaintiff had been set out clearly in the statement of account as at 3/7/02. The Defendant has not challenged its accuracy nor queried the Plaintiff about its calculation. The Individual Agreement the Defendant signed was in February 1999. Clause 12(ii) of that agreement states "that every calculation of the balance of the commission account of the agent shall be determined by the company and shall be final and conclusive and binding on the agent".

7. In the letter to the Defendant by the Plaintiff dated 1/2/99, 4th paragraph states "You are also entitled to a guaranteed income of HK$480,000 for the 1st year of your contract with East Asia Aetna". The contract was signed in February 1999. The Defendant cannot be heard to say that the $40,000 in January 99 was part of the contract for guaranteed income as the contract did not exist in January 99. Hence I find that the personal debt of the Defendant is as claimed i.e. $128,565.83.

8. As to the indebtedness incurred by the down line agents the Plaintiff has only put forward the Defendant's guaranteed amount in respect of Tsui Tin On Anthony and Mui Siu Man Sara. The Defendant has signed a confirmation of the debt of Tsui in the sum of $6,431.06 and the Plaintiff has also obtained judgment in the Small Claims Tribunal in the sum of $24,067.81. Both sums had not been recovered.

9. The Defendant has guaranteed to reimburse the Plaintiff for the payments advanced. The Defendant argued that he is not liable as there was no consideration. I do not agree. The Defendant in consideration of receiving a portion of the commission received by his underline agents guaranteed to reimburse the Plaintiff in respect of payments advanced to his underline agents. In the premises the Defendant is also liable to the Plaintiff in the sums of $6,431.06 and $24,067.81.

10. I assess that the Defendant is liable to the Plaintiff in the sums of $128,565.83, $6,431.06 and $24,067.81 respectively.

11. In the premises there be judgment for $159,064.70 with interest at 1% above prime p.a. from 1st June 2001 until judgment and thereafter at judgment rate. Order nisi : Costs to Plaintiff.