TSOI YIU CHUNG v. ING LIFE INSURANCE CO (BERMUDA) LTD formerly known as AETHA LIFE INSURANCE CO (BERMUDA) LTD

HCMP 247/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO. 247 OF 2011

(ON AN INTENDED APPEAL FROM HCA NO. 2447 OF 2007)

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Hon Yeung JA:

1.  The plaintiff, a former client of the defendant, at one stage held 25 policies of insurance issued by the defendant. He claimed to have been paying premiums of over $7.6 million between 1997 and 2004 with his credit card by direct payments to the defendant’s account.

2.  However, someone who appeared to be an employee of the defendant in charge of the plaintiff’s policies was able to manoeuvre the accounts and allocated the plaintiff’s payments to other customers’ policies instead of the plaintiff’s. The defendant alleged that, in such circumstances, the plaintiff’s policies had lapsed for non-payment of premiums and refused to give the plaintiff any redress for such fraud. The defendant suggests that notices had been sent to the plaintiff informing him that his policies had lapsed because of non-payment of premiums.

3.  The plaintiff claimed against the defendant for restitution of the premiums and the loss of the cash value of some policies.

4.  The case had been set down for a 7-day trial between 2 and 10 March 2011.

5.  On 11 and 18 of January 2011, the plaintiff applied to re-amend the amended statement of claim and to file additional witness statements, having made an indication to do so on 4 January 2011.

6.  On 21 January 2011, Deputy High Court Judge Carlson allowed the application and vacated the hearing dates to enable the parties to attend to the re-amendment and all consequential matters. Costs order in favour of the defendant was also made.

7.  The defendant objected to the judge’s orders and sought leave to appeal against the orders. It was refused on 15 February 2011.

8.  The defendant now seeks leave from this court and if leave is granted, an expedited hearing of the appeal. The issue we have to decide is whether the judge was wrong to exercise the discretion as he did.

9.  There is no doubt that the application to re-amend of the amended statement of claim was a late one and that the re-amendments were substantial. It is also right, as observed by Mr Yip for the defendant, that with the introduction of the Civil Justice Reform, it is important to deal with cases as expeditiously as is reasonably practicable and to achieve such an aim, the trial period is a milestone date, and should not be changed unless there are exceptional reasons.

10.  However, it has always been important and remains so to ensure that genuine disputes between the parties are properly resolved and that the only way to do so is by proper pleadings and proper evidence. Milestone dates can be changed, if necessary.

11.  The action commenced in late 2007 and pleadings were only closed with filing of witness statements in early 2010. The order to set down the trial was made in March 2010. There had not been substantial delay of the case.

12.  The judge had made certain observation about the plaintiff’s cause of action and in so doing, commented that the plaintiff had been defrauded of over $7.6 million. Mr Yip complains that there was insufficient particular and that the relevant particulars do not add up to $7.6 million.

13.  It is again not necessary for us to decide at this stage the merits of the parties’ respective cases.

14.  However, it appears that the plaintiff had in fact been defrauded by someone who appeared to be an employee of the defendant of a significant amount of money and that he does have a genuine claim against the defendant. The judge described the plaintiff’s case as a compelling one and that he had been a victim of a highly cynical and well-planned fraud perpetrated by an employee of the defendant. The dispute had to be properly resolved.

15.  The judge had taken note of the fact that the plaintiff’s case was originally handled by very junior counsel and when a more senior counsel was engaged in late December 2010, it was considered that proper amendment to the plaintiff’s case, by relying also the allegations that the defendant had failed to monitor an employee against her “fraud” and to comply with Code of Conducts as an insurer.

16.  The judge was entitled to rely on those matters and accept that such matters constitute sufficient reasons for him to exercise discretion in favour of the plaintiff and to change the “milestone date”.

17.  Mr Yip suggests that the proposed amendments will result in a different case and a substantial increased claim that the defendant has to meet. Mr Yip complains about the insufficient particulars and that the new cause of action involves matters and events that happened more than 13 years ago and as such, the issue of limitation of action can arise.

18.  Mr Yip also complains about possible prejudice when witnesses’ memories may be fading with passage of time and when extensive discovery of relevant documents may become necessary.

19.  Again, it is neither necessary nor possible for us to adjudicate on those matters at this stage.

20.  The suggestion, that the defendant may have to meet a different case and that the claim will be enhanced by the re-amendment, is not a sufficient reason not to exercise discretion in favour of the plaintiff.

21.  The alleged insufficiency of particulars, if still true, can be dealt with at an appropriate stage. The judge had granted leave to the defendant to apply for further and better particulars of the re-amended statement of claim. The issue of limitation of action can only be properly resolved when it is raised and the evidence examined.

22.  There is no undue prejudice, and in my view, the suggested prejudice appears to be perceived rather than real.

23.  I am not persuaded that the judge’s exercise of discretion in favour of the plaintiff in a case management decision is completely unsupportable. There is certainly no injustice to the defendant. I am satisfied that the defendant’s application for leave to appeal against such exercise of discretion has no reasonable prospect of success.

24.  I dismiss the defendant’s application for leave to appeal with costs to the plaintiff in any event.

Hon Hartmann JA:

25.  I agree and would wish to add only a couple of short observations.  First, an appellate court should not interfere with the decision of a trial judge in relation to directions given in respect of the conduct of civil proceedings unless the trial judge is found to have been plainly wrong.

26.  When making a decision of this kind a trial judge must attempt to do justice to all the parties.  Clearly, in the present case, the trial judge, as he was entitled, looked to the distressing outcome that was almost inevitable if he refused the application for re-amendment and also looked to the interests of the defendant by way of directions as to further conduct of the proceedings if he allowed the re-amendment.

27.  In the circumstances, I am satisfied that the exercise of discretion by the judge was correct in principle and clearly within the broad parameters given to him.