LEUNG WAI PING v. AIA INTERNATIONAL LTD

DCCJ 5080/2020

[2022] HKDC 1062

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 5080 OF 2020

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DECISION

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1.  These proceedings were begun by the plaintiff on 21 September 2020 to claim against the defendant for payment of benefits under a personal insurance policy entered on 30 August 2018. The plaintiff sustained personal injuries on 28 September 2018 giving rise to an amount of US$83,820 said to be payable in accordance with the terms of the policy.

2.  A defence was filed on 2 November 2020. As pleaded, the defendant does not dispute the subsistence of the policy. While no admission is made either to the occurrence of the accident or the extent of the injuries sustained, the primary issue taken by the defendant is that the plaintiff does not suffer from any “permanent and total disability” as defined in the policy contract. By 5 cheques, payments were made to the plaintiff in the total sum of US$66,040. Essentially, the defendant says that the plaintiff is not entitled to any further payment under the policy.

3.  By a summons taken out on 4 August 2021, the defendant sought discovery against the plaintiff of particular documents under O.24., r.7. Those documents were specified in a schedule (“Schedule”) which include: -

(1)  All Employer’s Return of Remuneration and Pensions submitted by the Plaintiff’s employer(s) in respect of the Plaintiff for the year of assessment 2017/2018 up to the present;

(2)  All income tax returns submitted by the Plaintiff to the Inland Revenue Department for the year of assessment 2017/2018 up to the present;

(3)  Tax assessment notices in respect of the Plaintiff issued by the Inland Revenue Department for the year of assessment 2017/2018 up to the present;

(4)  If any of the documents mentioned in paragraphs (1) to (3) above does not exist, a confirmation to such effect from the Inland Revenue Department;

(5)  All earnings records, salary statements and pay slips of the Plaintiff for the period from June 2017 up to the present, except for the salary slips from July to September 2018 issued by Royal Intl HK Co;

(6)  MPF monthly contribution records and MPF annual statements of the Plaintiff for the period from June 2017 up to the present;

(7)  Report prepared by the Mandatory Provident Fund Schemes Authority setting out the particulars of the MPF account(s) of the Plaintiff; and

(8)  All bank passbook entries and monthly statements of the Plaintiff’s bank account(s), whether held solely or jointly, for the period from June 2017 up to the present.

4.  The application for discovery was not opposed and so on 6 September 2021 an Order was made for the plaintiff to serve an affirmation within 14 days to state whether she had possession of the documents listed in the Schedule, if not then when did she part with them and what had become of them. The plaintiff was further ordered to allow inspection of the documents in her possession within 7 days thereafter, and permit the defendant to peruse, take copies, make notes of their contents, and be supplied with copies of the available documents upon payment of proper charges.

5.  Having failed to supply the required affirmation, on 15 October 2021 the defendant took out another summons for the plaintiff to make compliance by 4 pm on 19 November 2021. The application was disposed of by consent and the unless order was extended to 4 pm on 30 November 2021.

6.  Dated 29 November 2021, the plaintiff served an affirmation but which did not reach the solicitors for the defendant until 30 November 2021 at 5:44 pm (“Late Affirmation”). The filing of the Late Affirmation took place on the next day, 1 December 2021. Therefore, on 10 December 2021 the defendant applied by letter for the action be dismissed with costs on the basis that the unless order dated 15 November 2021 had been breached. Master B. Mak granted the dismissal and costs on 16 December 2021.

7.  Both the latest unless order and the order for dismissal were served on the solicitors for the plaintiff on 20 December 2021. Almost 2 months later, the plaintiff filed a notice of appeal dated 14 February 2022 to seek a reinstatement of this action, retrospective leave for the filing of the Late Affirmation, and for the costs order be set aside (“Notice of Appeal”). The defendant resisted the intended appeal and filed a summons on 19 April 2022 for a strike out of the Notice of Appeal upon the reason, namely, that the step taken by the plaintiff was procedurally wrong.

8.  After hearing submissions from counsel and upon an undertaking provided by the plaintiff to file a fresh summons for relief against sanction, on 23 May 2022 the Court adjourned the matter to a hearing to be fixed with 2 hours reserved, and gave consequential directions for the parties to file another round of evidence. On 25 May 2022, the plaintiff filed a summons accordingly under O.2, r.4 seeking more or less the same orders in the Notice of Appeal (“Relief Summons”).

9.  On 6 June 2022, Mr. Mohnani Dheeraj Suresh (“Mr. Mohnani”), the principal of Messrs. Mohnani & Associates, filed an affirmation in support of the Relief Summons. On 20 June 2022, Mr. Lo Wai, a senior associate of Messrs. Clyde & Co, filed a second affidavit in opposition.

10.  I deal first with the Relief Summons.

11.  Under O.2, r.4, an application for relief from sanction is to be made within 14 days from the date of non-compliance. O.2, r.5 continues to provide the relevant circumstances to be considered in deciding one such application.

12.  Mr. Oscar Tam, counsel for the plaintiff, draws specifically to my attention the following authorities: -

(a)  Bruce James Stinson v. Gu Ming Gao [2019] HKCFI 43, in which Deputy High Court Judge Marlene Ng, as she then was, said at §144, “In considering whether to extend time to grant relief from sanction, the court has to consider all relevant factors, particularly (a) the length of delay, (b) the reasons for the delay, (c) the merits of the proposed application for relief from sanction, and (d) the degree of prejudice to the other party, and the factor in (c) above will bring into focus the 9 factors in Order 2 rule 5(1) of the RHC.”;

(b)  An Zhou & Ors v. Zhou Zhen Kuan & Ors, HCA 241/2010, 30 August 2012, unreported, in which Hon. To J said at §27, “Usually the court would have considered the appropriateness of the sanction at the time of making of the unless order. However, circumstances may change. The extent of the breach as it turned out may not be as serious as anticipated and there may be mitigating circumstances. Worth noting is that Order 2, rule 5(f) expressly distinguishes between default caused by the litigant and that caused by his legal representative.”; and

(c)  Glory Sky Finance Limited v Chen Jianhua & Anor [2018] HKCFI 578, in which Deputy High Court Judge Keith Yeung SC, as he then was, said at §50, “In determining whether or not relief should be granted, the Court shall undertake a weighing exercise and consider all the circumstances including the 10 individual circumstances set out in Order 2, rule 5. When doing so, a weighty factor is the question of proportionality of the sanction in the circumstances in the case”.

13.  Mr. Vincent Chiu, counsel for the defendant, relies primarily on Top One International (China) Property Group Company Ltd v. Top One Property Group Ltd [2011] 1 HKLRD 606 in which Fok J, as he then was, said at §41,

“That is to say, although intentional and contumelious disregard of a court’s peremptory order may be the most usual circumstance leading to the refusal of an extension of time to comply with a peremptory order, the exercise of the discretion to refuse an extension or to relieve a party from sanctions is not limited to cases of intentional and contumelious default. As directed by O.2 r.5 of the Rules of the High Court, the court should consider all the individual circumstances including those listed in r.5(1) at subparas. (a)-(j). Depending on the circumstances, failure to comply with one or a number of orders through negligence, incompetence or sheer indolence may be such as to lead the court to conclude there is an existence and degree of fault which warrants a refusal of an extension of time, so that relief from a sanction for non-compliance specified in a peremptory order (including an order striking out a pleading) should not be granted. Any other conclusion would, in my opinion, be to ignore the positive duty place on parties to assist the court to further the underlying objectives of CJR (O.1A r.3 of the Rules of the High Court) and on the court to do so by actively managing cases (O.1A r.4(1) of the Rules of the High Court).”

14.  Mr. Chiu has also referred me to other cases but they were clearly decided against the facts of those decisions.

15.  The reasons in support for the relief against sanction are straightforward. It is unnecessary to go into a deep analysis of those reasons but in summary Mr. Tam submits as follows:-

(a)  that the delay in the filing of the Late Affirmation was a short one of less than 2 hours, caused by an unexpected absence from duty of the filing clerk of the solicitor firm of the plaintiff who had contracted coronavirus. Mr. Mohnani learned about the situation after court at 4:30 p.m. on 30 November 2021, and made arrangements for the service of the Late Affirmation on the solicitors for the defendant promptly. The filing of the Late Affirmation had to be carried out on the following day because the Court Registry was closed by then;

(b)  the plaintiff’s financial difficulties had contributed to the delay in the filing of the Notice of Appeal and the Relief Summons. Mr. Mohnani waived his professional fees in the conduct of the intended appeal;

(c)  the filing of the Notice of Appeal was a mistake on the part of the solicitors not the plaintiff who therefore did not intend to cause this part of the delay;

(d)  no or no substantial prejudice is caused to the defendant as the documents sought to be discovered had largely been provided. It came as no surprise for the plaintiff to be seeking a relief against sanction albeit by the Notice of Appeal inadequately;

(e)  the proceedings were still at a relatively early stage, there being no trial date fixed. The impact of non-compliance with the unless order was little and insubstantial, and can be compensated by costs;

(f)  the claim of the plaintiff is serious in nature which in the interests of justice warrants a decision on merits rather than to be dismissed by virtue of a procedural breach;

(g)  the refusal of a relief will be disproportionate under these circumstances.

16.  In my view, the starting point must be to look at the Late Affirmation. It consists of slightly more than 2 pages together with 5 exhibits. The first exhibit was a letter dated 13 September 2021 from Messrs. Mohnani & Associates to Messrs. Clyde & Co (“Mohnani Letter”) providing a number of documents said to be satisfying items 1, 2, 3 and 8 of the Schedule. It is to be noted that by this letter, the plaintiff purported to provide a copy of the bank passbook for an account in her name with the Industrial and Commercial Bank of China (Asia) Limited (“ICBC Account”) between August 2015 to September 2021. The ICBC Account was described to be “the only account of the Plaintiff”.

17.  At §5 of the Late Affirmation, the plaintiff disclosed that she had only one additional bank account with the Bank of East Asia, Limited opened jointly with her husband in November 2020 (“BEA Account”). A copy of the bank statements since November 2020 is also exhibited.

18.  Then the plaintiff explained her employment firstly with AMTD Risk Solutions Group Limited (“AMTD”) in 2015, making a monthly income of $14,000 as a supervisor. By July 2018 she became an Assistant Vice President. At that time she also had a second concurrent employment with Royal Intl HK Co (“Royal International”) receiving a monthly salary of $51,000. The plaintiff affirmed that at the time of the accident, she was on leave from AMTD and worked only for Royal International. However, during the sick leave period, the position was reversed in that she worked for AMTD but not Royal International.

19.  For the next exhibit, the plaintiff provided a copy of the pay advices issued by AMTD between January 2017 to September 2021. She confirmed them to be the only documents that she had received from AMTD regarding her salary.

20.  The last two exhibits concerned the annual MPF statements for two MPF accounts the plaintiff had maintained between January 2017 and December 2020, and a report issued by the MPF Schemes Authority dated 11 October 2021. She further affirmed that she did not have in possession any monthly MPF records.

21.  To put matters in context, on 6 September 2021, the plaintiff was ordered to affirm whether the documents in the Schedule were in her possession, if not when she had parted with them and what had become of them. An inspection of the available documents by the defendant was intended to follow the service of such an affirmation. The Mohnani Letter, albeit issued before the specified 14-day time limit, was not an affirmation and did not accord with the terms of the Order. It is significant to note that the Mohnani Letter also stated “We trust that all these documents together with the documents previously provided to you with respect to Royal Intl HK Co, shall more than suffice for you to assess the quantum of our client’s claim”.

22.  The plaintiff appeared to take the position that the Mohnani Letter was sufficient compliance with the Order dated 6 September 2021 and did not proceed with the service of an affirmation required. Hence, the defendant took out another Summons dated 15 October 2021. Once more, the defendant applied for the plaintiff to file an affirmation with, as stated in the Summons, reference to the “documents particularized in the Schedule attached to the Summons filed herein on 4 August 2021”. It is plain that the defendant did not accept the Mohnani Letter to have complied with the earlier Order dated 6 September 2021, and wanted the plaintiff to confirm by sworn evidence the subsistence of each type of documents set out in the Schedule. In that regard, the plaintiff did not, whether at that point or any stage thereafter, seek to challenge the Summons or to remove any items in the Schedule but instead gave consent which resulted in the unless order made on 15 November 2021.

23.  Still, the Late Affirmation did not conform with the requirements in the unless order, whether in form or in substance. Mr. Tam does not seek to argue otherwise.

24.  As it further turns out, a matter which Mr. Chiu now places great emphasis on, the pay advices provided by the plaintiff in the Late Affirmation reveal that she received the corresponding salary payments with a different bank account, that the defendant identifies to be with the Standard Chartered Bank (Hong Kong) Limited (“SCB Account”), from the bank accounts previously disclosed by her. It was also discovered by the defendant, as deposed by Mr. Lo Wai in his 2^nd Affidavit, that the cheques drawn by the defendant in favour of the plaintiff for payment of benefits under the personal insurance policy were deposited into a third bank account with the Bank of China (Hong Kong) Limited (“BOC Account”).

25.  The plaintiff offered no or no proper explanation to these derelictions. I find that the plaintiff has not been forthcoming with the number of bank accounts she owns, whether solely or jointly, and her actions defeat the very essence of the unless order. The service of the Mohnani Letter and the Late Affirmation cannot be described as unintentional or inadvertent non-compliance. Even as at the time of this hearing, the plaintiff has not provided confirmation of the SCB or BOC Account or the whereabouts of the corresponding documents which she could have volunteered after the affirmation of Mr. Mohnani filed on 2 June 2022 or even after the Late Affirmation filed in November 2021. The repeated and unexplained failures to comply with the discovery that the plaintiff herself consented to are inexcusable. I do not accept the submissions of Mr. Tam that no substantial prejudice is caused to the defendant, rather the failure to perform a positive duty on her part and so a failure to accede to active case management by the Court clearly by themselves constitute substantial prejudice.

26.  Mr. Chiu also takes issue with the delay and the truthfulness of the filing clerk being absent from duty at the material time. These matters even if I am to find in favour of the plaintiff which I do not, will not bring the plaintiff’s application any further under the circumstances of this case.

27.  Accordingly, I refuse the plaintiff’s application for relief against sanction and dismiss her Relief Summons dated 25 May 2022. It follows that the Notice of Appeal dated 14 February 2022 will also be dismissed. Mr. Tam has at the start of this hearing indicated that the plaintiff will not pursue the Notice of Appeal in any event.

28.  For costs, after hearing submissions from counsel, I order that the plaintiff do pay the defendant costs of the Notice of Appeal on a party and party basis and costs of the Relief Summons on an indemnity basis, to be taxed if not agreed, with certificate for counsel.