TSE SHAO CHUAN, the Administratrix of the estate of Ho Man Shing, deceased TSE SHAO CHUAN V. PANG KA YIN

DCCJ 3934/2022

[2023] HKDC 733

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 3934 OF 2022

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DECISION

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Introduction

1.  This is a curious claim, based on an insurance policy, but not against the insurance company.

Background Facts

2.  In their Statement of Claim (“SoC”), the 1^st and 2^nd plaintiffs (“Ps”), who are one and the same person suing in two different capacities, alleged that a named person (“the Deceased”) bought an insurance policy from a named insurance company (“the Company”) and then sadly passed away on 19 May 2019 at the age of 46. The Company was alleged to have issued a letter, dated 27 July 2019, confirming that a sum of US$76,562.10 (“the Sum”) should be payable under the insurance policy.

3.  It is Ps’ case that by a notice of change of beneficiary sent to the Company “on or about 15 May 2019”, the beneficiaries under the said insurance policy were changed to Ho Man Shing and Tse Shao Chuan, ie, Ps. The Company had nonetheless paid the Sum to the defendant (“D”), instead of Ps, “on or about 18 September 2019”. In other words, Ps’ case is, in substance, that the Company paid the wrong person.

4.  Instead of suing the Company for the Sum, Ps chose to sue D for a declaration that D was holding the Sum on trust for Ps. This tactical decision is unexplained, in the SoC or in any other document before me. It is also unknown to me, from reading the SoC or any other document, why the Company paid D instead of Ps, or whether the Company had ever given Ps an explanation of some kind in relation to this.

5.  D has apparently filed an acknowledgement of service but did not file any defence. On 27 March 2023, Ps took out an Order 19 summons (“the Summons”), which came to be heard by me today.

6.  Mr Tam Tak Wing, acting for Ps, asked for an order in terms of the Summons, including a declaration that D was holding the Sum on trust for Ps, in the absence of the Company, saying D had “by her conduct in essence effected a trust”.

The Law

7.  In Top One International (China) Property Group Co Ltd v Top One Property Group Ltd [2011] 1 HKLRD 606 (at §78 to §83) Fok J, as Fok PJ then was, said this:-

“In general, a declaration will not be granted when giving judgment by consent or without trial, eg where judgment is obtained in default of defence. This principle is, however, a rule of practice and not of law and will give way to the paramount duty of the court to do the fullest justice to the plaintiff to which he is entitled…. In the absence of a judgment reached after hearing evidence, a declaration could be based only on unproved allegations and the court ought not to declare as fact that which might not have proved to be such, had the facts been investigated…” (Emphasis added)

My View

8.  Ps’ case, as framed in the SoC, is not an appropriate case for a declaration to be granted summarily.

9.  Firstly, there is no necessity. There is no suggestion, whether in the SoC or otherwise, that the Sum was in any identifiable bank account. There is no suggestion that the cheque in question had ever been deposited or cashed. The usual priority considerations do not apply.

10.  Secondly, I am not satisfied that the facts as set out in the SoC, if all true, would necessarily create a trust. The possibilities are endless. Ps never pleaded the terms of the insurance policy, or the reasons given by the Company for paying the Sum to D instead of Ps (if any were given), or why Ps chose to sue D instead of the Company. It seems to me that this is a case where the facts need to be investigated, or proved in a trial, before a declaration should be made.

Disposition

11.  For the above reasons, I decline to make an order in terms of the Summons. As it seems possible for Ps’ case to be saved by substantial amendments to the SoC, instead of dismissing the Summons, I shall simply adjourn the Summons sine die, with liberty to restore it before any Judge of the District Court for a 2-hour hearing, and with costs reserved. Since I have been told by the defendant, appearing before me in person, that there shall be a Legal Aid Appeal Hearing in the High Court on 13 July 2023 at 2:30 pm, the Summons should not be heard before 31 July 2023. Ps’ own costs shall be taxed in accordance with the Legal Aid Regulations. This is the order I make today.

12.  I encourage Mr Tam Tak Wing, and of course Ps themselves, to reflect upon the above, before deciding what to do next.

13.  I do thank Mr Tam Tak Wing for his very able assistance.