AXA CHINA REGION INSURANCE CO. LTD. AND ANOTHER v. LI YU PING, ELLEN

HCA 9975/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 9975 OF 2000

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J U D G M E N T

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1. This is an application by the plaintiffs ("Axa") for the committal of the defendant to prison for contempt of court, the contempt being that she failed to comply with an order of Yeung J made on 14 November 2000 whereby she was ordered to deliver up to the plaintiffs' solicitors any of the following documents belonging to the plaintiffs, namely

Client lists, Proposals, White cards, Application forms and all other documents belonging to the Plaintiffs containing information relating to holders, or former holders of life insurance policies and/or insured persons issued by either of the Plaintiffs and all copies thereof in her possession

by 5:00 pm on 16 November 2000 (which was extended to 5:00 pm on 27 November 2000 by the order of Deputy Judge Muttrie on 17 November 2000) or at all.

2. The order with penal notice attached was served on the defendant on 14 November 2000 at approximately 2:05 pm.

3. Leave to make this application was granted by Yeung J on 12 September 2001.

4. For the purpose of this application Axa relied upon 8 particular grounds which are set out in paragraphs (a) - (h) of the Notice of Motion and Statement pursuant to O.52 r.2(2) of the Rules of the High Court, Cap. 4. Following successful submissions of "no case" by the defendant on 4 of those grounds after the close of the plaintiffs' evidence, 4 grounds now remain.

5. The 4 grounds can be summarised as follows:

Ground (b)	that whereas on 14 November 2000 the defendant was in possession of a set of copy "White cards" which were in the form of one card per page, she failed to deliver up such a set;
Ground (d)	that whereas on 14 November 2000 she was in possession of about 2 box files of original or copy Proposals she only delivered up one such box file on 16 November 2000;
Ground (e)	that the defendant made or caused to be made copies of Pink/White cards between 14 - 16 November which she failed to deliver up;
Ground (g)	that she failed to deliver up 3 particular Proposals which she gave to (Antoine) Ho Kwok Fu in about April 2001.

6. It is common ground that the statement under O.52 r.2(2) in support of an application for committal should be treated in a similar manner to an indictment in criminal proceedings having regard to the penal nature of the sanctions for contempt of court: see Grand Union Insurance Co. Ltd v Clyde & Co [1988] HKC 464. It is also common ground that no matter whether it is a civil or criminal contempt, proof is to the criminal standard i.e. beyond reasonable doubt.

7. The defendant is and was at all material times an insurance agent. On 1 February 1986 she became an agent of Axa and over the following almost 14 years sold a significant number of policies on its behalf. These were predominantly "life" policies. On 19 September 1999 over 90% of the policies which had been sold by her for Axa and which were still effective were of this type. As an agent she was entitled to 50 - 60% of the premium paid by a client in the first year of the policy which diminished to 3% after 5 - 10 years.

8. On 17 September 1999, through a firm of solicitors, the defendant tendered her resignation to Axa. During the defendant's one month notice period Axa came to believe that the defendant had broken her contract by encouraging fellow agents to leave Axa and therefore terminated her contract for cause by letter dated 7 October 1999. The defendant denied this allegation but nonetheless the immediate effect of her dismissal was that she ceased to receive renewal commissions in respect of the clients she had introduced to Axa.

9. Shortly afterwards on 2 November 1999 the defendant became an agent for Winterthur Swiss Insurance (Asia) Ltd ("Winterthur").

10. Thereafter Axa came to believe that the defendant was targeting their policy holders and attempting to persuade them to surrender their Axa policies and take out policies issued by Winterthur using Axa documents she had improperly taken with her after the termination of her contract with them. The ground for this belief came from what they have been told by Miss Pinky Cheng Wai Ping (Pinky Cheng), a previous employee of Axa, who worked for two months as the defendant's secretary at Winterthur from 17 August 2000 until 18 October 2000.

11. Her evidence was the basis for the interlocutory injunction obtained from Yeung J on 14 November 2000 by which he ordered the delivery up of the documents specified in his order. Axa issued a writ the same day.

12. On 16 November 2000 the defendant's solicitors delivered up to Axa's solicitors (Messrs Herbert Smith), a large quantity of documents pursuant to the order. It is the plaintiffs' case that everything that was delivered up is now in the 14 box files which comprise Exhibits P1 - P4.

13. Exhibit P1 comprises an original computer print out of the defendant's Client list as at 13 September 1999 (with a small number of pages missing) which derived from Axa's computer system.

14. Exhibit P2 comprises copy or original Proposals. Proposals are essentially illustrations given to potential policy holders before they enter into a life insurance policy which set out the main terms of the policy and give the potential policy holder a projection of the benefits which may or will accrue from the payment of a particular premium over a certain period.

15. Exhibit P3 comprises "White cards" (photocopied 3 to a page). White cards are cards produced by Axa once a policy has been issued and sent to the agent who arranged the policy and his or her manager. They set out the details of the policy holder and the salient points of the policy. Until around 1990 these White cards were coloured light pink and some agents continued to refer to White cards as "Pink cards" but the contents were the same.

16. Exhibit P4 comprises Application forms and associated documents (now in 11 box files). They are forms filled in by the policy holders in order to apply for an insurance policy.

17. Of these 4 types of documents only 2 are significant for the purpose of the remaining grounds alleged against the defendant:

(i) White/Pink cards (and in particular copies thereof) the subject of grounds (b) and (e); and

(ii) Proposals and copies thereof (grounds (d) and (g)).

18. Axa's case rests primarily on the credibility of two witnesses, Pinky Cheng (in respect of grounds (b) and (d)) and Antoine Ho Kwok Fu (in respect of grounds (e) and (g)). Both worked with the defendant at Winterthur. Pinky Cheng was, as I have said, the defendant's secretary and Antoine Ho was a "District Manager" reporting directly to the defendant (who was a "Regional Manager") between November 1999 and July 2001. Both had previously worked for Axa; Pinky Cheng as a personal assistant between January and August 2000 and Antoine Ho as an insurance agent between 1987 and 1991.

The Evidence of Pinky Cheng: Grounds (b) and (d)

19. Pinky Cheng's evidence amounts to this: At Winterthur the defendant had kept 4 particular box files in her office. One contained photocopies of Axa Client lists, two contained Axa Proposals or copies thereof and the fourth contained photocopies of Axa White cards, photocopied 3 to a page. Outside her office she kept copies of Axa Application forms.

20. In the drawer below her computer the defendant kept another set of copy White cards. This set had been created by cutting A4 paper into 3 segments so that only one copy White card appeared on each sheet. These copy White cards had been in bundles, sequenced in date order by reference to the policy renewal dates and held together by rubber bands. The defendant had asked her to check and ensure that they were in the correct order and at the end of each month would ask her to take out the copy cards which related to policies due for renewal in the coming month. Pinky Cheng said she had heard the defendant speaking to the policyholders on the telephone seeking to persuade them to surrender their Axa policies in return for a new Winterthur policy.

21. Axa's case on ground (b) is that these bundles of copy White cards photocopied one per page were not delivered up by the defendant. The defendant does not deny that she never delivered up such documents. Her evidence is that there never were such copies of White cards copied one per page.

22. In so far as ground (d) which relates to Proposals is concerned, Pinky Cheng's evidence is that there were two 3 inch box files (i.e. the same size as the box file now containing Exhibit P2) containing Proposals in the defendant's office. Both of these box files were so full that the rings had broken and the clips could not be put on them. The proposals in the box files were classified according to different categories of life policy. Both box files were fuller than the box file now containing Proposals (Exhibit P2). She was able to say that she looked through most of the documents in the 2 files and did not see anything other than Proposals in them. The occasions she had cause to look into the files would have been when the defendant had an appointment with an Axa client and the defendant would then ask Pinky Cheng to find a similar proposal from the files in respect of another Axa client. Also when the defendant was away from the office she would ask Pinky Cheng to give her the figures on past Proposals so she could check the yield.

23. The defendant's evidence is that she had delivered up all Proposals in her possession. She said that she had only one box file containing Proposals rather than the two alleged by Pinky Cheng and it was approximately as full as Exhibit P2.

The Evidence of Antoine Ho: Grounds (e) and (g)

24. Antoine Ho's evidence was that he had enjoyed a friendly relationship with the defendant. Following the service of the order of Yeung J on 14 November 2000 upon her, the defendant arranged to meet him at the office the following day. At that meeting there was a discussion as to whether the defendant should deliver up all the documents in her possession. The defendant had been concerned that if she delivered up all the documents, it would indicate that she had taken a lot of documents belonging to Axa. Ho said that he pointed out the trouble she would be in if Pinky Cheng had passed over photocopies of documents to Axa, and the defendant did not hand the original documents over. There had been a discussion as to which documents Pinky Cheng might have had access to. Later during the meeting the defendant had been sorting out the documents and she had given him "20 something" photocopy pages of Axa Pink cards on which there appeared 3 cards per page. She had asked him to photocopy these 20 pages for her and he had done so. The allegation of Axa in ground (e) is that these latter photocopies were not handed over.

25. The evidence of the defendant was that she did not ask Antoine Ho or indeed anyone else to make such photocopies. She is not alleging therefore that whilst such copies were made they were handed over to Axa's solicitors.

26. In so far as ground (g) is concerned Antoine Ho alleges that around February 2001 (i.e. after the delivery up of documents by her solicitors to Axa's solicitors) the defendant had sought to persuade him to approach some of the clients to whom he had sold policies while he had been an agent for Axa and persuade them to switch to Winterthur policies. She had given him three Axa proposals, one apparently prepared by her on 13 September 1993 and two others apparently prepared by Winterthur agents who had previously worked for Axa in 1999, Hui Tak Shing and Makky Ma. She had given them to him so as to assist him in talking to the clients about the superior performance of Winterthur policies. Subsequently, he had not used them but had taken the documents with him when he removed his belongings from Winterthur on 7 August 2001. He produced a receipt for the items he had removed on that day.

27. The defendant's evidence is that she did not give Antoine Ho such documents. She called Hui Tak Shing to say that he had lent the Proposal prepared by him to Antoine Ho in early 2001 and that therefore Ho was lying when he said they came from the defendant. She also called Rachel Wong Man Yee, the secretary in Winterthur who had compiled the receipt to which Mr Ho referred. She said that the item on the receipt to which Mr Ho referred, namely "a set of Axa (National Mutual) Proposals" did not relate to the particular 3 Proposals alleged by Mr Ho.

The Credibility of Pinky Cheng and Antoine Ho

28. In considering the credibility of Pinky Cheng and Antoine Ho, I have exercised great caution. I have borne in mind that both left Winterthur in circumstances in which, on their own evidence, they had reason to bear the defendant ill will. They accordingly had a possible motive to fabricate allegations against her. I also bore in mind that both were, on their evidence, to some extent party with her to unlawful actions to the detriment of Axa.

29. I have nonetheless concluded that both are honest and reliable witnesses as to the events which give rise to these grounds of complaint against the defendant. There is nothing to suggest collusion between them. I find that even though the manner of their leaving Winterthur may have motivated them to go to Axa, it was not to fabricate allegations against the defendant but to tell the truth.

Pinky Cheng

30. Pinky Cheng had previously worked for Axa before becoming the defendant's personal secretary at Winterthur and therefore was familiar with Axa documents.

31. She was dismissed following an argument with the defendant on 18 October 2000 and, after making a telephone conversation to Axa, had gone to Axa on 24 October to report the defendant's activities.

32. Even though I have some doubt as to her evidence that she would have reported the matter to Axa even if she had not been dismissed by the defendant, the manner in which she gave her evidence and a number of features of her evidence persuade me that she was giving a trustworthy account of what occurred. She was frank in admitting that she felt angry and humiliated at the manner of her dismissal. She was also frank in admitting that during the argument with the defendant on 18 October 2000 she had lost her temper with the defendant and had sworn at her, but the defendant had not sworn back. She frankly admitted that when she went to Axa on 24 October, she was still waiting for payment of her wages in lieu of notice. I accepted her evidence that she was not in any doubt that under the law she was entitled to her money.

33. She appeared to be careful not to exaggerate in the course of her evidence. She readily admitted for instance that she could not remember if the defendant's file containing the Client list contained partly Client lists and partly other documents. In so far as the two box files containing Proposals were concerned, when asked if she had looked through all the documents in the files, she said that she had looked through most but not all.

34. It is significant that her affirmation of 13 November 2000 was the basis upon which Yeung J made his order of the following day. In that affirmation she had deposed to the defendant having retained Client lists, copy White cards, Proposal forms and Application forms. The subsequent surrender of documents by the defendant on 16 November 2000 confirmed that she had been telling the truth in so far as the defendant's possession of documents of that type was concerned.

35. I have borne in mind that her evidence was confused as to how the documents surrendered by the defendant were bound when she looked at them at the office of Herbert Smith. In my view this did not reflect on her credibility as a witness. It is understandable that in her position that day she would not have been paying particular attention to the manner in which the documents were bound but to the nature of the documents.

Antoine Ho

36. Antoine Ho likewise struck me as a careful witness doing his best to recount what he remembered.

37. It was obvious to me, having heard his evidence and that of the defendant, that he was telling the truth when he said that he enjoyed a friendly relationship with her and not simply that of superior and subordinate as the defendant alleged.

38. He was frank about his motivation in reporting the matter to Axa. At the start of his cross-examination when asked if the reason for reporting the matter to Axa was that he had fallen out with the defendant, he replied, "you can put it this way". He admitted that he bore her a bit of a grudge. Indeed later when it was suggested that he was motivated by spite and malice in going to Axa and that his purpose was to damage the defendant, he again replied, "you can put it this way". He admitted that he felt badly done by Winterthur and to a large extent he blamed the defendant for his dismissal. He said that he felt that she had lied to him about a lot of things after he had helped her. He volunteered that he had been served with a bankruptcy petition from Winterthur on the day he had been giving evidence in chief.

39. There were discrepancies in the course of his evidence but none in my view reflected on his honesty. His explanation, for instance, of how he mistakenly came to allege that it was in a memo circulated to agents that it had been alleged that it was his idea that agents who failed to meet certain targets should be dismissed, was entirely plausible and was supported by the minutes of the meeting to which he referred. He readily admitted that he was mistaken about the putting of treasury tags on documents to be surrendered by the defendant. The fact that he erred as the month in the Spring of 2000 when Winterthur held its sales competition was an understandable error.

40. There was nothing in the evidence of the defendant or her witnesses to lead me to doubt Antoine Ho's truthfulness about the matters which are the subject of this application. While he may, after he left Winterthur, have spoken words to the effect that he had or intended to act to the defendant's detriment, I am satisfied that he was not by that implying that he would "molest" the defendant in the sense of telling lies about her.

41. In assessing Antoine Ho's credibility, I have considered whether there is any evidence that might cast doubt on his evidence that he had a meeting with the defendant at her office on the evening of 15 November and if so, whether that evidence cast doubt on his credibility generally.

42. I found the evidence suggesting that the documents had already been handed over to the defendant's solicitors by that time at best unreliable.

43. Paul Lam, who accompanied Antoine Ho and the defendant when they delivered them to the solicitor, gave no evidence of the date of delivery. He said that he agreed with Rachel Wong's description in her affirmation as to what had happened. Rachel Wong, who in any event I found to be an unreliable witness, had only said that it was "about 15 November". In evidence in court she said "around 14th or 15th" but that she could not be sure what date it was. In view of my findings as to her credibility generally I could not attach any weight to the defendant's evidence that the delivery had occurred in the afternoon of 15 November. In her 6th affirmation (paragraph 21) she had earlier stated that it had occurred in the afternoon of 16th although she described that as a "typo".

44. The evidence of Mr Liu Kin Shing, the defendant's solicitor with Boase, Cohen & Collins did not provide much assistance. He admitted that his firm did not have a record of when the documents were received. When he had made his affirmation of 15 November 2001, exactly a year later, knowing the significance of the date, he had only been prepared to say that delivery to his firm was "on or about 15 November 2000". In evidence in court, having said that he believed it was the 15th, he went on to say that he could remember that when he left the office on the 15th, he "had a sight" of the documents in the conference room. However, he had earlier said that, although there was no record of the receipt of the documents, there was a record of a booking of the conference room on the 15th which showed that he had met with the defendant that day and he believed that was the time that the defendant had handed over the documents. If this meeting with the defendant had been the occasion she had handed over the documents, it is curious, since the handing over of the documents would presumably have been an important feature of the meeting, that he could only recollect having "a sight" of the documents as he left the office that day. It was inconsistent with paragraph 4 of his affirmation in which he said that he could "confirm that it was about 7:15 pm on 16 November 2000 when I first saw the documents in my firm's conference room". In court he explained that he meant that that was when he first examined the documents and he denied his affirmation was misleading. It was only later in evidence that he conceded that he could not tell precisely whether the time that he had seen the documents was the 15th or 16th, but he said he could clearly remember that on the 15th his secretary had told him that many bundles of documents were delivered to his firm. But if he had had a meeting with the defendant on the 15th in the conference room and he believed that was the occasion when the documents were delivered up, it is curious that his only recollection was of his secretary telling him that many documents had been delivered up.

45. In conclusion, I find that there was no satisfactory evidence to cast doubt on Antoine Ho's evidence that his meeting with the defendant had occurred on the evening of 15 November. Even if he was mistaken as to the timing of the meeting, I am still satisfied that such a meeting occurred.

The Defendant

46. The credibility of the witnesses for the plaintiff was in marked contrast with that of the defendant.

47. She is clearly an intelligent woman but her evidence was thoroughly evasive and untrustworthy.

48. There were numerous examples of lack of frankness. I propose only to refer to some of them.

49. The most obvious example is her conduct in relation to Axa documents in the past.

50. On 7 October 1999 on her dismissal, Axa had written to her asking her to return "all monies, policies, receipts, rule books, manuals, literatures and other documents and properties in respect of our group of companies within 3 days". Her solicitor replied on 19 November 1999 saying that "our client has deposited with us certain items of stationery and promotional material for the purpose of returning to you on resignation". The list of documents attached included Pink cards and "life application copies" but no reference to Client lists or Proposals. It appeared that the documents concerned were not handed over to Axa at that stage because Axa wrote to the defendant's new solicitors, Wilfred K H Lam & Co in similar terms on 20 March 2000. The defendant's solicitors replied by letter of 17 July 2000 saying that the defendant did not have in her possession "any other materials, documents or properties in respect of your group of companies other than those enumerated" in the schedule of the letter. That schedule referred to "four bundles of client cards (pink) and bundle of life application forms for years 1986 to 1988, 1993 to 1996 and 1998 to 1999", but made no reference to copies of Pink/White cards, Client lists, Proposals or life application forms, all of which the defendant now admits she had in her possession at that time. I found her attempt to justify and explain this attempted deception on her behalf totally implausible. The result was that the defendant surrendered original Pink/White cards and the application forms for the years referred to in July 2000 but retained the other documents.

51. Her attempts to explain how over half the Proposals which she surrendered on 16 November 2000 had been printed out after she left Axa (almost all of which according to the documents were obtained by an agent who was unidentifiable for a client who was either given the name X or who was otherwise unidentifiable) by claiming to have obtained them from clients who were friends (whom she could not then name) after she left Axa was completely unconvincing. Bearing in mind the evidence of Pinky Cheng and Antoine Ho as to the use she sought to make of Axa proposals the inference is overwhelming that she obtained these Proposals improperly after she left Axa for the purpose of unfavourable comparison with Winterthur policies.

52. Another example of her lack of frankness was her evidence in her second affirmation that there had never been any suggestion prior to these proceedings that the documents which are the subject of this application were the property of Axa and that she had removed the documents which she delivered up to Herbert Smith on 16 November 2000 from Axa's office on 9 October 1999 with the consent of Axa's general manager, Trevor Chan. Trevor Chan's evidence, which I accepted, was that, far from consenting to the defendant removing Axa documents from Axa's office that day, he had actually removed Application forms, Proposals and White cards from her boxes and bags that day and told her that she could not take away such documents.

53. In addition to these matters, there was the lack of frankness about her relationship with Antoine Ho to which I have already referred, her unconvincing evidence when asked if she contacted old clients about their policies when they fell due, her implausible insistence that she did not talk about insurance to clients over the telephone, her initial evasiveness when asked to give her view as to whether Axa or Winterthur life policies provided the best return and her unconvincing explanation for making photocopies of White cards when she still had the originals. I have no hesitation in rejecting the defendant's evidence in so far as it conflicts with that of Pinky Cheng and Antoine Ho.

The Other Defence Witnesses

54. In addition the defendant called a number of witnesses, the majority of whom were now her direct subordinates at Winterthur but had previously been agents or employees of Axa and had left at approximately the same time as she did. These included Sam Lam, Sam Lau, Hui Tak Shing, Makky Ma and Rachel Wong. I found all these latter witnesses unimpressive and unreliable. I was left with a strong impression that they had been prevailed upon to give evidence in support of the defendant out of personal loyalty, self interest or self preservation. In particular, I disbelieved their evidence that the defendant had never encouraged them to persuade former Axa clients to switch their policies to Winterthur. Sam Lam and Makky Ma even went so far as initially denying that it would have been in their personal best interests to persuade an Axa client to surrender his policy in favour of a Winterthur one. The evidence of Anna Chow, the defendant's current personal secretary, was equally unsatisfactory and fell into the same category. I did not believe her evidence that having bought 3 Axa policies through the defendant, she would surrender them and buy 2 Winterthur policies again through the defendant without discussing the merits of doing so with the defendant. In so far as Vinson Own is concerned, I cannot dismiss the possibility that he might not have heard the defendant seeking to persuade former Axa agents to approach former Axa clients with a view to persuading them to switch their policies to Winterthur. But he himself was not a former Axa agent and the defendant may well have done such things in his absence. Because of his current relationship to the defendant in Winterthur and the involvement of a number of his colleagues in attempts to extricate the defendant from her current predicament, I cannot form any view as to the reliability of his evidence that he met Antoine Ho for a drink on or about July 2001. Antoine Ho denies that such an event occurred. If it did, I am satisfied that Antoine Ho never suggested that he would lie in order to harm the defendant.

Belonging to Axa

55. The terms of the order of Yeung J, although specifically identifying Proposals and White cards, qualifies the reference to those documents by the words "belonging to the plaintiffs". In the case of copies the originals must belong to the plaintiffs.

56. Since these proceedings are akin to criminal proceedings it is necessary for the plaintiffs to prove that the particular documents referred to in the charge, or at least the originals from which copies were made, belonged to the plaintiffs at the material time.

57. The ownership of the original documents and the confidentiality of their contents are separate issues, although the confidentiality of the contents may be relevant to the ownership of the document.

58. In so far as White cards are concerned the evidence of Mr Hok Man Choy, the senior manager, Agency Resources of Axa, was that they were printed through the main frame of the computer at Axa Headquarters. Once a policy was issued they were sent to the agent who arranged the policy and his or her manager. He said in paragraph 23 of his affirmation of 13 November 2000 "White cards set out in convenient form the details of the policyholder and the salient details of the policy and allow the agent better to service the ongoing needs of the policyholder". Agents do not have to pay for these White cards. I am satisfied that there can be no doubt that they belong to Axa. They are documents belonging to Axa provided to the agent for the purpose of carrying out his or her agency. They are not, for instance, provided for the personal use of the agent in compiling his or her tax returns. The fact that they contained information that an agent might find useful in compiling his tax return or answering queries from the Commissioner of Inland Revenue do not make the documents the property of the agent.

59. I am satisfied that the defendant not only knew that Axa claimed ownership of the White cards (see evidence of Trevor Chan that he had prevented her from taking such documents from Axa on 9 October 1999) but also that she herself believed that they belonged to Axa. Even though Axa had only asked for the return of documents "in respect of their group of companies" in their letters of 7 October 1999 and 20 March 2000, I do not believe that the defendant would have been prepared to surrender the original White cards then in her possession if she had genuinely believed that they did not belong to Axa.

Proposals

60. Proposals are illustrations provided to potential policyholders before they enter a life insurance policy to set out the main terms of the policy and give the policyholder an idea of the benefits which will or may accrue if he invests at a certain premium over a period of time.

61. They were always printed out on paper bearing the logo of Axa which was paid for and provided to the agent by Axa. They were produced as a result of an agent giving instructions to a secretary in their agency and providing certain details of the proposed client (in particular name, age and sex). The proposals which were printed out were the result of the use of Axa computer software. I am satisfied that the proposals so produced belonged to Axa but were entrusted to the agent for use on Axa's business.

62. I find that the position was not changed by the fact that in the defendant's agency each agent had to pay a $2.00 fee in respect of a proposal in English and to pay $5.00 in respect of a proposal in Chinese. On the defendant's own evidence these were not payments for the documents but were payments into a pool to reimburse the costs of the head of the agency in acquiring the computer.

63. I have also considered whether the position changed if the proposal was given to a potential client in view of the evidence that the potential client would not be required to return the proposal. I am satisfied that if having been shown a proposal the potential client chose not to keep it, it remained the property of Axa in the hands of the agent. If having originally kept the proposal, the client at a later stage chose to return it to the agent because he or she had no further use for it or if the agent asked to keep the proposal or a copy thereof, I am satisfied that the proposals were retained by the agent in his or her capacity as an agent of Axa and were the property of Axa. In evidence the defendant also said that the client would sometimes ask the agent to keep the proposal for him or her. I regarded this evidence with a considerable scepticism. It was not one of the situations referred to in paragraph 31 of her second affirmation and I believe that when she and other defence witnesses put forward that scenario it may well have been an attempt to devise a situation that would suggest that the proposal no longer belonged to Axa. However even if such a situation had occurred, I find that the proposal would still belong to Axa vis a vis the agent even if it could also be said to belong to the client. It would be fanciful to suggest that the client was asking the agent to keep the proposal for him or her in the agent's personal capacity rather than an agent for Axa. The evidence of Trevor Chan demonstrates that the defendant knew that Axa claimed that Proposals belonged to them.

64. I turn now to the remaining individual grounds against the defendant.

Ground (b)

65. I accept Pinky Cheng's evidence that the defendant was in possession of a set of copy White cards cut down one per separate page and arranged in date order so that the defendant could contact the policyholder when the Axa policies came up for renewal. Pinky Cheng was familiar with Axa documents and had been involved in the arranging of this set of White cards in date order as well as bringing out cards in respect of the following month. I reject the defendant's evidence that no such set ever existed. I find that the defendant failed to deliver such documents up.

66. There was evidence that White cards were issued not only for life policies but for other types of policy. Yeung J's order only referred to life policies. Can I be satisfied that the set of copy White cards to which Pinky Cheng referred included at least some in respect of life policies?

67. Pinky Cheng was not specifically asked whether these copy White cards which were in bundles secured by rubber bands related to life insurance but I am satisfied that the irresistible inference from her evidence both in court and in her affirmation of 13 November 2000 (paragraph 7) and her second affirmation (paragraph 3.2) is that the set of copy White cards one to a page was simply another version of the set of White cards in a box file (Exhibit P3) but rearranged in order of date for renewal. I observe that it is also logical that she would want such a photocopy set one to a page, having handed over the original White cards to Axa in July 2000.

68. Although not necessary for the purpose of my conclusion Pinky Cheng's evidence that the collective thickness of the different bundles of photocopy White cards was greater than the thickness of Exhibit P8 (which is about 3 cm), even taking into account the fact that Exhibit P3 is not a complete set, tends to a similar conclusion.

69. Furthermore, in denying that a set of photocopy White cards one to a page existed the defendant cannot have been mistaken. The only reasonable inference from the fact that she lied about their existence is that she believed that they were covered by Yeung J's order (i.e. were life policies).

70. I find that the plaintiffs have established ground (b) beyond reasonable doubt.

Ground (d)

71. I accept Pinky Cheng's evidence as to the existence of 2 box files crammed with Proposals. She would have had particular cause to remember this matter because she had been required by the defendant to look through the files to find proposals suitable for comparison purposes. In assessing her evidence I have borne in mind her confusion regarding the form of the documents she observed at the offices of Messrs Herbert Smith. I am satisfied that there is a significant difference between looking through bundles of documents which were, I am satisfied, tied together by treasury tags in a solicitors office and the circumstances of her observing the files in the defendant's office.

72. There is a more than 100% difference between 2 files crammed with proposals as Pinky Cheng testified and Exhibit P2.

73. The difference is not accounted for by the fact that as she told the court while she had looked through "most" of the documents in the files she had not looked through all of them. In any event the defendant's evidence was not that there were 2 files containing a mixture of Proposals and other documents but only one file containing Proposals.

74. The defendant accepted that the quantity of documents in Exhibit P2 was "approximately" the same as the quantity of documents in the one file she alleged was in her office. There is therefore no suggestion that she delivered up significantly more Proposals and copy Proposals than are contained in Exhibit P2.

75. Her failure to deliver up all the Proposals is consistent with the defendant's attitude to compliance with the order of Yeung J revealed by Antoine Ho's evidence as to his discussions with her after she had received that order.

76. In so far as proposals were concerned in view of the evidence that all Proposals related to life assurance, I am satisfied that the Proposals which the defendant failed to deliver up related to life assurance.

77. I find that the plaintiffs have proved ground (d) beyond reasonable doubt.

Ground (e)

78. Ground (e) relates to the failure to deliver up photocopies of Pink/White cards which she had asked Antoine Ho to make during their meeting after she had been served with the order of Yeung J.

79. I believed Antoine Ho's evidence that he had made photocopies of more than 20 photocopied pages of such cards on which the cards appeared three to a page. I disbelieved the evidence of the defendant that no such incident occurred. This is not a matter, therefore, upon which there can be any possibility that, although such copies were made, they were delivered up. Indeed it is common ground that there are no duplicate copies of photocopied Pink/White cards copied three to a page amongst the exhibits. I find that such photocopies were made and were not delivered up.

80. Before I could find this ground proved, I would also have to be satisfied that the photocopies or some of them related to life assurance. Having considered the evidence I consider it would be fanciful to conclude that there was a reasonable possibility that these more than 20 photocopies did not include photocopied cards relating to life assurance. It is significant that in Exhibit P3 (the photocopied White cards 3 to a page) which the defendant did deliver up, out of 746 such cards copied only 122 were cards in respect of non-life policies. Only one page in the 254 pages in that bundle bore copies of no life policy cards. Moreover, even in the absence of such evidence, in all the circumstances of the meeting between Antoine Ho and the defendant when the photocopies were made in which there had been discussions about whether all documents should be handed over to Axa and the consequences of not handing over documents Pinky Cheng might have photocopied, the only reasonable conclusion is that Antoine Ho was being asked to photocopy documents to which the order related in order to enable the defendant to continue to retain copies of some of such documents.

81. I find that the plaintiffs have proved this ground beyond reasonable doubt.

Ground (g)

82. The basis for this ground is Antoine Ho's evidence that the defendant handed him 3 Proposals which he produced to court (one dated 13 September 1993 prepared by herself, one dated 11 March 1999 prepared by Hui Tak Shing and one dated 7 December 1999 prepared by Makky Ma) in about February 2001 during afternoon tea at the Wanchai office for the purpose of persuading his former clients who had taken out Axa policies to switch to Winterthur policies.

83. I have no doubt that this evidence of Antoine Ho is truthful and reliable. I do not regard as significant the fact that Antoine Ho had originally said that this incident occurred in April 2001. He simply made an error as to the date of the Sales Competition which was the event which gave rise to the defendant's remarks. I accept his evidence that there were still former clients of his who had taken out policies through him with Axa and that the defendant was aware of that. There is no doubt that Antoine Ho had the 3 Proposals in his possession, otherwise he would not have been in a position to produce them. I do not believe he would have lied about taking them away from Winterthur's office on 7 August 2001. The evidence of Lau Fung Cheung was that Rachel Wong was only instructed to ensure that Antoine Ho took away his own personal belongings and not those of Winterthur. I consider that Rachel Wong is at best mistaken when she claims to be able to remember that the Axa Proposals that Antoine Ho took away were not the 3 which he produced to the court.

84. Neither the defendant nor Makky Ma could explain how Antoine Ho came to be in possession of Proposals prepared by them.

85. It is significant that in the file (Exhibit P2) which the defendant did deliver up, there are Proposals purportedly prepared both by Makky Ma and Hui Tak Shing. It is entirely consistent with Antoine Ho's account of the defendant giving him the Proposals of Hui Tak Shing and Makky Ma that she should have other Proposals prepared by the same agents on her file. Makky Ma could offer no convincing explanation of how the Proposals in Exhibit P2 which were apparently prepared by her and, like the Proposal produced by Antoine Ho, dated after the defendant had left Axa, should have come into the defendant's possession. The evidence strongly suggests that these were Proposals obtained by her on the defendant's behalf while she still worked for Axa and the defendant had left, for the defendant's use in selling Winterthur policies.

86. I found Hui Tak Shing's explanation as to how Antoine Ho came to have the proposal which had been prepared in his name contrived and implausible. He attempted to explain why the yield of 6% had been highlighted in the proposal (which might suggest had been used for comparison purposes) by saying that it had been prepared by him to demonstrate to an existing client that the yield on his policy had dropped. He maintained that the client had let him keep it at the time but at the time he had left Axa he had given it back to the client. When the client knew that Hui was still engaged in the insurance business, he had returned it to him. This had been the only Axa proposal which he had kept. At some stage Antoine Ho had asked him if he had any Axa Proposals and he had given him this one which is the only one he had. He did not know why Antoine Ho had asked for it. Despite the fact that the client had gone to the trouble of returning it to him after he had left Axa, he had lent it to Antoine Ho and then forgotten he had done so.

87. When questioned how he could have forgotten lending it to Antoine Ho if the client had asked him to keep it for him, he claimed that the client, when giving it back to him, had said it did not matter if he lost it.

88. His evidence that this was the only proposal he kept was difficult to reconcile with the fact that among the Proposals surrendered by the defendant (in Exhibit P2) were two in his name (dated 19 November 1999 i.e. after the defendant left Axa). He could only say that he was "not clear" as to how the defendant came to have them. As with the Proposals in Makky Ma's name, I am satisfied that the evidence points to the proposal in Hui's name produced by Antoine Ho being one Hui had prepared for the defendant while he still worked with Axa and after she had left for her use for comparison purposes when attempting to sell Winterthur policies.

89. I have no doubt that Antoine Ho is telling the truth about the circumstances he received the 3 Proposals from the defendant. I find ground (g) proved beyond reasonable doubt.