MASSMUTUAL ASIA LTD v. WAT KWING LOK

HCSA46/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 46 OF 2004

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J U D G M E N T

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1.  This is an appeal against a judgment of the Small Claims Tribunal on the payment by the respondent to the claimant of benefits under a hospital benefits insurance policy.

2.  The claimant had taken out two insurance policies with the respondent.  One policy was for life insurance with comprehensive accidental benefits and the other policy was for hospital benefits.

3.  The claimant suffered an accident on about 12 October 2002.  He was hospitalized from 12 October 2002 to 10 January 2003 in various hospitals.  For the period from 15 November 2002 to 10 January 2003, he stayed in Tai Po Hospital.  The respondent duly paid him the benefits under the life insurance policy for the whole period of hospitalization.  The respondent also paid him the benefits under the hospital benefits policy for the period up to 14 November 2002 but did not pay him any benefit under this policy for the period when he was in Tai Po Hospital.  The respondent refused to pay on the ground that Tai Po Hospital was not a hospital as defined in the policy. 

4.  The definitions section of this policy defined “hospital” to mean,

“Any hospital legally authorised by the authorities which provides facilities for major surgery and full-time nursing services and is not primarily a convalescent or a nursing home, rest home, home for the aged, a place for alcoholics or drug addicts, or for any similar purpose.”

5.  The respondent said in its defence that Tai Po Hospital was a convalescent hospital which did not provide facilities for major surgery, hence, no benefit could be paid under this policy in respect of hospitalization therein.

6.  The claimant disagreed and launched a claim in the Small Claims Tribunal for payment during the period when he was in this hospital.  At the hearing, the claimant said that on 16 November 2002, which was the second day when he was in Tai Po Hospital, a Mr David Wong, the Deputy General Manager of the respondent, paid him a visit and assisted him in lodging a claim for benefits under the two policies in respect of his earlier hospitalization in other hospitals.  The claimant said that Mr Wong did not on this occasion point out to him that Tai Po Hospital was not a hospital within the meaning of this policy and no benefit would be paid under this policy for hospitalization therein.  Mr Wong, in his evidence, said that he did advise the claimant but the claimant preferred to stay in this hospital as per the advice of his doctor.

7.  The learned adjudicator, at the end of the trial, accepted the respondent’s argument that Tai Po Hospital was not a hospital for the purpose of this policy, but the matter did not end there.  The learned adjudicator accepted the claimant’s evidence that Mr Wong, when visiting the claimant at Tai Po Hospital on 16 November 2002, had not pointed out to the claimant that this hospital did not fit into the definition of “hospital” in the hospital benefits policy.

8.  The learned adjudicator further held that Mr Wong at that crucial moment was assisting the claimant to claim benefits under the policies and had the duty of care to provide a reasonable standard of service.  As Mr Wong had admitted that it was common knowledge for insurance personnel and that insurance personnel should know that Tai Po Hospital was not a hospital for hospital benefits policies and that such information was commonly provided to the customers, the learned adjudicator therefore took the view that Mr Wong should have, in those circumstances, pointed this out to the claimant.

9.  Since the learned adjudicator had found that Mr Wong had not pointed out this matter to the claimant on 16 November, he therefore held that Mr Wong had breached his duty of care to the claimant and had failed to provide a reasonable standard of service.  He also held that at the material time Mr Wong was the agent of the respondent and the respondent should be responsible for Mr Wong’s negligence.  He therefore ordered the respondent to pay the claimant benefits under the hospital benefits policy for the claimant’s hospitalization in Tai Po Hospital.

10.  It is not the claimant’s case that Mr Wong had given him the wrong advice or had misrepresented to him that Tai Po Hospital was a hospital for the purpose of this policy.  The claimant’s case is simply that Mr Wong had not told him that Tai Po Hospital was not covered by the policy.  It is one thing to say that Mr Wong had a duty not to give wrong advice to the claimant.  However, it is quite another thing to say that he had a positive duty to volunteer correct advice to the claimant.  For this purpose, I refer to the case of Kincheng Banking Corporation v Kao Yu Kuei [1986] HKC 212 wherein Huggins, VP held that a bank was not under any duty to read and explain a guarantee in any language or dialect to a prospective guarantor.

11.  Mr Lo for the claimant submitted that Mr Wong at that time was advising the claimant on lodging claims for benefits under the policies and in those circumstances Mr Wong would also have the duty to volunteer to the claimant that Tai Po Hospital was not covered by the hospital benefits policy. 

12.  Mr Wong at that time was only assisting the claimant in lodging claims for benefits under the two policies in respect of his stay in other hospitals.  I do not accept that Mr Wong was then giving advice to the claimant on matters in the hospital benefits policy. 

13.  However, even if Mr Wong was advising the claimant on how to lodge claims in the policies, I still do not think he would in those circumstances create a duty for himself to volunteer advice on other matters in the policy.  If there should be such duty, it may extend to all other matters stated in the policy and I am not aware of any legal basis for such a duty to be constructed on the shoulders of Mr Wong.

14.  I do not think I can blame the respondent for not playing the role of the good Samaritan and then to rewrite the definition of “hospital” in the hospital benefits policy for the benefit of the claimant.  I therefore have to allow the appeal and set aside the judgment of the learned adjudicator.

15.  I also order that the claimant should pay the respondent costs of the appeal.