LO WAI LIN v. FWD LIFE INSURANCE COMPANY (BERMUDA) LTD

HCSA 6/2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

SMALL CLAIMS TRIBUNAL APPEAL NO 6 OF 2016

(ON APPEAL FROM SMALL CLAIMS TRIBUNAL

CLAIM NO 472 OF 2015)

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D E C I S I O N
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Introduction

1.  The dispute is over a claim for reimbursement under a medical insurance policy. 

2.  On 23 November 2015, Mr Chan KS Vod, the Learned Adjudicator of  the Small Claims Tribunal (“Adjudicator”)  awarded the claimant (a) HK$31,991 and (b) costs of HK$1,000, plus interest on (a) and (b), to be paid by the defendant, the insurance company (“1^st Award”).

3.  The defendant applied for review on 1 December 2015, and on 22 January 2016, the Adjudicator varied the amount in (a) above to HK$31,964, and the rest remained unchanged (“2^nd Award”).

4.  The Adjudicator gave brief reasons for his decision on 23 November 2015 (“Brief Reasons I ”) and for his decision on review on 22 January 2016 (“Brief Reasons II”).  The Adjudicator later handed down his detailed reasons (“Detailed Reasons”) on 29 February 2016.

5.  On 29 January 2016, the defendant instructed solicitors to file his application for leave to appeal on point of law and at the hearing before this court, Counsel Mr Ken To appeared on behalf of the defendant.

6.  For the proceedings before the Adjudicator, the claimant had appointed a representative Mr Yeung Hon Keung (“Mr Yeung”) to represent him, and a Ms Joanna Kwan, the Manager, Customer Service, of the defendant (“Ms Kwan”) attended the proceedings on behalf of the defendant.

Background

7.  The background has been set out in the Detailed Reasons.  Briefly, the claimant Madam Lo Wai Lin (“Madam Lo”) is the policy owner of a medical insurance policy no 12785421 issued by the defendant on 29 February 2012 (“Policy”), and the person insured  person is one Madam Leung Kum Yip (“Madam Leung”).

8.  Madam Leung underwent an eye operation and treatment at the St Paul Hospital (“Hospital”) between 28 November 2014 and 9 December 2014 and later on 10 December 2014, the claimant made an application for reimbursement of Madam Leung’s hospital and medical expenses from the defendant under the Policy (“Insurance Claim”).  This was received by the defendant on 16 December 2014.

9.  The Insurance Claim was for a total sum of HK $35,361 and the claimant’s application was accompanied by photocopies of :

(i) Madam Leung’s Discharge Statement dated 9 December 2014 of HK$32,761 (“Discharge Statement”), and an official receipt of 19 December 2014 for HK$32,761 (“Hospital Receipt”);

(ii) The receipt for the medical fees of HK$ 600 charged by Dr Ho Kai Kit (“Dr Ho’s Receipt”);

(iii) Two receipts for respectively HK$500 and HK$1,500 charged by the Dennis Lam & Partners Eye Centre (“Eye Centre Receipts”).

10.  Thereafter, having received no reimbursement, the claimant lodged a claim in the Small Claims Tribunal (“Tribunal”) on 5 January 2015 for the total sum of HK$35,361.

11.  The defendant’s defence was mainly that the claimant had failed to supply original bills, statements and receipts (2) doctor’s professional fee charges list/breakdown, and (3) The In-Patient Invoice (“Original Documents”).

12.  Shortly before the trial, Mr Yeung had on behalf of the claimant withdrawn the claim for the fees charged by Dr Ho and the Eye Centre, leaving only the claim for the total amount in the Discharge Statement of HK$32,761 .

Whether an original copy of the Discharge Statement and/or Hospital Receipt was necessary

13.  The evidence showed that after the defendant received the Insurance Claim from the claimant through the agent/servicing adviser, the defendant had on a number of occasions requested from the claimant the Original Documents.  So far as I can see, this culminated in a letter dated 15 June 2015 from the defendant to the claimant Madam Lo (“15.06.15 Letter”) setting out the previous requests/advices for the Original Documents, and making clear that the documents provided were not sufficient to substantiate the claim, but as a gesture of goodwill, the defendant was prepared to proceed with the claim on an ex-gratia basis subject to the claimant providing a declaration for the reason for the missing Original Official Receipt and that she had not claimed against other insurer(s) within or outside Hong Kong in relation to the relevant hospitalization claim (“Declaration”).  The claimant was given until 26 June 2015 to reply.

14.  Having received no reply, the defendant wrote again on 16 July 2015 repeating in gist what was said in the 15.06.15 Letter and its request for the Declaration as a gesture of goodwill, and giving the claimant until 29 July 2015 to reply. 

15.  Thereafter on 18 August 2015 the defendant wrote again stating that, based on the Discharge Statement, and subject to sufficient documentary evidence as previously requested being provided, the defendant assessed the amount of benefits payable to the claimant to be a total of HK$31,964 and the defendant repeated its request for the Declaration.  The claimant was given until 31 August 2015 to reply (“18.08.15 Letter”).  In the 19.08.15 Letter, the defendant had referred to a letter dated 30 June 2015 from the claimant, but this did not appear to be in the bundles before the Adjudicator.

16.  It would appear that the claimant had failed to provide the Original Documents requested by the defendant, nor was any declaration provided.

17.  On 14 January 2015, the claimant had written to the defendant stating that the defendant was authorized to verify all the breakdown and treatment costs with the St Paul Hospital, Dr Ho and The Eye Centre and provided an authorization letter in this respect and that the defendant was also authorized to obtain all the medical records of Madam Leung (“Authorization Letter”).

18.  It was the defendant’s case that the Authorization Letter only enabled the defendant to obtain medical records of Madam Leung, and did not authorize the defendant to obtain the Original Documents.  The defendant had telephoned the relevant hospital to make enquiries, but was informed that even with the Authorization Letter, the defendant would not be sent the Original Documents, which had already been issued to the insured person, ie Madam Leung, upon receipt of the fees/discharge.

19.  It was further Ms Kwan’s evidence that provision of the Original Documents was a trade practice of the insurance industry, and that according to the guidance issued by the Hong Kong Federation of Insurers (“Guidance”), the original of the receipt must be provided by the claimant. 

20.  At the hearing before the Adjudicator, no copy of the alleged Guidance or other expert evidence had been produced by the defendant.

21.  As seen in the Detailed Reasons, the Adjudicator held that it was not necessary for the claimant to provide the Original Documents for reasons including the following:

(i) There was no challenge to the authenticity of the copy of the Discharge Statement submitted by the claimant;

(ii) The Guidance was not part of the expressed contractual terms in the Policy;

(iii) There was no oral agreement that the Guidance should be part of the contractual terms in the Policy;

(iv) There was no implied term in the Policy that the original supporting documents should be submitted with the Insurance Claim;

(v) There was no expert evidence provided by the defendant to support the industry practice.

22.  Of the items in the Discharge Statement, there was also a dispute over a claimed amount of a total of HK$8,470.  The defendant’s case was that this amount fell under item 10 “Operating Theatre Charges Benefit” in the schedule to the Policy (“Schedule”). According to the defendant, under Item 8 Category 3 type of expenses set out in the Schedule, the highest amount payable was HK$22,000, and according to item 10, the highest payable would be 35% thereof, namely HK$7,700 only.  Thus, the claimant’s claim of HK$8,470 under this heading was HK$770 over and above HK$ 7,700.

23.  The Adjudicator accepted the defendant’s case over the HK$770.

24.  As for the amount of HK$27 for Hospital Services, the Adjudicator accepted that this amount was, as the claimant had said, was the miscellaneous expenses charged by the Hospital, and had allowed this amount.

25.  As mentioned earlier, the defendant had applied for a review of the 1^st Award (“Review”).  The defendant had submitted detailed grounds for the Review, and in particular, the defendant had attached a one page print out of the alleged Guidance from the website of the Hong Kong Federation of Insurers (“Attachment”), in support of the industry practice indicating that an insurance company would request the insured to produce a detail medical report and the original hospital receipt.

26.  The defendant’s main ground for the Review was that the claimant was obliged to produce the original receipt of the Discharge Statement/Hospital Receipt as proof of loss under clause 7.2 of the Policy and in accordance with the general practice in the medical insurance industry as evidenced by the Attachment.

27.  The defendant had also raised other grounds for the Review including the following:

(i) Mr Yeung should not be allowed to represent the claimant as he had previously practiced as a barrister;

(ii) The defendant had produced new evidence to indicate that the HK$27 under “Hospital Services” was for courier charges for an x ray report by Dr Ho from the hospital.

28.  The Adjudicator dealt with the Review in paragraphs 31-40 in the Detailed Reasons.  He did not allow the defendant’s objection to Mr Yeung’s representation of the claimant, but the Adjudicator accepted the new evidence as to (ii) above and allow the deduction of HK$27 from the 1^st Award.

29.  As for the main ground, this was dealt with by the Adjudicator in paragraphs 39 and 40 of the Detailed Reasons.  The Adjudicator stated in paragraph 39 that prior to the trial the parties had already confirmed that there was no dispute as to the authenticity of the copies of the Discharge Statement or Hospital Receipt, or the amounts therein. The Adjudicator then in paragraph 40 referred to Ms Kwan’s argument for the provision of the original of the Discharge Statement / Hospital Receipt under the section headed “Entitlement of Refund from other Sources” (Document C36), namely that the argument put forward by Ms Kwan was that the requirement for the provision of the original was to prevent any claimant from making the same claim from different insurance companies.  The Adjudicator said he rejected Ms Kwan’s argument as she had admitted that the Insurance Claim did not involve other insurance policies or other insurance companies (“Admission”).

30.  In his 1^st Brief Reasons, the Adjudicator had referred to the lack of evidence to show that it was an industry practice for original receipts to be produced[1], and that there was no such evidence before him.  There was, however no reference to the Attachment in his 2^nd Brief Reasons.  The Adjudicator also did not refer to the Attachment in the Detailed Reasons. 

31.  As the transcript of the hearings before the Adjudicator was not placed before this court, it is not clear when or how the Admission was made.

Grounds of Intended Appeal

32.  In the application for leave to appeal on point of law (Form 9), the sole ground was that the award was erroneous in point of law in that the Adjudicator had failed to inquire if the subject insurance contract contained the express / implied term[2] that the claimant had to submit original documentary proof as proof of her claim against section 16(3) of the Small Claims Tribunal Ordinance thereby adopting a wrong legal standard of proof.

33.  As set out in Counsel Mr Ken To’s skeleton submissions, the only ground of appeal thus was a well defined and narrow one, namely whether under the Policy it was a term that the original of the documentary proof was required to be submitted to the defendant as the insurer for reimbursement of medial fees incurred (“Term”), and that it was the defendant’s case that the Policy did contain the Term by reason of trade custom of the Hong Kong insurance industry (“Industry Practice”).

34.  In the Detailed Reasons, the Adjudicator did in paragraph 14 refer to Ms Kwan’s evidence on the Industry Practice but he had commented that she was not an expert, nor was there any evidence provided by her on the Guidance.  The Adjudicator appeared to be referring to Ms Kwan’s evidence during cross examination at the trial.  Thereafter whether in the 2^nd Brief Reasons or in the Detailed Reasons, the Adjudicator did not refer to the Attachment, being new evidence of the Industry Practice produced by Ms Kwan, nor whether the new evidence could support the Industry Practice, nor was there any further consideration of whether the new evidence could support that there was an express term / implied term of the Policy.  Further, as also mentioned earlier, it was not clear as to how the Admission was made.

35.  Having considered the above, I am of the view it may be arguable that the Adjudicator had erred on point of law by failing to inquire whether the Policy contained the express / implied terms that the claimant had to submit original documentary proof as proof of her Insurance Claim, and I am unable to say the appeal has no reasonable prospect of success.  In the circumstances, I grant the defendant leave to appeal, and that costs be reserved.