THE TAI PING INSURANCE CO. LTD. v. HUNG KAY DEVELOPMENT LTD. AND OTHERS and CHAN NAM SANG (Third Party)

HCA 11143/96

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 11143 OF 1996

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J U D G M E N T

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1. This is an unusual action. It arises by the plaintiffs suing an insurance company for the loss which they say they have suffered as a result of a burglary that took place. The insurance company refuses to pay because they say there was no robbery. The third party, who has been joined by the insurance company, was charged at the District Court with the burglary but acquitted, and the defendants say if they are liable, then they should recover against him.

2. It is a most unusual case because the plaintiffs alleged that there was a genuine robbery, and the third party who was acquitted in the District Court says that he was completely innocent and that it was the plaintiffs themselves who brought about the robbery, it was all a complete set-up or a sham and the claim by the plaintiffs against the insurance company is fraudulent.

3. The policy is a standard policy and it is not necessary to go into that, it is accepted by the defendants that if there was a genuine robbery, then they are liable to pay. There are a number of unusual features. The plaintiffs are operated by a Madam Ng Yee Yung and her husband. They became a company originally with Madam Ng and a Mr Lui, and Yeung Ho Shun, the husband, took over the shareholding. Mr Lui had been divorced from a person called Yeung Wai Suen who figures in this case. The plaintiffs say that they both come down from the Mainland and have been running a silk business. I have looked at the accounts, it seems a standard Hong Kong company; it is profitable in the sense that it provides a living for these two and with substantial entertainment, cars and in the usual way that people run companies in Hong Kong, to pay as little tax as possible.

4. The plaintiffs had a shipment of silk come in on about 27 June. On 30 June, Mr Yeung went down to check it for quality. He says he went down to the godown where all the goods were stored - there are photographs showing the godown - and he opened the grille and deactivated the burglary alarm. He checked the goods, he said they were in rolls and he said while he was checking, there was a knock on the grille, and someone said they were delivering goods. He walked over and opened the grille. When he opened it, three Chinese males rushed in, one man got hold of him held a knife and told him not to shout. He was tied up with wires and tape put round his month and was eventually taken to the lavatory in the warehouse. While in the lavatory, he was taken inside a cupboard, as he described it, which holds the air-conditioning plant. He was put in there which was quite a small room - I have seen photographs of it - full of pipes; his legs were tied up and he sat on a pipe.

5. There is no doubt at all because I accept the evidence of the employee at any rate who seems to me a perfectly honest person who came down later at about 5 o'clock together with the wife. The employee says that when he got down there, he could not find Mr Yeung, they searched all over the godown but could not find him and they were frightened of what they might find when they got to the toilet because they saw a sign on it which says "toilet out of order". He opened the door and there he found bound and gagged Mr Yeung and he untied him. Mr Yeung was taken to hospital and was found to have bruises on his head, burn marks on his wrists and legs. He had obviously been tied up in a forceful manner and locked in that room.

6. The questions arises then - who tied him up? The defendants would have me believe, as would the third party, that he got someone to tie him up and locked him in the room.

7. The police made inquiries and Interpol was contacted and they found Mr Chan Nam Sang in the Mainland. He came back to Hong Kong and gave himself up to the police. He was put on an identification parade and Mr Yeung picked him out. Mr Yeung said that was the man who came into his premises. He was carrying a briefcase and he was one of the robbers. Mr Yeung was interviewed by the police and put forward a most surprising story. He said "I am innocent". He said "I was contacted by this strange lady who is called Yeung Wai Suen". He does not know why she did it. He has a company dealing in plastics and chemicals. He said he was approached by this lady and asked if he would transport 375 boxes of something - he did not quite know what it was - across the border, and he was going to get paid $250,000. He said that he arranged for two large lorries to go to the warehouse. He got some labourers to help him. They were going to take all the goods out of the warehouse and then he arranged for some other transport firm to meet him at Lok Fu, which had international lorries, to go across the border.

8. The story he puts forward, frankly, is quite amazing. He went on trial at the District Court. He was defended very ably by Mr Oderberg, who put forward a number of propositions that he, Mr Chan Nam Sang, had been set up by this lady and that in some way it was the fault of the two directors, Madam Ng and Mr Yeung. Of course in criminal trials one can make all sorts of wild accusations about people, they really are not in a position to defend themselves. The District Court Judge has a different standard. He came to the view that he could not be sure and he acquitted him.

9. I think he was the robber. It is a very unusual thing for a person to be acquitted in the criminal court but in a civil case, I have to look at things on a different proposition on the balance of probabilities. In my judgment, the third party Mr Chan Nam Sang, robbed these premises. There is no need for me to say I am sure about it, I think the story he puts forward is quite amazing.

10. The plaintiffs gave their evidence, I believe them. I thought they were both good witnesses. The wife is obviously the dominant person, but I thought they both gave their evidence well, I have no doubt at all that the husband was tied up and locked in that little room for many hours, and that all his goods were stolen.

11. The insurance company, for reasons best known to themselves, have sought to ally themselves with Mr Chan Nam Sang and have said "Well, there were a number of strange features in this case". I accept it is strange. They said Mr Yeung should not have opened the grille and it all took place in the day time. But that does happen, people who carry out these daylight robberies of course run the risk of being detected, but unfortunately often get away with it.

12. I have no doubt at all that the third party wrote the notice at Mr Yeung's suggestion - his account that he did not want the labourers to use the toilet - I think that is a complete lie. I think he wrote the notice and put it up so that no one would find out, for many hours, this unfortunate man locked in the storeroom. I believe the plaintiffs and I do not believe the third party.

13. There is no evidence put forward by the insurance company. If the insurance wants to get out of its obligation to pay someone who is insured for loss, they should put forward some evidence. They have not done anything at all. They made an allegation unsupported by anything and it was unparticularized, but they made an allegation that it was by some arrangement between these people. There is no evidence at all about it. The only person who has provided any potential evidence is the third party. As I said I do not believe him, I think he was undoubtedly the robber. I think he was a very lucky man to be acquitted. He has also told a pack of lies in front of me which may amount to perjury. I intend to send the papers to the Secretary for Justice to see whether or not he should be prosecuted for perjury, not for the perjury told at his trial, but the perjury which I consider he has told me. What she does is a matter for her. But I think I am duty bound to do that.

14. The goods have disappeared, where they have gone, nobody knows. Mr Chan Nam Sang said he was paid $250,000 for this. In my judgment, he was a participant in the robbery that occurred, it was a genuine robbery and the insurance company has no defence to the claim that is made against them. There may have been inside information about the goods, but I do not believe it came from the plaintiffs.

15. As far as the damages are concerned, I have not heard any evidence about the values in detail. The value appears to be just slightly under the insured value of $5 million. It is suggested that it is suspicious, but I do not find anything suspicious at all about it. People are entitled to have goods up to that value. I have looked through the accounts, they seem to have sometimes far more. I hope that damages can be agreed in this case to save a further hearing, because there clearly was a large amount of boxes that were removed.

16. At this stage, I will only give interlocutory judgment. So I will give judgment to the plaintiffs for damages to be assessed. As far as the third party proceedings are concerned, there will be judgment (I consider that the third party has misappropriated the goods) for the insurance company against the third party, also for damages to be assessed. The counterclaim is dismissed.

17. The plaintiffs will have their costs against the defendants on a common fund basis, and the defendants will have their costs against the third party. I would like to thank Counsel for their very helpful assistance in this very interesting case.