LI WAI CHUN v. CITICORP SERVICES INCORPORATED

IN THE COURT OF APPEAL

1987, No. 7
(Civil)

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JUDGMENT

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Cons, V.-P. delivered the judgment of the Court:

1. This appeal is brought with the leave of the judge below against his judgment in favour of the Plaintiff in the sum of US$6,750 and interest.

2. It is necessary to set out certain of the important facts.

3. On the 4th March 1986 the Plaintiff purchased travellers cheques to the amount of the judgment from the Defendant’s agent in Hong Kong. She says that en the same day she lost them. She reported the loss to the police and also to the Defendant's agent.

4. Six months later, that is on the 16th September, the Plaintiff issued her Statement of Claim, claiming the amount of the cheques and interest thereon and costs. The writ was served by post to an address in Wanchai.

5. The Defendant immediately alleged that it was a foreign corporation having no place of business in Hong Kong and on the 9th October applied by summons to set aside the service of the writ. On the 23rd October the Plaintiff applied by summons for judgment in default of defence.

6. Before either summons came on for hearing the Defendant changed its mind and by a further summons (a) indicated that it would submit to the jurisdiction; (b) requested further and better particulars as to the source of the money used by the Plaintiff to purchase the cheques and as to the circumstances of the loss; and (c) requested an extension of time to file its defence within 28 days after provision of the particulars.

7. All three summonses came before His Honour Judge Scriven on the 5th December. After hearing solicitors on both sides he (a) allowed the summons to set aside the writ to be withdrawn; (b) entered judgment for the sum claimed and interest; and (c) dismissed the application for further and better particulars. The Defendant now appeals.

8. If this had been purely a matter of the exercise of the judge's discretion it is unlikely that we would have interfered. When the matter came before him it was some 9 months since the Plaintiff had reported her loss, a comparatively small amount of money was involved, at least as far as the Defendant was concerned, and no defence of any kind was put forward. The judge might have gleaned from a perusal of the correspondence a faint suggestion of fraud, but that was not pursued before him.

9. Nor has it been pursued before us. The defence now put forward is that the relationship between the parties is from its own nature one of uberrimae fides and requires the Plaintiff now to make full disclosure of all relevant matters, this she refuses to do and is therefore precluded from succeeding. Alternatively it is put as an implied term of the contract between the parties that she should thus disclose.

10. The difficulties in the way of the Defendant are firstly that this matter was not mentioned to the judge. We do not accept the suggestion that the judge was bound to go looking for the possibility or that the Plaintiff should have negatived the existence. Secondly this is not an application to set aside, but an appeal.

11. However the Plaintiff is not without her difficulties. The Statement of Claim is, a commendably short document, but unfortunately discloses no cause of action. The first paragraph alleges that the Plaintiff purchased the travellers cheques and then lost them; the second that she reported their loss to the Defendant and to the police "in accordance with the terms and conditions under which the cheques were issued", and the third that despite inquiries and demands the Defendant has not refunded their cost. Nowhere is 'there alleged an obligation on the part of the Defendant to do so.

12. Mr. Maxwell Lewis, who appears for the Plaintiff, suggests that the obligation is to be found within the express reference to "the terms and conditions under which the cheques were issued". But that is no help unless at least the substance of those terms or conditions is mentioned.

13. He further suggests that proceedings in a District Court do not require the same high standard of particularity that is demanded in the High Court, and that in effect the judge himself made good any deficiencies that might have existed in the Statement of Claim by virtue of the powers conferred on him by Rules 25 and 26 of the District Court Civil Procedures (General) Rules to frame the issues in an action.

14. We would observe in passing that were a judge to take such a course we would expect, at least where the parties are represented, as they were in this instance, that the judge would inform counsel of what he was intending to do and invite their comments.

15. However it may be that in this instance the judge did rely to some extent upon those provisions for he said, when giving the reasons for his decision -

"the Plaintiff has on the face of the documents produced to me brought herself within the requirements of the Defendant for refunding lost travellers checks,"

16. With respect that finding is open to question. The "requirements" for refunding" are to be found in documents included at pages 41 and 43 of the Appeal Bundle. They are not in identical terms and the purchaser may perhaps be a little confused as to exactly what he or she might be expected to do. For example only page 41 requires the purchaser to present his Purchase Agreement. We understand from Mr. Maxwell Lewis that in this instance there was such a document, although it does not appear to have been before the judge. In any event both pages require the purchaser to provide information, - page 41 "any relevant information", page 43 "all facts". The Defendant complains that the Plaintiff refuses to do this, in particular as to the source of her funds. It may be that the judge thought that was not relevant information but nowhere do we find any discussion of the question.

17. Perhaps more importantly the judge appears to have assumed that upon completion of the requirements there was an obligation upon the Defendant to refund in case of loss. With every respect to him, after perusal of pages 41 and 43, and of page 42 which is the only other document put before him, we are by no means satisfied that there is an open and shut case that such an obligation does exist. It may be of course that for commercial reasons the Defendant might not have wished to take the point. But we are not willing to uphold a judgment which, if such be the case, would, in effect, be a judgment by consent, without that consent's clearly appearing upon the record.

18. The Plaintiff has sought to achieve that end by a late application to amend. Counsel has this afternoon submitted a draft amendment. It may perhaps be sufficient to meet the situation as a purely technical approach, but the stark nakedness of the allegation therein contained will certainly need to be clothed with particulars of some kind. And in any event it is an allegation that will require to be pleaded to. In these circumstances we do not think it proper to accede to the application.

19. The judge was clearly very heavily influenced by what he thought to be the irrefutability of the Plaintiff's claim. For the reasons we have given we take leave to question whether that is so, and in the circumstances we think the proper course is to allow the appeal, set aside the judgment and remit the matter to the District Court with leave to the Plaintiff to amend her Statement of Claim generally and leave to the Defendant to file a defence within 14 days thereafter. We will be pleased to hear counsel as to costs and as to the monies in Court.