WONG PUI KWONG t/a SPLENDID MOTORS CO v. GRAND UNION INSURANCE CO LTD AND ANOTHER

1985, No. A1774

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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BETWEEN

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J U D G M E N T

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1. The plaintiff's claim against the defendants arose from a fire policy. The 1st defendant was at the material time an accredited insurer. The 2nd defendant was an insurance agent.

2. In the formation of the contract of insurance, in question, two personalities emerged, Cindy and Maggie. It is alleged by the plaintiff that both were servants and agents of the 2nd defendant.

3. In the course of procuring the insurance policy, it is so alleged, Maggie had participated. The 2nd defendant admits Cindy as an employee but denies that Maggie was in. its employ.

4. On divers paragraphs in the Defence, the plaintiff went before the Master for further and better particulars. The plaintiff's attempt was wholly unsuccessful, hence the Instant appeal.

5. The appeal as prosecuted before me this morning has been conveniently divided into three separate parts. The first deals with a request under paragraphs 4, 5 & 6 of the Defence. Those paragraphs can be briefly summarised. The 2nd defendant denies that Maggie was a servant or agent of the company. If the Court should conclude that in fact Maggie was in the employ of the 2nd defendant, it will be denied that Maggie had ever made any of the alleged representations. Again, if the Court should find in favour of the plaintiff, first, that Maggie was an employee of the 2nd defendant, and, secondly that Maggie did make the representations, the 2nd defendant will say that it owed the plaintiff no duty of care.

6. Counsel for the plaintiff complains that these paragraphs have introduced confusion while it is admitted that Maggie had participated as alleged in the formation of the insurance contract, by paragraphs 4, 5 & 6 of the Defence the 2nd defendant endeavours not only to set up inconsistent averments but, in effect, evade replying to the direct assertions of the plaintiff. The plaintiff is entitled to have, so Mr Pirie argues, the allegedly clouded issues clarified. In sum, the plaintiff demands to know what role Maggie in truth prayed.

7. The alleged connection between the 2nd defendant and Maggie is specifically denied. In paragraph 2 of the Defence,it is explicitly pleaded that Maggie was not an employee of the 2nd defendant, and the further averments contained in paragraphs 4, 5 & 6, as analysed, cannot, in my view, be said to he in any way confusing or evasive. It is simply making a reassertion at each logical stage. The basis on which the plaintiff seeks particulars from the 2nd defendant on these paragraphs, therefore, seems to be ill founded.

8. The matter can be better illustrated by examining the actual requests made under these paragraphs 4, 5 & 6. Request A:

"If the said Maggie Tam, alias, Tam Siu Cheung was not a sevant or agent of the 2nd defendant, who employed her or whose agent was she?"

Evidently, the 2nd defendant could not be compelled to give information on matters with which it claims to be wholly unconcerned.

Request B:

"How it camp to be that the policy was, effected through the 2nd defendant if the said Maggie Tam, alias Tam Siu Cheung was not, servant or agent of the 2nd defendant, giving full particulars of all facts and matters and/or documents in support thereof."

Quite obviously, the 2nd defendant is under no obligation to offer any explanation as to how, in fact, the policy of insurance had been otherwise effected on the basis that Maggie was not its servant or agent.

9. The first request for further and better particulars under paragraphs 4, 5 & 6 cannot, therefore, be acceded to and for the reasons I have given, it must be refused.

10. Next, I turn to paragraph 7 of the Defence. It is necessary for the whole paragraph to be set out seriatim:

"Alternatively, if which is denied, the 2nd defendant shall be found to have owed a duty of care to the plaintiff as alleged or at all, then it denied that it was guilty of the alleged or any negligence or breach of duty in the respects alleged. In particular, the 2nd defendant will in these premises aver that it took all reasonable care to ensure the accuracy of the representations made to the plaint if f as alleged."

11. Solicitor for the 2nd defendant submits that the last sentence in paragraph 7 adds nothing more to its first sentence. The approach of solicitor is quite understandable After all, the last sentence in paragraph 7 is prefaced by the words "In particular, the 2nd defendant will in these premises aver". It could be said that the last sentence merely supplements the first sentence in paragraph 7.

12. Mr Pirie, Counsel for the plaintiff, would be perfectly content if the last sentence in paragraph 7 were to be withdrawn or otherwise abandoned or if solicitor for the 2nd defendant were to undertake not to lead or adduce evidence at the trial in support of it. But for the reasons given to this Court, solicitor for the 2nd defendant is not prepared to act as Counsel has proposed. It would be, so it is sought to explain, incautious to do so. Solicitor for the 2nd defendant remarks: "I cannot see what affirmative case we can set up." In his submission, it is further observed: "It is not the case that we set up an affirmative case." Solicitor for the 2nd defendant concludes that the last sentence in paragraph 7 is probably redundant, superfluous. Those are just remarks or observations made by the legal adviser of the 2nd defendant. The fact remains that the last sentence is not being abandoned and I must deal with it on the submissions advanced to me.

13. It was well said by, I believe, Pennycuick J. in Chapple v. Electrical Trades Union & Others [1961] 1 W.L.R. 1290 at p.1293:

"A traverse is not to be regarded as pregnant with an affirmative merely on the ground that every traverse of a negative allegation implies an affirmative."

14. As a matter of formulation, the last sentence in paragraph 7 is an averment; it so stated. Thus, it falls to be decided whether despite the obscure preface to that sentence, it raises an affirmative averment. It is not a denial if only for the clear pleading that the "2nd defendant will aver". In my view, it is a blunt affirmative averment. Nothing need be implied. It is somewhat akin to, though not identical with the principle better known as "the snail in the bottle" case, Donoghue v. Stevenson, [1932] A.C. 562. It is an affirmative assertion that all reasonable care had been taken with a view displacing any prima facie case of negligence. It is "averred" that the 2nd defendant "took all reasonable care". Counsel for the plaintiff must be correct, therefore, that for such an affirmative assertion particulars should be given.

15. In the circumstances, allowing the appeal on this aspect, I would order that the 2nd defendant do, furnish further and better particulars as sought by the plaintiff on the last sentence in paragraph 7 unless the 2nd defendant will, within 3 days from today, inform the plaintiff in writing that the last sentence in paragraph 7 is no longer pursued. The situation justifies the making of an unless order.

16. Lastly, I pass to Request No. 3 on paragraph 8 of the Defence. It is a plea of estoppel and in one of its particulars given in the Defence, it is alleged:

"It was an implied condition of the 2nd defendant agreeing to give the said assistance and co-operation to the plaintiff that the plaintiff would continue its action against the 1st defendant only and would not proceed against the 2nd defendant."

17. It could be argued that the condition was to be solely implied form the 2nd defendant's alleged agreement. Of course, the particulars as given could also be read, as suggested by Counsel for the plaintiff, to mean an independently implied condition for which particulars need be supplied. However, the parties are ad idem that the matter be adjourned for further consideration to be given to these said particulars before the matter be returned to this Court for determination.

18. Solicitor for the 2nd defendant has intimated that it is quite possible that the present averment would be replaced by an allegation of an express condition.

19. I am more than agreeable to the suggestion of Mr Pirie, Counsel for the plaintiff, that as the 3rd Request in this appeal could be amicably settled between the plaintiff and the 2nd defendant, the parties ought to be given time to reach understanding. The proposed adjournment is not being resisted by the 2nd defendant.

20. In conclusion, the appeal on the 1st Request fails. The appeal on the 2nd Request succeeds but with an unless order. It would not be unfair in the circumstances to make no order as to costs for the appeal with each party succeeding approximately 50%. I make an order nisi for no order as to costs subject to what legal representatives of the parties have to say.

(Submissions on costs made)

21. I have been assisted by submissions made by counsel for the plaintiff as well as solicitor for the 2nd defendant on the question of costs. There seems to be some disagreement as to what transpired in relation to discussions on the 3rd Request. However, the plaintiff was unsuccessful before the Master and particulars for the last sentence in paragraph 7 of the Defence would not have been obtained if the plaintiff had not prosecuted the instant appeal. I suggested that there should be no order as to costs, but on reflection and as further assisted by counsel, it would seem that the proceedings before me are necessary for the rights and obligations of the plaintiff and the 2nd defendant in this action to be better defined. The correct order, acceptable to the plaintiff and not objected to by the 2nd defendant, is that costs, both of today's hearing and the proceedings before the Master, be costs in the cause.