CHAN CHING HO v. AMERICAN INTERNATIONAL ASSURANCE (BERMUDA) LTD

DCCJ 1106//2006

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 1106 OF 2006

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J U D G M EN T

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INTRODUCTION

1.  In the evening of 8 November 2004 after having had dessert in Sai Kung, the Plaintiff and a friend went to Fei Ngo Shan country park. They alighted from the Plaintiff’s friend’s motorcycle and went to an observation point there. The steps leading to the observation point was dark. On the way back, the Plaintiff slipped and fell, on the steps, landing on his buttocks.

2.  As a result of this slip and fall, the Plaintiff says that he suffered injuries and next morning was taken to Baptist Hospital, where he was admitted. An MRI examination was conducted on 10 November which revealed a small L5/S1 left paracentral disc herniation.

3.  The Plaintiff says that as a result of this slip and fall, he suffers residual pain to the extent that he cannot work.

4.  The Plaintiff held (inter alia) a personal accident policy of insurance with the Defendant (“The Policy”). The Policy provided for various benefits, including payments in the event of Permanent Total Disability and a Weekly Indemnity. (I use the translation adopted in the Defendant’s advertising pamphlet).

5.  The Plaintiff sought payment from the Defendant based on the Policy. The Plaintiff claimed to be entitled to payment for Permanent Total Disability and Weekly Indemnity under the Policy.

6.  The Defendant refused. The Defendant did not consider that the Plaintiff’s injuries and disabilities brought him within the entitlement to payment for Permanent Total Disability or Weekly Indemnity (beyond the period of 11 days already paid).

7.  The Plaintiff brought a complaint to the Insurance Claims Complaints Bureau against the Defendant’s refusal of payment. His complaint was rejected. Hence, the Plaintiff brings this action.

PLAINTIFF’S CASE

8.  The Plaintiff was born in Hong Kong. Before the end of his second form, he quit school and started his working life. This was around 1991.

9.  He started out as a decoration worker, then in 1993 or 1994 changed to become a waiter. In 1995, he switched jobs to become a bellboy in a hotel. This lasted until 1997 when he was laid off, at which point he started to engage in direct selling of products. In 2000, he started to be employed by a well known chain of fitness centres as a salesman.

10.  His job involved selling memberships, usually on the street. He would carry some 30-40lbs. of equipment, including a portable poster frame, a box or table as well as pamphlets and forms. He would try to sell memberships to passersby on the street.

11.  In about November 2001, his employer renegotiated the terms of his employment. Although he was doing the same work, he had to do it as an independent contractor instead of as an employee.  The Plaintiff set up a limited company called Ray & Vico Fitness & Beauty Agency Limited to operate this ‘business’. He and his then girlfriend (now his wife) were the shareholders and directors of this company.

12.  The Plaintiff’s earnings as a salesman prior to the accident ranged from $10,000 to $60,000, or even as high as $100,000 per month. For the period from 01.04.2004 up to the date of accident, his earnings were $333,448, over $40,000 per month.[1]

13.  His then girlfriend worked as an insurance agent for the Defendant. In about July 2004, she persuaded him to take out an insurance policy with the Defendant. The Policy was termed “Lifestyle Personal Accident Insurance”. The Plaintiff filled out a proposal dated 15.07.2004. The Defendant accepted and the Policy in this case was issued on about 05.08.2004.

14.   The accident happened when he was walking down some steps in the darkness. His buttocks landed first, then his waist area hit the side of the steps. He put out his hands to brace himself and came to a stop after sliding down around one or two steps.

15.  After the accident, he felt pain at his waist, and at his left upper limb around his hip. There were abrasions on both hands. He rested around 15 minutes at the place  where he fell before his friend took him home on the friend’s motorcycle. At home, he used some medicinal alcohol to massage the injured parts and applied gentian violet to his hands.

16.  When he woke up the next morning, there was a small area at the small of the back that felt very painful, and there was some numbness at the sole of his left foot. He contacted his girlfriend who accompanied him to Hong Kong Baptist Hospital. (HKBH).

17.  At HKBH, he was attended by Dr. Julian Chan, who apparently is an orthopaedist. Examination included X-Rays and MRI done on 10.11.2004. The MRI report revealed a small L5/S1 left paracentral disc herniation. He was given physiotherapy during his period in hospital. He was discharged home on 17.10.2004. Thereafter, he continued follow up visits and physiotherapy.

18.  The Plaintiff says that since the accident, his back has been in pain so that he cannot sit or stand for long periods. If he sits or stands for about 20-25 minutes, his lower back pain will increase and he feels tension in the muscles of his back. This is relieved by changing his position, although the pain will persist at a lower intensity. The sole of his left foot often feels cold and numb, his left calf, thigh and hips will sometimes feel numb. He cannot run or lift heavy objects. 

19.  He has been unable to return to his previous job. He had tried to look for other work, but with his physical disability and his lack of education, he had not been successful.

20.  Dr. Lung Hin Fai, an orthopaedic expert, gave evidence on behalf of the Plaintiff. Dr. Lung found normal lumbar lordosis and thoracic kyphosis. Sensation was intact. Muscle power was normal save for slight diminution of power of left big toe dorsiflexion and plantar-flexion. There was no obvious wasting of lower limb muscles. His diagnosis was prolapsed intervetebral disc, which he said was confirmed by MRI scan of the lumbar spine which revealed a small paracentral disc herniation at the L5/S1 level causing slight indentation of the thecal sac. The side of protrusion corresponded with his leg symptoms.

21.  He considered the Plaintiff to be one of the patients who have chronic low back pain or limb pain preventing him from functioning normally at work or in sports, usually due to residual neural tissue compression or degeneration. Dr. Lung considered that the Plaintiff may have to change to a sedentary type of job that would permit him to alternate between sitting and standing and which does not require him to lift weight.

DEFENCE CASE

22.  The Re-Re-Re-Amended Defence is in the nature of a denial of the various paragraphs of the Re-Amended Statement of Claim. The real thrust of the Defence came in cross-examination and final submissions. The Defence essentially was that the Plaintiff was exaggerating his symptoms and disabilities, and that the Plaintiff’s injuries and disabilities were not sufficient to bring him within the entitlement to payment under either the Weekly Indemnity or under Permanent Total Disability.

23.  The Defendant did not call any witnesses of fact. The only witness called for the Defence was an Orthopaedic expert Dr. Lau Hoi Kuen.

24.  In Dr. Lau’s opinion, the mild disc space dessication and narrowing as well as the small left paracentral disc herniation of the L5/S1 intervertebral disc should be due to degeneration which should have been in existence prior to the accident.

25.  Dr. Lau noted that there were multiple positive signs for inorganic pain, in other words, there were a number of signs which were not consistent with the complaint of injury/disability as described by the Plaintiff or as shown in the MRI. For instance, there was a difference in the degree of movement in the Straight Leg Raising test, a non-anatomical distribution of the neurological deficit, and inappropriate responses to tests which should not cause pain in circumstances of injury to the back.

26.  Dr. Lau further noted that the absence of muscle spasm over the Plaintiff’s lower back and preservation of the lordotic curvature suggests that the Plaintiff should not have such severe pain as he was complaining of.

27.  Dr. Lau’s conclusion was that any residual pain as a result of the accident should have caused only minimal decrease in efficiency at work and the Plaintiff could return to his pre-accident occupation, and there was no need for the Plaintiff to change to a sedentary job.

28.  The appropriate period of sick leave should be about 3-6 months. In cross-examination, his attention was directed to the sick leave granted by the Plaintiff’s doctors. Dr. Lau disagreed with the period of sick leave granted, but he could not say that they were wrong, but only that they were ‘less correct’.

29.  Dr. Lau also agreed that inappropriate symptoms might be caused by behavioural modification arising originally from the injury.

ISSUES

30.  The issues I have to decide is whether the Plaintiff suffered injury as a result of the accident, and if  so, what was and is the extent of his current disability.

31.  I will also have to decide as a matter of construction, whether the Plaintiff’s disability entitles him to claim for the Weekly Indemnity and Permanent Total Disability under the Policy.

32.  The burden of proof on the factual issues lies with the Plaintiff on the balance of probabilities.

MATTERS NOT TAKEN INTO ACCOUNT

33.  Before I set out my findings, I would first set out what I have not considered to be relevant and which have played no part in my findings.

34.  Mr. Gidwani says that the premium is disproportionate to the benefit which would be paid out by the Defendant if the Plaintiff’s construction of the Policy is correct. I consider that this is irrelevant to my construction of the terms of the Policy. People can and do make bad bargains. If the proper construction of a contract means that one party has miscalculated the extent of his liabilities thereunder, the Court cannot re-write the contract. In any event, there is no evidence at all of the statistical models which were used to derive the premium/benefit calculations, much less that these calculations were part of the matrix of fact available to both parties to this contract.

35.  There was a reference in the documents that the Plaintiff having taken out numerous insurance policies had obtained excessive cover for hospital income and accident indemnity, leading to a faint suggestion adverse to his credibility. This issue was wisely not made in cross-examination or in submissions. For the avoidance of doubt, the number of policies which the Plaintiff has taken out plays no part in my findings. People do take out numerous policies of insurance for various reasons, and I find nothing suspicious at all in the Plaintiff doing so. This is especially so when the Plaintiff’s then girlfriend was an insurance agent.

PLAINTIFF’S DISABILITIES

36.  I have listened carefully to the Plaintiff’s testimony and observed his demeanour in the witness box. I find the Plaintiff to be a straightforward witness, not shaken in cross-examination.

37.  In assessing the Plaintiff’s credibility, I have not simply relied on the Plaintiff’s own testimony, but I have compared his testimony with the evidence of the medical experts in this case, as well as the inherent probabilities. In particular, I find it not inherently probable that the Plaintiff would wind up a fairly successful business unless there was a good reason to, especially when he had gotten married sometime between his accident and the present case.

38.  I accept the Plaintiff’s evidence and I find that he is disabled in the way that he describes and has been described in Dr. Lung’s report. The pain that he feels upon continued standing or sitting is such as to prevent him from effectively returning to his previous employment.

39.  In coming to this finding, I have not disregarded Dr. Lau’s opinions. However, Dr. Lau agrees that the inorganic signs could be caused by behavioural modification consequent upon injury.

40.  Furthermore, what the Plaintiff really complains of is pain. Pain is still not yet fully understood by the medical profession, but what cannot be disputed is that different people have different thresholds of pain, and that certain physical situations that may cause unbearable pain in one person, may be simply shrugged off by another.

41.  That leads me also to a finding that the Plaintiff’s disabilities were caused by the accident he suffered on 08.11.2004. Although there was some suggestion that the Plaintiff’s present disabilities were caused ultimately by pre-existing degenerative changes, the immediate cause of his disability was the pain which was triggered off by the accident. In that sense, the Plaintiff was injured in an accident.

WEEKLY INDEMNITY

42.  Clause 1 of Section 2 of Part II of the Policy provides :

倘受保人就意外發生後九十(90) 日內引致完全及持續殘廢，並無法從事其工作相關之任何職務，本公司將於保單資料頁或任何批註載有之等候期(如適用) 後開始定期支付於保單資料頁或任何批註所載之每週賠償，惟賠償不得超過五十二(52) 週。

43.  In construing this Policy, I rely on the words of the Policy in the original Chinese. However, for the purpose of this judgment, I set out the translation in the original Defence as follows:

When by reason of Injury and commencing within ninety (90) days after the occurrence of an Accident the Insured is wholly and continuously disabled and prevented from performing each and every duty pertaining to his/her occupation, the Company shall pay periodically the weekly indemnity stated on the Policy Information Page and any Endorsement, for the period the Insured shall be so disabled, but in no case exceeding fifty-two (52) weeks, commencing immediately following the elimination period (if any) stated on the Policy Information Page or any Endorsement, as the result of any one (1) Accident.

44.  The matters in issue on the construction of this clause is the meaning of the words 完全殘廢 (totally disabled), as well as the meaning of 無法從事其工作相關之任何職務 (unable to perform any of the duties of his occupation).

45.  Mr. Gidwani for the Defendant says that 完全殘廢 means what it says, that for this benefit to take effect, the insured must be totally disabled. As to無法從事其工作相關之任何職務 , again Mr. Gidwani contends for a literal interpretation, such that if the insured is able to perform any part of his previous work, he would not be entitled to this benefit. 

46.  I do not agree. Mr. Fung for the Plaintiff referred to the principles of contractual interpretation expressed in Investors Compensation Scheme v. West Bromwich Building Society (No. 1).[2] Of particular relevance are principles (4) and (5) :

(4)  The meaning which a document (or any other utterance) would convey to a reasonable man is not the same thing as the meaning of its words. The meaning of words is a matter of dictionaries and grammars; the meaning of the document is what the parties using those words against the relevant background would reasonably have been understood to mean. The background may not merely enable the reasonable man to choose between the possible meanings of words which are ambiguous but even (as occasionally happens in ordinary life) to conclude that the parties must, for whatever reasons, have used the wrong  words or syntax.

(5)  The “rule” that words should be given their “natural and ordinary meaning” reflects the common sense proposition that we do not easily accept that people have made linguistic mistakes, particularly in formal documents. On the other hand, if one would nevertheless conclude from the background that something must have gone wrong with the language , the law does not require judges to attribute  to the parties an intention which they plainly could not have had.

47.  I consider that the parties could not have intended the clause to mean that the insured would only be able to claim this benefit if he could not do any aspect of his previous occupation, however small. I find that taking the clause in the context of the paragraph and the policy as a whole, 無法從事其工作相關之任何職務 means that the insured is not able to undertake any of the (substantial) duties of his previous occupation.

48.  As to the words 完全及持續殘廢 , I consider that they are qualified by the words 無法從事其工作相關之任何職務. In other words, the connecting word 並 in this context means “such that”.  If a literal interpretation were adopted such that someone has to be totally disabled in the sense of not being able to perform any tasks independently, the following words would have no meaning whatsoever. It is hard to imagine someone being totally disabled in such a sense and still being able to perform any of the tasks of his previous employment.

49.  The effect of this construction is that if the insured is suffering a disability as a result of an accident, and his injury is such that he cannot perform any substantial part of his previous work, he would be entitled to this benefit.

50.  The Plaintiff was granted sick leave by his treating doctors for a period of 2 years. Even Dr. Lau was unable to say that the granting of sick leave for this period was wrong. The most he could say was that the doctors who granted this period were “less correct” in their professional opinion than he was.

51.  Considering the above and in light of my earlier finding as to the extent of the Plaintiff’s disabilities, I find that the Plaintiff was 完全及持續殘廢，並無法從事其工作相關之任何職務 , and the Plaintiff was entitled to the Weekly Indemnity up to the limit of 52 weeks.

52.  The Defendant says that the Plaintiff was paid 11 days under the Weekly Indemnity. Mr. Fung for the Plaintiff did not concede this. However, it appears that the Plaintiff himself acknowledges this payment in a letter dated 04.01.2006 in Chinese to the Claims Department of the Defendant. In the circumstances, I am satisfied that the Plaintiff has received this sum and is therefore entitled to 52 weeks of Weekly Indemnity, less 11 days.

PERMANENT TOTAL DISABILITY

53.  Clause 2 of Section 1 of Part II of the Policy provides :

倘在意外發生後一百八十日內，受保人因意外受傷而引致永久完全殘廢，並無法從事根據其知識、訓練或經驗而適合並可賺取報酬的任何工作、職業或商業活動，而該殘廢己維持連續十二(12)個月後，受保人仍然完全、持續及永久殘廢，則公司會支付保單資料頁所載之永久完全殘廢賠償。該項賠償將於永久殘廢期內每月月底等額攤付百份之一(1%)，而支付期不得超過一百(100)個月。若在一百(100)個月的支付期內殘廢狀況消失或受保人回復工作能力，則此永久完全殘廢賠償將即時終止。

54.  Again, I set out the translation in the original Defence :

When as a result of Injury and commencing within one hundred and eighty (180) days from the date of the Accident, the Insured is totally and permanently disabled and prevented from engaging in any gainful work, occupation or business for which the Insured is reasonably qualified or fitted by knowledge, training or experience, the Company shall pay, provided such disability has continued for a period of twelve (12) consecutive months and is total, continuous and permanent at the end of this period, the Principal sum in equal monthly instalments payable at the end of each month during such total, continuous and permanent disability at the rate of one percent (1%) per month for not more than one hundred (100) months. If during the one hundred (100) month period the disability ceases or the Insured becomes able to return to work, the payments under the Benefit shall immediately cease.

55.  A literal construction of this clause is even less appropriate. The clause provides for total permanent disability, but the clause itself envisions that the disability may not necessarily be permanent.

56.  For the same reasons as above in relation to the Weekly Indemnity, I find that 永久完全殘廢 is qualified by the following words 並無法從事根據其知識、訓練或經驗而適合並可賺取報酬的任何工作、職業或商業活動 .

57.  Mr. Gidwani invited me to construe this clause by reference to the previous clause on Accidental Death and Dismemberment, which provides for varying levels of benefits depending on the extent of the disability, so for example loss of one or both eyes would give rise to a benefit of 100% of the insured sum, whereas the loss of one ear would only give rise to a benefit of 25% of the insured sum. Mr. Gidwani says that in order to come within this clause, the disability should be to a degree similar to the most serious of the Death and Dismemberment levels.

58.  I agree that the policy should be considered as a whole. However, each of the clauses under the separate sections and parts deal with different matters, and although assistance can be gained from comparing the various provisions, it must be borne in mind that they specifically deal with separate matters, and separate bases for compensation.

59.  However, there is a distinction to be drawn between this clause and the Weekly Indemnity clause. The Weekly Indemnity clause provides for a relatively short term cover, and the qualifying phrase of 並無法從事其工作相關之任何職務 needs to be construed in the context of the insured’s pre-accident occupation, to provide protection during the period of ‘sick leave’ (for want of a better phrase).

60.  Permanent Total Disability provides coverage for longer term disability but the qualifying phrase 並無法從事根據其知識、訓練或經驗而適合並可賺取報酬的任何工作、職業或商業活動 is not limited to the insured’s pre-accident occupation, but any work that that the insured can actually perform.

61.  This construction would be consistent with the intention of the parties as embodied in the Policy. The purpose of coverage for Permanent Total Disability and Death and Dismemberment is to cater for those injuries which leave an insured with a lasting disability which prevents the insured from earning his/her livelihood in any way which he/she can. The purpose of coverage for the weekly indemnity is to cater for those injuries which have a shorter effect and affects the immediate work.

62.  Construed in this way, I find that the Plaintiff is not 永久完全殘廢

並無法從事根據其知識、訓練或經驗而適合並可賺取報酬的任何工作、職業或商業活動. The extent of his disabilities may prevent him from returning to his pre-accident occupation, but they do not prevent him from doing any work at all. Although it may be difficult for him to find employment, and the work available may not be to his preference or may not provide him with a level of earnings approaching his previous work, there are still some jobs that he can undertake. He could, for example, work as a salesman over the telephone.

CONCLUSION

63.  The Plaintiff is successful on his claim for payment of Weekly Indemnity, but does not succeed on the claim for payment of Permanent Total Disability.

64.  The amount payable under the Policy for Weekly Indemnity is $4,000 per week. The maximum entitlement is 52 weeks, or $208,000. The Plaintiff was paid for 11 days, which is $6,285.71. The balance due is $201,714.29 and I enter judgment against the Defendant for that amount.

65.  I make an order nisi that the costs of the action are to be paid by the Defendant to the Plaintiff, to be taxed if not agreed, with Certificate for Counsel.