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Axa China Region Insurance Co. Ltd. And Another v Pacific Century Insurance Co. Ltd. And Others

Judgment Cited authorities 38 Cited in Precedent Map Related
Vincent
Judgment Date24 July 2001
Year2001
Judgement NumberHCA9093/2000
Subject MatterCivil Action
CourtHigh Court (Hong Kong)
HCA009093/2000 XCHRX AXA CHINA REGION INSURANCE CO. LTD. AND ANOTHER v. PACIFIC CENTURY INSURANCE CO. LTD. AND OTHERS

HCA009093/2000

HCA 9093/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 9093 OF 2000

____________

BETWEEN
AXA CHINA REGION INSURANCE COMPANY LIMITED 1st Plaintiff
(formerly known as National Mutual Insurance Company Limited and Sentry Insurance Company Limited)
AXA CHINA REGION INSURANCE COMPANY (BERMUDA) LIMITED 2nd Plaintiff
(formerly known as National Mutual Insurance Company (Bermuda) Limited)
AND
PACIFIC CENTURY INSURANCE COMPANY LIMITED 1st Defendant
NG WING KEUNG, PAUL 2nd Defendant
CHAN CHI KIN, JOHNNY 3rd Defendant
LAI HEUNG WING, DICK 4tn Defendant
LAU KAI MING, RAYMOND 5th Defendant
CHUNG KA FONG, JESSICA 6th Defendant
CHAN CHI KEUNG, JIMMY 7th Defendant
WOO PAK FAI, ANTHONY 8th Defendant
CHIU HARK WAN, JAY 9th Defendant
GOT WAI LING, JIMMY 10th Defendant
CHAN SHUI LAN, ANITA 11th Defendant
CHAN KA YI, CAROL 12th Defendant
LAU SHUK HAN 13th Defendant
CHAN WAI LING, STELLA 14th Defendant
CHOY KIN LUN, ALAN 15th Defendant
CHAN YICK CHEUNG, FRANCIS 16th Defendant
KONG MIU YEE 17th Defendant
LUNG SIU LING, ANITA 18th Defendant
CHU HAK NAM, KENNETH 19th Defendant
BISWAKARMA TILBAHADUR 20th Defendant
MO YUET YI, ANDREA 21st Defendant
LAU MEI YUK, MAY 22nd Defendant
CHEUNG KAM FAI, SHINE 23rd Defendant
LIU HING LUNG, DANIEL 24th Defendant
POON YUEN KAN 25th Defendant
LEE LUNG CHEUNG, DEREK 26th Defendant
LEUNG MEI LING, PHYLLIS 27th Defendant
LAU LUEN HAN, CANDY 28th Defendant

____________

Coram: Deputy High Court Judge To in Chambers

Dates of Hearing: 28 February, 1-22 March and 2-10 April 2001

Date of Decision: 24 July 2001

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D E C I S I O N

_______________

INTRODUCTION:

Background:

1. This is an application by the plaintiffs for interlocutory injunction, delivery up order and disclosure order against the 1st to 10th defendants in respect of the plaintiffs' confidential information collectively called "Client Data" (see paragraph 9 below). Since the hearing, 18 others have been joined as co-defendants. This decision only applies to the first ten defendants and the word "defendant" in this decision shall, unless the context otherwise requires, be construed to mean the first ten defendants or any of them.

2. The plaintiffs are both members of the AXA group of companies (hereinafter called "AXA") carrying on the business of insurance underwriting, including the underwriting of life insurance policies which the present case is involved. The 1st defendant is an insurance company (hereinafter called "PCI") carrying on a similar business. The other defendants (hereinafter collectively called "the Individual Defendants") were insurance agents appointed by AXA under contracts called "Agent's Contract" to market AXA's insurance policies.

3. In March 2000, PCI launched a policy matching scheme (hereinafter called "PMS") targeted at policyholders of AXA so that they may surrender their AXA policies and switch to PCI policies. PCI offered a hefty welcoming bonus to AXA agents who were willing to join PCI. A large number of AXA agents, including the 2nd to 10th defendants, terminated their Agent's Contracts or have their contracts terminated by AXA and joined PCI. Many of AXA's policyholders who were serviced by these agents surrendered their AXA policies and switched to PCI policies. At about the same time, AXA noticed what they considered as an unusually large amount of printouts of their client information from their computer system called Sales and Marketing System (hereinafter called "SAMS") had been effected under the passwords assigned to the 2nd to 10th defendants prior to the termination of their agency with AXA.

4. On 21 September 2000 AXA instituted the present proceedings. Upon receipt of the writ, PCI voluntarily delivered up a number of SAMS documents in their possession and undertook to deliver up further SAMS documents if discovered and not to process any applications for switching to PCI policies which are accompanied by SAMS documents. The other defendants filed affirmations pursuant to the order of Madam Justice Beeson. All denied that they are still having any SAMS documents.

5. AXA's cause of action against the Individual Defendants is based on breach of implied duty of fidelity by the Individual Defendants in wrongfully removing confidential information belonging to AXA during the currency of their agency with AXA for use after the termination of their agency and to AXA's detriment. As against PCI, AXA's causes of action are, firstly, breach of confidence in that PCI having received the confidential information from the Individual Defendants with knowledge of their breach of duty of fidelity intends to use or disclose the information without AXA's permission and, secondly, interference of AXA's business by unlawful means through the wrongful use of confidential information and misrepresentation made by PCI's own agents in marketing the PMS targeted at AXA's policyholders.

The relief sought:

6. By their summons dated 21 September 2000, AXA seek an interlocutory injunction until trial or further order (1) restraining PCI from disclosing, divulging or otherwise using any of AXA's Client Data, restraining it from accepting any application for a life insurance policy by person whose name appears in AXA's Client Data and who has been approached by any agent of PCI at a time when any of the Client Data was in the possession or under the control of PCI, restraining it from soliciting any business by representing that certain specified life insurance products of PCI match or are comparable with the corresponding AXA product and restraining it from accepting any application for certain specified life insurance product from any person holding a life insurance product issued by AXA and (2) restraining the Individual Defendants from disclosing, divulging or otherwise making use of any of AXA's Client Data.

7. Secondly, AXA seek an order for delivery up to AXA of all documents containing Client Data, including copies, in the possession, custody, power or control of the defendants.

8. Thirdly, AXA seek an order that each of the defendants swear an affidavit:

(a) verifying compliance with the delivery up order;

(b) disclosing all documents containing information relating AXA's policyholders which came into its or his possession, custody, power or control since 1 November 1999 stating, with reference to each such document, the date when and the name and address of the person from whom it came:

(c) disclosing all documents containing information relating to AXA's policyholders which it or he has given or divulged to another person since 1 November 1999 stating, with reference to each such document, the date when and the particulars of the person to whom it or he gave or divulged the documents;

(d) disclosing the name and address of every AXA's policyholder whose name appears in any of the Client Data who has been approached by any agent of the 1st defendant since 1 November 1999, identifying the agent, the nature of the solicitation and stating what if any such business came to the 1st defendant as a result;

(e) disclosing the name and address of all AXA's policyholders to whom any agent of the 1st defendant represented that any of the specified PCI's life insurance products match or are comparable with the corresponding AXA products, and stating what if any business came to the 1st defendant as a result.

9. "Client Data" referred to above means any information obtained or derived by an agent in the course of his agency with AXA, not being information known to the agent prior to such obtaining or derivation, and contained in SAMS, and any documents whether in hard copy or electronic form containing such information and any of the documents listed in Schedule C to the Statement of Claim, whether in hard copy or electronic form, and any information contained therein obtained or derived by an agent in the course of his agency with the plaintiffs not being information known to the agent prior to such obtaining or derivation.

The Agency system:

10. AXA's insurance business, as is customary in the insurance industry, is conducted mainly through insurance agents appointed under agency contracts. These agents are organized into separate groups called agencies headed by a director of agency or senior director of agency with a regional director of agency at the top. Within each agency is a pyramidal structure of senior managers and managers in charge of the various units into which the agents are grouped.

11. Agents including directors of agencies of various levels are not employees of AXA. Clause 1.3 of AXA's Agent's Contract with the 2nd to 10th defendants provides expressly that "it is understood and agreed that there is no employer-employee relationship either expressed or implied between AXA and the agents." They are not entitled to benefits under the Employment Ordinance.

12. The office of the agency is rented by the agency with subsidy from AXA in both rental and remuneration of administrative personnel. These personnel are employees of the agency and not of AXA.

13. Agents are independent and free agents. They are free to move from projects to projects, insurance company to other insurance companies. They are free to choose their principals as they wish, subject to giving one month notice required under the terms of the Agent's Contract. But so long as the Agent's Contract...

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