Introduction

In personal injury claims, the plaintiff is required to sign a statement of truth to verify the truth of the facts stated in a Statement of Damages. The potential consequences of overstating one’s losses are highlighted in the case of Zurich Insurance Company Limited v Chan Man Fu [2024] HKDC 1615.

Background

This case revolves around a committal application by an insurance company against a plaintiff in the underlying personal injury proceedings.

The respondent, Chan Man Fu, was involved in a traffic accident on 12 November 2018. Following the accident, Chan filed a personal injury claim against another driver whose motor insurer was the applicant in this case. At the time of the accident, Chan was represented by T.S. Tong & Co., with Tam as the handling solicitor, appointed by the Legal Aid Department.

Under the Statement of Damages dated 13 October 2022, Chan claimed a monthly income of HK$45,000 which includes his alleged earnings from two jobs: a freelance job at a cemetery and a part-time taxi driver job. The total amount of pre-judgment and post-judgment loss of earnings claimed by Chan come up to more than HK$5 million. The Statement of Damages included a statement of truth translated by Tam and signed by the respondent before Tam, confirming the accuracy and truthfulness of the information provided.

Key Evidence Suggested Chan Had No Income

Contrary to Chan’s declared income in the Statement of Damages, various documents disclosed by Chan during the personal injury proceedings revealed that Chan had no income at all during the relevant period:-

1. An Annual Statement of Earnings and Property Acquired dated 3 November 2018 (which was only nine days prior to the traffic accident) as signed by Chan, showed Chan had declared no income, listing only Comprehensive Social Security Assistance (CSSA) of HK$8,678;
2. In the Annual Statement of Earnings and Property Acquired filed for the period of 3 October 2018 to 3 October 2019, Chan also declared no income other than CSSA of HK$8,928;
3. In an application for the Traffic Accident Victims Assistance Scheme submitted by Chan himself in April 2019, Chan described himself as a self-employed taxi driver who was only familiarizing himself with the roads and had not taken any order or earned any income.

In face of the overwhelming evidence that Chan was lying about his income, Chan attempted to shift the blame on his solicitors by alleging that there was misunderstanding between him and his solicitors in that the income stated in the Statement of Damages was only referring to his potential income and not his actual income at the time of the accident. Chan also alleged that he was asked to sign the statement of truth (which Chan alleged Tam for claiming it was in draft form) first before the solicitors had explained the importance of the statement of truth and consequences of giving false statement (which Chan admitted was at least done after the signed the document). Chan also said that when he told Tam some statements in the Statement of Damages were incorrect, Tam allegedly said, “it does not matter, we can revise it [the Statement of Damages] later.”

The court finds Chan’s explanation implausible, as Chan did not insist on correcting the Statement of Damages even after being told about the serious consequences that can following the making of false statement. This remained the case long after the Statement of Damages is filed. Chan also failed to summon Tam to give evidence at the hearing nor adduce any evidence from Tam in support of his account of events.

Judgment

After considering the evidence above, the District Court Judge found Chan guilty of making false statements in his Statement of Damages. The court stressed that the evidence overwhelmingly demonstrated that Chan had knowingly or recklessly made false declarations about his income. The judge highlighted that Chan’s actions were a blatant attempt to mislead the court and secure financial benefits fraudulently.

Chan was eventually sentenced to 21 days of imprisonment for contempt of court. Additionally, he was ordered to pay the costs of the applicant on an indemnity basis, with counsel certificate.

Key Takeaways

This case highlights two key reminders in respect of signing of statements of truth in legal documents:

1. Honesty is Paramount: Claimants must provide truthful information in legal declarations. False statements can lead to severe legal consequences, including imprisonment, penalties, and adverse legal costs orders.
2. Verification of Claims: Before signing statements of truth, claimants should ensure that all claims and damages sought are accurate and supported by concrete evidence. Even if they are legally represented, claimants are ultimately responsible for the information they provide. They should fully understand the contents and implications of any legal documents before signing.

The case of Zurich Insurance Company Limited v Chan Man Fu underscores the critical importance of honesty and evidence in personal injury claims. Claimants must be diligent in ensuring the accuracy of their statements and be prepared to substantiate their claims with verifiable evidence. This case serves as a stark warning that the legal consequences of making false statements can be dire and far-reaching, affecting not the claimant’s chance of success in a personal injury action but also his potential exposure to imprisonment and monetary.

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