Insurance contracts require utmost good faith; misrepresentations regarding income and business existence void the contract if material to the insurer's risk assessment.

Atan Mustaffa Yussof Ahmad J:

Introduction

[1] Here is a tale stranger than fiction, yet grimly real. Abdul Razak Bin Noor Mohamad approaches an insurance agent with a most peculiar and specific question: "What if there's an accidental death from falling off a building?" The agent, perhaps thinking nothing of it, confirms he would be covered. Abdul Razak then takes out a policy on his life - a substantial policy worth millions. Twenty days later, he falls from the 17th floor of a building and dies. The agent herself testified that such a targeted question was rather unusual for someone buying a policy. Yet for all its dramatic peculiarity, this case does not turn on these extraordinary circumstances alone, but on the more prosaic - though no less vital - questions of what the contract says and what it means.

[2] The law of insurance, like all good law, must look beyond the sensational to the fundamental: what did the parties agree? On one side stands the adopted son - the Plaintiff who trusted that this policy would provide security - clutching the certificate document and pointing to its plain terms which promise payment upon accidental death. On the other side stands the mighty insurance company, with its battalions of lawyers wielding the sword of misrepresentation, crying that the very foundation of the contract is rotten - that Abdul Razak overstated his income, fabricated his business, and deceived them about who would pay the premiums They say the contract should be torn up as if it never existed, because it was built on falsehoods. The court must decide not whether Abdul Razak was a prophet of his own doom, but whether he told the truth when he sought coverage, and whether any alleged misrepresentations were material enough to justify the insurers walking away from their promises. These are the eternal questions of contract law - what did the words mean when written, and what do they mean when tested by the harsh realities of human tragedy?

Background Facts

[3] The Deceased, Abdul Razak Bin Noor Mohamad, applied for Takaful coverage from the Defendant through a proposal form dated 23 July 2020 ("the Proposal Form"). Based on the information provided in the Proposal Form, the Defendant. Prudential BSN Takaful Sdn Bhd, issued a Certificate known as "Sijil Takaful Keluarga Pru BSN Warisan Plus No.: 87265644" ("the Certificate"). The Plaintiff, Mohamad Habizan bin Mohaamd Yussof, was named as the nominee/beneficiary under the Certificate. According to the Plaintiff, he was the adopted son of the DSSMeceased.

[4] The Certificate provided for a Death Benefit of RM1.5 million, with an additional RM1.5 million payable in the event of accidental death.

[5] Merely 20 days after the issuance of the Certificate, on 17 August 2020, the Deceased passed away after falling from the 17th floor of a building where he resided. The post-mortem report revealed the presence of alcohol (approximately 67 milligrams per 100 millilitres of blood) and a prescription drug called Chloroquine in the Deceased's system.

[6] Following the Deceased's demise, the Plaintiff, as nominee, made a claim under the Certificate for a total of RM3 million (comprising both the Death Benefit and the Accidental Death Benefit).

[7] On 14 July 2021, the Defendant paid the Plaintiff a sum of RM3,113.51 as Khairat Benefit under the Certificate.

[8] However, by a letter dated 18 April 2022, the Defendant declined the Plaintiff's claim, asserting that the Certificate was v