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2013 MarsdenLR 2739
HIGH COURT MALAYA KUALA LUMPUR
PACIFIC & ORIENT INSURANCE CO BERHAD – Appellant
Versus
GOH CHENG LOONG & ORS – Respondent
[Saman Pemula No: 24NCVC-278-02/2012]
Insurers may not deny liability for third-party claims after defending their insured, which creates an estoppel against asserting fraud or conspiracy when substantial factual disputes exist.
Headnote:(A) Road Transport Act 1987 - Sections 96(1), 96(2), and 96(3) - Application for declaration of insurance policy as void and unenforceable - Insurer’s statutory liability arises once judgment is given against insured party - Conduct of insurer in defending insured prevents denial of liability based on asserted fraud and conspiracy - Issues of conspiracy and transfer of interest presented substantial factual disputes, inappropriate for determination via Originating Summons. (Paras 1, 12, 14, 19)
(B) Estoppel - Conduct of Plaintiff in defending insured bars it from denying liability for statutory coverage under policy - Upholding principle of waiver where insurer takes actions consistent with acceptance of liability. (Paras 13-14)
(C) Factual disputes regarding conspiracy and ownership transfer necessitate resolution through trial rather than summary proceedings. (Paras 19)
Findings of Court:
Originating Summons dismissed with costs of RM7,000.00 each to the 1st and 3rd Defendants.
Issues: Whether the application for declaration of the insurance policy being void is valid, and the appropriateness of resolving complex factual disputes via an Originating Summons.
Ratio Decidendi: The insurer’s actions implied acceptance of liability; substantial disputes of fact regarding conspiracy and transfer require trial for resolution.
Result: Originating Summons dismissed.
| Table of Content |
|---|
| 1. insurance policy dispute details (Para 1 , 2 , 3 , 4 , 5 , 6 , 7) |
| 2. arguments regarding estoppel and negligence (Para 8 , 9) |
[1] This is the Plaintiff's application for a declaration pursuant to s 96(3) and (5) of the Road Transport Act 1987 to declare the insurance policy certificate issued by the Plaintiff to the 1st Defendant to cover motorcycle No WJD 9746 void and unenforceable, and consequential relief.
[2] The Plaintiff had initially brought this action against the 1st and 2nd Defendants only. The 3rd Defendant was added by an Order of this Court, upon the 3rd Defendant's application to intervene in the proceedings.
[3] The facts as set out by the Plaintiff are as follows. The 1st Defendant had applied to the Plaintiff through its agent for motor insurance to cover the said motorcycle No WJD 9736 against 3rd party claims. On or about 21 January 2010, whilst the said motorcycle WJD 9746 was being ridden by the 2nd Defendant, a Myanmarese citizen, the said motorcycle was involved in a motor accident in which the 3rd Defendant was injured. The 3rd Defendant then filed a claim for negligence against the 1st and 2nd Defendants in the Sessions Court at Bandar Baru Bangi, Selangor ("the Sessions Suit"). The Plaintiff as insurer then retained Messrs Viknesh, Ratna & Co to file a defence for the 1st and 2nd Defendants in the Sessions Suit and represent them both in that suit.
[4] The Plaintiff subsequently retained the services of investigators, namely, Mestari Adjusters Sdn Bhd ("the Adjusters") to record statements from the 1st and 2nd Defendants regarding the accident, which they did. The Adjusters also recorded a statement from one Wong Chi Kong, the owner of a motorcycle shop trading as AMP Motor Trading.
[5] According to the Plaintiff, the 1st Defendant in his statement to the Adjusters had stated that Wong Chi Kong, the owner of AMP Motor Trading had used the 1st Defendant's name, with the 1st Defendant's consent, to purchase the said motorcycle for the use of the 2nd Defendant. The 1st Defendant had apparently stated he was does not know of the accident nor did he use the motorcycle at the material time. The 1st Defendant had merely allowed his name to be used for the motorcycle to be registered in his name.
[6] According to the statement recorded by the Adjusters from the 2nd Defendant, the 2nd Defendant had confirmed that the 1st Defendant's name was merely used to register the motorcycle and that the shop owner did all arrangements. The 2nd Defendant confirmed that he was the rider of the motorcycle at the time of the accident and that he did not inform both the 1st Defendant and the shop owner about the accident.
[7] The Plaintiff's case is that the 1st Defendant had conspired with the 2nd Defendant and the shop owner to defraud the Plaintiff into obtaining cover for the said motorcycle. The Plaintiff states that if the 1st Defendant had told the truth when applying for the insurance cover that he was only lending his name because the 2nd Defendant was a Myanmari citizen, then surely the Plaintiff would not accepted such risk more so when the intended owner, the 2nd Defendant, did not even have a driving license.
[8] The 1st Defendant's case is that this Originating Summons is filed mala fides, as despite the Plaintiff's claim herein, the Plaintiff has retained the services of solicitors who are continuing to act for the 1st Defendant in the Sessions Suit and the appeals therefrom to the High Court and Court of Appeal. In the circumstance, the 1st Defendant states that the Plaintiff is estopped from raising conspiracy as a ground to declare the policy void.
[9] The 3rd Defendant on the other hand submits that the issues raised by the Plaintiff are between the Plaintiff and the 1st and 2nd Defendants and has nothing to do with the 3rd Defendant. The 3rd Defendant states that these issues do not affect his rights under s 96 of the Road Transport Act 1987 , in particular the right to be indemnified by the Plai
