The insurer is liable under the Road Transport Act 1987 despite policy exceptions when ambiguity exists in the exclusion clauses.

[1] The brief facts of this case originating in the Sessions Court were that a lorry insured by a company (2nd Defendant) was being driven by the authorised driver (1st Defendant) and the 1st and 2nd Plaintiffs were attendants (kelindan) carried in the lorry.

[2] The 1st Defendant had lost control of the lorry which overturned and caused injuries to the 1st and 2nd Plaintiffs, who then sued the Defendants.

[3] The 1st and 2nd Defendants were initially represented by lawyers appointed by the insurance company but the lawyers later discharged themselves when a position was taken that the Plaintiffs were lorry attendants whose claims would be excluded under the lorry's insurance policy.

[4] The 1st and 2nd Plaintiffs then obtained judgment in the Sessions Court against the 1st and 2nd Defendants and sought to enforce the judgment against the Appellant herein, as insurer, under the provisions in s 96(1) of the Road Transport Act 1987 (" RTA 1987"), which provisions are reproduced below:-

(1) If, after a certificate of insurance has been delivered under subsection 91(4) to the person by whom a policy has been effected, judgement in respect of any such liability as is required to be covered by a policy under para 91(1)(b) (being a liability covered by the terms of the policy) is given against any person insured by the policy, then notwithstanding that the insurer may be entitled to avoid or cancel, or may have avoided or cancelled the policy, the insurer shall, subject to this section, pay to the persons entitled to the benefit of the judgement any sum payable there under in respect of the liability, including any amount payable in respect of costs and any sum payable in respect of interest on that sum by virtue of any written law relating to interest on judgements.

[5] The issue decided by the Sessions Court was whether the lorry's policy afforded coverage to the Plaintiffs.

[6] The Sessions Court found in favour of the Plaintiffs, and hence this appeal.

[7] In order for s 96(1) to be applicable, the Judgment must be in respect of liability required to be covered under s 91(1)(b) RTA 1987.

[8] Section 91 (1)(b) RTA 1987 requires that any vehicle must have coverage for third party liability before it can be issued with a licence ("road tax") and be allowed on public roads.

[9] The requirements for third party coverage to be met by motor vehicle insurance policies are dictated by s 91(1) of the Road Transport Act 1987 , which stipulates as follows:-

(1) In order to comply with the requirements of this Part, a policy of insurance must be a policy which-

(a) is issued by a person who is an authorised insurer within the meaning of this Part; and

(b) insures such person, or class of persons as may be specified in the policy in respect of any liability which may be incurred by him or them in respect of the death of or bodily injury to any person caused by or arising out of the use of the motor vehicle or land implement drawn thereby on a road:

Provided that such policy shall not be required to cover-

(aa) liability in respect of the death arising out of and in the course of his employment of a person in the employment of a person insured by the policy or of bodily injury sustained by such a person arising out of and in the course of his employment; or

(bb) except in the case of a motor vehicle in which passengers are carried for hire or reward or by reason of or