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2021 MarsdenLR 3738
HIGH COURT SABAH & SARAWAK SIBU
SEAPOWER SHIPPING SDN BHD – Appellant
Versus
QBE INSURANCE (MALAYSIA) BERHAD – Respondent
[Admiralty Action No: SBW-22NCvC-9/7-2020 (HC)]
A valid Classification Certificate negates the necessity for further discovery in insurance claims regarding vessel classification.
Headnote:(A) Evidence Act 1950 – Section 131 – Insurance claim – Discovery of documents sought by Defendant regarding classification of vessel – Defendant's application dismissed as no challenge to the validity of Classification Certificate was made – The Barge was classified and certified, with no need for further discovery. (Paras 11, 12, 29, 34)
(B) Discovery – Principles for discovery applications cited – Discovery must be relevant, necessary, and with documents in control – Defendant’s failure to question the Classification Certificate weakens its application. (Paras 24, 28)
Facts of the case: The plaintiff claimed on a marine insurance policy after the Barge capsized. The Defendant resisted the claim, seeking discovery regarding classification certificates. The plaintiff argued against the need for this discovery, as the classification was already established. (Paras 1-6)
Findings of Court: The court found no need for discovery given the existing valid Classification Certificate and that issues of the vessel’s loss were to be addressed at trial. (Paras 11, 34)
Issues: Whether discovery was necessary to establish vessel classification when a valid certificate was possessed by the Defendant. (Paras 11, 30)
Ratio Decidendi: The court ruled that the life of the existing Classification Certificate rendered the discovery unnecessary, emphasizing the importance of establishing relevance in discovery applications. (Paras 28, 34)
Result: Defendant’s application for discovery dismissed with costs.
JUDGMENT
Background
[1] The Plaintiff was the registered owner of a dumb barge named "Pertama Hijau" ("the Barge") registered with the shipping registry at Chafing Malaysia. It had a net tonnage of 708 tons and measured 81.93 meters, breath of 23.17 meters and depth of 4.88 meters.
[2] The Barge was classified with NKK and/or Class NK Information Technology Department ("the Society") as "a barge". Hence the Barge was issued with the Classification Certificate (' the Classification Certificate"), International tonnage certificate (1969), International Load Line Certificate, International Anti-Fouling System Certificate And Certificate For Cargo Ship Safety Construction (Non-Convention) all exhibited in the AIS (D-2).
[3] The Barge was insured with the Defendant, an insurance company, under a "Hull and Machinery" insurance under policy number 53-M0103427-MCH-R010 for the period of 12 months from the 1 November 2017 ("the Policy").
[4] It was a term of the Policy that the insured
"warranted vessel classed as stated in the policy schedule and class maintained throughout the duration of the policy".
The Defendant can avoid liability under the Policy if the Barge was not within the classification of the Society.
[5] On or about the 27 September 2018 while laden with bauxite, the Barge, while under a tow, encountered rough seas and capsized in the Solomon Islands and was lost.
[6] As night would follow day the Plaintiffs made a claim on the policy and the Defendants predictably sought to resist honouring the claim on the Policy. The Plaintiffs sued the Defendants and the suit was registered in this Court. The Defendant is resisting the claim.
[7] In the process of preparing for trial the Defendant filed a Notice of Application in Enclosure 35 for discovery of documents under O 24 r 7A(2) of the Rules of 2012 (RoC) for a third party, the Society, to disclose documents and information in relation to the classification criteria and other technical details for the classification of vessels such as the Barge.
Enclosure 35 - Discovery under Order 24 Rules 7A(2).
[8] It became immediately apparent to me that while the Defendant had never in the past queried the Barge's classification in receiving annual premia, they choose to do so now when a claim on the Policy was being made.
[9] In essence, they are seeking to go behind the classification certificate of the Barge which certificate they appeared to have previously always accepted or never appeared to have questioned.
[10] The Defendant went to great and admirable lengths in its submissions to convince me that their application for discovery meets all the criteria and tests laid down by both the Rules of 2012 and the impressive string of authorities cited.
[11] However the Defendant's submission fail in one material aspect, that is; - why is such discovery required in the light of the fact that the Barge is already in possession of a Classification Certificate whose validity, adequacy or authenticity was never challenged or questioned by the Defendant now or in the past.
[12] Hence, on the 3 May 2021 I dismissed Enclosure 35 (emphasis added):-
The main aim of the Defendant's application is to ascertain from the Society if the barge was in fact maintaining its classification when it allegedly capsized in heavy seas and subsequently sank.
This is because the Marine Policy which the Plaintiff is claiming on is subject to a condition of liability which requires:-- "warranted vessel classed as stated in the policy schedule and class maintained throughout the duration of the policy"
However the stark reality is that the Defendant has in its possession of a valid and current Classification Certificate for the vessel dated 4 January 2016 and valid until the 1 January 2021. Such, certificate classified the vessel as a barge. For this reason I cannot see how the application for discovery can confirm what has already been properly and currently certified for the barge.
For this reason (among
