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2022 MarsdenLR 1222
HIGH COURT MALAYA KUALA LUMPUR
BERJAYA SOMPO INSURANS BERHAD – Appellant
Versus
SHAMISA HOLIDAY & TRAVEL SDN BHD & ORS (ENCL 1) – Respondent
[Originating Summon No: WA-24NCC-81-02/2021]
An insurance policy is void ab initio if procured by a company in winding up and is based on fraudulent misrepresentation regarding the insured vehicle.
Headnote:(A) Road Transport Act 1987 - Section 96 - Companies Act 2016 - Section 471 - Insurance policy - Declaration sought to deem insurance policy void ab initio; the policy in question was determined invalid as it was procured by a wound-up company and thus lacked authorization from the appointed liquidator. (Paras 18-20, 40-41)
(B) Contract of Insurance - Misrepresentation - The policy was deemed void due to fraudulent misrepresentation of the vehicle; discrepancies between the insured vehicle and the vehicle involved in the accident established grounds for this declaration under Section 96. (Paras 54-76)
Facts of the case: The plaintiff sought declarations regarding the enforceability of an insurance policy for a vehicle which was invalid due to the policyholder's winding-up status prior to policy issuance. (Paras 2-21)
Findings of Court: The insurance policy was declared void ab initio based on its procurement without liquidator authorization and fraudulent misrepresentation about the insured vehicle’s nature. (Paras 86)
Issues: The main issues include the validity of the insurance policy post-winding up, the breach of utmost good faith (uberrimae fidei), and whether the policyholder had an insurable interest in the vehicle. (Paras 20-22)
Ratio Decidendi: The court ruled that the policy was invalid due to lack of authorization from the liquidator at the time of its issuance and because of substantial misrepresentation regarding the vehicle. (Paras 40-66)
Result: Application allowed for prayers declaring the policy void. (Para 86)
JUDGMENT
[1] The was an application by the Plaintiff via Originating Summons dated 9 January 2021 (encl 1) for a declaration in respect of the enforceability of an insurance policy under s 96(3) of the Road Transport Act 1987 (" RTA ") ("this Application").
[2] The reliefs sought in this Application are, inter alia, as follows:
"(a) Masa untuk memfailkan dan menyerahkan Saman Pemula ini dilanjutkan jika perlu);
(b) Sijil insurans No MA606969 (selepas ini dirujuk sebagai 'sijil insuran tersebut') yang melindungi kenderaan No BKT3359 dari tempoh 4 June 2019 sehingga 3 June 2020 harus disifatkan terbatal sejak dari mula (void ab initio') dan tidak boleh dikuatkuasakan (unenforceable);
(c) Susulan dari perintah (b) diatas, Plaintif tidak bertanggungan (not liable) terhadap sebarang perintah dan/atau penghakiman di bawah s 96 Akta Pengangkutan Jalan 1987 berdasarkan prosiding sivil di Mahkamah Majistret Kulim melalui Writ Saman No KF-A73KJ-338-10/2020 yang diperolehi atau mungkin diperolehi oleh Defendan Kedua terhadap Defendan Pertama dan/atau mana-mana individu dalam mana-mana tindakan lain yang akan dan/atau telah difailkan berikutan kemalangan jalanraya tersebut dan/atau melibatkan kenderaan No BKT3359;"
[Own Emphasis Added]
[3] The 1st Defendant was wound up on 8 January 2019 vide Alor Setar High Court, Petition No KA-28NCC-60-08/2018 ("Winding Up Court") and the Director General of Insolvency was appointed as the liquidator of the 1st Defendant company ("the Liquidator").
[4] According to the Plaintiff, it was informed that the 1st Defendant was wound up on or about 31 March 2021 during a Case Management of another matter involving the 1st Defendant.
[5] Thereafter, on 3 May 2021, the Plaintiff applied to the Winding Up Court under s 471 of the Companies Act 2016 (" CA 2016") for leave to proceed with this Application.
[6] The Plaintiff's solicitors then wrote to this Court vide letter dated 5 May 2021 requesting for a deferment of the directions given in respect of this Application, until leave has been obtained by the Plaintiff from the Winding Up Court.
[7] The deferment was granted and this Application then continued after the Plaintiff obtained leave from the Winding Up Court on 27 October 2021.
[8] The 1st and 3rd Defendants in this action did not file any affidavit in respect of this Application and neither did either of them appear in person or by way of legal representation.
[9] Therefore, the opposition to this Application was only from the 2nd Defendant.
[A] Salient Background Facts
[10] The Plaintiff is an insurance company and had issued the motor vehicle insurance policy certificate No MA606969 for a motorcycle bearing registration No BKT 3359 ("Insured Vehicle") for the period between 4 June 2019 until 3 June 2020 ("the Policy").
[11] The Policy was issued at around 5:41pm on 4 June 2019 in the name of the 1st Defendant who is the policyholder.
[12] A motor vehicle accident was alleged to have occurred on 3 November 2019 involving a bus bearing registration No BKT 3359 (the same registration No as the Insured Vehicle) and a lorry bearing registration No PKQ 4796 ("the Accident").
[13] The 2nd and 3rd Defendants were both passengers on the Bus at the time of the Accident.
[14] The Plaintiff was subsequently served with two notices pursuant to s 96(2) RTA , the first by solicitors for the 2nd Defendant and the second by the solicitors for the 3rd Defendant pertaining to the Accident which is said to involve the Insured Vehicle.
[15] The 2nd Defendant has commenced a civil suit against, inter alia, the 1st Defendant in Kulim Magistrates Court, Civil Suit No: MCCA No KF-A73KJ-338-10/2020 for special and general damages as a result of the Accident ("the Accident Suit").
[16] The Plaintiff conducted an investigation into the Accident and specifically the vehicle bearing registration No BKT 3359. The following was discovered:
(i) The Policy was purchased to provide insurance coverage for the Insured Vehicle b
