The court affirmed that insurance policies can create separate contracts for the policyholder and authorized drivers, establishing their rights independently.

[1] This judgment is prepared pursuant to s 78(1) of the Courts of Judicature Act 1964, as Justice Zainun Ali and Justice Ramly Hj Ali have since retired. This is the unanimous decision of the remaining judges of the panel.

[2] For ease of reference, we shall refer to parties as they were referred to in the High Court. This is an appeal by the insurer Malaysian Motor Insurance Pool, the plaintiff in the suit below pursuant to leave granted by this Court on 6 October 2017.

[3] The sole question allowed by this Court is as follows:

"Where a contract of insurance reproduces or substantially incorporates the exclusion of liability provided for under clauses (aa), (bb) and (cc) of the proviso to s 91(1), RTA , are those exclusions to be interpreted as applying equally to authorized drivers without the need for express exclusion of such liability."

Backgroud Facts

[4] The facts which led to the above question of law are for the most part undisputed and are as follows. The plaintiff is the insurer of motor lorry bearing Registration No: ACN 6836 from 26 January 2015 to 25 January 2016 under a commercial insurance policy no: 235-012-15-000846 ("the Insurance Policy"). The 1st defendant is the authorised driver of the said motor lorry. The 2nd defendant is the owner of the motor lorry and the insured. The 3rd defendant was, at the material time of the accident, travelling in the said lorry which was driven by the 1st defendant.

[5] The 3rd defendant (the respondent in this appeal) claimed that when he was performing his duty as a lorry attendant, the 1st defendant negligently reversed into him resulting in his injuries.

[6] The plaintiff appointed an Adjuster who, upon completing his investigations, discovered that the 3rd defendant was at the material time an employee of and was paid by the 2nd defendant.

[7] The 3rd defendant sued the 1st and 2nd defendants for negligence before the Sessions Court at Sungai Petani, Kedah, vide Suit No: A53 KJ-181-082005 (Suit 181).

(Note: Suit 181 was discontinued by the 3rd defendant on 1 March 2016 due to a technical error. It was subsequently refiled as Suit No: A53 KJ-38-022017).

[8] This then prompted the plaintiff to file an Originating Summons at the High Court of Malaya at Kuala Lumpur under s 96(3) of the Road Transport Act 1987 (" RTA ") seeking the following relief:

"1. Deklarasi bahawa Polisi Insurans yang dikeluarkan oleh pihak plaintif dengan nombor 235-012-15-000846 terhadap pihak defendan kedua diisytiharkan dibatalkan dan tidak berkuatkuasa dan plaintif berhak untuk mengelakkan tanggungan bersangkutan sebarang tuntutan yang timbul daripada kemalangan jalanraya yang dikatakan berlaku pada 25 March 2015 di sebatang lorong yang tidak dinamakan di belakang Jalan Teratai, Bandar Amanjaya, Sungai Petani, Kedah yang melibatkan defendan ketiga dan m/lori No: ACN6836 yang dimiliki oleh pihak defendan kedua dan dipandu oleh pihak defendan pertama.

2. Ganti rugi am;

3. Sebarang perintah atau relif lanjut yang difikirkan patut, sesuai dan adil oleh Mahkamah yang Mulia ini dalam kedaan ini."

[Emphasis Added]

[9] As stated by the learned High Court Judge in her judgment, the plaintiff's claim in a nutshell was for a declaration that the scope of the Insurance Policy issued by the plaintiff does not cover the incident as asserted by the 3rd defendant. This was on the ground that the 3rd defendant falls within the exception provided by the law where the plaintiff, as the insurer, is entitled to avoid liability under the Insurance Policy and has no obligation to pay the 3rd defendant's claim since the 3rd defendant is an employee of the 2nd defendant.

[10] The High Court allowed Prayer 1 only to the extent of the porti