Chang Min Tat FJ (delivering the judgment of the Court):

The facts in this case, save in one particular, are largely undisputed.

The appellants are operators of a service station and service cars as well as wash them. As part of the services they provide they are prepared when required by their customers to send the cars back to their houses or other addresses given by them. The second respondent who was at all relevant times in their employ and held a driving licence used to perform the additional service of returning the vehicles. The first appellant was a customer of some standing and he used to get his car sent back to him. This saved him from having to wait. On the day in question, he sent his car for a wash and in the absence of the first appellant whom he usually asked, he directed the second respondent to send the car to a certain address and if he was not there to return to the service station where he would pick up the car later. After the wash, the second respondent drove to this address but not finding the first respondent there, he returned to the service station as instructed. On the way back, at the entrance to the service station, he knocked down an oncoming motor-cyclist in circumstances that left no doubt of his entire negligence. In a traffic summons case, he therefore pleaded guilty to a charge of negligent driving.

The motor-cyclist sustained injuries to his person and his vehicle was also damaged. He took an action in the Special Sessions Court in Kuala Lumpur against the second respondent as the driver and the first respondent as the owner. In the usual way he claimed that the driver was the agent or servant of the first respondent or driving with his permission. In any case, there was no doubt of the liability of the first respondent under the policy of insurance for the action of the second respondent as the person driving on his orders or with his permission. There being no possible defence, the motor-cyclists claim was settled for $4,300, by the first respondent's insurers. It is of no materiality that the settlement was on the basis of an ex-gratia payment with no admission of liability.

The motor-cyclist sustained compound fractures of the right tibia and fibula which left him with a permanent limb. He claim for personal injuries was limited to a sum under $10,000 to bring his action within the jurisdiction of the Sessions Court. He also claimed special damages in the sum of $613 and loss of earnings at $10 per day. The settlement of $4,000 for both special and general damages and $300 costs would appear to be a very satisfactory one from the point of view of the insurers.

The first respondent also sustained damages amounting to $383.35 to his car which the insurers paid in part. The policy of insurance was a comprehensive one, with the now ordinary provision that the insured would be responsible for the first $250 of the loss or expenses incurred. There is no doubt that the first respondent was paid the damages less this excess. Certain expenses were also incurred: they were specified as $168.55 for investigation fees, $676 for legal expenses (presumably in settling the claim of the motor-cyclist) and $25 for inspection fees. Clearly these expenses were incurred by the insurers, who were thus $5,552.90 out of pocket. This sum would include the $250 excess not paid to the insured.

The first respondent then took action similarly in the Sessions Court at Kuala Lumpur to recover this sum of $5,552.90, interest and costs. Clearly the action was taken in his name by the insurers under the latter's right of subrogation.

The defence was that (i) the second respondent was at the relevant time the agent of the first respondent, (ii) the doctrine of "volenti non fit injuria" applied, (iii) the first respondent had suffered no loss as the claims of the motorcyclist and his own claims were settled by the insurers and consequently the claim was "totally misconceived, frivolous and an abuse of the