Abdul Malek Ahmad JCA:

The poser in this appeal is whether a woman, who is the respondent before us, travelling as a passenger in a motor car belonging to her husband, who is the insured in the relevant policy covering the said motor car which is being driven by her son, who is the authorised driver under that policy, can claim damages from the insurance company, the appellant here, in Johor Bahru Sessions Court Civil Action 52-804-91(3) (hereinafter "the second suit") for a road accident that occurred on the morning of 4 June 1988 while being driven to work at a market stall at the Central Market, Jalan Ah Fook, Johor Bahru run by Tharmarajoo a/l Chinna Kolanthai (hereinafter "Tharmarajoo") after judgment had been entered against her husband and son in Johor Bahru Sessions Court Civil Action 53-218-1989(1) (hereinafter "the first suit") on 21 November 1991.

In the first suit, interlocutory judgment had been entered against the husband and son on 14 March 1991 and the final judgment in default was entered on 21 November 1991 for general damages in the sum of RM47,000, loss of pretrial earnings amounting to RM12,000, RM8,400 for pretrial costs of hiring a maid and another RM4,800 for post trial costs of hiring a maid, and interest at 8 per cent per annum on general damages from the date of service of the writ of summons on 8 January 1990 to the date of judgment, and at 4 per cent per annum on pretrial special damages of RM21,000 from the date of accident on 4 June 1988 to the date of judgment, and another 8 per cent per annum on the judgment sum thereafter to the date of realisation with costs assessed at RM6,873.

Subsection (1) of s. 91 of the Road Transport Act 1987 (hereinafter "the Act') states:

91(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; and

(bb) except in the case of a motor vehicle in which passengers are carried for hire or reward or by reason of or in pursuance of a contract of employment, liability in respect of the death of or bodily injury to persons being carried in or upon or entering or getting onto or alighting from the motor vehicle at the time of the occurrence of the event out of which the claims arise; or

(cc) any contractual liability.

The second suit was filed on 1 December 1991 based on para. (bb) of the proviso to sub-s. (1) of s. 91 of the Act read with s. 96, in particular sub-s. (1), of the Act which states:

96. Duty of insurers to satisfy judgments against persons insured in respect of third party risks.

(1) If, after a certificate of insurance has been delivered under subsection (4) of section 91 to the person by whom a policy has been effected, judgment in respect of any such liability as is required to be covered by a policy under paragraph (b) of subsection (1) of section 91 (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 thereunder in respect of the liability, including any amount payable in respect of costs and any sum payable in