Insurers bear the burden of proving a fire was deliberately caused; absence of evidence supports finding the fire was accidental.

Ong Chee Kwan J:

Introduction

[1] This judgment concerns insurance claims by the insureds, Supreme Power Auto Sdn Bhd ("SPA"), Yong Thien Wieo ("YTW') and Lim Sze Way ("LSW') for loss arising from a fire incident on 5 August 2012 which destroyed a single storey factory situated at Lot 53, Kawasan Perindustrian, Kelemak Jaya, 78000 Alor Gajah ("Lot 53"). The claim for the loss due to the destruction of the building at Lot 53 as well as the stock-in-trade therein form the subject matter of Suit 329 and Suit 330 respectively. The claims for the loss of 3 luxury vehicles which were also destroyed by the said fire form the subject matter of Suits 541, 542 and 543.

[2] Although the Malaysian Fire Brigade ("Bomba) concluded that it was an accidental fire originating from an electrical source, being the arcing of the copper wires within the electrical distribution board, the insurers repudiated the claims on the basis that the fire at Lot 53 was deliberate.

[3] The insurer in Suit 329 for the loss of the building is Liberty Insurance Berhad ("Liberty"), the insurer in Suit 330 for the loss of the stock-in-trade is MSIG Insurance (Malaysia) Berhad ("MSIG") and the insurer for all the 3 luxury cars is Allianz General Insurance (Malaysia) Berhad ("Allianz").

[4] An overview of the claims in the 5 suits before this Court is tabulated in the Table below:

[5] Pursuant to leave granted by this Court on 16 June 2020, 2 questions were posed for preliminary determination:

1st Question

Whether the fire that broke out at Lot 53 was accidental or deliberately caused. This question applies to all the 5 suits.

2nd Question

Whether SPA was in breach of the Storage of Hazardous Goods Warranty A of the Schedule to the Insurance Policy which restricts the storage to 3600 litres of all liquids including kerosene oil and diesel giving off flammable vapour with flash point of not less than 93°C? This question applies only to Suit 330. If the question is answered in the positive, whether MSIG is entitled to avoid liability under the policy.

[6] The trial of the aforesaid two questions lasted 37 days.

Background Facts

[7] SPA was in the business of manufacturing, wholesale and export of automobile spare parts and to provide such other services related to automobiles, and they operated from SPA's building at Lot 53. The building also served as its warehouse and showroom. Its stock-in-trade was stored in various steel racks and carton boxes. Engine oils in plastic bottles and 200-litre drums were also kept in the building. The warehouse was partitioned into separate sections which are identified in a sketch plan below:

[8] On 5 August 2012 at about 3.00 am., a fire occurred in Lot 53 resulting in extensive damage to the building, the stock-in-trade together with 3 luxury cars, namely the Porsche 911, Ferrari and Porsche 333 which were parked at the Rear Extension of the building at the material time ("the Incident").

[9] After the Incident, the Plaintiffs made insurance claims to Liberty, MSIG and Allianz to be indemnified for the loss and damage to the building, the stock-in-trade and the 3 luxury cars, the Porsche 911, Ferrari and Porsche 333.

[10] Allianz appointed Associated Adjusters Sdn Bhd ("AASB") to investigate the insurance claims submitted by the Plaintiffs in regard to the Porsche 911, Ferrari and Porsche 333 under their respective Private Car Policy. Liberty appointed McLaren Saksama (M) Sdn Bhd ("MSM") to investigate the insurance claim submitted by SPA for the building at Lot 53 under the Premise Policy. MSIG appointed Maphilindo International Sdn Bhd (now known as Sedgwick Malaysia Sdn Bhd) ("Maphilindo") to investigate the claim for the stock-in-trade.

[11] Liberty with MSIG jointly appointed Forensic Services (M) Sdn Bhd ("FSM") as forensic experts to further investigate the cause of the fire at Lot 53.

[12] At the hearing, all the insurers relied heavily on the investigation conducted by Ani Ling (DW-6) and Yu Ong Sing (DW-4) of FSM and the conclusion