Insurers cannot deny liability to third parties based on policy breaches by the insured, as per sections 94 and 96 of the Road Transport Act 1987.

JUDGMENT

Introduction

Badariah Sahamid JCA:

[1] This is an appeal against the High Court's decision dated 27 October 2017 where the learned Judge had allowed the applicant's ('Etiqa Takaful Bhd') application for a declaration that the contract of insurance through Certificate No TGPC-PC 195025 ('the said policy') which covers a motorcar bearing Registration No QAU 1314 for the period of 30 July 2012 to 29 July 2013 was void and unenforceable in respect of coverage of an accident which allegedly occurred on 2 September 2012 between a motorcar bearing Registration No QAU 1314 and a motorcycle bearing Registration No QAR 2278.

[2] The learned Judge further granted a declaration that the applicant is not responsible to comply with any orders following the civil action in the Sessions Court of Kota Samarahan Suit No KSN A53KJ-26-2-2016 and/or any other claims which arise from the road accident which allegedly occurred on 2 September 2012 between a motorcar bearing Registration No QAU 1314 and a motorcycle bearing Registration No QAR 2278.

[3] After the learned Judge had granted the abovementioned declarations against the 1st respondent ('Ambrose anak Jewon) on 30 August 2017, learned counsel for the 2nd respondent (Abuseman Jamaluddin) requested to make further submissions on the issue of whether the abovementioned declaratory order against the 1st respondent would disentitle the 2nd respondent of his third party statutory rights under s 96(1) of the Road Transport Act 1987 (' RTA 1987').

[4] On 27 October 2017, the learned Judge maintained her earlier decision delivered on 30 August 2017 in respect of the declaration against the 1st respondent. The learned Judge further declared that the applicant is not responsible to comply with any orders following the civil action pending in the Sessions Court and/or any other claims which arise from the road accident which allegedly occurred on 2 September 2012 between a motorcar bearing Registration No QAU 1314 and a motorcycle bearing Registration No QAR 2278.

[5] In this appeal by the 2nd respondent against the applicant, the contention of the 2nd respondent is that the learned Judge had erred in declaring the said policy as void and/or unenforceable against the 2nd respondent and the 2nd respondent is disentitled to claim from the applicant any judgment following the civil action in the Sessions Court and/or any claims which arise from the alleged accident. Such a declaration would disentitle the 2nd respondent of his third-party statutory rights under s 96(1) of the RTA 1987.

Background Facts

[6] The applicant is a company licensed under the Insurance Act 1966 to carry out the business of general insurance and is the insurer of the said policy in respect of a car bearing Registration No QAU 1314.

[7] The 1st respondent is at all material times the registered owner and driver of the motorcar bearing Registration No QAU 1314, insured by the said policy which was issued by the applicant.

[8] The 2nd respondent is the rider of the motorcycle bearing Registration No QAR 2278, who had sustained severe injuries due to an accident involving the 1st respondent, which was alleged to have occurred on 2 September 2012.

[9] Subsequently, the 2nd respondent had commenced a civil suit against the 1st respondent at the Sessions Court in Kota Samarahan to claim for general and special damages arising out of the alleged accident.

Proceedings At The High Court

[10] Meanwhile, while the Sessions Court suit was still ongoing, the applicant filed an Originating Summons in the High Court (encl 1) on 23 March 2017, which sought inter alia the following declarations:

a. Contract of insurance through Certificate No TGPC-PC 195025- BRTQKVCH which covers a motorcar bearing Registration No QAU1314 for the period of 30 July 2012 to 29 July 2013 is void and unenforceable to cover an accident which allegedly occurred on 2 September 2012 between a motorcycle bearing Registration No QAR 2278 and a motorcar bearing Registration No