The court affirmed that under subrogation laws, an insurer can claim losses from a third party if the insured has been indemnified, establishing a valid bailment relationship and the duty of care owed by the bailee.

Arziah Mohamed Apandi JC:

Introduction

[1] In the usual walks of life, the Appellant sends his motorcar for repair at the car maker's workshop as his insurance policy covers the repair due to accidents. It never occurred to the Appellant that it became a double whammy when his motorcar became beyond repair at the same workshop instead of being repaired. His motorcar was declared a total loss due to the accidental fire ignited at a nearby premises, which spread all over.

[2] As with other reasonable men, the Appellant would claim losses from his insurer due to the total loss of his motorcar. The Appellant was paid by his insurer and compensated by the workshop for losing his motorcar. The Appellant's insurer would claim against the workshop as the tortfeasor for the payment made to the Appellant under the subrogation laws. However, the workshop refused to reimburse the insurer since the Appellant made and accepted compensation. Hence, this action is in court.

[3] In stepping into the shoes of the Appellant under the law of subrogation, the Appellant's insurer filed this action for reimbursement of payment from the Respondent (through its insurer). The existence of a bailee-bailor relationship between parties was claimed to have been created upon handing over his motorcar at the workshop. The Appellant claimed RM72,394.50 for the total loss value of his motorcar, and a notice of subrogation was issued. The dispute arose when the Appellant had also signed an acceptance of payment of RM3,000.00 from the Respondent for the total loss of his motorcar.

[4] The Learned Magistrate ("LM") dismissed the Appellant's claim. Although the LM made a finding of fact and law, there is subrogation, but because the Appellant accepted the settlement sum from the Respondent, his claim was rejected. The LM did not rule on the determination of a contract of bailment.

Background Facts

[5] The Appellant has Progressive Insurance Berhad ("Progressive Insurance") insurance for his motorcar with Registration No: VAH6342 ("his motorcar"). The Appellant, being the owner of his motorcar, sent it to the Respondent's premises at TCEAS-Balakong (Relocation) at Lot 15A, Jalan Satu, Cheras Jaya Industrial Estate in Balakong, Selangor ("the premises"), for service where:

(a) on 29 March 2018, at about 4 am, a fire occurred which was reported that several premises had burnt, and Ismail bin Samsudin lodged a Police Report;

(b) by the Report On The Cause of Fire dated 17 April 2018, it is stated that the source of the fire was resistance heating and it was an "accidental fire";

(c) the Respondent had breached the contractual obligation of bailment as the Respondent was responsible for ensuring that his motorcar was returned to the Appellant in good condition;

(d) the Respondent had a "fire policy" with Lonpac Insurance Bhd;

(e) the Appellant lodged a Police Report on 16 October 2020, in respect of the fire as mentioned earlier that occurred;

(f) the Respondent was negligent in taking care of his motorcar and res ipsa loquitur is applicable;

(g) the Appellant incurred a loss of RM72,394.50;

(h) Progressive Insurance has the right to all the rights of the Appellant and has used the Appellant's name to enforce the Appellant's rights against a third party; and

(i) Progressive Insurance, in an action based on subrogation, has claimed RM72,394.50 against the Respondent for the loss of RM72,000.00 and payment of the Adjuster's fee in the sum of RM394.50.

Pleadings

[6] The Statement of Claim dated 13 July 2021 ("SOC") stated that:

i) The fire broke out in the area involving some business premises, including the Respondent's workshop, which is the premises. The police report by the Respondent's head workshop stated that the rear section of the insurance claim, office section, car service area, and some cars and factory equipment were burnt, including some customer vehicles, including his motorcar. The Report on the Cause of the Fire, dated 17 April 2018, found the cause was the source o