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2014 MarsdenLR 1370
COURT OF APPEAL PUTRAJAYA
GREAT EASTERN LIFE ASSURANCE MALAYSIA BERHAD – Appellant
Versus
SIU YAN TAM & ANOR AND ANOTHER APPEAL – Respondent
[Civil Appeals No: W-02(NCVC)(W)-318-02-2013 & W-02(NCVC)(W)-243-01-2013]
An insurer is not liable for negligence regarding a living assurance claim made during the life of the insured, even if the insured passes before payment.
Headnote:(A) Insurance Act 1996 - Living Assurance Policy - Negligence in issuing benefits to the deceased - The appellant, GE, wrongfully issued a cheque for benefits to the deceased even after being notified of his passing. The court found insufficient evidence of fraud against Collin who was appointed as trustee. (Paras 18, 22, 24, 36, 41)
(B) Duty of Care - The insurer did not owe a duty to the original nominee, Tam, as she had been removed and thus had no standing to claim. (Paras 37, 39, 54)
Facts of the case:
The deceased purchased an insurance policy, naming his wife as the original nominee, later excluding her in favor of his sons under a will. After his demise, the insurer paid the benefits to Collin, who allegedly misappropriated the funds.
Findings of Court:
The court ruled any claim against Collin for fraud was not substantiated, and GE was not liable for negligence towards Tam.
Issues: 1) Tam's locus standi against GE and Collin. 2) GE's alleged negligence in handling the policy claim. 3) Collin's contributory negligence determination.
Ratio Decidendi: The court held that as a matter of law, GE fulfilled its obligations under the Living Assurance Claim, which was validly submitted by the deceased. The notification of death did not invalidate the claim, and Tam lacked any entitlement.
Result: Appeals allowed; GE and Collin are not liable.
| Table of Content |
|---|
| 1. tam's negligence claim against ge. (Para 16 , 17) |
| 2. decision of the high court on ge's negligence. (Para 18 , 19 , 20 , 21 , 22) |
| 3. court's approach to appeals and evidence (Para 23) |
| 4. court's observations on the findings of fraud and forgery. (Para 24 , 27 , 28 , 29 , 30) |
| 5. main issues for determination by court of appeal. (Para 25 , 26) |
| 6. issues of fraud and the validity of forms (Para 31 , 32) |
| 7. court's analysis of the living assurance claim. (Para 33 , 43 , 44 , 46 , 48) |
| 8. nature of living assurance claim vs. death claim (Para 34 , 35) |
| 9. locus standi issues for tam (Para 36 , 37) |
| 10. court's reasoning regarding tam's locus standi. (Para 38 , 39 , 40 , 41 , 51) |
| 11. assessment of ge's negligence regarding cheque issuance (Para 42 , 45) |
| 12. responsibility in cheque issuance under living assurance claim (Para 47 , 49 , 50 , 52 , 53 , 54) |
| 13. accountability and contributory negligence of collin (Para 55) |
[16] Tam's claim against GE was based on negligence in that:
(a) GE did not exercise its duty of care reasonably when it processed the LAC Form to protect the interests of Tam and the deceased;
(b) as GE had been notified of the death of the deceased, GE ought to have issued the cheque payable to the estate of the deceased and not in the personal name of the deceased; and
(c) GE ought not to have handed the cheque to Collin thereby causing payment to the wrong party.
Defence Of GE
[17] GE's defence to the claim of negligence was as follows:
(a) GE was not liable to Tam as Tam was not entitled to receive any benefits or had any interest to be protected under the Policy, having been removed as the original nominee and as such she has not suffered any loss.
(b) GE did not owe a duty of care to Tam to investigate the LAC Form and cannot be held by Tam to be negligent.
(c) The Policy benefits were properly paid out under the Living Assurance Claim in accordance with the terms of the Policy.
(d) The cheque was properly handed to Collin as he was a co-trustee of the Policy.
(e) The loss, if any, suffered by Tam was not caused by GE.
(f) In the event GE was held liable to Tam in negligence, GE sought an indemnity and/or contribution from Collin.
Decision Of The High Court
[18] After a full trial that lasted nine days, the learned trial judge came to the following conclusions and made the following orders:
(a) that GE was negligent when it issued the cheque for the benefits under the Policy in respect of the Living Assurance Claim in the name of the deceased on 16 June 2010 after it had been notified on 9 June 2010 that the deceased had passed away on the 29 May 2010;
(b) GE was ordered to pay the sum of RM268,248.66 being the benefits under the Policy together with interest and costs to Tam;
(c) GE was successful in proving contributory negligence against Collin and pursuant to the Notice of Indemnity and Contribution issued by GE, Collin was held 50% liable and was ordered to pay half of the amount ordered against GE; and
(d) there was insufficient evidence adduced to prove fraud and forgery against Collin and Cedric Miranda. Tam's claim against Collin and Cedric Miranda was accordingly dismissed.
Appeal To The Court Of Appeal
[19] Being dissatisfied with the orders of the learned trial judge made on 27 December 2012, both GE and Collin appealed against the said orders. Specifically, GE appealed against the order holding it liable in negligence towards Tam and the order holding Collin to be 50% contributorily negligent only on the Notice of Indemnity and Contribution issued by GE.
[20] Collin in turn, appealed against the decision ordering him to pay half of the judgment sum together with interest and costs made against GE.
[21] It will be important to note that there was no cross appeal by Tam against the decision of the learned trial judge dismissing the claim of fraud and forgery made against Collin and Cedric Miranda.
Decision Of The Court Of Appeal
[22] Upon reading the Records of Appeal, the written submissions of
