JUDGMENTBY: SALLEH ABAS L P

(delivering the Judgment of the Court): The question to be decided in this appeal is whether a contract of life insurance was formed, or simply whether there was an acceptance by the respondents.

The facts which gave rise to this issue are as follows:

One Azian bte Borhanuddin (deceased) was a flight stewardess employed by Malaysian Airline System (MAS). On December 4, 1977 she was on duty in MAS flight No. MH 653 which crashed at Tanjong Kupang, Johor. All persons on board, including Azian were killed.

However, about two weeks before the crash on November 21, 1977 the deceased submitted a proposal form duly completed and signed by her to the respondents proposing to insure her life for a sum of $ 50,000/- with an additional accident benefit of another sum of $ 50,000/-. The proposal form ended with a declaration containing a number of paragraphs, one of which -- which is material to the appeal -- is paragraph (c) and is as follows:

"The assurance herein applied for shall not take effect unless and

until a policy is issued and delivered to me on this application and

the first premium thereon actually paid in full during my lifetim

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