Gopal Sri Ram JCA:

Introduction

[1] There are three appeals before us. The parties have agreed to go forward on only this one. That is because the result of this appeal will determine the event of the others. We will now address the facts very briefly.

[2] The appellant is the successor in title to Commercial Union Assurance (M) Sdn Bhd In July 1989 Commercial Union Assurance (M) Sdn Bhd and a Company called Provincial Insurance (M) Sdn Bhd ("Provincial") as co-insurers issued to the respondent a policy of insurance. Provincial is the appellant in one of the other appeals, W-02-29-2000. The sum insured was initially RM14.932 million. In August 1989 it was increased to RM32.431 million. According to the policy the insured subject matter was security paper which was initially stored in Kuala Lumpur and later at a warehouse in Kampong Acheh, Sitiawan. For the purposes of this appeal we will treat it as if it was the appellant who issued the policy as that is the position taken by all before us. On 11 September 1989, a fire broke out at the Kampong Acheh warehouse. The building and its contents were reduced to ashes. The respondent made a claim on the two insurance companies for t