Gunn Chit Tuan SCJ:

This was a claim by one Lim Eng Yew (the plaintiff, who was an employee of one Lim Yoke Pak t/a Chop Pak Kee, a sundry wholesaler, pursuant to the provisions of s. 80(1) of the Road Traffic Ordinance 1958 (the Ordinance), concerning the duty of insurers to satisfy judgments against persons insured in respect of third party risks.

The said Lim Yoke Pak was the registered owner of a motor lorry No. AL 1577 (the said vehicle), which had a "C" carrier's licence and was insured with third party risks under a commercial vehicle policy issued by the Oriental Fire and General Co. Ltd., the predecessor of the United Oriental Assurance Sdn. Bhd. (the defendant), for the period 1 May 1972 to 30 April 1973.

On 26 June 1972, the plaintiff sustained severe personal injuries when the said vehicle driven by one Lim See Keong as servant or agent of the said Lim Yoke Pak went off the road and landed in a ditch. At the time of the accident, the plaintiff was being carried as a passenger in the said lorry pursuant to a contract of employment between him and the owner of the lorry, the said Lim Yoke Pak.

On 7 June 1977, the plaintiff sued Lim See Keong, the authorised driver of the lorry at the time of the accident, and on 15 June 1978, he obtained judgment against him for damages arising out of the accident in the sum of RM120,000 being general and special damages with interest and costs. Costs were subsequently agreed at RM3,000 in lieu of taxation. On 18 April 1979, the plaintiff, through a firm of solicitors served a notice on M/s. Shearn Delamore & Co., the solicitors for the defendant, demanding payment of the judgment sum, and on 26 April 1979, M/s. Shearn Delamore & Co. replied that there was no liability on the part of their client, the defendant.

In the Court below, when the learned Judge gave judgment for the plaintiff, he referred to the exceptions to s. II of the said policy on liability to third party, which provided inter alia as follows:

The company shall not be liable in respect of:

(i) death, bodily injury or damages caused or arising beyond the limits of any carriageway or thoroughfare in connection with the bringing of the load to the motor vehicle for loading thereon or the taking away of the load from the motor vehicle after unloading therefrom

(ii) death of or bodily injury to any person in the employment of the insured arising out of and in the course of such employment

(iii) death of or bodily injury to any person (other than a passenger carried by reason of or in pursuance of a contract of employment) being carried in or upon or entering or getting on to or alighting from the motor vehicle at the time of occurrence of the event out of which any claim arises.

The learned Judge was of the opinion that the above-quoted exception (iii) to the exceptions to s. II above made the defendant liable because the plaintiff was "a passenger carried by reason of or in pursuance of a contract of employment". He relied on the Singapore High Court case of Chan Kum Fook & Ors. v. The Welfare Insurance Co. Ltd. [1975] 2 MLJ 184, in which case Tan Ah Tah J in construing a similar clause in a policy issued by the defendants in that case, held that the effect of the words in exception (iii), that is, "other than a passenger carried by reason of or in pursuance of a contract of employment" is to make the defendants liable in respect of injuries sustained by the plaintiffs who were passengers "carried by reason of or in pursuance of a contract of employment". Ajaib Singh J as he then was, in this case also relied on China Insurance Co. Ltd. V. Teh Lain Lee & Anor. , in which the Singapore Court of Appeal, in dismissing an appeal against the judgment of D'Cotta J in the High Court, held `inter alia' that the words (in exception (iii), that is, "other than a passenger carried by reason of or in pursuance of a contract of employment") is to make the defendants in that case liable as a result of the death of the decease