JUDGMENT

Denys Roberts CJ:

Background

[1] IRB Finance Berhad ("IRB") the plaintiff, is a finance company which, among other things, advances money to the purchasers of motor vehicles

[2] Borneo Insurance Sdn Bhd. ("BI") is an insurance company, operating in Brunei. It insures some of the motor vehicles in respect of which the plaintiff has lent money. Other insurance companies use policies which are similar to those used by BI.

[3] The plaintiff does not select the insurance company. This is chosen by the purchaser of the car, or the dealer who sells it to him.

[4] The buyer of a motor vehicle cannot take it on the road without a valid insurance. He therefore fills in an application form, which the dealer (in these four cases NBT(B) Sdn Bhd.) sends to an insurance company, which pays him a commission.

[5] Before the form has been completed and sent to the insurance company, the finance company makes such enquiries as it thinks proper into the credit worthiness of the applicant. The evidence of Mr Alfred Young suggests that these enquiries were no more than perfunctory in many cases

[6] However, as he explained, the finance company is protected by its rights over the vehicle itself, whi