2010 MarsdenLR 3649 ; 2010 MarsdenLR 1

ABANG ISKANDAR
TAN JING JEONG – Appellant
Versus
ALLIANZ LIFE INSURANCE MALAYSIA BHD & ANOR – Respondent

Misrepresentation and non-disclosure in insurance contracts voids the policy, compelling rescission under the Contracts Act 1950, emphasizing utmost good faith from both parties.

Headnote:(A) Contracts Act 1950 - Section 76 - Insurance Law - Misrepresentation and non-disclosure of material facts in insurance contracts - Plaintiff sold an Investpro policy based on misrepresentations and failure to disclose 55% premium usage for administrative charges - The policy was found voidable due to breaches of utmost good faith, warranting rescission of the contract and entitlement to refund - Difficulties in understanding had been evaded by defendants, leading the court to favor the plaintiff’s claim. (Paras 7, 13, 24, 34)

(B) Insurance Contracts - Uberrima Fides - Both parties in an insurance contract are under mutual obligations to disclose material facts truthfully - Failure to disclose material information renders a contract voidable. (Paras 21, 34)

(C) Credibility - The court favored the testimony of the plaintiff over that of the insurance agent due to the latter's evasiveness and lack of honesty. (Paras 32, 34)

Facts of the case:
Plaintiff entered into an Investpro insurance policy with defendants but later discovered material misrepresentations regarding the use of premium amounts and investment returns, leading to significant financial losses.

Findings of Court:
The court found that the defendants failed to disclose critical information about premium allocation and subsequently ruled the Investpro policy voidable.

Issues: The plaintiff alleged misrepresentation and non-disclosure and contested whether the contract was voidable.

Ratio Decidendi: The court held both misrepresentation and non-disclosure warranted rescission of the policy under Section 76 of the Contracts Act 1950, affirming the necessity of utmost good faith in insurance dealings.

Result: Judgment in favor of the plaintiff; defendants ordered to refund premiums and pay damages.