Summary judgment should not preclude a defendant from contesting triable issues; factual considerations mandate a full trial.

[1] The respondent's application for summary judgment was allowed by the High Court. Upon due consideration of the grounds of judgment, the submissions of learned counsel and the records of appeal, we allowed the appellant's appeal finding that the learned judge had erred in the exercise of discretion when applying the principles related to the entry of summary judgment.

Background

[2] The respondent is an insurance company while the appellant is a reinsurance company. From 2010 to 2012, the parties entered into three separate reinsurance agreements in relation to the motor insurance business of the respondent's branch at Shanghai, specifically in relation to the brands of Ferrari and Maserati. These three agreements are collectively referred to as the "Shanghai Agreements".

[3] In 2012, the parties entered into two more reinsurance agreements for the respondent's branch at Beijing, but this time in relation to the additional brands of Bentley, Rolls-Royce and Lamborghini. These agreements are collectively referred to as the "Beijing Agreements".

[4] The respondent claimed that the terms of the two sets of agreements were "generally similar" to each other, citing that the salient express terms of the two agreements are:

i. the reinsurance share of the defendant/appellant shall be 60%;

ii. Pan Asia Insurance Ltd shall act as the intermediary and that it is agreed and understood between the parties that all premiums paid to Pan Asia Insurance Ltd are deemed paid to the appellant; and

iii. the statement of accounts shall be submitted or declared by the respondent on a quarterly basis within 30 days after the close of each quarter. The appellant must provide confirmation on the statement of accounts within 15 days of receipt, and the respondent must settle its premiums within 60 days after receiving the confirmed statement of accounts from the appellant.

[5] The respondent claimed that it was an implied term of the two sets of agreements and/or the parties had a mutually accepted course of conduct that the mode of settling the premium payable by the respondent to the appellant and the payment of indemnity by the appellant to the respondent was according to a "Settlement Mode" as described at paras 8 and 18 of the Statement of Claim in that:

i. on a quarterly basis, the respondent would submit a statement of accounts to the appellant setting out the premium (inclusive of commission) and indemnity payable by the respective parties;

ii. the appellant would confirm that statement of accounts and convey its confirmation to the respondent;

iii. if the premium, inclusive of commission due from the respondent to the appellant is greater than the sum of indemnity due from the appellant to the respondent, the respondent will set that sum off with the indemnity and pay the appellant the offset balance, or net due; and

iv. if the sum of indemnity is greater than the premium (inclusive of commission) due from the respondent to the appellant, then the appellant will similarly set off the indemnity from the premium (inclusive of commission) and pay the respondent the net due.

[6] The respondent claimed that the Settlement Mode had been adopted from 2010 to the third quarter of 2012. During this period, the premium (inclusive of commission) had always been greater than the indemnity due from the appellant to the respondent. As such, the respondent had been paying the appellant, or its intermediary, Pan Asia Insurance Ltd, the net due.

[7] The respondent claimed that it had paid a total of USD4,709,820.11 under the Shanghai Agreements and a total of USD818,710.36 under the Beijing Agreements.

[8] Towards the end of 2012, the respondent decided not to renew