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2025 MarsdenLR 4130
HIGH COURT MALAYA GEORGETOWN
NG AI SOOE – Appellant
Versus
HONG LEONG ASSURANCE BERHAD & ORS – Respondent
[Suit No: PA-22NCC-64-09-2023]
The doctrine of utmost good faith mandates full disclosure in insurance contracts; failure to disclose critical medical history justifies policy repudiation and negates the applicability of the incontestability clause.
Headnote:(A) Financial Services Act 2013 - Paragraphs 5 of Schedule 9 - Non-disclosure of material facts in life insurance context - Duty of disclosure in insurance contracts is paramount and can void the contract if breached - Repudiation by insurer upheld due to failure of insured to disclose prior medical history - Incontestability clause applicable unless fraudulent misrepresentation is proven. (Paras 43, 91, 109)
(B) Contract law - Utmost good faith - Courts must ensure full adherence to duties outlined in insurance agreements - Claims based on purported reliance on agents must still align with the contract terms. (Paras 44, 55, 69)
(C) Burden of proof - Plaintiff must demonstrate full disclosure on balance of probabilities, while insurer must show non-disclosure was fraudulent. (Paras 40, 41, 106)
Facts of the case:
Plaintiff claimed death benefits of RM1.3 million after the Deceased's demise due to leukaemia, alleging full medical disclosure was made in insurance applications; however, insurer denied the claim citing non-disclosure of medical history including major depression and leukaemia. (Paras 32, 29, 109)
Findings of Court:
Plaintiff failed to prove that full disclosure was made; evidence presented supported insurer's position that non-disclosure of critical medical conditions occurred. (Paras 108, 121)
Issues: Whether the Deceased disclosed all relevant medical conditions; application of the incontestability clause; whether agents' actions absolve the Plaintiff of liability for non-disclosure. (Paras 91, 107)
Ratio Decidendi: Court concluded that non-disclosure of significant medical conditions amounted to fraudulent misrepresentation; thus, insurer entitled to repudiate policy, and the incontestability clause could not be invoked. (Paras 106, 119)
Result: Plaintiff's claim for the death benefits dismissed; costs awarded to Defendants. (Paras 121, 123)
| Table of Content |
|---|
| 1. definition of utmost good faith in insurance contracts. (Para 1 , 2) |
| 2. summary of the factual background of the life insurance case. (Para 3 , 4 , 5 , 6 , 28) |
| 3. plaintiff's claims following the husband's death. (Para 29 , 30 , 31) |
| 4. plaintiff's arguments concerning disclosure and procedural issues. (Para 32 , 35 , 38 , 39) |
| 5. court's analysis of necessary disclosures and evidence. (Para 50 , 54 , 58 , 73 , 78) |
| 6. application of the incontestability clause concerning fraudulent misrepresentation. (Para 79 , 89 , 92) |
| 7. final decision of the court regarding the dismissal of the plaintiff's claim. (Para 119 , 121) |
Introduction
[1]"Uberrimae fidei" is a Latin phrase meaning "utmost good faith." It is a legal doctrine that requires parties to a contract to act with the highest level of honesty and transparency, particularly in insurance contracts. This means making full and accurate disclosures of all relevant facts to the other party.
[2] This case brings to the fore the critical issue of whether the Plaintiff's late husband's life insurance policy was properly/ lawfully repudiated by the 1st Defendant as the insurer on account of non-disclosure and a breach of uberrimae fidei.
[3] I will, in this judgment, set out the salient background facts/chronology of events leading to the commencement of this action, the parties' respective contentions, as well as my analysis based on the evidence before me in determining if the Plaintiff's claim is meritorious.
Background Facts/ Chronology Of Events
[4] The facts of this case are not complicated and learned counsel for the Plaintiff has helpfully provided a chronology of events commencing November 2018, ie the date the Plaintiff and the deceased signed an e-authorisation/ application form, right until the date the 1st Defendant (D1) repudiated the claim on 23 November 2021. The said chronology of events is annexed as Appendix A herein.
[5] From the pleadings and the trial, the salient background facts and the chronology of events can be summarised as follows.
[6] The Plaintiff is the lawful wife and executrix of the estate of the late Ooi Chong San (hereinafter referred to as "the Deceased") vide a Grant of Probate dated 16 November 2021 issued by the Penang High Court on 20 December 2021.
[7] D1 is an insurance company offering various insurance products. D2 to D4 acted at all times as agents of D1.
[8] Between November 2018 and February 2019, the Deceased [through D2 (DW1)] purchased a life insurance policy (Policy No UL 201818332354) from D1 with a death benefit of RM1,300,000.00 (hereinafter referred to as "the said life insurance policy"). The Plaintiff was nominated as the beneficiary under the said life insurance policy.
[9] It is undisputed that on 15 November 2018, the Deceased applied for the life insurance policy by completing and submitting the first proposal application to the D1 (hereinafter referred to as "proposal form") via an E-Application Authorisation Form.
[10] Of importance is cl 1 of the proposal form dated 15 November 2018, which provides as follows:
"Pre-Contractual Duty of Disclosure
For consumer insurance contracts:
Paragraph 5 of Schedule 9 of the Financial Services Act 2013 (" FSA ") requires you:
(a) a duty to take reasonable care not to make a misrepresentation to us when answering any question in this proposal form; and
(b) a duty to take reasonable care to disclose to us any other matter (other than the questions in this proposal form) that you know may be relevant to our decision on whether to accept the risk which we are being asked to accept and the rates and terms to be applied.
1.2 Paragraph 5 of Schedule 9 of the FSA also prescribes that your duties set out in (a) and (b) above shall continue until the time the policy contract is entered into, varied or renewed.
"consumer insurance contract" means a contract of insurance entered into, varied or renewed by an individual wholly for purposes unrelated to the individual's trade, business
