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2025 MarsdenLR 1561
HIGH COURT MALAYA PULAU PINANG
RAVENDRAN KALANGIAM – Appellant
Versus
ALLIANZ GENERAL INSURANCE COMPANY (M) BERHAD – Respondent
[Civil Suit No: PA-22NCvC-211-11/2020]
The burden of proving fraud lies with the party alleging it, and unsupported assertions fail to invalidate prior judicial orders.
Headnote:(A) Road Transport Act 1987 - Section 96(3) - Declaratory order by insurer regarding insurance policy validity - Plaintiff challenges the void status of insurance on grounds of alleged fraud by insurer's adjuster - High Court upheld the declaratory order, affirming no evidence of fraud established by plaintiff. (Paras 27, 33, 65)
(B) Burden of proof - It is incumbent upon the party alleging fraud to substantiate claims with credible evidence - Merely asserting fraud without corroborating testimony does not suffice to set aside a prior judgment. (Paras 63, 64)
Facts of the case:
Following a motorcycle accident involving the plaintiff and an insured party, the insurer sought a declaratory order under s 96(3) asserting the insurance policy was void due to fraud. The claimant later attempted to challenge this order, claiming fraud in the production of a corrective police report, but failed to provide sufficient evidence.
Findings of Court:
The court found that the plaintiff did not meet the burden of proof to establish fraud against the insurer, thus affirming the validity of the declaratory order.
Issues: The main issue was whether sufficient evidence of fraud existed to impeach the declaratory order.
Ratio Decidendi: The court held that without credible evidence or testimony from key witnesses, specifically the party alleging fraud, the previous judicial decision stands.
Result: Plaintiff's claim dismissed with costs to the defendant.
| Table of Content |
|---|
| 1. fraudulent reporting affects insurance liability. (Para 1 , 3 , 5 , 10 , 12) |
| 2. chronology of facts surrounding the accident. (Para 6 , 8 , 22) |
| 3. impeachment of declaratory orders requires fraud evidence. (Para 20 , 26 , 29) |
| 4. burden of proof lies with the one asserting fraud. (Para 36 , 54 , 65) |
| 5. claim dismissed due to insufficient evidence. (Para 63) |
Prelusion
[1] There was a motorcycle accident. The plaintiff (P) filed a suit against the rider and owner of the other motorcycle. The rider and owner of the other motorcycle were insured by the insurer (D).
[2] D (insurer), by the provision of s 96(3) of the Road Transport Act 1987 ( RTA ), applied for a s 96(3) declaratory order to declare that the contract (policy) of insurance between D and the rider and owner of the motorcycle was void and unenforceable. The Kuala Lumpur High Court granted the declaratory order.
[3] The effect of the s 96(3) Declaratory Order is that D (the insurer) does not have to pay the judgment sum, even if the rider and owner of the other motorcycle is found liable for tort against P.
[4] P now, after the event, filed this suit, in the Penang High Court, to impeach (challenge) the validity of the s 96(3) Declaratory Order, on the ground of fraud (on the part of the D (insurer)).
[5] Should the s 96(3) declaratory order be set aside or should it be sustained?
Chronology Of Pertinent Facts And Proceedings
[6] Foremost, I set out the pertinent facts and proceedings that are pertinent to this suit.
[7] 9 February 2016 — Mohd Fadzli Mohd Salleh (Fadzli) lodged his 1st police report, stating that he was in an accident on 7 February 2016. Fadzli was riding motorcycle PHF 2940 (Fadzli's motorcycle) when he had an accident with P and his motorcycle PLS 4299 (P's motorcycle). Fadzli did not fall, but P fell.
[8] 9 June 2017 — P filed the personal injury (tort) suit in Georgetown Magistrates Court (MC) Civil Suit PA-A73KJ-513-06/2017 (MC Suit 513). P sued the owner of Fadzli's motorcycle: Normah Hashim (Normah), and the rider of the motorcycle: Fadzli. Fadzli's motorcycle was insured with D.
[9] 19 October 2017 — D appointed the loss adjusters: Darmani Adjusters & Investigators (M) Sdn Bhd (Adjusters).
[10] 21 October 2017 (one year and eight months after his 1st police report) — Fadzli lodged his 2nd police report (Corrective Report). In the Corrective Report, Fadzli stated that, actually, he was not involved in the accident that occurred on 7 February 2016 referred to in his 1st police report. He averred that a friend asked him to lodge the 1st police report to make a false insurance claim.
[11] Note: Fadzli lodged this Corrective Report (dated 21 October 2017) about four and a half months after MC Suit 513 was filed (on 9 June 2017). It was likely that by this time (October 2017), he had known that he was made a defendant in MC Suit 513.
[12] 13 November 2017 — Normah lodged a police report stating that Fadzli's motorcycle was not involved in the accident on 7 February 2016.
[13] 24 November 2017 — D (insurer) filed an application to intervene in MC Suit 513.
[14] 12 December 2017 — D filed an application for what I will call a s 96(3) Declaratory Order, through Kuala Lumpur High Court Originating Summons No WA-24NCC-557-12/2017 (section 96(3) Declaration Suit).
[15] A s 96(3) Declaratory Order effectively declares that the contract (policy) of insurance between D (the insurer) and its insured is void and unenforceable. This means that if a judgment is entered against the insured in the personal injury tort suit — D (the insurer) does not have to pay the judgment sum ordered to be paid by the insured in the personal injury tort suit.
[16] P's grounds in the s 96(3) Declaration Suit include the following averments, supported by the following documentary evidence-
(1) Fadzli's 1st police report dated 9 February 2016 stated that he was involved in the accident on 7 February 2016 with the plaintiff in MC Suit 513 ie P here;
(2) B
