The insurer has the right to intervene in negligence suits to address potential fraud claims under statutory provisions, ensuring all parties are present for effective justice.

[1]The above two appeals (2 Appeals) are heard together and discuss the effect of s 96(1) and (3)Road Transport Act 1987RTA) [as interpreted by the recent Federal Court’s judgment delivered by Abdul Rahman Sebli FCJ (as he then was) in AmGeneral Insurance Bhd v Sa’ Amran a/l Atan & Ors and other appeals [2022] 5 MLJ 825Sa’ Amran)] on, among others, the following two suits:

(1)an action filed by a plaintiff (Claimant) for damages from a defendant (Insured) based on the Insured’s negligence [Claimant’s Suit (Insured’s Liability)] regarding an incident involving a “motor vehicle” (defined in s 2 RTA ); and

(2)a suit instituted by an insurer of the Insured (Insurer) under s 96(3) RTAPolicy) issued by the Insurer to the Insured [Insurer’s Suit (Policy Invalidation)].

B. Background

[2]For ease of reference, we shall refer to parties as they were in the Sessions Court.

[3]The second plaintiff (2^nd Plaintiff) is the registered owner of a motorcycle bearing the registration no. PER 6664 (Motorcycle).

[4]At about 2.20 am, 3.9.2014 -

(1)the first plaintiff (1^st Plaintiff) was riding the Motorcycle along Jalan Skudai Pantai Lido, Johor, when the 1^st Plaintiff alleged that a motorcycle with the registration no. JQA 6107 and ridden by the defendant (Defendant) hit the rear side of the Plaintiff’s Motorcycle (Incident); and

(2)the Incident had caused -

(a)the 1^st Plaintiff to suffer severe injuries; and

(b)damage to the Motorcycle.

[5]The Defendant’s motorcycle was insured by Pacific & Orient Insurance Co. Bhd. (Intervener).

C. Legal proceedingsC(1). Negligence Suit

[6]With regard to the Incident, on 19.9.2016, the 1^st and 2^nd Plaintiffs (referred collectively in this judgment as the “Plaintiffs”) filed a negligence suit against the Defendant in the Johore Bahru Sessions Court (Negligence Suit).

[7]In the Negligence Suit -

(1)the Intervener (as the Defendant’s insurer) initially appointed Messrs SK Lee (Messrs SKL) to act for the Defendant; and

(2)Messrs SKL filed a defence for the Defendant which pleaded, among others, that the Defendant’s motorcycle was not involved in the Incident.

[8]The Intervener carried out investigation regarding the Incident and discovered as follows, among others:

(1)the Defendant’s motorcycle was not involved in the Incident; and

(2)the Defendant was paid by an unidentified man to make a false police report to support the Negligence Suit

(Intervener’s Discovery).

[9]In view of the Intervener’s Discovery -

(1)the Intervener filed Originating Summons no. WA-24NCC-537-12/2016 against the Defendant in the Kuala Lumpur High Court [Intervener’s Suit (Policy Invalidation)]. In the Intervener’s Suit (Policy Invalidation), on 25.1.2017 the High Court granted a declaration that the insurance policy issued by the Intervener in respect of the Defendant’s motorcycle, was void (High Court’s Policy Invalidation Order); and

(2)on 28.2.2017, Messrs SKL applied to the Sessions Court for an order that Messrs SKL would cease to act for the Defendant in the Negligence Suit (Messrs SKL’s Application). The Sessions Court allowed Messrs SKL’s Application on 14.3.2017 [Sessions Court’s Order (Messrs SKL’s Discharge)] and thereafter the Defendant was not legally represented in the Negligence Suit.

[10]On 28.9.2017, in the Negligence Suit -

(1)the Defendant was not present at the trial in the Sessions Court (Trial). The Plaintiffs did not however adduce any evidence to support the Negligence Suit at the Trial; and

(2)the Plaintiffs obtained a judgment in the Sessions Court against the Defendant (Sessions Court’s Judgment). According to the Sessions Court’s Judgment, among others -

(a)the Defendant was 100% liable to the Plaintiffs for the tort of negligence;

(b)the Defendant shall pay a total sum of RM998,503.00 as general damages;

(c)actual loss of earnings and future loss of earnings amounting to RM228,000.00 shall be paid by the Defendant;

(d)the Defendant shall pay a total sum of RM2,453,714.90 to take care of the “Plaintiff” (the Sessions Court’s Judgment did no