S Nantha Balan JC:

INTRODUCTION

[1]This case involves an allegation by an insurer that there is fraud and collusion between their insured (the defendant) and the third party claimant (the plaintiff) in a running down action. The insurers, who would be liable to satisfy any judgment against their insured/defendant by virtue of s 96Road Transport Act 1987

[2]Thus, the issue that arose for consideration in this case is whether in a running down action, where insurers are already having conduct of the defence on behalf of their insured/defendant, may nevertheless be allowed (under O 15 r 6(2)(b)(ii) of the Rules of Court 2012) to intervene and added as a co-defendant where they have reason to believe that there is fraud and collusion between the insured/defendant and the plaintiff.

[3]The matter came before me by way of an appeal by the plaintiff/appellant against the decision of the Sessions Court at Georgetown in Summons No 53–455–05 of 2012 (the ‘running down action’) which was handed down on 9 May 2013 allowing the notice of application filed by Pacific & Orient Insurance Co Bhd (‘P & O’), the intervener/respondent and granting leave to intervene pursuant to O 15 r 6 of the Rules of Court 2012 and consequently that they be added as second defendant in the running own action.

[4]The running down action was filed on 30 May 2012. (See p 8–13 of the appeal record — ‘AR’) The relevant facts in so far as the running down action is concerned are that on 5 September 2010 a motor vehicle accident occurred along the Jelutong Expressway involving motorcycles No PFB 3845 and (allegedly) PHP 2167. The rider of motorcycle No PFB 3845 was the plaintiff/appellant, whereas the rider of motorcycle No PHP 2167 was (allegedly) one Sri Jaimuralydasan a/l Munindi. In the running down action, Sri Jaimuralydasan a/l Munindi was named as the defendant. It is not in dispute that P & O was the insurer of motorcycle No PHP 2167 at the material time of the motor vehicle accident.

[5]As the insurers, P & O were at risk under the policy of insurance and pursuant to s 96Road Transport Act 1987

[6]Section 96(1)Road Transport Act 1987

96 Duty of insurers to satisfy judgments against persons insured in respect of third party risks.

If, after a certificate of insurance has been delivered under section 91(4) to the person by whom a policy has been effected, judgment in respect of any such liability as is required to be covered by a policy under section 91(1)(b) (being a liability covered by the terms of the policy) is given against any person insured by the policy, then notwithstanding that the insurer may be entitled to avoid or cancel, or may have avoided or cancelled the policy, the insurer shall, subject to this section, pay to the persons entitled to the benefit of the judgment any sum payable there under in respect of the liability, including any amount payable in respect of costs and any sum payable in respect of interest on that sum by virtue of any written law relating to interest on judgments.

P & O having conduct of the defence

[7]P & O appointed a firm of solicitors namely Messrs K Suganthi & Co to file defence and generally to have conduct of the matter. The said firm of solicitors duly filed a defence dated 29 June 2012 on behalf of the defendant. (see p 18–21 AR). Thereafter, the insurers carried out investigations through their appointed adjusters to, inter alia, verify the authenticity of the claim in all respects. As is the usual practice for motor claim cases, adjusters would investigate the liability and quantum aspects of the claim and ascertain whether the claim is exaggerated or fraudulent from the aspect of the damages sought for the pain and suffering and/or loss of earnings. They would also investigate whether there was any fraud in relation to the occurrence of the accident and more significantly, whether the insured (quite possibly on the basis of a promise of some pecuniary benefit to be derived from any judgment that may be procured) was collud