An insurer is not liable for passenger claims made under an insurance policy unless the passengers are carried for hire or in pursuance of a contract of employment, as provided by the Road Transport Act.

DECISION

Ahmad Fairuz Zainol Abidin J:

Introduction

[1] Vide the Originating Summons ("the OS") documented in encl 1, the Plaintiff sought for a declaration pursuant to s 96(3) of the Road Transport Act 1987 ("the RTA ") that the Insurance Policy No K6542955 ("the Policy") issued by the Plaintiff for the coverage of motor vehicle BHM 5893 ('the Vehicle') for the period between 3 June 2016 until 2 June 2017 is void and unenforceable with respect to the accident on 25 April 2017 involving motor vehicle No NBE 1846 and the Vehicle driven by the 1st Defendant while carrying the 3rd Defendant as the passenger.

[2] Having heard from parties, this Court allowed the application. Dissatisfied, the 2nd and 3rd Defendants filed an appeal against the decision of this Court.

[3] The following are the reasons of this Court in allowing the application.

Background Facts

[4] This case arose out of an unfortunate accident on 25 April 2017 at Jalan Gemas - Rompin, Negeri Sembilan, involving the Vehicle. At the material time, the Vehicle was driven by the 1st Defendant wherein her children Dhaneshwar a/l P Krishnasamy (NRIC No: 031116-05-0221) (hereinafter referred to as "the 1st deceased"), Vharshiena a/p P Krishnasamy (NRIC No: 060111-05-0452) (hereinafter referred to as "the 2nd deceased"), Dhenissha a/p Krishnasamy (NRIC No: 080322-05-0338) (hereinafter referred to as "the 3rd deceased") and the 3rd Defendant who were minors were travelling as passengers in the Vehicle.

[5] The 2nd and 3rd Defendants then instituted an action against the 1st Defendant in the current suit for negligence vide Seremban Session Court's Suit No NA-A53KJ-171-04/2020 ("Suit 171") claiming inter alia for bereavement, general damages and special damages caused by the said accident.

[6] It is worth noting that the 1st Defendant is the wife of the 2nd Defendant. Despite their relationship and because of the belief that the insurance policy covers the claim, the 1st Defendant in her affidavit strongly supported 2nd and 3rd Defendants' claim against her in Suit 171.

[7] The present OS was filed on 15 February 2021 for a declaration that the Policy is unenforceable pursuant to s 96(3) of the RTA .

[8] On the same date, an application to intervene was also filed by the Plaintiff in Suit 171 at the Seremban Sessions Court.

The Plaintiff's Contention

[9] It is the Plaintiff's contention that the Policy does not provide coverage to passengers of the said Vehicle. As such, the 2nd and 3rd Defendants' claim in respect of the said accident are not covered under the Policy and the Plaintiff is not statutorily liable under the RTA to indemnify the 1st Defendant or pay to the 2nd and 3rd Defendants any judgment sum obtained by them against the 1st Defendant.

The Defendants' Contention

[10] In resisting the OS, the 1st Defendant contended that:

a) the Plaintiff has a statutory and contractual duty to indemnify the 1st Defendant as the insured against any third-party claims Even when accidents arose from various circumstances, the Plaintiff is still to be held liable in line with the intention of the RTA which does not allow the insurer to avoid liability in any circumstances;

b) the Policy particularly Cl 1b (ii) and (iv) of Section B is contradictory and inconsistent. Hence any ambiguity must be interpreted in favor of the 1st Defendant and against the insurer;

c) the OS which was filed concurrently with the application to intervene, is a wrongful and a two-pronged attempt to evade liability against the 2nd and 3rd Defendants' claim vide Sessions Court Suit 171; and

d) the OS is premature and an abuse of the Court's process as Suit 171 is still ongoing in determining the liability of the Plaintiff as the insurer.

[11] In support of the 1st Defendant, the 2nd and 3rd Defendants argued that:

a) the OS is premature;

b) the Policy under "SECTION B: LIABILITY TO THIRD PARTIES" covers the 2nd and 3rd Defendants;

c) the 1st, 2nd and 3rd deceased as well as the 3rd Defendant were part of the household; an