Insurance contracts require utmost good faith, and breaches of warranties allow insurers to repudiate claims regardless of the insured's motives.

[1] The three (3) appeals before us emanate from one civil action at the High Court at Shah Alam. At the High Court, the first respondent, Veheng Global Traders Sdn Bhd and the second respondent, RHB Islamic Bank Berhad, made a claim against the appellants as insurers under four insurance policies. The insurers are the first appellant, AmGeneral Insurance Berhad and the second appellant Sun Life Malaysia Takaful Berhad as the co-insurer to one of the policies.

[2] After a full trial, the learned trial judge had on 29 January 2016 found the appellants liable for the claim under two of the policies. Pursuant to that finding on liability, the learned trial judge proceeded to make his finding on quantum. On 19 February 2016 the learned judge substantially allowed the quantum prayed for together with interest and costs in favour of the respondents.

Brief Facts

[3] The first respondent was issued by Kurnia Insurance Berhad [now AmGeneral Insurance Berhad] with two (2) Fire Material Damage Policies Nos HB-0-08-H000005 (FMD Policy 005) and HB-0-08-H000006 (FMD Policy 006) and two (2) Fire Consequential Loss Policies Nos HB-0-08H000189 (FCL Policy 189) and HB-0-08-H000733 (FCL Policy 733), for the period from 01 July 2008 to 30 June 2009 with the situation risk, at Lot 711A, Jalan Batu Tiga, Sungai Rasau, Section 16, 40200 Shah Alam, 40200 Selangor (the premises) subject to the terms and conditions therein contained.

[4] The coverage of the 4 policies are:-

a. FMD Policy 005 covered on stock in trade consisting of new recondition, rebuilt, recycle and used vehicle's spare parts, metal products and goods held by them in trust or on commission for which they are responsible for an insured sum of RM40 million;

b. FMD Policy 006 covered on renovation and all type of equipment in the premises for an insured sum of RM2,180,000.00;

c. FCL Policy 189 covered on standing charges on 6 months rental at the rate of RM85,000.00 per month and on increase cost of working for indemnity period of 12 months with multiplier of 100.00% for an insured sum of RM500,000.00;

d. FCL Policy 733 covered on gross profit of RM20 million per year which the insured are entitled to recover under the provisions of the attached specification which is declared to be incorporated of the property insured, for the sum at RM60 million for 3 years. As for the definition of 'damage', it shall include destruction or damage caused by the extraneous perils of the company's FMD Policies with indemnity period of 36 months and multiplier of 80%.

[5] FCL Policy 189 and FCL Policy 733 will be referred to collectively as the "FCL Policies".

[6] Sun Life Malaysia Takaful Berhad (formerly known as CIMB AVIVA Takafu Berhad) is the co-insurer to FMD Policy 005. Under FMD Policy 005, the total insured sum is 87.5% from Kurnia and 12.5% from Sun Life from the total insured amount of RM45,000,000.00. The second respondent is a mortgagee of this policy as stated in clause 1 of that FMD Policy 005 pursuant to it being a financier to the first respondent. The second respondent was the financier to the first respondent when it granted a Murabahah revolving credit facility vide letter of offer dated 29 June 2006. The facilities was subsequently restructured to Commodity Murabahah Overdraft-I' facilities totalling RM30 million on 23 June 2009.

[7] Fire broke out at the