Etiqa General Takaful Berhad v 1. ) AWIE ANAK KILAU (WA-24NCC-186-04/2024)

AWIE ANAK KILAU …RESPONDENTS (IC No.: 840531-13-6217)

TAMRON AUTO SERVICE (Company No.: JM0702602-T)

HALIJAH BINTI ISMAIL (IC No.: 580712-01-5088)

NUR IFFAH NADZIRAH BINTI MOHD HAFIZ (IC No.: 000821-01-1656)

[Declaration that insurance policy not enforceable under section 96 RTA] The Mischief

A bought a car. A insured the car with B, an insurer. A then sold the car to C but C failed/neglected/refused to register the change of ownership of the car to C’s name. Consequently, C did not insure the car in C’s name. C then driving the car hit D/an innocent third-party accident victim. The accident happened during the period of the insurance policy bought by A from B.

D can sue C but may not recover as C is uninsured. If D sues A, is B liable as insurer? Can B argue it is not liable as A has ceased to have an insurable interest in the car at the time of the accident as the car had been sold by A at the time of the accident although the accident happened during the period of the insurance policy? In short, can B argue the insurance policy is void and unenforceable under section 96 of the Road Transport Act 1987 [“RTA”]? The Cure

The above issue was resolved in 2022 by the Federal Court in the landmark decision of AmGeneral Insurance Bhd v Sa’ Amran Atan & Ors And Other Appeals [2022] 6 AMR 1; [2022] 8 CLJ 175, FC.

Abdul Rahman Sebli FCJ delivering judgment for the Federal Court endorsed the view of the Supreme Court in Malaysia National Insurance Sdn Bhd v Lim Tiok [1997] 2 CLJ 351, “that the underlying purpose of compulsory motor insurance against third party risks was to ensure that innocent third parties who were injured in vehicular accidents were given full and effective protection, regardless of the private insurance arrangement between the insurer and the insured”. [at paragraph [55]].

The Federal Court held that if the insurer’s insured is still registered as the owner of the car at the time of the accident, this imposes a liability on his insurer and it is irrelevant if the car had been sold to someone else. Abdul Rahman Sebli FCJ said – [69] For all the reasons aforesaid and on the authorities, our answer to the leave question is in the affirmative, that is to say, the registration does impose liability on the insurer notwithstanding the fact that the insured ceased to have insurable interest in the motor vehicle at the time of the accident.

The Federal Court arrived at this decision after noting that similar decisions were made in English, Australian, Hong Kong Courts; and also, by Indian Courts based on Indian legislation similar to our RTA. [at paragraph [59 - 63]]. The OS before me

In the Originating Summons dated 17-04-2024 [Enclosure 1] before me, the Applicant, Etiqa General Takaful Berhad contends that it is not the insurer of the registered owner of the car at the time of the accident.

In the OS the Applicant asked as against the four respondents for, inter-alia, - i. A declaration that based on the interpretation of the Insurance Policy between the applicant and the first respondent identified as Policy No. 81468846, the said policy was cancelled and unenforceable when the first respondent transferred ownership of the motorcar No. JGR 1029 [“Motorcar”] to the second respondent on 02-09-2019; and ii. A declaration that the applicant is not the insurer of the Motorcar and is not liable to bear any order and/or any other claim arising from the accident on and/or specifically the accident involving the Motorcar and the motorcycle No. JTU 1766 on 16-02-2020.

The OS was opposed by the 4th respondent [“R4”] who is the injured motorcyclist. I heard counsel on 17-06-2025 and 15-08-

Broad grounds for dismissal of OS

On 15-08-2025, I dismissed the OS with costs of RM 1,000 to be paid by the applicant to R4 subject to allocatur. My grounds were that the applicant had failed to prove it is not the insurer of the registered owner of the Motorcar at the time of the accident on 16- 02-2020 because-i. The applicant had admitted it was the insurer of the Motorcar. [See applicant’s letter dated 09-03-2020 to the solicitors, M/s Norasmadi & Noraini in the affidavit of Nur Iffah Nadzirah Binti Mohd Hafiz dated 25-07-2024 [Enclosure 5] Exhibit IF-1, PDF page 7]; ii. If the registered owner of the Motorcar is R1 the applicant is the insurer of the Motorcar [See Exhibit CSY 1 to the applicant’s affidavit in Enclosure 2, PDF page 9]; and iii. Even assuming the registered owner of the Motorcar is now R2 [as alleged by the Applicant], the Applicant is also the insurer of the Motorcar for the period from 09-04-2019 to 08- 04-2020. [See the JPJ search in Exhibit CSY 3 to the Applicant’s affidavit in Enclosure 2, PDF page 64];

The plaintiff has appealed to the Court of Appeal on 12-09-2025. These are my Grounds of Decision. Preliminary observations on good practice

The facts set out below are obtained by me from the documents in the applicant’s affidavit in Enclosure 2 and the affidavit of R4/Nur Iffah Nadzirah Binti Mohd Hafiz dated 25-07-2024 [Enclosure 5].

As the applicant’s solicitors had failed to paginate the voluminous documents and both counsel had neglected to set out the pdf pages for the documents in their written submissions, I regret it is not easy to find the documents and follow their submissions. Counsel for R4 had also made mistakes like calling the applicant “Perayu” in R4’s written submissions and neglected to use numbering in his written submissions in Enclosure 23/36. It should be obvious to both counsel that all these failures will make it difficult to have an efficient hearing. Facts of the case Parties

The Applicant is an insurance company providing insurance for cars.

The 1st respondent [“R1”] is a person with the name Awie Anak Kilau. The 2nd respondent [“R2”] is a company called Tamron Auto Service. The 3rd respondent [“R3”] is Halijah binti Ismail. R4 is Nur Iffah Nadzirah Binti Mohd Hafiz. Accident

An accident happened on 16-02-2020 between motorcycle No. JTU 1766 and the Motorcar. R3 is the driver of the Motorcar. R4 is the injured motorcyclist. R4 lodged a police report on the accident [Exhibit CSY-2]. R4 also sued R3 in the JB Magistrates Court. Investigation by the Applicant’s adjuster [applicant’s affidavit in Enclosure 2]

The following facts set out below are obtained from the documents exhibited in Exhibits CSY 1 to 5 to the applicant’s affidavit in Enclosure 2.

The applicant had hired Malayan Adjustment Company Sdn Bhd to investigate the accident. They rendered three reports to the Applicant. The reports are-i. Final Report Third Party Bodily Injury Claim dated 21-02- 2021 [Exhibit CSY-3 PDF page 27]; ii. Supplementary Report [1] Third Party Bodily Injury Claim dated 01-03-2021 [Exhibit CSY-4 PDF page 66]; and iii. Supplementary Report [2] Third Party Bodily Injury Claim dated 07-01-2022 [ Exhibit CSY-5 PDF page 75].

R1 signed a SD. He on oath in his SD said he bought the Motorcar from a company called EK Sport Motor, Skudai, Johor in September 2018 [“EK Sport Motor”]. He said he could not pay the instalments. So, he said he returned the Motorcar to EK Sport Motor [Exhibit CSY-3 PDF page 72]. He had earlier purchased insurance for the Motorcar from the Applicant for the insured period 09-04-2019 to 08-04-2020. [Exhibit CSY-1 PDF page 10].

The applicant’s Loss Adjuster in their Supplementary Report [1] Third Party Bodily Injury Claim dated 01-03-2021 said R1 told them that R1 had returned the Motorcar sometime in March 2019 to EK Sport Motor as he could not serve the monthly instalment but the used vehicle dealer failed to transfer ownership to itself but continued to renew insurance in R1’s name without permission. [See Conclusion in letter in Exhibit CSY-4 PDF page 70].

EK Sport Motor is not a defendant in this OS.

According to the Final Report Third Party Bodily Injury Claim dated 21-02-2021 from Malayan Adjustment Company Sdn Bhd, R3, Halijah binti Ismail said she bought the Motorcar from R2, Tamron Auto Service on 23-04-2019 but did not change the ownership of the motorcar due to disagreement on the additional charges imposed by R2 being the fee for JPJ ownership transfer. [Exhibit CSY-3 PDF page 32]. CSY-5 to Enclosure 2

In a follow-up Supplementary Report [2] Third Party Bodily Injury Claim dated 07-01-2022 [Exhibit CSY-5 PDF page 75], the Applicant’s Loss Adjuster said the JPJ search shows the current owner of the car is R2 [Exhibit CSY-5 PDF page 77]. They assumed EK Sport had transferred ownership of the car to R2 on 02-09-2019 as R2 is now stated as the owner in the JPJ search.

In my view, the above facts can explain why-i. The insurance policy produced in Enclosure 2 shows the insured is R1 and the Applicant is the insurer for the period from 09-04-2019 to 08-04-2020 [See CSY-1 to Enclosure 2 PDF page 10]; and ii. The JPJ search shows R2 is the owner of the Motorcar and the Applicant is still the insurer for the same period from 09- 04-2019 to 08-04-2020. [See CSY-3 to Enclosure 2 PDF page 64].

The Applicant filed the OS under section 96 RTA seeking as against the four respondents for, inter-alia, - i. A declaration that based on the interpretation of the Insurance Policy between the applicant and the first respondent identified as Policy No. 81468846 the said policy was cancelled and unenforceable when the first respondent transferred ownership of the Motorcar to R2 on 02-09-2019; and ii. A declaration that the applicant is not the insurer of the Motorcar and is not liable to bear any order and/or any other claim arising from the accident on and/or specifically the accident involving the Motorcar and the motorcycle No. JTU 1766 on 16-02-2020. Applicant’s contentions

The Applicant filed written submissions in Enclosures No. 30, 35 and 39. I find the submissions very unstructured. The court understands the submissions to say the following points set out below.

The applicant contends R1 had transferred ownership of the Motorcar to R2 and therefore they are not liable as they only insured R1. [See applicant’s written submissions in Enclosure 30 paragraph 8, 13 to 19].

The applicant further contends as the insurer for the motorcycle [sic, it is Motorcar] of R1, the insurance contract is void ab initio as there were fraud and misrepresentation by R2. [See applicant’s written submissions in Enclosure 30 paragraphs 9 to 11].

The applicant also contends the JPJ search [See CSY-3 to Enclosure 2 PDF page 64] which shows R2 is the owner of the Motorcar and the applicant is still the insurer for the same period from 09-04-2019 to 08-04-2020 is not conclusive proof that the insurance policy is valid. [See applicant’s written submissions in Enclosure 30 paragraph 22]. R4’s contentions

R4 filed written submissions in Enclosures No. 23/36, 37 and 38. I find the submissions equally unstructured. Worse, there is no paragraph numbering in Enclosure No. 23/36.

R4 disagrees with the applicant’s submissions. Issues

As it see it, the issues are-i. Whether the applicant has proven on a balance of probabilities that it is not the insurer for the registered owner of the Motorcar; and ii. Whether the insurance contract is void ab initio as there were fraud and misrepresentation by R2. Court’s analysis Section 96 RTA

Before I answer the issues, I propose to set out the basis for the Applicant’s application under section 96 RTA. Section 96 RTA reads as follows-PART IV - PROVISIONS AGAINST THIRD PARTY RISKS ARISING OUT OF THE USE OF MOTOR VEHICLES Section 96. Duty of insurers to satisfy judgements against persons insured in respect of third party risks.

If, after a certificate of insurance has been delivered under subsection 91(4) to the person by whom a policy has been effected, judgement in respect of any such liability as is required to be covered by a policy under paragraph 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 judgement any sum payable thereunder 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 judgements.

No sum shall be payable by an insurer under subsection (1)-

in respect of any judgement, unless before or within seven days after the commencement of the proceedings in which the judgement was given, the insurer had notice of the proceedings;

in respect of any judgement, so long as execution thereon is stayed pending an appeal; or

in connection with any liability, if before the happening of the event which was the cause of the death or bodily injury giving rise to the liability the policy was cancelled by mutual consent or by virtue of any provision contained therein and either-

before the happening of the said event the certificate was surrendered to the insurer or the person to whom the certificate was delivered made a statutory declaration stating that the certificate had been lost or destroyed;

(ii) after the happening of the said event, but before the expiration of a period of fourteen days from the taking effect of the cancellation of the policy, the certificate was surrendered to the insurer or the person to whom the certificate was delivered made such a statutory declaration as aforesaid; or

(iii) either before or after the happening of the said event, but within the said period of fourteen days, the insurer has commenced proceedings under this Part in respect of the failure to surrender the certificate.

No sum shall be payable by an insurer under subsection

if before the date the liability was incurred, the insurer had obtained a declaration from a court that the insurance was void or unenforceable: Provided that an insurer who has obtained such a declaration as aforesaid in an action shall not thereby become entitled to the benefit of this subsection as respects any judgement obtained in proceedings commenced before the commencement of that action unless, before or within seven days after the commencement of that action, he has given notice thereof to the person who is the plaintiff in the said proceedings specifying the grounds on which he proposes to rely, and any person to whom notice of such an action is so given shall be entitled if he thinks fit to be made a party thereto.

If the amount which an insurer becomes liable under this section to pay in respect of a liability of a person insured by a policy exceeds the amount for which he would, apart from this section, be liable under the policy in respect of that liability, he shall be entitled to recover the excess from that person.

In this section, the expression "material" means of such a nature as to influence the judgement of a prudent insurer in determining whether he will take the risks, and if so at what premium and on what conditions, and the expression "liability covered by the terms of the policy" means a liability but for the fact that the insurer is entitled to avoid or cancel or has avoided or cancelled the policy.

In this Part, reference to a certificate of insurance in any provision relating to the surrender or the loss or destruction of a certificate of insurance shall, in relation to policies under which more than one certificate is issued, be construed as references to all the certificates and shall, where any copy has been issued of any certificate, be construed as including a reference to that copy. [Emphasis added]. Rationale for section 96 RTA

The rationale for section 96 RTA has been explained by the Court of Appeal in Hameed Jagubar bin Syed Ahmad v Pacific & Orient Insurance Co Bhd [2017] 6 MLJ 618, CA. Note - this decision was overturned by the Federal Court in Pacific & Orient Insurance Co Bhd v Hameed Jagubar bin Syed Ahmad [2018] 12 MLJ 1, FC on a separate issue of when an insurance policy takes effect.

Harmindar Singh JCA (delivering judgment of the Court of Appeal) said– [12] The rationale for s 96 of the RTA (which is in pari materia with the English provision under s 10(3) of the Road Traffic Act 1934 and probably inspired by it) was perhaps best explained by the English Court of Appeal in Merchants’ and Manufacturers, Insurance Co Ltd v Hunt and Others [1941] 1 All ER 123 wherein Scott LJ stated (at p 125): Before I consider the facts of the case, or the relevant terms of the policy, it will be convenient to quote the essential provisions of the Road Traffic Act 1934, upon which the whole appeal turns. Section 10(1) provides as follows: … if a judgment for damages for personal injuries or death is obtained against a person insured by such a policy as is required by sect 36 of the 1930 Act, then, notwithstanding that the insurer may be entitled to avoid the policy, the insurer shall, subject to the provisions of this section, pay to the persons entitled to the benefit of the judgment the damages, interest and costs awarded. This proviso thus gives to plaintiffs who obtain judgment in an action for damages caused by the negligent driving or management of a motor car a direct right of action against the insurance company who issued the policy required by the 1930 Act, although the plaintiffs in the negligence action are not party to the policy, and although the policy is voidable at the insurer’s instance. From the extreme hardship which might otherwise result from sub-s (1), sub-s (3) gives the insurer a conditional means of escape. If he discovers that he was induced to make the contract of insurance by some material non-disclosure or misrepresentation which, by ordinary insurance law, and not merely by reason of some special stipulation which he has put in his form of policy, entitles him to avoid the contract, he may obtain a declaration to that effect from the court, and he will then be free from the statutory liability to the injured third party. This legislation was obviously intended to effect, inter alia, a fair compromise between the two desirable but conflicting objects — namely, on the one hand that of protecting the public from the danger of impecunious tortfeasors on the roads, and on the other hand, that of avoiding the injustice of putting on a wholly innocent and misled insurer the whole pecuniary burden of a policy which, neither in law nor in equity, is his policy. However, it would have been unfair to confer this relief unconditionally. There was an obvious danger of the injured party being deprived of the pecuniary safeguard which was the subject of sub-s (1) through the possibility of the policy being avoided in proceedings under the first part of sub-s (3) without his knowledge, and even by collusion between the insurer and the insured. It was essential that he should have notice of any such action by the insurer, and also that he should be given the right to appear in it and there defend his rights. Both the requisites are met by the proviso to sub-s (3), which in effect creates two conditions precedent to the existence of the insurer’s right to get his declaration under the first part of sub-s (3). The third party gets full notice of the ground of the insurer’s claim, and is given an unqualified right to become a party in the insurer’s action, and it is particularly to be noted that he is given all the rights of a party to an action without any qualification upon them. [13] In this context, we note that a declaration obtained under s 96(3) would amount to a complete defence against any recovery proceedings by the injured third party under s 96(1). It is therefore only fair and logical that the injured third party should not only be added as a party to the insurer’s declaration proceedings but also be given every opportunity to defend his or her rights to oppose the application by an insurer without qualification. Citing privity of contract as a ground to deprive the third party of his right to defend his or her rights, with respect, is misconceived as this is a right provided by statute. [Emphasis added].

I now consider the issues. Issue 1 - whether the applicant has proven on a balance of probabilities that it is not the insurer for the registered owner of the Motorcar Applicant’s contention

The applicant contends R1 had transferred ownership of the Motorcar to R2 and therefore they are not liable as they only insured R1. [See applicant’s written submissions in Enclosure 30 paragraphs 8, 13 to 19]. Law

As stated above, the law had been clarified in 2022 by the Federal court in the landmark decision of AmGeneral Insurance Bhd v Sa’ Amran Atan & Ors And Other Appeals [2022] 6 AMR 1; [2022] 8 CLJ 175, FC where the Federal Court held that if the insurer’s insured is still registered as the owner of the car at the time of the accident, this imposes a liability on his insurer and it is irrelevant if the car had been sold to someone else.

Cases relied on by the Applicant, decided before this decision, which took the contrary position that an insurer is no longer liable once the vehicle is sold like Roslan bin Abdullah v New Zealand Insurance Co Ltd [1981] 1 LNS 216, FC; New India Insurance Co Ltd v Simirah [1966] 2 MLJ 1, FC; Allianz General Insurance Company (Malaysia) Bhd lwn Mohd Fauzi Abdul Manaf & Yang Lain [2016] 1 CLJ 587, HC at paras [26 - 29] and Jamilah Ibrahim & Satu Lagi Lwn Liberty Insurance Bhd [2018] 1 LNS 812, HC at paragraphs [20 - 22] are no longer good law. Application to facts

In my view the applicant has failed to prove on a balance of probabilities that it is not the insurer for the registered owner of the Motorcar at the time of the accident on 16-02-2020 for these reasons below. i. The applicant had admitted it was the insurer of the Motorcar. [See applicant’s letter dated 09-03-2020 to the solicitors M/s Norasmadi & Noraini in [Enclosure 5] in the affidavit of Nur Iffah Nadzirah Binti Mohd Hafiz dated 25-07-2024 Exhibit IF- 1, PDF page 7] ii. R4 had averred in paragraph 11 of her affidavit of Nur Iffah Nadzirah Binti Mohd Hafiz dated 25-07-2024 [Enclosure 5] [Exhibit IF-1, PDF page 7] that the applicant had admitted it was the insurer of the Motorcar and produced the applicant’s letter dated 09-03-2020 in Exhibit IF-1. The applicant failed to file a reply affidavit to deny the said assertion. iii. In evaluating affidavit evidence, where one party makes a positive assertion upon a material issue, the failure of his opponent to contradict it is usually treated as an admission by him of the fact so asserted. [See Ng Hee Thoong & Anor v Public Bank Bhd [1995] 1 AMR 622; [1995] 1 MLJ 281; [2000] 1 CLJ 503, CA] . iv. The applicant’s admission letter is dated 09-03-2020. R4 contends this OS filed 4 years later is an after-thought. I agree it could be filed for tactical reasons to force a favourable settlement or to delay R4’s suit for compensation. v. If the registered owner of the Motorcar is R1 the applicant is the insurer of the Motorcar [See Exhibit CSY 1 to the applicant’s affidavit in Enclosure 2, PDF page 9]; and vi. Even assuming the registered owner of the Motorcar is now R2 [as alleged by the applicant], the applicant is also the insurer of the Motorcar for the period from 09-04-2019 to 08- 04-2020, which covers the accident on 16-02-2020. [See the JPJ search in Exhibit CSY 3 to the applicant’s affidavit in Enclosure 2, PDF page 64]; Issue 2 - whether the insurance contract is void ab initio as there were fraud and misrepresentation by R2

This issue is irrelevant. Alleged fraud and misrepresentation by R4 was denied by R4. [See Enclosure 37]. Even if there were fraud and misrepresentation by R2 [which is unproven in this OS], there is no evidence that there were fraud and misrepresentation by R4 who is the innocent third-party accident victim opposing this OS.

For the reasons above, I dismiss the OS with costs of RM 1,000 to be paid by the applicant to R4 subject to allocatur. Dated: 09th October 2025 ………(signed)………… Leong Wai Hong Judge High Court of Malaya Kuala Lumpur (NCC 6) Counsel for applicant: Sean Danis. Jayadeep Hari & Jamil (Petaling Jaya) Counsel for 4th respondent: Daniel Othman. Norasmadi & Noraini (Johor Bahru) CASES REFERRED TO: 1) AmGeneral Insurance Bhd v Sa’ Amran Atan & Ors And Other Appeals [2022] 6 AMR 1; [2022] 8 CLJ 175, FC. 2) Hameed Jagubar bin Syed Ahmad v Pacific & Orient Insurance Co Bhd [2017] 6 MLJ 618, CA. 3) Jamilah Ibrahim & Satu Lagi Lwn Liberty Insurance Bhd [2018] 1 LNS 812, HC. 4) Malaysia National Insurance Sdn Bhd v Lim Tiok [1997] 2 CLJ

5) Merchants’ and Manufacturers, Insurance Co Ltd v Hunt and Others [1941] 1 All ER 123. 6) New India Insurance Co Ltd v Simirah [1966] 2 MLJ 1, FC. 7) Allianz General Insurance Company (Malaysia) Bhd lwn Mohd Fauzi Abdul Manaf & Yang Lain [2016] 1 CLJ 587, HC. 8) Ng Hee Thoong & Anor v Public Bank Bhd [1995] 1 AMR 622; [1995] 1 MLJ 281; [2000] 1 CLJ 503, CA. 9) Pacific & Orient Insurance Co Bhd v Hameed Jagubar bin Syed Ahmad [2018] 12 MLJ 1, FC. 10) Roslan bin Abdullah v New Zealand Insurance Co Ltd [1981] 1 LNS 216, FC. LEGISLATION REFERRED TO: 1) Road Transport Act 1987, s 96.