Mohamad Zulkarnain bin Mustafa v Allianz General Insurance Company (M) Bhd (W-02(IM)(NCC)-1676-08/2017)

Content

Page 1 of 9 DALAM MAHKAMAH RAYUAN MALAYSIA (BIDANG KUASA RAYUAN) RAYUAN SIVIL NO: W-02(IM)(NCC)-1676-08/2017 ANTARA MOHAMAD ZULKARNAIN BIN MUSTAFA (NO.K/P: 960724-08-6005) … PERAYU

Preamble

Pursuant to sub-s 96(3) of the RTA 1987, the plaintiff was entitled to commence an action to repudiate a policy in respect of an insured vehicle before any judgment is obtained in the civil action commenced by the 3rd defendant. SUBMISSION OF PARTIES [6] Learned counsel for the 3rd defendant canvassed the following points: i. On 23.10.2017, the 3rd defendant obtained judgment in his civil action in the Sessions Court. The insured and insured rider was adjudged to be wholly liable and special and general damages were awarded to the 3rd defendant. The High Court dismissed the insured and insured rider’s appeal. ii. The Originating Summons should not have been disposed on the SDs and affidavits because the issue of fraud is involved. As fraud is a serious issue to be tried, the matter should have been heard on viva voce evidence. The 3rd defendant should Page 6 of 9 have been given the opportunity to cross-examine the witnesses and deponents of the affidavits and statutory declarations (Ting Ling Kiew v Tang Eng Iron Works Company Ltd [1992] 2 MLJ 217; Bank Negara Malaysia v Mohd Ismail Ali Johor [1992] 1 CLJ (Rep) 14; Alloy Automotive Sdn Bhd v Perusahaan Ironfield Sdn Bhd [1986] CLJ (Rep) 45). iii. The learned judge erred in giving too much weight to the SDs and affidavits of the 1st and 2nd defendants. iv. The SDs and affidavits of the 1st and 2nd defendants were not credible because it was an afterthought and was brought about by the involvement of the plaintiff’s adjusters. v. The learned judge erred in holding that the 3rd defendant was not entitled to seek indemnity under the contract of insurance (Pacific & Orient Insurance Co Bhd v Kamacheh Karuppen [2015] 4 CLJ 54). [7] In reply, counsel for the plaintiff argued that the OS action in the High Court is a distinct and independent proceeding from the tort action in the Sessions Court. Secondly, the learned judge had carefully scrutinized the SDs and affidavits of the 1st and 2nd defendants before coming to her decision. In addition to the SDs and affidavits, the 2nd defendants have also made a corrective police report denying the involvement of the insured motorcycle in the accident. Third, the 3rd defendant who was represented in the OS proceedings did not apply to convert the OS into a writ action or applied to the Court to cross-examine Page 7 of 9 both the deponents of the affidavits. Lastly, as the 1st and 2nd defendants have admitted and confirmed that the insured motorcycle was never involved in the accident, both the 1st and 2nd defendants have breached the principle of good faith which entitled the plaintiff to repudiate the contract of insurance. [8] Counsel for the 1st and 2nd defendants adopting the submission of the plaintiff added that both the 1st and 2nd defendant have affirmed the contents of the SDs. The 2nd defendant only lodged a police report implicating the insured motorcycle in the accident at the request of the lawyer’s agent. More importantly, there was no rebuttal evidence from the 3rd defendant to challenge the contents of the 1st and 2nd defendant’s SDs and affidavits. The 3rd defendant’s counsel could have cross-examined the 1st and 2nd defendants on their affidavits but did not do so. DECISION [9] The OS in this appeal relates an application for a declaration that the insurance was void and unenforceable pursuant to sub-s 96(3) of the RTA 1987. A contract of insurance is a contract of utmost good faith; as such, the insured and insured rider are obliged to make a frank and full disclosure to the plaintiff insurer in respect of any matter arising therefrom. This obligation of full and frank disclosure begins from the time the contract of insurance is entered into; and the obligation continues until the coverage expires. [10] In this instance, the learned judge had found as a fact that the insured rider made a false police report saying that the insured motorcycle was involved in the accident with the 3rd defendant. The learned judge Page 8 of 9 came to her conclusion after a careful and comprehensive evaluation of the affidavit evidence. The learned judge also considered and rejected the issues raised by the 3rd defendant. [11] Even though the police investigating officer may have given evidence implicating the insured rider and motorcycle in the accident in the Sessions Court proceedings, the learned judge was correct to decide on the affidavit evidence before her. We are of the view that the proceedings in the Sessions Court relating to the 3rd defendant’s claim are separate and distinct proceedings which have no bearing on the OS proceedings in the High Court. At any rate, as the insured and insured rider were not cross-examined on their SDs and affidavits, the learned judge was justified in making her finding that there was a failure to make full and frank disclosure, which finding warranted the making of the declaration sought by the plaintiff. [12] On a perusal of the appeal record and after hearing of submission of parties, we are of the view that the findings of fact of the learned judge is not plainly wrong. The 3rd defendant’s complaint that the matter should have been fully tried on oral evidence is without merit as counsel did not apply to convert the OS into a writ action, nor did counsel apply to cross-examine the insured and insured rider on their SDs and affidavits. Therefore, there was ample and uncontroverted evidence in the form of the SDs and affidavits of the insured and insured rider to show that there was a false police report made by the insured rider. Page 9 of 9 [13] For the foregoing reasons, we were of the unanimous decision that there is no merit in the issues raised by the 3rd defendant. Accordingly, the appeal was dismissed with costs. sgd (Vernon Ong) Judge Federal Court Malaysia Dated : 12th October 2020 Counsel: For the Appellant : Jayaprathap Messrs. Jayaprathap & Rakan-Rakan For the 1st Respondent: R Ratha Davi Messrs. S G Lingam & Co For the 2nd and : Dasaratharaj 3rd Respondents Messrs. V.K. Raj & Bavani