Sinnamah A/p Munisamy (Pentadbir bagi harta pusaka Kovilan A/L Perumal, Si Mati, menurut Pemberian Surat Pentadbiran bertarikh 22.12.2022) v GREAT EASTERN LIFE ASSURANCE (MALAYSIA) BERHAD (WA-22NCC-301-07/2021)

This judgment concerns a life insurance dispute arising from the rejection and avoidance of three insurance policies by an insurer following an early death claim. The case involves the fundamental principles of utmost good faith and material disclosure in insurance contracts, specifically whether the insured person made misrepresentations regarding his income and occupation in the insurance proposal forms.

The central issues before this court relate to the burden of proof required to establish non-disclosure of material facts, the honesty and sincerity of the information provided by the Life Assured, and whether the insurer waived its right to rely on the alleged misrepresentations.

The deceased Life Assured had purchased three separate life insurance policies with a total death benefit of RM2,000,000, declaring himself as a business person managing a transport business with substantial annual income ranging from RM200,000 to RM400,000. Following the Life Assured’s death from natural causes within months of policy inception, the insurer conducted investigations that allegedly revealed discrepancies between the declared income and occupation versus the Life Assured’s actual financial circumstances.

The insurer subsequently rejected all death benefit claims and repudiated the policies, citing material misrepresentations in the proposal forms that breached the duty of utmost good faith. The beneficiaries contested this decision, arguing that the investigation report lacked evidential value, that any discrepancies were not material to the risk, and that the insurer had waived its right to complain about non-disclosure through its conduct.

This case therefore requires the court to examine the delicate balance between an insured’s duty to make full and accurate disclosure of material facts and an insurer’s reliance on such information in underwriting decisions. The resolution of these issues has significant implications for the 3 insurance industry’s practices regarding policy avoidance and the enforceability of death benefit claims.

The court must ultimately determine whether the evidence supports the insurer’s decision to avoid the policies or whether the beneficiaries are entitled to the substantial death benefits claimed.

The Life Assured, Kumaresan A/L Kovilan, purchased three separate life insurance policies from the Defendant, Great Eastern Life Assurance (Malaysia) Berhad, during the course of 2017. The first Insurance Policy, numbered 102550242-1, commenced on 12.7.2017 with a basic sum assured of RM500,000.00 and a monthly premium of RM500.00. The second Insurance Policy, numbered 102573408-6, commenced on 21.8.2017 with a basic sum assured of RM500,000.00 and a monthly premium of RM540.00. The third Insurance Policy, numbered 102597015-1, commenced on 28.9.2017 with a basic sum assured of RM1,000,000.00 and a monthly premium of RM1,080.00. These policies shall be referred to as “Insurance Policies.” The total death benefits across all three Insurance Policies amounted to RM2,000,000.00.

All three insurance proposal forms were completed by the Defendant's agent, Mitesh Kumar A/L Hamendra Kumar. The Life Assured made the requisite premium payments for 4 all three Insurance Policies by transferring funds via Automated Teller Machine using the Malaysian Electronic Payment System (MEPS) Fund Transfer. The premiums were paid regularly from July 2017 through to December 2017, and all three Insurance Policies remained valid and in force during this period.

In the proposal forms for the Insurance Policies, the Life Assured declared his occupation as a business person at Nansu Resources. For the first two Insurance Policies, he stated his annual income as RM200,000.00, whilst for the third Insurance Policy, he declared an annual income of RM400,000.00. The business address provided was Block 7, Flat PKNS, Seksyen 16, Shah Alam.

On 18.12.2017, during the currency of all three Insurance Policies, the Life Assured passed away due to natural causes attributed to coronary artery atheroma. At the time of his death, the first Insurance Policy had been in force for 5 months and 6 days, the second Insurance Policy for 3 months and 27 days, and the third Insurance Policy for 2 months and 20 days. A post-mortem examination was conducted, and the post-mortem report dated 28.5.2018 confirmed that the Life Assured was found dead on the side of Jalan Kapar at 9.45am and that the cause of death was coronary artery atheroma.

Following the Life Assured's death, his father Kovilan A/L Perumal (“Kovilan”), who was the named nominee under all three Insurance Policies, submitted death claim notification forms to the Defendant in January 2018. The claim forms were submitted along with supporting documentation including death certificates, medical reports, and other required materials.

On 17.1.2018, the Defendant acknowledged receipt of the death claims and issued a standard letter requesting additional documentation for assessment purposes. These included a completed doctor's statement, certified true copy of the detailed post-mortem report, bank statements, investigation reports from the previous three years, consent forms, and details of the Life Assured's regular doctor.

Due to the short period between the commencement of the Insurance Policies and the Life Assured's death, particularly the fact that he died within three months of the issuance of the third Insurance Policy, the Defendant classified this as an “early claim”. The high total sum assured of RM2,000,000.00 across the three Insurance Policies was another factor that triggered the Defendant's investigation procedures.

The Defendant's Claims Department referred the matter to their Investigation Team for further inquiry. The Investigation Team conducted an initial in-house investigation which included visiting the Life Assured's 6 residential address and attempting to verify his employment details. They conducted a company search with the Companies Commission of Malaysia (CCM) regarding Nansu Resources and discovered that the business was registered under the name of Nanthini A/P Tanabal, not the Life Assured. The investigation revealed that Nansu Resources had been registered on 9.7.2017, just three days before the Life Assured applied for his first Insurance Policy. When the Investigation Team visited the business address provided in the proposal forms, they found the premises vacant.

Subsequently, the Defendant engaged My Private Eye Consulting Sdn Bhd, a private investigation company, to conduct a more comprehensive investigation. The private investigator prepared a detailed Investigation Report dated 17.7.2018 (“Investigation Report”) based on company searches and interviews with various individuals.

On 6.12.2018, the Defendant issued a letter rejecting all three death claims and repudiating the Insurance Policies. The rejection was based on allegations that the Life Assured had provided false information in his proposal forms regarding his occupation and annual income. Specifically, the Defendant alleged that the Life Assured had misrepresented himself as a business person at Nansu Resources earning substantial annual income when, according to their investigation, he was largely unemployed during the three years prior to purchasing the Insurance Policies and his main sources of income were selling clothes door-to-door and working as a part-time lorry attendant. The Defendant also alleged that since Nansu Resources was owned by Nanthini A/P Tanabal and not the Life Assured, his declaration was false. The letter offered to return the total premiums paid of RM7,957.85.

Kovilan commenced legal proceedings against the Defendant on 9.7.2021 by filing this suit in the High Court of Malaya at Kuala Lumpur. However, on 19.9.2022, before the trial commenced, Kovilan passed away due to severe sepsis as confirmed by his death certificate dated 19.9.2022.

Following Kovilan's death, his widow Sinnamah A/P Munisamy was appointed as the legal administratrix of his estate. Letters of Administration were granted on 22.12.2022. Pursuant to a Court Order dated 13.3.2023, Madam Sinnamah was substituted as the Plaintiff in the proceedings, and the case continued as if she had been substituted for the deceased Kovilan. Madam Sinnamah shall be referred to as “the Plaintiff” for the remainder of this judgment.

The matter proceeded to trial over five non-consecutive days: 25.9.2023, 26.9.2023, 24.10.2023, 26.10.2023, and 26.2.2024. The central issues in dispute related to whether the Life Assured had made material misrepresentations in his insurance proposal forms regarding his occupation and 8 income, whether such alleged misrepresentations entitled the Defendant to avoid the Insurance Policies, and whether the Plaintiff was entitled to the death benefits totalling RM2,000,000.00 under the three Insurance Policies.

Based on the pleadings, the Plaintiff's pleaded case centres on challenging the Defendant insurer's rejection and avoidance of the three Insurance Policies taken out on the life of the Life Assured, the deceased Kumaresan A/L Kovilan. The Plaintiff, as administrator of the deceased's estate, seeks payment of death benefits totaling RM3,000,000 across the three Insurance Policies, maintaining that the Defendant's rejection of the claims lacked legal basis.

The Plaintiff contends that the Defendant's Investigation Report, which formed the basis for policy avoidance, lacks sufficient evidential value to prove misrepresentation by the Life Assured. The Plaintiff argues that the report relies heavily on hearsay evidence from interviews with individuals who were not called to testify in court, particularly statements from Ganesan A/L Kovilan (“Ganesan”) that were not independently verified. The Plaintiff submits that these findings regarding the Life Assured's annual income, occupation, and business ownership are inadmissible hearsay and insufficient to justify avoiding the Insurance Policies.

A central element of the Plaintiff's case is the waiver argument, asserting that the Defendant waived its right to complain about non-disclosure through its conduct during the proposal process and policy administration. The Plaintiff pleads that the Defendant requested proof of income for the Life Assured's 2016 proposal declaring RM100,000 annual income but failed to do so for subsequent 2017 proposals despite substantial increases to RM200,000 and RM400,000. The Plaintiff further alleges that the Defendant's witness admitted to noticing discrepancies in declared annual income in the third policy but took no action to inquire further or verify the information. Additionally, the Plaintiff contends that the Defendant continued accepting premium payments until the Life Assured's death despite allegedly knowing of inaccuracies in personal details, thereby becoming estopped from later contending misrepresentation.

The Plaintiff also advances alternative arguments that the Life Assured's personal details regarding occupation, business name, and annual income were not material information to the risk insured under the Insurance Policies. In the further alternative, the Plaintiff pleads that any inaccurate information was provided carelessly or innocently as a result of poor guidance or assistance from the Defendant's agent during the proposal process.

Throughout the pleadings, the Plaintiff maintains that the Defendant breached its duty to act in good faith and that the rejection and repudiation of the Insurance Policies had no legal basis, entitling the Plaintiff to the death benefits under the policies. The Plaintiff also relies on post-mortem examination findings showing that the Life Assured's death resulted from natural causes due to coronary artery atheroma, with no foul play involved, to support the legitimacy of the claim.

Based on the pleadings, the Plaintiff seeks the following reliefs: a) A Declaration that the Defendant was not entitled in law to avoid and/or repudiate Insurance Policy No. 102550242-1; b) A Declaration that pursuant to the Insurance Policy No. 102550242-1, the Defendant is liable to pay the death benefit and/or compensation in the sum of RM 1,000,000.00 to the Plaintiff, being the legal administratix of the estate of Kovilan A/P Perumal, deceased, the named nominee of the Life Assured under the Insurance Policy No. 102550242-1; c) A Declaration that the Defendant was not entitled in law to avoid and/or repudiate Insurance Policy No. 102573408-6; 11 d) A Declaration that pursuant to the Insurance Policy No. 102573408-6, the Defendant is liable to pay the death benefit and/or compensation in the sum of RM 1,000,000.00 to the Plaintiff, being the legal administratix of the estate of Kovilan A/P Perumal, deceased, the named nominee of the Life Assured under the Insurance Policy No. 102573408-6; e) An Order that the Defendant pay the death benefit and/or compensation in the sum of RM 1,000,000.00 under the Insurance Policy No. 102597015-1 to the Plaintiff, being the legal administratix of the estate of Kovilan A/P Perumal, deceased, the named nominee of the Life Assured under the Insurance Policy No. 102597015-1; f) As an alternative to prayers (c), (d), and (e), damages in such other amount determined by this court as being due to the Plaintiff, being the legal administratix of the estate of Kovilan A/P Perumal, deceased, the named nominee of the Life Assured under the Insurance Policies; g) Interest on the sum of RM2,000,000.00 or on any award of damages in the Plaintiff's favour at such rate and for such period deemed fit by this court; h) Costs; and 12 i) Such further and other relief as this court deems fit.

In essence, the Plaintiff seeks declarations that the Defendant was not entitled to avoid the three Insurance Policies and orders for payment of the total death benefits of RM 3,000,000.00 (RM 1,000,000.00 under each policy), together with interest, costs, and alternative damages if the specific sums are not awarded.

The Defendant fundamentally contends that the Insurance Policies are void and unenforceable by the Plaintiff on the grounds that the Life Assured breached his duty to act in good faith when applying for insurance coverage.

The Defendant's case centres on the principle of uberrimae fidei, asserting that the Life Assured was under a duty to act in good faith in all matters and transactions with the Defendant when applying for insurance coverage. The Defendant alleges that the Life Assured breached the terms in the proposal forms by providing false information regarding his employment and annual income. Specifically, the Defendant contends that the information provided by the Life Assured about his employment, occupation, and annual income in the three proposal forms was false or inaccurate, and that the Life Assured deliberately provided such false and incorrect information.

The Defendant maintains that these misrepresentations constitute material facts that were relevant to their decision-making process in issuing the Insurance Policies. The Defendant emphasises that the information on annual salary and income of the Life Assured was directly relevant to their decision whether to approve the insurance application and to determine the rates or terms to be applied. The insurance Insurance Policies were approved and issued in reliance on the information provided by the Life Assured, including information on his total annual income.

Importantly, the Defendant states that they had no obligation to verify the accuracy or truthfulness of the information provided by the Life Assured, and that the misrepresentations in the proposal forms were only discovered after the death claim was submitted by the Plaintiff. The Defendant argues that the false information about the employment and annual income of the Life Assured directly led to the issuance of the Insurance Policies, constituting a breach of the Life Assured's duty to act in good faith and a breach of the terms in the proposal forms.

Consequently, the Defendant contends that the Life Assured breached his duty to act in good faith and that the cancellation of the Insurance Policies is legally justified due to the false information and misrepresentations in the proposal forms. The Defendant maintains that under the 14 principles established in insurance law and the Financial Services Act 2013, they are entitled to avoid the Insurance Policies based on these material misrepresentations and non-disclosures, and therefore the Plaintiff is not entitled to the reliefs sought as the claim is completely without merit.

Five witnesses appeared for the Plaintiff as follows: a) PW1 is Sinnamah A/P Munisamy, the Plaintiff, a 76- year-old housewife who became the Plaintiff as administrator of her late husband Kovilan's estate. Her evidence relates to three Insurance Policies totaling RM2 million taken out by the Life Assured, her deceased son Kumaresan A/L Kovilan, with the Defendant, where her late husband was named as nominee. She testifies about the claims process following the Life Assured’s death in December 2017, the Defendant's subsequent rejection and repudiation of all three Insurance Policies in December 2018, and the family's appeals process. Her knowledge is limited due to her age and she relies largely on information from her youngest son Surres regarding the insurance matters and the la’s occupation as a clothing businessman and lorry attendant. His Witness Statement is marked as “WS-PW1”. 15 b) PW2 is Surres A/L Kovilan (“Surres”), a 43-year-old businessman and youngest son of the Plaintiff. He runs his own businesses under Shani Resources and Shani Baking. His evidence provides detailed testimony about the insurance application process for the Life Assured. He testifies that his partner Nanthini A/P Tanabal established Nansu Resources as a family business in July 2017 at the Life Assured's request to channel income from clothing sales and lorry attendant work. PW2 arranged meetings between the Life Assured and the Defendant's agent Mitesh Kumar, leading to three Insurance Policies totaling RM2 million. He confirms premium payments were made and describes receiving the police call about the Life Assured's death on 18.12.2017. His evidence challenges the Defendant's rejection of claims, arguing that the agent had knowledge of the Life Assured's actual occupation and income, and that any misrepresentations were due to the agent's unilateral completion of proposal forms given the Life Assured's limited education. His Witness Statement is marked as “WS-PW2”. c) PW3 is Nanthini A/P Tanabal (“Nanthini”), a 36- year-old who assists her partner Surres in his businesses Shani Resources and Shani Baking. She is the partner of PW2 since 2011, with whom she has a son. Her evidence centres on her role in 16 establishing Nansu Resources as a sole proprietorship in July 2017 at the request of the Life Assured and her partner. She testifies that she reluctantly registered the business under her name for the family's use, emphasising she never conducted any actual business under Nansu Resources. PW3 arranged meetings between the Life Assured and the Defendant's agent Mitesh Kumar, explaining the Life Assured's occupation as a clothing trader and lorry attendant. She served as a liaison and translator during the claims process, helping with documentation and translation between Malay and Tamil for the family. Her Witness Statement is marked as “WS-PW3”. d) PW4 is Nordin A. Ahmad, the Timbalan Ketua Polis Balai of Balai Polis Kapar with 36 years of police service. His evidence relates to the police investigation concerning the deceased being found unconscious by the roadside at Bukit Kapar. He testified that the original investigating officer SM Rozmin has since retired and his whereabouts are unknown. He confirmed that he was not involved in the original investigation and only took over the case papers after it was classified as “No Further Action” (NFA) by the Deputy Public Prosecutor, with his role limited to administrative finalisation in the PRS system. 17 e) PW5 is Dr. Noorain Maulad Mohammed Yunus, a general medical practitioner who was attached to the Jabatan Perubatan Forensik, Hospital Tengku Ampuan Rahmah, Klang at the material time. Her evidence relates to the post-mortem examination she conducted on the Life Assured on 18.12.2017. She testified that after conducting external and internal examinations and histological tests, she concluded the cause of death was coronary artery atheroma (natural causes) with 80% blockage in the right coronary artery and 40% blockage in the left anterior descending artery. She confirmed during re-examination that she found no element of foul play during the post-mortem examination.

Six witnesses appeared for the Defendant as follows: a) DW1 is Jong Sung Chiun, Assistant Vice President at the Defendant's Claims Department and head of the Investigation Team since 2015. He joined the Defendant in January 2010 as an associate. His evidence focused on the investigation conducted following the death claims on the three Insurance Policies totaling RM2 million. He testified that the claims triggered investigation due to two factors: it was an early claim (death occurred within 3 months of the last policy inception) and the high sum assured. DW1's team conducted initial checks at the Life Assured's residential area and attempted to 18 verify his employment, discovering through CCM searches that Nansu Resources was owned by Nanthini AP Tanabal, not the Life Assured. Finding the declared Nansu Resources address vacant, he engaged a private investigator for comprehensive investigation. Based on the investigation report's findings regarding alleged misrepresentations about occupation and income, DW1 recommended to the Claims Department that the Insurance Policies be rejected and repudiated. He also responded to Kovilan's complaint to Bank Negara Malaysia, explaining the basis for the Defendant's decision to reject the claims. His Witness Statement is marked as “WS-DW1”. b) DW2 is Nurhidayati binti Mohd Rijah, the Deputy Manager of the Contribution Management Department at KWSP (Employees Provident Fund). Her evidence relates to the management of member accounts and contribution records. She testified about KWSP records concerning the Life Assured's employment and contribution history, including both mandatory employer-employee contributions and voluntary contributions. c) DW3 is Wan Zairi Afhtar bin Ishak, a director of My Private Eye Consulting Sdn Bhd, a private investigation company. He holds qualifications in Forensic Accounting and Financial Criminology from UiTM and is a certified fraud examiner. His evidence relates to the Investigation Report he prepared and supervised regarding the Life Assured. He testified that he coordinated the investigation with his staff conducting field work, personally met with police at Kapar, and stands by the findings in his Investigation Report. d) DW4 is Lee Eng Leng, Assistant Vice President in the Defendant's Claims Department. She joined the Defendant in July 2013 as a Claims Associate, was promoted to Claims Manager in April 2017, and became Assistant Vice President in July 2019. Her evidence focused on the Claims Department's decision-making process regarding the rejection of the three death claims totaling RM2 million. She testified that the Claims Department received the death claims in January 2018 and initially issued a standard letter requesting additional documents. Based on the investigation findings received from DW1's team, she explained that the Claims Department decided to reject the death claims and render the three Insurance Policies null and void on grounds of misrepresentation regarding annual income and occupation. DW4 emphasised the principle that life assured customers have a duty not to make misrepresentations in proposal forms and must make full and accurate disclosure. Her Witness Statement is marked as “WS-DW4”. 20 e) DW5 is Yap Siew Leng, Assistant Vice President in the Defendant's New Business Department with 13 years of experience at the Defendant. Prior to joining the Defendant in 2010 as an Underwriting Manager, she worked as an Underwriting Executive at Manulife Insurance Berhad for 2 years and as an Underwriting Specialist at Prudential Services Asia for 5 years. Her evidence focused on the underwriting processes for evaluating applicant eligibility for insurance coverage. She testified that for the first two policies where the Life Assured declared annual income of RM200,000, the applications were automatically approved by the underwriting engine, while the third policy declaring RM400,000 annual income required manual underwriting due to exceeding non-medical limits. DW5 explained that after the death claims were submitted, the Claims Department referred the matter to her to determine the materiality of the financial misrepresentation. She testified that had the Life Assured not had fixed earned income and was not the actual owner of Nansu Resources as represented, the Defendant would have declined all three applications. His Witness Statement is marked as “WS-DW5”. f) DW6 is Mitesh Kumar A/L Hamendra Kumar (“Mitesh Kumar”), the insurance agent employed by the Defendant who solicited the sale of the three Insurance Policies to the Life Assured. His evidence 21 relates to the completion of the proposal forms and his interactions with the Life Assured during the application process. He testified about the Life Assured's declared annual income of RM100,000 plus additional monthly income of RM8,000 from t-shirt sales for the first two policies, and the doubling of income to RM400,000 for the third policy. He admitted in cross-examination that he could not recall who provided the RM400,000 figure and that he may have included it on his own, and that he did not verify the Life Assured's income despite noticing the discrepancy between policies. His Witness Statement is marked as “WS-DW6”.

From the facts of the case, defences relied on by the Defendant and the submissions of parties, the court frames the following main issues for deliberation which this court considers pivotal to the resolution of this case: a) Whether the Defendant has discharged its burden of proving non-disclosure of material facts by the Life Assured, justifying the avoidance of the Insurance Policies; b) Whether the Life Assured honestly and sincerely provided his personal information to the Defendant's Agent without misrepresentation; and 22 c) Whether the Defendant waived its right to rely on any alleged non-disclosure or misrepresentation by the Life Assured. ANALYSIS AND FINDINGS OF THE COURT Whether the Defendant has discharged its burden of proving non-disclosure of material facts by the Life Assured, justifying the avoidance of the Insurance Policies

The Plaintiff submitted that the Investigation Report relied upon by the Defendant lacks sufficient evidential value to prove misrepresentation. she argued that the report is largely based on hearsay evidence from interviews with individuals not called to testify in court, particularly the statements of Ganesan which were not independently verified. The Plaintiff contended that the Investigation Report's contents are inadmissible hearsay and that the findings regarding the annual income, occupation, and business ownership of the Life Asssured are not conclusive enough to justify avoiding the Insurance Policies. She further argued that the Defendant's decision to avoid the Insurance Policies based on the report amounts to a breach of its duty to act promptly and in good faith, and that the Defendant lacked sufficient grounds to reject and avoid the Insurance Contracts. The Plaintiff relied on the case of Chua Kheng Yik v Wong Zhen Yaik [2022] 1 LNS 3030, where the High Court held that an adjustor's report derived 23 from conversations with people not called to give evidence has little or no evidential value.

Conversely, the Defendant maintained that the Investigation Report has sufficient evidential value, with the maker of the report (DW3) having been called to tender it in court. It argued that the report is merely a recommendation considered by the Defendant, and not an instruction to repudiate the claims. The Defendant submitted that the Plaintiff failed to establish any untrue statement in the report or prove that the Life Assured was earning the declared income and was a business owner of Nansu Resources running a transportation business. It contended that even if the report's findings are not conclusive, the evidence still shows that the Life Assured misrepresented his income and occupation. The Defendant relied on the principle of uberrimae fidei (utmost good faith) as outlined in Tan Jing Jeong v Allianz Life Insurance Malaysia Berhad & Ors [2012] 7 MLJ 179 (HC), which emphasises that both the insurer and the insured have a duty to deal with each other in good faith and make full disclosure of all material facts.

While the Investigation Report contains elements of hearsay evidence, I find that it still carries sufficient weight when considered in light of the totality of the evidence before this court. In Capital Insurance Bhd v Cheong Heng Loong Goldsmith (KL) Sdn Bhd [2005] 6 MLJ 593, the Federal Court specifically addressed the evidential status of adjuster reports based on interviews with persons not called to 24 testify. Abdul Hamid Mohamad FCJ observed at paragraph [34] that: “It is clear that the findings that ‘there was a robbery that was carefully planned’ is based on interviews with the insured, his colleagues who were with the insured at the time of the alleged robbery and discussions with the police and not from his own personal knowledge. None of the persons interviewed were called to give evidence to substantiate that the robbery did take place. For these reasons I rule that the evidence in respect of the robbery in the report is clearly hearsay.”

His Lordship further held at paragraph [84] that: “P9 does not prove the fact of the robbery. The content is hearsay, the opinion of the adjusters has no evidential value and does not bind the appellant and the appellant did not admit the fact to respondent. There is no basis for an appellate court to reverse the finding of fact of the learned trial judge that the robbery had not be proved.”

Crucially, the Federal Court distinguished between the admissibility of the report as a document versus the inadmissibility of its hearsay contents to prove the facts stated therein, emphasising that while such reports may assist insurers in claim decisions, they do not constitute admissions of liability. Despite these limitations on the Investigation Report's evidential value, the Federal Court found that the High Court was correct in considering the totality of evidence rather than relying solely on the inadmissible hearsay elements contained within the report.

In the present case, while c3.-ertain aspects of the Investigation Report, particularly the statements of Ganesan, may be considered hearsay, the key findings of the report regarding the Life Assured's income and occupation were not effectively challenged or rebutted by the Plaintiff. Importantly, the Plaintiff’s witnesses, especially PW2 (Surres, brother of the Life Assured who testified that he had helped establish Nansu Resources as a family business to channel the Life Assured's income from selling clothes and working as a co-pilot to a lorry driver) and PW3 (Nanthini, PW2's partner who registered Nansu Resources under her name at PW2's request, and who had introduced DW6, the Defendant's insurance agent to the Life Assured) accepted the correctness of their respective interviews in the report, thereby reinforcing its accuracy. This acceptance lends credibility to the report's findings, even if some portions may be considered hearsay.

The Plaintiff has argued that the Life Assured's exact income and occupation details were not clearly material to the risk for these consumer insurance contracts. While this argument merits consideration, I find that the income and occupation information provided by the Life Assured was indeed material to the Insurance Contracts in question.

Firstly, it is important to recognise that materiality in insurance contracts is not solely determined by its direct relation to the insured risk. Rather, as established by the House of Lords in Pan Atlantic Insurance Co Ltd v Pine Top Insurance Co Ltd [1994] 3 All ER 581, the test for materiality is both objective and practical in its application.

The House of Lords definitively rejected the “decisive influence test” and confirmed that a fact is material if it would influence the judgment of a prudent insurer in determining whether to accept the risk or in fixing the premium. As Lord Mustill observed: “In my opinion ‘the judgment of a prudent insurer’ cannot be said to be ‘influenced’ by a circumstance which, if disclosed, would not have affected acceptance of the risk or the amount of the premium.”

His Lordship further explained that the test is concerned with whether the undisclosed fact would have an impact on the formation of the prudent insurer's opinion and decision-making process, rather than requiring that it would decisively alter the final outcome.

Lord Goff of Chieveley reinforced this approach, stating that the statutory language: “… does not require that the circumstance in question should have a decisive influence on the judgment of the insurer; and I, for my part, can see no basis for reading this requirement into the subsection.”

Crucially, the House of Lords emphasised the practical difficulties inherent in the decisive influence test. Lord Mustill noted that it would be “impractical” for courts to 27 determine, years after the event, “what a prudent underwriter would have done” in hypothetical scenarios. In contrast, there is “no great difficulty” in answering the question whether any particular factor is one the insurer would want to know and take into consideration in determining whether to accept a risk and on what terms.

This approach ensures that the materiality test remains workable and prevents insurers from avoiding policies on vague grounds of non-disclosure supported by vague evidence - even though disclosure would not have made any difference.

In the present case, DW5, the Assistant Vice President of the Defendant's New Business Department, provided crucial testimony on this matter. She stated that “Should the Life Assured not have a fixed earned income and is not the owner of the business called Nansu Resources as he represented in the proposal forms, we would decline the application for the 3 policies as financially, his application for coverage over his life would not be accepted for the coverage under the 3 policies which he applied for.”

This testimony clearly indicates that the income and occupation information was pivotal to the Defendant's underwriting decision. The fact that the Defendant specifically asked for this information in the proposal forms further underscores its importance to its risk assessment process.

Moreover, the substantial nature of the policies in question - totaling RM2 million in coverage - magnifies the importance of accurate financial information. It is reasonable for an insurer to closely scrutinise the financial standing of an applicant seeking such significant coverage to ensure the proposed sum assured aligns with the applicant's financial profile and to guard against potential fraud or moral hazard.

The Plaintiff's argument that these details may not be material for consumer insurance contracts is not convincing in this context. While consumer insurance contracts may have different considerations than commercial policies, this does not negate the importance of truthful financial disclosures, especially for high-value life insurance policies.

In light of these considerations, I find that the Life Assured's income and occupation details were material to the insurance contracts. The Defendant has sufficiently demonstrated that these details would have substantially affected its underwriting decision. Therefore, the misrepresentation of these material facts justifies the Defendant's decision to void the Insurance Policies.

Moreover, the evidence shows that the Life Assured declared himself as a “business person” managing a “transport business” at Nansu Resources with a high annual income of up to RM200,000 and RM400,000 in the insurance proposal forms. However, the salary vouchers adduced by the Plaintiff for the period between 28.1.2017 29 and 28.10.2017 only showed that the Life Assured was earning between RM3,400 and RM4,300 per month, which could not justify the annual income declared in the proposal forms. The Plaintiff also failed to produce any other convincing evidence, such as income tax statements, to prove that the Life Assured was earning the declared income.

Furthermore, the Defendant's decision to avoid the Insurance Policies based on the Investigation Report's findings does not amount to a breach of its duty to act in good faith. The Defendant was entitled to rely on the report as part of its investigation into the suspicious circumstances surrounding the early death claim and high sum assured. This approach aligns with the principles established in Chong Kai Leng v Prudential Assurance Malaysia Berhad [2024] 2 MLRH 226. In that case, the High Court held that an insurer has the right to void policies and reject claims based on financial misrepresentation, even if the misrepresentation is unrelated to the cause of death.

Furthermore, the Defendant's decision to avoid the Insurance Policies based on the Investigation Report's findings does not amount to a breach of its duty to act in good faith. The Defendant was entitled to rely on the report as part of its investigation into the suspicious circumstances surrounding the early death claim and high sum assured.

This approach aligns with the principles established in Chong Kai Leng v Prudential Assurance Malaysia Berhad, where Jamhirah Ali JC (as she then was) comprehensively addressed the issue of financial misrepresentation in life insurance policies. In that case, involving the non-disclosure of three AIA policies totalling RM3.5 million when applying for Prudential policies worth RM4 million, the High Court definitively held that an insurer has the right to void policies and reject claims based on financial misrepresentation, even where the misrepresentation is unrelated to the cause of death.

Her Ladyship concluded at paragraph [84]: “I find it on the balance of probabilities proven that the existence of the 3 AIA Policies was a material fact, and the Life Assured was aware of the existence of the 3 AIA Policies but had deliberately and fraudulently suppressed their existence. Hence, the Defendant is entitled to repudiate the Plaintiff's claim on the two PAMB Policies because of the Life Assured's fraudulent non-disclosure and fraudulent misrepresentation in accordance with the provisions of the FSA.”

Crucially, this ruling was made despite the cause of death being certified as “decomposed body” - completely unrelated to the financial misrepresentation.

The Chong Kai Leng case is particularly applicable here because it establishes that financial misrepresentation encompasses various forms of non-disclosure relating to material facts that would influence an insurer's underwriting 31 decision. The court in that case specifically addressed the statutory framework under the Financial Services Act 2013, noting at paragraph [34] that: “when a life insurance contract has been in force for a period of more than two years during the lifetime of the insured, such a contract shall not be avoided by a licensed life insurer on the ground that a statement made or omitted to be made in the proposal for insurance… was inaccurate, false, or misleading unless the insurer shows that the statement was on a material matter or suppressed a material fact and that it was fraudulently made or omitted to be made by the Life Assured.”

The court further clarified at paragraph [35] that the test for materiality under paragraph 13(3) requires showing that the undisclosed fact: “…would have led to its refusal to issue a life policy to the policy owner or would have led it to impose terms less favourable to the policy owner than those imposed in the life policy.”

Similarly, in the present case, the alleged misrepresentation relates to the Life Assured's income and occupation, which are fundamental financial information that directly impacts underwriting decisions. The Defendant’s witness, DW5, testified that: “Should the life assured not have a fixed earned income and is not the owner of the business called Nansu Resources as he represented in the proposal forms, we would decline the application for the 3 policies as financially, his application for coverage over his life would not be accepted for the coverage under the 3 policies which he applied for.”

This testimony mirrors the materiality standard established in Chong Kai Leng, where non-disclosure of financial information constituted sufficient grounds for policy avoidance regardless of its connection to the ultimate cause of death.

Regarding the admissions made by the Defendant's witnesses during cross-examination, particularly DW6 (Mitesh Kumar, the Defendant's insurance agent who solicited the sale of the three Insurance Policies to the Life Assured, filled out the proposal forms, and testified about his interactions with the Life Assured during the application process), several significant concessions were made that warrant careful analysis.

During cross-examination, DW6 admitted that the Life Assured initially declared an annual income of RM100,000 with an additional monthly side income of RM8,000 from T-shirt sales. This would total approximately RM196,000 annually, not the RM200,000 stated in the proposal forms. As recorded in the Notes of Proceedings, DW6 testified: “Yes, because I remember the annual income LA told me was RM100,000 and this additional thing because I needed to fill up the column of that income figure, so I said how much do you earn annually. So he said my annual income is RM100,000 plus I got some side income of RM8,000 from the, monthly from the T-shirts.”

DW6 further admitted that he rounded up the figure to RM200,000 as the nearest available option on the form.

Most significantly, regarding the third policy where the income was doubled to RM400,000, DW6 admitted he could not recall who actually provided this information. He testified that he was “not sure who asked for the amount of RM400,000 to be placed in the third proposal form” and that, according to his statement dated 7.8.2018, he may have included it on his own.

When confronted about this substantial discrepancy and his failure to verify the information, DW6 acknowledged: “SVS: And like what you, and you did nothing to enquire further regarding the same as far as the RM400,000 is concerned.

He also admitted that despite noticing the glaring difference between the first two policies (RM200,000) and the third policy (RM400,000), he “did not ask for any bank statements or proof income at that material time.”

However, these admissions do not negate the overall strength of the evidence showing misrepresentation by the Life Assured, as they merely reflect what was communicated to DW6 at the time rather than addressing the fundamental issue of whether the Life Assured's 34 declared income figures were accurate representations of his actual financial circumstances.

The Plaintiff's interpretation of DW6's testimony during cross-examination is taken out of context and does not accurately represent the full picture of the Life Assured's representations. As the Defendant correctly points out, the context of DW6's cross-examination must be considered in its entirety.

Firstly, DW6's agreement that the Life Assured did not misrepresent his income at the point of filling up the proposal form must be understood in the specific context of that moment. DW6 was relating the information as it was told to him at the time of applying for the policy, not what he subsequently learned about the Life Assured's actual income.

The evidence in cross-examination of DW6 in the Notes of Proceedings on page 333 provide crucial context: “KUMAR: Yes, because I remember the annual income LA told me was RM100,000 and this additional thing because I needed to fill up the column of that income figure, so I said how much do you earn annually. So he said my annual income is RM100,000 plus I got some side income of RM8,000 from the, monthly from the T-shirts.”

This testimony reveals that the Life Assured initially declared an annual income of RM100,000, with an additional monthly side income of RM8,000. Even if we 35 accept these figures at face value, they only amount to RM196,000 annually, not the RM200,000 stated in the proposal form.

Moreover, DW6's agreement that the total comes to RM196,000 and not RM200,000 does not negate the possibility of misrepresentation. It merely indicates that at the time of filling the form, DW6 rounded up the figure to the nearest available option on the form. This does not address the fundamental issue of whether the income figures provided by the Life Assured were accurate in the first place.

It is crucial to distinguish between what was said at the time of filling the form and what was subsequently discovered about the Life Assured's actual income. The fact that DW6 did not perceive a misrepresentation at the time of filling the form does not mean that a misrepresentation did not occur. The duty of utmost good faith requires the Life Assured to provide accurate information, regardless of whether the agent immediately recognises any discrepancies.

Therefore, while DW6's testimony provides insight into the process of filling out the proposal form, it does not definitively prove that there was no misrepresentation by the Life Assured regarding his income. The court must consider this testimony in light of all other evidence presented about the Life Assured's actual financial situation at the time of the insurance application.

It is important to consider these admissions in their proper context. DW6's admission relates specifically to the moment of filling out the form and does not preclude the possibility of misrepresentation in the broader context of the insurance application process.

Other admissions-such as those by DW1, DW3, and DW4- acknowledging that the findings in paragraphs 6.4, 6.5, and 6.6 of the Investigation Report regarding the Life Assured's annual income, occupation, and business ownership were not conclusive, must be weighed against the totality of the evidence.

Specifically, during cross-examination, DW3 admitted that the findings in paragraphs 6.4, 6.5, and 6.6 of the Investigation Report regarding the Life Assured's occupation with Nansu Resources and his annual income were not conclusive. Similarly, DW4 conceded that the findings of the private investigator in paragraphs 6.4, 6.5, and 6.6 of the Investigation Report regarding the Life Assured’s annual income, occupation and the business ownership were not conclusive, and that the findings and conclusions of the private investigator in paragraphs 6.4,

6.5, and 6.6 of the Investigation Report regarding the Life Assured’s annual income, occupation and the business ownership and the conclusion were identical. [80] However, these admissions regarding the inconclusiveness of specific investigative findings must be viewed against compelling documentary evidence that contradicts the Life Assured’s declared income. [81] The salary vouchers produced by the Plaintiff for the period between 28.1.2017 and 28.10.2017 show that the Life Assured was earning between RM3,400 and RM4,300 per month. This translates to an annual income of approximately RM40,800 to RM51,600 - significantly less than the annual income of RM200,000 to RM400,000 declared in the proposal forms. [82] This represents a staggering discrepancy, with the declared income being approximately four to ten times higher than the documented earnings. The Plaintiff’s failure to produce more convincing evidence-such as income tax statements, business financial records, or bank statements showing deposits consistent with the declared income-further strengthens the case for misrepresentation. [83] As noted in the Defendant’s submissions: “If the Life Assured was actually earning an annual income of up to RM200,000 or RM400,000, or even RM100,000 as suggested by counsel for the Plaintiff, the Plaintiff could easily produce the Life Assured’s income tax statements to prove the same. There is zero evidence before the Court to show that the Life Assured was even earning an annual income of at least RM100,000.” [84] The absence of such fundamental financial documentation, combined with the substantial disparity between declared and proven income, provides compelling evidence of material misrepresentation that cannot be negated by the admitted inconclusiveness of certain investigative findings. [85] Moreover, the principle established in Tindok Besar Estate Sdn Bhd v Tinjar Co [1979] 2 MLJ 229 is relevant here. The Federal Court in that case held that greater weight should be given to contemporaneous documents and actions than later oral recollections, especially from witnesses with their own interests to serve. Applying this principle to the present case, the documentary evidence, including the proposal forms and salary vouchers, should be given more weight than the later oral testimonies and admissions of witnesses. [86] Turning to the applicable statutory provisions, Paragraph 5(1) of Schedule 9 of the Financial Services Act 2013 states: “Before a consumer insurance contract is entered into or varied, a licensed insurer may request a proposer who is a consumer to answer any specific questions that are relevant to the decision of the insurer whether to accept the risk or not and the rates and terms to be applied.” [87] This provision underscores the importance of the questions asked in the proposal form and the answers provided by the Life Assured. The questions regarding income and occupation were clearly relevant to the Defendant's decision to accept the risk and determine the rates and terms of the Insurance Policies. The Life Assured's duty, as per Paragraph 5(2) of Schedule 9 of the Financial Services Act 2013, which states: “It is the duty of the consumer to take reasonable care not to make a misrepresentation to the licensed insurer when answering any questions under subparagraph (1)”, was to take reasonable care not to make a misrepresentation when answering these questions. The evidence before this court suggests that this duty was not fulfilled. [88] Therefore, despite certain weaknesses in the Defendant's case arising from admissions made during cross-examination, the overall strength of the evidence, including documentary proof and the Investigation Report (considered in its proper context), supports the finding of misrepresentation by the Life Assured. This misrepresentation relates to material facts that were relevant to the Defendant's decision-making process in issuing the Insurance Policies, as outlined in the Financial Services Act 2013. [89] In conclusion, I find that the Defendant had sufficient grounds to avoid the Insurance Contracts based on the material non-disclosure by the Life Assured. The principle of utmost good faith, as comprehensively addressed in Tan Jing Jeong v Allianz Life Insurance Malaysia Berhad & Ors, establishes the fundamental requirement for complete transparency between contracting parties in insurance contracts. [90] Abang Iskandar J (as he then was) emphasised at paragraph [22] that: “a higher duty is exacted from parties to an insurance contract than from parties to most other contracts in order to ensure the disclosure of all material facts so that the contract may accurately reflect the actual risk being undertaken.” [91] His Lordship further explained the rationale for this principle by referencing the seminal case of Carter v Boehm [1766] 97 ER 1162, noting that in insurance contracts: “The special facts, upon which the contingent chance is to be computed, lie most commonly in the knowledge of the insured only: the under-writer trusts to his representation, and proceeds upon confidence that he does not keep back any circumstances in his knowledge, to mislead the under-writer into a belief that the circumstance does not exist … Good faith forbids either party by concealing what he privately knows, to draw the other into a bargain from his ignorance of that fact, and his believing the contrary.” [92] The court in Tan Jing Jeong further elaborated at paragraph [23] that: “there is therefore a duty on both sides to disclose facts which must be regarded as being material which they both have to consider before they decide to commit themselves to be bound by the contract.” [93] Crucially, the judgment established that this duty extends beyond mere passive honesty to active disclosure, stating that: ““the duty to disclose material facts in the insurance proposal” requires the insured to “reveal the exact nature and potential of the risks that he transfers to the insurer.”” [94] In the present case, the evidence overwhelmingly demonstrates that the Life Assured failed to disclose his true income and occupation-facts which were material and directly relevant to the Defendant’s decision to accept the risk and to determine the terms to be applied, as mandated by paragraph 5(1) of Schedule 9 of the Financial Services Act 2013. [95] The substantial discrepancy between the declared income of RM200,000 to RM400,000 and the documented earnings of RM3,400 to RM4,300 per month, coupled with the misrepresentation of his occupation as a businessperson managing a transport business - when the evidence shows he was primarily engaged in selling clothes and working as a lorry attendant - constitutes a clear breach of the uberrimae fidei principle. [96] Consequently, the Defendant is entitled to avoid the Insurance Policies and refuse all claims, as provided under Paragraph 15 of Schedule 9 of the Financial Services Act 2013, which states: “If a misrepresentation was deliberate or reckless, a licensed insurer may avoid the consumer insurance contract and refuse all claims.” Whether the Life Assured honestly and sincerely provided his personal information to the Defendant's Agent without misrepresentation [97] The Plaintiff argued that the term “business person” used in the proposal forms was broad enough to encompass the Life Assured's activities of selling clothes and working as a lorry co-pilot. She submitted that the Life Assured did not misrepresent his involvement with Nansu Resources, as it was a family business and he never claimed ownership. The Plaintiff contended that the income figures provided were accurate or, at most, rounded up approximations, and that any discrepancies were due to the negligence or poor guidance of the Defendant's agent's (DW6). She relied on the evidence of PW2 and PW3, who testified that the Life Assured was selling clothes and working as a lorry attendant, and that Nansu Resources was registered as a family business. The Plaintiff also pointed out that the Life Assured's salary vouchers for the period between 28.1.2017 and 28.10.2017 showed that he was earning some income, albeit lower than the declared figures in the proposal forms. [98] On the other hand, the Defendant submitted that the Life Assured's declarations in the proposal forms must be read as a whole, showing that he represented himself as a business person managing a transport business at Nansu Resources with a high annual income. It argued that none of the Plaintiff’s witnesses testified that the Life Assured was managing a transport business, and that the registration of Nansu Resources for the Life Assured's use left no room for denying his ownership. The Defendant maintained that the Life Assured's salary vouchers could not justify the declared annual income, and that the Plaintiff failed to prove the Life Assured was earning the represented income. It relied on the principle of utmost good faith, as outlined in Tan Jing Jeong v Allianz Life Insurance Malaysia Berhad & Ors, which requires the insured to make full and accurate disclosure of all material facts. The Defendant also referred to Paragraph 5(2) of Schedule 9 of the Financial Services Act 2013, which imposes a duty on the consumer to take reasonable care not to make misrepresentations when answering questions posed by the insurer. [99] After careful consideration, I find that the Life Assured did make misrepresentations in the proposal forms regarding his occupation and income. This conclusion is based on the reasons below. [100] While the term “business person” may be broad, it cannot be stretched to encompass the Life Assured's activities as described by the evidence. The Life Assured specifically declared that he was managing a transport business at Nansu Resources with a high annual income of up to RM200,000 and RM400,000. However, the evidence presented paints a different picture [101] Firstly, PW2 (Surres, the Life Assured’s brother) and PW3 (Nanthini, PW2’s partner who registered Nansu Resources under her name) provided detailed testimony that the Life Assured was primarily engaged in two distinct but modest activities: selling clothes and fabrics door-to-door to customers (described in Malay as “menjual kain-kain dan dia supply kain-kain semualah kepada customer”) and working as a lorry attendant or co-pilot (referred to as “kelindan” or “pengikut lori” in Malay). [102] During cross-examination, PW2 specifically testified: “Abang saya berniaga sendiri. Dia menjual kain-kain dan dia supply kain-kain semualah kepada customer dan dia pun ada bekerja sebagai kelindan... Pengikut lori.”). [103] Both witnesses confirmed that these constituted the Life Assured’s two primary sources of income. PW2 explained that he had helped establish Nansu Resources as a family business specifically to channel the Life Assured’s income from these activities. [104] Significantly, even DW6 (the Defendant’s insurance agent) confirmed during cross-examination that the Life Assured had represented that he was selling clothes or T-shirts “on the side to earn additional income.” DW6 also acknowledged that the Life Assured had provided two pieces of information: that he was involved in the transport business and that he sold clothes for additional income. [105] Secondly, there was a complete absence of substantial evidence to demonstrate that the Life Assured was actively managing, operating, or overseeing a transport business in any meaningful capacity. None of the Plaintiff’s witnesses-including PW1, PW2, and PW3-testified that the Life Assured was managing a transport business. [106] The Defendant correctly submitted in its reply submissions that: “None of the Plaintiff’s witnesses testified that the Life Assured was managing a transport business.” [107] The evidence consistently showed that Nansu Resources, which was registered only four days before the first proposal form was submitted, had no operational activities, no bank account, and no substance as a functioning business entity. [108] PW2’s testimony revealed that the company was established purely as a vehicle to channel the Life Assured’s income from the sales of the clothes and working as a co-pilot to a lorry driver, rather than as an operational transport business. [109] Furthermore, DW6’s admission during cross-examination that the Life Assured “did not say he was the owner of the said family transport business” further undermines any suggestion of active management or control over transportation operations. [110] Thirdly, the stark disconnects between the Life Assured’s actual activities and the representation of managing a transport business constitutes a fundamental mischaracterisation that cannot be reconciled with established business terminology or industry understanding. [111] The activities of selling clothes door-to-door and working as a lorry attendant or co-pilot are fundamentally incompatible with the conventional understanding of managing a transport business. That term typically encompasses strategic oversight of fleet operations, route planning, logistics coordination, personnel management, regulatory compliance, and operational decision-making responsibilities. [112] As the Defendant aptly characterised in its submissions: “By no stretch of the imagination can it be said that a lorry attendant's occupation is in the transport business. Equating a lorry attendant with being in the transport business is a misrepresentation of the most devious kind. It is akin to a bricklayer claiming his nature of business as property development business.” [113] The role of a kelindan or lorry co-pilot is essentially that of an assistant or helper who accompanies the primary driver. It bears no resemblance to business management, ownership responsibilities, or strategic control over transportation operations. [114] This mischaracterisation becomes even more pronounced when considered alongside the substantial income declarations of RM200,000 to RM400,000 annually, which are entirely inconsistent with the modest earnings typically associated with door-to-door fabric sales and part-time lorry assistance work. [115] The evidence adduced by the Plaintiff, particularly the salary vouchers, falls significantly short of substantiating the declared income figures. Specifically: a) The salary vouchers for the period between 28.1.2017 and 28.10.2017 showed that the Life Assured was earning between RM3,400 and RM4,300 per month. b) This amounts to an annual income of approximately RM40,800 to RM51,600, which is far below the declared figures of RM200,000 and RM400,000 in the proposal forms. c) The Plaintiff failed to produce any additional evidence, such as income tax statements or business financial records, to bridge this substantial gap between the proven and declared income. [116] The principle established in Chong Kai Leng v Prudential Assurance Malaysia Berhad is particularly relevant to this case. In Chong Kai Leng, the High Court held that: a) An insurer has the right to void policies and reject claims based on financial misrepresentation, even if the misrepresentation is unrelated to the cause of death. b) The existence of other insurance policies, which were not disclosed, was deemed material information that would have affected the insurer's underwriting decision. c) The court emphasised that insurers rely on applicants' disclosures to assess risk, and material non-disclosure breaches the duty of utmost good faith. [117] Applying the principles established in Chong Kai Leng to the present case, it is evident that the misrepresentation of income and occupation by the Life Assured constitutes material information that would have significantly influenced the Defendant's underwriting decision. The substantial discrepancy between the declared and proven income represents a material non-disclosure that breaches the fundamental duty of utmost good faith in insurance contracts. Importantly, the fact that the Life Assured's cause of death is unrelated to his income or occupation does not diminish or negate the Defendant's right to void the Insurance Policies based on this misrepresentation. This aligns with the court's reasoning in Chong Kai Leng, which emphasised that the materiality of non-disclosed information is not contingent on its relation to the cause of death, but rather on its potential impact on the insurer's risk assessment and policy issuance decision-making process. [118] The Plaintiff’s argument that the Life Assured did not misrepresent his involvement with Nansu Resources is not persuasive for the reasons below. [119] The evidence shows that Nansu Resources was set up specifically for the Life Assured's use, as testified by PW3. This undermines the claim that he did not represent himself as the owner: a) PW3 (Nanthini) testified that she registered Nansu Resources at the request of PW2 (Surres) for the use of the Life Assured. b) This indicates that while PW3 was the registered owner, the business was effectively set up for the Life Assured's benefit and use. c) By declaring Nansu Resources as his place of business in the proposal forms, the Life Assured implicitly represented himself as having a significant role in or control over the business, even if not the legal owner. [120] The fact that the Life Assured's brother, PW2, also declared himself as a business person with Nansu Resources in his own insurance proposal form further weakens the Plaintiff’s contention: a) This duplicate declaration suggests that Nansu Resources was being used as a convenient entity for multiple family members to claim business ownership or involvement. b) It raises questions about the true nature and operations of Nansu Resources, and whether it was a legitimate business entity or merely a facade. c) The inconsistency between multiple individuals claiming to be business persons at the same entity undermines the credibility of the Life Assured's representations. [121] The Defendant contended that the registration of Nansu

on 6.7.2017, just days before the Life Assured submitted the first proposal form on 10.7.2017, undermined the credibility of his claim to be a business person earning a substantial income. It argued it was implausible for the Life Assured to earn an annual income of RM200,000 to RM400,000 mere days after the business was registered, suggesting this as evidence of misrepresentation in the proposal forms. Conversely, the Plaintiff argued that while Nansu Resources was indeed established on 6.7.2017, the Life Assured had been gainfully self-employed prior to this, selling clothes and working as a lorry co-pilot. She maintained that the registration of Nansu Resources was merely a formalisation of the Life Assured's existing business activities, done at his request to channel his income into a family business structure. [122] Upon careful consideration of both positions, the court finds the Defendant's argument more compelling. While the Plaintiff's explanation offers a potential rationale for the timing discrepancy, it lacks sufficient corroborating evidence to outweigh the suspicious timing highlighted by the Defendant. The registration of a business just days before claiming substantial income from it in an insurance proposal raises significant concerns about the accuracy of the information provided. The court notes that if the Life Assured had indeed been earning such income from pre-existing activities, it would have been prudent and expected for him to disclose this clearly in the proposal forms, rather than attributing it solely to a newly registered business. The failure to do so, combined with the timing of Nansu Resources' registration, lends credence to the Defendant's position that there was a material misrepresentation regarding the Life Assured's occupation and income. This finding contributes to the overall assessment of whether the Life Assured fulfilled his duty of utmost good faith in completing the insurance proposal forms. [123] Further, I am not convinced by the argument that the discrepancies in the proposal forms were solely due to DW6's negligence or poor guidance. While DW6's actions, such as not requesting a copy of the business registration search from the Life Assured and potentially including the RM400,000 annual income figure in the third proposal form on his own, may have contributed to the inconsistencies, this does not absolve the Life Assured of his responsibility to provide truthful and accurate information. The reasons for this are: a) The principle of uberrimae fidei (utmost good faith) in insurance contracts places a primary duty on the insured to disclose all material facts accurately. b) The Life Assured, as the applicant, had the most direct knowledge of his own income and occupation, and was in the best position to ensure the accuracy of this information. c) By signing the proposal forms, the Life Assured affirmed the truthfulness of the information contained therein, regardless of who physically filled out the forms. [124] The landmark case of Leong Kum Whay v QBE Insurance

(M) Sdn Bhd & Ors [2006] 1 MLJ 710 provides comprehensive guidance on the fundamental duty of disclosure in insurance contracts and directly supports the Defendant’s position in the present case. [125] Gopal Sri Ram JCA (as he then was) emphasised at paragraph [15] the uncompromising nature of this duty: “It is settled beyond dispute that a contract of insurance is one that imposes a mutual duty on the parties to it to act uberrimae fidei towards each other. On the part of the insured, he or she must make full disclosure of all material facts. It is not for him or her to decide in his or her own mind what is material. It does not matter whether the insurer asks any questions of the insured. The duty is on the insured to make full disclosure of material facts within his knowledge. Whether a particular fact is material is a question of fact… But the duty to make full disclosure of all material facts is not an implied term of a contract of insurance. There is in fact no contract at the point at which the duty arises; the parties being still at the stage of negotiations. It is therefore a pre-contractual duty imposed by the common law.” [126] The Court of Appeal further reinforced this principle by referencing Rozanes v Bowen [1928] 32 L1L Rep 98, where Scrutton LJ observed: “As the underwriter knows nothing and the man who comes to him to ask him to insure knows everything, it is the duty of the assured, the man who desires to have a policy, to make a full disclosure to the underwriters without being asked of all the material circumstances, because the underwriter knows nothing and the assured knows everything.” [127] Additionally, the court cited Schoolman v Hall [1951] Lloyd's Rep 139, where Cohen LJ clarified that the duty extends beyond mere questionnaire responses: “[The duty to disclose] does not relieve the proposer of his general obligation at common law to disclose any material which might affect the risk which was being run, or which might affect the mind of the insurer as to whether or not he issue a policy.” [128] Applying these established principles to the present case: a) The Life Assured's income and occupation are clearly material facts that would influence the insurer's decision to accept the risk and determine the terms of the policy. b) Even if the Life Assured believed that the income figures or description of his occupation were not significant, he was not entitled to make this determination unilaterally. c) The duty of disclosure extends to all information that would objectively be considered material to the insurance contract, regardless of the insured's subjective assessment of its importance. [129] Paragraph 5(2) of Schedule 9 of the Financial Services Act 2013 states: “It is the duty of the consumer to take reasonable care not to make a misrepresentation to the licensed insurer when answering any questions under subparagraph (1).” [130] The application of this provision to the present case is as follows: a) The Life Assured, as a consumer, had a statutory duty to take reasonable care in answering the questions in the proposal forms. b) This duty is not negated by the actions of the insurer's agent (DW6) in filling out the forms or providing guidance. c) “Reasonable care” would include ensuring that the information provided about income and occupation was accurate and not misleading. [131] The Life Assured, by signing the proposal forms, took ownership and responsibility for the answers provided therein. She cannot shift the blame entirely to the Defendant's agent for any inaccuracies or discrepancies. This is because: a) The signature on the proposal forms serves as a verification and attestation of the truthfulness of the information provided. b) It is a fundamental principle of contract law that a person is bound by what they sign, barring exceptional circumstances such as fraud or duress, which are not alleged here. c) The Life Assured had the opportunity to review the forms before signing and could have corrected any inaccuracies or sought clarification on any points of confusion. [132] While the actions of DW6 may have contributed to some of the inconsistencies in the proposal forms, the primary responsibility for the accuracy of the information provided rests with the Life Assured. The evidence demonstrates that there were significant misrepresentations regarding income and occupation, which cannot be excused solely on the basis of the agent's conduct. [133] The Plaintiff contended that the annual earned income figures of RM200,000 and RM400,000 were DW6's own information, and relies on Paragraph 12, Schedule 9 of the Financial Services Act 2013, which states: “A person who is authorized by a licensed insurer to be its insurance agent and who solicits or negotiates a contract of insurance in that capacity shall be deemed, for the purpose of the formation or variation of the contract of insurance, to be the agent of the insurer and the knowledge of that insurance agent shall be deemed to be the knowledge of the insurer”, to argue that the agent's knowledge should be deemed the insurer's knowledge, thereby precluding the Defendant from repudiating the Insurance Policies. The Plaintiff asserted that if these income figures were DW6's decision rather than information provided by the Life Assured, the Defendant cannot claim misrepresentation. Conversely, the Defendant argued that the principle of agent's knowledge being deemed the insurer's knowledge is only applicable for the purpose of forming insurance contracts and does not apply to the stage of claim repudiation. The Defendant further submitted that the discrepancies in the Life Assured's income and business ownership were only discovered after the investigation conducted by the private investigator, and there was no evidence that DW6 knew about these facts when going through the proposal forms with the Life Assured. [134] Upon careful consideration of both arguments, the court finds the Defendant's position more compelling. The court agrees that Paragraph 12, Schedule 9 of the Financial Services Act 2013 is explicitly limited to “the purpose of the formation or variation of the contract of insurance” and does not extend to the stage of claim repudiation. Furthermore, the evidence presented indicates that DW6 was acting on information provided by the Life Assured at the time of filling out the proposal forms. DW6's testimony that the Life Assured informed him of an annual income of RM100,000 plus monthly earnings of RM8,000 from t-shirt sales for the first two policies, and a doubled income for the third policy, suggests that DW6 was not inserting his own information but rather working with figures provided by the Life Assured. The court also notes that the true extent of the Life Assured's income and business ownership was only discovered after the post-claim investigation, indicating that DW6 did not possess this knowledge at the time of policy formation. Therefore, the court concludes that the Defendant's right to repudiate the Insurance Policies based on misrepresentation is not negated by the principle of agent's knowledge being deemed the insurer's knowledge in this context. [135] In conclusion, I find that the Life Assured did make misrepresentations in the proposal forms regarding his occupation and income, and did not honestly and sincerely provide his personal information to the Defendant's agent. The evidence adduced by the Plaintiff is insufficient to prove that the Life Assured was indeed managing a transport business and earning the declared high annual income. Consequently, the Defendant is entitled to avoid the Insurance Policies and refuse all claims, as provided under Paragraph 15 of Schedule 9 of the Financial Services Act 2013, which allows the insurer to do so in cases of deliberate or reckless misrepresentation by the consumer. The Defendant waiving its right to rely on any alleged non-disclosure or misrepresentation by the Life Assured [136] The Plaintiff contended that the Defendant waived its right to rely on any non-disclosure or misrepresentation by the Life Assured, as it had sufficient knowledge of the Life Assured's personal and financial details before approving the Insurance Policies but failed to carry out due diligence or make proper inquiries, particularly regarding the significant increase in declared income for the third policy. She argued that this failure, along with the inconsistency in underwriting procedures between the 2016 and 2017 applications, and the actions and admissions of DW6, constituted a waiver of the Defendant's right to complain about non-disclosure. The Plaintiff relied on the evidence that the Defendant had requested proof of income for the Life Assured's 2016 proposal with a declared annual income of RM100,000 but did not do so for the 2017 proposals, despite the substantial increase in declared income to RM200,000 and RM400,000. She also pointed out that DW6 admitted to noticing the discrepancy in the annual income declared in the third policy but did nothing to inquire further or verify the information. The Plaintiff cited the Court of Appeal case of Balamoney Asoriah v MMIP Services Sdn Bhd [2020] 1 CLJ 476 and the High Court case of Chua Kheng Yik v Wong Zhen Yaik to argue that the Defendant waived its right to complain about non-disclosure by not conducting further verification of the Life Assured's information. [137] In response, the Defendant submitted that the principle of waiver in the cited in the case of Balamoney v MMIP Services and Chua Kheng Yik v Wong Zhen Yaik is distinguishable from the present case. It argued that the Life Assured's annual income, nature of business, and business name were specifically asked in the proposal forms, and the Defendant was entitled to rely on the principle of utmost good faith, as outlined in Tan Jing Jeong v Allianz Life Insurance Malaysia Berhad & Ors. The Defendant maintained that there is no legal authority supporting the Plaintif’s contention that an insurer cannot rely on information to repudiate a claim if no further investigation was made at the proposal stage. It emphasised that imposing such a duty on insurers would be contrary to the principle of utmost good faith and would place an unreasonable burden on it. [138] Having considered the evidence and submissions, I find that the Defendant did not waive its right to rely on the non-disclosure or misrepresentation by the Life Assured. The duty of utmost good faith, as affirmed in Tan Jing Jeong v Allianz Life Insurance Malaysia Berhad & Ors, applies to both the Life Assured and the Defendant. The court in Tan Jing Jeong held that “the insured must reveal the exact nature and potential of the risks that he transfers to the insurer, while at the same time the insurer must make sure that the potential contract fits the needs of, and benefits, the assured.” This mutual duty requires the Life Assured to provide accurate and honest answers to the questions in the proposal forms, and the Defendant was entitled to rely on the information provided without conducting extensive investigations at the proposal stage. [139] The cases cited by the Plaintiff, namely Balamoney v MMIP Services and Chua Kheng Yik v Wong Zhen Yaik, are distinguishable from the present case for several reasons. [140] The Balamoney case is distinguishable from the present case in several key aspects: a) Balamoney involved a motor insurance policy, which is a different type of insurance contract from the life insurance policies in the present case. The material facts and risk assessment for motor insurance differ significantly from those for life insurance. b) Balamoney dealt specifically with the renewal of an existing insurance policy, whereas the present case involves new policy applications. This distinction is crucial because the duties of disclosure and the application of the doctrine of waiver may differ between renewals and new applications. c) In Balamoney, the Court of Appeal emphasised that the insurer did not ask any specific questions when renewing the policy. As stated in paragraph 37 of the judgment: “Where the insurer does not undertake the exercise of posing questions when considering whether or not to assume risks and enter the contract of insurance with the consumer, the insurer is deemed to have waived the right to complain that there has been a failure of disclosure – sub-para. 5(5).” d) In contrast, in the present case, the Defendant specifically asked for the Life Assured's annual income, nature of business, and business name in the proposal forms for all three Insurance Policies. e) The Balamoney case applied Paragraph 5 of