Federal Court, Putrajaya
Richard Malanjum CJSS, Suriyadi Halim Omar, Ramly Ali, Aziah Ali, Prasad Sandosham Abraham FCJJ
[Civil Application No: 02(f)-28-05-2016 (W)]
12 July 2017

Insurance : Motor insurance - Insurer's liability to satisfy judgment - Motor insurance policy issued by Malaysian insurer did not cover passenger liability - Whether Malaysian insurer liable to satisfy judgment obtained by victim of accident involving Malaysian registered vehicle in Singapore pursuant to a Special Agreement

In this appeal, the following questions of law, inter alia, required determination: (ii) whether pursuant to a Special Agreement (together with its annexures), a Malaysian insurer was liable to satisfy a judgment obtained by a victim of an accident (in the instant case, one Zuraini) involving a Malaysian registered vehicle in Singapore, even though the Motor Insurance Policy issued by the Malaysian insurer did not cover passenger liability; (iii) if question (ii) was answered in the affirmative, whether under the Special Agreement (together with its annexures), the Malaysian insurer was entitled to seek indemnity against the authorised driver of the Malaysian registered vehicle that was involved in the accident in Singapore; and (vi) whether evidence of "detriment" was necessary before the doctrine of estoppel could be invoked to estop the insurer from denying or repudiating its liability under the insurance policy, in view of the decision of the Federal Court in Boustead Trading (1985) Sdn Bhd v. Arab-Malaysian Merchant Bank Berhad [1995] 1 MLRA 738; [1995] 3 MLJ 331; [1995] 4 CLJ 283; [1995] 3 AMR 2871.

Held (dismissing the appeal with costs):

(1) Based on the relevant principles of law, Zuraini would be unable to enforce the Consent Judgment she had obtained against the respondent, as the policy issued did not include cover for passenger liability and no liability would ensue. The extent to which an insurer under a Motor Insurance Policy would be liable under the said Policy was considered by the Privy Council when hearing an appeal from Malaysia in Bankers and Traders Insurance Company v. National Insurance Company Ltd [1985] 1 WLR 734 wherein their Lordships decided that an insurer could not be rendered liable in law for a liability which it had not agreed to insure under the terms of the Policy. If the liability was expressly excluded by the terms of the Policy the insurers were not liable. As such, Zuraini's only recourse, on the facts, was to rely on the Special Agreement and its terms, ie the agreement between the respective Insurance Companies including the respondent and the Singapore Motor Insurers Bureau. There was no question of the Special Agreement being interposed into the contract of Insurance and to find otherwise would also mean imposing liabilities on the respondent where no premiums were paid for by the insured. In the upshot, question (ii) would be answered in the negative. In the light of the above, there was no need to deal specifically with the rest of the questions posed. Question (vi), involved findings of fact. As the question of law was a settled one, this court declined to answer the same. (paras 11-13)

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