TANG LOON PAU & ORS v MOHD SALIHIN KOTNI & ANOR [2023] 8 CLJ 105

COURT OF APPEAL

Motor Insurance – Liability of insurer – insured motorcar proven not involved in accident

1.       On 2 September 2015, a motor vehicle accident occurred at Jalan Klang – Teluk Intan which involved the first Plaintiff (“P1”) who was the rider of the motorcycle with his wife (“the deceased”) who was the pillion. A motorcar belonged to the first Defendant (“D1”) was also claimed to be involved in the said accident.

2.       At the outset, D1 was the only Defendant in the lawsuit. However, Pacific & Orient Insurance Co who is the insurer of D1’s motorcar intervened and was subsequently added as co-defendant (“D2”) in the suit.

3.       P1 and all the dependants of the deceased (“the Plaintiffs”) had claimed for general damages, damages for bereavement and special damages.

4.       Following a comprehensive trial, the Sessions Court Judge (“SCJ”) held the Defendants to be fully liable for the accident. The SCJ held that due to D2’s decision to assert that they had no case to answer, they had effectively abandoned their defence against the Plaintiffs’ claim. As a result, the Plaintiffs were awarded general damages totalling RM33,750.00, bereavement compensation amounting to RM10,000.00, and special damages valued at RM135,287.00.

5.       D2 made an appeal to the High Court whereas D1 did not appeal but remained a party to the proceedings at the High Court. It was held by the High Court that the SCJ had erred in finding that the Plaintiffs had proven its case on a balance of probabilities that D1’s motorcar was involved in the alleged accident. The pivotal point of the High Court’s decision was that the motorcar was not involved in the alleged accident hence the previous decision attributing 100% liability to the Defendants was set aside.

6.       Aggrieved by the decision of the High Court, the Plaintiffs filed an appeal to the Court of Appeal (“COA”).

Whether D2 as the insurer can challenge the findings of the accident when D1 as the insured himself did not appeal.

Whether D2 as the insurer can challenge the findings of the accident when D1 as the insured himself did not appeal.

1.       The Plaintiffs asserted that as long as the insured does not challenge the decision of the SCJ, the insurer cannot argue otherwise and is obligated to fulfil the judgment.

2.       The insurer’s liability to satisfy judgments against persons insured in respect of third party risks is governed under Section 96(1) of the Road Transport Act 1987 (“Act 333”). This provision stated that:

“(1) 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 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.”

3.       The Plaintiffs also contended that D2 is automatically under a liability to fulfil the judgment unless a declaration under Section 96(3) of the Act 333 was obtained. Section 96(3) of the Act 333 provides that-

“(3) No sum shall be payable by an insurer under subsection (1) 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 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 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.”

4.       However, the COA was on the view that If the Plaintiffs cannot prove on balance of probabilities that the insured motor vehicle was involved in the disputed accident, then the insurer will not be liable.

5.       The COA in the case of Jiwaneswary Raman v Etiqa General Takaful Bhd [2023] 2 MLJ 437 (CA) had discussed about the insurer’s right to intervene and safeguard their legal and commercial interests. It was emphasised in this case that-

6.       Therefore, the insurer being the real and substantial Defendant would be involved either in the name of the insured or in their own name as an intervener.

“An insurer does not have to take the Section 96(3) of the RTA route and that they could intervene in the running down action especially where they intend to show that the insured motor-vehicle was not involved in the accident and that there was collusion between the insured and the third party claimant.”

The judgment of the High Court is affirmed and the Appellant’s appeal dismissed.

1.       In a road traffic accident case, the claimant ie the Plaintiff must prove their case on the balance of probabilities to show that the Defendant was at fault or negligent.

2.       But it must be noted that when a case is concerned with the insurers, although the insurers were made directly liable to satisfy the insured, it is common for them to challenge the claim made against them as they were in actual fact defending their own pockets.

3.       Therefore, the driver involved in a road traffic accident case is only the nominal Defendant whereas the party injuriously affected by an award of damages is the insurer by and whose interest should be defended.

4.       However, in this present case it was found that the Plaintiffs had failed to prove on a balance of probabilities that the insured motorcar was involved in the accident hence the insurer is absolved of any liability under Section 96(1) of the Act 333.