AXA AFFIN GENERAL INSURANCE BHD vs MITSUI SUMITOMO INSURANCE (MALAYSIA) BHD (MJLR2009a15) Tengku Maimun,Malaya
Alasan Penghakiman No: D3-22-263-2007
1
DALAM MAHKAMAH TINGGI MALAYA DI KUALA LUMPUR
(BAHAGIAN DAGANG)
GUAMAN NO: D3-22-263-2007
ANTARA
AXA AFFIN GENERAL INSURANCE BHD … PLAINTIF
DAN
MITSUI SUMITOMO INSURANCE (MALAYSIA BHD) … DEFENDAN
ALASAN PENGHAKIMAN
OLEH YANG ARIF HAKIM
DATO’ TENGKU MAIMUN BINTI TUAN MAT
Alasan Penghakiman No: D3-22-263-2007
2
The plaintiff insured the entire Diethelm and its associated
companies under a Marine Open Cover Policy. The policy is for any
loss or damage to Diethelm’s goods being shipped as an
export/import from any ports/airports and/or places in the world from
warehouse to warehouse and also for all inland transit and
transportation from any of Diethelm’s premises to
customers/principals/dealers/stockists and/or ports/airports and vice
versa within Malaysia, Singapore, Brunei and Thailand. The policy
covers the period of 1.1.2005 until 31.12.2005.
Diethelm had a written transport and delivery agreement with
Tomatrans (M) Sdn Bhd for the transportation of the goods
belonging to Diethelm in the southern zones of West Malaysia.
Tomatrans had taken out a Marine Cargo Insurance Policy with the
defendant. The insured under the defendant’s policy is Tomatrans
and the nominated sub-contractors and the interest insured are
“Goods Held in Trust”. The territorial limit of the policy was within
Peninsular Malaysia and Singapore and the period of insurance was
from 18.3.2005 to 17.3.2006.
As a result of two cases of theft and hijack of two lorries
belonging to Tomatrans in Johor on 14.9.2005 and 11.10.2005
respectively, Diethelm made two claims to the plaintiff. After being
verified by Crawford & Company Adjusters (Malaysia) Sdn Bhd, the
plaintiff paid Diethelm the amounts of RM372,852.01 and
RM158,454.59 respectively. The plaintiff is now claiming for
contribution against the defendant for the sum of RM254,162.65.
Alasan Penghakiman No: D3-22-263-2007
3
Miss Wo Yoke Fong (PW1) gave evidence that in the course
of the investigation, the plaintiff found out that the policy taken out
by Tomatrans was for the interest of the cargo owners of goods held
in trust and the policy covers the period of Diethelm’s loss; that
there was double insurance on the goods; that the policies issued
by the plaintiff and the defendant both covered the same goods; that
the goods belonged to Diethelm; that both policies insure the same
rights and interest in the damaged or lost property as both policies
are all risks policies; and that a right of contribution exists in law.
PW1 had also explained how the figure claimed for contribution was
arrived at.
The defendant did not lead any evidence but its pleaded case
is as follows:-
“3. Defendan mempunyai polisi insuran untuk Tomatrans (M)
Sdn Bhd (selepas ini dirujuk sebagai “Tomatrans”) untuk
perlindungan barangan yang dipegang di bawah amanah
untuk barangan pelanggan Tomatrans yang meminta
perlindungan insurans.
5. Tomatrans tidak mengeluarkan perlindungan insurans
untuk Diethelm Logistic Services Sdn Bhd (selepas ini
dirujuk sebagai “Diethelm”).
Butir-butir
Diethelm telah memberitahu Tomatrans bahawa Diethelm
tidak memerlukan perlindungan insurans daripada
Tomatrans. Diethelm melalui surat-surat bertarikh 19hb
Alasan Penghakiman No: D3-22-263-2007
4
Mei 2004 dan 30 Julai 2004 memaklumkan kepada
Tomatrans bahawa Diethelm mempunyai insurans goods
in transit sendiri dan Diethelm tidak akan membuat
tuntutan gantirugi terhadap Tomatrans.”
The letters referred to in the statement of defence are
reproduced below. The letter dated 19.5.2004 from Diethelm to
Tomatrans states:-
“In regards to your enquiry on insurance coverage under taken by
DLS, we have insurance for “Goods in Transit” of which we have
a group wide coverage.
As is stated in our contract under 8/liability, DLS reserve the right
to recover any loss etc from our carriers.
We carry our own insurance cover, we would determine on a
case to case basis any claim. Should we take a claim under our
insurance, there would not be any claim for re-imbursement,
against you (resulting in double claim).”
Diethelm again wrote to Tomatrans vide a letter dated
30.7.2004 which reads:-
“In regards to your enquiry on insurance coverage under taken by
DLS, we have insurance for “Good in Transit” of which we have a
group wide coverage.
As stated in our contract under clause 8/liability, DLS reserve the
right to recover any loss etc. from our carrier.
Alasan Penghakiman No: D3-22-263-2007
5
In event of loss resulting from all accident or hijack of our carrier’s
lorries, subjected to a report made to the police and its
subsequent investigation. DLS agreed the loss would be covered
by our own insurance coverage and there would be no
subsequent claim against you.”
In cross examination PW1 agreed that the letters stated that if
Diethelm claimed from the plaintiff under their own policy, then the
plaintiff would not be claiming against Tomatrans. It was put to PW1
in cross examination that from the two letters, there was no need for
Tomatrans to take up insurance cover for and on behalf of Diethelm
because Diethelm has their own coverage, to which PW1
disagreed. PW1 however agreed that Diethelm was not named in
the defendant’s policy and that the defendant’s policy is more
limited in scope as compared to the plaintiff’s policy.
Learned counsel for the plaintiff argued that the above letters
do not support the defendant’s case that Tomatrans had not taken
out insurance on behalf of Diethelm. As a matter of fact, learned
counsel submitted that only Tomatrans would know if they are
taking out insurance and on whose behalf. This, argued learned
counsel, is a question of fact and not construction. Since the
defendants failed to lead any evidence to show that these letters led
Tomatrans to exclude Diethelm from the scope of the cover or that
Tomatrans never intended to cover Diethelm in their policy, learned
counsel contended that the defence must fail. It was also the
submission of learned counsel that the two letters is not relevant to
Alasan Penghakiman No: D3-22-263-2007
6
the plaintiff’s claim for contribution but would only be relevant if the
plaintiff is claiming under subrogation which is not the case here.
FINDING
The plaintiff’s case is founded on section 80 of the Marine
Insurance Act 1906 (UK) and under the general principles of
insurance law and equity which provides that a right of contribution
arise when there is double insurance.
The real issue to be determined, as submitted by learned
counsel for the plaintiff is whether as a matter of law, the plaintiff is
entitled to seek contribution from the defendant. Before the court
decides on this issue, the court has to first decide whether there is
double insurance. A double insurance situation will arise when a
person insures a particular risk with two or more insurers. There
cannot be double insurance unless there exists another contract of
insurance and the same insured is covered in respect of the same
property against the same risk (see Principles of Insurance Law
Fifth Edition by Poh Chu Chai).
The insured under the plaintiff’s insurance is Diethelm and the
insured under the defendant’s policy is Tomatrans and its
nominated sub-contractors. The subject matter of the plaintiff’s
policy is the goods of Diethelm. The subject matter of the
defendant’s policy is “the cargo owners”. Diethelm’s goods are not
specifically stated in the defendant’s policy. By virtue of the
agreement between Diethelm and Tomatrans, Diethelm would be
Alasan Penghakiman No: D3-22-263-2007
7
one of the cargo owners. However, it is a fact that under the
agreement there is no obligation for Tomatrans to take out
insurance policy for Diethelm and it is also a fact that Diethelm had
informed Tomatrans that Diethelm had their own “group wide
coverage” and that Diethelm would be covered by their own
insurance coverage.
PW1 said that Tomatrans took out insurance to cover the
interest of Diethelm. Her testimony is premised on the wordings of
the defendant’s policy which states that it covers the interest of
cargo owners. Whilst it cannot be disputed from the wordings that
Tomatrans took out insurance for and on behalf of cargo owners, I
am of the view that the wording itself is insufficient to prove the fact
that Tomatrans had taken out insurance for Diethelm. By merely
relying on the words “cargo owners” I am not able to accept that
Tomatrans had taken out insurance to cater for the interest of
Diethelm in the light of the agreement and the two letters referred to
above. And I do not think that the relevancy of the letters depended
on whether the plaintiff’s claim is one of contribution or subrogation.
What matters is the letters made it clear that it was not intended by
Diethelm that they would be making insurance claim against
Tomatrans for the goods in transit. Since the letters expressly state
that Diethelm had their own insurance coverage and Diethelm
would not be making any claims from Tomatrans, it is only
reasonable to conclude that there was no need for Tomatrans to
take out insurance for Diethelm. In that regard I find that the letters
do support the defence.
Alasan Penghakiman No: D3-22-263-2007
8
Even assuming that Tomatrans has effected an insurance
upon the interest of Diethelm from the mere words of “cargo
owners”, there was no evidence that Diethelm has given its
authority or has elected to adopt the insurance. The letters do not
signify the authorization or ratification by Diethelm.
MacGillivray & Parkington on Insurance Law Eighth Edition
states at paragraph 1715:-
“If an insurance is effected in the name of or upon the interest of a
third party without his authority, such person has the option of
adopting the insurance retrospectively so as to constitute a
double insurance from the time it was effected but if he does not
elect to adopt the insurance it cannot be treated as a double
insurance by the other insurers.”
Further, although both the plaintiff’s and the defendant’s
policies are expressed to be Marine Cargo Policies, they are in fact
different in scope. The condition of cover under the defendant’s
policy is only by land conveyance whereas under the plaintiff’s
policy, the terms and conditions of cover are by air, by sea and
inland transit. In respect of the inland transit, the plaintiff’s policy
covers Malaysia, Singapore, Brunei and Thailand and although the
defendant’s policy covers Peninsular Malaysia and Singapore it
must be noted that the agreement between Diethelm and
Tomatrans is only for the southern zones of West Malaysia. Hence,
Tomatrans would not be transporting Diethelm’s goods to Singapore
and to the other places in West Malaysia. In that regard the
Alasan Penghakiman No: D3-22-263-2007
9
defendant’s insurance policy could not be said to be taken out by
Tomatrans for Diethelm.
Looking at the wordings of both policies I find that the
plaintiff’s policy and the defendant’s policy are different in scope and
interests insured although it is apparent that they do overlap. But
the fact that there is an incidental or some overlap between two
insurance policies taken out by an insured will not by itself constitute
double insurance. (Principles of Insurance Law, supra, at pg 805).
Having regard to the oral testimony and the documentary
evidence in totality I find that the plaintiff has not proven the fact that
there was another insurance policy such that Diethlem is to receive
two sums for having two insurances instead of one. Until and
unless the plaintiff has discharged the onus to prove its case, the
burden does not shift to the defendant. Therefore it does not matter
that the defendant has not led any evidence. And since it has not
been shown that there was double insurance, the issue of
contribution does not arise. The plaintiff’s claim is accordingly
dismissed with costs.
(DATO’ TENGKU MAIMUN BINTI TUAN MAT)
HAKIM
MAHKAMAH TINGGI MALAYA
BAHAGIAN DAGANG
KUALA LUMPUR.
Dated 10th July 2009
Alasan Penghakiman No: D3-22-263-2007
10
Encik Arun Krishnalingam bagi pihak plaintif
Tetuan Sativale Mathew Arun
Peguambela dan Peguamcara
6, Jalan SS 15/8B
47500 Subang Jaya.
Encik Philip Teoh bagi pihak defendan
Tetuan Philip Teoh & Co
Peguambela dan Peguamcara
Unit 3-3, The Place
No. 1, Jalan PJU 8/5G
Bandar Damansara Perdana
47820 Petaling Jaya.
1
DALAM MAHKAMAH TINGGI MALAYA DI KUALA LUMPUR
(BAHAGIAN DAGANG)
GUAMAN NO: D3-22-263-2007
ANTARA
AXA AFFIN GENERAL INSURANCE BHD … PLAINTIF
DAN
MITSUI SUMITOMO INSURANCE (MALAYSIA BHD) … DEFENDAN
ALASAN PENGHAKIMAN
OLEH YANG ARIF HAKIM
DATO’ TENGKU MAIMUN BINTI TUAN MAT
Alasan Penghakiman No: D3-22-263-2007
2
The plaintiff insured the entire Diethelm and its associated
companies under a Marine Open Cover Policy. The policy is for any
loss or damage to Diethelm’s goods being shipped as an
export/import from any ports/airports and/or places in the world from
warehouse to warehouse and also for all inland transit and
transportation from any of Diethelm’s premises to
customers/principals/dealers/stockists and/or ports/airports and vice
versa within Malaysia, Singapore, Brunei and Thailand. The policy
covers the period of 1.1.2005 until 31.12.2005.
Diethelm had a written transport and delivery agreement with
Tomatrans (M) Sdn Bhd for the transportation of the goods
belonging to Diethelm in the southern zones of West Malaysia.
Tomatrans had taken out a Marine Cargo Insurance Policy with the
defendant. The insured under the defendant’s policy is Tomatrans
and the nominated sub-contractors and the interest insured are
“Goods Held in Trust”. The territorial limit of the policy was within
Peninsular Malaysia and Singapore and the period of insurance was
from 18.3.2005 to 17.3.2006.
As a result of two cases of theft and hijack of two lorries
belonging to Tomatrans in Johor on 14.9.2005 and 11.10.2005
respectively, Diethelm made two claims to the plaintiff. After being
verified by Crawford & Company Adjusters (Malaysia) Sdn Bhd, the
plaintiff paid Diethelm the amounts of RM372,852.01 and
RM158,454.59 respectively. The plaintiff is now claiming for
contribution against the defendant for the sum of RM254,162.65.
Alasan Penghakiman No: D3-22-263-2007
3
Miss Wo Yoke Fong (PW1) gave evidence that in the course
of the investigation, the plaintiff found out that the policy taken out
by Tomatrans was for the interest of the cargo owners of goods held
in trust and the policy covers the period of Diethelm’s loss; that
there was double insurance on the goods; that the policies issued
by the plaintiff and the defendant both covered the same goods; that
the goods belonged to Diethelm; that both policies insure the same
rights and interest in the damaged or lost property as both policies
are all risks policies; and that a right of contribution exists in law.
PW1 had also explained how the figure claimed for contribution was
arrived at.
The defendant did not lead any evidence but its pleaded case
is as follows:-
“3. Defendan mempunyai polisi insuran untuk Tomatrans (M)
Sdn Bhd (selepas ini dirujuk sebagai “Tomatrans”) untuk
perlindungan barangan yang dipegang di bawah amanah
untuk barangan pelanggan Tomatrans yang meminta
perlindungan insurans.
5. Tomatrans tidak mengeluarkan perlindungan insurans
untuk Diethelm Logistic Services Sdn Bhd (selepas ini
dirujuk sebagai “Diethelm”).
Butir-butir
Diethelm telah memberitahu Tomatrans bahawa Diethelm
tidak memerlukan perlindungan insurans daripada
Tomatrans. Diethelm melalui surat-surat bertarikh 19hb
Alasan Penghakiman No: D3-22-263-2007
4
Mei 2004 dan 30 Julai 2004 memaklumkan kepada
Tomatrans bahawa Diethelm mempunyai insurans goods
in transit sendiri dan Diethelm tidak akan membuat
tuntutan gantirugi terhadap Tomatrans.”
The letters referred to in the statement of defence are
reproduced below. The letter dated 19.5.2004 from Diethelm to
Tomatrans states:-
“In regards to your enquiry on insurance coverage under taken by
DLS, we have insurance for “Goods in Transit” of which we have
a group wide coverage.
As is stated in our contract under 8/liability, DLS reserve the right
to recover any loss etc from our carriers.
We carry our own insurance cover, we would determine on a
case to case basis any claim. Should we take a claim under our
insurance, there would not be any claim for re-imbursement,
against you (resulting in double claim).”
Diethelm again wrote to Tomatrans vide a letter dated
30.7.2004 which reads:-
“In regards to your enquiry on insurance coverage under taken by
DLS, we have insurance for “Good in Transit” of which we have a
group wide coverage.
As stated in our contract under clause 8/liability, DLS reserve the
right to recover any loss etc. from our carrier.
Alasan Penghakiman No: D3-22-263-2007
5
In event of loss resulting from all accident or hijack of our carrier’s
lorries, subjected to a report made to the police and its
subsequent investigation. DLS agreed the loss would be covered
by our own insurance coverage and there would be no
subsequent claim against you.”
In cross examination PW1 agreed that the letters stated that if
Diethelm claimed from the plaintiff under their own policy, then the
plaintiff would not be claiming against Tomatrans. It was put to PW1
in cross examination that from the two letters, there was no need for
Tomatrans to take up insurance cover for and on behalf of Diethelm
because Diethelm has their own coverage, to which PW1
disagreed. PW1 however agreed that Diethelm was not named in
the defendant’s policy and that the defendant’s policy is more
limited in scope as compared to the plaintiff’s policy.
Learned counsel for the plaintiff argued that the above letters
do not support the defendant’s case that Tomatrans had not taken
out insurance on behalf of Diethelm. As a matter of fact, learned
counsel submitted that only Tomatrans would know if they are
taking out insurance and on whose behalf. This, argued learned
counsel, is a question of fact and not construction. Since the
defendants failed to lead any evidence to show that these letters led
Tomatrans to exclude Diethelm from the scope of the cover or that
Tomatrans never intended to cover Diethelm in their policy, learned
counsel contended that the defence must fail. It was also the
submission of learned counsel that the two letters is not relevant to
Alasan Penghakiman No: D3-22-263-2007
6
the plaintiff’s claim for contribution but would only be relevant if the
plaintiff is claiming under subrogation which is not the case here.
FINDING
The plaintiff’s case is founded on section 80 of the Marine
Insurance Act 1906 (UK) and under the general principles of
insurance law and equity which provides that a right of contribution
arise when there is double insurance.
The real issue to be determined, as submitted by learned
counsel for the plaintiff is whether as a matter of law, the plaintiff is
entitled to seek contribution from the defendant. Before the court
decides on this issue, the court has to first decide whether there is
double insurance. A double insurance situation will arise when a
person insures a particular risk with two or more insurers. There
cannot be double insurance unless there exists another contract of
insurance and the same insured is covered in respect of the same
property against the same risk (see Principles of Insurance Law
Fifth Edition by Poh Chu Chai).
The insured under the plaintiff’s insurance is Diethelm and the
insured under the defendant’s policy is Tomatrans and its
nominated sub-contractors. The subject matter of the plaintiff’s
policy is the goods of Diethelm. The subject matter of the
defendant’s policy is “the cargo owners”. Diethelm’s goods are not
specifically stated in the defendant’s policy. By virtue of the
agreement between Diethelm and Tomatrans, Diethelm would be
Alasan Penghakiman No: D3-22-263-2007
7
one of the cargo owners. However, it is a fact that under the
agreement there is no obligation for Tomatrans to take out
insurance policy for Diethelm and it is also a fact that Diethelm had
informed Tomatrans that Diethelm had their own “group wide
coverage” and that Diethelm would be covered by their own
insurance coverage.
PW1 said that Tomatrans took out insurance to cover the
interest of Diethelm. Her testimony is premised on the wordings of
the defendant’s policy which states that it covers the interest of
cargo owners. Whilst it cannot be disputed from the wordings that
Tomatrans took out insurance for and on behalf of cargo owners, I
am of the view that the wording itself is insufficient to prove the fact
that Tomatrans had taken out insurance for Diethelm. By merely
relying on the words “cargo owners” I am not able to accept that
Tomatrans had taken out insurance to cater for the interest of
Diethelm in the light of the agreement and the two letters referred to
above. And I do not think that the relevancy of the letters depended
on whether the plaintiff’s claim is one of contribution or subrogation.
What matters is the letters made it clear that it was not intended by
Diethelm that they would be making insurance claim against
Tomatrans for the goods in transit. Since the letters expressly state
that Diethelm had their own insurance coverage and Diethelm
would not be making any claims from Tomatrans, it is only
reasonable to conclude that there was no need for Tomatrans to
take out insurance for Diethelm. In that regard I find that the letters
do support the defence.
Alasan Penghakiman No: D3-22-263-2007
8
Even assuming that Tomatrans has effected an insurance
upon the interest of Diethelm from the mere words of “cargo
owners”, there was no evidence that Diethelm has given its
authority or has elected to adopt the insurance. The letters do not
signify the authorization or ratification by Diethelm.
MacGillivray & Parkington on Insurance Law Eighth Edition
states at paragraph 1715:-
“If an insurance is effected in the name of or upon the interest of a
third party without his authority, such person has the option of
adopting the insurance retrospectively so as to constitute a
double insurance from the time it was effected but if he does not
elect to adopt the insurance it cannot be treated as a double
insurance by the other insurers.”
Further, although both the plaintiff’s and the defendant’s
policies are expressed to be Marine Cargo Policies, they are in fact
different in scope. The condition of cover under the defendant’s
policy is only by land conveyance whereas under the plaintiff’s
policy, the terms and conditions of cover are by air, by sea and
inland transit. In respect of the inland transit, the plaintiff’s policy
covers Malaysia, Singapore, Brunei and Thailand and although the
defendant’s policy covers Peninsular Malaysia and Singapore it
must be noted that the agreement between Diethelm and
Tomatrans is only for the southern zones of West Malaysia. Hence,
Tomatrans would not be transporting Diethelm’s goods to Singapore
and to the other places in West Malaysia. In that regard the
Alasan Penghakiman No: D3-22-263-2007
9
defendant’s insurance policy could not be said to be taken out by
Tomatrans for Diethelm.
Looking at the wordings of both policies I find that the
plaintiff’s policy and the defendant’s policy are different in scope and
interests insured although it is apparent that they do overlap. But
the fact that there is an incidental or some overlap between two
insurance policies taken out by an insured will not by itself constitute
double insurance. (Principles of Insurance Law, supra, at pg 805).
Having regard to the oral testimony and the documentary
evidence in totality I find that the plaintiff has not proven the fact that
there was another insurance policy such that Diethlem is to receive
two sums for having two insurances instead of one. Until and
unless the plaintiff has discharged the onus to prove its case, the
burden does not shift to the defendant. Therefore it does not matter
that the defendant has not led any evidence. And since it has not
been shown that there was double insurance, the issue of
contribution does not arise. The plaintiff’s claim is accordingly
dismissed with costs.
(DATO’ TENGKU MAIMUN BINTI TUAN MAT)
HAKIM
MAHKAMAH TINGGI MALAYA
BAHAGIAN DAGANG
KUALA LUMPUR.
Dated 10th July 2009
Alasan Penghakiman No: D3-22-263-2007
10
Encik Arun Krishnalingam bagi pihak plaintif
Tetuan Sativale Mathew Arun
Peguambela dan Peguamcara
6, Jalan SS 15/8B
47500 Subang Jaya.
Encik Philip Teoh bagi pihak defendan
Tetuan Philip Teoh & Co
Peguambela dan Peguamcara
Unit 3-3, The Place
No. 1, Jalan PJU 8/5G
Bandar Damansara Perdana
47820 Petaling Jaya.
