KURNIA INSURANS (MALAYSIA) BHD vs SOON CHEE TEONG & SOON CHEF TEONG (MJLR2009a23) Abu Backer,SS
Civ-App-No.12-13-2008
1
5 MALAYSIA
IN THE HIGH COURT IN SABAH AND SARAWAK AT SIBU
CIVIL APPEAL NO. 12-13 OF 2008
BETWEEN
10
KURNIA INSURANS (MALAYSIA) BHD
Menara Kurnia
No 9, Jalan PJS 8/9
46150 Petaling Jaya
15 Selangor Darul Ehsan …Appellants
AND
SOON CHEE TEONG (BICK.629344)
No 3, Long Bridge Road (Back Portion)
20 96000 Sibu
Sarawak …1st Respondent
LILY SOON AI LEE (BICK.719453)
No. 12, Long Bridge, Jalan Lanang
96000 Sibu, Sarawak …2nd 25 Respondent
(IN THE MATTER of Sibu Sessions Court Summons No.SB-52-211-2005)
BETWEEN
30
KURNIA INSURANS (MALAYSIA) BHD
Menara Kurnia
No9, Jalan PJS 8/9
35 40150 Petaling Jaya
Selangor Darul Ehsan …Plaintiffs
AND
40
Civ-App-No.12-13-2008
2
SOON CHEF TEONG 5 (BICK.629344)
No 3, Long Bridge Road (Back Portion)
96000 Sibu, Sarawak …1st Defendant
10 LILY SOON Al LEE (BICK.719453)
No I2, Long Bridge, Jalan Lanang
96000 Sibu
Sarawak …2nd Defendant
15
BEFORE THE HONOURABLE JUDICIAL COMMISSIONER
Y.A. DR. HAJI HAMID SULTAN BIN ABU BACKER
20 OPEN COURT
JUDGMENT
This is my judgment in respect of the appellants’ appeal against the
decision of the learned sessions judge, for refusing to allow the appellants’
25 claim pursuant to an insurance agency agreement for an outstanding
premium of RM184,906.93 against them.
Brief Facts
1. (i) The plaintiffs and the 1st 30 defendant entered into an Agency
Agreement dated 15.4.1993 whereby the Plaintiffs had appointed the
1st Defendant as its Agent to do the insurance business on behalf of
the Plaintiffs subject to the terms and conditions set out in the Agency
Agreement. (ii) Pursuant to the Agency Agreement, the 1st defendant
35 shall collect all premiums in respect of the insurance business
transacted. (iii) The 1st defendant as agent for the plaintiffs had
entered the insurance business on behalf of the plaintiffs and
Civ-App-No.12-13-2008
3
collected the gross premiums from the insureds. 5 All the insurance
policies and cover notes in relation to the same had been issued and
delivered to the insureds by the Plaintiffs through the 1st defendant.
The plaintiffs say that, despite the collection of the gross premiums,
the 1st defendant had defaulted in paying the net premiums (after
10 deductions of his commissions) to the plaintiffs and as at 15.7.2005, a
sum of RM184,906.93 being the outstanding net premium, is due and
payable by the 1st defendant to the plaintiffs.
The respondents say that all the premiums due and owing in law has
15 been paid, and the appellants inter alia submit as follows:
“From the Statement of Agreed Facts (PBA4), the respondents had
admitted receiving the said sum of RM184,906.93 from the
insureds and also admitted the said sum being the amount
outstanding due to the appellant. What is left for determination is on
20 the questions of whether there was any additional commission paid
and whether the respondents are liable to pay the sum of
RM184,906.93 if no additional commission paid. This is because
the respondents are arguing that although the said sum of RM
184,906.93 was due to the appellant, the respondents are not liable
25 to pay back the said sum because the appellant did not pay an
additional commission to the 1st respondent. The appellant on the
other hand argues that there were additional commission payments
made to the 1st respondent and alternatively even if no additional
commission payments were made, the respondents are still liable
30 because the said sum of RM184,906.93 had been admitted to have
been received by the 1st respondent from the insureds.”
2. I have read the appeal record and the submission of the parties in
detail. From reading the lengthy and prolix memorandum of appeal, it
35 is clear that the complaint of the appellants is relating to finding of
facts. It is trite that appellate courts will not ordinarily disturb the
finding of facts. I have read the judgment of the learned sessions
judge, who had meticulously dealt with the relevant issues and given
Civ-App-No.12-13-2008
4
reasons for the judgment. I take the view that the 5 appellants’ claim
must be dismissed. My reasons are as follows:
(a) Under the terms of the agreement, it was inter alia agreed as
follows:
“(i) the 1st Defendant shall collect all premiums in respect of
10 insurance business within the stipulated time in the agency
agreement. (ii) the 1st Defendant shall be personally liable to the
Plaintiff for the payment of premiums in respect of all insurance
business transacted by the 1st Defendant whether or not such
premium has been collected or recovered by the 1st Defendant. (iii)
the 1st 15 Defendant shall pay direct to the Plaintiff or into a bank
account opened by and designated in the name of the Plaintiff all
premiums and other sums collected on behalf of the Plaintiff (in
gross before deducting any commissions but excluding any
permitted discounts to the insured ) within seven (7 ) working days
20 from date of receipt of the said premiums and /or other sums' of
money, failing which in addition to having the agency agreement
terminated, he shall pay interest on such premium or other sum
form the expiry of seven ( 7) working days until date of payment at
the rate of 8% per centum per annum.”
25
By reading para (c) of the above, it is difficult to fathom how the
appellants can have any claim for premium in a lump sum and
without proof that there was a breach at various dates, as the
premium is due and owing within seven working days from the
30 date of the receipt of the premium. Further, as a general rule
insurance law requires the insurer to receive cash before
coverage and in consequence it is difficult for a moment to
fathom how the claim could have arisen. In consequence, it
gives more credence to the respondents’ version.
35 (b) Further, the insurance law requires the appellants to diligently
claim the premium and not to assume risk without receiving
premium. If there is such a breach, then the guarantor will be
Civ-App-No.12-13-2008
5
relieved from liability, pursuant to various 5 provisions of the
Contract Act 1950.
3. For reasons stated above, I dismiss the appellants’ appeal with costs.
The getting up fees shall not exceed RM10,000.00. If costs cannot
be agreed, the respondents are at liberty to tax the costs.
10
I hereby order so.
15 SGD
(Y.A. DR. HAJI HAMID SULTAN BIN ABU BACKER)
Judicial Commissioner
High Court
Sibu.
20
Date: 10th February 2009
For the Appellants/Plaintiffs:
25 Messrs. Stephen Robert & Wong Advocates
47 & 49, 2nd Floor
Kampung Nyabor Road
96000 Sibu, Sarawak
30 For the Respondents/Defendants:
Messrs. Liong & Co, Advocates
No. 6B, 1st Floor
Jalan Kampong Dato
96000 Sibu
1
5 MALAYSIA
IN THE HIGH COURT IN SABAH AND SARAWAK AT SIBU
CIVIL APPEAL NO. 12-13 OF 2008
BETWEEN
10
KURNIA INSURANS (MALAYSIA) BHD
Menara Kurnia
No 9, Jalan PJS 8/9
46150 Petaling Jaya
15 Selangor Darul Ehsan …Appellants
AND
SOON CHEE TEONG (BICK.629344)
No 3, Long Bridge Road (Back Portion)
20 96000 Sibu
Sarawak …1st Respondent
LILY SOON AI LEE (BICK.719453)
No. 12, Long Bridge, Jalan Lanang
96000 Sibu, Sarawak …2nd 25 Respondent
(IN THE MATTER of Sibu Sessions Court Summons No.SB-52-211-2005)
BETWEEN
30
KURNIA INSURANS (MALAYSIA) BHD
Menara Kurnia
No9, Jalan PJS 8/9
35 40150 Petaling Jaya
Selangor Darul Ehsan …Plaintiffs
AND
40
Civ-App-No.12-13-2008
2
SOON CHEF TEONG 5 (BICK.629344)
No 3, Long Bridge Road (Back Portion)
96000 Sibu, Sarawak …1st Defendant
10 LILY SOON Al LEE (BICK.719453)
No I2, Long Bridge, Jalan Lanang
96000 Sibu
Sarawak …2nd Defendant
15
BEFORE THE HONOURABLE JUDICIAL COMMISSIONER
Y.A. DR. HAJI HAMID SULTAN BIN ABU BACKER
20 OPEN COURT
JUDGMENT
This is my judgment in respect of the appellants’ appeal against the
decision of the learned sessions judge, for refusing to allow the appellants’
25 claim pursuant to an insurance agency agreement for an outstanding
premium of RM184,906.93 against them.
Brief Facts
1. (i) The plaintiffs and the 1st 30 defendant entered into an Agency
Agreement dated 15.4.1993 whereby the Plaintiffs had appointed the
1st Defendant as its Agent to do the insurance business on behalf of
the Plaintiffs subject to the terms and conditions set out in the Agency
Agreement. (ii) Pursuant to the Agency Agreement, the 1st defendant
35 shall collect all premiums in respect of the insurance business
transacted. (iii) The 1st defendant as agent for the plaintiffs had
entered the insurance business on behalf of the plaintiffs and
Civ-App-No.12-13-2008
3
collected the gross premiums from the insureds. 5 All the insurance
policies and cover notes in relation to the same had been issued and
delivered to the insureds by the Plaintiffs through the 1st defendant.
The plaintiffs say that, despite the collection of the gross premiums,
the 1st defendant had defaulted in paying the net premiums (after
10 deductions of his commissions) to the plaintiffs and as at 15.7.2005, a
sum of RM184,906.93 being the outstanding net premium, is due and
payable by the 1st defendant to the plaintiffs.
The respondents say that all the premiums due and owing in law has
15 been paid, and the appellants inter alia submit as follows:
“From the Statement of Agreed Facts (PBA4), the respondents had
admitted receiving the said sum of RM184,906.93 from the
insureds and also admitted the said sum being the amount
outstanding due to the appellant. What is left for determination is on
20 the questions of whether there was any additional commission paid
and whether the respondents are liable to pay the sum of
RM184,906.93 if no additional commission paid. This is because
the respondents are arguing that although the said sum of RM
184,906.93 was due to the appellant, the respondents are not liable
25 to pay back the said sum because the appellant did not pay an
additional commission to the 1st respondent. The appellant on the
other hand argues that there were additional commission payments
made to the 1st respondent and alternatively even if no additional
commission payments were made, the respondents are still liable
30 because the said sum of RM184,906.93 had been admitted to have
been received by the 1st respondent from the insureds.”
2. I have read the appeal record and the submission of the parties in
detail. From reading the lengthy and prolix memorandum of appeal, it
35 is clear that the complaint of the appellants is relating to finding of
facts. It is trite that appellate courts will not ordinarily disturb the
finding of facts. I have read the judgment of the learned sessions
judge, who had meticulously dealt with the relevant issues and given
Civ-App-No.12-13-2008
4
reasons for the judgment. I take the view that the 5 appellants’ claim
must be dismissed. My reasons are as follows:
(a) Under the terms of the agreement, it was inter alia agreed as
follows:
“(i) the 1st Defendant shall collect all premiums in respect of
10 insurance business within the stipulated time in the agency
agreement. (ii) the 1st Defendant shall be personally liable to the
Plaintiff for the payment of premiums in respect of all insurance
business transacted by the 1st Defendant whether or not such
premium has been collected or recovered by the 1st Defendant. (iii)
the 1st 15 Defendant shall pay direct to the Plaintiff or into a bank
account opened by and designated in the name of the Plaintiff all
premiums and other sums collected on behalf of the Plaintiff (in
gross before deducting any commissions but excluding any
permitted discounts to the insured ) within seven (7 ) working days
20 from date of receipt of the said premiums and /or other sums' of
money, failing which in addition to having the agency agreement
terminated, he shall pay interest on such premium or other sum
form the expiry of seven ( 7) working days until date of payment at
the rate of 8% per centum per annum.”
25
By reading para (c) of the above, it is difficult to fathom how the
appellants can have any claim for premium in a lump sum and
without proof that there was a breach at various dates, as the
premium is due and owing within seven working days from the
30 date of the receipt of the premium. Further, as a general rule
insurance law requires the insurer to receive cash before
coverage and in consequence it is difficult for a moment to
fathom how the claim could have arisen. In consequence, it
gives more credence to the respondents’ version.
35 (b) Further, the insurance law requires the appellants to diligently
claim the premium and not to assume risk without receiving
premium. If there is such a breach, then the guarantor will be
Civ-App-No.12-13-2008
5
relieved from liability, pursuant to various 5 provisions of the
Contract Act 1950.
3. For reasons stated above, I dismiss the appellants’ appeal with costs.
The getting up fees shall not exceed RM10,000.00. If costs cannot
be agreed, the respondents are at liberty to tax the costs.
10
I hereby order so.
15 SGD
(Y.A. DR. HAJI HAMID SULTAN BIN ABU BACKER)
Judicial Commissioner
High Court
Sibu.
20
Date: 10th February 2009
For the Appellants/Plaintiffs:
25 Messrs. Stephen Robert & Wong Advocates
47 & 49, 2nd Floor
Kampung Nyabor Road
96000 Sibu, Sarawak
30 For the Respondents/Defendants:
Messrs. Liong & Co, Advocates
No. 6B, 1st Floor
Jalan Kampong Dato
96000 Sibu
