IN THE HIGH COURT AT KUALA LUMPUR (COMMERCIAL DIVISION)
SUMMONS NO. D-22NCC-92-2009
IFS CAPITAL (MALAYSIA) SDN BHD
(Company No: 736091-V) … PLAINTIFF
MSIG INSURANCE (MALAYSIA) BHD
(Company No: 46983-W) … DEFENDANT
BEFORE THE HONOURABLE JUDGE Y.A. DR. HAJI HAMID SULTAN BIN ABU BACKER
IN OPEN COURT
This is my judgment in respect of the plaintiff’s claim against the insurer for the sum of RM 339,435.89 with interest, costs, etc; relating to a Machinery Equipment Policy.
1. The plaintiff as owner of Thermo Oil Cooker hired to Soytech Food Sdn Bhd (hirer) and a policy of insurance was issued by the defendant. The hired goods were damaged and the hirer made a claim against the defendant for reinstatement works done and the defendant paid in full,
based on satisfactory evidence of repairer’s bill etc. This the plaintiff claims is in breach of the policy terms, as it was the owner and the payment ought to have been made to them directly and not to the hirer. The plaintiff asserts because of the defendant’s negligence the plaintiff has suffered loss and damage.
2. The defendant says (i) the plaintiff till date has not made a formal claim pursuant to policy terms (ii) the hirer made the claim and they have honoured in full as per the reinstatement value clause (RVC) which reads as follows:
“In the event of the property insured under the within Policy being destroyed or damaged, the basis upon which the amount payable under the Policy is to be calculated shall be the cost of replacing or reinstating on the same site property of the same kind…subject to the following Special Provisions and subject also to the terms and conditions of the Policy except insofar as the same may be varied”.
3. One witness gave evidence for the plaintiff, two for the defendant. In the instant case the plaintiff had not joined the hirer. In addition the plaintiff admits that it was not able to repossess the goods from the hirer. As per the policy term the defendant’s payment was for reinstatement for damages. The plaintiffs claim if granted will prima facie lead to unjust enrichment. If the goods have been repaired there is no loss suffered by
the plaintiff. In addition, the RVC clause makes it clear that they will not be able to make a liquidated claim other than for repairs etc. It must not be forgotten that the law of insurance is essentially based on the principles of indemnity and there must be actual loss suffered by the plaintiff to succeed whether in contract or in a cause of action purportedly framed on negligence.
The plaintiff and defendant had relied on the following cases namely: London & Lancashire Guarantee & Accident Co. of Canada et al. v. M & P Enterprises Ltd 69 DLR (2d) 465; Malaysia British Assurance Bhd v Syarikat Pembenaan Karun Sdn Bhd  4 CLJ 1; Spandeck Engineering (S) Pte Ltd v Defence Science & Technology Agency  SGCA 37; Overseas Tankship (U.K.),Ltd. V. Morts Dock & Engineering Co., Ltd  All E.R. 404; Jaswant Singh v Central Electricity Board and Anor  1 M.L.J. 272; Lombard Australia Ltd. V. N.R.M.A. Insurance Ltd.  1 Lloyd’s Rep. 575; IRB Finance Berhad v Borneo Insurance Sdn Bhd  3 CLJ 617; Chan Ting Hong v The Asia Insurance Co Ltd  6 MLJ 522; United General Insurance Co Sdn Bhd v Progress Credit Sdn Bhd (1988) 2 M.L.J. 297; Chiew Swee Chai v British American Insurance Co. (M) Sdn Bhd  1 M.L.J. 53; Aswan Engineering Establishment Co Ltd v Iron Trades Mutual Insurance Co Ltd 1 Lloyd’s Rep 289.
4. I have read the evidence, read the documents and submission of the parties in detail. I do not wish to repeat the same as it has been adequately dealt with by the parties. After giving much consideration to the plaintiffs submission I take the view the plaintiffs claim ought to be dismissed in limine. My reasons inter alia are as follows:
(i) In the instant case it is an agreed fact that the plaintiff did not submit any formal claim to the defendant. In consequence, the plaintiff will have no cause of action on the policy terms on the facts of the case as the condition precedent has not been met with. The policy is subject to condition 4(a) of the policy terms which reads as follows:
“On the happening of giving rise or likely to give rise under this Policy coming to your knowledge you shall give notice thereof to us or our nearest representative as soon as possible ”.
(ii) In addition it was PW1 evidence that they knew of the claim which arose because of fire damage as early as 25-5-2008. However the plaintiff took no step to protect their interest, if any, under the policy terms. The plaintiff, having been negligent in protecting their right, cannot per se show the finger against the defendant. It is trite court does not assist indolent plaintiff.
(iii) The reading of the said hire purchase agreement and the insurance policy per se cannot be said that the conduct of the defendant was inconsistent with the spirit and intent of all the three parties. The plaintiff in the instant case does not want to recognise the claim made by the hirer. If that is so there will have been no claim made under the policy terms and in consequence the claim against the defendant cannot succeed.
(iv) In the instant case common sense will dictate there is no loss suffered by the plaintiff. If at all there was a loss it was because the plaintiff was not able to repossess the goods and that has nothing to do with the insurance policy. In consequence the plaintiffs claim pursuant to the insurance policy terms purportedly based on negligence is frivolous, vexatious and abuse of process of court.
5. For reasons stated above, I dismiss the plaintiffs claim with costs. The plaintiff to pay defendant costs in the sum of RM 40,000.00.
I hereby order so.
(Y.A. DR. HAJI HAMID SULTAN BIN ABU BACKER)
High Court (Commercial Division)
Date: 4th March 2010
For the Plaintiff: Kenneth Lee; M/s Kenneth Lee & Company For the Defendant: Y.M Tunku Farik Ismail (Y. W Lee with him); M/s
Azim, Tunku Farik & Wong.