Uni Machinery Parts Supply Sdn Bhd V Tokio Marine Insurans (M) Berhad

  

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Alasan Penghakiman No: D7-22-790-2005

 

DALAM MAHKAMAH TINGGI MALAYA DI KUALA LUMPUR

 

(BAHAGIAN DAGANG)

 

GUAMAN NO: D7-22-790-2005

 

ANTARA

 

UNI MACHINERY PARTS SUPPLY SDN BHD … PLAINTIF

 

DAN

 

TOKIO MARINE INSURANS (M) BERHAD … DEFENDAN

 

ALASAN PENGHAKIMAN OLEH YANG ARIF HAKIM DATO’ TENGKU MAIMUN BINTI TUAN MAT

 

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Alasan Penghakiman No: D7-22-790-2005

 

The plaintiff is in the business of importing and selling of reconditioned hydraulic excavators, cat loaders, bull dozers and other heavy machineries. It operates from an address known as Lot 2012, Batu 12 A Jalan Serdang Lama, Serdang, Selangor (the said premises) which consists of a yard and a shed. The yard is the open area where the plaintiff kept its heavy machineries whilst the shed serves as the office. The whole premise is within a chain-linked perimeter fence.

 

The plaintiff took out a burglary insurance policy No. W-G-A4-Ag-001802 (the said policy) with the defendant to cover the said premises. The operative clause of the said policy which was printed reads:-

 

“NOW THIS POLICY WITNESSES that in consideration of the Insured paying to the Company the premium, the Company will subject to the terms, exceptions and conditions herein or endorsed hereon indemnify the Insured in respect of the undermentioned events happening during the Period of Insurance:-

 

A. The Property Insured or any part hereof described and included in the Schedule hereto whilst contained in the Premises described in the said Schedule shall be lost:

 

(1) By Theft consequent upon actual forcible and violent entry upon the said Premises or committed by any person or persons (other than employees) feloniously concealed thereon, or

 

(2) …

 

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Alasan Penghakiman No: D7-22-790-2005

 

B. There shall arise any damage to the said Property Insured or to the Premises falling to be borne by the Insured due to any such Theft as aforesaid or any attempt thereat

 

PROVIDED ALWAYS that the Premises mentioned in the Schedule shall not include any yard, garden, outbuilding or other appurtenances unless specifically included in the Schedule hereto.”

 

The said policy also states:-

 

“THE FOLLOWING CLAUSES ARE NOT APPLICABLE UNLESS THEY ARE SPECIFICALLY DECLARED THERETO IN THE SCHEDULE AND/OR BY ENDORSEMENTS

 

ARMED ROBBERY/HOLD UP ENDORSEMENT.”

 

The Schedule to the said policy contains the following type written particulars:-

 

“THE INSURED ADDRESS :

 

OCCUPATION:

 

UNI MACHINERY PARTS SUPPLY SDN BHD LOT 2012, BATU 12 %

 

JALAN SERDANG LAMA 43300 SERDANG SELANGOR

 

IMPORTER & SALE OF HEAVY MACHINERIES

 

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Alasan Penghakiman No: D7-22-790-2005

 

THE PROPERTY INSURED

 

1.00 PREMISES 1

 

AS ABOVE ADDRESS

 

1.01 ON STOCK IN TRADE CONSISTING OF HEAVY EQUIPMENT AND THE LIKE, THE PROPERTY OF THE INSURED OR HELD BY THEM IN TRUST OR ON COMMISSION.”

 

A burglary occurred at the said premises on 8.4.2004 and on 24.9.2004 during which time the said policy was in force. As a result of the burglary, some spare parts of the heavy machineries (the goods) were stolen from the said premises. The plaintiff made two claims against the defendant under the said policy for a total sum of RM712,790.04. Both claims were denied by the defendant. It is the defendant’s contention that the losses were not covered under the said policy.

 

THE EVIDENCE

 

Four witnesses, including two police officers testified for the plaintiff. The defendant called one witness. The evidence established that the said premises had been robbed on 8.4.2004 and 24.9.2004; that a group of robbers had cut the fence of the said premises; the robbers overcame the security guard on duty and dismantled and stole the goods i.e. the parts attached to 3 units of heavy equipment parked at the yard of the said premises.

 

The evidence also established that prior to obtaining the said policy coverage for the stock in trade in 2003, the defendant’s risk

 

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Alasan Penghakiman No: D7-22-790-2005

 

surveyor, one Mas Asyraf had conducted a survey of the plaintiff’s premises. The risk surveyor had advised the plaintiff to have security guard, a guard dog and to install floodlights at the fenced yard. The plaintiff complied with the requirements (exhibits P10 and P13). In the Burglary Survey Report dated 18.3.2003 (exhibit P42) the risk surveyor states that the risk as it stands is satisfactory and under the “General Remarks” states:-

 

“Satisfactory because:

 

• 7 staffs lived in

 

• 1 security guard after hour

 

• Goods are heavy and bulky

 

• Wholly fenced up”

 

Thereafter the defendant duly issued a burglary insurance policy wherein the premises was covered from 22.3.2003 until 21.3.2004. The said policy which is the subject matter of this suit is in fact the renewal of the first policy effective from 6.4.2004 until 5.4.2005.

 

THE ISSUE

 

The issue to be determined revolves around the true construction of the said policy. The defendant had refused to indemnify the plaintiff on the grounds that the machinery which was burgled on the two incidents was kept in the open area and therefore falls within the proviso that “provided always that the Premises mentioned in the Schedule shall not include any yard, garden,

 

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Alasan Penghakiman No: D7-22-790-2005

 

outbuilding or other appurtenances unless specifically included in the Schedule hereto.” It was further the case for the defendant that the said policy does not cover losses resulting from armed robbery.

 

Learned counsel for the defendant submitted that it is trite law that in its task of construing the whole contract of insurance so as to give a reasonable interpretation to it, as well as to particular words or phrases, the court may only give effect to the intention of the parties as evidenced by the written words of the policy (see South Staffordshire Tramways Co v Sickness & Accident Assurance Association (1891) 1QB 402 and Yorkshire Insurance Co Ltd v Campbell (1917) Ac 218); that the intention of the parties must be gathered from the written instrument itself (see Goh Gok Hoon v Abdul Hamid & Anor [1967] 1 MLJ 36); that this view is also enacted in sections 91 and 92 of the Evidence Act 1950 which excludes other evidence once a contract is reduced into writing (see Augustine Paul, Evidence Practice and Procedure (3rd Ed); Faber Merlin (M) Sdn Bhd & Ors v Lye Thai Sang & Anor [1985] 2 MLJ 381).

 

For the plaintiff it was contended that there is a contradiction between the printed words of the policy and the typewritten words. Learned counsel submitted that where a policy is partly printed and partly typewritten and there is a conflict between the two, the printed words must be rejected in favour of the typewritten words. The case of Tay Hean Seng v China Insurance Co Ltd [1953] MLJ 38 was cited in support thereof. Learned counsel also cited the case of Malaysia British Assurance Bhd v Syarikat Pembenaan Karun Sdn

 

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Alasan Penghakiman No: D7-22-790-2005

 

Bhd [2009] 4 CLJ 1 in support of the proposition that the object of the parties is to be steadily borne in mind and the policy must not be construed to as to defeat the object nor as to render it practically illusory.

 

FINDINGS

 

In the case of Malaysia British Assurance Bhd v Syarikat Pembenaan Karun Sdn Bhd [2009] 4 CLJ 1 Ahmad Maarop JCA

 

said at pg 10:-

 

“That a policy of insurance is basically subject to the same rules of construction as any other written contract is abundantly clear from the authorities. In the words of Hashim Yeop A Sani FJ delivering the judgment of the Federal Court in Provincial Insurance Co. Ltd v Yee Chee Swee:

 

the words used in it must be given their plain, ordinary meaning but in the context of the policy looked at as a whole and subject to any special definition contained in the policy.

 

In construing the policy, the object of the parties is to be steadily borne in mind and the policy must not be construed so as to defeat that object, nor as to render it practically illusory.”

 

Raja Azlan Shah FJ (as His Royal Highness then was) said in the case of Malaysia National Insurance Sdn Bhd v Abdul Aziz bin Mohamed Daud [1979] 2 MLJ 29 at pg 32:-

 

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Alasan Penghakiman No: D7-22-790-2005

 

“It also seems to me that as between the assured and the insurers, the exception clause in the proviso, on the ordinary principles of construction has, as far as possible, to be read against the insurance company, that is to say, if there is a doubt as to its extent, and the question were to arise as to the liability of the insurers, the construction most favourable to the assured must be given to him.”

 

The typewritten words in the Schedule of the said policy describes the property insured as “Lot 2012, Batu 12 % Jalan Serdang Lama, Serdang, Selangor” and “on stock in trade consisting of heavy equipment and the like, the property of the insured or held by them in trust or on commission” whilst the printed words of the said Policy states that the premises mentioned in the Schedule shall not include any yard. Given that the plaintiff is in the business of importing and selling of heavy machineries and given that the address consists of an open yard and an office, it is only logical that the heavy machineries are kept at the yard. Further, these heavy machineries are the very goods that the plaintiff insured with the defendant under the said policy. If the defendant’s contention is correct, then it would mean that the plaintiff can only claim under the said policy if the heavy machineries are not kept in the yard but in the shed which forms the office. It seems to me that this contention is preposterous as no heavy machineries can be kept in the office.

 

In this regard I agree with the plaintiff that there is an ambiguity in the said policy when it talks about insuring the stock of heavy machineries which had to be kept in the yard, yet it did not include the yard. Applying the principles enunciated in the cases cited above and bearing in mind the object of the said policy which

 

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Alasan Penghakiman No: D7-22-790-2005

 

is to insure the plaintiff’s stock in trade of heavy machineries, I hold that the said policy cover the goods kept at the yard of the said premises. To hold otherwise would be to negate the very purpose of the plaintiff taking out the said policy and would render the said policy illusory.

 

The defendant had also denied the plaintiff’s claim on the ground that the said policy does not cover losses due to armed robbery. DW1 explained that the said policy does not provide automatic coverage for losses due to armed robbery or hold-up. PW1 has also admitted that the Armed Robbery/Hold Up Endorsement was not extended to the said policy.

 

There is no dispute that on 8.4.2004 and 24.9.2004 unknown persons had entered into the said premises by cutting the perimeter fence. There is also no dispute that consequent thereto goods were stolen from the said premises. On the first incident of 8.4.2004, a police report (exhibit P19) lodged by the plaintiff’s security guard states that “.. saya … telah ditahan oleh (6)(L) India dengan bersenjatakan parang mengugut saya supaya diamkan diri kalau mahu selamat. Kemudian tangan saya telah diikat dengan tali plastik dan dijaga oleh (2)(L) India supaya tidak berbuat apa-apa…” PW1’s police report (exhibit P18) also states that the plaintiff “telah kena samun”.

 

As for the second incident, the police report lodged by the plaintiff’s security guard (exhibit P28) states that the said Premises was attacked by 18 individuals where he was subsequently tied up. The police investigating officers (PW2 and PW3) confirmed that

 

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Alasan Penghakiman No: D7-22-790-2005

 

armed robbery occurred at the said Premises on 8.4.2004 and 24.9.2004.

 

It was submitted by learned counsel for the defendant that the facts of the case clearly show that the alleged losses were results of armed robberies as ‘Armed robbery or Hold up’ is expressly defined under the said policy as “… taking of insured property:

 

1) by violence inflicted upon a custodian

 

2) by putting him in fear of violence

 

3) from the custodian who has been killed or rendered unconscious subject otherwise to the terms, exceptions and conditions of this Policy”

 

For the plaintiff it was submitted that the policy covers the property insured or any part thereof lost “by theft consequent upon forcible and violent entry upon the said Premises”. The entry by the intruders to the plaintiff’s premises at Lot 2012, Batu 12 ^ Jalan Serdang Lama, Serdang, Selangor by using a cutter or some other instrument to cut the perimeter chain link fence to enter the plaintiff’s premises, contended learned counsel, would clearly fall within the definition of “actual forcible and violent entry” into the said premises. It was further the contention of the plaintiff that the risks of theft include the risks of robbery.

 

Learned counsel for the plaintiff had also raised the following issues during cross-examination of DW1:-

 

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Alasan Penghakiman No: D7-22-790-2005

 

1. that by imposing the presence of a security guard at the said Premise, it is impossible for the plaintiff’s stock to be stolen without confrontation and tying up the security guard; and

 

2. consequently there would not be any circumstances that the plaintiff could make a claim for theft under the said policy.

 

DW1 explained that theft could have occurred at the said Premises without being detected by the security guard because:-

 

1. the lone security guard is stationed at the guardhouse which is located at the front entrance;

 

2. the intruder could easily gain access into the said Premises from other section of the said Premises; and

 

3. due to the size of the said Premises it is easy for any intruder to steal the spare parts from the machines stored thereat without being detected.

 

Learned counsel for the plaintiff had referred to the case of Wong Kon Poh v New India Assurance Co. Ltd [1970] 2 MLJ 287 where the Federal Court said that theft is not severable from robbery and that a policy which insures against loss by “burglary, housebreaking or theft” but says nothing of “robbery” must on any reasonable construction be held to include “robbery” within the coverage for “theft”.

 

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Alasan Penghakiman No: D7-22-790-2005

 

Wong Kon Poh’s case is distinguishable from the instant case. In Wong Kon Poh nothing was said of “robbery”. In the instant case “robbery” has been expressly mentioned and excluded. Ong CJ said at pg 288 of Wong Kon Poh’s case:-

 

“If, contrary to commonsense, the insurance company still maintains that the perils insured against are different, so that it is not bound to indemnify the victim of a robbery where, the policy covers only loss by theft, then it is the duty of the insurers to say so in plain terms, so that policy-holders may not continue to pay their premiums under a misapprehension as to the exceptions to liability.”

 

This is what exactly happens here. It is expressly stated in the said policy that the armed robbery endorsement is not applicable unless specifically declared in the policy schedule. The policy schedule is silent on armed robbery. Also, it must be noted that whilst the plaintiff alleged that one Mr. Sim of the defendant company had informed PW1 and PW4 that the defendant made a mistake in not extending the insurance coverage to the yard, there is no such allegation of mistake in respect of the Armed Robbery/Hold Up Endorsement.

 

Based on the abovementioned evidence and authorities, I find that the incidents on 8.4.2004 and 24.9.2004 which resulted in the loss of the plaintiff’s goods were occasioned by armed robberies. The plaintiff has not proved its claim that they are entitled to be indemnified for the losses due to armed robbery. In any event, the plaintiff has not proved the losses sustained.

 

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Alasan Penghakiman No: D7-22-790-2005

 

In respect of the first loss which occurred on 8.4.2004, it was alleged that the parts belonging to 3 excavators bearing registration Nos. WJE 9041, WJA 6779 and WJN 7540 were stolen. These machines were only registered in the plaintiff’s name on 27.4.2004. Although the plaintiff produced copies of invoices showing that the machines were sold to them, there was no proof that the plaintiff had made payments for the said invoices. As for the second loss, the plaintiff’s claim form (exhibit P38) shows that the parts found missing were from 4 excavators bearing Nos. CAG 7936, WJE 9041, QKG 856 and WMG 560 and a New Fine Hydraulic Breaker. In examination-in-chief PW1 testified that the vehicles which the spare parts were stolen were CAG 7936, QKG 856 and WMG 560. Nothing was mentioned of WJE 9041 and a New Fine Hydraulic Breaker. Again, except for WJE 9041, the plaintiff has failed to proof that it owns the abovementioned excavators. In view of all the above, the plaintiff’s claim is dismissed with costs.

 

(DATO’ TENGKU MAIMUN BINTI TUAN MAT)

 

HAKIM

 

MAHKAMAH TINGGI MALAYA BAHAGIAN DAGANG KUALA LUMPUR

 

Dated 31st May 2010

 

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Alasan Penghakiman No: D7-22-790-2005

 

Cik Sharmini Navaratnam bagi pihak Plaintif

 

Tetuan Siva Dharma & Associates

 

Peguambela dan Peguamcara

 

Unit A-21-16, Level 21

 

Menara UOA Bangsar

 

No. 5, Jalan Bangsar Utama 1

 

59000 Kuala Lumpur.

 

Encik Wong Wai Leong bagi pihak Defendan

 

Tetuan Azim, Tunku Farik & Wong

 

Peguambela dan Peguamcara

 

Unit 5-03, 5th Floor

 

Straits Trading Building

 

2 Lebuh Pasar Besar

 

50050 Kuala Lumpur.

 

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