Citation(1998) 10 SAcLJ 97
Published date01 December 1998
Date01 December 1998

In the scheme of compulsory motor insurance in Singapore, imposed by the Motor Vehicles (Third-Party Risks and Compensation) Act1, the determination of the respective rights and liabilities of the drivers of the vehicles and any victims revolve around the construction of the phrase “caused by or arising out of the use” of a motor vehicle.2 Questions of the respective rights or liabilities which may arise are, inter alia, whether the victim of the party at fault would be able to sue not just the tortfeasor but also the insurer directly.3 There may also be the issue of what will happen should the tortfeasor be uninsured. Would criminal liability follow and would the victim be thereby left without any remedies?

Insofar as “caused” is concerned, it is clear that the normal rules of causation would apply. However, there still remains questions as to what is the ambit of the word “use” in relation to a motor vehicle. Is it restricted only to a vehicle which is in running order? Is it restricted only to a person who is driving the vehicle, thereby excluding anyone else? The use of the phrase “arising out of” also presents problems. It is probably true to say that it must mean something other than “caused” since it is used in the alternative, but beyond that it is a matter of conjecture as to how much further it does extend.

The interesting thing, of course, is that these issues have never come before the courts in Singapore even though the MVA has been with us since 1960. In fact, they do not seem to have cropped up in the reported cases in Malaysia either. Recently, there has been some significant case law development in the United Kingdom on the meaning of these two phrases. So, it is an appropriate time to examine the pertinence and ambit of this statutory language.


The natural place to begin with, before considering the case law development on the words mentioned above, is to consider the statutory framework behind those words. An understanding of the statutory scheme will help in the understanding of the legislative aims behind the MVA as well as show the relevance of the phrase in the context of this framework.

Motor insurance against third party risks is compulsory in Singapore by virtue of the MVA. Of course, this statutory provision for compulsory insurance is limited only to third party risks which relate to compensation for death or personal injury; it does not pertain to property damage. In fact, it is an offence under the MVA for any person to “use or to cause or to permit any other person to use” a motor vehicle without such insurance cover.4

In order for this requirement for compulsory insurance to be satisfied, the policy in question must be one which

insures such person, persons or classes of persons as may be specified in the policy in respect of any liability which may be incurred by him or them in respect of the death of or bodily injury to any person caused by or arising out of the use of the motor vehicle. (emphasis my own)5

Section 4(1)(b) is important because although section 9 of the MVA gives the right to the third party to sue the insurer directly upon obtaining judgment against the tortfeasor driver, it only does so if the liability in question is something which is covered by the MVA.

What section 9 of the MVA does is to give the third party the right to sue the insurer directly in the event that he has successfully obtained judgment against the insured driver and he has not been able to obtain satisfaction on that judgment. This is a statutory assignment of contractual rights.6 Thus, one must draw a distinction between the rights of the parties

(to the insurance contract) inter se and the rights between the injured third party and the insurer. The first is dependent upon the terms of the contract only, while the second is based upon the statutory rights given by the MVA. As such, the right of the third party to sue the insurer directly must be limited and circumscribed by the enabling statute. Section 9(1) of the MVA reads as follows:

If after a certificate of insurance has been issued under section 4(5) to the person by whom a policy has been effected judgment for a sum exceeding $5,000 in respect of any liability as is required to be covered by a policy under section 4(1)(b) (being a liability covered by the terms of the policy) is obtained 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 Public Trustee as trustee for the persons entitled thereto to any sum payable thereunder 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 laws relating to interest on judgments, (emphasis my own)

Section 9(2) further provides that:

Notwithstanding subsection (1) providing for the payment to the Public Trustee, the right of action thereby created shall vest to the persons entitled to the benefit of the judgment payable thereunder.

An illustration of this point is provided by the decision of QBE Insurance v Thuraisingam7. Here, the insured was involved in an accident with a third party, whose car was damaged. Judgment in default was obtained in respect of the cost of repairs. The insurers refused to pay the judgment sum, whereupon the third party instituted proceedings against them. It was held by the Malaysian High Court that a third party right given under the Act8 to seek satisfaction of a judgment sum against the insured from the insurers is circumscribed by reference to liabilities in respect of which insurance is compulsory. Hence, since it is not required by the Act that property damage has to be insured against, it necessarily follows that the right granted by the Act to sue the insurers directly does not extend to a claim for such property damage.

Thus, it becomes apparent that in order for a right of action to be vested in the third party against the insurer directly, the cause of action must be something which arises out of “in respect of the death of or bodily injury to any person caused by or arising out of the use of the motor vehicle”.

Another important relevant issue is whether the Motor Insurers’ Bureau would be liable. By a memorandum of agreement made in 1975, the Motor Insurers’ Bureau of Singapore has agreed to implement a scheme to “secure compensation to third party victims of road accidents where, notwithstanding the provisions of the Motor Vehicles (Third-Party Risks and Compensation) Act … relating to compulsory insurance, the victim is deprived of compensation by the absence of insurance, or of effective insurance”9 as well as to implement “a scheme to secure compensation for third party victims of road accidents when the driver responsible for the accident could not be traced.”10 It has to be noted that the MIB would only be liable if the liability is one for which it is compulsory to be insured under the MVA.11

Thus, it was held in Buchanan v Motor Insurers’ Bureau12 that the use of a “motor vehicle” within the limits of the Port of London Authority was not a “use” as is covered by the ambit of the UK Road Traffic Act 1930.

It was found, as a fad, that the road in question was not one to which the public had access since only authorised persons were allowed to enter into the port area. Under the UK Act, “use” is defined as “use on any road” and “road” is defined as “any public road and any other road to which the public has access”.13 Since this use was not required to be covered by insurance under the Act, the MIB successfully denied liability to compensate for the injuries in question.

Thus far, we have only been looking at the implications of compulsory insurance insofar as civil claims are concerned. However, section 3(1), read with section 4(1)(b), of the MVA should also be of concern as it imposes criminal liability in relation to any “use” of any vehicle without the necessary insurance covering such use. Section 3(1) reads as follows:

Subject to the provisions of this Act, it shall not be lawful for any person to use or cause or permit any other person to use a motor vehicle unless there is in force in relation to the use of the motor vehicle by that person or that other person, as the case may be, such a policy of insurance or such a security in respect of third-party risks as complies with the requirements of this Act. (emphasis my own)

Springing from this statutory offence14 is also the question of whether the injured third party would be able to sue for a breach of the passenger’s statutory duty to ensure that his “use” of the vehicle is covered by a policy. Here, the injured third party would be able to sue the passenger for using the vehicle without there being the requisite insurance cover.15 The Court of Appeal in Monk v Warbey16 has decided that the fact that it has been made an offence to fail to comply with compulsory insurance does not in any way limit the common law remedies of the third party. In fact, in line with the fact that the imposition of compulsory insurance is to ensure that injured third parties should have a remedy, there is no reason why this aim should be defeated merely because this compulsory insurance has not been complied with.

Of course, these days, with the Motor Insurers’ Bureau Agreement to cover certain situations where a third party has been injured or killed by

an uninsured driver, the third party is more likely to look towards the MIB for satisfaction, rather than take out an action against the uninsured “user” for the breach of his statutory duty to insure.17 As pointed out earlier, the MIB has only agreed to compensate victims where the liability in question would have required cover by a policy.18 Thus, the issue whether any claim could be made by such a...

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