China Insurance Company Ltd v Teh Lain Lee and Another

• Jurisdiction: Singapore
• Judgment Date: 27 October 1976
• Date: 27 October 1976
• Docket Number: Civil Appeal No 15 of 1976
• Court: Court of Appeal (Singapore)

China Insurance Co Ltd

Plaintiff

and

Teh Lain Lee and another

Defendant

[1976] SGCA 9

Wee Chong Jin CJ

,

F A Chua J

and

Choor Singh J

Civil Appeal No 15 of 1976

Court of Appeal

Insurance–Motor vehicle insurance–Risk defined–Collision between policyholder's lorry and another vehicle–Lorry driven by policyholder's servant on the order of the policyholder and in the course of his employment–Policy obliged insurers to indemnify “any authorised driver” of the vehicle–Exception clause providing that insurer shall not be liable in respect of death of or bodily injury to any persons in the employment of the policyholder arising out of and in the course of employment–Interpretation of exception clause–Whether driver of lorry covered under policy

Under a policy of insurance, the appellant agreed to indemnify the policyholder and any other person driving on the policyholder's order or with his permission against liability at law in respect of the death or bodily injury to any person caused by or arising out of the use of the policyholder's lorry. One of the policyholder's servants (“the deceased”) was killed as a result of a collision between the policyholder's lorry and another motor vehicle. At the time of the accident, another servant of the policyholder (“Khoo”) was driving the lorry on the order of the policyholder and in the course of his employment. The respondents, as legal representatives of the deceased's estate, sued the drivers of both vehicles and obtained judgment against Khoo. The respondents requested that the appellant satisfy the judgment, but the appellant refused to pay. According to the appellant, its obligation to indemnify “any authorised driver” of the vehicle under paragraph 2 of s II of the policy was subject to the “Exceptions to s II” in the policy, which provided that it would not be liable “in respect of death of or bodily injury to any persons in the employment of the insured arising out and in the course of such employment”. The judge below found in favour of the respondents, and the appellant appealed.

Held, dismissing the appeal:

(1) Khoo's liability to the respondents was covered by the insurance. The primary object of the “Exceptions to s II” was addressed to the case of the policyholder incurring the liability and to the insurance of him for his own protection under the statute. Even if the clause could conceivably be read as applicable to a case such as the present, it was insufficient to affect the primary object of the quite separate paragraph 2 of the policy, which was the insurance of the driver: at [9] and [10].

(2) If the appellant's liability to indemnify an authorised driver, which was separate and distinct from the liability to indemnify the insured, did not extend to cover death or injury to employees of the insured, this would be contrary to the provisions of s 4 of the Motor Vehicles (Third-Party Risks and Compensation) Act (Cap 88...