Chubb Insurance Singapore Ltd v Sizer Metals Pte Ltd

• Jurisdiction: Singapore
• Judge: Belinda Ang Saw Ean JCA,Woo Bih Li JAD,Aedit Abdullah J
• Judgment Date: 03 May 2023
• Docket Number: Civil Appeal No 37 of 2022
• Court: High Court Appellate Division (Singapore)

Chubb Insurance Singapore Ltd

and

Sizer Metals Pte Ltd

[2023] SGHC(A) 17

Belinda Ang Saw Ean JCA, Woo Bih Li JAD and Aedit Abdullah J

Civil Appeal No 37 of 2022

Appellate Division of the High Court

Evidence — Proof of evidence — Onus of proof — Respondent discharging legal burden of proof that thefts occurred during period of insurance — Whether insured prima facie discharged legal burden of proof showing thefts occurred during period of insurance cover — Whether insurer discharged evidential burden of proof showing thefts occurred before period of insurance cover

Insurance — Marine insurance — Thefts occurring to shipments of tin concentrate — Whether insurer liable to indemnify insured for loss of four shipments — Whether thefts of shipments occurred during period of insurance cover

Held, dismissing the appeal (Woo Bih Li JAD dissenting):

Per Belinda Ang Saw Ean JCA and Aedit Abdullah J:

(1) In an “all risks” policy, the coverage was not against risks of a specified class or classes; “all risks” under the ICC(A) covered any fortuitous accident or casualty resulting in loss of or damage to the subject matter insured unless expressly excluded under cl 1 of the ICC(A). A plaintiff discharged his special onus when he had proved that the loss was caused by some accident or casualty and need not go further to prove the exact nature of the accident or casualty which, in fact, occasioned his loss: at [56] to [58].

(2) Clause 8.1 of the ICC(A) had set out the duration of the insurance cover, which in this case was delineated by the delivery terms of the sale and purchase contracts between Sizer and Excellent Mining. As a matter of general principle, an insurer was liable if the fortuitous loss caused by an insured peril occurred during the period of cover: at [59].

(3) The burden of proof lay with Sizer to show that the fortuitous loss, ie, the thefts of the tin concentrate, occurred during the Transit Period. The legal burden remained with Sizer throughout the trial. To discharge its legal and evidential burden at the first instance, Sizer had to produce evidence in the form of witness testimony or documents to prove that the risk under the Policy had attached when the thefts/losses occurred. If Sizer succeeded in demonstrating on a prima facie basis that the losses occurred during the Transit Period, the evidential burden then shifted to Chubb who had the opportunity to produce evidence either rebutting Sizer's evidence or supporting Chubb's counter theory that the theft had occurred in Excellent Mining's premises (ie, prior to the commencement of the Transit Period): at [61], [85] and [135].

(4) The Judge had not reversed the burden of proof in deciding that the resolution of the case involved an almost binary choice for his consideration. Having rejected Chubb's counter theory that the thefts had occurred at Excellent Mining's premises, it was not wrong of the Judge to conclude that Sizer had proved its case on the balance of probabilities that the thefts had occurred during the Transit Period based on the evidence it presented, and all things considered: at [63] to [65].

(5) The Judge had not erred in applying a method of elimination which entailed eliminating the possible location of the thefts to determine the true state of affairs. Unlike the case of Rhesa Shipping Company SA v Edmunds (The Popi M)[1985] 1 WLR 948, the present case was not about determining the proximate cause of the loss by an enumerated insured peril. The primary dispute between Sizer and Chubb was whether or not the thefts had occurred during the Transit Period. The fact that Excellent Mining's premises was “eliminated” as the locus of the theft was not to say that the Judge had been compelled to choose between two competing improbable locations: at [76].

(6) The Judge had not erred in failing to consider that the thefts could have happened in Penang, after the end of the Transit Period, as it was never Chubb's pleaded case: at [78] to [83].

(7) In order for Sizer to have had prima facie discharged its legal burden, it had to establish that: (a) tin concentrate (as the insured subject matter) was packed into the drums at Excellent Mining's premises; (b) the losses suffered were as a result of a fortuitous casualty; and (c) the fortuitous casualty occurred after the risks insured under the Policy had attached: at [86].

(8) It was agreed that a fortuitous casualty had occurred, ie, the losses suffered by Sizer were attributable to thefts of the tin concentrate in the drums, which involved its substitution with iron oxide: at [96].

(9) There were several undisputed facts which cumulatively gave rise to prima facie proof, whether arising directly or inferentially, that the tin concentrate was stolen during the Transit Period: (a) first, iron oxide instead of tin concentrate had been delivered to the end receiver in Penang; (b) second, all the tin concentrate in the drums was substituted and replaced, suggesting that there was opportunity for tampering with the contents after the sealing of the drums and containers, and further that the Four Shipments cleared customs without incident; (c) third, there was a casualty that occurred which caused the loss; and (d) fourth, the only difference between the successfully delivered first five shipments and the four subsequent stolen shipments was that for the latter shipments, iron oxide was received in Penang, which pointed toward the thefts occurring during the Transit Period, especially given that both the successful and stolen shipments travelled overland on the same route from Kigali to Dar Es Salaam and cleared customs without incident, with only the overland transit of the last Four Shipments being unsuccessful because of theft: at [104] and [105].

(10) There were several documents which also gave rise to prima facie proof that the tin concentrate was stolen during the Transit Period. First, Chubb's position was consistent with the contents of the Rwanda Revenue Authority's (the “RRA”) documents which stated that after documentary and physical verification of the drums by customs, the seals and the drums were found intact at the time of customs clearance. Second, the stuffing surveys (“Stuffing Reports”) issued by Bureau Veritas subsequently also recorded that all the drums in the sixth, eighth and ninth shipments were in good condition when they were transferred from the 40ft containers to the 20ft containers at the port in Dar es Salaam after the overland journey from the Bonded Warehouse. As for the seventh shipment, it was recorded that two out of the 30 drums shipped had been damaged by stevedores, although nothing turned on this: at [110] to [115].

(11) In relation to the Stuffing Reports, despite Chubb's initial reservation to agree to their contents in the agreed bundle of documents (“Agreed Bundle”), its subsequent conduct in relying on the truth of their contents during cross-examination and in its final submissions demonstrated that it had lifted any prior reservation or qualification. The result of this was that the documents were included in the Agreed Bundle without qualification and stood as evidence in the case before the court: at [116].

(12) Chubb's reliance on the truth of the contents of the RRA documents and the Stuffing Reports effectively served to withdraw any earlier limitation placed on the scope of their agreement as to the veracity of their contents. By Chubb's conduct at trial, these documents were accepted and admissible as evidence having satisfied s 32(1)(k) of the Evidence Act (Cap 97, 1997 Rev Ed): at [117].

(13) In the court below, Chubb's counter theory that the thefts had occurred at Excellent Mining's premises before the Transit Period and thus before the risk attached under the Policy was based on its expert's case theory on the modus operandi of the theft. The modus operandi suggested did not cohere with common sense, given the magnitude of the task of substituting and replacing a large quantity of tin concentrate in drums with iron oxide. As facts in support of the case theory were not proven, no inferences of fact could be drawn. Thus, it was unlikely that the thefts had occurred at Excellent Mining's premises. Chubb had not discharged its evidential burden of proof with the result that Sizer's evidence stood unrebutted: at [120], [122] and [128].

(14) Chubb had not adequately challenged the evidence led by Sizer in the trial below, which had been accepted by the Judge. This evidence was that the thefts could not have happened at Excellent Mining's premises due to logistical difficulties, time and space constraints, the location, and the security measures present. The only way for the thefts to have occurred in Excellent Mining's premises was with the complicity of its staff, for which there was no evidence: at [125].

(15) Even if the Judge erred in concluding that security was weakest during the inland transit and therefore the thefts were most likely to have had occurred there, this was not fatal: at [135].

Per Woo Bih Li JAD (dissenting):

(16) The minority agreed with the majority that the Judge did not err when he applied a process of elimination and where he had not considered the possibility that the thefts of the tin concentrate might have occurred in Penang: at [141].

(17) It was not the approach of the Judge or Sizer that there was prima facie proof that the tin concentrate was swapped with iron oxide during the Transit Period. In any event, a prima facie case had not been established: at [143] and [158].

(18) The first, third and fourth undisputed facts identified by the majority were not material to the question of whether the thefts occurred during the Transit Period: at [145] to [151].

(19) In relation to the RRA letter, the fact that the container seals were not broken was not material. There was no evidence of any discrepancy at any time, whether before or after the journey to the...