Lam Seng Hang Company Pte Ltd v The Insurance Corporation of Singapore Ltd

• Judgment Date: 16 February 2001
• Date: 16 February 2001
• Docket Number: Originating Summons No 7014 of
• Court: High Court (Singapore)

Lam Seng Hang Co Pte Ltd

Plaintiff

and

The Insurance Corporation of Singapore Ltd

Defendant

[2001] SGHC 31

Tan Lee Meng J

Originating Summons No 7014 of 2000

High Court

Civil Procedure–Appeals–Leave–Whether reasons existing to grant leave to appeal to High Court–Insurance–Marine insurance–Whether insurer liable where delay was one of two proximate causes of damage

In January 1999, the plaintiff LSH had 14mt of mace loaded into two containers on the Penang Glory to be shipped from Belawan to Singapore. Without LSH's knowledge, the carrier removed the two containers containing LSH's cargo and loaded them onto another vessel, the Seven Seas Beacon. The original bill of lading was not substituted with a new one. On 2 February 1999, the defendant ICS, who was the plaintiff's insurer, issued LSH a policy which noted that the cargo of mace was shipped on board the Penang Glory. By then, the cargo had already arrived in Singapore on board the Seven Seas Beacon.After the vessel arrived in Singapore it was discovered that 117 of the 434 bags of mace were wet, and the damaged cargo was sold as salvage. LSH duly made a claim against ICS for $41,050.08. ICS later discovered that LSH's cargo had not been carried on board the Penang Glory and that the Seven Seas Beacon, which carried the cargo to Singapore, took 17 days to sail from Belawan to Singapore, when a vessel usually completed this voyage in about two days. The reason for this delay was not explained.

ICS invited LSH to submit a claim for its consideration but did not settle the claim. LSH thus instituted an action against ICS to recover its loss. ICS resisted LSH's claim on several grounds including delay, for which it relied on the Institute Cargo Clauses (A) (the “ICC (A)”). The trial judge found that there were two proximate causes of the loss in question: (a) prolonged exposure of the damaged mace to the sun, rain and cold, and (b) delay. As the claim amount was less than $50,000, LSH applied unsuccessfully to the trial judge for leave to appeal to the High Court. LSH then applied in the High Court for leave to appeal against the trial judge's decision.

Held, dismissing the application:

(1) It was trite law that where there were two or more concurrent causes of loss, the insurer was entitled to avoid liability if one of the causes fell within the ambit of an exception in the policy: at [11].

(2) There was no merit in allowing an appeal for the sake of determining whether or not the trial judge was right in concluding from the facts and after hearing witnesses that delay was one of the proximate causes of the loss. LSH's argument that ICS had failed to plead that the claim was defeated by the defence of delay could not be countenanced. It was obvious from ICS's pleadings that ICS was relying on the defence of delay. Reference was made to the relevant clauses of the ICC (A) and the Marine Insurance Act with respect to delay: at [15] and [16].

(3) It was erroneous for LSH to assert that since the policy issued for the cargo did not refer to the date of departure of the vessel from Belawan, it could be assumed that ICS was not interested in the duration of the voyage. If that were the case, ICS would have lost the right to avoid liability for any loss caused by delay if the vessel had left months ago but been delayed in an intermediate port for unexplained reasons. In such a situation, ICS would, without more, certainly be entitled to rely on the exception in the policy with respect to damage caused by delay: at [17].

(4) LSH's interpretation of cl 8.3 of the ICC (A) to mean that ICS would not be entitled to avoid liability by relying on an exception with respect to damage caused by delay was incorrect. The clause merely made it clear that the policy would remain in force during delay beyond the control of the assured. It did not have the effect of negating the other terms of the...