District Judge Loo Ngan Chor:
INTRODUCTION:
These are the reasons for my decision to allow the plaintiff’s claim against the defendants and to dismiss their third party actions against the 3rd party, which are issued for the purpose of the defendants’ appeal against my decision. In this judgment, I use the phrase “the defendants” where I mean to refer to the two defendants collectively.
The plaintiff is a general insurance company whose services include providing motor vehicle insurance.
The 1st defendant was the owner of a Maserati Quattroporte car bearing registration no. SJU 11 P (previously SJE 5628 L) (“the car”) which was insured by the plaintiff. Although this was a matter which was in dispute in the main action, the plaintiff’s premise is that the insurance policy was one which required that the car be driven only by the 1st defendant’s chairman, Mr Derrick Ong Puay Khoon (“Derrick”).
The 2nd defendant (“Marcus”) is Derrick’s son and is the managing director of the 1st defendant.
The 3rd party retails used luxury and other cars. It also assisted the 1st defendant in procuring the insurance policy in question.
The plaintiff’s witnesses were Ms Jelly Chua Li Li (“Jelly”), a manager in the plaintiff’s recovery claims department and Mr Chee Weng Fei (“Chee”), the business development manager of T.H.I.S. (which was the plaintiff’s authorized agent).
The 1st defendant’s witness was Derrick and Marcus testified for himself, although for all practical purposes, both the defendants’ positions were in fact aligned.
The 3rd party’s witnesses were Mr Ken Lee Geok Leng (“Ken”), the then sales representative of the 3rd party, who sold the car to the 1st defendant, Mr Low Soon Leong (“Low”), also known as Derek, the 3rd party’s director, Mr Chia Kok Keong (“Chia”), the managing director of INS Group Pte Ltd which was the 3rd party’s regular insurance broker, and Chee.
UNDISPUTED FACTS:
The underlying facts set out in [10] to [15] are not in dispute.
The main action arose out of a road traffic accident on 30th December 2009 at about 3 am at Jalan Buroh involving the car which was driven by Marcus.
The rear seat passenger in the car, Mr Tan Peng Chye, sued Marcus in DC 1773/2010 (“the suit”) for damages for his personal injuries caused by Marcus’ negligent driving. The 1st defendant was not named as a party to the suit. Neither did it apply to be joined in the suit.
The plaintiff had insured the car under a “Private car – high value car (Comprehensive)” insurance policy no. SD09V02835/VPS/R0 for the period from 21st February 2009 to 20th February 2010 (“the policy”), by reference to the previous registration number of the car.
The plaintiff repudiated liability under the policy on 10th January 2010 as it took the view that the 1st defendant had breached the policy terms by allowing Marcus to drive the car.
Marcus engaged his own lawyers and eventually allowed a consent judgment to be entered for $98,168.14, comprising $74,500 in general damages, $17,324.64 in special damages, $5000 being costs and $1343 being disbursements.
Sometime on or about 4th August 2011, the plaintiff, as insurer, made payment to the Public Trustee in favour of Mr Tan, the plaintiff in the suit. This payment was made pursuant to an agreement made on 22nd February 1975 between the Minister of Finance of the Republic of Singapore and the Motor Insurers’ Bureau.
PARTIES’ CASES:
The Plaintiff:
In this suit, the plaintiff seeks recovery from the defendants of the sum (at [14]) it paid under the suit.
The plaintiff’s basic premise is that the 1st defendant had breached the policy terms and conditions in allowing the Marcus to drive the car at the time of the accident.
It has two bases for its claim: Breach of the policy which restricted the use of the car to Derrick. In equity and recoupment under the MIB agreements (of which more below).
The Defendants:
The case of the defendants is a total denial that there was any breach of the policy. This was because Marcus was at all material times an authorised driver under the policy because Marcus had been authorised to drive the car by the 1st defendant, based on their understanding of the policy.
In regard to the equity and recoupment claim, the defendants say that the plaintiff’s payment of the judgment debt in the suit was gratuitous and/or officious. The reason that the defendants say this is because the plaintiff, as insurer of the car, was not “at risk” under s9 of the Motor Vehicles (Third Party Risks and Compensation) Act (Cap 189) (“the Act”) or the MIB agreements in that the 1st defendant was not a party to the suit. This being so, the plaintiff was not entitled in law or equity to seek recovery from either defendant.
The Defendants’ Case Against The 3rd Party:
The defendants brought in the third party for it to indemnify them against any liability that might be found against either or both of them.
The 1st defendant had visited the 3rd party’s showroom sometime in early February 2009 to view the car. He was attended to by Ken. Marcus said that he told Ken that the 1st defendant would be the buyer of the car and it would be “driven by the 1st defendant’s employees, including me…”
On the evening of 17th February 2009, Derrick, Marcus and a driver of the 1st defendant, Zuraimi b Md Ariffin (“Zuraimi”) visited the 3rd party’s showroom again when they were attended to by Ken again. Marcus said that during this visit, Derrick verbally instructed Ken in Marcus’ presence, that the car would be registered in the 1st defendant’s name and be driven “by the 1st defendant’s employees, including me, and that the 3rd party was to arrange for a motor insurance for [the car] to insure the 1st defendant’s employees, including me, who will be driving the car.” Ken “verbally acknowledged and agreed” to the instruction.
Ken was negligent in failing to comply with the defendants’ instruction. The 3rd party was thus vicariously negligent. The defendants’ case was that the 3rd party, in agreeing to procure insurance for the car and in doing so, was their agent for this purpose and owed and breached its duty of care to the defendants: Zurich Insurance (Singapore) Pte Ltd v B-Gold Interior Design & Construction Pte Ltd [2008] 3 SLR(R) 1029 at [158]-[162].
Derrick’s evidence-in-chief on that point was similar to, although more concise than, that of Marcus, as he adopted the latter’s affidavit of evidence-in-chief.
It was also Derrick’s evidence that he relied on those facts and signed a sale agreement for the car in blank. He also signed the insurance proposal form in blank, after it was given by Ken to one of the 1st defendant’s staff. It seems that Derrick’s position was that he signed the insurance proposal form in blank, it being one of the blank forms brought to the 1st defendant’s office by Ken on 18th February 2009. While he may have agreed that he signed a form at the Singapore General Hospital on 19th February 2009 when he was visiting his daughter, which Ken would say (below) was the insurance proposal form duly completed, he equally maintained that it was signed in blank.
In cross-examination by Mr Tony Yeo (the 3rd party’s counsel), Derrick agreed that he was aware of named driver policies since the 1st defendant had one such car, a Porsche 911 Carrera S, at the material time with an insurance policy (11th June 2008 to 10th June 2009) naming him and his wife as the authorised drivers.
Derrick agreed that he probably did not mention Marcus’ name as one of the drivers of the car.
On being asked about his test driving the car on 17th February 2009, Derrick denied that he test drove the car. He said instead that Zuraimi probably test drove the car the following day because the car in any case needed minor repairs.
In Marcus’ evidence-in-chief, he too stated that Derrick signed, in Marcus’ presence, the sale agreement and the insurance proposal form in blank. He also said that on 18th or 19th February 2009, Ken went to the 1st defendant’s office and handed over some blank insurance proposal forms to the finance manager, Ms Lim Siew Hoon. He exhibited these (signed) blank insurance proposal forms (which did not include the proposal form in question).
The signed and completed sale agreement was dated 17th February 2009 for the price of $175,000 for the car. It also stated that the car was first registered on 6th January 2005.
Zuraimi took delivery of the car from the 3rd party’s showroom on 21st February 2009. He was not told by Ken that he was not insured to drive the car.
The 3rd Party’s Case:
The 3rd party’s case was that the defendants had not told Ken that all of the 1st defendant’s employees would drive the car. The alleged express mention of Marcus’ name as a driver of the car was illogical in that Marcus was then serving 12 months’ disqualification from driving all classes of driving licences from 20th March 2008 to 19th March 2009 based on his guilty plea to three charges which included one for driving a car insured in his sister’s name on 24th February 2008 while he was under 18 years old.
Ken’s evidence was that the purchase was completed on 17th February 2009, with loan financing and insurance to be arranged. In the usual way, the 3rd party’s practice concerning insurance coverage for the cars it sold was to deal with INS. On 18th February 2009, he went to the 1st defendant’s office where he handed over, amongst other things, blank insurance proposal forms. Having later completed and faxed the insurance proposal forms to INS’ Chia. Chia reverted later with the quotation and premium and told Ken that only the plaintiff had responded and that the insurance arrangements being urgent, he had brought in T.H.I.S. as only T.H.I.S. had authority to issue the cover note on the plaintiff’s behalf. When insurance...
