Lim Kitt Ping Lynnette v People's Insurance Co Ltd and Another

• Jurisdiction: Singapore
• Judge: Kan Ting Chiu J
• Judgment Date: 12 May 1997
• Neutral Citation: [1997] SGHC 122
• Docket Number: Suit No 2235 of 1992
• Date: 12 May 1997
• Published date: 19 September 2003
• Year: 1997
• Plaintiff Counsel: Toh Peng Ann (Toh & Co)
• Citation: [1997] SGHC 122
• Defendant Counsel: Benedict Chan (Goh Poh & Partners)
• Court: High Court (Singapore)
• Subject Matter: Non-payment of premium within premium warranty period,Insurance,Premium warranty clause,Whether dispute should be referred to arbitration,Compliance with premium warranty clause impossible,Debit note issued out of time,Whether insurers relieved from liability under policy,Motor vehicle insurance

Judgment:

1.KAN TING CHIU J

The plaintiff received a BMW car from her father as a birthday gift. He also arranged for the car to be insured with The People`s Insurance Co Ltd (hereinafter referred to as `the insurers`). He insured it with them because he was a director of Kwang Hua Insurance Agencies Pte Ltd (hereinafter referred to as `Kwang Hua`), their brokering agent.

2.The parties went through several steps insuring the car. On 5 April 1991Kwang Hua issued the insurers` cover note which was pre-signed by them. Kwang Hua then forwarded a copy of the cover note and the plaintiff`s proposal form to the insurers. The insurers did not issue a policy or collect the premium straightaway on receiving the documents. The insurance policy was issued on 25 June together with a debit note for the premium. Kwang Hua issued its own debit note to the plaintiff on 31 July and paid the insurers the premium by their cheque dated 30 October 1991. The insurers issued their receipt on 11 February 1992. The receipt was issued after three months because the insurers took legal advice before they presented the cheque for payment. The insurers pleaded in their defence that they accepted the payment without prejudice to their right to rely on the premium warranty clause, but that was not stated on the receipt nor in any contemporaneous correspondence and was not raised in evidence during the trial.

3.The cover note stated that the plaintiff was insured `in the terms of the company`s usual form of Comprehensive/Third Party Policy`. The insurers` debit note and the policy bore the notation `Subject to 60 days premium warranty clause attached`.

4.The premium warranty clause provided that

Notwithstanding anything herein contained to the contrary and subject only and without prejudice to Clause 2 hereinafter set out, it is hereby declared and agreed that it is a condition precedent to liability under this Policy, Renewal Certificate, Endorsement or Cover Note that any premium due must be paid and actually received in full by the company, the registered broker or registered agent through whom this policy was effected:LABEL="(a)">when the period of insurance is 60 days or more, within sixty (60) days from the:

(i) Inception date of the coverage under the Policy, Renewal Certificate or Cover note; or

(ii) Effective date of the coverage stated on each Endorsement, if any, issued under the Policy, Renewal Certificate or Cover Note when the effective date of coverage stated on the Endorsement is on or after the Insurance date of the Endorsement; or

(iii) Issuance date of each Endorsement, if any, issued under the Policy, Renewal Certificate or Cover Note where the effective date of coverage under the Endorsement is before the issuance date; or

(b) where the total premium under any single Policy exceeds S$50,000 and the company has allowed payment of that premium by instalments, within sixty (60) days from the:Inception date of the cover under the Policy, Renewal Certificate or Cover Note for the first instalment and thereafter from the agreed dates on which the subsequent instalments become payable and Effective date of coverage of any Endorsement issued under such Policy, for the first instalment and thereafter from the agreed dates on which the subsequent instalments become payable or

(c) when the period of insurance is less than sixty (60) days within the period of insurance specified in the Policy, Endorsement, Renewal Certificate or Cover Note.

2 In the event any of the abovementioned premium is not paid in full to the company, registered broker or registered agent as described above in the manner and within the time stipulated above (the `premium warranty period`), the cover under this Policy, Renewal Certificate, Endorsement or Cover Note shall be deemed to have terminated from the expiry of the premium warranty period and the company shall be discharged from all liability therefrom but without prejudice to any liability incurred before that date and the company will be entitled to a pro-rata time on risk premium subject to a minimum of S$25.

5.The insurers` solicitors wrote to Kwang Hua on 11 December 1991 for proof that the plaintiff had made payment within the premium warranty period, recognising that under cl 2 of the premium warranty clause, payment can be made either to the insurers or their registered broker or registered agent. There was no response from Kwang Hua, and no queries were made directly to the plaintiff. On the available evidence it can be inferred that payment was made out of time as the debit note was issued late.

6.On 26 February 1992 they wrote to the plaintiff to inform her the insurers were disclaiming any liability under the policy. Specifically they said that:

As the cover under the said motor policy had terminated from the expiry of the premium warranty period, there was no insurance policy purporting to cover the use of motor vehicle SBN 6448E in force at the time of the accident. [Emphasis added.]

7.They also enclosed a cheque for $1,590.24 made payable to Kwang Hua being the refund of the premium after deducting premium for the period that they were on risk and their credit note for the same amount. There was no evidence that the refunded premium was accepted.

8.When the insurers sought to disclaim liability under the policy, they knew that the plaintiff had a serious accident on 30 July 1991 resulting in personal injury to her and her three passengers, and the car was so damaged that it had to be scrapped.

9.The plaintiff disputed the disclaimer and commenced proceedings...