Ng Choon Hoo trading as Overseas Union Radio & Electric Co v The Nippon Fire & Marine Insurance Co Ltd

• Jurisdiction: Singapore
• Judge: Judith Prakash JC
• Judgment Date: 15 March 1995
• Neutral Citation: [1995] SGHC 71
• Docket Number: Suit No 2519 of 1992
• Date: 15 March 1995
• Published date: 19 September 2003
• Year: 1995
• Plaintiff Counsel: G Murugaiyan and Tan Gee Tuan (G Murugaiyan & Partners)
• Citation: [1995] SGHC 71
• Defendant Counsel: William Chai and Ramasamy (William Chai & Rama)
• Court: High Court (Singapore)
• Subject Matter: Property insurance,Claim on policy,Insurance,Proof of defendants' claim,Defendant insurers rejected claim,Whether equitable fraud committed by defendants which entitled plaintiff to maintain action against insurers,Fire,Whether claim procedures brought to notice of insurers,Whether claim made in accordance with claim procedures specified under policy,Whether claim time barred,Defendants alleged that fire started by plaintiff or his servants and agents

Cur Adv Vult

The plaintiff is the sole proprietor of the business known as Overseas Union Radio & Electric Co which deals in electronic and electrical goods and components on both a wholesale and a retail basis. In October 1990, the plaintiff rented the first floor (the warehouse) of the premises known as 169 Ubi Avenue 4, Pan Malayan Warehouse, Singapore for use as a store. The following month, he obtained a fire insurance policy (the policy) from the defendant insurers which policy covered the plaintiff`s stock-in-trade in the warehouse and its furniture, fixtures and fittings for the period 1 December 1990 to 30 November 1991. On 29 September 1991, a fire broke out in the warehouse causing substantial damage to the plaintiff`s goods. The plaintiff subsequently presented a claim under the insurance policy which claim was rejected by the defendants. This action is the result of the rejection.

The defendants resist the plaintiff`s claim on various grounds. Apart from putting the plaintiff to strict proof of his allegations of the extent of the loss sustained, the defendants in their defence also put forward a positive case on the basis of which they contend that the policy should not answer the claim. Their main defence is that the loss or damage was occasioned by the wilful act of the plaintiff or with his connivance in that they allege that the fire was deliberately started with the aid of an accelerant by the plaintiff himself or by his servants or agents. The second substantial line of defence is one of time bar. The defendants say that the policy requires the plaintiff to commence action within 12 months of the fire and that as this action was only commenced on 30 November 1992, two months after the anniversary of the fire, it is time barred. Finally, they allege that the plaintiff is also in breach of cl 11 of the policy which required him to file his claim in a specified way and to provide them with all documents necessary to make a proper assessment of the claim.

Background

The plaintiff has dealt in electronic goods for over 30 years. Initially, he worked in Sungei Road for his elder brother. He started his own business in 1970, also in Sungei Road. He shifted his business operations several times thereafter until around 1980, when he took up a shop unit in Sim Lim Tower. At some stage thereafter, he also rented a store in the basement of Sim Lim Tower. About $1m worth of goods were kept in the store but, in late 1990, the plaintiff decided to move his extra stock to the warehouse. He said that the basement store was too small and the goods in it were prone to damage because of frequent flooding of the premises.

The initial lease in respect of the warehouse was for a period of 11 months between 1 October 1990 and 31 August 1991. On its expiry, this lease was renewed for a further period of one year. Whilst the goods in the store at Sim Lim Tower had not been insured, shortly after the lease of the warehouse was concluded, the plaintiff applied for and obtained a policy of insurance from the defendants covering his stock-in-trade kept in it. He explained that he had taken out a $3m insurance policy because at that stage he had a lot of new customers which had led to an increase in the amount of stocks that he had purchased.

The plaintiff`s financial statements showed that his business developed steadily between 1988 and 1991. In 1988, he had sales of $1,034,206. 1989 showed a 3.6% increase in sales and by 1990, his sales had increased another 50% to slightly over $1.5m. In 1991, his sales took a quantum leap of 119% to over $2.2m. In 1991, also, his purchases increased by 249% over the previous year: he bought $5.7m worth of goods as compared with $2.3m worth in 1990. Over the years, export of goods formed a substantial portion of the plaintiff`s business. He had active dealings with customers from a wide span of foreign countries including Sri Lanka, Japan, Vietnam, Iran, Indonesia, Mexico, Bangladesh, Malaysia, Taiwan, Hong Kong and Turkey. In fact, most of the plaintiff`s substantial sales were made to parties outside Singapore.

In 1991, the plaintiff`s business was run principally by himself and one Mr Lim Seng Kok, who was employed as his export manager. He employed, in addition, a clerk, one Ms Joanne Pang, a general sales assistant and a Mr Rajan, who was described as a `casual labourer`. Further, the plaintiff`s wife, Mdm Poh Siew Kim, assisted him in the shop at Sim Lim Tower and his son, James Ng Hwee Meng, who was then doing national service, spent most of his free time helping the plaintiff in his business.

The premises at the Pan Malayan Warehouse is a large, purpose built, three- storey block. In 1991, part of the building had been let to a company known as Norva (SEA) Pte Ltd (Norva). Norva occupied the upper two floors of this part and also a mezzanine workshop on the first floor, but they sub-let the remainder of the first floor to the plaintiff. This first floor (which I refer to in this judgment as `the warehouse`) consisted of a large open storage area for boxes of electrical components and two washrooms at the rear. Some of the plaintiff`s boxes of stock stood on wooden pallets; others were directly on the floor. Between the stacked boxes of goods, there were aisles to allow access to the stock.

Access to the warehouse was gained via a large roller shutter door and a small pedestrian access door at the front and by a rear door. In addition, there was access to the mezzanine workshop via a separate staircase at the rear of the block. The electrical supply for all three storeys of the premises entered the building at the rear of the warehouse where it fed a distribution panel located at the rear of the portion of the first floor occupied by the plaintiff.

According to the plaintiff, there were only two sets of keys to the doors of the warehouse. Both sets of keys were always with him. No one had access to the keys except with the plaintiff`s express permission. When the plaintiff travelled out of Singapore, as he did frequently in 1991, he would hand over one set of keys to his son while keeping the other set with him. In the plaintiff`s absence, visits to the warehouse were rather complicated. As Ng Hwee Meng was generally in camp in Nee Soon during office hours, whenever Mr Lim needed to visit the warehouse, he would page Ng Hwee Meng and set up an appointment to meet the latter in camp and collect the keys from him. After his business at the warehouse was completed, he would meet Ng Hwee Meng in camp again in order to return the keys.

On 24 September 1991, the plaintiff left Singapore for Calcutta and Bombay. As usual, he kept one set of the keys to the warehouse with him and gave the other to Ng Hwee Meng.

On the morning of Saturday, 28 September, one of the plaintiff`s customers, an Indonesian lady, came into the Sim Lim shop and asked Mr Lim to retrieve from the warehouse some 15 cartons of clothing which she had previously asked the plaintiff to store there for her. Later that morning, Mr Lim having then obtained the keys from Ng Hwee Meng, went to the warehouse accompanied by Mr Rajan. Once there, the two men loaded the 15 cartons of clothing into their vehicle and took them back to Sim Lim Tower. Mr Lim kept hold of the keys as Joanne Pang then asked him to go back to the warehouse to check on some stock.

Mr Lim left the shop again in the afternoon and, after picking up a friend, went back to the warehouse. He arrived there at about 4.10pm and proceeded to check on the stock of integrated circuit chips kept there. He was unable to find any stock of the type of chips required. At about 4.30pm, he locked up the warehouse and returned to the shop. He then returned the keys personally to Ng Hwee Meng. No further trips were made to the warehouse that day.

At about 1am on 29 September, the Geylang Fire Station received telephone information that the warehouse was on fire. Two appliances were sent to the site of the fire. On arrival, the fire crew saw flames coming out of the windows at the rear, but no flames or smoke were issuing from the front of the warehouse. The fire crews found that the premises were locked. They therefore forced an entry via the front shutters and later forced opened the other accesses to the warehouse. The fire was brought under control within an hour from the arrival of the fire brigade.

The next morning, Mr Lim, on checking his pager, discovered an unfamiliar number which turned out to be that of the Geylang Police Station. He called the station and was informed that the warehouse had caught fire. Mr Lim went to the warehouse, arriving there at about 10.30am. Police officers at the site took a statement from him. Mr Lim left the warehouse at about 1pm and, about an hour later, he telephoned the plaintiff`s home and told the latter`s wife about the fire. The plaintiff himself arrived back in Singapore that afternoon and was home by about 3.45pm. Subsequently, he made a short visit to the warehouse. The next day, Monday, 30 September, Mr Lim telephoned the defendants and notified one of their officers about the fire.

The defendants then appointed M/s McLarens Singapore Pte Ltd (McLarens), loss adjusters, to investigate the fire and ascertain the extent of the damage to the plaintiff`s goods. McLarens began their investigation that same morning with their representative, one Mr John Pang, going down to inspect the site. They also, with the defendants` consent, appointed M/s Dr JH Burgoyne & Partners Ltd (Burgoyne), consulting scientists and engineers, to carry out a forensic investigation into the cause of the fire. Dr Eric Mullen, Burgoyne`s resident Singapore director, took charge of the investigation and he visited the premises on four days between 30 September and 3 October 1991. Dr Mullen took several photographs and also six samples of the debris found at the fire site which were then sent to England for chemical analysis.

McLarens asked the...