Nippon Fire and Marine Insurance Co Ltd v Sim Jin Hwee

• Jurisdiction: Singapore
• Judge: Karthigesu JA
• Judgment Date: 20 April 1998
• Neutral Citation: [1998] SGCA 24
• Citation: [1998] SGCA 24
• Date: 20 April 1998
• Year: 1998
• Plaintiff Counsel: Lawrence Lee and Sandy Foo (David Chong & Co)
• Docket Number: Civil Appeal No 200 of 1997
• Defendant Counsel: John Tay and Thakuta (John Tay Syed & Partners)
• Court: Court of Appeal (Singapore)
• Published date: 19 September 2003

Judgment:

KARTHIGESU JA

Cur Adv Vult

(delivering the judgment of the court): This appeal raises two interesting questions of law. The first is whether, in the events which have happened in this case, an insurer of a motor vehicle is liable under s 9(1) of the Motor Vehicles (Third-Party Risks and Compensation) Act (Cap 189) (the Act) to satisfy judgments against persons insured in respect of third-party risks; and the second is whether, in the event the insured becomes bankrupt the insured`s rights against the insurer under the policy in respect of that liability is transferred to and vests in the third party to whom the liability was so incurred pursuant to s 10(1)(a) of the Act.

2.The learned judge in the High Court held that the claim of the respondent, the third party in this case, fell within the ambit of s 9(1) of the Act and further that notwithstanding that the insured under the policy had become bankrupt, the respondent had `satisfied all the pre-conditions envisaged` under s 10(1) of the Act as well as under s 1(1) of the Third Parties (Rights Against Insurers) Act (Cap 395, 1994 Ed) and hence the respondent was entitled to enforce the judgment obtained by him against the insured against the insurer, the appellants, as the respondent had satisfied all the requirements of s 9(3) of the Act. The appellants, Nippon Fire and Marine, being dissatisfied with the learned judge`s judgment have appealed.

3.The facts are not contentious except for who was driving the car at the time of the accident. However, this has no material consequence on the question of Nippon Fire and Marine`s liability to satisfy the judgment obtained by the respondent against the insured under s 9(1) of the Act.

4.The respondent was injured in a road accident on 5 December 1991 on the Malaysian side of the Singapore-Johore causeway and is now partially paralysed. He was a passenger in a car which he claimed was driven by one Lim Heng Nam (Lim); there was one other passenger, Wong Teo Hin (Wong) who, on another version of the evidence, was reputed to be the driver. But as we have said above whether Lim was the driver or Wong was the driver has no materiality in so far as Nippon Fire and Marine`s liability under s 9(1) of the Act is concerned. The learned judge found that Lim was the driver. Nippon Fire and Marine appear to have accepted this finding.

5.The car was registered in the name of Mdm Leong Suet Wun (Leong), who was the hirer of the car under a hire-purchase agreement she had entered into with OCBC Finance Ltd (OCBC Finance) on 18 January 1991. Nippon Fire and Marine were Leong`s insurers under a motor insurance policy dated 15 January 1991.

6.The events preceding the accident may be stated briefly. Leong, who was having difficulty in keeping up with the monthly instalment payments to OCBC Finance, agreed to sell the car to Wong in June 1991. Wong took possession of the car and the understanding was that the change in the registration of the car with the Registry of Vehicles (ROV) would not be effected until certain payments were made. In the event the payments were not made and the change in registration with the ROV was not effected with the result that on the date of the accident, namely 5 December 1991, the car was still registered with the ROV in Leong`s name. In legal terms the property in the car had not passed to Wong notwithstanding that possession of the car was given to him by Leong in June 1991.

7.By November 1991 Leong was already several months in arrears with her instalment payments to OCBC Finance. On 27 November OCBC Finance claimed payment of the arrears within seven days, failing which they said they would terminate the hire-purchase agreement. Leong`s financial position was tight; she wanted to get back the car from Wong in order to sell it and raise the money to pay off OCBC Finance. She demanded its return from Wong several times in November and December 1991. She even made a police report against Wong on 4 December 1991.

8.In the meantime OCBC Finance decided to repossess the car because of Leong`s breaches of the hire-purchase agreement. They appointed the respondent to do this and furnished him with the necessary authority and information. After several attempts the respondent contacted Lim and arranged to meet him on the night of 4 December 1991. Lim arrived at the meeting place in the car. He wanted to go to Johore Bahru to collect some moneys. The respondent accompanied him as a passenger. There was another passenger in the car who presumably was Wong. In the early hours of 5 December 1991 the car was involved in the accident on the Malaysian side of the causeway causing serious injuries to the respondent.

9.The respondent sued Lim and Leong for damages in negligence for his injuries. He alleged that Lim was Leong`s servant or agent. In the event, the respondent successfully entered judgment against Leong on 29 February 1996 for $460,648.56 and costs. No judgment was entered against Lim. Although it appears, as the learned judge found, that Nippon Fire and Marine had due notice of the proceedings commenced by the respondent against Lim and Leong and of the date of the assessment of damages, Nippon Fire and Marine declined to take part, holding the view that they were not liable under Leong`s motor insurance policy. At that time they gave no reasons. Leong did not or was not able to pay the judgment sum; she was made a bankrupt on 4 September 1992. The respondent then commenced the present action against Nippon Fire and Marine and the Motor Insurer`s Bureau seeking payment of the judgment sum. The action against the Motor Insurer`s Bureau was struck out on 4 April 1997.

10.As against Nippon Fire and Marine, the respondent claimed that they were liable to satisfy his judgment against Leong under s 9(1) of the Act. Nippon Fire and Marine denied liability on four grounds. Firstly, the accident happened in Malaysia and was outside the scope of s 9(1) of the Act. Secondly, the policy had lapsed when Leong sold the car to Wong in June 1991. Thirdly, the car was being driven by a person other than an...