QBE Insurance (International) Ltd v Winterthur Insurance (Far East) Pte Ltd

• Jurisdiction: Singapore
• Judge: Andrew Ang JC
• Judgment Date: 24 January 2005
• Neutral Citation: [2005] SGHC 11
• Citation: [2005] SGHC 11
• Defendant Counsel: K Anparasan (Khattar Wong and Partners)
• Published date: 26 January 2005
• Plaintiff Counsel: Michael Eu (ComLaw LLC)
• Date: 24 January 2005
• Docket Number: Originating Summons No 565 of 2004
• Court: High Court (Singapore)
• Subject Matter: Whether plaintiff's silence amounting to representation relied upon by defendant to its detriment,Promissory estoppel,Contractual terms,Express terms,Contract,Doctrine of contribution in cases of double insurance,Whether agreement between plaintiff and defendant existing,Equity,Insurance,Plaintiff alleging term of agreement that defendant agreeing to contribute to claim of sub-contractor,Whether plaintiff's own conduct amounting to breach of terms in alleged agreement,Breach,Whether defendant discharged from performing obligations in alleged agreement by virtue of plaintiff's breach,Whether plaintiff estopped from relying on alleged agreement,Estoppel,Whether equitable to apply doctrine of contribution under the circumstances,General principles,Contribution,Sub-contractor insured by main contractor's insurer (plaintiff) and own insurer (defendant)

24 January 2005

Andrew Ang JC:

1 This was an originating summons taken out by QBE Insurance (International) Limited (“QBE”) against Winterthur Insurance (Far East) Pte Ltd (“Winterthur”) for a declaration that Winterthur is liable to contribute 50% (or such sum or percentage as may be assessed by the court) towards meeting the claim of a common insured.

The facts

2 QBE had issued a workmen’s compensation policy (“the QBE policy”) on 2 March 2001 to IRE Corporation Ltd (“IRE Corporation”). The insured was described as:

I.R.E. Corporation Ltd as contractor and all levels of their sub-contractors and/or their nominated/designated sub-contractors and Sembawang Town Council as principal F.T.R.R.

3 IRE Corporation was the main contractor of the Sembawang Town Council’s re-roofing project in Woodlands (“the Project”). It had sub-contracted the supply, erection and dismantling of scaffolds for the Project to one Lye Soon Woh trading as Lye Soon Woh Scaffolding Work (“LSW Scaffolding”).

4 Winterthur had issued a workmen’s compensation policy (“the Winterthur policy”) to LSW Scaffolding.

5 On 24 August 2001, one Ng Yeok Onn (“the Injured Workman”), a workman in the employ of LSW Scaffolding, was injured in an accident at the site of the Project in the course of his work for LSW Scaffolding.

6 On 17 August 2002, the Injured Workman brought an action in Suit No 965 of 2002 (“the Proceedings”) against LSW Scaffolding (as first defendant) and IRE Corporation (as second defendant) alleging, inter alia, negligence, breach of duty as occupier and/or as employers.

7 The chronology of events after the issuance of the Writ is as follows:

(a) On 27 August 2002, the Injured Workman’s lawyers, M/s Sim Mong Teck & Partners (“SMT & Partners”), forwarded a letter to LSW Scaffolding and another to IRE Corporation giving them notice of the issuance of the Writ against them;

(b) On 30 August 2002, IRE Corporation forwarded the said letter from SMT & Partners and the Writ dated 17 August 2002 to QBE;

(c) On 31 August 2002, IRE Corporation submitted a claim form under the QBE policy to QBE;

(d) On 3 September 2002, QBE instructed M/s ComLaw LLC (“ComLaw”) to enter appearance on behalf of IRE Corporation. ComLaw lodged the Memorandum of Appearance on the same day; and

(e) On 4 September 2002, Winterthur notified QBE that LSW Scaffolding had forwarded a copy of the Writ to it and asked whether QBE would be taking over the conduct of the defence of LSW Scaffolding.

8 On 10 September 2002, the claims manager of QBE, one Stephen Chua Lai Soon (“Chua”), spoke with Winterthur’s claims manager, Mrs Corina Tay (“Mrs Tay”). The parties disagree as to what transpired between their respective claims managers in the conversation.

9 QBE’s version of the conversation, as recounted by Chua in his affidavit of 10 September 2004, was as follows:

(a) QBE would instruct ComLaw to enter an appearance and take conduct of the proceedings on behalf of LSW Scaffolding;

(b) QBE and Winterthur would contribute towards the claim, including legal costs, against LSW Scaffolding;

(c) ComLaw would address the issue as to which policy (namely, the QBE policy, the Winterthur policy or both) vis-à-vis LSW Scaffolding, was invoked; and

(d) If it was later established that only the Winterthur policy should respond in respect of the liability of LSW Scaffolding, Winterthur could appoint solicitors to take over from ComLaw the conduct of LSW Scaffolding’s defence.

10 QBE further alleged that the aforesaid agreement between the two claims managers was relayed to ComLaw who recorded the same in their letter dated 10 September 2002 to Winterthur with a copy to QBE. Winterthur, on the other hand, denied that there was any agreement between Mrs Tay and Chua as to Winterthur contributing towards the claim.

11 In her affidavit filed on behalf of Winterthur on 21 September 2004, Mrs Tay denied that she had agreed that Winterthur would contribute or otherwise be responsible for payment of any part of the Injured Workman’s claim. She added that there was no reason for her to do so pending further investigation. Winterthur had not instructed solicitors at that time. She had reserved Winterthur’s position on policy liability.

12 That being so, she saw no difficulty in allowing QBE to instruct solicitors to defend both the insured defendants (LSW Scaffolding and IRE Corporation) in the Proceedings. Therefore, when Chua suggested that QBE instruct its solicitors to enter appearance for LSW Scaffolding in the Proceedings and take on conduct of the matter on behalf of LSW Scaffolding pending further investigation, she agreed.

13 Since QBE relied on the letter dated 10 September 2002 written by its solicitors ComLaw to Winterthur as proof that Winterthur had agreed to contribute towards payment of the Injured Workman’s claim, the letter is set out below in full:

We act for QBE Insurance (International) Ltd.

We have been instructed by our clients’ Mr Steven Chua, pursuant to his conversation with your Ms Corina Tay today, to enter appearance for the 1st Defendant [LSW Scaffolding] and to attend the PTC tomorrow for both Defendants.

Meanwhile, we will be addressing the issue of whose Policy liability vis-à-vis the 1st Defendant is invoked after perusing both yours and our clients’ Policies and Schedules in this matter. If it is later established that your Policy will respond in respect of the 1st Defendant’s liability, then you can appoint solicitors to take over from us the conduct of the 1st Defendant’s defence.

What is immediately obvious is that there is not a word in the letter regarding the alleged agreement to contribute. It is also clear that it had not been resolved whose policy was engaged. QBE’s solicitors (ComLaw) had undertaken to consider whose policy liability vis-à-vis LSW Scaffolding was invoked. Finally, ComLaw had agreed that if it was later established that the Winterthur policy would respond in respect of LSW Scaffolding’s liability, then Winterthur could appoint its own solicitors to take over conduct of LSW Scaffolding’s defence.

14 In Mrs Tay’s fax of the same date (10 September 2002) to Chua, she had confirmed the morning’s telephone conversation in which Chua had agreed to instruct ComLaw to represent Winterthur’s insured at the pre-trial conference “pending further investigations by both ourselves”. In the same fax, she had forwarded a copy of the policy issued by Winterthur and requested a copy of the QBE policy and a copy of an investigation report on the accident. She received no response. She therefore wrote on 16 October 2002 to ComLaw asking for the documents requested. At the same time, she notified ComLaw that as Winterthur’s insured had “breached the policy condition”, Winterthur had reserved its rights under the policy. Still, there was no response from ComLaw.

15 On 1 November 2002, Winterthur sent a reminder enclosing its fax of 10 September 2002. There was again no response. Finally, on 30 December 2002, Mrs Tay wrote to ComLaw as follows:

We refer to our fax dated 1.11.02 enclosing copy of our fax dated 10.9.02 to your client, QBE.

To-date, we received no response from you. In view thereof, we shall take it that the claim from the Plaintiff shall be responded under your client’s workmen’s compensation policy and that they are also defending the 2nd [sic] Defendant, Lye Soon Woh.

We await your response within 7 days from the date of this letter failing which we shall take it that the foregoing is accepted by your client and we shall treat the matter as closed.

Even then, she received no response. She therefore assumed that QBE had accepted liability for both IRE Corporation (the main contractor) as well as for LSW Scaffolding. She also considered the matter as closed.

16 On 12 March 2004 (some 15 months after Winterthur’s last letter to them of 30 December 2002), ComLaw finally wrote to Winterthur saying that they had perused both policies and were of the view that both operated to cover the action brought by the Injured Workman and that equal contribution should be made by QBE and Winterthur. QBE sought confirmation from Winterthur that it would make contribution of 50% towards the claim (including legal costs). Finally, it threatened legal action unless it heard favourably from Winterthur within two weeks.

17 It emerged that two days before sending this letter, ComLaw had consented to interlocutory judgment being entered against LSW Scaffolding and had also negotiated for the Injured Workman to discontinue the action against IRE Corporation (QBE’s insured). Winterthur had not been consulted in regard to this. In fact, ComLaw had concluded the litigation without reference to Winterthur at all, whether in the filing of the Defence or the consent to interlocutory judgment.

18 In these circumstances, Winterthur declined to confirm that it would contribute and QBE then took out the originating summons herein.

19 At the hearing before me, counsel for QBE produced a claim memo (“the memo”) allegedly written by Chua on 10 September 2002 containing notes of the conversation with Mrs Tay on the same day. The note included this entry:

If any contribution from Sub-Contractors Winterthur will respond + contribute on liability accordingly. Have informed Ms Chua Li Suan of ComLaw LLC of this arrangement.

Strangely, although Chua had affirmed an affidavit on 10 September 2002, he had not mentioned the existence of the memo. Instead, reliance had been placed by him and by another deponent, Hong Heng Kum (in the latter’s affidavit of 24 May 2004 on behalf of QBE), solely on the letter of 10 September 2002 written by ComLaw to Winterthur. Why was the memo not even alluded to earlier? It came from out of the blue, as it were, at the hearing and was not verified by an affidavit. No explanation was offered why it had not been produced earlier. Although no objection was taken by counsel for Winterthur in regard to the lack of verification, I had reservations...