Siang Hoa Goldsmith Pte Ltd v The Wing On Fire & Marine Insurance Co Ltd

• Jurisdiction: Singapore
• Judge: G P Selvam J
• Judgment Date: 30 August 1997
• Neutral Citation: [1997] SGHC 224
• Docket Number: Suit No 1532 of 1994
• Date: 30 August 1997
• Year: 1997
• Published date: 19 September 2003
• Plaintiff Counsel: Tan Joo Thye (Rodyk & Davidson)
• Citation: [1997] SGHC 224
• Defendant Counsel: Michael Eu (Cooma Lau & Loh)
• Court: High Court (Singapore)
• Subject Matter: Whether non-payment of purchase price constitutes a risk within meaning of policy,Policy covers loss of gold stock and merchandise,Theft and fraud,Policy extended to include one-off carriage of jewellery under air waybill,Insurance,Jewellery released under forged letter of indemnity -No payment received,Property insurance,Loss due to two causes -One cause caught by exemption clause -Whether person who transacts with insured a customer within the meaning of policy,Policy excludes loss which caused by fraud, dishonesty or dishonest deception of customer of insured,Whether insurer liable where loss caused by two causes and one cause falls within exclusion clause

Judgment:

GP SELVAM J

The facts of this case are agreed. The plaintiffs, a Singapore company, carried on the business of jewellers.

2.By an all risks policy of insurance dated 12 August 1992 issued by the defendants to the plaintiffs, the defendants agreed to indemnify the plaintiffs in respect of loss or damage to the property insured. In respect of gold stock and merchandise, the sum insured was S$3.5 million.

3.Exclusion 1 of the policy provided that the policy did not cover `loss or damage caused by fraud, dishonesty or dishonest deception committed by any customer of the insured or any customers of the insured`s broker`.

4.By a endorsement dated 14 June 1993, the policy was extended to include an one-off overseas sending of 1 carton 18K gold jewelleries weighing 23,717.55g from Singapore to Miami, Florida, USA by air flight No BA 12 under an air waybill for an insured sum of S$380,000 but subject to the terms and limitations of the policy.

5.On or about 8 May 1993, someone introduced himself as Samuel Lustig of Italgold and placed a large order of 18K jewelleries with the plaintiffs. The estimated price of the purchase was US$220,000. At the request of the plaintiffs, Samuel Lustig paid a deposit of 10% or US$22,000 by way of US$5,000 in cash on 8 May 1993 and sent US$17,000 by telegraphic transfer on 19 May 1993.

6.On 9 June 1993, the plaintiffs proceeded with the shipment of the goods with British Airways. The plaintiffs rendered two invoices dated 8 June 1993 for the agreed US$224,454.10 to Italgold.

7.The said shipment arrived at Miami Florida USA without any mishap on 10 June 1993. British Airways released the goods to one Mike Delgado on 11 June 1993 against a letter of indemnity purportedly issued by Capital Bank, the consignee named under the air waybill. The letter of indemnity was forged, presumably by Samuel Lustig.

8.On 11 June 1993, one Mike Delgado personally transported the goods to Italgold`s office at Miami Free Zone and delivered it to Samuel Lustig who had placed the order for them in Singapore. The goods were acknowledged and received by Samuel Lustig. Italgold had not attended at the Capital Bank to make any payment and the original shipping documents were returned to the plaintiffs` bank, United Overseas Bank, by Capital Bank.

9.Based on the above agreed facts two issues were : (a). First whether the jewellery delivered to Samuel Lustig of Italgold Inc was a `loss` within the meaning of the insurance policy?

(b). Next, if there was a loss...