Vaswani Lalchand Challaram and Another v Vaswani Roshni Anilkumar and Another

• Jurisdiction: Singapore
• Judge: Choo Han Teck J
• Judgment Date: 29 June 2005
• Neutral Citation: [2005] SGHC 110
• Docket Number: Originating Summons No 387 of 2004 (Registrar's Appeal from the Subordinate Courts
• Date: 29 June 2005
• Year: 2005
• Published date: 30 June 2005
• Plaintiff Counsel: Sunil Singh Panoo (Dhillon Dendroff and Partners)
• Citation: [2005] SGHC 110
• Defendant Counsel: Ramesh Appoo (Just Law LLC)
• Court: High Court (Singapore)
• Subject Matter: Deceased's widow objecting to parents' request for payment from insurer,General principles,Whether parents proper claimants to insurance proceeds,Privity of contract,Whether exception to privity rule arising,Claims,Whether policy moneys belonging to estate of deceased to be distributed in accordance with laws of intestate succession,Contract,Whether policies amounting to gifts forming part of deceased's estate,Deceased taking out insurance policies prior to marriage and naming parents as beneficiaries,Whether beneficiaries named in insurance policies precluded from suing on contracts of insurance,Sections 61(1), 61(6) Insurance Act (Cap 142, 2002 Rev Ed),Insurance,Whether insurer obtaining valid discharge from liability by paying out insurance moneys to parents

29 June 2005 Judgment reserved.

Choo Han Teck J:

1 Anilkumar Vaswani was an insurance agent in the employ of the second defendant. He died on 25 February 2003, at the age of 30. His widow is the first defendant in this originating summons. The plaintiffs are his parents. His father is 75 years old and his mother is 73. The deceased married the first defendant in 1999. The assets of the deceased comprised mainly the moneys due under three insurance policies taken out by the deceased from the Great Eastern Life Assurance Co Ltd, the second defendant in this originating summons. All three policies were contracted before the deceased married the first defendant. His parents were the named beneficiaries in all three policies.

2 The first policy (Policy No 1680799-8) is an 18-year “Golden Lion Endowment” policy purchased on 28 September 1994 for an annual premium of $2,247. The second policy (Policy No 1924575-4) is a “12-year Capital Assurance Plan” for which a single, one-off premium of $50,000 was paid on 26 April 1996. The third policy (No 1995137-5) is a “Living Assurance Policy”, with a monthly premium of $227.35 commencing from 31 December 1996. The plaintiffs joined the second defendant in this originating summons on the ground that the contracts of insurance were made between the deceased and the second defendant. The Originating Summons was brief in its content and only pleaded as follows:

By this Summons, the Plaintiff seeks the following orders:-

1. That the Contest of the 1^st Defendant over the monies payable under the 2^nd Defendant’s Policy Nos. 16807998, 19245754 & 19951375 be declared null and void.

2. That the 2^nd Defendant pays the monies due under the 2^nd Defendant’s Policy Nos. 16807998, 19245754 & 19951375 to the Plaintiffs forthwith.

3. That the 1^st Defendant pays the Plaintiffs the costs of these proceedings.

4. There be no order as to costs as to the 2^nd Defendant or in the alternative, the 1^st Defendant pays the costs of the 2^nd Defendant.

5. Such further or other relief as this Honourable Court thinks fit.

3 The hearing in the district court below concerned principally the three issues identified in the grounds of the court ([2005] SGDC 11) as follows:

(1) Who were the persons entitled to the payments under the [three] policies of insurance?

(2) Could the insurer [the second defendant], have obtained a legal discharge by making payment to the Plaintiffs?

(3) Does the doctrine of privity apply to the facts of this case to deny the Plaintiffs their rights as conferred on them by the policies?

4 The plaintiffs claim to be entitled to the insurance moneys by virtue of the fact that they were the nominated beneficiaries in the three policies. The first defendant claims that the moneys belong to the estate of the deceased as part of his assets, and hence, as his widow, she would be entitled under the Intestate Succession Act (Cap 146, 1985 Rev Ed) to half the assets of the estate, and thus, half the sum of the moneys under the three policies. The first defendant contends that the plaintiffs were not privy to the contracts of insurance and, therefore, precluded from the privity rule in contract to sue on them.

5 Thus, it would be useful to first consider s 61(1) of the Insurance Act (Cap 142, 2002 Rev Ed). Section 61(1) provides that:

In any case where the policy owner of any life policy or accident and health policy of an insurer dies, and the policy moneys are payable thereunder on his death, the insurer may make payment to any proper claimant a prescribed amount of the policy moneys of all such policies issued by the insurer on the deceased’s life without the production of any probate or letters of administration; and the insurer shall be discharged from all liability in respect of the amount paid.

A “proper claimant” is defined by s 61(6) of the Insurance Act to mean “a person who claims to be entitled to the sums in question as executor of the deceased, or who claims to be entitled to that sum (whether for his own benefit or not) and is the widower, widow, parent, child, brother, sister, nephew or niece of the deceased”.

6 Section 61(1) empowers the insurer to make payment under a policy and such payments made under the terms of this section shall discharge the insurer. This section does not indicate who shall lawfully be entitled to the beneficial interests under the policy. In the present case, the deceased died intestate and letters of administration have not been granted. Counsel stated that neither party really wanted to administer the estate since the main assets of the deceased were the moneys due under the three policies. In the circumstances, neither party could have claimed payment from the second defendant under the first limb of s 61(6), id est, as executor or administrator (although the latter was not specified in
sub-s 61(6). It is, however, necessary to explain that the words “claims to be entitled” – which are not defined in the Act – must refer to a prima facie entitlement only. The Act does not, in my opinion, require the claimant to be legally entitled since the legal entitlement might, as in this case, be pending determination by litigation. Therefore, had the second defendant paid out the moneys to the plaintiffs it would have obtained a valid discharge under s 61(1) of the Act. The second defendant decided that because of the competing claims, it would not make the decision to pay. If it had a valid reason to decline making payment, then it must accept the responsibility of meeting any challenge in court. It was thus joined initially, as the second defendant, but the plaintiffs withdrew...