Zhang Yiguang (suing by the committee and estate of his person, Tong Wen Li) v Intergraph Systems South East Asia Pte Ltd

• Jurisdiction: Singapore
• Judge: Choo Han Teck J
• Judgment Date: 11 June 2004
• Neutral Citation: [2004] SGHC 126
• Docket Number: Suit No 1132 of 2003
• Date: 11 June 2004
• Year: 2004
• Published date: 14 June 2004
• Plaintiff Counsel: Doris Chia and Adeline Chong (Harry Elias Partnership)
• Citation: [2004] SGHC 126
• Defendant Counsel: Harish Kumar and Mark Yeo (Engelin Teh Practice LLC)
• Court: High Court (Singapore)
• Subject Matter: Insurance policies taken by employer on life and health of employees,Whether additional benefits conferred by employer on employee could be deducted from insurance payments,General principles,Insurance,Whether employee entitled to benefits due under insurance policies,Claims

11 June 2004 Judgment reserved.

Choo Han Teck J:

1 This is a claim by Tong Wen Li, the wife and committee of the person of Zhang Yiguang (the plaintiff) for a sum of money amounting to $473,089.50 being insurance payments made to the defendant. The plaintiff was an employee of the defendant from 4 October 1999. He suffered a serious and permanent head injury in an accident in Atlanta, USA on 13 June 2002. There was no dispute that he was injured whilst in the employment of the defendant. His employment was terminated on 13 May 2003, a year after the accident. The insurance payments under the policies taken out by the defendant included $186,912 under the Group Term Life Insurance; $280,368.00 under the Group Personal Accident Benefits; and $809.50 under the Group Hospital and Surgical Insurance in respect of medical expenses incurred in Singapore. There was also a travel policy taken out by the defendant with the American Insurance Group (“the AIG policy”) under which a sum of $5,000 had been paid to indemnify the defendant for expenses occasioned by the evacuation of the plaintiff to Singapore. The defendant paid a total of $27,369.58 towards the evacuation costs. All payments under the policies were made to the defendant.

2 The claim by the plaintiff for the AIG payment was misconceived because that was a direct indemnity policy and the money was paid to indemnify the insured for the expenses actually incurred up to the limit agreed under the policy. It was not disputed that the defendant paid the costs of evacuating the plaintiff. Thus, I find that the plaintiff was not entitled to the $5,000 under the AIG policy. The plaintiff’s claim for the rest of the insurance money is less straightforward. The defendant disputed the claims on the ground that since it, and not the plaintiff, was the insured, it was entitled to all payments made under the insurance policies. Its defence averred that “an employee who is insured under a group insurance policy does not acquire any direct interest in the policy unless he is a party to the contract of insurance”. It also denied that it held the benefit of the policies in trust for its employees. It denied that the plaintiff, or any of its employees, was entitled, contractually, to the benefits under the policies.

3 Miss Chia, counsel for the plaintiff, argued that the plaintiff was entitled to the insurance money as a matter of “entitlement”, that is to say, as a matter of contract. She referred to cl 11 of the employment contract (dated 4 October 1999) and the defendant’s “Employee Handbook” dated June 2001 as constituting the applicable terms of the contract. Clause 11 reads as follows:

Admission for Employee to the Company’s non-contributory medical, dental and hospital scheme. Dental benefit apply after 6 (six) months employment.

Clause 7.3 of the Employees’ Handbook reads as follows:

All employees are entitled to the benefits of insurance protection under the following schemes at the Company’s cost. Employees based in Singapore, Myanmar and Vietnam are covered by (the Insurance Corporation of Singapore). For employees based in Malaysia, Indonesia and Philippines, please contact your local office administrator for details of your insurance coverage.

4 The schedule of benefits provided by the insurance company was annexed to the handbook. A company handbook is usually a compendious document that sets out the entitlement and benefits of the employees, as well as the house rules by which they are expected to conduct themselves. Whether the content of the handbook or any part of it...