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a) The issue arise is whether Jessie Koh would successfully claim an indemnity from MINI Insurance Bhd. In a given situation, an insured is Sam Lee and the insurer is MINI Insurance Bhd. The type of policy is motor insurance policy. Part IV of Road Transport Act 1987 provides that every motorist must insure with an authorized insurer to provide protection in respect of the death of or bodily injury to a third party caused by or arising out of the use of motor vehicle. Basically, it is compulsory for drivers to insure against liability in respect of specified third party risk. It is also to regulate the form and content of compulsory motor insurance contracts to safeguard the indemnity payable by insurer. Further, under Sec 90(1) of Road Transport Act 1, it stated that, it shall not be lawful for any person to use or permit any other person to use a motor vehicle unless there is in force in relation to the user of the vehicle, a policy of insurance in respect of third party risk. The standard term and conditions that are found in motor vehicles policy are important to compulsory and non-compulsory insurance as even though as will be seen, some of them may not be enforceable against a third party victim where insurance was compulsory, they may remain between insurers and insured. The standard terms will be considered under three headings which are:2 1. Standard extensions, 2. Limitation on use of vehicles and; 3. Terms relating to the condition of the insured vehicles. For the first heading, it is common for motor policies to insure people other than the insured or policy holder driving the car or vehicles in question. For example, cover may extend to spouse of the insured or anyone driving the vehicles on the insured order or permission. In Morgans v Launchberry,3 the case strictly involved only the point of law of tort as to whether the insured as the owner of the car was vicariously liable for the acts of the driver and it was held that she was not, and in the Court of Appeal, indicates that if the insured was not liable, the insurers would not be liable to indemnified the driver because the latter did not have her permission.
1 2

[1987] Birds John (2007). Birds Modern Insurance Law. Sweet and Maxwell Ltd: London p 387 3 [1973] A.C 127.

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Secondly, motor policy generally provides that the insurers are not to be on risk or liable when the insured vehicles is being driven in an unsafe or roadworthy condition. Roadworthiness clause is a condition precedent which is a provision stated that policy does not cover liability while vehicle is driven in an unroadworthy manner. In the case of Clarke v National Insurance & Guarantee Corp4, it was held that, insurer is not liable for total loss of the car as reliance on the Roadworthiness Clause as the insurer not liable for any accident if vehicle is driven in unsafe manner. For the third heading, if an insured is covered for social, domestic and pleasure purpose and not for business use or at least only for travelling from home to work, the distinction becomes important. It must depend on the facts of the particular case and the essential character or primary purpose of the journey. In Jones v Welsh Insurance Corp,5 it was held that the insurers were not liable. The insured was carrying on the business of sheep farming which was not stated in the policy and the policy does not cover. In the case of Union Insurance Sdn Bhd v Chan You Young6, the issue raise is whether, res, a woman travelling as a passenger in a car, owned by husband as insured, driven by son with husband authority can claim damages. It was later held that, the 1st suit against the son for negligent. Husband who is insured was sued in regards to vicarious liability for the action in tort against the son. In application, Sam Lee was an insured under MINI Insurance Bhd and Jessie Koh is the third party in this case. By relaying to Section 91 (1) of Road Transport Act and Section 91(1) (bb), Jessie Koh is the third party who is injured while riding the car with her husband and her nephew. In this application, Joe Lee is an authorized driver by relying on the fact that he drives Sam and Jessie to work. Further, it can be argued that, there is no condition for the use of vehicles. Although Joe was speeding at 130 kmph as they were late, but still there is no clause provided under the policy that prohibit from claiming. By relying on the arguments in can be said that Jessie Koh is a third party who is injured and she is entitled to claim an indemnity from MINI Insurance for the injuries that she suffers. In conclusion, it can be said that Jessie Koh is entitled to claim for the loss suffers from MINI Insurance Bhd.
4 5

[1964] 1 Q.B 199 [1937] 4 All E.R 149 6 [1999] CA

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b) The issue arise is whether Renee is a rightful claimant for claiming all the policy monies from ASIA Insurance Bhd and EURO Insurance. The parties involves in this situation is the insured is Sam Lee; the insurers are ASIA
Insurance Bhd, EURO Insurance and MINI Insurance Bhd. Meanwhile, the beneficiaries are Gary Lee, Sally Tan, Jessie Koh and Sam Lees children which are Minnie and Tim. And the other lawful claimants to the policy are Renee and Joe Lee. Basically, right to make claim exist upon the occurrence of the insured event ie, the policy ended and it would amount to the benefit where the insured had died. By virtue of Sec 165 169 of Insurance Act 1996, the person who has legal capacity to make a claim are the policy owner, beneficiaries or nominees, assignees and also the personal representatives. Basically, personal representative is the person who has legal capacity whose armed with legal documents for example Letter of Administration to make a claimant of the insured policy. Previously, by virtue of S. 44 (5) of IA 1963, it is provided that the proper claimant to include the executor of deceased, widow/widower, parents, child, brother/sister or nephew/niece. Further, S. 167 (1) of IA 1996 provides that a nominee, other than spouse, child or parent to receive the policy moneys payable on the insureds death as an executor and not as beneficiary. The moneys become a part of the deceaseds estate and are subject to his debts. In addition to this, beneficiaries have legal right to bring an action against the insurer in to enforce his/her right. Besides, S. 163
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stated that the insured is free to nominate a natural person to receive the policy money payable upon

his death. In Manomani v Great Eastern Life Insurance ,8 the court held that insurer has a legal duty to pay the policy moneys to a named beneficiary. In the case of Vaswani R. Anilkumar v Vaswani L. Challaram,9 where the insured bought three policies and named his parents as beneficiaries but he did not revoke that nomination after marriage to appellant. After his death, insurer could not make payment to beneficiaries because of widows claim. As insured dies intestate, the widow claimed money formed as part of the estate. The Court of Appeal held that no statutory was created as the named beneficiaries were parents and not spouse or child. Furthermore, by naming a beneficiary, insured had expressly authorized the insurer to make payment to persons named.

7 8

Insurance Act 1996 [1991] 1 CLJ 141 9 [2003] SLR CA

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By virtue of S. 165 (1) provides that where the policy holder has made nomination, the insurer will pay the policy moneys of the deceased according to the direction of nomination. However, if there is no nomination of beneficiaries, S. 169 provides that, that if the insurer died without having made the nomination, the insurer can pay the policy moneys to the applicant who produces the Letter of Administration or Distribution Order. This situation can be illustrated in the case of Perumal A/L Manickam v Malaysian Cooperation Insurance Soc10, it was held that, the proof of deceased date of birth as per the proposal form was a condition precedent to payment of the policy money. Further, in the case of Lee Heng Moy v John Hancock Life Insurance (M) Bhd & Anor11, where there is a competing claim by lawful wife and second wife, the court had decide in favour of second wife as the court referred to the nomination made and the intention of the insured. In the other hand, in S.23 of Civil Law Act12 provided that where the policy moneys is payable on the death of the insured for the benefit of insureds wife or child, it will not form as a part of the insureds estate. Further, S. 166 (2) provides that the policy moneys under the statutory trust is not form a part of the insureds estate or be subject to his debts. In order to create statutory trust, there are two approaches: 1. Pre 1997s statutory trust governed by S.23 of CLA 1956 where the insured must fulfill the following requirements - subscribe the life insurance; expressed benefit for spouse or children; to fill in a Section 23 Form; and must appoint two trustees and in accordance with this provision, the intention of insured is not so important. 2. Post 1997s statutory trust governed by S. 166 of IA 1996 where the insured must fulfill the following requirements - subscribe the life policy or personal accident policy; nominate his spouse, child (include illegitimate/adopted child) or parent (if single/unmarried at that time); and it must be made at the time of contract or subsequently. In applying to the situation, Sam Lee is the insured and he is free to nominate any person as his beneficiaries for his life insurance. He subscribed the policy after 1997, particularly in June 2005 and 2009. The named beneficiary for the first and second policy with ASIA Insurance Bhd is respectively insureds father, Gary Lee and insureds foster mother, Sally Tan. In this contex t, foster mother can be defines as a women who looks after or bring up a child or children as a mother in place of the
10 11

[1995] 2 MLJ 144 [2010] 1 MLJ 624 CA 12 (1956)

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natural or of adoptive mother. As Sally Tan is Sam Lees foster mother, her capacity is not within the scope of parent to be nominated as required under S.166 (1) of Insurance Act. However, by virtue of S. 167 (1) of Insurance Act, she has right to receive the policy moneys as an executor and she is required to distribute it in accordance with Distribution Act 1958. The beneficiaries for policy with EURO Insurance are insureds second wife, Jessie Koh and children, Minnie and Tim. By virtue of the post 1997s statutory trust requirements and Vaswani case, the policies with ASIA Insurance Bhd are not statutory trust. It is said so because the beneficiaries are not the insureds wife or children but respectively the Sam Lees father and foster mother, thus the policy moneys are a part of Sam Lees estate in pursuant to S. 167 (1) of Insurance Act 1996. However, for the policy with EURO Insurance, it is statutory trust as the beneficiaries are expressly for the benefit of Sam Lees wife and children, thus the policy moneys are not a part of Sam Lees estate in pursuant to S. 166 (2) of Insurance Act 1996. Although Renee managed to get the Letter of Administration, she is not a qualified applicant within the S. 169 (1) of Insurance Act, as Sam Lee had made the nomination prior to his death, thus the Letter of Administration is not enforceable. As in this situation, the insurers are entitled to pay the monies in accordance of nomination made by Sam Lee. Besides, as applying to the case of Lee Heng Moy, as the nomination was made on the name of Jessie Koh and their children, therefore, they had a better claim compared to Renee and as she is Sam Lees wife then she is qualified nominee under S 166 (1) of Insurance Act 1996, thus she has full right over the monies and the administratrix is not a proper claimant when the life insurance policy has been nominated.

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The second issue arise is whether Renee (administratrix) has right to claim over motor insurance policy. The type of policy involve is motor insurance policy and the parties involved are Renee, the wife and administratrix of Sam Lees estate and the insurer is MINI Insurance. Under motor insurance policy, claims for damages and injury against insurer can be made by third parties ie the personal representative or executor of accident victims. In Perdana Cigna Insurance Bhd v Kalsom bt Mohd Abu13, the mother institute proceeding against the insurer. However, the claims failed as the respondent did not called the owner of the motivation as the witness to prove that certificate of insurance had been delivered to him and as approve that the insured motor van had purchased the insurance. Under S.91 (1)14 , the insurer would be liable for the injury of third party or death caused by the use of such vehicles. The, this provision should also cover an employee of an insured or employee of third parties who is carried as passengers. In applying to the situation at hand, Sam Lee, his nephew and his wife had met an accident and then he had died from internal bleeding. As stated in the law previously, claims and damages can be made by representative or administratrix of the third parties, Renee is entitled to make a claim for her late husband due to the accident. It is to be noted that, Renee can claim as long as the loss was covered under the insurance that was taken by Sam Lee as in the case of Perdana Cigna Insurance Bhd. Therefore, in relying to the principles, Renee is entitled to make a claim against the insurer of motor insurance policy as the one who died is her lawful husband and she is the administratrix of her husband estate. In conclusion, it can be said that Renee can make a claim against MINI Insurance on the loss of her husband life during the accident.

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[2009] 7 MLJ 585 Road Transport Act 1987

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c) The issue arise is whether MINI Insurance exercise its right to subrogate against Sam Lees estate. The issue involves subrogation principle and the type of policy involved is a motor insurance policy where the parties are MINI Insurance and Sam Lees estate. Subrogation applies to all insurance contracts which are contracts of indemnity that is particularly to contracts of fire, motor, property and liability insurance. It must be noted that, subrogation does neither applicable to life insurance policy nor prima facie to accident insurance.15 Subrogation also can be defined as the right of insurer having indemnified another under a legal obligation to do so, to stand in place of that order and avail himself of all the rights and remedies of that other whether already enforced or not. This principle was established in the case of Burnand v Rodocanachi16, where the payment by third party to insured was solely for insured benefit. Insurer cannot recover sum because it was given not for purpose of reducing the loss. Basically, the rationale behind this is that it is fair and equitable in law that when an insurer has paid claim to an insured and a third party was liable for the cause of the loss; the third party should not avoid his or her financial responsibilities. After an insurer has fully indemnified insured, he is entitled to all the rights and remedies of insured in mitigation of the loss. Doctrine of subrogation may only apply to contracts of indemnity. In the case of Castellain v Preston,17 rules that the doctrine does not arise upon any terms of the contract of insurance and it is a doctrine to prevent the assured from recovering more than a full indemnity; it has been adopted solely for that reason. Typically, the insured right will be to sue a third party liable to pay damages in tort or breach of contract or under statutory right or liable to provide an indemnity to the insured, the third partys liability being in respect of the event for which the insured had recovered from his insurer.18 Where a third party negligently causes the death of a person holding a life policy, deceased representative may recover damages from the guilty party in the course of tortuous liability and the insured sum from the life policy.

15 16

Birds John (2007). Birds Modern Insurance Law. Sweet and Maxwell Ltd: London p 305 [1882] 1 App. Cas. 333 17 [1883] L.R 11 Q.B.D. 380, CA 18 Birds John (2007). Birds Modern Insurance Law. Sweet and Maxwell Ltd: London p 309

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The question usually arise is whether insurers suing in their insureds name are entitled to claim interest for their own benefit. Nominally, that award would go to the insured, the nominal claimant, but it is now clear that the insurers subrogation rights include the right to appropriate interest under S.1519. In the case of Lin Lin Shipping Sdn Bhd v Govindasamy Mahalingam
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, it was held that the doctrine of subrogation applies where an insured brings an action against

the wrongdoer if called upon to do so by the insurer, but it is his own cause of action and not of the insurer. Therefore, the insurer is entitled to enforce the right of actions against the wrongdoer in the name of insured. In applying to the situation, MINI Insurance is intended to exercise its right under subrogation principle against Sam Lees estate. The right of subrogation arises on the issue of torts. Seconds, in applying to the case of Lin Lin Shipping, the insurer can only apply if the subrogation action was taken under the third party under the insured name. However, in this situation, MINI Insurance intended to bring an action against Sam Lees estat e, and not against the third party. Therefore, in conclusion, as Sam Lee is the insured of the stated policy, therefore, it can be said that it is impossible to bring an action against the insured which is Sam Lees estate.

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Supreme Court Act [1981] [1993] 2 MLJ