Judgment

Mohamed Dzaiddin FCJ

(delivering the judgment of the court)

1. This is an appeal from the judgment of KC Vohrah J given on 16 December 1993 dismissing an appeal against the decision of the Sessions Court, Alor Setar dismissing the plaintiff’s claim of RM50,000 for permanent disability suffered by him under a personal accident policy of insurance (‘the policy’) issued to him by the defendant, East West UMI Insurance Bhd.

2. The facts of the case were these. The plaintiff took a policy of insurance from the defendant on 20 May 1986 insuring himself against personal injury or death for the period of 14 May 1986 to 14 May 1987. During the currency of the policy, i.e. on 23 January 1987, while cutting coconut, he accidentally chopped his left thumb. Under the policy he was entitled to be paid compensation in the sum of RM50,000 for permanent disablement. He gave notice of the accident and submitted his claim which the defendant company refused to pay him on two grounds, the relevant ground in this appeal being that he was in breach of condition 4 of the policy when he failed to inform the defendant that during the currency of the policy, another policy had been issued to him by Royal Insurance (M) Sdn Bhd for RM100,000.

3. The plaintiff filed an action against the defendant in the Sessions Court, Alor Setar on 13 December 1988 claiming for RM50,000 under the policy with interest and costs. The defendant denied liability and pleaded in the defence that by condition 4, the plaintiff was required to notify the defendant of his contracting or effecting any policy with other insurance companies. He failed to do so. Hence, the plaintiff was in breach of condition 4. In reply, the plaintiff contended that he was not required under condition 4 to disclose any other insurance effected against accident where such insurance was effected after or during the policy with the defendant. Further, and in the alternative, he contended that condition 4 was vague and ambiguous. After hearing the evidence, her Honour found as a fact that the plaintiff had accidentally cut off his left thumb. She also held that the plaintiff had breached condition 4 of the policy as he had failed to disclose the existence of the Royal Insurance policy at the material time. She found no ambiguity in the language of condition 4 and ruled against the plaintiff. The defendant was therefore entitled to avoid liability.

4. The learned High Court judge agreed with her Honour’s interpretation of condition 4. In his grounds of judgment, his Lordship dealt with condition 4 of the policy on the basis of what had been pleaded in the defence and reply and the arguments in the sessions court. At p 45 of appeal record, he had this to say:

   It is necessary to set out Condition 4 of the policy which reads: The Insured shall give immediate notice to the company of any changes of address occupation pursuits or any injury, disease, physical defect or infirmity by the Insured has become affected and also notice of any other Insurance (excepting coupon or in connection with a Motor Insurance Policy) effected against accident or incapacity. The plaintiff had become a member of the ‘Eagle Card’ scheme. ‘Eagle Card’ is a discount card. In consideration of his becoming a member of the scheme, he was assured under the Group Personal Policies with American International Assurance Co Ltd from 6 January 1986 to 5 January 1987 for RM100,000. The defendant company complained that the plaintiff did not inform the defendant of the insurance with the Royal Insurance (M) Sdn Bhd.  The plaintiff contended that he was not required to give notice of any other policy of insurance effected against accident where such policy was effected after or during the policy issued by the defendant. Alternatively it was averred that condition 4 was vague and ambiguous.  The learned judge found no ambiguity in the language of condition 4 and ruled against the plaintiff. I agree with her interpretation of condition 4 that the plaintiff was required to give notice to the defendant of the policy issued by Royal Insurance (M) Sdn Bhd.

   His Lordship continued (at p 47):

   Counsel for the plaintiff also argued the condition 4 was not a condition precedent to liability on the part of the defendant but the short answer to this is that the second opening clause in the policy issued by the defendant company states that if during the period of the policy of insurance ‘the Insured shall sustain such bodily injury … the company will subject to the terms provisos exclusion and conditions of and endorsed in this Policy (which terms provisos exclusions and conditions shall so far as their nature of them respectively will permit be deemed condition precedent to the right to recover under this Policy) pay to the Insured … the sum or sums specified in the Table of Benefit’. The plaintiff was fully aware of the policy of insurance issued to cover him by virtue of his being a member of the ‘Eagle Card’ scheme and the defendant is entitled to rely on this clause to say that the plaintiff had not fulfilled his obligation to inform the defendant of the insurance policy issued by Royal Insurance (M) Sdn Bhd.  In the result the appeal must fail and I accordingly dismiss the appeal with costs. [emphasis added]

5. The plaintiff appealed against the above judgment on the following ground:

   The learned judge erred in finding that the appellant should have notified the respondents of insurance coverage benefiting him by virtue of him being a member of ‘Eagle Card’ when such insurance was expressly excluded by condition 4 of the policy issued to him by the respondents in the words appearing therein ‘excepting coupon’ which words signify the description of such Group Personal Policies effecting coverage upon being assigned a discount card.

6. Clearly, the issue central to this appeal is whether the policy issued to the plaintiff by the Royal Insurance Company as an incentive for his becoming a member of Eagle Credit Card is a ‘coupon’ within the meaning of the exception clause on condition 4 of the policy so as to exempt the plaintiff from the obligation of giving notice to the defendant company.

7. It is worth noting that this issue was never pleaded and argued in the courts below. At the outset of the proceedings, Ms. Zechariah, counsel for the defendant, seized the opportunity by raising an objection that it was not open to the plaintiff to argue on appeal a fresh point not litigated and decided by the courts below. We overruled the objection upon the basis that since the ground of appeal concerned the construction of condition 4 of the policy, it is within our discretion to hear the arguments of the parties. For this conclusion, we are guided by the decision of the Federal Court in Gulwant Singh v Abdul Khalik [1965] 2 MLJ 55 (per Thomson LP at p 58):

   A point which is not raised at the trial and which is raised for the first time in the Court of Appeal must always be most jealously scrutinized (The Tasmania (1890) 15 App Cas 223 at p 225). The question of whether effect should be given to such a point is, however, one for discretion (see Perkowski v Wellington Corp [1959] AC 53 at p 69) and the principles on which that discretion may be exercised have been thus set out in the case of Connecticut Fire Insurance Co v Kavanagh [1892] AC 473 at p 480) (per Lord Watson): When a question of law is raised for the first time in a court of last resort, upon the construction of a document, or upon facts either admitted or proved beyond controversy, it is not only competent but expedient, in the interests of justice, to entertain the plea.

8. Although this fresh issue involves a question of law on the construction of the word ‘coupon’, in our view, there is a burden on the plaintiff to adduce evidence that the Royal Insurance Policy was a ‘coupon’ within the meaning of the exception provided in condition 4. Sarkar on Evidence (14th Ed, 1993) called this burden as ‘the burden of proof as a matter of adducing evidence’ (p 1338). ‘The burden in the sense of adducing evidence shifts from time to time having regard to the evidence adduced or the presumption of fact or law raised in favour of one or the other’ (Ajit Pd v Nandini AIR 1975 Orissa 184).

9. In his submission for the plaintiff, Mr.
    Rumi Manecksha recounted that the plaintiff became a member of the ‘Eagle Card’ and one of the incentives was that he was given a free PA policy. He contended that the policy issued by Royal Insurance (M) Sdn Bhd by virtue of his being the Eagle Card holder was coupon insurance within the meaning of the word ‘coupon’ under condition 4. He submitted that the defendant, in the course of their insurance business, knew what coupon insurance was. He then referred us to 25 Halsbury’s Laws of England (4th Ed) pp 319–320 and Ivamy’s General Principles of Insurance Law (4th Ed) pp 121–122 on general principles and nature of coupon insurance. He concluded that as the Royal Insurance policy was coupon insurance, the plaintiff was excluded by condition 4 from giving notice to the defendant of any other insurance effected against accident or incapacity during the currency of the policy.

10. In reply, Ms. Zechariah submitted that there was no evidence that a PA policy issued to ‘Eagle Card’ holder was coupon insurance. This was a question of fact which could only be decided by the trial judge after hearing the evidence and examining the documents. As such, this court could not infer that the policy issued by Royal Insurance (M) Sdn Bhd to the plaintiff was coupon insurance which exempted him from giving notice to the defendant of any other insurance policy under condition 4. On the contrary, counsel submitted that upon the evidence before the trial court, the defendant had shown that the plaintiff was in breach of condition 4 in failing to inform the defendant regarding the PA policy issued by Royal Insurance (M) Sdn Bhd.

11. In this particular case, whether or not the plaintiff’s second policy comes under the exclusion clause must necessarily depend on the facts. The evidential burden is on the plaintiff to bring himself within the exception. This can only be resolved by the court below after hearing the evidence adduced by the plaintiff. In Yong Mok Hin v United Malay States Sugar Industries Ltd [1967] 2 MLJ 9 at p 16, the Federal Court adopted the observations of Reay J and Lord Finlay LC in A-G v Pang Ah Yew [1934] MLJ 184 at p 187 and Banbury v Bank of Montreal [1918] AC 626 respectively, that on general principles, where a decision on a question of law is dependent upon a finding of fact which was not made by a judge or jury because the question was not raised or put at the trial or where the question of law cannot be resolved without further evidence not available on the record, a court of appeal would not interfere with the judgment or verdict of the lower court.

12. From the notes of proceedings in the courts below, we are satisfied that the issue of coupon insurance was never raised by the plaintiff’s former counsel. In fact, the argument of the plaintiff’s counsel concerning condition 4 before the learned High Court judge was not on the meaning of ‘excepting coupon’, but that the said condition was not a condition precedent to liability on the part of the defendant. Nowhere was the question of coupon insurance argued before the judges below, because otherwise, something would have been said in their respective judgments. We also find no evidence upon which the plaintiff can bring himself within the exception of condition 4.

13. In The Tasmania (1890) 15 App Cas 223 (per the judgment of Lord Herschell), it was held that a Court of Appeal was competent to decide even a question of fact raised for the first time on appeal provided:

    If it is satisfied beyond doubt, first, that it has before it all the facts bearing upon the new contention, as completely as would have been the case, if the controversy had arisen at the trial; and next that no satisfactory explanation could have been offered by those whose conduct is impugned if an opportunity for explanation had been afforded them when in the witness box.

14. In the present case, there are absolutely no facts upon which this court can decide on the contention of the plaintiff that the PA insurance policy issued to him by Royal Insurance (M) Sdn Bhd by virtue of his being an ‘Eagle Card’ holder was coupon insurance.

15. For reasons we have stated above, we are not prepared to interfere with the concurrent finding of the courts below and would accordingly dismiss this appeal with costs. Deposit to be paid to the defendant to account of taxed costs.

Cases

A-G v Pang Ah Yew [1934] MLJ 184

Ajit Pd v Nandini 1975 AIR 184

Banbury v Bank of Montreal [1918] AC 626

Gulwant Singh v Abdul Khalik [1965] 2 MLJ 55

Tasmania, The (1890) 15 App Cas 223

Yong Mok Hin v United Malay States Sugar Industries Ltd [1967] 2 MLJ 9

Representations

RJ Manecksha & Ranjit Singh with him (M/s Jagjit Singh & Co) for the appellant.

Renu Zechariah (M/s Anad & Associates) for the respondent.

Notes:-

This decision is also reported at [1997] 3 MLJ 517.