Vehicle insurers liable to passengers injured on work travel, says Federal Court

 

The Federal Court ruled that a car passenger, Chen Boon Kwee, is entitled to enforce a judgment for RM200,000 obtained against Berjaya Sompo, the insurer of the vehicle he was travelling in.

PUTRAJAYA: 

The Federal Court has in a landmark decision ruled that a passenger travelling in a vehicle on work matters can recover compensation from the vehicle’s insurers for injuries suffered in the event of an accident.

Justice Vazeer Alam Mydin Meera said Section 91(1)(b)(bb) of the Road Transport Act 1987 (RTA) protects third party accident victims who travel in an insured motor vehicle for work engagements.

“Any passenger travelling pursuant to his employment is intended by Parliament to be a ‘third party’ which the RTA protects.

“The insurer is bound by Section 96(1) and 91(3) of the RTA to satisfy the judgment which the (passenger has) obtained against the insured,” the judge said.

Vazeer was part of a three-member bench which unanimously allowed an appeal by Chen Boon Kwee from a Court of Appeal ruling favouring Berjaya Sompo Insurance Berhad.

Chen, a passenger in a Toyota Camry car owned by his wife, Tan Saw Kheng, and driven by Masri Tamin, sustained injuries in a road accident in 2015.

He obtained judgment against Masri and Tan in the Batu Pahat sessions court five years ago and sought to enforce it on Berjaya Sompo, the vehicle’s insurer under a third-party risk motor insurance policy.

Berjaya Sompo sought to disclaim liability for the judgment on grounds that the policy did not cover members of the vehicle owner’s household.

Vazeer rejected the insurer’s contention, holding that Section 91(1)(b) protects third party accident victims travelling in the course of employment.

“Since the appellant (Chen) has established the fact of him travelling in the vehicle in pursuance of his contract of employment, the respondent (Berjaya Sompo), as the insurer, is bound by Sections 96(1) and 91(3) of the RTA to satisfy the judgment which the appellant obtained against the insured,” the judge said.

Vazeer said Chen ought not to be treated differently from any other third party victim who obtains a judgment simply just because he was also the vehicle owner’s husband.

“The respondent is clearly liable to indemnify the insured and concomitantly pay the appellant the judgment sum (obtained in the) sessions court,” he said in a 53-page judgment.

Also on the panel hearing the appeal were Justices Zabariah Yusof and Hanipah Farikullah.

The bench, chaired by Zabariah, also awarded Chen RM150,000 in costs.

In its decision, the apex court also overturned the Court of Appeal’s ruling that an injured passenger who has already obtained judgment against an insured vehicle owner must bring a separate “recovery action” to enforce his claim against the vehicle’s insurer.

Vazeer said, the RTA, being a piece of beneficent social legislation, must be given a broad and liberal interpretation that enhances its avowed object.

“For the courts to impose a requirement for a recovery action would defeat the intent of the legislature,” the judge said.

He said an insurer seeking to challenge liability on grounds that the claimant is excluded from cover or that the policy is void or unenforceable must pursue the necessary relief from the courts before liability judgment is entered.

“Absent that relief, the insurer’s liability to pay is immediate,” the judge said.

Chen was injured when the car he was in collided with a lorry on the Pagoh-Yong Peng highway.

In 2019, the sessions court awarded him damages of RM200,000 after holding Masri solely responsible for the accident. The court also found Tan vicariously liable in her capacity as owner of the car.

The judgment was upheld by the High Court.

Berjaya Sompo then filed a separate action in the High Court seeking a declaration that Chen was obliged to file a recovery suit to prove that he was covered under the policy before the judgment could be enforced on the company.

Both the High Court and the Court of Appeal found in the insurer’s favour, leading to the present appeal which saw the lower courts’ ruling overturned.

Lawyers GK Ganesan, R Ganavathy Naidu, KN Geetha and Aloysius Ng appeared for Chen.

JS Naicker and Rosmaria Daud acted for the insurance company. - FMT