MALAYSIA IN THE HIGH COURT IN SABAH AND SARAWAK AT SIBU CIVIL APPEAL NO OF 2008 BETWEEN AND

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1 Civ-App-No MALAYSIA IN THE HIGH COURT IN SABAH AND SARAWAK AT SIBU CIVIL APPEAL NO OF 08 1 BETWEEN KURNIA INSURANS (MALAYSIA) BHD Menara Kurnia No 9, Jalan PJS 8/9 46 Petaling Jaya Selangor Darul Ehsan AND SOON CHEE TEONG (BICK ) No 3, Long Bridge Road (Back Portion) Sarawak Appellants 1 st Respondent 2 LILY SOON AI LEE (BICK.71943) No. 12, Long Bridge, Jalan Lanang, Sarawak 2 nd Respondent (IN THE MATTER of Sibu Sessions Court Summons No.SB ) 3 BETWEEN KURNIA INSURANS (MALAYSIA) BHD Menara Kurnia No9, Jalan PJS 8/9 40 Petaling Jaya Selangor Darul Ehsan AND Plaintiffs 40 1

2 Civ-App-No SOON CHEF TEONG (BICK ) No 3, Long Bridge Road (Back Portion), Sarawak 1 st Defendant LILY SOON Al LEE (BICK.71943) No I2, Long Bridge, Jalan Lanang Sarawak 2 nd Defendant 1 BEFORE THE HONOURABLE JUDICIAL COMMISSIONER Y.A. DR. HAJI HAMID SULTAN BIN ABU BACKER OPEN COURT JUDGMENT 2 This is my judgment in respect of the appellants appeal against the decision of the learned sessions judge, for refusing to allow the appellants claim pursuant to an insurance agency agreement for an outstanding premium of RM184, against them. Brief Facts 3 1. (i) The plaintiffs and the 1 st defendant entered into an Agency Agreement dated whereby the Plaintiffs had appointed the 1 st Defendant as its Agent to do the insurance business on behalf of the Plaintiffs subject to the terms and conditions set out in the Agency Agreement. (ii) Pursuant to the Agency Agreement, the 1 st defendant shall collect all premiums in respect of the insurance business transacted. (iii) The 1 st defendant as agent for the plaintiffs had entered the insurance business on behalf of the plaintiffs and 2

3 Civ-App-No collected the gross premiums from the insureds. All the insurance policies and cover notes in relation to the same had been issued and delivered to the insureds by the Plaintiffs through the 1 st defendant. The plaintiffs say that, despite the collection of the gross premiums, the 1 st defendant had defaulted in paying the net premiums (after deductions of his commissions) to the plaintiffs and as at 1.7.0, a sum of RM184, being the outstanding net premium, is due and payable by the 1 st defendant to the plaintiffs. 1 2 The respondents say that all the premiums due and owing in law has been paid, and the appellants inter alia submit as follows: From the Statement of Agreed Facts (PBA4), the respondents had admitted receiving the said sum of RM184, from the insureds and also admitted the said sum being the amount outstanding due to the appellant. What is left for determination is on the questions of whether there was any additional commission paid and whether the respondents are liable to pay the sum of RM184, if no additional commission paid. This is because the respondents are arguing that although the said sum of RM 184, was due to the appellant, the respondents are not liable to pay back the said sum because the appellant did not pay an additional commission to the 1 st respondent. The appellant on the other hand argues that there were additional commission payments made to the 1 st respondent and alternatively even if no additional commission payments were made, the respondents are still liable because the said sum of RM184, had been admitted to have been received by the 1 st respondent from the insureds I have read the appeal record and the submission of the parties in detail. From reading the lengthy and prolix memorandum of appeal, it is clear that the complaint of the appellants is relating to finding of facts. It is trite that appellate courts will not ordinarily disturb the finding of facts. I have read the judgment of the learned sessions judge, who had meticulously dealt with the relevant issues and given 3

4 Civ-App-No reasons for the judgment. I take the view that the appellants claim must be dismissed. My reasons are as follows: (a) (b) Under the terms of the agreement, it was inter alia agreed as follows: (i) the 1 st Defendant shall collect all premiums in respect of insurance business within the stipulated time in the agency agreement. (ii) the 1 st Defendant shall be personally liable to the Plaintiff for the payment of premiums in respect of all insurance business transacted by the 1 st Defendant whether or not such premium has been collected or recovered by the 1 st Defendant. (iii) the 1 st Defendant shall pay direct to the Plaintiff or into a bank account opened by and designated in the name of the Plaintiff all premiums and other sums collected on behalf of the Plaintiff (in gross before deducting any commissions but excluding any permitted discounts to the insured ) within seven (7 ) working days from date of receipt of the said premiums and /or other sums' of money, failing which in addition to having the agency agreement terminated, he shall pay interest on such premium or other sum form the expiry of seven ( 7) working days until date of payment at the rate of 8% per centum per annum. By reading para (c) of the above, it is difficult to fathom how the appellants can have any claim for premium in a lump sum and without proof that there was a breach at various dates, as the premium is due and owing within seven working days from the date of the receipt of the premium. Further, as a general rule insurance law requires the insurer to receive cash before coverage and in consequence it is difficult for a moment to fathom how the claim could have arisen. In consequence, it gives more credence to the respondents version. Further, the insurance law requires the appellants to diligently claim the premium and not to assume risk without receiving premium. If there is such a breach, then the guarantor will be 4

5 Civ-App-No relieved from liability, pursuant to various provisions of the Contract Act For reasons stated above, I dismiss the appellants appeal with costs. The getting up fees shall not exceed RM, If costs cannot be agreed, the respondents are at liberty to tax the costs. I hereby order so. 1 SGD (Y.A. DR. HAJI HAMID SULTAN BIN ABU BACKER) Judicial Commissioner High Court Sibu. Date: th February 09 For the Appellants/Plaintiffs: 2 Messrs. Stephen Robert & Wong Advocates 47 & 49, 2 nd Floor Kampung Nyabor Road, Sarawak For the Respondents/Defendants: Messrs. Liong & Co, Advocates No. 6B, 1 st Floor Jalan Kampong Dato