A three-member bench chaired by Justice Choo Kah Sing found that Bespoke Motoring Sdn Bhd, the owner of a Ferrari, failed to reveal that Lee Koon Tong had been driving against the flow of traffic for a considerable distance before an accident on Oct 5, 2018.
Bespoke, in its police report, claim form and interview with an insurance adjuster, claimed that the Ferrari driven by Lee had swerved to avoid an unknown vehicle on the MEX Highway and spun around to face the opposite direction when struck by a Honda.
Premised on this version of events, AmGeneral Insurance Bhd offered a RM1.5 million settlement, which it revoked two months later after closed-circuit television (CCTV) footage of the accident was obtained from the highway authorities.
Justice Evrol Mariette Peters, delivering the broad grounds of judgment, said there was overwhelming evidence that Bespoke, through Lee, had failed to honour its post-contractual duty of utmost good faith.
“An insurance contract requires the highest standard of good faith. The insured must make full, frank and honest disclosure of all material facts,” she said in delivering the panel’s decision allowing the insurance company’s appeal.
Peters said the narrative and illustration drawn in the claim form submitted by Bespoke were materially false, as they depicted an instantaneous accident following Lee’s loss of control of the vehicle, whereas the CCTV footage showed the Ferrari being driven for a considerable distance against the flow of traffic.
“This was a material fact that would obviously influence an insurer’s assessment of the claim, particularly regarding the driver’s recklessness or state of mind. By concealing this, the respondent (Bespoke) breached the terms of the policy,” she said.
Peters said the insurance company’s conditional settlement offer, made in February 2019, was explicitly subject to full compliance with policy terms.
The judge said the subsequent discovery of the misrepresentation, which went to the root of the claim, entitled the insurer to revoke its offer and repudiate the claim in its entirety.
“We find the appellant’s repudiation valid and justified. The respondent’s claim was tainted by misrepresentation and a breach of the duty of utmost good faith,” she said.
The bench, also consisting of Justice Aliza Sulaiman, awarded RM100,000 in costs to the insurance company.
Peters said the trial judge’s failure to consider that the car was driven against the flow of traffic was significant, and a misunderstanding of the relevant legal principles.
She said the trial judge failed to properly appreciate the circumstantial evidence pointing to a lack of good faith and a possible explanation for Lee’s conduct.
Bespoke bought the supercar in August 2018 and insured it for RM1.79 million with the insurance company.
Lawyers Cyrus Das, JS Naicker and Kishan Govindaraju appeared for the insurance company, while Ashok Kandiah, Mishand Pathmanathan and Celinne Teh acted for Bespoke.