Apex Court Rules For Claimant

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 - under 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.

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

Overturned Court Of Appeal Ruling - 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.

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.