John Kennedy Santiavo

[2020] MLRHU 394 v. Great Eastern General Insurance Berhad & Anor pg 1

JOHN KENNEDY SANTIAVO

v.
GREAT EASTERN GENERAL INSURANCE BERHAD &
ANOR

High Court Malaya, Johor Bahru

Fredrick Indran XA Nicholas JC
[Civil Appeal No: JA-12ANCvC-101-07/2019]
21 May 2020

Case(s) referred to:

Bandar Builder Sdn Bhd & 2 Ors v. United Malayan Bank Corporation Bhd
[1993] 1 MLRA 611; [1993] 3 MLJ 36; [1993] 4 CLJ 7; [1993] 2 AMR 1969 (refd)
Dancom Telecommunication (M) Sdn Bhd v. Uniasia General Insurance Bhd
[2008] 1 MLRA 808; [2008] 6 MLJ 52; [2008] 5 CLJ 551 (refd)
Ng Hee Thoong v. Public Bank Bhd [1999] 1 MLRA 600; [2000] 2 MLJ 29; [2000]
1 CLJ 503; [2000] 1 AMR 407 (refd)
Sagujuta (Sabah) Sdn Bhd v. Trane Malaysia Sales & Services Sdn Bhd [2014] 6
MLRA 65; [2014] 5 MLJ 535 (refd)
Target Warehousing (M) Sdn Bhd v. Msig Insurance (Malaysia) Berhad [2013]
MLRHU 1253 (refd)

Legislation referred to:

Rules Of Court 2012 O 18 r 19(1), O 32 r 13(2), O 92 r 4

Counsel:
For the appellant: Hanapi Haron; M/s Mohd Hanapi Haron & Co
For the respondents: Wong Wai Leong (together with Alvin Kua Tze Min); M/s
Azim, Tunku Farik & Wong

[Appeal dismissed.]

JUDGMENT

Fredrick Indran XA Nicholas JC:

[1] This is an appeal from the decision of the learned Sessions Court Judge
('Sessions Judge') dated 19 June 2019 which allowed the 1st Respondent's
application to strike out the Appellant's Writ and Statement of Claim against
them. The 2nd Respondent is a nominal party in this appeal; whereat an
appeal against him is dealt with in a separate judgment for Case No: JA-
12ANCvC-100-07/2019.

The Matrix

[2] At the material time, the Appellant had procured a Platinum Personal
Accident Policy No PPA-P0522220-JB ('the Policy') from the 1st Respondent
 John Kennedy Santiavo
pg 2 v. Great Eastern General Insurance Berhad & Anor [2020] MLRHU 394

for the period of coverage from 29 October 2014 to 28 October 2015.

[3] On or about 15 November 2014, while out collecting bamboo in a forested

area, the Appellant chanced upon a mishap with a parang, which resulted in
him losing both phalanges of his right thumb.

[4] The Appellant then promptly made a claim against the 1st Respondent
under the Policy.

[5] By way of a letter dated 26 June 2015 the 1st Respondent repudiated the
Appellant's claim on the ground that the Appellant had failed to disclose
relevant and material facts with regard to the issuance of the Policy.

[6] It was not until 21 February 2019 that the Appellant then filed a Civil Suit
(JA- A52NCvC-70-02/2019) against both the 1st and 2nd Respondents with
regard to his rejected claim under the Policy.

[7] After having filed their statement of Defence on 30 April 2019, the 1st
Respondent then filed an application to strike out the Appellant's case under
the provisions of O 18 r 19(1) and O 92 r 4 of the Rules of Court 2012. This
was done on 17 May 2019.

[8] The said application was heard on 19 June 2019 and a decision there upon
was delivered by the learned Sessions Judge on the instant date.

[9] It is that decision which has been impugned before this Court in this action.

Findings Of The Learned Sessions Judge

[10] In gist, the raison d'etrar of that learned officer's determination can neatly
be summarised as follows:

i) the Appellant had failed to file an Affidavit-in-Reply to the 1st

Respondent's application to strike out the suit; and

ii) that the Appellant had no reasonable excuse or justification for his
failure to file and serve the required Affidavit-in-Reply upon the 1st
Respondent within the time allowed under O 32 r 13(2) of the Rules of
Court 2012; which was a mandatory provision.

The Appellant's Contentions

[11] It was the Appellant's view that the learned Sessions Judge had erred in
law and in fact by his failure to make any findings with regard to whether the
Appellant's suit could fit into any of the 4 requirements provided under O 18 r
19(1) of the Rules of Court 2012; in that he did not state in his grounds of
decision whether there was an absence of any reasonable cause of action; or if
it was scandalous, or could delay a fair trial and was an abuse of court process.

[12] Further, the learned Sessions Judge had failed to state whether the
 John Kennedy Santiavo
[2020] MLRHU 394 v. Great Eastern General Insurance Berhad & Anor pg 3

Appellant's claim was subject to arbitration and/or was time barred; and made
his decision without giving the Appellant a right to be heard on the facts.

The 1st Respondent's Viewpoint

[13] The said application was filed pursuant to the Court's inherent powers
under O 92 r 4 and O 18 r 19(1) of the Rules of Court 2012 which reads:

"Inherent powers of the Court (O 92 r 4)

4. For the removal of doubt it is hereby declared that nothing in these

Rules shall be deemed to limit or affect the inherent powers of the
Court to make any order as may be necessary to prevent injustice or to
prevent an abuse of the process of the Court."

"Striking out pleadings and endorsements (O 18, r 19)

19. (1) The Court may at any stage of the proceedings order to be
struck out or amended any pleading or the endorsement, of any writ in
the action, or anything in any pleading or in the endorsement, on the
ground that-

(a) it is discloses no reasonable cause of action or defence, as

the case may be;

(b) it is scandalous, frivolous or vexatious;

(c) it may prejudice, embarrass or delay the fair trial of the

action; or

(d) it is otherwise an abuse of the process of the Court,

and may order the action to be stayed or dismissed or judgment to be

entered accordingly, as the case may be.

(2) ....

(3) ...."

[14] The 1st Respondent was of the view that the Appellant had failed to
comply with O 32 r 13(2)(b) of the Rules of Court 2012 which reads:

"Service or use of affidavit (O 32, r 13)

13. (2) Save as otherwise provided in these Rules, or unless otherwise

directed by the Court-

(a).....
 John Kennedy Santiavo
pg 4 v. Great Eastern General Insurance Berhad & Anor [2020] MLRHU 394

(b) a party intending to reply to an affidavit intended to be

used in support of an application shall file his affidavit and
serve it on the other party within fourteen days from the date
the sealed application and the affidavit in support of that
application were served on him whichever is later;

(c).....

(d)....."

[15] As a consequence, the Appellant had fallen foul of a well settled principle
governing the evaluation of affidavit evidence, whereby when one party makes
a positive assertion upon a material issue, the failure of his opponent to
contradict or counter it would, in the normal course of events, be deemed to be
an admission of the fact so asserted. (Reference was drawn to the case of Ng
Hee Thoong v. Public Bank Bhd [1999] 1 MLRA 600; [2000] 2 MLJ 29; [2000]
1 CLJ 503; [2000] 1 AMR 407).

[16] The issue of arbitration and limitation was raised in the Statement of
Defence. The Appellant himself brought up these issues in his submissions
before this Court. In response, the 1st Respondent parried with the fact that
the Appellant was in fact in clear breach of an Arbitration Clause' (Clause 10)
and the Time Limitation' Clause (cl 11) in the Policy. This issue was asserted
in the 1st Respondent's Affidavit-in-Support of their application; which in
point of fact, went unchallenged by the Applicant by his failure to file an
Affidavit-in-Reply.

[17] As such, the 1st Respondent submitted that they were properly entitled to
the order granted by the learned Sessions Judge.

Findings

[18] I will begin with a locus classicus in this area of the law: that is the case of
Bandar Builder Sdn Bhd & 2 Ors v. United Malayan Bank Corporation Bhd
[1993] 1 MLRA 611; [1993] 3 MLJ 36; [1993] 4 CLJ 7; [1993] 2 AMR 1969 @
p 11, where the Supreme Court held as follows:

"The principles upon which the Court acts in exercising its power
under any of the four limbs of O 18 r 19(1) Rules of the High Court
are well settled. It is only in plain and obvious cases that recourse
should be had to the summary process under this rule (per Lindley M
R in Hubbuck v. Wilkinson [1899] 1 QB 86, p 91), and this summary
procedure can only be adopted when it can be clearly seen that a claim
or answer is on the face of it "obviously unsustainable" (Attorney-
General of Duchy of Lancaster v, L & N W Ry Co [1892] 3 Ch 274,
CA). It cannot be exercised by a minute examination of the
documents and facts of the case, in order to see whether the party has
a cause of action or defence" (Wenlock v. Moloney [1965] 1 WLR
1238; [1965] 2 All ER 871, CA.). The authorities further show that if
 John Kennedy Santiavo
[2020] MLRHU 394 v. Great Eastern General Insurance Berhad & Anor pg 5

there is a point of law which requires serious discussion, an objection

should be taken on the pleadings and the point set down for argument
under O 33 r 3 (which is in para material with our O 33 r 2 Rules of the
High Court) (Hubbuck v. Wilkinson) (supra) . The Court must be
satisfied that there is no reasonable cause of action or that the claims
are frivolous or vexatious or that the defences raised are not arguable."

[19] As the Appellant failed to respond to the application to strike out and its
supporting affidavit; and did not apply for leave or abridgment of time to file
an affidavit in response; nor provide the Court any explanation for their failure
to do the needful; the 1st Respondent relied on the case of Sagujuta (Sabah) Sdn
Bhd v. Trane Malaysia Sales & Services Sdn Bhd [2014] 6 MLRA 65; [2014] 5
MLJ 535, where the Court of Appeal held:

"The appellant had not applied for leave or abridgment of time to file
the said affidavit. Furthermore the said affidavit was served after the
respondent had served on the appellant's solicitors their submissions
and bundle of authorities in respect of the summary judgment
application. The judge had correctly exercised his discretion in
allowing the preliminary objection and consequently rejecting the said
affidavit."

[20] Under such circumstances, the 1st Respondent asserted that the learned
Sessions Judge had rightly held that the said application to strike out the
Appellant's Writ and Statement of Claim be allowed.

[21] This was particularly so, as the Appellant was shown to have breached cl
10 of the Policy, which reads as follows:

"10. Arbitration

All differences arising out of this Policy shall be referred to the

decision of an Arbitrator who shall be appointed in writing by You
and Us. If there is no agreement on a single Arbitrator, then two
Arbitrators are to be appointed in writing, one by You and the other
by Us, within one calendar month of the disagreement. In case of
disagreement between the Arbitrators, an Umpire is to be appointed
by the Arbitrators in writing before hearing the reference. The
Arbitrator or Arbitrators and/or Umpire must make an award before
You can commence legal proceedings against Us."

[22] This clause made it a mandatory requirement for the Appellant to have
had recourse to arbitration in the first place, in the event that he disputed the
1st Respondent's repudiation of his claim. It was only after an arbitration
award was handed down, could the Appellant commence legal proceedings
against the 1st Respondent.

[23] Clearly, the Appellant had breached this mandatory requirement in this
case.
 John Kennedy Santiavo
pg 6 v. Great Eastern General Insurance Berhad & Anor [2020] MLRHU 394

[24] Further, cl 11 of the Policy provided as follows:

"11. Time Limitation

We will not be liable to pay any claim made after the expiration of
twelve (12) calendar months from the date of Our disclaimer. If You
do not do so then the claim shall for all purposes be deemed to have
been abandoned and shall not thereafter be recoverable under this
Policy."

[25] As the repudiation of the appellant's claim occurred on 26 June 2015, the
12 calendar month time limitation began to run from that date.

[26] In the case of Dancom Telecommunication (M) Sdn Bhd v. Uniasia General
Insurance Bhd [2008] 1 MLRA 808; [2008] 6 MLJ 52; [2008] 5 CLJ 551, a
similar arbitration clause was reviewed by the Court of Appeal, where it was
decided that provisions of a contract have to be enforced and parties deemed
to have relinquished their claim if the period of time to refer to arbitration is
not adhered to.

[27] The pertinent points declared by the Court of Appeal in the above said
case bear repeating here (from p 66 of the reports):

"[22] The bringing of an action in an ordinary court of law is readily

distinguishable from a reference of a dispute to arbitration. A contract
which incorporates an arbitration clause, such as cl 14, to refer the
parties' dispute to arbitration within a specified period as agreed by the
parties, is a contract sui generis. The hallmark of arbitration is
characterized by the autonomy of the parties. By wav of agreement,
the parties have an unfettered choice, not only to refer their dispute to
arbitration and to choose their own arbitrators or umpires, but also to
prescribe the time frame for such reference. Their intention is to
sustain the mechanism of alternative dispute resolution by way of
arbitration and not court action. Their desire is to place arbitration
under their exclusive control. They hope to achieve eg speed in the
hearing and determination of their dispute..."

[48]... The parties have agreed by the terms of the agreement the
mechanism by which dispute is to be resolved. The proper approach
should also be that it arguable that time limitation clauses being a
beneficial feature in commercial contracts are capable of being upheld.
It would enable parties to draw a time at a much earlier stage than the
limitation statutes allow. I would therefore echo my learned brother's
reasoning in respect of party autonomy.

[49] The court should resist parties going back on what they have
agreed. In this case cl 14 indicates that if steps are not taken within the
time frame prescribed therein then the "claim for all purposes be
deemed to have been abandoned and shall not thereafter be
 John Kennedy Santiavo
[2020] MLRHU 394 v. Great Eastern General Insurance Berhad & Anor pg 7

recoverable hereunder". The words "then the claim for all purposes be
deemed to have been abandoned'' in their ordinary sense clearly show
a waiver of the claim if the claim is not "within 12 calendar months
from the date of such disclaimer have been referred to arbitration..."

[50] In the final analysis I would state this. The appellant is not in a
position to resist the conditions inserted in the contract which impose
obligations on him because if he were he would also be in a position to
take advantage of his own wrong..."

Yang Arif Abdul Malik Ishak JCA further held in m/s 85, 87-88 that:

"The cardinal rule of construction has always been that the

intention of the parties must prevail... The parties must be
bound by the terms and conditions of cl 14 of the policies. The
appellant cannot resile from it. As Lord Sumner said in
Yorkshire Insurance Co Ltd v. Campbell [1917] AC 218, at 224,
PC: Prima facie all the words which the policy contains... are
words of contract to which effect must be given."

[Emphasis Added]

[28] The judicial reasoning in the above mentioned case was adopted in the
case of Target Warehousing (M) Sdn Bhd v. Msig Insurance (Malaysia) Berhad
[2013] MLRHU 1253, where the High Court held at p 478:

"[21]...The plaintiff failed to invoke the arbitration process within 12

months of such disclaimer of liability, and this breach bv the plaintiff
of what was a condition precedent of the policy, deprived the plaintiff
the right to institute a civil action or further prosecuting any claim
under the policy.

[22] The plaintiff's suite against the defendant was also obviously
unsustainable on this around of breach of the condition 8 of the policy
(breach of the arbitration clause)."

[Emphasis Added]

[29] Here the Appellant chose not to proceed by way of arbitration for reasons
best known to him; and only belatedly filed a civil action on 21 February 2019;
some nearly 4 years after the 1st Respondent's repudiation his claim.

[30] Under the circumstances, the Appellant had clearly breached both cl 10
and Clause 11 of the Policy.

[31] As it is trite that both there clauses were conditions precedent to put the
1st Respondent under liability for any claim made by the Appellant under the
Policy, the Appellant's failure to comply or abide by the same must verily be
construed against him.
 John Kennedy Santiavo
pg 8 v. Great Eastern General Insurance Berhad & Anor [2020] MLRHU 394

[32] Thus, notwithstanding the omission by the learned Sessions Judge to

remark in his grounds, upon the premise stated in the preceeding paragraph,
surely it would not be far-fetched to reasonably construe, that in the decision
making process of this senior and learned Sessions Judge, he had encompassed
in his contemplation these very issues when making his determination on the
application based upon the affidavit in support, which was before him.

Final Order

[33] Under the circumstances, having heard the oral submissions and
considered the written submissions and authorities of both learned counsel;
and after having had sight of the relevant documents presented in this case, it
was the considered view of this Court that this appeal be dismissed; and so be
it that it was so ordered.