TEMPERLITE INSULATION SDN BHD v AMGENERAL INSURANCE BERHAD

Case Significance

Shows how a Malaysian court approaches an insurer's reliance on a policy exclusion it must prove was incorporated and communicated, and the evidential burden on an allegation that a construction insurance claim was exaggerated.

This High Court decision from the Commercial Division at Kuala Lumpur concerns a disputed claim under a Contractors' All Risk (CAR) insurance policy following a structural collapse during construction. The insured, a builder of a two-storey warehouse in Sepang, Selangor, sued its insurer for RM1,775,845.50 after a steel portal frame structure collapsed on 22 July 2020, when the works were certified at roughly 70% completion with a site value of about RM2.37 million. The insurer repudiated the claim, relying principally on Special Exclusion 1(c) said to be contained in a 'Policy Jacket' that it maintained formed part of the insurance contract alongside the Policy Schedule. The agreed triable issues turned on whether the Policy Jacket tendered in court actually referred to the schedule issued to the insured, whether that jacket had ever been given to the insured, whether the insured had complained of not knowing its contents when the claim was repudiated, whether the schedule and jacket together formed the entire policy so as to bind the insured to the exclusion, and whether the insured had proved its losses and rectification costs. The court's analysis centred on the insurer's ability to bring the exclusion home to the insured and on the evidential burden of proving both the contents of the contract and the alleged exaggeration of the claim. On the quantum challenge, the court noted that the insurer's own witness accepted the certified site value and the 70% completion, so that a claim proportionate to a total collapse appeared reasonable. The court held that the insurer had failed to discharge its burden under section 103 of the Evidence Act 1950 to establish the alleged inflated figure, while the insured had proved its entitlement through documentary evidence. Finding in favour of the insured, the court allowed the claim under the CAR policy. The judgment is a useful illustration of how a Malaysian court treats an insurer's reliance on an exclusion clause it must first prove was incorporated and communicated, and of the burden of proof on an allegation that a claim was exaggerated.