1. ) THERUMOORTHI A/L APPALANAIDU 2. ) ANJELAI DEVI A/P MANIAM v 1. ) PUBLIC BANK BERHAD 2. ) AIA BERHAD

Case Significance

Illustrates how a court construes the health questions in an insurance proposal — treating separately worded questions as requiring separate answers — the effect of the disclosure obligation on a life-policy claim, and a court's willingness to moderate costs where counsel acts pro bono.

This High Court decision at Kuala Lumpur, delivered by Leong Wai Hong J after a trial heard over three days, concerns a claim on a life insurance policy. The first plaintiff sued in his own right and as administrator of the estate of his deceased son, together with a second plaintiff, against Public Bank Berhad and AIA Berhad. The suit against the first defendant, Public Bank, had been struck out, so the trial proceeded against the second defendant, the insurer AIA Berhad. The dispute centred on the answers given to two health questions in the insurance proposal and their effect on the validity of the cover and the insurer's liability to pay.

The Court's interpretation of the proposal was central. It held that the two health questions were two separate questions, independent of each other, appearing in two separate paragraphs and each requiring a separate answer — a reading reinforced by the question mark at the end of each, signifying the end of each question. On that construction the Court assessed whether the proposer had properly and fully answered each health question, and the consequences for the insurer's liability of any failure to make full and accurate disclosure of material matters bearing on the risk.

Having construed the health questions and weighed the evidence, the Court concluded that the plaintiffs' claim could not succeed and dismissed the suit, with costs fixed at the modest sum of RM10,000. The Court explained that it had awarded low costs because counsel for the plaintiffs was acting pro bono (Latin for "for the public good") and had requested low costs, to which the defendant's counsel graciously agreed to leave the quantum to the Court's discretion. The judgment is a useful illustration of how a court construes the health questions in an insurance proposal — treating separately worded questions as requiring separate answers — and of the effect of the disclosure obligation on a claim under a life policy, as well as of a court's willingness to moderate costs where counsel acts pro bono.