PUTRAJAYA,MALAYSIA: An insurance company was correct in rejecting the RM32.4mil fire insurance claim by a paper mill for property destroyed in a godown fire 17 years ago, the Court of Appeal ruled yesterday. Court of Appeal judges Justices Gopal Sri Ram, Alauddin Mohd Sheriff and Abdul Kadir Sulaiman said this was because the claim by Asean Security Paper Mills Sdn Bhd was made on the false and fraudulent ground that the fire was the result of spontaneous combustion. The three-man bench, who wrote a joint 108-page judgment said having scrutinised the evidence in this case they were satisfied that the High Court judge had misdirected himself on the facts and evidence. “To sum up, this was a case in which there was no judicial appreciation of the evidence of relevant and material witnesses,” said Justice Sri Ram, who headed the panel. “In consequence, there has been occasioned a substantial miscarriage of justice. It is therefore our duty as an appellate court to intervene.” The Court of Appeal ordered that the High Court decision be set aside. On May 12, 2000, the High Court ordered CGU Insurance Bhd formerly known as Commercial Union Assurance (M) Bhd to pay RM16,124,500 in fire insurance claims to Asean Security Paper Mills for property destroyed in a godown fire in 1989. Justice Datuk P.S. Gill, who was then the High Court judge, also ordered Commercial Union Assurance (M) to pay Asean Security Paper Mills interest at 8% from the date of the filing of the writ on Sept 11, 1990. The fire at the godown of the paper mill at Kampung Acheh Industrial Estate, Sitiawan, Perak, on Sept 11, 1989 destroyed property worth RM32mil. Justice Sri Ram, who read the judgment said that when considered as a whole, the circumstances established beyond a reasonable doubt the fire was the result of an act of arson. He said there was no doubt this was a case where the warehouse was intentionally set on fire by two of the paper mill's employees acting on the instructions of paper mill chairman B. Nithiabala. “There is also no doubt in our minds that on the evidence, considered as a whole, it was Nithiabala who planned the fire and its execution and that it was his intention to cause the respondent to make a false and fraudulent claim against the appellant (CGU Insurance),” he said
Thanks to: 16 February 2006, By The Star
