American International Assurance Co Ltd v Wong Cherng Yaw: Interim Payments & Insurer's Mistake in Investment-Linked Policies
In American International Assurance Co Ltd v Wong Cherng Yaw, the Court of Appeal of Singapore heard an appeal by American International Assurance Co Ltd (AIA) against an interim payment order granted to Wong Cherng Yaw and other policyholders/investors. The dispute arose from AIA's alleged mistake in valuing investment-linked policies (ILPs), leading to the policyholders' significant gains. The High Court ordered an interim payment of $1,019,300 to the respondents. The Court of Appeal partially dismissed the appeal, varying the interim payment to $600,000, finding that the respondents were entitled to the return of their capital investment.
1. Case Overview
1.1 Court
Court of Appeal of the Republic of Singapore1.2 Outcome
Appeal dismissed in part.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
AIA's appeal against an interim payment order to policyholders/investors (Wong Cherng Yaw) was partially dismissed. The court adjusted the interim payment amount.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| American International Assurance Co, Ltd | Appellant | Corporation | Appeal dismissed in part | Partial | |
| Wong Cherng Yaw | Respondent | Individual | Interim payment ordered | Partial | |
| Tan Siew Mui Junie | Respondent | Individual | Interim payment ordered | Partial | |
| Lim Wee Chee | Respondent | Individual | Interim payment ordered | Partial | |
| Liaw Chong Kiaw | Respondent | Individual | Interim payment ordered | Partial | |
| Wong Shyh Yaw | Respondent | Individual | Interim payment ordered | Partial | |
| Tie Ah Chai | Respondent | Individual | Interim payment ordered | Partial | |
| Low Bee Hong | Respondent | Individual | Interim payment ordered | Partial | |
| Goh Chong Wee Jasper | Respondent | Individual | Interim payment ordered | Partial | |
| Tan Tiong Thye | Respondent | Individual | Interim payment ordered | Partial | |
| Ong Swee Boon | Respondent | Individual | Interim payment ordered | Partial |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Chan Sek Keong | Chief Justice | Yes |
| Andrew Phang Boon Leong | Justice of the Court of Appeal | No |
4. Counsels
4. Facts
- The appellant, an insurer, offered investment-linked policies (ILPs).
- The respondents were policyholders/investors in the ILPs.
- A dispute arose concerning the ILPs due to the appellant's mistake in valuing the funds.
- The respondents made large profits through numerous fund switches.
- The appellant claimed the respondents exploited the mistake, causing a loss to other policyholders.
- The respondents' investments were liquidated, and the proceeds were held in a joint stakeholder's account.
- The respondents applied for an interim payment from the stakeholder's account.
5. Formal Citations
- American International Assurance Co Ltd v Wong Cherng Yaw, CA 42/2009, [2009] SGCA 26
6. Timeline
| Date | Event |
|---|---|
| Third respondent purchased first investment-linked policy. | |
| Respondents began numerous fund switches. | |
| Dispute arose between the respondents and the appellant concerning the investment-linked policies. | |
| Appellant realized its mistake in valuing the funds. | |
| Respondents' investments peaked. | |
| Third respondent applied to withdraw $495,420 from one of his investment-linked policies; appellant refused. | |
| Respondents' applications to switch funds were rejected. | |
| Third respondent's solicitors demanded payment of the partial withdrawal. | |
| Appellant commenced the Suit. | |
| Third respondent filed an affidavit on behalf of the other respondents. | |
| Respondents agreed with the appellant to liquidate their positions in the investment-linked policies. | |
| Mr. Martin Knight filed an affidavit. | |
| Respondents brought an application for interim payment of certain sums of money. | |
| Judgment reserved. |
7. Legal Issues
- Interim Payment
- Outcome: The court ordered an interim payment of $600,000 to the respondents, varying the High Court's order.
- Category: Procedural
- Sub-Issues:
- Application of Order 29 Rule 12(c)
- Consideration of cross-claims and counterclaims
- Unjust Enrichment
- Outcome: The court considered the appellant's claim of unjust enrichment but found it did not preclude the respondents' entitlement to their capital investment.
- Category: Substantive
8. Remedies Sought
- Interim Payment
- Account
- Inquiry to trace and recover units and/or proceeds
- Damages
- Indemnity
9. Cause of Actions
- Breach of Fiduciary Duty
- Tortious Conspiracy
- Unjust Enrichment
10. Practice Areas
- Commercial Litigation
- Insurance Litigation
11. Industries
- Finance
- Insurance
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Schott Kem Ltd v Bentley | Court of Appeal | Yes | [1991] 1 QB 61 | England and Wales | Cited for the two-stage test to determine whether to order an interim payment. |
| Shanning International Ltd v George Wimpey International Ltd | Court of Appeal | Yes | [1989] 1 WLR 981 | England and Wales | Cited regarding the consideration of independent counterclaims in interim payment applications; Judge expressed dissent from the approach. |
| Smallman Construction Ltd v Redpath Dorman Long Ltd | N/A | Yes | (1988) 47 BLR 15 | N/A | Cited for the view that independent counterclaims must be considered by the court at both the first and second stage. |
| Chiron Corporation v Murex Diagnostics Limited (No 13) | N/A | Yes | (1996) 23 FSR 578 | N/A | Cited regarding interim payment in respect of part of a complex claim. |
| Bovis Lend Lease Ltd v Braehead Glasgow Ltd | N/A | Yes | (2000) 71 Con LR 208 | N/A | Cited regarding interim payment procedure. |
| American International Assurance Co Ltd v Wong Cherng Yaw | High Court | Yes | [2009] SGHC 89 | Singapore | The High Court decision from which the appeal arose. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Order 29 r 12(c) Rules of Court | Singapore |
| Order 29 r 17 Rules of Court | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Investment-linked policies
- Interim payment
- Fund switches
- Bid prices
- Stakeholder's account
- Capital investment
- Unjust enrichment
- Cross-claims
15.2 Keywords
- Interim payment
- Investment-linked policies
- Fund switching
- Unjust enrichment
- Stakeholder
- Insurance
- Singapore
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Civil Practice | 75 |
| Contract Law | 60 |
| Unjust Enrichment | 40 |
| Fraud and Deceit | 30 |
| Misrepresentation | 30 |
| Conspiracy by Unlawful Means | 30 |
| Estoppel | 30 |
| Agency Law | 20 |
| Insurance Bad Faith | 20 |
| Costs | 20 |
| Fiduciary Duties | 20 |
| Insurance | 20 |
| Banking and Finance | 20 |
16. Subjects
- Civil Procedure
- Insurance
- Investments