Lonpac Insurance v American Home: Double Insurance & Extrinsic Evidence in Workmen's Compensation

In Lonpac Insurance Bhd v American Home Assurance Co, the High Court of Singapore addressed a dispute between two insurance companies, Lonpac and AHA, regarding double insurance coverage for an injured worker of Rotary Engineering Ltd (REL). The court, presided over by Judith Prakash J, set aside the Assistant Commissioner of Labour's decision and remitted the matter for re-hearing, ruling that extrinsic evidence should be considered to determine the scope of Lonpac's annual workmen's compensation policy. The court found that AHA, as a third party to the insurance contract between Lonpac and REL, could not prevent Lonpac from introducing extrinsic evidence to explain the policy's intended coverage.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Decision set aside and remitted for re-hearing; extrinsic evidence to be considered.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Lonpac Insurance Bhd v American Home Assurance Co: Court addresses double insurance in workmen's compensation and admissibility of extrinsic evidence.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Lonpac Insurance BhdPlaintiff, AppellantCorporationAppeal Allowed in PartPartial
American Home Assurance CoDefendant, RespondentCorporationAppeal DismissedLost

3. Judges

Judge NameTitleDelivered Judgment
Judith PrakashJudgeYes

4. Counsels

Counsel NameOrganization
M RamasamyM Rama Law Corporation
Nagaraja S ManiamM Rama Law Corporation
Hong Heng LeongAng & Partners
Sunita Carmet NettoAng & Partners

4. Facts

  1. Lonpac and AHA both issued workmen’s compensation policies covering REL's liability to employees.
  2. Lonpac issued an annual policy to the Rotary Group, including REL.
  3. AHA issued a project-specific policy to REL for a construction project on Jurong Island.
  4. An REL employee was injured on the project on 29 November 2008.
  5. The employee applied for compensation under the Work Injury Compensation Act.
  6. The Assistant Commissioner ordered Lonpac and AHA to each pay 50% of the compensation.
  7. Lonpac appealed, arguing that the annual policy did not cover the injured worker.

5. Formal Citations

  1. Lonpac Insurance Bhd v American Home Assurance Co, OS 100 of 2011, [2011] SGHC 257

6. Timeline

DateEvent
Project policy issued
Claimant injured in accident
Claimant applied for compensation
Assistant Commissioner ordered Lonpac and AHA to each pay 50% of compensation
Judgment reserved

7. Legal Issues

  1. Double Insurance
    • Outcome: The court determined that the issue of double insurance hinged on whether the annual policy also covered the claimant’s claim.
    • Category: Substantive
  2. Admissibility of Extrinsic Evidence
    • Outcome: The court held that it was incorrect for the Assistant Commissioner to have shut out the adduction of extrinsic evidence when undertaking the task of construing the annual policy.
    • Category: Procedural

8. Remedies Sought

  1. Setting aside or revision of the Assistant Commissioner's decision

9. Cause of Actions

  • Claim for contribution between insurers

10. Practice Areas

  • Commercial Litigation
  • Insurance Coverage
  • Contract Disputes

11. Industries

  • Insurance

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
China Insurance Co (Singapore) Pte Ltd v Liberty Insurance Pte LtdHigh CourtYes[2005] 2 SLR(R) 509SingaporeCited for the principle that Section 94 of the Evidence Act does not apply when the issue is between persons who are essentially strangers to the contract.
Zurich Insurance (Singapore) Pte Ltd v B-Gold Interior Design & Construction Pte LtdCourt of AppealYes[2008] 3 SLR(R) 1029SingaporeCited for the principle that the case added to the growing body of local case law adopting the contextual approach to contractual interpretation while affirming, at the same time, the continued existence of the parol evidence rule (as statutorily embedded in the Evidence Act).

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Work Injury Compensation Act (Cap 354)Singapore
Evidence Act (Cap 97, Rev Ed 1997)Singapore
Evidence Act (Cap 97, Rev Ed 1997)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Double insurance
  • Workmen’s compensation
  • Extrinsic evidence
  • Parol evidence rule
  • Annual policy
  • Project policy
  • Construction of contract
  • Evidence Act

15.2 Keywords

  • insurance
  • workmen's compensation
  • double insurance
  • extrinsic evidence
  • contract law
  • Singapore

17. Areas of Law

Area NameRelevance Score
Workers Compensation90
Double Insurance85
Insurance Bad Faith75
Construction of Insurance Policy70
Contract Law60
Civil Procedure50

16. Subjects

  • Insurance
  • Contract Law
  • Civil Procedure
  • Evidence