Justice Leong Wai Hong also ordered Pacific & Orient Insurance Co Bhd to pay plaintiff Lai Leong Peng interest at 5% per annum from the date the suit was filed until full settlement of the judgment sum.

He also awarded Lai RM50,000 in costs.

Additionally, Leong ordered the insurer to pay towing charges of RM5,150, storage charges of RM13,317.80, and medical expenses incurred at Klinik Pakar Au Yong for psychiatric treatment amounting to RM2,059.

He further ordered that general damages for mental distress suffered by Lai be assessed against the defendant.

The insurer has since filed an appeal to the Court of Appeal.

Lai’s Porsche 911 GT3 RS was registered in Langkawi under a tax-free regime and insured for RM1.225 million.

Following an accident in October 2022, the insurer assessed the vehicle as BER and initially offered RM1.225 million after deducting the policy excess.

However, the insurer later imposed a condition requiring the plaintiff to first pay customs duties on the vehicle before the insurance payout could be released.

Lai rejected the condition and filed the suit, arguing that neither the insurance policy nor the law required her to pay customs duties before receiving indemnity under the policy.

The insurer subsequently alleged that the plaintiff had used a false Langkawi address and claimed there had been non-disclosure and misrepresentation.

Demand for customs duties payment ‘in bad faith’

In his nine-page judgment, Leong held that the insurer’s demand for payment of customs duties was not part of the insurance contract and described the condition as “misguided and in bad faith”.

Leong said the court found that the insurer had already accepted liability by classifying the vehicle as BER and making settlement offers without raising any issue of non-disclosure.

The court also rejected the insurer’s allegation that the Langkawi address was false, noting that the address existed, had been accepted by both the road transport and customs departments, and that no investigation or prosecution had been initiated against the plaintiff.

He said the insurer could not subsequently repudiate the policy for alleged misrepresentation because it had failed to do so in accordance with Section 19 of the Contracts Act.

“Evidence from the insurer’s own witness confirmed that the policy had never been repudiated,” he said.

Lawyers Lee Chan Leong and Goh Chin How represented the plaintiff, while Viknesvaran Kanagathipillai and Archana Devi Thirumalai appeared for the defendant.