The insured vehicle was stolen by a group of persons who had impersonated as policemen (perpetrators). The perpetrators who were in an MPV had overtaken the insured’s vehicle and blocked his path. One of them wore a police vest and introduced himself as a policeman. He switched off the engine, instructed the insured to alight from the vehicle and asked the insured to produce his identity card. The insured was accused of carrying drugs in the vehicle. The insured denied the allegation and the perpetrator asked his accomplice to check the vehicle. The accomplice then entered the vehicle and drove the vehicle away whilst the perpetrator sped off in the MPV.

The insured submitted a theft claim to the insurer for the loss of the vehicle. The insurer rejected the claim on the recommendation of the licensed loss adjuster pursuant to Exception 4 (e) to section A of the policy which states:
We will not pay for:
(e) any loss or damage caused by or attributed to the act of cheating/criminal breach of trust by any person within the meaning of the definition of the offence of cheating/criminal breach of trust set out in the Penal Code.

Investigation and Findings
The Mediator noted that the issue to be determined is whether the factual circumstances of the case constituted ‘theft’ or ‘cheating’, as defined in the Penal Code.

The Mediator observed from the facts of the case that the incident had occurred at about 4.45am and the insured was alone. There were more than 2 perpetrators involved and they were wearing police vests. Further, the insured’s path of travel was blocked by the perpetrators’ MPV.

The Mediator made reference to the case of Ayob Bin Salleh v Am General Insurance Bhd & Anor (2015) 6 CLJ, whereby the plaintiff’s vehicle was taken by three men who impersonated as motor re-possessor from a finance company where a hire purchase loan for the motor vehicle was taken. The alleged re-possessors were actually motor thieves. S. Nantha Balan, JC (as he then was) held:

The plaintiff had parted with the said vehicle as he genuinely believed that the three men were motorcar re-possessors from the finance company. By parity of reasoning, the three men in the instant case who took the vehicle from the plaintiff could similarly be described as car thieves who pretended to be motor car re-possessors. The loss of the vehicle was due to an event of theft by three unknown persons who intended to and did steal the vehicle. Ultimately, the vehicles were stolen from the rightful owners. Although the adjuster opined that the plaintiff ‘voluntarily’ handed over the keys, the plaintiff had no choice as he really did not know what he was dealing with. Hence, the safest thing to do would be to hand over the keys as there is no telling on what could have happened if he refused to give the keys. It would not be fair to say that the plaintiff voluntarily parted with the said vehicle. Rather, the said vehicle was taken from him by the three men who pretended to be re-possessors. The plaintiff’s reaction was normal, reasonable and sensible in light of all the circumstances, hence, the exception to the policy did not apply as this was a case of theft. 

The court in the above case had also referred to the Federal Court case of Malaysian Motor Insurance Pool v Naza Motor Trading Sdn Bhd [2011] 9 MLJ 605 and stated ‘the facts of the present case are not very different from the Naza Motor case (supra). Just as the insured in the Naza Motor case had allowed the ‘buyer’ to take possession of the motorcar, here too the Plaintiff parted with the said vehicle as he genuinely believed that the three men were motorcar re-possessors from the finance company.’

Thus, the Mediator highlighted to the insurer that the circumstances leading to the loss of the insured’s vehicle were similar to the above decided cases.

The insurer agreed with the Mediator’s observation and settled the claim with the insured.