Must an Insurer Be Formally Told What It Already Knows? [Saamran: 3/11]

Must an Insurer Be Formally Told What It Already Knows? [Saamran: 3/11]

For the first time in ninety years, we are asking the right questions in the right order. Under s.96(2)(a) RTA 1987, must an accident victim personally notify the insurer before suing — or does that duty lie elsewhere? Ten questions, and the answers a century of Commonwealth law has been quietly supplying.

by GK Ganesan May 26, 2025 1923 Views

A study of Mohamed Fayadh bin Abdul Gaffor & Ors v Liberty Insurance Bhd (formerly Uni Asia General Insurance Bhd) [2024] 6 MLJ 519 (Court of Appeal, per Wong Kian Kheong JCA), and the long line of Commonwealth authority that made it inevitable.

[This is a long article meant for publication in a law journal. It is a critical analysis of the development of the law of Notices in s. 96(2)(a) RTA 1987]

I. A Claim Lost for Want of a Few Words

Picture the victim of a road accident. He is injured by an insured driver, sues, and the insurer — fully aware of the suit — steps in to defend, instructs solicitors, files a defence, and contests the matter for years. Then the first suit is discontinued on a technicality and refiled on identical facts. No fresh notice goes to the insurer for the second action. The insurer, having lived inside the litigation from the start, now declares that it never heard of it. On that footing, it says, it owes nothing.

For the better part of four decades, Malaysian law indulged this manoeuvre. A claim that was sound in every other respect could be extinguished because a notice that everyone knew about was technically attached to the wrong writ. Justice was sacrificed to procedural housekeeping, and the victim paid.

Mohamed Fayadh put a stop to it.¹ The Court of Appeal held that notice under section 96(2)(a) of the Road Transport Act 1987 is a question of substance, not form. What matters is the insurer’s knowledge of the suit, not the ritual by which that knowledge arrived. It is a fine decision. But it did not appear from nowhere. Behind it stands nearly ninety years of English and Commonwealth jurisprudence, built case by careful case, which had already worked out the answer. This essay traces that line — from the formalism of 1938 to the substance of 2024 — and distils from it ten principles that ought to guide every court that meets the question again.

II. The Genesis of Formalism

Herbert: notice must be more than gossip

The story begins with Porter J in Herbert v Railway Passengers Assurance Company.² Wilkinson had insured his motorcycle-and-sidecar through Ackery, a fellow employee who happened also to act as the insurer’s agent. In friendly, casual conversation, Wilkinson let slip that an action had been brought against him. When the injured claimant later tried to recover from the insurer under section 10 of the Road Traffic Act 1934, the question was whether that idle remark amounted to “notice of the bringing of the proceedings”.

Porter J held it did not. Notice, he said, must be “something much more formal than that, something which would indicate to the company’s agent … that a notice was being given”. In his often-quoted words, “it must really be a notice in the sense that it is given formally as a notice. It must not be some mere piece of casual conversation.” A claim could not be built on a chance word dropped between colleagues.

The decision was sensible on its facts. The danger lay in its language. Later courts seized on the demand for formality and lost sight of why Porter J had imposed it: to ensure that an insurer received a real warning, not to erect a turnstile through which only the procedurally immaculate might pass.

Weldrick: formalism at high tide

That danger was realised in Weldrick v Essex & Suffolk Equitable Insurance Society Ltd, where Birkett J carried the formalist instinct to its extreme.³ Months before proceedings began, the claimant’s solicitors had written to the insurers stating they would “have to take proceedings”, and asking the insurers to confirm their repudiation of liability. The insurers duly confirmed it. They plainly knew what was coming.

Birkett J held this insufficient. The insurers, he reasoned, had “an intimation that in certain circumstances proceedings might be brought, but not necessarily that they would be brought.” A conditional warning, on that view, was no warning at all. The flaw is obvious once stated: every intimation of future litigation is conditional, because proceedings follow only if the claim is not first settled. To demand certainty was to demand the impossible, and to reward insurers who already knew the case was coming. Weldrick marked the high-water mark of form over substance — and, as we shall see, the tide had already begun to turn against it.

III. The Turn Toward Substance

Thambugala: the Privy Council changes course

The corrective came from the Privy Council in Ceylon Motor Insurance Association Ltd v Thambugala.⁴ A claimant’s letter had warned that unless his claim was settled “on or before the 31st instant, we are instructed to file action against the owner of the car.” The insurer argued that the conditional phrasing rendered the notice ineffective under section 134(a) of Ceylon’s Motor Car Ordinance 1938 — a provision the Board expressly recognised as the near-twin of section 10(2)(a) of the English Road Traffic Act 1934.

Delivering the opinion of the Board, Mr de Silva rejected the argument in words that proved prophetic: “A notice of action without such words necessarily carries with it the implication that action will be filed only if the claim is not settled, and the addition of the express statement does not alter its meaning or its effect.” Conditionality was inherent in any warning of future litigation; saying so out loud changed nothing. The Board held the letter a sufficient notice. Form had yielded to substance, and the foundation of the modern law was laid — though its full reach would take another half-century to emerge.

IV. The Modern Trilogy

Desouza: the triumph of substance

The decisive rejection of formalism came in the Court of Appeal in Desouza v Waterlow.⁵ The claimant, unable to secure the cooperation of the insured doctor, had warned the insurers repeatedly — by letter and finally by telephone — of his intention to sue. The trial judge found against him. The Court of Appeal, comprising Roch LJ and Cazalet J, unanimously allowed the appeal and set the law on a surer footing.

Cazalet J supplied the governing test. Whether notice has been given “in any particular case is a matter of fact and degree and will turn on the extent to which the insurer has been made aware of the background circumstances and of the position of the claimant in regard to the taking of proceedings.” Such notice, he added, “can be given orally or in writing.” Its purpose was modest and practical: “that the insurer is not met with information, out of the blue, that his insured has had a judgment obtained against him.”

Roch LJ disposed of a technical argument that would resurface, unhappily, in Malaysia decades later: the suggestion that the definite article in “notice of the proceedings” required a fresh notice tied to each specific suit. He would have none of it. “The subsection is not to be interpreted in that way,” he held. “As notice of the bringing of proceedings can be given before those proceedings are commenced, that is to say at a time when the proceedings do not exist, the notice that has to be given to the insurers is information that the third party intends to commence an action against the insurers’ insured.” He added, for good measure, that “the onus was on the respondents to prove that they had not had the necessary notice.” The burden lay on the insurer, not the victim.

Wake v Page: the law codified

If Desouza settled the principle, Wake v Page organised it.⁶ Kennedy LJ reviewed the authorities from Herbert onward and distilled five propositions that have framed the inquiry ever since. They are worth setting out in his own words:

(1) “To show that the insured had notice of the bringing of the proceedings there must be more than evidence of casual comment to someone who at times acted as an agent for the insurers (see Herbert v RPA Company).”

(2) “Any notification relied upon must not be subject to a condition which may or may not be fulfilled … but if the only condition is one which requires action from the recipients which they choose not to take then by making that choice they render the notice unconditional and thus effective (see Ceylon Motor Insurance Association Ltd).”

(3) “The notice can be oral, and it need not even emanate from the claimant … It can be given before proceedings have commenced, and it need not be specific as to the nature of the proceedings, … or the court.”

(4) “Whether in any given case it is shown that the insurer had notice of the bringing of the proceedings (as opposed to the making of a claim) is a matter of fact and degree.”

(5) “The essential purpose of the requirement of notice is to ensure that the insurer is not suddenly faced with a judgment which he has to satisfy without having any opportunity to take part in the proceedings in which that judgment was obtained.”

It was in the course of this synthesis that Kennedy LJ pronounced Weldrick’s epitaph: “In the light of later authorities I doubt if that decision can stand. Certainly it should be regarded as peculiar to its own facts.” The extreme formalism of 1949 had not survived the century.

For all its clarity, Wake v Page showed the tension was not wholly resolved. Kennedy LJ found that the claimant’s letter of claim, comprehensive though it was, gave notice of a claim rather than of the bringing of proceedings — a distinction his fourth principle preserved, and one that still rewards careful attention.

Nawaz: substance applied, and a safety valve

The trilogy closes with Nawaz v Crowe Insurance Group, where the Court of Appeal applied the settled principles to the most informal of communications.⁷ A trainee solicitor had telephoned a legal secretary acting for the insurers and, while seeking the defendant’s details, mentioned that proceedings were now being issued. The District Judge found that adequate notice had been given; the Court of Appeal restored that finding after the Circuit Judge wrongly interfered with it.

Lord Woolf CJ treated the question as one of fact and good sense. “For a legal secretary of a partner acting on behalf of insurers to be told that proceedings are about to commence,” he observed, “is something that should ring bells.” He then added a practical safety valve: “The Civil Procedure Rules now confer ample discretion upon the court to avoid insurers suffering undue hardship because of their failure to appreciate in time that a notice had been given.” Substance would govern, but the court retained the means to prevent genuine unfairness in the rare case that warranted it.

V. Malaysia Catches Up

The old law: technical tyranny

For years the Malaysian position ran in the opposite direction. China Insurance Co Ltd v Ng Siak Yow, Chan Sow Ying v Pacific & Oriental Underwriters (M) Sdn Bhd, and, more recently, the High Court in Malaysian Motor Insurance Pool v Jivarathinam held that each fresh suit demanded a fresh notice.⁸ If the first suit lapsed or was withdrawn, the notice lapsed with it. The Jivarathinam court reached this conclusion partly by reading the definite article in “the proceedings” to require a suit-specific notice — the very argument Roch LJ had demolished in Desouza a quarter of a century earlier.

The consequences were harsh. Victims with sound claims found themselves unable to recover because they had not served a fresh notice for a refiled suit, even where the insurer knew everything and had suffered nothing. Rights were lost for want of a few words.

Mohamed Fayadh: the sea change

The facts of Mohamed Fayadh were the familiar trap in miniature. A notice was served for the first suit; the insurer acknowledged it and appointed solicitors to defend the insured. The first suit was discontinued. A second suit followed on the same material facts, with the original notice merely re-attached by email. The insurer obtained a High Court declaration that it was not liable, on the sole ground that it had no notice of the second suit.

The Court of Appeal swept the declaration aside. Wong Kian Kheong JCA, delivering the judgment, held that section 96(2)(a) contains two limbs — notice “before” or “within seven days after” the commencement of proceedings — and that either suffices. The phrase “notice of the proceedings” refers to the insurer’s knowledge of the suit that may later fix it with statutory liability under section 96(1). Read purposively, as section 17A of the Interpretation Acts 1948 and 1967 requires, and as befits social legislation,⁹ the conclusion followed plainly: where an insurer already knows of a first suit that is then discontinued, no fresh notice is required for a second suit founded on the same facts. The knowledge does not evaporate with the writ.

The Court added two reinforcing points. Such knowledge may reach the insurer from a third-party source, including the insured. And whether the insurer has it in any given case is a question of fact and degree — the very test Cazalet J had laid down in Desouza.

On this footing the Court affirmed Talasco Insurance Bhd v Goh Thiam Hock and overruled Ng Siak Yow, Chan Sow Ying, and the High Court in Jivarathinam.¹⁰ It also declined to be bound by the Court of Appeal and Federal Court decisions in Jivarathinam, neither of which carried a written judgment from which a ratio could be drawn — a tidy reminder that an unwritten decision binds no one.

What the Court did not do, it is fair to add, is parade the long line of English authority that had reached the same destination first. The result is right. The reasoning, with respect, might have been the richer for showing its lineage — which is the work this essay attempts.

The deeper point is that motor insurance exists to distribute risk and to protect those the legislation was designed for. Technical requirements that serve no substantive purpose should not be allowed to defeat that object.¹¹

VI. Ten Principles of Substantive Justice

Drawing the threads together — from Herbert through Thambugala and the modern trilogy to Mohamed Fayadh — one can distil ten principles. They are offered not as something any single court has enumerated, but as a synthesis of nearly nine decades of Commonwealth reasoning on what notice truly requires.

First: substance over form

Section 96(2)(a) is satisfied by knowledge, actual or constructive; the form is immaterial. The evolution from Porter J’s insistence on formality to the modern test reflects a change of judicial temper. As Cazalet J put it in Desouza, notice is “a matter of fact and degree” — the question is whether the insurer was adequately warned, not whether a ritual was observed.

Second: knowledge may come from any source

Notice need not emanate from the claimant. It may arise from correspondence, from the insurer’s own dealings with its insured, or from its participation in related proceedings. Roch LJ said as much in Desouza; Wake and Nawaz confirmed that information reaching an insurer by any credible route will serve. Modern litigation rarely depends on a single channel of communication, and the law should not pretend otherwise.

Third: knowledge carries across proceedings

A notice given for an earlier suit may suffice for a refiled one, provided the insurer is not prejudiced. This is the precise holding of Mohamed Fayadh, and it rests on the rationale Cazalet J identified: the purpose of notice is to spare the insurer a judgment sprung “out of the blue”. Where an insurer already knows of the claim, the technical withdrawal and refiling of proceedings neither erases that knowledge nor creates any prejudice that fresh notice could cure.

Fourth: the burden lies on the insurer

It is for the insurer to show that it lacked notice or suffered prejudice, not for the victim to prove the negative. Roch LJ stated it plainly in Desouza: “the onus was on the respondents to prove that they had not had the necessary notice.” Insurers are sophisticated parties with the resources to investigate claims and protect their position; the burden of a technical defence sits naturally with them.

Fifth: modes of service are directory, not mandatory

The prescribed modes of service should be treated as directory rather than as conditions precedent to liability. What the provision protects is the insurer’s knowledge; the channel by which a document travels is secondary. To treat the mechanics of service as mandatory would reintroduce, by the back door, the very formalism the modern authorities discarded — and assess the consequences of non-compliance by rote rather than by reference to the statute’s purpose.

Sixth: an insurer “kept in the picture” cannot complain

Where an insurer has continuous knowledge of a claim and takes part in defending its insured, the office of notice is already served. As Kennedy LJ observed in Wake v Page, the essential purpose is to ensure the insurer “is not suddenly faced with a judgment which he has to satisfy without having any opportunity to take part in the proceedings”. An insurer kept in the picture throughout cannot credibly claim to have been ambushed.

Seventh: statutory purpose prevails over technicality

The protective purpose of compulsory insurance legislation must take precedence over readings that would frustrate it.¹² Compulsory insurance serves a social end that transcends the commercial interest of any single insurer; where a technical reading would defeat that end without any countervailing benefit, the purpose must govern.

Eighth: constitutional values inform the construction

The interpretation of notice provisions cannot be divorced from the guarantees of equality before the law and access to justice.¹³ A reading that creates arbitrary barriers between classes of victim — some compensated, some not, for no reason connected to the merits — sits uneasily with those values.¹⁴ To allow a technical defence to defeat an otherwise valid claim is to draw a distinction the legislation never intended.¹⁵

Ninth: harmony with Commonwealth authority

Consistency with the leading Commonwealth decisions, particularly the English line, promotes coherence and fairness. The Malaysian RTA was modelled on the English legislation, and Malaysian courts have long looked to English authority on cognate provisions. Alignment with the modern English approach keeps local law in step with the best of the tradition from which it sprang.

Tenth: focus on the mischief, not the formality

The inquiry should fix on whether the real mischief has been avoided — that an insurer be taken by surprise by a judgment it had no chance to contest — rather than on whether a technical box was ticked. Where the insurer had ample knowledge and opportunity to protect itself, a defect in the manner of notice should not defeat a sound claim. The requirement is a means to an end, not an end in itself.

VII. What It Means

Mohamed Fayadh is, at bottom, the triumph of substance over form in Malaysian insurance law. By asking whether the insurer was prejudiced rather than whether a formality was satisfied, the Court of Appeal has ensured that the right to compensation turns on the merits of a claim and not on the dexterity of a claimant’s clerk. It places the focus where it belongs, removes a tier of needless technicality, and brings Malaysian law into line with the modern Commonwealth approach.

The decision’s significance reaches beyond notice. It reaffirms the social bargain that underpins compulsory motor insurance: that the scheme exists to protect road users, and that its protective purpose is not to be eroded by technical defences. The ten principles set out above are the distillation of that long journey — from the formalism of Herbert to the substance of Mohamed Fayadh. They ensure that the law of notice serves the end Parliament intended, while leaving insurers the protection they are genuinely owed: not to be surprised, and not to be ambushed.

Nothing more, and nothing less.

∞§∞

The author thanks Gana Naidu, KN Geetha, TP Vaani, JN Lheela and Lydia Jaynthi.

Acknowledgements: Image is from Nhan Hoang, Unsplash

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Must an Insurer Be Formally Told What It Already Knows? [Saamran: 3/11]

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