1 YONG PUNG HOW CJ

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4  The facts

5 The facts were simple and were agreed by the appellant. The whole of the prosecution case rested on the agreed facts. The appellant is a private limited company engaged in the business of consultant engineering services and general insurance. BUPA is an insurer based in the United Kingdom which offers health care insurance coverage. At the material times, BUPA was not registered with the Monetary Authority of Singapore under s 3 of the Insurance Act, and it was prohibited from carrying on any class of insurance business in Singapore. At the material times, Rosaline Margaret Yap Gim Leng (Rosaline Yap) and John William Wilson were the directors and shareholders of the appellant. Rosaline Yap was in charge of the general insurance business division in the company.

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7  Comismar

8 In a letter dated 24 August 1994, the appellant informed BUPA that it was organising the health care insurance of the management and consultancy personnel of Comismar and conveyed information on Comismar. On 26 August 1994, BUPA replied and it was followed by an exchange of correspondence between BUPA and the appellant. On 3 October 1994, the appellant sent a letter to BUPA, enclosing the agreement duly signed by BUPA and the duly completed enrolment forms of five employees of Comismar. BUPA acknowledged receipt of the forms.

9  Quodling

10 On 31 October 1995, the appellant, at the request of Quodling, sent to him literature on health insurance plans offered by BUPA and ProMedico, an insurer, and the application forms for both insurers. In the letter, the appellant asked Quodling to return the application form duly completed so that the application `could be handled and approval sought from the respective underwriters`. On 15 December 1995, the appellant forwarded to BUPA the application form completed by Quodling and the premium paid by Quodling. On 9 January 1996, the appellant informed Quodling that his application to BUPA had been accepted. The appellant further informed Quodling that the insurance cover had commenced on 1 January 1996 and that relevant documents would be despatched to him once the appellant received them. Subsequently the appellant received the membership certificate issued by BUPA for Quodling and in turn sent the certificate to Quodling.

11  The defence

12 At the close of the prosecution`s case, the defence counsel argued that there was no case to answer. Section 33(1) of the Insurance Act only covered `Singapore policies` under First Schedule para 2(1) or offshore polices issued in Singapore under para 2(2), read with s 2(5) of the Act. The policies in respect of which the appellant was charged were policies issued by foreign issuers not in Singapore. Alternatively, even if s 33(1) applied to the insurance policies in question, the appellant had not committed any offence as it had not carried on insurance business as an agent for an insurer; it had not received proposals for polices, issued policies or received premiums on policies under s 2(5). It merely acted as a post-box to transmit information from BUPA. The district judge rejected the defence submission of no case to answer. He called upon the appellant to enter its defence. The appellant elected not to give evidence. The district judge convicted the appellant on the grounds that the appellant did in fact carry on insurance business in Singapore as an insurance agent under s 2(5). Further s 33(1) was not restricted only to `Singapore policies`.

13  The appeal

14 Whether the appellant was acting as an insurance agent for BUPA within s 33(1) Insurance Act

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17  Dictionary of Insurance , p 11 and 38; Clarke, Law of Insurance Contracts (3rd Ed, 1997) p 189. This is fortified by an examination of s 33. A heavier penalty is provided for an insurance agent carrying on business for an unauthorised insurer than for an insurance broker who negotiates a contract with an unauthorised insurer. An insurance agent within s 2(5) is one that acts on behalf of the insurer and is perceived by the legislature as being more culpable. Of course this does not mean that an insurance agent necessarily acts on the insurer`s behalf the whole of the time and he may in limited circumstances also act for the insured. In such a case, he will still be considered to be acting as an insurance agent under s 2(5). To hold otherwise would make the provisions of the regulatory legislation unworkable.

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23  insurance policies `, and not only Singapore policies. There is no reason why the definitions in para 2 of the First Schedule should apply to s 2(5) or s 33.

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25  in Singapore as defined in s 2(5) .

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28 Koon Wing Lau v Calwell [1949] 80 CLR 533 which held that `to issue` meant that the document had to pass from the possession of the authorities either into his manual custody or under his control or into his legal possession so as to be at his command. The district judge accepted the interpretation that, for the insurance policy to be issued to a person, there had to be physical delivery of the document into the custody of the recipient or under his control.

29  Koon Wing Lau v Calwell was dealing with a case under the amended Australian Immigration Act 1949. The Act provided that a certificate of exemption `issued` by an authorised officer, to a prohibited immigrant or an immigrant required to pass a dictation test within a certain period, was deemed to be valid. When such a certificate was issued, he was not subject to provisions of the Act restricting entry into or stay in Australia. The importance of the certificate of exemption was that, if the certificate expired or was subsequently cancelled (on the stipulated grounds), he would be declared a prohibited immigrant and might be deported. The High Court of Australia held that the certificate was only `issued` within the 1949 Act if the certificate was delivered to the person named in the certificate. In that case, the High Court of Australia was dealing with the status of immigration of persons who could be deported. There was no doubt that, on such matters affecting his right to stay in Australia, the immigrant had to be informed as to whether he was allowed to remain in Australia. If the certificate was only signed by the authorities informing the immigrant and the certificate subsequently expired, he was liable to be deported. Hence it was justifiable to hold that the certificate had to be delivered to the immigrant.

30  Law of Insurance (2nd Ed, 1997) at p 25. For the policy to be issued to the insured, there is no requirement that the policy must be both executed and delivered to the insured. Once the policy is executed to the insured, the policy is binding on both parties. This is illustrated in Roberts v Security Co Ltd [1897] 1 QB 111. In that case, a proposal for an insurance of goods against loss by burglary was made by the plaintiff to the defendant insurance company. The insurance company affixed the seal of the company to the policy which was in conformity to the proposal and the policy was duly signed. However, the policy remained in the hands of the insurance company and was not yet delivered when the loss occasioned by burglary occurred. The Court of Appeal held that the policy constituted a complete contract of insurance; the proposal was accepted when the policy was executed under the seal of the company.

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35  a bank draft drawn in pounds made in BUPA`s favour for the first premium. Counsel for the defence argued that there was no receipt of moneys in Singapore as the premium took the form of a bank draft made to BUPA`s order for onward transmission. Receipt of the premiums only took place when the bank draft made in BUPA`s favour was delivered to BUPA. The appellant did not receive the premiums in Singapore. The appellant had authority to receive the bank draft and to transmit it to BUPA but it was essentially acting only as a conduit in this respect. Hence I found that there was no receipt of premiums in Singapore.

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38  Sentence

39 The offence under s 33(1) of the Act is punishable with up to $20,000 fine increased by up to $1,000 for every day on which the offender is proved to have continued the offence, or up to two years imprisonment or to both. The district judge sentenced the appellant to an $18,000 fine, increased by a sum of $1,000 for every day of the four days it contravened s 33(1). With respect, I was of the view that the sentence was manifestly excessive. The appellant had contravened s 33(1) in relation only to two insurance policies relating to two different clients. The offence stretched from October 1994 to March 1996 but the appellant`s carrying on insurance business in Singapore was limited only to receiving proposals from the proposed insured and forwarding them to BUPA. The insured`s interest was not shown to be affected nor was the operation over such a prolonged period. It was not carrying on a large scale insurance business for BUPA. It was the appellant`s first conviction. I accepted that the appellant did not know that its manner of carrying on business contravened s 33. The public interest was not adversely affected. In the circumstances the fine should be reduced to $10,000. Given my earlier finding that the offence was committed only on the receipt of Quodling`s proposal in Singapore, as well as the receipt of Comismar`s proposals in Singapore, the contravention of s 33(1) took place only on two occasions, as opposed to the four occasions found by the district judge. Accordingly the sentence was reduced to a $10,000 fine increased by a sum of $1,000 for each of the two days the appellant violated s 33(1), making a total sentence of $12,000. The appeal against the sentence was allowed to this extent.