Voluntary payments

Where two insurers both potentially face liability for a claim, and one of them makes payment, the law of contribution permits that insurer to seek full or partial reimbursement from the other. However, there is some doubt as to whether the paying insurer has the right to seek contribution or reimbursement when it has paid sums beyond its own legal liability. In SHC Capital Ltd v NTUC Income Insurance Cooperative Ltd [2010] SGHC 224 it has been held in Singapore by Chan Seng Onn J – consistently with the most recent English authority – that voluntary payment does not preclude a restitutionary claim.

SHC v NTUC: the facts

Pan-United Concrete engaged Simei Engineering and Trading as its main contractor, and Simei in turn engaged EIN Engineering and Construction as its sub-contractor, in respect of a project for collecting and delivering several dismantled structures to a new site. One of EIN’s employees, Omar, was injured when he was struck by metal chains attached to the bottom of a mobile crane being operated by another of Simei’s sub-contractors, Hock Swee. On 10 July 2007 a consent judgment was entered in favour of Omar, which apportioned liability between the various parties: 10% was borne by Pan-United; 26.7% was borne by EIN and Simei collectively; 53.3% was borne by Hock Swee; and Omar was found to be 10% to blame for his own loss. Damages were later assessed, and the total amount of EIN and Simei’s liabilities amounted to S$317,664.70.