Cosmic Insurance v United Oil: Indemnity for Workman's Hospital Expenses under Workmen's Compensation Act

Cosmic Insurance Corp Ltd ("Cosmic") appealed against the dismissal of its claim against United Oil Co Pte Ltd ("United Oil") for indemnity under s 18(b) of the Workmen's Compensation Act (Cap 354, 1998 Rev Ed) ("the WCA"). Cosmic, the insurer of Protec Guards Management Services ("Protec"), sought to recover hospital expenses paid on behalf of Samuel Palraj (“Samuel”), a Protec employee injured at United Oil's factory. The High Court dismissed the appeal, holding that hospital expenses do not constitute 'compensation' under the WCA and therefore are not subject to indemnity under s 18(b).

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Appeal Dismissed

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Cosmic Insurance sought indemnity from United Oil for hospital expenses paid to an injured workman. The court held that these expenses did not constitute 'compensation' under the WCA.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Cosmic Insurance Corp LtdAppellantCorporationAppeal DismissedLost
United Oil Co Pte LtdRespondentCorporationJudgment for RespondentWon

3. Judges

Judge NameTitleDelivered Judgment
Woo Bih LiJudgeYes

4. Counsels

Counsel NameOrganization
K AnparasanKhattarWong
Nadia AlmenoarKhattarWong
Michael Eu Hai MengComLaw LLC

4. Facts

  1. Cosmic insured Protec under a workmen’s compensation policy.
  2. Samuel, a Protec employee, was injured at United Oil's factory.
  3. Cosmic reimbursed Protec for Samuel's hospital expenses.
  4. Cosmic claimed indemnity from United Oil under s 18(b) of the WCA.
  5. Samuel did not recover any compensation under the WCA but claimed damages against United Oil.
  6. The Commissioner of Labour did not assess the amount payable.

5. Formal Citations

  1. Cosmic Insurance Corp Ltd v United Oil Co Pte Ltd, DA 34/2005, [2006] SGHC 85

6. Timeline

DateEvent
Protec provided United Oil with a security guard at the factory.
Cosmic issued Workmen’s Compensation Policy No PWC000-00001962.
Workmen’s Compensation Policy No PWC000-00001962 became valid.
Samuel commenced employment with Protec.
Samuel met with an accident at the factory.
Cosmic paid Protec $25,473.32 for medical expenses incurred by Samuel.
Workmen’s Compensation Policy No PWC000-00001962 expired.
Cosmic paid Protec $18,742.13 for medical expenses incurred by Samuel.
Cosmic commenced action against United Oil.
Decision Date

7. Legal Issues

  1. Whether hospital expenses amount to 'compensation' within the Workmen's Compensation Act
    • Outcome: The court held that hospital expenses do not constitute 'compensation' under the WCA.
    • Category: Substantive
  2. Whether insurer is entitled to indemnity for hospital expenses under s 18(b) of the Workmen's Compensation Act
    • Outcome: The court held that the insurer is not entitled to indemnity for hospital expenses under s 18(b) of the WCA because hospital expenses are not considered compensation under the act.
    • Category: Substantive

8. Remedies Sought

  1. Indemnity for hospital expenses
  2. Adjuster's fees

9. Cause of Actions

  • Statutory Claim for Indemnity

10. Practice Areas

  • Insurance Litigation
  • Employment Law
  • Personal Injury

11. Industries

  • Insurance
  • Oil and Gas
  • Security

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Singapore Bus Service Ltd v Lim Swee Pheng & Sons (Pte) LtdCourt of AppealYes[1978–1979] SLR 225SingaporeCited to explain the object of s 18(a) of the WCA, which is to prevent the enforcement of double recovery of both damages and compensation.
Commercial Union Assurance Pte Ltd v Chua Kim BakHigh CourtYes[1999] 1 SLR 553SingaporeCited for the proposition that medical expenses and lost wages constitute compensation payable under the Workmen’s Compensation Act. The court disagreed with the conclusion in respect of medical expenses.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Workmen's Compensation Act (Cap 354, 1998 Rev Ed)Singapore
Workmen's Compensation Act (Cap 354, 1998 Rev Ed)Singapore
Workmen's Compensation Act (Cap 354, 1998 Rev Ed)Singapore
Workmen's Compensation Act (Cap 354, 1998 Rev Ed)Singapore
Workmen's Compensation Act (Cap 354, 1998 Rev Ed)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Workmen's Compensation Act
  • Indemnity
  • Hospital expenses
  • Compensation
  • Insurer
  • Workman
  • Approved policy

15.2 Keywords

  • Workmen's Compensation
  • Indemnity
  • Hospital Expenses
  • Singapore
  • Insurance

17. Areas of Law

Area NameRelevance Score
Work Injury Compensation95
Insurance Bad Faith60

16. Subjects

  • Employment
  • Insurance
  • Compensation