MARKETLEND PTY LTD v QBE INSURANCE (SINGAPORE) PTE. LTD.

Facts

QBE Insurance (Singapore) Pte Ltd issued a trade credit insurance policy dated 14 July 2020 to Novita Trading Limited, covering buyers' non-payment on goods sold and shipped on deferred terms. Marketlend Pty Ltd, an Australian lending platform, financed Novita under a facility dated 9 August 2019, and Australian Executor Trustees Limited (AETL), trustee of a trust funding that facility, was added as joint insured by a banker's endorsement. The schedule to the facility contained a power of attorney and a clause by which Novita assigned to Marketlend its rights under any insurance policy.

In Originating Application No 16 of 2023 in the Singapore International Commercial Court, Marketlend and AETL claimed a total of US$9,035,365.38 for eight alleged sales by Novita to eight buyers, none of whom paid. Novita took no part, was placed in liquidation on 27 March 2024, and its former director refused to cooperate. QBE denied liability, contending that the trades were fictitious, that Novita's rights had been assigned without its consent, that requested documents were never supplied, and that it was entitled to avoid the policy and had done so.

Issues

1. Whether Marketlend had standing and whether an assignment without QBE's written consent entitled QBE to avoid liability.
2. Whether the failure to provide requested documents breached a condition precedent to liability.
3. Whether the claimants proved on a balance of probabilities that the alleged trades were genuine physical trades giving rise to insured debts.
4. Whether there were further breaches of the duty of disclosure and whether QBE was entitled to avoid the policy.

Holding

The Singapore International Commercial Court dismissed the claims in their entirety, holding them defeated on several independent grounds, and directed that QBE was entitled to its reasonable costs, to be agreed or assessed.

Reasoning

The power of attorney let Marketlend sue, as QBE's counsel conceded. But the schedule's clause assigned Novita's policy rights to Marketlend as soon as the policy was issued, without QBE's written consent. Clause 2 was not limited to later assignments, no term could be implied to exclude earlier ones, QBE's emails did not amount to consent, and no estoppel arose. Since the claimants conceded the point would affect both of them, QBE could avoid liability to both.

Alternatively, the policy made compliance with its terms a condition precedent. Correspondence sending invoices, bills of lading and shipping documents from Novita to its buyers fell within the document clauses and was reasonably necessary to assess the claims; it was never produced. That Novita, not the claimants, was at fault was no answer.

On the merits, insured debts required genuine sales of goods actually shipped. The bills of lading showed real shipments but not that Novita was in the chain. The sale contracts had no direct proof of authenticity and shared unusual, one-sided terms the experts said departed from market practice. Even if the recorded calls in which buyers' representatives confirmed invoices were admissible, those speakers were never tested. There was no evidence of Novita's purchases, and Novita's director refused to give evidence. Credible third-party evidence showed that the tin and wheat cargoes were traded without Novita, so the court found those two trades fictitious and inferred that the rest were as well. It set aside the evidence of alleged links to a money-laundering group, treating it as untested.

Non-disclosure that the trades were fictitious breached a condition precedent and entitled QBE to avoid the policy. The court rejected QBE's case that Novita knew of a winding-up application against one buyer.

From the judgment