RWASAMIRERA v. SONARWA

RWASAMIRERA v. SONARWA

- Source: Amategeko - Section: Decisions (Judgements) - Date: 2016-06-13 - Case/document no.: RCOMA 0172/12/CS - Collection: Supreme Court

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RWASAMIRERA v. SONARWA [Rwanda SUPREME COURT – RCOMA 0172/12/CS (Mutashya, P.J., Rugabirwa and Gakwaya, J.) 13th June 2014] Commercial procedure – Analysis of subject matter of claim – The party who arises on the claim submitted by other party, he/she cannot say that the Court did not analyse the subject matter of claim if there is no any other means it should decides on it without analysing the points that both parties disagree on them. Insurance laws – Determination of damages in insurance cases – The validity of insurance contract in which over insurance occurred – In case of good faith or no fraud, it cannot be invalid, it is paid damages which shall never be more than the value of the insured object at the day the accident occurs – when there is bad faith in the contract or fraud from one of contracting party, the other party may request the invalidation of that contract with moral damages – On the other hand, the contract continue to be valid but in the limit of the value of the insured objects – Organic-Law n° 20/75 of 20/06/1975 Governing insurance, article 27 and 29 paragraph 2. Insurance laws – The difference between the insured value with declared value – The value that the insured declares in taking insurance is that called insured value while the value declared in Revenue authority is that called declared value – when the party does not provide the evidence showing

the value declared in the insurance, the declared value is the one taken as real value of insured object. Contracts or obligations laws – Moral damages and those for being taken into Court – Not be granted for them when there is no fault resulting from them or caused body harm – It cannot be taken as taking inconvenience when a party not satisfied by decision taken by the previous Court appealed for it – Law of 30/07/1888 relating to contracts or obligations, article 258. Facts: Rwasamirera made an insurance contract of a boat with SONARWA Ltd, thereafter it made an accident from Storm of the wind and was downgraded. Rwasamirera filed a claim before the Commercial High Court requesting that SONARWA Ltd pays him 36.000.000 Rwf of insured value, loss resulting from delaying the payment and moral damages. SONARWA Ltd also filed a claim in that judgment requesting the invalidation of that insurance contract of a boat because Rwasamirera lied the value of the boat and requested damages. The Commercial High Court decided that the claim of Rwasamirera has merit in part and ordered SONARWA Ltd to pay him 6.601.462 Rwf of the value of the his boat. Rwasamirera appealed before the Supreme Court saying that the Commercial High Court contradict itself when it decided that contract remains valid and changed the value of the boat, that it did not decide on the subject matter of the claim,

and confused declared value and insured value and that it refused to allocate him the damages he requested. SONARWA Ltd states that Rwasamirera shall be given the boat value as indicated by the certificate of Rwanda revenue authority because it shows the real value, otherwise he did that with bad faith or fraud, then the contract between them should be invalid. It continued saying that the damages that Rwasamirera is requesting does not deserve them because he did not

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provide without doubt that the loss he incurred is more than the value of the boat, that normally those damages are given when the insurer fails to pay, and SONARWA Ltd tried to pay him the real value and refused. Held: 1. The amount of damages shall never be more than the value of insured object at the day the accident occurs. If the declared value in the contract is more than the value of the object insured but without bad faith or fraud, contract remain valid, but without exceeding the value of objects insured. Thus, the arguments of Rwasamirera that when the Commercial High Court did not invalidate his insurance contract made with SONARWA Ltd, it cannot have merit because the declared value is more than the value of object insured but without bad faith or fraud, which lead to non invalidation of the contract.

2. The insured is considered as having good faith when he notifies the insurer the value of the insured object, and the insured has no interest to refused or to investigated for the real value of the object at the day of signing the contract.

3. The subject matter of the claim shall be determined by the claims made by the respective parties. These claims shall be indicated in the plaintiff’s and defendant’s submissions. In determining the value of the subject matter of claim when both parties disagree on it, there is no other mean the Court shall determine it unless it analyses its value.

4. Insured value of the object insured is the value declared by the insured when he requests for insurance while the declared value is one which is declared in Rwanda Revenue Authority. When both parties disagree on qualification of the value indicated in those denominations, the declared value is taken as true when the other party does not provide the evidence that insured value shall be considered.

5. Any act of a person that causes damage to another obliges one by whose fault it happened to repair it. When that act is based to the request moral damages and damages for being taken into courts, the claimant cannot be given them because when the requested party is not satisfied by the decisions of previous court may appeal. Appeal has no merit. The judgement appealed remain unchanged. Court fees to the appellant. Statutes and statutory instruments referred to: Law n° 21/2012 of 14/6/2012 relating to the civil, commercial, labour and administrative procedure, article 143. Organic-Law n° 20/75 of 20/6/1975 governing the insurance, article 27 and 29 paragraph 2. Law of 30/07/1888 relating to contracts or obligations, article 258. No case referred to. Authors cited: Jean VAN RYN et Jacques HEENEN, Principes de droit commercial, Tome quatrième, Bruylant, Bruxelles, 1965, P. 61

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Judgment I.

BRIEF BACKGROUND OF THE CASE [1] Rwasamirera Raoûl and SONARWA Ltd made an insurance contract of the boat, then it crashed from Storm of the wind where it was floating in Kivu Lake, and it was definitely downgraded. RWASAMIRERA Raoûl filed a claim before the Commercial High Court requesting that SONARWA Ltd should paid him 36.000.000 Rwfs, loss generated from not be paid on time of 1.327.919 Rwfs per month, moral damages and advocate fees. [2] SONARWA Ltd also filed a claim requesting the nullity of that insurance contract of boat because in taking the insurance Rwasamirera Raoûl has lied the price of the boat and requested the damages. On the request of SONARWA Ltd, those both cases were joined and the Court analyzed them together. [3] The Court decided that the claim of Rwasamirera Raoûl has merit in part, but that of SONARWA Ltd has no merit, and it ordered SONARWA Ltd to pay to Rwasamirera Raoûl 6.601.462 Rwfs of his boat value, 264.058 Rwfs of prorated fees of 4%, and for the court fees of 5.500 Rwfs will be withdrawn from the court fees paid by SONARWA Ltd when it filed a claim. [4] Rwasamirera Raoûl was not satisfied by the judgment and appeal in the Supreme Court, saying that the cause of his appeal is of the Court contradict itself when he decided that contract is not changed but change the value of the boat, because it didn’t decides on the subject matter of claim, that it confused the declared value and insured value, and that it did not allocate to Rwasamirera Raoûl the damages he requested. [5] The judgment was held in public on 13th May 2014, counsels Gilles GAKWAYA and Eric KANAMUGIRE were representing Rwasamirera Raoûl, while counsel Molly RWIGAMBA was representing SONARWA Ltd. II.

ANALYSIS OF LEGAL ISSUES a. Whether the Commercial High Court decided on the subject matter in deciding the value of the boat insured and whether it confused the declared value and insured value [6] RWASAMIRERA Raoûl says that the Commercial High Court analyzed the subject matter which is different to what was claimed, because the subject matter was not to determines the value of the boat because it was in the contract made by both parties, but rather the subject matter which should be analyzed was the execution of that contract. Therefore, he finds that the Commercial High Court contradict itself in its decision, because it found that the contract between Rwasamirera Raoûl and SONARWA Ltd should not be terminated, which means that the contract remain with its validity, but it decided to change the value of the boat from 36.000.000 Rwfs to 6.601.462 Rwfs.

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[7] Counsel Eric Kanamugire says that Rwasamirera Raoûl requests that SONARWA Ltd shall perform the contract between them because SONARWA Ltd accepts that the boat downgraded without fault from RWASAMIRERA Raoûl. He continued saying that instead of SONARWA Ltd pays, went to Rwanda Revenue Authority (RRA) to request the value of the boat, this can change nothing to the agreed contract, because the insured value is different from declared value, because the insured value is not determined by RRA but determined by the contract between insured and the insurer. Therefore, he finds that SONARWA Ltd shall perfom its contract without coming back to the insured value in case of accident and that the premium received was based on the value of the boat of 36.000.000 Rwfs. [8] Counsel Gilles GAKWAYA says that there is no fraud or bad faith from Rwasamirera Raoûl when he provide the price because it was based on the contract between both parties, SONARWA Ltd had rights to refuse it, then the price in the contract shall be respected, and be paid. He continued saying the amount paid by RWASAMIRERA Raoûl and accepted by SONARWA Ltd, was the average made, based on the receipt of payment till the boat reached the Lake, thus the information from RRA shall not be considered, because it shall be respected the contract still they did not refuse the depreciation, that also the certificate from RRA

should be requested when there is disagreement between the insured and the insurer, because is not requested when the sinister occurs. [9] Counsel Eric KANAMUGIRE says that the Commercial High Court confused the declared value to insured value, because RRA provides declared value, and when it finds that there is a fraud, it is the one to sue the suspect for the tax evasion; thus the insured value is the value the insured and the insurer give to the object insured, that value is the market value because it is wondered the damage which shall be paid to that object when it crashed for finding the similar object. [10] Counsel Molly RWIGAMBA says that basin on the article 29 of Organic Law n° 20/75 of 20/6/1975 governing the insurance, RWASAMIRERA Raoûl shall be paid refers to the value as is shown by RRA certificate, if he refuses it shall be considered that he determined the insured value by bad faith or fraud, then SONARWA Ltd requests the nullification of that contract as provided by the mentioned provision, because also the article 27 of the Organic Law mentioned above provides that the amount of damage shall not be more that the value of the insured object on the day the sinister occurs. [11] Counsel Molly RWIGAMBA explains that if the client comes in SONARWA Ltd is considered as person of good faith but when the accident occurs, the court request the real value of the object

to be paid and where the reparation was made, and that RWASAMIRERA Raoûl failed to present them, or explain how the boat has depreciated, that is why SONARWA Ltd went to RRA for knowing the real value of the boat when it was downgraded refers to its value when it entered in county, and it found that there was bad faith, that is why it filed a claim because the boat was given the price of 36.000.000 Rwfs, while it came on price of 6.000.000 Rwfs. [12] Counsel Molly RWIGAMBA says also that in insurance contract, it is insured the risk, the insured accept to pay the value of the object insured on the day of the accident, that the reason it was based on the value from RRA was that SONARWA Ltd requested to

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RWASAMIRERA Raoûl certificate maintenance and depreciation of the boat, and failed to submitted them. Referred to duty-paid value instead of the real value was due to SONARWA Ltd requested RWASAMIRERA Raoûl the invoice indicating the value of boat from United State of America (U.S.A.) where he bought it, for checking its depreciation, failed to submit it, then SONARWA Ltd went in RRA for checking the value he bought it for calculating its depreciation. [13] For the confusion of insured value and declared value, counsel Molly RWIGAMBA says that 6.000.000 Rwf contained in RRA certificate, includes the amount paid to that boat carried till to its place of floating, which is contrary to the value RWASAMIRERA Raoûl gave, that is why the contract continue but must be based on article 29, second paragraph of Organic Law of 20/6/1975 mentioned above, then the value shall remain the one contained in RRA certificate because its the real value, because it shall be considered the value of the insured object when the accident occurs. She Explained also that the insured value is the value of the insured object when the insured took the insurance, while real value is determined when the accident occurs because it indicates the depreciation or negligence of the insured, that SONARWA Ltd request them to RWASAMIRERA Raoûl and failed, and when it investigated, it found that the insured value

in the contract is more than the value of boat insured (overinsurance). The view of the Court [14] The article 4, first paragraph of the Law n° 21/2012 of 14/6/2012 relating to the civil, commercial, labour and administrative procedure provides that the subject matter of the claim shall be determined by the claims made by the respective parties. These claims shall be indicated in the plaintiff’s and defendant’s submissions. [15] The article 7of the Law n° 21/2012 of 14/6/2012 mentioned above provides that the judge shall rule only and on all that which is referred to the court. While article 8 of that law provides that a judge cannot base his/ her decision on facts that were not presented in the course of trial; nor can he/ she decide a case basing on his/her personal knowledge of the case. [16] The article 27 of Organic Law n° 20/75 of 20/6/1975 governing the insurance provides that the insurance of the object is a contract of damage. The amount of damage shall never be more than the value of the insured object on the day the accident occurs. [17] The article 29, first paragraph and second of the Organic Law n° 20/75 of 20/6/1975 mentioned above provides that ‘‘ if, in the contract, the insured value is more than the value of object insured, because of the bad faith or fraud from one of the contracting parties, other party shall request the revocation of that contract with

moral damages. In case of no bad faith or fraud, the contract continued remain valid, but on the value not exceeding the value of object insured. [18] For the argument of RWASAMIRERA Raoûl that the Commercial High Court analyzed the subject matter which was not requested, the Supreme Court finds that in SONARWA Ltd’s submissions, before the previous Court, as it found in the judgment appealed, regarding the the reply for what RWASAMIRERA Raoûl was claiming, SONARWA Ltd had requested, in counterclaim filed by other party, to invalidate the contract between them because basing on the article 16 and 29 of Organic Law n° 20/75 of 20/6/1975 governing the insurance, first paragraph,

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it found that his opponent lied the value of boat when he was asking the insurance, then, the fact that SONARWA Ltd in its defense was requesting the invalidation this contract for the lies find and the extra value of the boat insured, the High Commercial Court did not decide to the subject matter not claimed, refers to article 4 and 7 of the Law n° 21/2012 of 14/06/2012 mentioned above. [19] The Supreme court find also that after the non invalidation of the contract as was requested by SONARWA Ltd, the Commercial High Court in deliberation should decides on the real amount that SONARWA Ltd must pay RWASAMIRERA Raoûl, and there is no any other procedure of determining it without analyzing the value of the object insured when both party disagreed on it. [20] For the argument of RWASAMIRERA Raoûl that if the Commercial High Court decided that the contract should not be invalid, it should order SONARWA Ltd to pay him the value of the insured price in the contract, the Supreme Court finds that when the Commercial High Court ordered that the insurance is more than insured value of the object without bad faith or fraud, was the reason of not invalidating the contract they concluded, but it shall not decide that SONARWA Ltd paid the amount insured at that time, because refers to article 27 and 29, paragraph two of the Organic Law mentioned above, the damages shall not be more that

the value of the object insured at the day the accident occurs1or to be more than the the value of insured object2. [21] For the arguments of RWASAMIRERA Raoûl that when SONARWA Ltd received the amount paid calculated on the value of the boat equal to 36.000.000 Rwf, that the Commercial High Court should order it to pay him the damage equal to that amount, which means 36.000.000 Rwf. The Supreme Court finds that it is not fair, bur if the insurance is more than the value of the object insured without bad faith or fraud from the insured, the insurer remain with the amount paid by the insured3 and even when the accident occurs, the insurer pay to the insured the damages equal to the value of the object insured at the day the accident occurs. [22] For the explanations of RWASAMIRERA Raoûl that SONARWA Ltd has accepted the value of the boat he submitted when they made contract, it should not came back, to investigate 1‘’Ainsi conçu, le principe indemnitaire entraînerait cette conséquence que, pour des raisons d’ordre public, dans tout contrat d’assurance de dommages, l’indemnité payée par l’assureur devrait toujours correspondre d’une manière rigoureuse à la perte effectivement subie par l’assuré. Toute clause qui dispenserait de cette correspondance ou qui permettrait d’y déroger serait entachée de nullité’’, Jean VAN RYN et Jacques HEENEN, principes de droit commercial, Tome

quatrième, Bruylant, Bruxelles, 1965, P. 61. ‘’Dans les assurances de dommages, le montant de la prestation est nécessairement proportionnel au dommage effectivement subi. Le principe indemnitaire, d’ordre public, s’oppose à ce qu’un assuré bénéficie d’un quelconque enrichissement ensuite de la réalisation d’un sinistre’’ http:// www.jurisques.com/cass 9. Htm, droit des assurances-règlement du sinistre, PP. 19-20, consulté le 9/6/2014. 2‘’Le principe indemnitaire est ainsi sauvegardé, soit que l’assuré ait été de bonne foi, soit que la mauvaise foi n’ait pas pu être prouvée par l’assureur’’,http:// www.jurisques.com/cass 9. Htm, droit des assurances-règlement du sinistre, P. 26, consulté le 9/6/2014. 3‘’Les primes échues restent définitivement acquises à l’assureur, ainsi que la prime de l’année courante quand elle est à terme’’,http:// www.jurisques.com/cass 9. Htm, droit des assurances-règlement du sinistre, P. 26, consulté le 9/6/2014. En cas de surassurance non frauduleuse, le client ne sera dédommagé que sur la base d’un calcul effectué (dégressivité au vu de l’âge du véhicule au moment de l’accident) sur le montant correct de la valeur de la chose assurée’’, http:// assurancehttp://.be/en-pratique/surassurance.html, que se passe-t-il en cas de surassurance ?, consulté 9/6/2014.

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on the boat value when the accident occurred, the Supreme Court finds that argument has no merit because the insurer is considered as honest when he informs the insured the value of the object insured, that the insurer has no interest of refuse or investigate on the real value of the object when at the day of contracting4 because refers to the principle compensatory principle found in the article 27 of the Organic-Law n° 20/75 of 20/6/1975 mentioned above, when the accident occurs, the amount of damages shall never be more than the value of the object insured at the day the accident occurs5. [23] For the confusion of the value of the object insured and the declared value submitted in RRA said by RWASAMIRERA Raoûl, the Supreme Court finds that what has been done by SONARWA Ltd, was to investigate the real value of the boat insured when it entered in Rwanda and that the Commercial High Court decided that the boat value submitted in tax declaration was the real one, thus except providing the evidence, it is unbelievable how the object value submitted during tax declaration may be different from with the one submitted in taking insurance. [24] Except that, as far as insurance laws are concerned, the value that RWASAMIRERA Raoûl submitted when he was taking insurance is called declared value or insured value, therefore, the Commercial High Court did not confuse them, but it

interpreted the value contained in the contract made by both parties and the value contained in the certificate delivered by RRA, for discovering the real value of the boat insured. [25] Basing on those explanations provided above, The Supreme Court finds that RWASAMIRERA Raoul did not provide any evidence that that boat had the value of 36.0000.000 Rwf till it reached in Kivu, and he did not submit to it the value of that boat when it broken from Storm of the wind, thus that point of appeal has no merit. b. Whether the Court did not provide to RWASAMIRERA Raoûl the damages he requested [26] Counsel Eric KANAMUGIRE says that the Commercial High Court did not provide to RWASAMIRERA Raoûl the damages by appreciation, that it arose the confusion because RWASAMIRERA Raoûl requested the damages from loss generated because SONARWA Ltd refused to pay him when his boat was damaged without working, but that Court after deciding that it shall pay him, it did not give him the damages when they were requested for the reparation what SONARWA Ltd damaged in delaying to pay him, which leads RWASAMIRERA Raoûl to file a case before Court requesting for justice. [27] Counsel Eric KANAMUGIRE says also that RWASAMIRERA Raoûl has filed a claim before the Commercial High Court, requesting moral damages and advocate fees, explaining that SONARWA Ltd complicated to pay him while they made a contract,

but it bought him in 4‘’Avec le principe de la valeur déclarée, l’assuré déclare lui-même lors de la souscription du contrat la valeur de ses biens. Il n’y a pas de contrôle exercé de la part de l’assureur qui se repose sur la bonne foi de l’assuré. En cas de sinistre, l’assuré doit prouver la valeur de ses biens par tous moyens, et l’expert contrôle également la valeur du bien’’. https://www.addvalue-assurance.fr/ins-valeur-agréée-ou-valeur-déclarée-définitions-et-avantages-53.htm, consulté le 04/6/2014. 5‘’A vrai dire, le principe indemnitaire enlève tout intérêt à la surassurance, dans le chef de l’assuré, puisque-en cas de sinistre- l’indemnité se calculera néanmoins d’après la valeur réelle de la chose’’,Jean VAN RYN et Jacques HEENEN, op.cit., P. 64.

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litigations, for both, the Commercial High Court did not motivate while it is its duty to rule only and on all claimed. He conclude by requesting to order SONARWA Ltd to pay RWASAMIRERA Raoûl 36.000.000 Rwf of the boat value and to pay the loss generated by its fault equal to 1.327.516 Rwf per month from March 2012 till the end of the judgment, and pays him 5.000.000 Rwf of moral damage and 1.000.000 Rwf of procedural and advocate fees. [28] Counsel Molly RWIGAMBA says that RWASAMIRERA Raoûl does not deserve damages he is requesting because he does not show clearly the loss he incurred which is more than the boat value, and normally those damages are given when the insurer refused to pay, SONARWA Ltd tried to pay him but he refused that he want to be paid what he was not insured, therefore it cannot pay damages because it accepts to pay the real value. The view of the Court [29] The article 143 of the Law n° 21/2012 of 14/6/2012 mentioned above provides that damages for moral damage loss shall not be granted unless if and only if the breach of the contract caused bodily harm or when the nature of the contract or the breach thereof was the cause of that moral loss. [30] For the damages requested by RWASAMIRERA Raoûl, related to the loss he undergone when SONARWA Ltd refused to pay him while his boat was downgraded and is not working, the Supreme Court finds that in the paragraph

18 of the judgment appealed, the Commercial High Court decided that he shall not be given them because the delay to be paid, was not the fault of SONARWA Ltd, it explained that he played a role in delaying to be paid, because if he would submit the real boat value, there is no proof that he would not be paid without any complication. [31] Except saying that the Commercial High Court refused to give him by appreciation, the Supreme Court finds that RWASAMIRERA Raoûl does not criticize the motivation of that Court, which leads not to give him the requested damages, therefore his argument is groundless, then, he cannot not be given the damages he requesting. [32] For moral damages and advocate fees RWASAMIRERA Raoûl was requesting, the Supreme Court finds that the Commercial High Court was not decided on it, but refers to the article 7 of the Law n° 21/2012 of 14/6/2012 mentioned above, the Judge shall rule only and on all that which is referred to the court, but as find above, SONARWA Ltd did not violate the contract made with RWASAMIRERA Raoûl and that it was not its will the payment of damages was delayed because when it found that the insured was more than the boat value, it has, on its rights, to know the real value of boat insured still when that boat made an accident, basing on compensatory principle found in the article 27 of Organic-Law n° 20/75 of 20/6/1975 mentioned above , therefore refers to article 143 of law n° 21/2012 of 14/6/2012 said above, RWASAMIRERA Raoûl must not be awarded to those moral damages. [33] Concerning the advocate fees, the Supreme Court finds that when RWASAMIRERA Raoûl did not get an answer to his request from the previous Court there is no reason it could give him advocate fees.

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[34] Basing on those explanations given above, the Supreme Court finds that this point of appeal of RWASAMIRERA Raoûl has not merit. c. Whether SONARWA Ltd shall be given procedural and advocate fees [35] Counsel Molly RWIGAMBA says that SONARWA Ltd requests RWASAMIRERA Raoûl the damages for being brought in court because it accepted to pay him but he sued it in court, those damages are equal to the amount he tried to refund by bad faith from SONARWA Ltd when he lies that the boat had the value of 36.000.000 Rwf instead of saying the real value of that boat, and he shall pay SONARWA Ltd 5.000.000 Rwf of procedural and advocate fees. [36] Counsel Eric KANAMUGIRE says that those damages are requested when there is an act of person that he/she causes to another, then the fact that the Commercial High Court decided that RWASAMIRERA Raoûl has not committed any fault , and SONARWA Ltd accepted that and did not appeal, those damages are not fair because of lack of their basis. The view of the Court [37] The article 258 of Civil Code Book III provides that any act of a person that causes damage to another obliges one by whose fault it happened to repair it. [38] For the damages that SONARWA Ltd is requesting for being brought in court, the Supreme Court finds that it shall not be given them because the fact that RWASAMIRERA Raoûl was not satisfied by the decision of the Commercial High Court, it cannot be called making some tired because there are some of its points he was not satisfied for. [39] For the procedural and advocate fees, the Supreme Court finds that it merit them but because it request too much, it gives it in its appreciation (ex aequo et bono) those equal to 700.000 Rwf, which means 300.000 Rwf of procedural fees and 400.000 Rwf of advocate fees fees.

DECISION OF THE COURT [40] It decides that appeal of RWASAMIRERA Raoûl has no merit. [41] It decides that the judgment RCOM 0135-0242/12/HCC rendered on 5th October 2012 by the Commercial High Court remain unchanged. [42] It orders RWASAMIRERA Raoûl to pay SONARWA Ltd 400.000 Rwf of advocate fees and 300.000 Rwf of procedural fees, both equal to 700.000 Rwf. [43] It orders RWASAMIRERA Raoûl to pay court fees of this judgment equal to 15.300 Rwf.