SANLAM AG Plc v. NZAMWITAKUZE

# SANLAM AG Plc v. NZAMWITAKUZE

- Source: Amategeko - Section: Decisions (Judgements) - Date: 2024-02-16 - Case/document no.: RS/INJUST/RC 00003/2023/SC - Collection: Supreme Court

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SANLAM AG Plc v. NZAMWITAKUZE [Rwanda SUPREME COURT-RS/INJUST/RC 00003/2023/SC (Cyanzayire, P.J., Muhumuza, Kalihangabo, J.) 16 February 2024] Laws relating to civil cases – Damages arising from road accidents – Civil liability – When a vehicle was not the cause of the accident which, neither the driver nor the insurer are liable for damages. Facts: On 1st May 2017, Sebanani who was riding a bicycle collided with a motorcycle with plate number RC 132 X, which was ridden by Makuza, so that Nzamwitakuze who was transported by it, got injured. Basing on the fact that the motorbicycle was insured by SORAS AG Ltd, which later was rebranded SANLAM AG Plc, Nzamwitakuze filed a claim before the Intermediate Court of Nyarugenge seeking the damages amounting to FRW 9,630,969. The Court adjudicated the case and held that her claim has merit, it ruled that SANLAM AG Plc should pay to her the damages amounting to FRW 6,603,044. At the appellate level, the High Court held that the appeal filed by SANLAM AG Plc is unfounded, while the cross-appeal lodged by Nzamwitakuze has merit, it decided that the appealed judgment is sustained, in addition, it held that SANLAM AG Plc should pay to Nzamwitakuze FRW 108,000 as aesthetic damages and FRW 1,000,000 as procedural fee. SANLAM AG Plc applied for the review of the judgment on grounds of injustice; the case was transferred to the Supreme Court, and the latter examined whether SANLAM AG Plc is liable for an accident caused by a cyclist. SANLAM AG Plc alleged that it was ordered to pay the damages arising from an accident while the insured person did not commit any fault. Nzamwitakuze pleads that, though the accident was caused by a cyclist, it is the motorbicycle which transported her, which knocked her over, and the motorbicycle was insured by SANLAM AG Plc., and therefore the latter cannot escape its liability arising from the accident, especially that it does not explain that the insured vehicle should have committed a fault for the insurer to be held liable for damages. This Court found that the collapse of the motorbicycle was directly a cause of being hit by bicycle. The respondent did not demonstrate any involvement of the motorbicycle in the accident. Therefore, since the motorbicycle was not involved in the accident that occurred, neither the motorcyclist nor the insurer are liable; because the accident caused to Nzamwitakuze who was transported by the motorbicycle was due to that bicycle, and it should therefore be held liable. Held: When a vehicle was not the cause of the accident which, neither the driver nor the insurer are liable for damage. The application for review of the judgment on grounds of injustice has merit. Statutes referred to: Law No 22/2018 of 29/04/2018 Law relating to the civil, commercial, labour and administrative procedure, article 111.

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Decree-Law n⸰ 32/75 of 07/08/1975 relating to compulsory insurance risk coverage for road-using motorised vehicles as modified by Law n⸰ 02/2002 of 17/01/2002, article 3. Cases referred to: Musengamana Jean Marie Vianey v. SGF, RS/INJUST/RC 00019/2022/SC, rendered by the Supreme Court on 02/06/2023. Judgment I. BACKGROUND OF THE CASE

This case originates from an accident that occurred on 01 May 2017 at around 6:30 pm in Nyarucyamo II Village, Gahogo Cell, Nyamabuye Sector, Muhanga District, when Sebanani Gilbert, a cyclist, hit a motorbicycle with plate number RC 132, ridden by Makuza Leonard, it was transporting Nzamwitakuze Thérèse and the latter got injured. Basing on the fact that the motorbicycle was insured by SORAS AG Ltd, which later was rebranded SANLAM AG Plc, she requested the Company to amicably settle the issue, but in vain. Nzamwitakuze filed a claim before the Intermediate Court of Nyarugenge seeking the damages amounting to FRW 9,630,969.

SANLAM AG Plc declined the damages arguing that the accident was not caused by the motorcyclist who transported Nzamwitakuze Thérèse, adding that the accident was rather caused by the cyclist who deviated from his traffic lane, SANLAM AG Plc stated that the insured vehicle was not involved, and therefore, the insurer bears no liability for the requested damages.

In the judgment RC 00783/2018/TGI/NYGE rendered on 31 May 2019, the Intermediate Court of Nyarugenge held that: i. Makuza Léonard, a motorist, who knocked over Nzamwitakuze Thérèse is liable for the accident-related damages as per the provisions of article 2581 of the civil code, Book III; however, since the motorist was insured by SANLAM AG Plc, and given the fact that Nzamwitakuze Thérèse sustained an incapacity of 35%, it is that Company that is liable for damages as provided for by article 2602 of the above mentioned civil code. ii. Nzamwitakuze Thérèse deserves no aesthetical damages since she did not present any evidence that can prove that the level of incapacity matches the physical impairment caused by the accident.

The Court held that the claim filed by Nzamwitakuze Thérèse has merit and ruled that SANLAM AG Plc should pay to her the damages amounting to FRW 6,603,044 including FRW 4,007,572 3 for income loss, FRW 432,0004 for loss of marriage opportunity, FRW 540,0005 for

1 That article provided that “anyone causing damage to others may pay for the damage caused” 2 That article provided that “a person shall not always be civilly liable for his or her own personal torts, as he/she can also be liable for damages caused by third parties under his/her stewardship” 3 Calculated as follows: FRW 3000 x 30 x 12 x 35 x 35% 1+ (6,575 x 35) = 13, 230, 000 3,30125= FRW 4, 007.572 4 Calculated as follows: FRW 3000 x 40% x 30 x 12 = FRW 432,000 5 Calculated as follows: FRW 3000 x 30 x 6 = FRW 540,000

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career damage, FRW 623,469 for accident-related expenses, FRW 800,000 for the advocate fee, FRW 200,000 for the procedural fee and FRW 20,000 for the court fee.

SANLAM AG Plc appealed against the judgment before the High Court and argued that the insurer can only pay for damages when the insured person has done some wrong, and alleged that since the insured person committed no torts, the insurer is not liable for any damages, and it insisted that the damages should be paid by a person who caused the accident. SANLAM AG Plc made the above submission with reference to their letter of 20 June 2018, written in a reply to the letter of Nzamwitakuze Thérèse of 9 March 2018, coupled with the Police statement on the cause of the accident; Nzamwitakuze Therese filed a cross appeal and requested to the High Court to grant her aesthetical damages she was not awarded.

In the case No RCA 00295/2019/HC/KIG decided, the High Court found that: i. Though the cyclist caused the accident, he/she did not knock over Nzamwitakuze Thérèse, as she was knocked over by the motorcyclist and the motorbicycle was insured by SANLAM AG Plc; ii. SANLAM AG Plc cannot avoid responsibility or disregard the consequences of the accident, more so that they cannot demonstrate that the insurance contract it entered into with the motorcyclist is exclusively limited to the fact that the insured vehicle is involved in the accident. iii. The fact that Nzamwitakuze Thérèse was knocked over by a motorbicycle with plate n⸰ RC 132 X and insured by SANLAM AG Plc, it is enough for the insurance Company to be held liable for the damages and then make a recursory action as provided for under article 258 of Civil code book III. iv. Nzamwitakuze Thérèse should be granted FRW 108,000 as damages for aesthetical impairment since she provided evidence thereof.

The Court held that the appeal filed by SANLAM AG Plc has no merit while the cross- appeal filed by Nzamwitakuze Therese has merit, and confirmed the judgment RC 00783/2018/TGI/NYGE rendered on 31/05/2019, and added that SANLAM AG Plc should pay to Nzamwitakuze Thérèse FRW 108,000 as damages for aesthetical impairment and FRW 1,000,000 for the expenses of the appeal proceedings.

On 03 July 2020, SANLAM AG Plc wrote to the President of the Court of Appeal requesting that the judgment RCA 00295/2019/HC/KIG rendered by the High Court on 18 June 2020, should be reviewed on grounds of injustice. After examining the application, the President of the Court of Appeal wrote to the President of the Supreme Court requesting the review of the case. On 1 September 2022, by the decision No 176/CJ/2022, the President of the Supreme Court ordered that the case should be transferred t to the Registry of the Supreme Court for review.

The case was heard in public on 10 January 2024 when SANLAM AG Plc was represented by Counsel Niyindora Nsengiyumva together with Counsel Nkeza Sempundu Clement, while Nzamwitakuze Thérèse was represented by Counsel Nsabayezu Evariste; and the parties debated the three following issues:

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a. Determining whether SANLAM AG Plc is liable for an accident caused by a cyclist; b. Determining whether Nzamwitakuze Thérèse can be ordered to refund all the money she received; c. Determining the basis of the damages requested in this case. II. ANALYSIS OF LEGAL ISSUES OF THE CASE II.1. Determining whether SANLAM AG Plc is liable for an accident caused by a cyclist

Counsel Niyindora Nsengimana and Counsel Nkeza Sempundu Clement representing SANLAM AG Plc allege that the High Court’s decision in the case RCA n⸰ 00295/2019/HC/KIG for which the review is sought, was characterized by contradictions. As it ordered to SANLAM AG Plc to pay the accident-related damages, yet there was no fault and held that the cyclist could only be liable for the accident, if the bicycle had knocked over Nzamwitakuze Thérèse.

They submit that the fact that the High court held that it is Sebanani Gilbert, the cyclist, who caused the accident, and then held that SANLAM AG Plc should pay the damages owing to the fact that a motorbicycle that knocked over Nzamwitakuze Thérèse was insured by SANLAM AG Plc, denotes that the Court made the decision that connotes the occurrence of two different accidents, and disregarded the fact that the cyclist who recklessly changed the traffic lane, and caused an accident that knocked over Nzamwitakuze Thérèse and she got injured.

They allege that the Court disregarded the fact that the insurer only covers liability resulting from the insured’s unintentional personal torts. They also state that the Court held the motorcyclist liable for having been hit by a cyclist, prior examination of whether there was the motorcyclist’s fault or absent-mindedness that led to the accident. They also added that one of the reasons that discharge SANLAM AG Plc from such a liability, is that the insurance Company is not responsible for an uninsured person, as it only covers its clients for unintentional damages caused on third parties.

Thy also allege that he High Court disregarded the fact that for the insurer to pay damages the responsibility of the insured person must be substantiated, which means that the liability of the insurer cannot never cover more that the insured’s faults and then extend to the uninsured torfeasors just as it is provided under article 2 of the Decree-Law N0 32/75 of 07/08/1975 relating to compulsory insurance for road using motorized vehicles6 in force by the time of the accident, a version that is even emphasized by article one of SANLAM AG Plc of the contract (risk coverage policy).

They sustain that it is Sebanani Gilbert who committed the tort that directly led to knocking over Nzamwitakuze Thérèse and got her arm broken, cannot engage the insurer’s liability, rather

6 That article provides that « motor vehicles are only permitted to circulate on public roads, on land open to the public, and on private land open to certain persons entitled to use them on a condition that the civil liability that might thereby arise is covered by the Insurance in accordance with the provisions of this Decree-Law n0 32/75 of 7 August 1975 relating to compulsory insurance for civil liabilities for motorized vehicles”.

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the fact that the High Court found that the accident was caused by a bicycle, is enough to absolve SANLAM AG Plc of liability.

They also allege that the High Court should not have relied upon the right of subrogation to charge SANLAM AG Plc the damages and later exercise a recourse action against the tortfeasor who caused the accident on behalf of the insured person because the insured person was not bound to pay the damages since it is not him who caused the accident. Therefore, the insurer has no obligation to pay.

They explain that pursuant to article 1287 of the Law N⸰ 030/2021 of 30/06/2021 relating the organization of the insurance business, the High Court should not have ordered to SANLAM AG Plc to cover the losses that were caused by Sebanani Gilbert, the cyclist who was neither the policy holder nor the rightful beneficiary, arguing that once such a precedent is set, any tortfeasor causing a road accident, the insurance company would be ordered to cover his/her torts without considering whether the tortfeasor is or is not insured, which means that the insurance policy would be meaningless and the insurance business would no longer be possible.

Counsel Nsabayezu Evariste assisting Nzamwitakuze Thérèse contended that the submissions made by the advocates of SANLAM AG Plc, arguing that though the accident was caused by a bicycle, it is the motorcyclist who knocked over his client, and the motorbicycle was insured by SANLAM AG Plc. He explains that the fact that the motorbicycle that was transporting her is the one that caused the accident that got her injured, thus, SANLAM AG Plc cannot avoid responsibility to cover losses resulting from that accident, more so that it does not prove that the insurance policy is exclusively limited to the sole faults committed by the insured vehicle alone.

He alleges that SANLAM AG Plc should not disregard the fact that the insurance policy stipulates that in case of an accident, the insurer covers the damages caused by the insured vehicle and then subrogates the insured in the right of recovering the compensation from the real tortfeasor (right of subrogation). And this is a principle by which SANLAM AG Plc should pay damages arising from the accident that knocked over and impaired Nzamwitakuze Thérèse, and then seek a refund from the cyclist at its convenience.

He explains that the article one of Automobile Insurance policy provides that the insurer has an obligation to cover accident-related damages caused or occasioned by the insured vehicle “Par le présent contrat, la société couvre, aux conditions ci-après indiquées, la responsabilité civile de l’Assuré du chef des dommages causés au Rwanda par le véhicule automoteur désigné aux conditions particulières”.

He also alleges that based on article 28 of the Law N⸰ 41/2001 of 19/09/2001 relating to compensation to victims’ physical accidents caused by motor vehicles and argued that his client was not involved in the accident, as she was just knocked over by a motorcyclist who was

7 That article provides that « when the Insurer has paid for a claim under a contract of indemnity insurance, the insurer is entitled to exercise a subrogation right against a third party who is liable for the damage to the extent the insurer has indemnified the policyholder or the beneficiary” 8 That article provides that “The compensations provided for under article 4 to 10 hereunder are reduced in the ratios of shared responsibility incumbent upon the victim in the occurrence of the accident. The victim’s faults prevent him/her or their beneficiaries from obtaining compensations.

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transporting her and had a responsibility of taking her to her destination safely, irrespective of the cyclist who caused the accident. Therefore, the fact that the motorbicycle was insured by SANLAM AG Plc., it is clear that the insurance company should assume the responsibility and pay for the involved damages per the provisions of article 260 of Civil code, book III, hold that the judgment N⸰ RCA 00295/2019/HC/KIG under review is not tainted with injustice. DETERMINATION OF THE COURT

While examining this issue, it is important to first thoroughly analyse the nature of risks that are insured under the compulsory insurance for motorised vehicles, such prior analysis is so crucial for determining whether SANLAM AG Plc was really liable for civil damages resulting from an accident caused by a cyclist.

Article 3 (2) of the Decree-Law N⸰ 32/75 of 07 August 1975 relating to compulsory insurance for road using motorised vehicles as modified by Law N⸰ 02/2002 of 17 January 2002 provides the following: “insurance must cover the risks that befall persons or properties that occur in Rwanda. It must include injuries caused to people being transported, in whatever capacity, by the vehicle that caused the injury. The goods transported by that vehicle may be exempted from the insurance coverage by conventional clauses9” .

Article one of general insurance scheme of SANLAM AG Plc (the former SORAS AG Ltd), in force by the time of accident, provided that the company covers civil liabilities that are caused by the insured vehicle10.

In the judgment RS/INJUST/RC 00019/2022/SC rendered by the Supreme Court on 02 June 2023 wherein the parties were Musengamana Jean Marie Vianey v. the Special Guarantee Fund for accidents caused by road-using automobiles and animals (SGF), the Court made reference to the scholars’ explanations and explained that liability must be understood as an obligation to pay for the caused damage, while the liability insurance is defined as a commitment to pay for damages that an insured person might cause to third parties11.The Court has also held that it is the claimant victim who must prove about the damage liability of the accused offender.12

The above explanations denote that the insured risks are damages that are caused by the insured vehicle. Therefore, for the insurer to pay for the caused damages, it is important to first highlight that the concerned damage was caused by the insured person, and it is the claiming victim who must prove it.

For this case at hand, both parties concur that the accident was caused by a cyclist who knocked down a motorcycle as it is indicated by the Police statement. The only point of

9 This was the law in force by the time of the accident. 10 “ As per this contract, the insurance company covers, according to the conditions mentioned below, the civil liability of an insured person for the damages caused in Rwanda by the motorised vehicle mentioned according to the particular conditions . 11 Case RS/INJUST/RC 00019/2022/SC rendered by the Supreme Court on 02 June 2023, paragraph 24. 12 Idem

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disagreement is about the person who caused the accident which befell Nzamwitakuze Thérèse, when she was being transported on a motorbicycle.

It is Sebanani Gilbert, the cyclist, who hit the motorcycle ridden by Makuza Leonard. The Police statement indicates that the accident was caused by Sebanani Gilbert, the cyclist, who made an awkward overtaking, and left his traffic lane and crossed into another lane, and hit the motorcycle that was riding in the opposite direction and left the motorbicycle’s passenger injured. And, the Police statement contains no single detail on the motorist’s possible recklessness, neither does it blame him for over speeding or any other fault that could lead to the accident, and none of the litigants has doubt about the police statement.

Based on all the above provided explanations, the motorbicycle accident was directly caused by the cyclist. And, the respondent did not substantiate the fact that the motorbicycle was involved in the accident, that could have led to the accident. As long as the motorcycle was not involved in the accident that took place, neither the motorcyclist nor the insurer should bear liability since the accident that befell Nzamwitakuze Thérèse, transported by the motorcycle, was caused by the bicycle, which should be held liable for all damages.

Based on all the above provided elucidations, the Court finds that SANLAM AG Plc bears no liability for the accident that was caused by the cyclist. II.2. Determining whether Nzamwitakuze Thérèse should be ordered to refund all the amount she received

Counsel Niyindora Nsengiyumva and Counsel Sempundu Clement, representing SANLAM AG Plc, sustain that in case the Court finds that SANLAM AG Plc was unduly ordered to pay for the accident-related damages, Nzamwitakuze Thérèse should be ordered to refund FRW 7,731,044 she received during the execution of the judgement under review as indicated by the payment slip of 23 July 2020.

Counsel Nsabayezu Evariste representing Nzamwitakuze Thérèse contended that there is no reason the Court would rely on to order her to refund the money she had received, since there was no fault or violated law while granting the damages. DETERMINATION OF THE COURT

Article 32, paragraph 2 of the Decree-Law N⸰ 32/75 of 07/08/1975 relating to compulsory insurance for civil liability of road-using motorised vehicles as modified by the Law N⸰ 02/2002 of 17/01/2002, which provides that civil liability insurance applies when the damage was caused by an insured vehicle.

The High Court granted to Nzamwitakuze Thérèse the damages based on the fact that she got into an accident while being transported on a motorbicycle, but the Court did not examine the role and the faults of the motorcyclist in the course of the accident. As explained above, Nzamwitakuze Thérèse did not substantiate the role of Makuza Leonard in the accident that caused her injuries and that is why SORAS AG Ltd was rebranded as SANLAM AG Plc should not have been ordered to pay the damages resulting from the accident in which the insured person did not

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play any role; which means that it must get the refund of the money it payed to Nzamwitakuze Thérèse during the execution of judgement under review.

The Court finds that the case file contains a document titled as “claims estimate advice slip/claims payment requisition” indicating that for the purpose of execution of the judgment rendered by the High Court on 18 June 2020, SANLAM AG Plc paid to Nzamwitakuze Thérèse FRW 7,731,044 on 23/07/2020. But due to the fact that the amount was unduly paid as explained above, the Court finds that SANLAM AG Plc should be refunded as it so requests. II. 3. Determining the basis of the damages requested in this case

[35] Counsel Niyindora Nsengiyumva and Counsel Nkeza Sempundu Clement representing SANLAM AG Plc allege that the fact that SANLAM AG Plc had nothing to do with the accident that took place, tit should not have been brought into such unnecessary lawsuits, more so that SANLAM AG Plc is not the insurer of the bicycle that caused the accident. They also contended that the unnecessary lawsuits that Nzamwitakuze Thérèse initiated made the Company incur some costs, and they request FRW 3,000,000 for the advocate fee paid from the first instance to the current proceedings, and FRW 1,000,000 for the procedural fee.

[36] Counsel Nsabayezu Evariste who represented Nzamwitakuze Thérèse contended that all the damages granted should not be invalidated because she was deservedly granted them, especially that the cause of the accident due to which she got injured is the motorbicycle insured by SANLAM AG Plc. She also requested FRW 2,000,000 for the advocate fee and FRW 500,000 as procedural fee for having been dragged into courts. DETERMINATION OF THE COURT

Article 111 of the Law N0 22/2018 of 29/04/2018 relating to the civil, commercial, labour and administrative procedure, provides that the claim for representation fees is incidental to the principal claim, and it aims at repaying expenses incurred during judicial proceedings. The claim for legal costs is adjudicated at the same time with the principal claim, but it can even be admitted and adjudicated even when the principal claim has not been admitted.

The Court finds that the procedural and advocate fees requested by Counsel Nzabayezu Evariste for Nzabamwita Thérèse are not granted since the latter wins nothing from this case. Instead, the Court finds that SANLAM AG Plc’s refund requests made by Counsel Niyindora Nsengiyumva and Counsel Nkeza Sempundu Clement for SANLAM AG Plc are relevant since the Company was compelled to hire lawyers to plead this case. However, the Court finds that the amounts of money requested are excessive and moreover unaccounted for. Therefore, at the discretion of the Court, SANLAM AG Plc is granted FRW 3,000,000 for the procedural fee and FRW 1,500,000 for the advocate fee computed from the first instance up to this very level. III. DECISION OF THE COURT

Holds that the application filed by SANLAM AG Plc for review on grounds of injustice of the judgment N0 RCA 00295/2019/HC/KIG rendered by the High Court on the 18 June 2020, has merit;

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Holds that the judgment No RCA 00295/2019/HC/KIG rendered by the High Court on the 18 June 2020 is entirely overturned;

Orders to Nzabamwita Thérèse to refund to SANLAM AG Plc FRW 7,731,044 she received during the execution of the judgment N0 RCA 00295/2019/HC/KIG; Orders to Nzabamwita Thérèse to pay to SANLAM AG Plc FRW300,000 as the procedural fee and FRW 1,500,000 as the advocate fee.