20151016 TZHC Dar es Salaam

IN THE HIGH COURT OF TANZANIA (COMMERC~ DMSION) AT DAR ES SALAAM COMMERCIAL CASE NO. 42 OF 2013 . Al OUTDO~R (T) LIMITED ................................... PLAINTIFF VERSUS· MOMENTUM INSURANCE . TANZANIA Lll\'.l:ITED ........................... .............. . DEfENDANT JUDGMENT Mansoor, J: Date of Judgement- 16th October 2015 The Plaintiff's claim against the Defendant is for payment of Tanzania Shillings Forty Five Million (THz 45,000,000) being I replacement value in resp~ct of the damage to tJe Plaintiff's I I I Motor Vehicle bearing Registration No. T183 AMJ, Toyota Land 1 Cruiser, comprehensively insured by the Defendant, and for paymenti of THz 41, 184,000 being costs and expenses incurred by the plaintiff in seeking alternative means of transport and in respect of storage and towing charges and extra costs suffered by the Plaintiff due to the Defendant's failure, neglect or otherwise refusal to compensate the Plaintiff for the loss and damage sustained, and also for payment of general and punitive damages suffered by the Plaintiff as a result of the failure to compensate the Plaintiff's Motor Vehicle for the losses suffered, other costs and expenses incurred by the plaintiff. ' The Plaintiff claims that it insured the vehicle with the · Defendant and a Policy of Motor Insurance and Motor Vehicle Endorsement Advice were issued on 7 th September 2011. The Plaintiff avers that he paid a premium of THz 615,000 for an ! insurance cover of 4 th September 2011 to 3 rd March 2012, both dates inclusivei. for comprehensive insurance of the Motor Vehicle m·entioned herein above. 2 The plaintiff avers further that on 25 th December 2011, while the Insurance Cover was still· valid, the Plaintiffs Motor Vehicle was involved in an, accident' around the arJl known as Oporoto Street, along New Bagamoyo Road, withi the City of Dar es Salaam, whereby the Motor Vehicle wy damaged beyond repair. The accident was reported to the police and the . I . inspection was conducted by the Police, and the Pb lice issued, the Vehicle Inspection Report in Police Form ' No. 93, ' I I I particulars of Road Accident in Form No. 90, . and !final I .. Report of the Police of the Particulars of the Road AccidJnt in Form . . . I . No. 115. All these reports were annexed to the Plaint as Annexure Al Plaint -2, and they were admitted ls evidence and marked as Exh. P2. The Plaintiff avers that it also reported the accident/ claim to the Defendant as the insurer through Ndege Insurance Broker, claiming THz 39,905,000 being value for repi'acelent of the Motor Vehicle and its acceSsories and spare part including the reasonable costs'of repairing the Motor Vehicll and fitting I the parts in accordance with the Terms and Conditions of the 3 , Insurance Policy. The Amount of.Claim was assessed by Hudi Auto Garage, the dealer for repairing all kinds of Motor Vehicles. A copy of the Assessment Report by Hudi Auto Garage was admitted as ev1dence and marked p.S Exh P3. The plaintiff also exhibited invoices from Square Investments Limited (Exh P6), showing that it was hiring Motor Vehicle for its use from Square Investments Limited, since it required alternative transport for its business. 1 Plaintiff alleges th~.ti it also incurred towing charges i~ hiring the breakdown for removing the Motor Vehicle .from the scene of the accident to the Central Traffic Police Station for ' inspection, and then to the Garage for repairs. A receipt from Leopard Breakdown and invoices for storage charges issued by Hudi Garage for 328 days amounting to THz 1,640,000 was admitted as Exh P3, ahd invoice for breakdown issued by Leopard Breakdown for THz 700,000 was admitted as Exh PB .. 4 The Plaintiff claimed that de~pite the dbmands I for compensation of the, damages, costs and expensed incurred by it, the defendant refused or neglected to pay tlie plaintiff a I sum commensurate to the loss suffered. 1· I The defendants filed a defence, and denied the c\aims by the plaintiff and stated ·. thereby that the pre-accide!t estimated value of the car it insured was THz 26,500,000 1Jss excess of . ' i THz 1,325,000, thus the 'maximum amount payable to the I · plaintiff for the loss •suffered would have been THz!I 25,175,000 ' ' and this was in accordance to the assessmert do.ne. by Coopers Insurance Assessors Co. The .defe11-dant1 states that the claim by the plaintiff of THz 45 million was exaggerated. . . . .. I . The Assessment Report from Coopers Insurance Assessors Co. . . I . . was admitted as Exh Dl. ' The defendant states at paragraph 9 of the writteh statement of defence that it offered salvage of the damaged M\otor Vehicle to the Plaintiff at THz 8,000,000 but the philintiff never • I responded, -instead the Defendant received a, lettfr from the 5 ·Commissioner for Insurance dated 17 th July 2012 asking on how the defendant intends to settle the claitp by the plaintiff. 1 This letter was admitted in court as Exh. D3. The defendant states in its closing submissions that the value of the Motor Vehicle \nvolved in the accident was as stated by PWl who testified that he bought the Motor Vehicle in 2006 at the price of USD 26,000 and the exchange rate for a Dollar at that time was THz 1,261, thus the value of the Motor Vehicle was only THz 36,540,000 and this was verified by PW2, the person who is working with a Car Dealer who testified that the value of the similar Vehicle is THz 30,000,000 only. The. defendant states that every year the value of the Motor Vehicle depreciates at 10% of its value, and this why the defendant offered the plaintiff the payment of THz 17,175,000 after having deducted the vaiue of the damaged vehicle which. was assessed at the value of THz 8,000,000, and the settlement was therefore at the value of THz 25,175,000. This was stated· by DWI one Kiran Mandalia the Claims Control Officer of the Defendant. DW2, one Omary Hussein Kuppa, the Insurance Assessor, told the Court that he inspected the Motor Vehicle 6 and came up with the Value of THz 19,985,000 as the value of repair and stated that the Market Value of the Motor Vehicle similar to the Motor Vehicle in dispute was THz 45,000,000, ,. and that the Motor Vehicle was used for more than five years i.e. from 2006 -201 ~ and thus he applied the depreciation value of 10% for each year the Motor Vehicle was used, and he came up with the value of THz 26,500,000 less ex~ess of 5% of THz 1,325,000, so the Net Amount which were to be paid t<? the Plaintiff covering the Total Loss was THz 25,175,000 only. DW2 also tendered 'a Letter from Detective Corporal Masaka, saying that the Driver who was involved in the accident ha~ no valid licence at the time of the accident. Detective Corporal Masaka also testified in Court , for the Defendant stating that at the time of the accident the Driver had no Licence at all, and . the Licence was only manufactured by the Plaintiff for. the ·purposes of the Insurance. Detective Corporal Mas.aka testified in Court that he had a telephone conversation with the Driver one .Ally Maulid Athuman regarding the Licence' No. 55772, and the said Ally Maulidi Athumani told Corporal Masaka that at the time of the accident he did not have the Licence, but the 7 Licence was brought to him while he was in Court at Kinondoni and the Licence was brought to him by his Boss. When cross examined, on whether he verified the genuineness of the licence, Detective Corporal Masaka stated that he did not verify it with any issuing Authority especially the Mwanga Police Office, the Authority which issued the Licence to the Driver. Now, having read the pleadings· of the parties herein, ·and on completion of the mediation processes, and during the Final Pre Trial Conference, the Court framed the fallowing issues for determination of the dispute; 1. Whether the Defendant refused and or defaulted to compensate the plaintiff's damaged Motor Vehicle as per the Express Terms and Conditions of the Insurance Policy, read together with the Motor Vehicle Endorsement Advice; · 8 2. Whether the Plaintiff's Claim for TH~ ~5,i°00,000 as I based on the Insured Estimated Value of the Motor ' · Vehicle at the time of Renewal of the Policy dn which the premium was computed and paid 1s subject to depreciation; 3. Whether the Plaintiff suffered and contin e suffering I . I consequential costs, expenses, losses, and damages dueI to the. Defendant's refusal to timely ,P~~ the Plaintiff' Claims; 4. What reliefs, if any, are the parties entitleq. to? 1. Whether the Defendant refused and or defaulted to I ,J compensate the plaintifl's damaged Motor Vehiele as per the Express Terms and Conditions of the Insuranc~ Policy, read together with the ~otor Vehicle Endorsement Ahvice; According to the plaintiff the insured vehicle was being driven ~y driver one Ally Maulidi' Athumani, there was no one with 9 him inside the car at the time of accident. There was no mention of any injury to any person/ driver in the car. There is the question of the authenticity of the Driving Licence and of the competency of the Driver to be determined. The Driver's Licence was questionable, and an explanation was needed by the Police so that to complete the investigation Report of the· Police. The plaintiff and the driver refused to cooperate with the Police. Thus there were suppression· of the material facts in the complaint. Moreover, two separate report regarding the validity of the Drivers Licence were reported the Report by the t Police , had doubted the validity of the Driver's licence, and another Report by Coopers Insurance Assessors (Exh D 1) ' dated 12 April 2012, stating at page 2 as follows: "During the material time of our involvement we came across the charge sheet of Tanzania Police Force on which we noted that the drive of your insured driver, especially under second count was found guilty for driving the vehicle without a road licence. However, as the time went on, your insured presented us with the original driver's licence LL:hich shows it is valid from 12/ 03/ 2010 to 11 I 93/ 2013, from which we mare photocopy for attachment to this report. Given the original diving licence, we travelled to Mwanga and visited Mwanga Police Station to verify it where the officers at th~ station commeAted that the . . I . , same originated from their office and is authentic." '.fhere is another report from the same Coopdr Insurance Assessor dated 24 th October 2013, which states as follows: "Inquiries were carried out by the Police who interviewed the . . . , , I . . driving licence bearer Ally Maulid Athuman through his cell 0653-874192 in which the folloiµing were revealed: • that Ally Maulidi Athumani is not a residenf of Mwanza but of Morogoro; • That since he was born he never attended d1riving school as a l~amer; · . ' . I · I . . • That at the particular time of accident, he was without a driving licence; . 11 • That after being involved into the road accident and sent to a Court of law at Kinondoni, his employer, Al Outdoor provided him with the driving licence No. 55772. validating I.I 11/04/2010 to 12/04/2013;". I The Assessor concluded in his report that at the time of the accident, the driver had no valid driving licence. In both the report of the police, the case held at Kinondoni and the 2 nd report of the Assessor, it was mentioned that at the time of accident, the driver did not have the valid driving licence·. On receipt of the claim, the insurance company, the defendant ·fierein, immediately appointed Coopers Insurance Assessor~ Co., the licensed Assessor to ascertain the cause and assess the extent of loss. The preliminary surveyor/ assessor~s report was filed to the insurance company on 12. April 2012, and the 2 nd Final report on 24 th October, 2013. It is further clear that insured has concealed facts regardiHg the validity of the 12 drivers' licence at the time of accident. ,TJis ! raised a presumption that Mr Ally Maulid Athumani ~as not the qualified driver at the ti~e of the accident. \ J?uring the l I investigation, it was also revealed by the Polic~ as well as . I Court Records at Kinondoni where the Driver was charged I I with Driving the Car without a valid Licence (as lhown in the Report of the Surveyor) that at the time of the Accident the I . . . Driver did not have the valid Driving Licence. ' The Claims by the plaintiff were rejected or repu9iated by the I defendant and the ground for repudiation of thJe insurance . I . claim was the failure of the C()mplainant/plaintj to provide logical explanation to the queries of the Police raised as shown . I in the Police Report dated 16 / 10/ 2013 (Exh D4). It was emphasized on behalf of the defend.ant that neithJr the Driver . , I or the plaintiff went to the police to provide proof of the validity of the drivers license despite several calls made tb the driver; No officer from the plaintiff company was call~d upon to provide proof in the respect of the queries re~arding the drivers license raised by the police during their inv~stigati0ns. ·I 13 I I It ts a well settled principle of insurance that a contract of ' insurance is based on the doctrine of uherrimae fidei _(of i utmost good faith) and that the terms and conditions of such contracts are binding on both the parties. In the present case the complainant/plaintiff has not app.roached this Co~rt with clean hands and has suppressed the material facts, regarding the vehicle of the Drivers Licence Under the circumstances, there was a valid reason by the Insurance Company to reject the claims by the insured, the Applicant herein and no deficiency of service nor adoption of unfair trade practice on the part of the insurance company and for t~is reason the complaint was liable to be rejected. 2. Whether the Plaintiff's Claim for THz 45,000,000 as based on the Insured Estimated Value of the Motor Vehicle at the time of Renewal of the Policy on which the premium was computed and paid is subject to depreciation; 14 I I I On the other hand, if the Driver would have b~ed found to be in possession of the valid driving . License a~ thJ ti~e. ~f the .. • . 'I ·1 . accident, benefit of a new or replaced car is conditional upon ,· I . confirmation of the total loss of the vehicle pY \ a surveyors report and reimbursement. of pre accident value, df I the vehicle . . . I minus the depreciation costs by the insurance corhpany under ! . . motor insurance policy. The pre insured value df I the 199 0 . . Toyota Land Cruiser S/Wagon UZJlOO model'w4s estimated I to be THz 45 million, as it _was reported by th~ shrveyor that the Car was first registered in Tanzania on 0210612006 and the Car have been in use for almost five ye~s briar to the .. I accident. The Surveyor had applied the depreciarng of 15% per year for the first three years arid 10% per pillum for the two years period, thus the established pre accident value of I TH~ 25, 175,000 was correct. In this case howeve~ there shall •. I • be no settlement o~ payment or replacement' o{ the Mot~r Vehicle since· the in~urance claim of the com~lainbt/pl~~tiff . I . was correctly repudiated by . the insurance company on the . a b ove state d groun d s. The insurance . 1s Company '., not I 1· bl. 1a e at . I I 15 all to give a new car to the plaintiff or replace the damaged car as prayed in the plaint. It is worth to note Clause 15 of the General conditions to the ' '\ Insurance Policy (Exh P 1) that states that "in the event of total loss the insured will only be entitled to recover the pre accident market value so that over-insurance means paying more premium than necessary." 3. Whether the Plaintiff suffered and continue suffering . consequential costs, expenses,, losses, and damages due to the Defendant's refusal to timely pay the Plaintiff' Claims; Removal of car from the spot of the . accident and storage charges: The Plaintiff maintained that it incurred the towing costs of the damaged vehicle to Central Police station and the Vehicle was to be parked at a safer place to avoid any subsequent loss ' . . or damage; adhering to this, car was towed by Leopard Breakdown and an amourit of Tshs 700,000 was paid by the plaintiff, and also Ttfz ib)300,000 being . storage charges . paid 16 by the plaintiff to ~udi Auto Garage for keep in~ the Car for I I 3600 days .. 'Here it was also important to note that Oporoto ·street on w.hich accident occurred was not a ~uJ highway, it is a mere street and wonder why it was not ~ossitile to ·wait for I . the . arrival of the officials of the insurance company for inspection after information. It is not also exp]Led by the plaintiff ·as·to when they reported the accident to either Ndege ·· 1 Insurance Brokers or to the defendant. There :are evidence establishing that the plaintiff filed a claim Fo~ .witli. tli<'! Insurance Broker on or about 27 / 12/2011 while the. _acc~qen t. occurred on 25.12.2011. It has not been _establish~d by tb.e • I . plaintiff that they reported the . c Irum .' imme d"iate1y on I . . occurrence of the accident to the Insurance Company and that . . t h e insurance e aye d"in bnnging company dl ''. t h e towing I . . services and therefore there was no alternative but ~o move the I • , I damaged car to a safer place .to avoid further damage or loss . . , I The costs incurred by the plaintiff in towing anqi storing the damaged vehicle cannot be footed by the insurarh.ce company . I .• on the foregoing reasons. II . . 17 Damages incurred by the plaintiff in hiring another Vehicle for its own use; Since it. has been established that the insured, the plaintiff herein was not entitled to replacement or repair of the damaged vehicle due to the reasons given herein above, then the plaintiff cannot be awarded the damages or costs it has incurred in hiring an alternative vehicle for its use. 4. To what reliefs are the parties entitled: '· Since the plaintiff claims were tainted with faults, violation of the rule of uberima fide (utmost good faith), then the claims contained in the plaint are untenable, hence the entire suit is dismissed with costs. DATED at DAR ES SALAAM this 16 th day of October, 2015 MANSOOR 18 ' l' • JUDGE . l! .: . 16TH OCTOBER 2015 . .[: i ., lI ';.1'' ~I ~ 1f 1j I. \I i' t q· ! I I'I I I d ! I· I l! I i.,l : I ! il I! tI :l .' lI .I i Ii I "1 t I ' iI ). I i I'. 19 :11I i•i : -·1 'I I ;! ' f ' ,-,- ···- '1 'I ,..,., I