20200903 TZHC Dar es Salaam

r ,1 .... • J IN THE HIGH COURT OF TANZANIA 1 AT DAR ES SALAAM CIVIL CASE NO. 238 OF 2017 FRANK JOACHIM RUPEPO ................ ~ ......................... PLAINTIFF VERSUS ALLIANCE CORPORATION LTD ....... ~ ......................... DEFENDANT JUDGMENT 09/0/2020 & 03/09/2020 Masoud, J. The plaintiff, filed a suit against the above-named defendant. The suit arose from an insurance claim of TZS 250,000,000/- which was repudiated by the def-endant. The insurance claim was in relation to a motor-vehicle, namely, a passenger bus Scania Model 113, Engine Number B8062106, with Registration No. T 704 DFJ (the vehicle), owned by the plaintiff. The vehicle was comprehensively insured by the defendant at a fully paid premium of TZS 25,000,000/- at a market value of TZS 250,000,000/-. The said vehicle was used for the business of carrying passengers between _Dar es Salaam and Mwanza. The insurance claim was allegedly due and payable to the plaintiff on the basis of indemnity for the total loss of the insured vehicle. The loss was i caused ,, by a fire accident on 29/05/2016 . as the vehicle was on its daily operations driven by the driver one, Luhamo George Lesilwa, at around 18.30hrs, along Bagamoyo/Msata. road, at Bigiro village. The bus was completely burnt and destroyed. Apart from claiming for a relief of TZS I 250,000,000/- being the market value of the insured vehicle, other 1 ,·, . ' .' reliefs sought by the plaintiff included, specific damages for loss of business suffered to the tune of TZS 320,000,000/-, payment of TZS 20,000,000/- per month as loss of income, the defendant pays the plaintiff TZS 77,500,000/-, the defendant pays the plaintiff TZS 50,000.000/- for incidental costs incurred, and general damages. The plaintiff pleaded that he complied with all the requirements and submitted all the documents in relation to indemnification for the loss of the insured vehicle. However, the defendant failed or refused and/or neglected to indemnify the plaintiff for the damage of his vehicle. The defendant was for such reason in breach of the contract of insurance, which had, according to the plaintiff, resulted into loss of his income from the passengers' carrying business and general damages. Despite follow up, the plaintiff was never indemnified by the defendant. The defendant in her written statement of defence disputed the claim. Among other things, the defendant stated as follow. She maintained that she was not in breach of the insurance contract. The plaintiff was not entitled to the reliefs sought. The cause of the fire alleged to have caused the accident did not fall within the insurance cover to entitle the plaintiff for indemnity. The insurance cover was subject to terms and conditions of use that had to be adhered to by the plaintiff in the use of the vehicle and application of the policy cover at all times. It was subject to such terms and conditions that the plaintiff was to be indemnified in the event of accident. 2 The defendant also disputed that the vehicle caught fire while on its daily operations of transporting passengers between Dar es Salaam and Mwanza. Rather, the vehicle caught fire and burnt down beyond repair while on examination drive test conducted by the plaintiff's employees to determine its road worthiness. Equally, the defendant claimed that the quality and condition of the insured vehicle was poor when the fire accident occurred. The defendant further disputed the claim of loss of business, saying it was spurious as it was consequential. There were allegations of contradictions in the plaintiff's pleading as to how, and where the insured vehicle caught fire. The plaintiff was in breach of the conditions stipulated in the insurance policy as to use of the insured vehicle. Furthermore, the defendant in his written statement of defence disputed the police reports alleging that they were not official police investigation report on the findings of the fire accident which involved the vehicle. On this defence, the defendant relied on the so-called forensic analysis report prepared by Mr J.A. Minja, Prof. A. K. Temu, and K. Izina of Bureau of Industrial Cooperation of University of Dar es Salaam. In addition, the written statement of defence had it that the plaintiff failed to provide required information and documentation in support of his claim to enable the defendant assess the claim. Despite requests, the defendant failed to furnish the defendant with sufficient documents for the effective assessment of the claim. She denied allegation of refusing to settle the claim. 3 = The above context gave rise to three issues which were duly recorded. They were, firstly, whether the cover note covered the fire accident; secondly, if the first issue is in the affirmative whether the defendant honored her obligations under the insurance cover note; and thirdly, to what reliefs are parties entitled. As the first and the second issues were interconnected, my resolve was to tack them simultaneously. The plaintiff, namely, Frank Joachim Rupepo, testified as PW.1 and was the only witness for the plaintiff's case, while George Felician Mkangala testified as DW.1 as the only defence witness. PW.1 testified on how and when the vehicle was insured, and used for passengers' carrying business between Dar es Salaam and Mwanza; when, where and how it caught fire; the fact that the vehicle worked for nine months and was in good working conditions before it was destroyed by the fire accident; how the accident was reported to relevant authorities, resulting in . investigation on the incident; income earned from the business, how he claimed for indemnification in vain; and how he suffered loss following the accident. PW.l tendered a number of exhibits in a bid to substantiate his oral testimony. He tendered, the Vehicle Registration Card for· the insured vehicle (Exhibit P.1); various forms bearing registration number of the ins~red vehicle relating to earnings from the business (Exhibit P.2); insurance policy and the respective tax invoices (Exhibit P.3); vehicle inspection report-PF.115 (Exhibit P.4); vehicle inspection report-PF90 4 (Exhibit P.5); Fire brigade report (Exhibit P.7 ); and copy of a motor accident claim form (Exhibit P.8). As to DW.1, he testified against the claim, how the defendant investigated the claim in a bid to prove its validity and the findings of the investigation which included that the vehicle was not in its proper commercial use when it caught fire. He also testified on the source of fire accident, and the insurance policy and conditions thereof and why the defendant repudiated the contract and did not indemnify the plaintiff. He tendered only a report entitled forensic analysis of fire claim on the insured vehicle (Exhibit D.1). This report was objected by the plaintiff and the court resolved to receive the report without prejudice to the power of the court to consider its admissibility when the court determine the case. I considered the pleadings, the evidence and the final submissions on the record. It was common ground that there were facts which were not in dispute at all. They were as follow. The plaintiff was the owner of the vehicle, a subject matter of this suit, which was used for the commercial purpose of transporting passengers between Dar es Salaam and Mwanza. The plaintiff's motor vehicle was comprehensively insured at . the market value of TZS 250,000,000/-. A premium of TZS 25,476,200/- was fully paid for the period between 21/10/2015 and 20/10/2016. The insurance cover was still valid when the fire accident occurred on 29/05/2016. The vehicle caught fire and burnt down beyond repair while on the road test drive, along Bagamoyo/Msata road. The incident was reported to the police and fire brigade, which investigated the incident 5 and issued reports. The plaintiff lodged a motor accident claim in respect - - ·-- - of the loss of the insured vehicle suffered which -was repudiated by the defendant. I pondered on the recorded issues whilst mindful of the matters which were not in dispute and the evidence on the record. There was the comprehensive insurance which covered the vehicle at a fully paid premium of TZS 25,000,000/-. The premium was based on the insured vehicle market value of TZS 250,000,000/-. With this insurance cover, the vehicle was fully covered as agreed in principal by the plaintiff and the defendant. The core dispute between the plaintiff and the defendant was on whether the vehicle was not covered by the insurance policy because it caught fire on the road test drive which is within the reliability trial exclusion and not on its daily operations of transporting passengers. I examined the evidence against the backdrop of this dispute. Of significance was a copy of insurance policy (exhibit P.3) which was tendered by PW.1 and which was also heavily relied on by DW.1 The evidence of PW.l was that the vehicle's road test drive on 29/05/2016 was covered by the insurance cover because the test was meant to ascertain the vehicle's road worthiness before resuming its passengers' transporting operation a day after. PW.1 was clear that the test drive was preceded by the routine service of the vehicle in a garage situated at Mwenge, Dar es Salaam. Exhibit P.1) was relied upon to substantiate that the vehicle was comprehensively insured when it 6 caught fire on the material day. In the light of the evidence and final _ submissions on the- record, I- understood--PW .1-as- saying that th-e road test drive was very well connected to the vehicle's daily operation of transporting passengers between Dar es Salaam and Mwanza and was therefore within the terms and conditions of the insurance policy (Exhibit P.3) that covered the vehicle. On the contrary, the evidence of DW.1 was that the vehicle's road test drive was within the reliability trial clause of the insurance policy which excluded the vehicle from the insurance cover. Therefore, DW.1 had it that since the vehicle was on the road test drive and not in its daily operations of carrying passengers, it was not covered by the insurance policy at the material time of the fire accident. Using the insurance policy (Exhibit P.3), DW.1 testified to·the court in relation to limitations as to use clause of the policy which, in his view, in so far as it related to reliability trial, it excluded the vehicle' road test drive from the insurance cover. DW.1 accused the plaintiff for not telling the truth when he reported that the vehicle was in the pla'intiff's daily operations of carrying passengers when it caught fire and burnt down. It was the defendant's view therefore that the plaintiff could not in the circumstances be indemnified for the loss of the vehicle. I read through the relevant clause of the Policy (Exhibit P.3). The clause is on the limitations as to use of the vehicle. The clause was relied on by both the plaintiff and the defendant in support of the positions they respectively maintained. The clause reads thus: 7 r , Limitation as to use · Use in connection with insureds business Or social domestic and pleasure purposes. Policv does not cover use for racinf!J pacemakinf!J reliability trial or speed(or use for practice for anv of them) or for hire or reward By virtue of the clause, in my considered opinion, the defendant is liable to indemnify the plaintiff for the loss when the insured vehicle is used for social, domestic, pleasure purpose, and for insured's own business only. The clause also excludes the cover for use for racing, pacemaking, reliability trial or speed or for hire or reward. The defendant was of the position that the vehicle's road test drive was within the reliability trial which means that the vehicle was excluded from the cover when it caught fire on the material day. The plaintiff's position was that since the vehicle was being test driven to ascertain its road worthiness before resuming its operations a day after, it was within the insurance cover. Therefore, the reliability trial would not apply to exclude the plaintiff from being indemnified. Understandably, the evidence of PW.1 that the test was meant to establish whether the vehicle was road worthy to continue with its daily operation of transporting passenger on the following day was neither controverted by the evidence of DW.1 nor discredited during cross- examination. The question is, therefore, whether the road test drive of the vehicle held after the service of the vehicle to ascertain its road worthiness before continuing with its passengers transporting operations a day after the test is within the purview of reliability trial which would exclude the vehicle from the insurance cover. 8 The meaning of the term 'reliability trial' used in the clause of the policy on the limitation as to use is critical to the determination of the issue at stake. As to whether the term can be interpreted to include the vehicle's road test drive after the service or routine checkup of the insured vehicle so as to exclude the insurance cover is an issue that preoccupied my mind. I am neither aware of any local authority on this issue, nor was I referred to any such authority. Exhibit P.3, which was the relevant insurance policy, does not define the term in any way. My reading of the clause persuaded me' that the term cannot be interpreted for purpose of repudiating a claim where a comprehensively insured vehicle meets a fire accident while on the road test drive after service of the vehicle and before the vehicle resumes its daily passengers' transporting operation. In other words, I do not think that the term "reliability trial" can be interpreted to include a road test drive or trial of a vehicle held after the service of the vehicle. My finding that the reliability trial in the exclusion clause is not meant to include the road test drive of the vehicle is based on the following. One, such a test or trial is, directly linked to a daily operation of the vehicle and the obligation to ensure that the vehicle is roadworthy. And two, the term "reliability trial" in the clause is used with reference to racing, pacemaking, and speed (or use for practice for any of them) which to relate to motor vehicle sports, events or competitions. Apparently, the test drive to ascertain the roadworthiness of a vehicle before for its daily 9 operation which is not related with such events e:>~ _~Ol}lRetition does _not- - - -- -- - - - -fall within the p-u-rview of the reliability trial used in the relevant clause. My reasoning is inspired by an Indian case of Sh-ri Ashim Kumar Saha · - vs oriental Insurance Co. Ltd (Revision No. 90 of 2007 delivered on 27/03/2012) in which the court had opportunity to consider the meaning of term "reliability trial" in the insurance policy in relation to whether it excluded trials by mechanic after servicing of the vehicle. The court reasoned that: ... the reliability trials are akin to racing competitions/rallies with a distinction that the participants have to compete the designated course within a set time limit without recourse to outside help. It is a competition to Judge the reliability/capability of the driver/rider under the demanding circumstances without external help. Even for the purpose of insurance/ reliability trials are insured by specific insurers..... .It is a total misinterpretation to place the trials by servicing machinic in the category of reliability trials for purpose of exclusion from insurance cover. Applying the legal maxim Ejusdem Generis in connection with the issue whether the test drive after servicing an insured vehicle can be equated with the reliability trial appearing in the limitation as to use clause of an insurance policy, the court in Ashim Kumar Saha(supra) held that: 10 Trials by a mechanic after servicing of the vehicle cannot be equated with the reliability trials occurring in the exclusion clause. Word reliability trials in the, limitation as to the use is preceded by the term of racing competition like organizing racing/ pace making and followed by the word speed testing. Applying the legal maxim Ejusdem Generis the word reliability trials would mean and/or to be interpreted to mean items/events similar to racing/ rallies/ pace making/ etc./ which are racing competitions excluded from the purview of the policy cover. A simple trial of the vehicle by the mechanic not being a racing event/competition would neither mean nor include within the term reliability trial. From the,eading of the terms of the policy it is deducable that the clause Limitations as to the use covers the loss caused to the vehicle while it is used for social, domestic/ pleasure purposes or the insureds own business but excludes racing competitions or motor sports of all kinds from the purview of the insurance cover. For this purpose the motor sports like organized racing/ pace making/ reliability trial and speed test are mentioned in series for the purpose of exclusion from the insurance cover. Interpretation/construction put by the insurance Compa_ny to even include the trial runs by the mechanic within the scope of reliability trials cannot be accepted and warrants rejection. Words reliability trials and speed tests provided in the limitation as to the use clause of policy cover refer to racing event/competition rather than trial runs or speed testing as may be used in common parlance. The speed testing as provided in the Limitations as to the use clause to the policy cover is a racing event/competition rather than any speed testing as 11 I ' may be used in ·common parlance. We are of- the opinion - that the State Commission has erred in holding that words reliability trials and speed testing occurring in the exclusion clause limitation as to the use in the policy would include the trials runs or speed testing by the mechanic after servicing. The above holding echoes the situation in relation to the issue at stake. It is noteworthy that there was no evidence from DW .1 that the test drive of the vehicle was in relation to motor sports, events or competitions. On the contrary, the evidence of PW.l which was not challenged in any way by the defendant was that the vehicle was serviced and subjected to road test drive after being serviced in order to ascertain its road worthiness before resuming its passengers' transporting operation. Accordingly, I would proceed to hold the road test drive held on 29/05/2016 in respect of the vehicle was not reliability trial within the purview of the exclusion clause of the policy which would exclude the vehicle from the insurance cover. I find no evidence to hold otherwise. The argument of the defendant in her final submissions should accordingly fail. I should pose here and observe that there were other angles from which the established insurance cover of the vehicle was attacked in the course of the trial and in the final submissions. The pleading of the plaintiff was challenged by the defendant for being contradictory in relation to the 12 - c·ause -of the fire- accident, and the place where the -vehicle caught fire -- --- -- and burnt down beyond repair. The plaint had it that the fire accident whose cause was from the vehicle's compressor, occurred at around 18.30 hrs along Bagamoyo/Msata Road, Bigilo Village. On the other hand, the defendant stated in her written statement of defence that the vehicle caught fire along Bagamoyo/Msata Road, at Usigwa, Kidomole Village and not Bigilo. As to the cause of the fire accident, the defendant stated in the written statement of defence that the alleged cause of fire did not fall within the insurance cover. It seemed to me that the dispute was only on whether the alleged source of fire was within the insurance cover. The evidence of PW.1 was that the fire accident occurred along Bagamoyo/Msata Road at around 17.00 hrs, at Bigilo Village. As to the cause of the fire accident, PW.l told the court that it was a result of technical fault involving a compressor. PW.1 tendered PF 115 (Exhibit P.4), PF 90 (Exhibits PS), PF 95-Vehicle Inspection Report D (Exhibit P.6), and Fire Brigade Fire Accident Report (Exhibit P.7) which related to place where the accident occurred, the time at which the accident occurred, and the cause of the fire accident. In particular, Exhibit P.5 was to the effect that the fire accident occurred at Bigilo village, along Bagamoyo/Masata Road due to " ... hitilafu katika mfumo wa umeme," which in English simply means "fault in the auto electrical system of the vehicle". According to this Exhibit, the vehicle was then being driven from Msata to Bagamoyo. Exhibit P.7 also showed 13 - - - fhaf the- fire -acddei1f occurrea at Kidomole Village -and the -cause- of- the-- - - - - - fire started from the vehicle's compressor. Conversely, the evidence of DW.l was that the defendant carried out investigation on the incident. The report of the investigation was tendered but objected by the counsel for the plaintiff. It was eventually received as Exhibit D.1 without prejudice to the plaintiff's right to determine its admissibility or admissibility of any party of the exhibit. DW.1 told the court that the investigation discovered that the conditions of the insurance cover in respect of the vehicle were breached. He also testified that fire accident did not happen the way it was reported. There was no evidence in chief adduced by DW.1 to substantiate the averment in the written statement of defence in relation to where, when and how the fire accident occurred. In the cross-examination DW.1 purported to introduce the evidence to no avail. I considered the above evidence in relation to the pleadings and matters which were not in dispute. It was clear to me that it was not in dispute that the vehicle caught fire along Bagamoyo/Msata Road on 29/05/2016 and burnt down beyond repair. The dispute was on the cause of fire accident and the village at which the accident occurred. Exhibit P.7 has it that the fire started from the compressor of the vehicle. Whilst relying on Exhibit P.5 and Exhibit P.7 respectively attributing the cause of the fire accident to faults in the auto-electrical system and compressor of the vehicle, PW.1 told the court that the fire accident was generally a result of faults in the compressor of the vehicle. When the 14 evidence from Exhibits P.5, and P.7 and the testimony of PW.1- is put together and considered as a whole, I am persuaded that the fire accident was caused by technical fault within the vehicle which is related to the compressor and/or auto electric system of the vehicle. In view of the Exhibit P.5 and the oral testimony of PW.1, I am convinced that the incident occurred at the Bigilo village, along Bagamoyo/Msata Road. In any case, there was no evidence led by the defence to show that the said Bigilo and Kidomole were in two different places along Bagamoyo/Msata Road. What would appear as discrepancies in Exhibits 5 and 7 and the testimony of PW.1 in relation to the cause of the fire accident were in my view trivial as they all point to the fact that the cause of the fire accident which occurred along Bagamoyo/Msata road was a technical fault within the vehicle itself. They are also consistent with the undisputed fact that the vehicle caught fire and burnt down beyond repair. Besides the defendant's pleading, DW.1 did not adduce evidence suggesting a different cause of the fire accident other than the technical faults within the vehicle which the evidence of the plaintiff and the exhibits from responsible authorities pointed at. There was likewise no evidence shown to suggest that the technical faults in auto-electrical system or compressor of the vehicle as the causes of the fire accident were not covered in the plaintiff's insurance policy as alleged in the pleading. The exhibit D.l which was tendered by DW.1 was a report dated 25/07/2016 about forensic analysis of fire claim on the insured vehicle. It was a result of investigation on the fire accident commissioned by the 15 defendant. The report could not in my view conclusively be relied on in -- - --· - the presence of the other reports from the police and fire brigade. These reports include the motor vehicle inspection reports which show that the said motor vehicle was inspected at the scene of the incident by the police and fire brigade on 29/05/2016. The reports were not disputed by the defendant. Despite being a report about the fire accident, Exhibit D.1 was not entirely admissible and I would reject and discount it for the following reasons. One, it was based on copies of a number of documents whose originals were not produced. Two, DW.1 who tendered the document was clear that he could not comment on the report as he was not. the author. And three, the report is based on opinions of its authors drawing from their own interpretations of the documents which were never tendered in court and from the interviews they conducted from various interviewees. Consequently, the averment by the defendant about the investigation that she commissioned affords no cogent and heavier evidence than the evidence led by the plaintiff. The foregoing disposed of the first issue as to whether the cover note covered th.e fire accident; and the second issue as to whether, if the first issue is in the affirmative, the defendant honored her obligations under the insurance cover note. As to the first issue, I would answer it in the affirmative, to the effect that the cover note covered the fire accident. Consequently, I would also answer the second issue in the negative in that the defendant did not honour her obligations under the insurance 16 _cover note, _and Jor such re_ason, she_ w_as_ in_ l:;>re9ch of _th~ -insurance -- - - -- contract as alleged by the plaintiff. As to the reliefs, it was common ground that the vehicle burnt down beyond repair. The vehicle, whose owner was the plaintiff, was insured at a market value of Tshs 250,000,000/- on the basis of which a premium of Tshs 25,000,000/- was fully paid to the defendant. The defendant was never indemnified despite completing and lodging the claim form with the defendant. It was also common ground that the vehicle was used for commercial purpose of transporting passengers between Dar es Salaam and Mwanza, and by the time the accident occurred, it had already operated the business for about nine (9) months. The plaintiff tendered relevant motor-vehicle registration card for the vehicle showing that he was indeed the owner of the vehicle which was used for commercial purpose as shown above; documents about earnings from the business (Exhibit P.2), the insurance policy (Exhibit P.3), and Motor vehicle claim form (Exhibit P.8). Unlike the position maintained by the defendant that the form (Exhibit P.8) was not duly completed, I am settled that the places which were not completed were left because in the circumstances they were not required to be completed. In connection with Exhibit P.2, it was the evidence of PW.1 that the plaintiff used to earn a total of Tshs 2,000,000/- per trip. It was also shown that following the accident and the failure of the defendant to indemnify the plaintiff, the plaintiff has been out of the business ever since and has lost his earnings. I am not in doubt that the plaintiff is 17 entitled to be indemnified the loss suffered and this is the cost of putting - him-in-the position he was- before the fire accident~ My examination of the reliefs sought in relation to the evidence left me in no doubt that there was no evidence to show how the figure of 320,000,000/-; Tshs 20,000,000/-; Tshs 77,500,000/-; Tshs 50,000,000/- claimed as, specific damages, monthly loss of income from the vehicle, an escalation of costs of motor vehicle at the current market value, incidental costs incurred by the plaintiff and for disturbance caused were arrived at. The only document tendered in relation to earnings from the vehicle was Exhibit P.2 whose evidence and the oral testimony of PW .1 were in my view insufficient to establish the claimed amount. The claim of earning Tshs 2,000,000/- per a single trip was no established. It was not clear whether the sum was a gross or net income. There was no evidence in relation to tax payment associated with the earning which could have helped the court to assess the plaintiff's net earnings per a given period of time. While I am aware that the plaintiff must have incurred loss and damages for non-use of the vehicle, the absence of the proof as to how much he was getting per month, how the costs of motor vehicles escalated, how the claimed incidental costs were arrived at, and the likes, meant that there is no basis upon which the claimed sums can be awarded. The exception is payment in respect of indemnifying the plaintiff for the actual market value of the vehicle insured by the plaintiff as the vehicle 18 •I was burnt down beyond repair. The other exception is in general -damages for refusal to honour· the insurance claim and hence breach of the insurance contract. In the end, judgment is entered for the plaintiff against the defendant. Consequently, the defendant shall pay the plaintiff the sum of Tshs 250,000,000/- being the market value of the vehicle insured by the plaintiff at the time of loss. Further, the defendant shall pay the plaintiff general damages to the tune of Tshs 100,000,000/- for refusal to honour the claim and breach of the insurance contract which led to loss of income on the part of the plaintiff. Furthermore, the defendant shall pay the plaintiff interest on the decretal sum of Tshs 250,000,000/- only at the court's rate of 12% per month from the date of judgment upto the date payment is made in full. The plaintiff is also awarded costs. Ordered accordingly. Dated at Dar es Salaam this 3rd day of September 2020 ... ~ ' : ? . ~ / B. S. Masoud ·. Judge 19