20071212 TZHC Zanzibr

~ IN THE COURT OF APPEAL OF TANZANIA AT ZANZIBAR {CORAM: MUNUO, J.A., KILEO. J. A. AND KALEGEYA. J.A.) CIVIL APPEAL NO 5 OF 2007 NATIONAL INSURANCE CORPORATION (T) LTD .......... APPELLANT VERSUS RAS NUNGWI BEACH HOTEL .............................. 1ST RESPONDENT TIM HENDRIKS ..................................................2ND RESPONDENT {Appeal against the Judgment and Decree of the High Court of Zanzibar (Kihio, J.) th Dated 6 Day of December 2005 In Civil Case No.15 of 2003} JUDGMENT OF THE COURT 04/12/2007 & 12/12/2007 KILEO, J. A.: The respondents were the successful party in civil case no. l 5 of 2003, which they filed against the appellants in the High Court of Zanzibar, (Kihio, J.) The facts of the case are straight forward and may be summarized as follows: On l 6/08/2000 the respondents insured their vehicle, a Pajero with the appellants. The cover period was between l 6/08/2000 and 15/08/200 l. The motor vehicle was insured at the value of -- -· - Tshs. l 0,000,000/=. A premium of Tshs. 396,000/= was dully paid. 2 On 31 st December 2000 the motor vehicle was involved in an accident. The respondents took the matter to court after the appellant declined to pay their claim for compensation to the tune of Tshs. 10,000,000/=. In their written statement of defense the appellant had disputed the occurrence of the accident and the resultant damage to the vehicle. One of the issues framed at the trial was therefore whether there was an accident in respect of the motor vehicle in issue. There was however ample evidence, some of which was tendered by the appellant's own witnesses, which established that an accident had occurred which resulted in total loss to the respondents in so far as the motor vehicle was concerned. The memorandum of appeal contains five grounds. However, Mr. Oscar Msechu, learned advocate who represented the appellant at the hearing of the appeal abandoned ground number five. He argued the remaining grounds together. The grounds are listed as follows: 1, The .lequ1f~.ct.trfq/ Jvdge. E:r(edJnjq(:;t"'orJd"jo_J_a_•il . .and holding that the respondents are entitled to Tshs. 10,000,000/- as indemnity. 2. The learned trial Judge erred in law and in fact that, there was no breach of a principle of uberima fidei on the part of the respondent. 3 3. The learned trial Judge erred in law and in fact, in holding that the respondent has proved its case on a balance of probabilities. 4. That, the learned trial Judge erred in law and in fact in holding that there is no sufficient evidence to establish the fact that the respondent had failed to disclose material facts within his knowledge before the conclusion of the insurance contract. The learned counsel did not dispute the fact that there was an accident, which resulted 1n a total wreckage of the respondents' motor vehicle. He did not dispute the fact that the vehicle had been insured for the value of Tshs. 10,000,00/=. The appellant's complaint is centered on the value of Tshs. 10,000,000/= which was given by the respondents as being the value of the vehicle at the time it was insured. Mr. Msechu argued that the respondent breached the principle of utmost good faith when he stated that the vehicle was valued at shs. 10,000,000/= while the assessor's evidence showed that after his . -ca Icu Ia ti on S-- .ba sed---O n .d epre.cia tio n ---- principle s,--Jb e. • mot or~"" -----~- ......__________ -- vehicle's pre- accident value was Tshs 7,437,500/=. Mr. Nassar Mohamed, learned counsel for the respondents submitted that the argument that there was non-disclosure oJ material facts was not maintainable because there was no ... .,,, ··- 4 evidence given to counter the value· '·of Tshs.10,000,000/=, which was given by the respondents. The learned counsel wondered why the appellant was prepared to pay the amount, which was assessed by their assessor if they believed that the respondents had committed a breach of the principle of utmost good faith because when that is proved, an insurance company is entitled to avoid the contract as being void ab initio. According to the learned counsel, the fact that the respondents are willing to pay the amount assessed by their assessor implies that they do not really consider that the respondents breached the principle of utmost good faith. We think that at the end of the day, the appeal boils down to one issue, and that is whether there was breach of the principle of utmost good faith so as to disentitle the respondents to their claim of compensation of Tshs. 10,000,000/=. The appellant is relying on calculations done by their assessor, which tend to show that by depreciation, the vehicle, which was a 1992 model, would be valued at shs. 7,537,500/= just before the ---ae::-cident -occurred .. The -r:espondents~-{~;),R-t-r-i.e-eth-er-_,hend ,,.said that the value of Tshs. 10,000,000/= which they gave at the time of insuring the vehicle was the market price value. No evidence was tendered to counter that the market price value was not that which was given by the respondents. We are of the settled view that the value of a vehicle arrived at through calculations 5 t of percentage of depreciation does not necessarily go to prove that the market price value given by the insured was not right. The question of breach of utmost good faith does not therefore arise in the circumstances. There was also no evidence to prove that the respondents were not entitled, when insuring their motor vehicle, to obtain a cover for the market price value. More still, though the assessor claimed that a 1992 model vehicle would have depreciated by about 75% by the year 2000, there was no proof that the 1992 model motor vehicle was actually manufactured in 1992 and that it had been in use for more than seven years at the time of the accident as purported by the assessor. The trial judge disregarded the opinion of the assessor. We are satisfied that the circumstances of the case entitled him to do that. In his well reasoned judgment he stated as follows: "DWl did not substantiate his evidence that the value of a brand new motor vehicle was shs. 35,000,000/= and the value of T. shs 7, 437,500 is fair and reasonable. DWl 's evidence tei the effect that the value of, shs--7__,,437,500/- -is -- · = = = fair and reasonable-- is expert - --- opinion, - which does not bind --- this court. I am not in agreement with Mr. Msechu's submission that going by common practice of depreciation the value of the---plaintiffs motor vehicle in dispute was T. shs 7,437,500/- immediately before the • 6 accident. Mr. Msechu's submission finds no strong evidential backing." With due respect to Mr. Msechu, we find no reason to fault the trial judge in his findings. There is no doubt that the appeal has been brought in vain. We accordingly dismiss it with costs. DATED at ZANZIBAR this 12th Day of December 2007. E.N. MUNUO. JUSTICE OF APPEAL E. A. KILEO JUSTICE OF APPEAL L. B. KALEGEY A JUSTICE OF APPEAL t this is a true copy of the originaL S. ,/R ANYIKA PUTY REGISTRAR