Professional Insurance Corporation Zambia Plc v Lewsi Chisenga (Appeal No. 234 of 2024) [2025] ZMCA 119 (28 August 2025)

L OF ZAMBIAv 11Pµ~l IN THE COURT OF APPEA • ~-- ~ ~ Appeal No. 234 of 202.4 HOLDEN AT NDOLA (Civil Jurisdiction) BETWEEN: ( ~~:r2 - - 5~/ B AUG 2025 L.. , ' , ,,, .. ,r, •'{, C'\.,'' • IL J.i.[C.,J'-~ - ---., .;)J ti,) !I 1. ', '" , --:--, ~ .4: I . ✓/ ... ,.-" ~ ' . . : . ? -· PROFESSIONAL INSURANCE CORPORATION ZAMBIA PLC APPELLANT AND • LEWIS CHISENGA RESPONDENT CORAM: SIAVWAPA JP, CHISHIMBA & PATEL, JJA On 19th & 28th August 2025 For the Appellant: Ms. M. Bwalya Messrs. Mwenye & Mwitwa For the Respondent: Mr. M . Machaya Messrs. Equitas Legal Practitioners JUDGMENT Patel, JA, delivered the Judgment of the Court J1 Cases referred to:: 1. Madaine v Gatty {1921] 1 AC 376 2. Freeman v Cooke [1848] 2 Exch .. 654 3. Castellan v Preston 1[1883] 11 Q. B. D 380 4. N/imba Investments Limited v NICO Insurance Zambia - SCZ Appeal No. ~ 30/2016 5. Khalid Molham,ed v The Attorney-Gen,erall (1982} ZR 49 6. Wilson Ma:sau.so Zulu v Avondale Housing Project Limited (1982} Z. R. 172 7: Ndongo v:s Mo:ses Mulyango & Another - SCZ Judgment No. 4 of 2011 8. Susan Mwale Harman vs Bank of Zambia -SCZ Appeal No. 191 of 2015 9. Amchile Import & Export Limited and Others v Ian Chimanga (T/A Tawana Busin,ess Ventures) and Anotlher-SCZ Appeal No. 43A/2011. 10. Simwanza INam poshya v Zambia State Insurance Corporation Limited (2010} Z. R. 339 11. Orakpo v Barclays llnsuranoe Services (1995} LR 443 12. 13.. Maamba Collieriies v Godfrey Mudenda Ng'andu -SCZ Appeal No. 8 of 2005 Advance Transport Limited v !Landmark Carriers Limited and Savenda General Insurance !Limited -CAZ Appeal INo. 143 of 2023 14. Galaunia Farms limited v Nationa l Mil ling Company and National Milling Corporation Limited (2004) ZR 1 ~ ~ J2 15. Suhail International Limited v J. M Mwamulima Properties Import & Export Limited, Lafarge Cement Zambia PLC - SCZ No. 108 of 2015 16. Martha Mushipe v Gaudensia Rossi - SCZ Appeal No. 118 of 2020 17. ayton v Martin (1986) 2 FLR 277 18. Reid and Co. v. Harvey and Others ([1816] UKHL 4_Dow_97) Legislation & Rules referred to: 1. The Rules of the Supreme Court ("Whitebook" ) 1965 (1) 1999 Edition 2. The Judgments (Amendment) Act No. 16 of 1997 Other Works referred to: 1. Halsbury's Laws of England, 4th Edition 2003 Reissue, Vol. 25 2. Law of Contract, 13th Edition, Butterworths (1996) J3 1.0 INTRODUCTION 1.1 This is an appeal against the Judgment delivered by Hon E. Musona J, on 12th December 2023, in respect of an action for breach of insurance contract namely the iinsurance Policy, comm,enced by the Respondent against the Appellant in the Commerciall Division of t he High Court. 1.2 The dispute in this ,appeal is h'inged on a motor vehicle insurance Policy between the Appellant and Respondent entered into on 14th October 2021, till 31st December 2021 under policy number 305/AP/COMP/2021/3867. (The Policy). 1..3 The subject of the Policy was a motor vehicle black in colour, registered in the name of Lewis Chisenga (The Respondent), Mercedez Benz GLS00 Reg1istration Number BCD 5614 ZM, whose year of manufacture was 2006 w ith engine and chassis numb,er and WDC1648862A28.5752 respectively. i(the Vehicle). 1.4 The dispute before the lower Court, and on appeal to this Court, centres around a Road Traffic Accid,ent (IRTA) which occurred on or about 24t h October 2021, at whkh time th,e vehide was being driven by one Muyoka Kashina, ,along Yotam Muleya Road in Lusaka. 1.5 Fo:lllowing the RTA, the Respondent notified the Appellant and subsequently lodged aH necessary documents w 1ith the Appellan t to process the claim on or about 8th November . 2021. Emanating from the refusal or delay processing the Rrespond ent's claim, he :commenced proceedings against the Appellant. J4 1.6 The Court, in pronouncing itself, will turn to address the broader considerations relevant to appellate review. It is essential to reiterate settled legal principles guiding when and how an appellate Court may interfere with t he findings of a trial Court, especially noting whether factual determinations were properly analysed and whether there was proper application of established doctrines. 2.0 BACKGROUND 2.1 For the purposes of the appeal, the Parties shall be referred to as they appear in this Court. 2.2 The Respondent (Plaintiff in the Court below), following the RTA, commenced an action on 8t h February 2022 against the Appellant (Defendant below), by way of Writ of Summons and Statement of Claim seeking the following reliefs: i. Breach of contract for an insurance claim in the sum of K900,000.00 being the sum assured under the insurance cover; ii. Damages for breach of contract in the sum of KS00,000.00; iii. Special Damages in the sum of K200,000.00; iv. Interest on the amount found due on the recoveries. v. Costs of and incidental to these legal proceedings vi. Any further or other relief that the Court may deem fit. JS 2.3 The particulars for special damage were as follows: a) Travel expenses to and from work ZMW 100, 000. 00 b) Non- use of the Motor Vehicle for Private Purposes ZMW 100, 000. 00 Total ZMW 200, 000. 00 2.4 According to the Statement of Claim, the Respondent paid all premiums under the Policy to the Appellant which were duly acknowledged by the Appellant who issued receipts and invoices to the Respondent. 2.5 The Appellant filed its defence on 2ist February 2022. In its defence, the Appellant denied breaching the insurance contract and maintained that it was conducting investigations, after its preliminary investigations revealed that the market value and insured va lue of the Respondent's Motor Vehicle were different. 2.6 It was the Appellant's contention that the Respondent had commenced the action prematurely, considering the procedure laid down in the insurance policy between the Parties, and that the Respondent was not entitled to any of the claims. 2.7 On 9th March 2022, the Respondent filed his reply in which he stated that the Appellant had been conducting investigati,ons before the Respondent commenced the proceedings, despite its request for twenty-one (21) days to conclude its investigations and relevant claim processes. 2.8 According to the Respondent, the Police concluded its investigations, and two Police Reports were issued, both of which indicated that the Respondent's motor vehicle had been damaged to the extent of the claim . J6 The Respondent maintained that the Appellant, therefore had no reasonable j ustification in its delay in processing and paying the Respondent's claim. 3.0 DECISION OF THE LOWER COURT 3.1 The issue that fell for determination before the learned tri al Judge, in his opinion, was whether in the circumstances, the Respondent was entitled to be indemnified for the loss allegedly suffered . 3.2 The learned Judge referred to Section B of the Policy between the Parties which provides as follows: "If your vehicle is damaged or stolen and provided all reasonable precautions are taken, we will, at our opinion; a) Pay the reasonable cost of repairing any damage to your vehicle within its market value, or b) Pay an amount in cash equivalent to the value of any loss or damage to your vehicle, or c) Pay the cost of replacing the insured vehicle or any part thereof which has been lost or damaged, with one of a similar type .and in similar condition, the replaced item then becoming our property. " 3.3 The learned trial Judge was of the considered view that the above clause is clear and unambiguous in that the policy covers loss such as damage to the insured motor vehicle . The learned trial Judge held the view that this means th at the Appellant agreed to indemnify the Respondent in the event of loss in the form of damage. He noted, however, that the Appellant did not J7 indemnify the Respondent because it had doubts as regards the authenticity of the daiim but since the Appell.ant did not plead fraud, the learned trial Judge did not addr,ess his m1ind to 1it. 3.4 The learned triial Judge noted the Appellant's defence that the Respondent was not entitled to the amount daiimed despite agreeing to insure the motor vehicle for K 1,000,000.00. He noted t hat the Appellant did not raise the issue of "overstat,ed" market value at the time the Respondent sought the policy. Thre learned trial Judge noted that the premiums the Appellant charged the Respondent were based on the insu red sum of Kl, 000,000.00. 3.5 The learned trial Judge was of the considered view that this issue brought iinto appHcation t he doctrine of estoppel, which applies in any situation where, because of a party's previous conduct, it would be unconscionable to perm.it th,em to deny a fact. The l,earned t r iall Judge relied on the definition of estoppei referred to by Lord Birkenh,e;ad in the case of Maclaine v Gatty1 • 3.6 The learned trial! Judge was of the considered view that the basic principle of the doctrine of estoppel is th:at a person who makes, by words or conduct, a representation to another intending the other to act on it, and the other does so to his detr:iment, will not be allowed subsequently to take a position inconsistent with t he representat1ion. The learned Judge referred to other cases such as Freeman v Cooke 2 and Castellan v Preston 3 • 3.7 Consequently, the learned trial Judge found that the Appel la nt acquiesced the market value of t he R,espondent's motor vehicle by its conduct. He held t hat the Appellant w as estopped from asserting otherwise as a J,8 representation was made to the Respondent, who relied on the same by paying premiums calculated on the insured sum. 3.8 On the issue of damages, and special damages for loss of use of the motor vehicle, the lower Court determined that the claims were unsuccessful. 3.9 The learned trial Judge found that the Respondent succeeded as regards his claim for breach of the insurance contract in the sum of K900,000.00. He also awarded the Respondent interest from the date of the action to the date of payment at the short-term deposit rate. He f urther awarded the Respondent interest from the date of Judgment to the date of full payment at the rate determined by the Bank of Zambia with costs. 4.0 THE APPEAL 4.1 Rattled with the outcome in the lower Court, the Appellant filed its Notice and Memorandum of Appeal, on 15th December 2023, fronting five (S) grounds of appeal, namely: ,. The learned High Court Judge misdirected himself in fact and law, when he decided, at page 29 lines 3 to 7 of the Judgment, inter alia, that he would not address his mind to the Appellants doubts as regards the authenticity of the Respondent's claim because the Appellant did not specifically plead fraud notwithstanding that the authenticity of the claim was at the center of determining the issues directly related to the determination of whether the Appellant had allegedly breached the insurance contract. J9 ii. The learned High Court Judge erred in fact and law when he held, at page 29 lines 8 to 12 and lines 1 to 7 at page 31 of the Judgment, that the Appellant did not raise the issue of the "Overstated" market value of the Respondent's motor vehicle at the time that the Respondent sought the policy and as such was bound by the doctrine of estoppel contrary to the principles of law applicable to insurance contracts. iii. The learned high court judge erred in law and fact when he held at page J33 lines 7 and 8 that the Respondent succeeds as regards the claim for breach of the insurance contract in the sum of K900, 000.00 when evidence was led in the court below that at the time the Respondent made his demand for settlement of the claim and commencement of the action in the court below, investigations as to the accident and claim were still on going and had not been concluded. iv. The learned High Court Judge misdirected himself in law and fact, when he decided at pages 33 lines 7 and 8 of the Judgment, that the Respondent's claim for breach of the insurance contract in the sum of K900,000.00 succeeds notwithstanding the undisputed evidence presented to the Court by the Appellant that the Respondent lodged a questionable and false insurance claim to the Appellant contrary to the provisions of the insurance policy as well as the principle of utmost good faith required in insurance. JlO v. The learned Judge in the court below, erred in law when he awarded interest on the sums of money he found due and payable to the Respondent on page 34 of the Judgment when in fact there was no breach of contract of the insurance policy by the Appellant. 5.0 APPELLANT'S HEADS OF ARGUMENT 5.1 We have duly considered and appreciated the Appellant's Heads of Argument filed on 23 rd August 2024. It is noted that the Appellant has argued Grounds 1, 3 and 4 collectively and grounds 2 and 5 separately. 5.2 It is the Appellant's submission that from the evidence before the trial Court, it was evident that the Respondent tampered with the Vehicle in order to alter its appearance and the extent of the damage after the accident had occurred . The Appellant argued that this matter was and is centred on the truthfulness and authenticity of the insurance claim made by the Respondent to the Appellant. It was further submitted that the Appellant had to conduct investigations regarding the claim and the Respondent hurriedly brought the action before the Court whilst it was still conducting its investigations. The Appellant came to a conclusion after its internal investigations that the Respondent's claim was not authentic and did not give an account of the damage to the Vehicle. 5.3 It was submitted that an insurance contract is a contract based on utmost good faith and that this duty continues beyond the time of settling the insurance contract and operates even when an insured makes a claim against the insurer in the event of a loss being suffered . Jll 5..4 . It is the Appella nf s subm1ission that by giving false information regard ing the value of the Motor Vehicle at the time of entering into the insurance contract and the extent of the damage after the Motor Vehicle was involved in an acddent, the !Respondent breached the duty of utmost good faith which is a cancl'ina:I principle of every insur:ance contract. It is the argument that the Appellant is not lliabie to honor the Respondent's claim for the reason that the daim was fraudulent. 5.5 The Appellant referred to the authors of Halsbury's Laws of England, 4th 1Edition1 cited in paragraph 3.3.14 above, a fraudulent claim is defined as follows at paragrajplh 18. Z: "A claim is fraudulent if: the insured has suffered no loss or has brought about his own loss; the claim is supported by the use of fraudulent means or devices; or the insured has deliberately suppressed a defence which would otherwise be open to the insurers. 11 lln th,e sam e paragraph, the authors further state that : "A claim will also be fraudulent if the insured, having made a genuine claim, subsequently discove,rs that he had not suffered any loss or that the amount of loss was significantly smaller that was originally thought, but has proceeded with the fufl amount of the claim. 11 15.6 Based on the above, it w as the Appell,anfs argument that the Respondent's cllaim was fraudulent on account of t he evidence tendered before the lower Court, t he Respondent forfeited all the benefits under the insurance contract. Jl2 5. 7 In support of ground two, it is the App,ellant's submission that it was erroneous for the trial Court to have made a finding that the Appellant is barred from cla iming that the Respondent overstated the market value of his Motor Vehicle by the doctrine of estoppe1I at the time of entering into the insurance contract. .5 .. 8 It iis the Appellant's subm1ission, that failure by a party to a contract to disdose materiial facts, immediately permits the other party to avoid a contract altogether. It was submitted that the doctrine of estoppel does not apply in this case as th,er,e was a breach of duty of utmost good faith by the Respondent whren finalizing the application form for an insurance policy. The Appellllant also placed reliance on the fact that an insurance contract is a contract uberrimae fidei based on utmost good faith. 5.9 The Appellant referred to Ord,er 1,8 Rul,e '8 (14) of the Rules of the Supreme Court 1965 (1) 1999 Edition 1 which provides as follows: 'Tstoppel - This must be specially pleaded, unless there is no opportunity to do .so {Coppinger v Norton {1902} 2 lr. R.241}". 5.10 Thre . Appellant submitted that the onlly reHef the Respondent is entitled to in this matter is refund of the premiums which the Appellant paid and not the amount awarded by the trial Court. . J13 6.0 RESPONDENT'S HEADS OF ARGUMENT 6.1 We have duly considered and appreciated the Respondent's He·ads of Argument filed on 24th September 2024. 6.2 Responding to the grounds in the manner adopted by the Appellant,, the. gist of the Respondent's argument in opposing grounds 1, 3 and 4, is that the lower Court had an opportunity to address its mind to the issues ra i1s,ed and its findings were not perverse in any way and cannot be overturned. Secondly, the Appellant seeks to advance an iss,ue that the insurance cllai1m was fraudulent, which fraud it did not plead in its defence, particulariise or lead evidence. Thirdly, the Respondent argue,s t hat the Appellant' s entire, appeal is based on opinion evidence, which is inadmissibl1e at law as t he Appellant has not met the exceptions under that rule .. Final ly, the Respondent submitted that there is no legal justification as to why a party to an insurance contract must be at the mercy of the insura nce company to delay endlessly in honouring its obligation to indemnify an insured based on carrying out interna l investigations at its own preforred pace, .. 6.3 In response to ground 2, the Appellant submitted that the Responden t allegedly overstated the market value against the actual value of the Motor Vehicle at the time of entering into the contract of i1nsurance. The Respondent in its argument drew the Court's attention to the Reply fifed on 9th March 2022, on paragraph 5 to demonstrate that thi1s, issue was raised by the Respondent. J14 6.4 lt is th,e .argument that an ,in.surer is duty-bound before it enters into an insurance pdlicy to assess the risk through its Insurance Risk Assessors and Underwriters before it can draft an insurance policy. It was further argued t hat the Appell ant like any other insurer in Zambia, had the opportunity at the time of entering in an insurance pol.icy with the Respondent to assess the value of the Motor Vehide through its Risk Assessors and that refusing to indemnify the policy b,asied on the cover of ZMW 1, 000, 000.00 is going back on its word and conduct. 6.5 The Respondent submitted that the question is not whether an insured is under a duty of utmost good faith to disclose material facts, and an obligation to avoid active or passive misrepresentation of facts when they enter 1into an ;insurance contract, but whether, in the present case, the placing of the insured value at ZMW 1,000,000 constituted misrepresentation and therefore amounted to a breach of the duty of utmost good faith .. 6.6 The Respondent referred to the case of INyimba Investments Limited v NICO Jnsurance Z.ambia4 in which the supreme Court guided that the law pertaining to insurance, as it appl.ies on the issue of misrepresentation, must take into account at least two tests: first, the materiality test and, second, the inducement test. 1lt is the argum,ent that for the Appellant to be absolved of its duties and be permitted to repudiate the insurance contract, the two tests must be met. JlS 6.7 It was further submitted that evidence on record shows that the part ies fulfilled the necessary preliminary steps before effecting the insurance policy. It was also argued that the Appellant had the opportunity at the time to assess the market value if, what was provided was at variance, but it did not do so. Further, that the principle of good faith applies to both parties, the failure to settle the Respondent's claim amounts to breach of the duty when the Respondent has in fact paid the requ ired premiums as agreed . 7.0 THE HEARING 7.1 At the hearing, Counsel Bwalya for the Appellant, placed reliance on the Record of Appeal and Heads of Argument filed on 23 rd August 2024. By way of brief augmentation, she submitted that the dispute hinged on the questionable claim presented by the Respondent and which the learned Judge glossed over by simply making a finding of fact that there was a contract of insurance between the Parties. 7.2 Counsel referred the Court to page 173 of the Record and to the conditions of contract under the sub-heading 'False Declaration .' It was her submission that the dispute hinged on the claim being questionable and was not hinged on fraud. 7.3 Counsel Machaya placed reliance on the Respondent' s Heads of Argument filed on 24th September 2024 and argued that there was no dispute that the contract of insurance existed and that the accident occurred. He also canvassed the argument that fraud was not pleaded as required and called on th e Court to dismiss the appeal with costs. J16 8.0 ANALYSIS AND DECISION OF THIS COURT 8.1 We have carefully considered the arguments and submissions in this appeal by both the Appellant and Respondent as well as the assailed Judgment of the lower Court. It is noted that both Parties addressed grounds 1, 3 and 4 collectively and ground 2 separately. It is also noted that Ground 5 relates to the award of interest and will rest on our determination in upholding the decision of the lower Court or otherwise . There are therefore no arguments advanced in support of the same. 8.2 There is no dispute that the Policy was obtained, and premiums paid. The value of the insurance Policy was for the sum of Kwacha One Million. Copies of the tax invoice and receipt are noted on pages 177 and 178 of the Record . 8.3 Whilst it is obvious that the appeal before us challenges findings of fact made by the lower Court, we are immediately drawn to consider whether the Respondent has proved the evidential burden incumbent upon him in accordance with the established cases such as Khalid Mohamed v The Attorney-General 5 • It is only after we have satisfied ourselves with this aspect that we will move to consider the findings of fact made by the lower Court and the circumstances in which these may be set aside. Authorities abound in our jurisdiction which need no further elaboration . We are all too familiar with the cases of Wilson Masauso Zulu v Avondale Housing Project Limited 6 , Ndongo v Moses Mulyango & Anr7 , Susan Mwale Harman v Bank of Zambia 8 and Amchile Import & Export Limited and Others v Ian Chimanga {T/A Tawana Business Ventures) and Another9 • J17 8.4 Specifically, the issue is whether, in the circumstances of this case, the Respondent has discharged the burden of proof to establish entitlement to the reliefs granted by the lower Court. Whilst we consider the evidential burden, we have not lost sight of the fact that the claim emanates out of an insurance Policy whose underlying feature is that of good faith. 8.5 In addressing this issue on the burden of proof, we have noted the conflicting evidence on Record. There are vital issues which remained unclarified at the time proceedings were issued. Some of these are: i. When did the accident take place? ii. Was the car towed away from the scene of the accident or was it driven away? iii. What was the extent of damage to the vehicle? iv. Did the Police Officer who rendered a Report view the vehicle as required by the Roads and Road Traffic Act? v. Did the 3 garages which submitted quotations view the vehicle? vi. Did the Respondent prematurely commence the action before the Appellant had concluded its assessment? 8.6 It is only upon establishing the answers to the pertinent issues above that we can fully appreciate the findings of the lower Court before we pronounce whether they were perverse or arrived at on a misapprehension of the evidence before the Court. J18 8.7 It is the AppeHant's argument that the claim submitted by the Respondent was not authentic and had glariing irregu larities regarding the motor vehicle 's appearance and extent of damage. It is the argument that the Appellant conducted investigations regarding the sai,d claim and the Respondent prematurely commenced this action p,ending investigations. It was further argu:ed that the Appellant in the Court be1low, contended that it had not refus,ed to settle the claim but had to investigate the claim and thereafter make a decision of the co1urse of action to take. It was further argued that the Appelllant came to a conclus.ion, after its internal investigations, that the R1espondent' s claim was not authientic and did not give an exact account of damage to th,e Motor Vehicle .. 8.8 In response to the Appellant's subm1ission, the Respondent argued that the lower Court considered all t he evid,ence on record as well as the submissions befor•e it in the determlination of this matter. The Respondent's argument is tha t t he damage occas1ioned to the vehicle was authenticated by two Police Reports appearing from pages 116 to 11·9 of the Record. 8.9 We examined the ,evidence of the w 1itnesses in the immediate aftermath of the accident and noted that DW2 was denied access to the vehicle. PWl, who was the driver of the vehicle, elect ed to show DW2 pictures on his plhon,e. He also fa1i!ed to tak,e DW2 to the p.laoe where the vehicle was parked cit1ing lack of sufficient fuel. DW2 also t estified that PWl had asked her to induide damage to the veh icle which she could not ascertain from the p1ictures and which she refused to do. J19 8.10 It is also noted that there is no report in the Claim Form submitted by the Respondent as to how the accident occurred or the exact extent of the damage. This can also be seen from the Statement of Claim. In the circumstances that face us, as they did before the lower Court, we ask ourselves the critical question whether payment of the insurance premium alone, absolved the insured (the Respondent), from any other ongoing responsibility. 8.11 In as much as it is canvassed that a contract of insurance is simply that, a contract which is considered perfected at the point of the premiums having been paid, we are of the considered opinion, and it is trite law that an insurance contract is a contract which has a continuing duty based on utmost good faith. The authors of Halsbury's Laws of England 4th Edition 2003 Reissue Vol 25 1 in Insurance at paragraph 36 state as follows: "Requirement of the utmost good faith. A contract of insurance is a contract based on the utmost good faith, and if the utmost good faith is not observed by either party the contract may be avoided by the other party. This principle is of universal application to all types of insurance contracts. The utmost good faith imposes positive obligations of disclosure. In practical application the principle permits either party to avoid the contract altogether if it is established against the other party either that: (1) there has been a failure by the other party to disclose a material fact; or (2) the other party has made an innocent misrepresentation of a material fact, since statements made in a contract must be true in fact. Although an insurer's breach of the J20 obligation to deal with the proposer with the utmost good faith does not give rise to a remedy in damages the proposer is entitled to a return of the premium. " 8.12 This principle was accepted by the Supreme Court in the case of Simwanza Namposhya v Zambia State insurance Corporation Limited 10 . The continuing duty of good faith on the part of the insured was sufficiently explained by Hoffman Jin the case of Orakpo v Barclays Insurance Services 11 when his Lordship stated as follows : "I do not see why the duty of good faith on the part of the assured should expire when the contract has been made. The reasons for requiring good faith continue to exist. Just as the nature of the risk will usually be within the peculiar knowledge of the insured, so will the circumstances of the casualty; it will rarely be within the knowledge of the insurance company. I think the insurance company should be able to trust the assured to put forward a claim in good faith ". 8.13 If the insured' s claim is fraudulent, the Insurance Company may defeat the claim. The Appellant has referred to Halsbury's Laws of England 1 which has defined a fraudulent claim as noted at paragraph 5.5 above. 8.14 Analysing the provisions of the law, combined with the evidence of the witnesses, it is clear that the lower Court misapprehended the Policy as being one of creating contractual relations whi ch culminated in the payment of the premium by the insured. We have noted the reason proffered by the lower Court in paragraph 3.2 above. A reading of section B which was relied on by the lower Court provides as follows: J21 If your vehicle is damaged or stolen and provided all reasonable precautions are taken, we will, at our opinion; vi. Pay the reasonable cost of repairing any damage to your vehicle within its market value, or ..... (emphasis is ours). Supported by the authorities above, and a fuller reading of the section above, we are of the considered view that the trial Court misdirected itself by placing entire reliance on a part of section B without considering it in its entirety to pay the claim 'within its market value' and in view of the continu ing duty of disclosure and good faith . 8.15 In order for us to fully address the issues in this appeal, it is imperative to refe r to the evidence provided by the witnesses, which is central to the grounds before us. As we do so, we have not lost sight of the principle established by the case of Maamba Collieries v Godfrey Mudenda Ng'andu 12 which states that: "it is trite law that in matters of findings of fact and questions of credibility the trial Court had the advantage of seeing and hearing the witnesses, which this Court does not have." 8.16 According to the evidence of PWl, Muyoka Kashinga, who was the driver of the motor vehicle, the accident was reported, though not immediately after its occurrence . He further stated that when the Police Officer requested to inspect the vehicle, he informed the Police Officer that the vehicle had already been moved by a tow truck. DW2, Nyirenda Modesta Besa, the designated Police Officer, gave evidence that she did not find the car when she arrived at the scene of the accident. Her evidence was that she requested J22 to view the vehicle and PWl stated he did not have enough fuel to take her to Meanwood where it was located. Her evidence was that she was shown photographs depicting damage to the airbags, front bumper, front windscreen, and wheel. She testified that PW1 asked her to include damage to the front tyre but that she declined to do so as the photographs showed that the tyre was intact. 8.17 DWl, Corporal Elias Munthali of Arakan Barracks testified that he observed damage to the Respondent' s motor vehicle, particularly to the front right tyre and the right side of the vehicle. His evidence was that the windscreen, airbags, and headlights were intact. He noted that the damage to the vehicle that he physically saw after the accident, was not the same as the damage in the pictures that he was shown on pages 144 to 166 of the Record in Court. 8.18 We note from the record thatthere are three Police Reports seen from pages 116 to 121. The first stamped on 25t h October 2021, suggesting that the accident occurred on 24th October 2021 when the driver of the vehicle failed to keep to his nearside land hence went off the road and hit into the street light pole. There are two other Police Reports stamped 15th February 2022. The second mirrors the details of the first, except for the description that "the accident was reported by Mr Muyoka Kashinga the next day on the 25th October 2021 and scene was visited. The vehicle was not found at the scene and it was not physically inspected to ascertain the damage. However, pictorial evidence was produced and damage was recorded as seen on the photos on the phone. Then the driver, Mr. Muyoka Kashinga, was charged for careless driving c/sec 154 (1) of 2002 Act of Zambia, to which he accepted J23 and paid Admission of Guilty fine on receipt number 0934183. 11 The third Police Report rep licated the second one except it suggested that the date of the accident was 23 rd October 2021 and occurred around 23:00 hours. The reported damage to the vehicle was the same in all exhibited reports being damage to the "FRONT BUMPER, GRILL, and FRONT WINDSCREEN AND AIR BAGS." 8.19 It is clear from the foregoing that there are multiple conflicting accounts of what transpired on the material day, which, if pursued in detail, would lead to a fruitless and most likely inconclusive inquiry. However, what is manifestly evident is that only PWl and DWl personally observed the motor vehicle following the accident. We refer to the Insurance Policy reflected at page 171 to 176 of the record which reads as follows: GENERAL CONDITIONS Conditions Precedent We will only be liable to provide an indemnity or make payment under this contract of insurance if: a) any person claiming indemnity or on whose behalf indemnity is claimed has complied with all the terms and conditions contained in the Policy, Policy Schedule and any Endorsements; b) the declaration and information given on the Statement of Insurance is correct and complete to the best of the Policyholder's knowledge and belief; c) the Insured Vehicle is being used and driven in accordance with the Certificate of Motor Insurance. J24 J We also refer to page 173 which provides as follows: FALSE DE CLARA T/ON This Policy will be void and of no effect if: a) The Statement of Insurance, proposal or declaration is untrue in any material respect; b) The Policyholder or anybody on his behalf makes a claim that is fraudulent or deliberately exaggerated; c) The Policyholder or anybody on his behalf makes a false declaration or statement in support of any such claim; d) The circumstances in which the Policyholder entered into the insurance are altered without our consent. (emphasis is ours) 8.20 In the circumstances and from the totality of the evidence, we are of t he considered view that the learned Judge in the lower Court took a rather simplistic view of the dispute before him. We are of the considered view that had the learned Judge taken the view that the contract of insurance being one founded on the principle of good faith and providing an enduring obligation, he would not have arrived at the conclusion that a contract of insurance, precluded the Appellant from conducting its independent assessment to establish and verify the claim . It would be a naive argum ent in insurance law, to maintain and hold t he view that premiums once paid, settle the obligation to honour the claim of the insured, no matter the circumstances. J25 8.21 It is therefore evident that strict compliance with the terms set out in the policy is a condition precedent to the validity of any claim. Any deviation, whether by mistake, or failure to adhere to the stipulated procedures, risks rendering the policy void ab initio. The emphasis placed on the truthfulness of the policyholder's declarations, and the accurate disclosure of all material facts underscores the insurer's reliance on the integrity of the statements provided at inception and throughout the contractual relationship. 8.22 In our recent Judgment delivered in the case of Advance Transport Limited v Landmark Carriers Limited and Savenda General Insurance Limited 13 , we noted that in insurance law, a condition precedent is a term that must be met before the insurer has a legal obligation to pay a cla im. We also note that the Respondent has argued that the lower Court was on firm ground in its decision not to address its mind to the Appellant's concerns on the basis that fraud was not specifically pleaded as stipulated in Order 18 Rules of the Supreme Court of England 1965 1 . However, considering the circumstances, the question we have goes back to the root of the matter, did the Respondent discharge the burden of proof that he was entitled to the reliefs? Put differently, does the evidence on record sufficiently establish that the Appellant breached the terms of the insurance contract so as to justify the grant of the reliefs claimed? J26 8.23 We are of the view that the terms and conditions of the insurance policy were not properly followed by the Respondent to begin with and so the issue of fraud on the part of the Appellant does not arise. We refer to the case of Galaunia Farms Limited v National Milling Company and National Milling Corporation Limited14 in which it was held: "A plaintiff must prove his case and if he foils to do so, the mere failure of the opponent's defence does not entitle him to judgment." 8.24 In Khalid Mohamed v Attorney General 5 , in a judgment by Ngulube, D. C. J, as he then was, the Supreme Court stated as follows: "An unqualified proposition that a plaintiff should succeed automatically whenever a defence hos foiled is unacceptable to me. A plaintiff must prove his case and if he foils to do so the mere failure of the opponent's defence does not entitle him to judgment. I would not accept a proposition that even if a plaintiff's case hos collapsed of its inonition or for some reason or other judgment should nevertheless be given to him on the ground that a defence set up by the opponent hos also collapsed. Quite clearly a defendant in such circumstances would not even need a defence." 8.25 The Supreme Court in its decision in the case of Su hail International Limited v J. M Mwamulima Properties Import & Export Limited, Lafarge Cement Zambia PLC15 , addressed a serious question as to whether or not the court correctly apportioned the burden of proof to the parties. The Court held that the burden of proof lay on the 1st Respondent (the Plaintiff), not the appellant, to prove its claim that it had not received 6000 bags of cement. J27 The trial Court had misapplied the burden of proof by shifting it to the Appellant before the p t Respondent had made out a prima facie case. Consequently, the Court held that it was not necessary to even consider the strength of the case for the Appellant and 2nd respondent as the p t Respondent had not discharged the evidential burden. 8.26 In casu, we are of the view that it is the Respondent who had the primary obligation to prove that the Appellant breached the insurance contract. This required the Respondent to present concrete evidence to show a shortfall. Instead, what we have seen on record is that the very manner in which the action was commenced was premature, in that investigations were still on going and a decision had not been made. The evidence of witnesses at trial demonstrates serious doubts on the authenticity of the Respondent' s claim, which should not have been ignored, as these irregularities went to the root on the insurance contract and terms and conditions that were binding on both Parties. 8.27 We therefore, disagree with the arguments of the Respondent as it is abundantly clear that the Respondent had not discharged its own evidential burden. The lower Court's decision to not deal with the issue of the authenticity of the claim and address the terms and conditions of the Insurance Policy, in its Judgment was a serious misdirection. 8.28 In light of the foregoing, it is evident that the Respondent was under a duty of disclosure, as underscored by the terms and conditions of the insurance contract. These obligations are contractual in nature and bind both Parties accordingly. From the evidence before the Court, the absence of a physical J28 inspection of the motor vehicle, couplled with the Respondent's refusal to allow a duly authorized Police Officer to inspect the same, amounted, in our view, to a breach of the duty of utmost good faith. In the absence of an accurate, :independent and reliable description of the extent of the damage, we are of the settled view that there e.xisted no legal or factual basis upon which the !lower Court could have concluded that the Appellant had breached the insu ranee contract. 8.29 It is the Respondent's argument that there is no legal justification on why a party to an insuranoe contract must he ;at the mercy of an insurance company when loss from an insured risk has materialized merely because it is convenient if not benefid al, for the insurance company to delay in carrying out its investigations. We dismiss this argument for the reasons above. 8.30 ·we have taken the time to carefully consider the sequence of events from the date of the :accident and also reviewed th,e iinvestigation timeline starting from the Acknowledgment of Claim Notification on 8th November 2021 up to 8th February 2022, when the !Respondent commenced the action in the High Court In our view, while the Respondent alleges that the Appellant unreasonably delayed processing and settling the claim, a closer look at the t imerine and surround·ing conte.xt suggests otherwise. 8.31 We observed that Respondent submitt,ed the claim form on 8th November 2021. Less than two months tater, on 3pt D,ecember 2021, the Respondent issued a letter of demand, claim1ing immediate payment of K900,000.00 and an additional KS00,000.00 in damages, on the basis that the Appellant had allegedly withheld paym ent w ithout reason or justification. It is our J.29 .. considered opinion that this was premature given that the Appe llant had, in its claim acknowledgment, explicitly reserved its right to conduct further inquiries. Notably, the acknowledgment stated: "4. We reserve the right to carry out a second inspection for verification of losses. 7. Lastly, please be assured of our response within two weeks of submission of full claim documentation." 8.32 Subsequently, on 12th January 2022, a final letter of demand was issued. The very next day, 13th January 2022, the Appellant responded to the demand. Thereafter, a number of significant events unfolded as follows: i. On 2nd February 2022, the Appellant received a report from a private investigator raising material concerns regarding the circumst ances of the accident and the extent of the alleged damage . ii. On that same date, the Appellant requested withdrawal of the initial Police Report, on the premise that it did not reflect an accurate description of what occurred after having concluded on invest igations confirmed by the evidence of DWS. iii. On 8t h February 2022, the Appellant formally wrote to the Respondent to inform them that investigations were still pend ing, following the ' withdrawal of the first Police Report. iv. On the same day, the Respondent commenced legal action against the Appellant. J30 • • 8.33 We have noted that one of the express terms of the insurance contract clearly stated that the policy would be void and of no effect if the insured submitted a fraudulent or deliberately exaggerated claim. With that in mind, the sequence of events reveals that there were clear overlaps between the Respondent's legal action and the Appellant's ongoing investigation. It is our considered view that in these circumstances, the Appellant cannot be faulted for the time taken in investigating a claim where there were clear inconsistencies regarding the extent and cause of damage. It is our view that the continued efforts to verify the claim, even as legal proceedings were being initiated, cannot be seen as an unjustified delay, particularly given the conflicting accounts and questionable evidence on record . 8.34 We are therefore, of the considered view that the learned trial Judge erred in law in finding the Appellant liable for breach of the insurance contract without addressing the glaring inconsistencies in the evidence. His failure to do so particularly in relation to the requirement under the insurance policy, went to the very root of the matter. The lower Court ought to have taken these factors into account when determining whether a breach had occurred . The contradictions in the Respondent's own account of events justified further investigation. 8.35 We rely on the decision in the cited case of Suhail International Ltd v Mwamulima Properties 15 , that the Respondent cannot rely solely on attacking the Appellant's defence or allege delay without themselves providing credible, positive evidence to establish its claim. In this case, we J31 • are of the settled view that the lower Court prematurely shifted the burden to the Appellant before the Respondent had discharged his. 8.36 We also rely on the recent decision of the Supreme Court in the case of Martha Mushipe v Gaudensia Rossi 16 , wherein the Supreme Court in relation to the burden of proof in civil matters stated as follows : "At the expense of repetition, a plaintiff is compelled by Jaw to prove his or her case to the satisfaction of the Court if he or she is to have judgment. In so doing, the Plaintiff is compelled to lead evidence, viva voce and documentary which properly explains the case. In the case with which we are engaged, while the Appellant laid before the High Court voluminous documentary evidence, she omitted to explain it the satisfaction of the court. She must suffer the consequences of her default. " 8.37 Likewise, in casu, we are of the view that it is the Respondent who had the primary obligation to prove that the Appellant breached the insurance contract. This required the Respondent to present concrete evidence to show a shortfall. Instead, what we have seen on record is that the very manner in which the action was commenced was premature, in that investigations were still on going and a decision had not been made. The evidence of witnesses at trial, including the quotations for repairs from three named garages, who later confirmed that they had not even inspected the vehicle in question, shrouds the whole incident into a cloud of uncertainty, lacking in good faith and casts serious doubts on the authenticity of the Respondent's claim. In our cited Judgment, in the case of Advance Transport J32 Limited, we noted that it is good practice to submit three quotations to ensure that the repair costs were genuine and justified in the ci rcumstances of the case. In casu, as has been noted, the vehicle was not inspected by the named Garages which opted to provide quotations. These glaring inconsistencies should not have been ignored as these irregularit ies went to the root of the contract and terms and conditions that were binding on both parties. 8.38 We therefore find merit in grounds 1, 3 and 4. 8.39 We now turn to address ground 2 of the appea l in which the Appellant submitted that it was erroneous for the trial Court to make a find ing that the Appellant is barred from cla iming that the Respondent overstated the market value of his Motor Vehicle by the doctrine of estoppel at the time of entering into the insurance contract. It was argued that an insurance contract is a contract of indemnity and that the Respondent was in breach by overstating the ma rket value. 8.40 In response, the Respondent submitted that an insurer is duty bound before it enters into an insurance policy to assess the risk through its Insurance Risk Assessors and Underwriters before it can draft an insurance policy. The Respondent argued that the Appellant like any other insurer in Zambia, had the opportunity at the time of entering in an insurance policy w ith the Respondent to assess the value of the Motor Vehicle through its assessors and that, in refusing to indemnify the policy based on the cover of ZMW 1, 000, 000, the Appellant went back on their word and conduct. • 8.41 The Respondent referred to the case of Layton v Martin 17 and submitted that estoppel is an equitable doctrine which must be used a shield not a sword. 8.42 We have already noted above that at the heart of every insurance contract, is the principle of utmost good faith in which both Parties must make full and honest disclosure of material facts . In the case of Reid and Co. v. Harvey and Others 18 , the Court reinforced the principle of utmost good faith, making it clear that insurers are entitled to rely on the complete and truthful disclosures by the insured . This decision deterred Parties from concealing or misrepresenting critical information, thereby fostering a more transparent and trustworthy insurance market. 8.43 The learned authors of Law of Contract, 13th Edition, Butterworths (1996)2 at page 29 reads as follows: "Behind all forms of contract, no doubt, lies the basic idea of assent. A contracting party, unlike a tortfeasor is bound because has agreed to be bound. Agreement, however, is not a mental state but an act, and as an act, it is a matter of inference from conduct. The parties are to be judged not by what is in their minds, but by what they have said or written or done." 8.44 In light of the above, we have observed it is a term of the insurance contract that: "This policy will be void and of no effect if: J34 .. a) The Statement of Insurance, proposal or declaration is untrue in anv material respect. .. " (emphasis ours) 8.45 We have carefully examined the record and, in particular, the Detailed Declaration at page 136, which reflects that the market value of the motor vehicle was ZMW 61,561.10. Notably, during cross-examination, the Respondent candidly admitted that he had no proof to support the asserted value of ZMW 900,000.00. He reiterated that he did not possess any proof to substantiate this figure. 8.46 We refer to the cited case of Simwanza Namposhya v Zambia State Insurance Corporation Limited 10 in which the Supreme Court of Zambia held as follows: ''There is no doubt therefore, that the contract between the appellant and the respondent satisfied the criteria laid down by the law. It is trite law that an insurance contract is a contract of uberrimae /idei, that is, a contract based on utmost good faith. There is a duty on both the insurer and the assured to observe utmost good faith in their dealings with each other. This includes the duty to disclose all material facts to each other." 8.47 Estoppel is an equitable doctrine, and he who comes to equity must come with clean hands. In our view, the learned trial judge erred in finding that the Appellant was estopped from raising the issue of overstated market value of the vehicle for reason that the Appellant acquiesced the value by its conduct. While it is true that the Respondent paid premiums based on the declared value, it is our view that this does not override the Respondent's duty to J35 make a full and honest disclosure at the increption of t he contract. The doctrine of utmost good faith requires both parties to be transparent in the1ir dealings with each other. Therefore, the acceptance of premiums on the part of the Appellant does not cure the failure to disdose the t rue market value of the motor vehicle on the part of the Respondent. We are of the considered view that the doctrine of estoppel cannot arise wher,e the contract i;s,elf is tainted by material misrepresentation contrary to the terms and conditions of the insurance pol icy. Ground 2 succeeds accordingly. 8.48 As a consequence of our findings above, ground 5 on the award of interest is obviously rendered otiose. 9.0 CONCLUSION 9.1 Having found merit in grounds 1, 3 and 4 and 2, the appeal succeeds accordingly. Consequently, the Judgment of the lower Court is set aside. We order instead that the premium paid by the Respondent be refunded to him, with non-compounded interest, computed at the Bank of Zambia policy rate, from the date of the Writ of Summons to the date of this Judgment and t hereafter in accordance with The Judgment Act2. 9.2 On the issue of costs, we are of the considered view that the justice in the matter will be best served by an Order that the Parties bear their costs respectively, both here and in the Court below. J36 .. 9.3 Accordingly, the Orders herein are a direct reflection of the principles of contract law, particularly in the context of insurance, where the integrity of representations made at the inception of the agreement holds paramount importance. The remedy granted of a refund of premiums with appropriate interest serves to restore the Parties to the positions they ought to have occupied had full disclosure been made from the outset. M. J. SIAVWAPA JUDGE PRESIDENT ~ q F. M. CHISHIMBA A. N. PATEL S. C. COURT OF APPEAL JUDGE COURT OF APPEAL JUDGE J37