REPUBLIC OF NAMIBIA

HIGH COURT OF NAMIBIA MAIN DIVISION, WINDHOEK

JUDGMENT

                                                Case No: HC-MD-CIV-ACT-CON-2020/04900

In the matter between:

RMH LOGISTICS CLOSE CORPORATION                                 PLAINTIFF

and

NEPTUNE RISK MANAGERS (PTY) LIMITED                         DEFENDANT

Neutral citation:    RMH Logistics Close Corporation v Neptune Risk Managers (Pty) Limited (HC-MD-CIV-ACT-CON-2020/04900) [2023] NAHCMD 75 (24 February 2023)

Coram:        B USIKU J

Heard:          17 and 20 October 2022

Delivered:    24 February 2023

Flynote:       Practice – Absolution from the instance – Court applying the trite test – Court holding that the plaintiff has not placed before court evidence upon which a court could or might find for the plaintiff – Application for absolution from the instance granted.

Summary:    The plaintiff and the defendant entered into an agreement in terms of which the plaintiff appointed the defendant as its insurance broker. Later a truck allegedly belonging to the plaintiff caught fire and was destroyed by the fire. The plaintiff lodged a claim with an insurance company for indemnification. The insurance company rejected the claim on the basis that the truck was not insured. The plaintiff sued the defendant. The court held that there is no evidence, at the close of the plaintiff’s case, upon which it could or might find for the plaintiff. The court grantes absolution from the instance in favour of the defendant.

ORDER

1.    The application for absolution from the instance is granted.

2.    The plaintiff is ordered to pay the defendant’s costs, such costs are to include costs of one instructing and one instructed counsel.

3.    The matter is removed from the roll and is regarded finalised.

JUDGMENT

USIKU J:

Introduction

[1]      This is an application by the defendant for absolution from the instance, made after the plaintiff closed its case.

[2]      The plaintiff and the defendant concluded a written agreement in terms of which the plaintiff appointed the defendant to act as its insurance broker.

[3]      Pursuant to its obligations in terms of its mandate, the defendant arranged an insurance cover for the plaintiff with SANTAM Namibia Ltd (‘SANTAM’). The parties agree that Annexure RMH2 annexed to the particulars of claim is the copy of the insurance agreement issued by SANTAM in respect of the plaintiff.

[4]      The insurance policy, as appears in RMH2, covers the period from ‘12 June 2020 to 30 June 2020 both dates inclusive’. The effective date is stated as 17 June 2020. The anniversary or renewal date is reflected as 1 July 2021.

[5]      In terms of the aforesaid policy, SANTAM insured the plaintiff, inter alia, against loss in consequence of damage occurring during the period of insurance arising from fire, with effect from 17 June 2020.

[6]      On 21 July 2020, the plaintiff’s Volvo FH12 Globetrotter H/R T/T C/C Truck, with registration number N973000 (“the truck”) succumbed to fire damage and completely burnt down.

[7]      The plaintiff lodged a claim with SANTAM on 24 July 2020 consequent on the damage it sustained. The plaintiff was later informed by SANTAM that the truck was never insured with it and therefore the claim was rejected.

[8]      The plaintiff contends that the defendant breached its obligation in terms of its mandate in one or more of the following respects; namely that it failed to:

(a)      exercise the degree of care and skill reasonably expected of an insurance broker in ensuring that the plaintiff was adequately covered, and/or,

(b)      comply with the plaintiff’s instruction to ensure that the plaintiff was fully covered for any potential loss arising under the policy.

[9]      The plaintiff contends further that, as a result of the fire and the interruption of its business, it suffered damages in the amounts of:

1. N$350 000, being loss of profit as a result of business interruption, and,
2. N$550 000, being the replacement value of the truck.

[10]    The plaintiff therefore instituted action against the defendant seeking an order in the following terms:

(a)      payment in the amount of N$900 000,

(b)      interest on the aforestated amount at the rate of 20% per annum, a tempore morae, and ,

(c)      costs of suit.

[11]    The defendant defends the action and has filed a plea.

The trial

[12]    At the trial, the plaintiff called one witness, namely Rodney Hanganda (‘Mr Hanganda’).

[13]    Mr Hanganda testified that he is the sole member of the plaintiff. On or about 20 July 2020 at Walvis Bay, the plaintiff and the defendant entered into an oral agreement. Subsequent thereto, the defendant sent a correspondence (Annexure “RMH1”), to the plaintiff, dated 20 July 2020, which constitutes the written part of the agreement.

[14]    According to Mr Hanganda, the terms of the agreement among other things, were that:

(a)      the plaintiff appointed the defendant as its insurance broker for the purposes of arranging a comprehensive insurance cover;

(b)      the defendant would, on the instructions of the plaintiff, canvass the insurance market for appropriate insurance cover, covering risks associated with its business and arrange a comprehensive cover;

(c)      the defendant would exercise the degree of care and skill reasonably expected of an insurance broker, with a view to ensure that the plaintiff was adequately covered from time to time.

[15]    Pursuant to its obligations in terms of its mandate, the defendant arranged an insurance cover for the plaintiff, for the period commencing ‘from 20 July 2020’, with SANTAM. SANTAM issued the plaintiff a policy reflected in “RMH2” which is to be read together with “RMH1”. In terms of the policy as reflected in “RMH2”, the plaintiff is, with effect from 17 June 2020, insured by SANTAM against loss in consequence of damage occurring during the period of insurance, arising from fire.

[16]    On 21 July 2020, Mr Hanganda testified, the plaintiff’s truck succumbed to fire damage and was completely burnt down. The plaintiff notified the defendant and filed a claim for indemnification on or about 24 July 2020. The defendant confirmed that all was well and that it would lodge the claim with SANTAM. Later, the plaintiff learnt that the truck was never insured with SANTAM and that its claim was rejected.

[17]    Mr Hanganda maintains that the defendant breached its obligation in terms of its mandate by failing to exercise the degree of care and skill reasonably expected of an insurance broker, to ensure that the plaintiff was adequately covered. Furthermore, Mr Hanganda avers that the defendant failed to comply with plaintiff’s instructions to ensure that the plaintiff was fully covered for any potential loss arising under the policy.

[18]    On the issue of the damages suffered by the plaintiff, Mr Hanganda states that, as a result of the fire and interruption of the plaintiff’s business, the plaintiff suffered damages in the amounts of:

(a)      N$ 350 000, being loss of profit as a result of business interruption, and,

(b)      N$550 000, being the replacement of value of the truck.

[19]    Mr Hanganda concedes in his evidence, that the plaintiff is not the owner of the truck, but insists that there is a contract (Annexure RMH3) in terms of which the plaintiff and the owner of the truck constituted a general partnership and agreed to confer on each other authority to contract on behalf of and to bind, each other.

[20]    At the close of the plaintiff’s case, the defendant applied for absolution from the instance.

Application for absolution from the instance

[21]    The defendant applied for absolution from the instance on account that the plaintiff failed to prove three essential elements of its claim, namely:

(a)      the contract and its terms;

(b)      the truck and the damage it sustained; and;

(c)      the damages suffered by the plaintiff and the quantum thereof.

[22]    In respect of the first element, the defendant argues that the plaintiff relies on an oral and written agreement concluded on 20 July 2020. However, during cross-examination Mr Hanganda conceded that the broker agreement between the parties was actually concluded in writing on 26 February 2020, as evidenced by Exhibit “C” (and not in 20 July 2020).

[23]    The defendant therefore submits that the agreements pleaded and relied upon by the plaintiff have not been proved. Moreover, submits the defendant, the plaintiff has not proved the instruction it has given to the defendant which the defendant is alleged not to have complied with, which constitutes breach. The defendant submits that the plaintiff has failed to discharge its onus to prove the agreement it relies on and its breach, and that for that reason, the defendant is entitled to absolution from the instance.

[24]    In regard to the second element, the defendant points out that the truck that succumbed to fire was not a Volvo FH12 Globetrotter bearing registration number N973000WB as alleged in the particulars of claim and in the testimony of Mr Hanganda. The truck that succumbed to fire was an FM10 truck with registration number N973000WB, as is reflected from Exhibit ‘F’ (‘certificate of registration in respect of motor vehicle’). This FM10 truck belongs to Ms MA Hanganda, whom Mr Hanganda testified is his wife to whom he is married out of community of property.

[25]    The defendant submits that, firstly, the truck in respect of which the plaintiff claims damages, does not exist and secondly the truck that was destroyed by fire belongs to a third party and the plaintiff is not entitled to claim damages in respect of a property belonging to a third party.

[26]    The defendant submits further that the agreement that the plaintiff wishes to rely upon for the purposes of claiming damages, namely, “RMH3”, was entered into between Mr Hanganda and Ms Hanganda and the plaintiff was not a party to that agreement.

[27]    Thus, the defendant submits that the plaintiff has failed to discharge its onus that it suffered damages as a result of the fire that consumed the FM10 truck and absolution from the instance should be granted.

[28]    In regard to the third elelment, the defendant contends that the plaintiff has not led evidence on the issue of damages and the quantum thereof. The plaintiff has not put forth facts showing the:

(a)      replacement value of the truck, and,

(b)      plaintiff’s loss of profit.

[29]    The defendant submits that the plaintiff ought to have led expert evidence in respect of the replacement value of the truck and at the very least, the financial and related records of the plaintiff, in order to assess its loss of profit. The defendant therefore argues that absolution from the instance be granted on this basis as well, together with costs which costs are to include costs of one instructing and one instructed counsel.

[30]    On the other hand the plaintiff contends that it has presented before court overwhelming evidence upon which the court could find in its favour and submits that the application for absolution be dismissed with costs.

Analysis

[31]    It is trite law that the test for absolution from the instance is whether there is evidence at the end of the plaintiff’s case, upon which a court could or might find for the plaintiff. This implies that, in order to survive absolution, a plaintiff has to make out a prima facie case, in a sense that there is evidence relating to all elements of the claim, because without such evidence, no court could find for the plaintiff.[1]

[32]    In the present case the plaintiff has led evidence to the effect that, one of the terms of the agreement between it and the defendant was that, the defendant would, on the instructions of the plaintiff canvass the insurance market and arrange for a comprehensive cover. According to the plaintiff, the agreement was concluded on 20 July 2020 and the truck was destroyed by the fire the following day, namely the 21 July 2020. The plaintiff has not led evidence as to the date and place when it instructed the defendant, the nature of the instruction given and when and how the defendant failed to comply with the instruction(s) given.

[33]    In addition to the above, the evidence on record shows that the truck that was destroyed by the fire was owned by a third party. The plaintiff has not presented evidence before court how it sustained damages in respect of the loss of the truck that was owned by a third party.

[34]    Furthermore, as was correctly argued by the defendant that, there is no evidence before court on:

(a)      the replacement value of the truck, and,

(b)      the loss of profit.

In the absence of this evidence, I am of the opinion that no court could or might find for the plaintiff, in the circumstances.

[35]    Having taken into account all of the above considerations, I am of the opinion that there is no evidence, at the end of the plaintiff’s case, upon which a court could or might find for the plaintiff. For the aforegoing reason, the application for absolution from the instance stands to be granted.

[36]    Insofar as the issue of costs is concerned, I am of the view that the general rule that costs follow the result, must find application.

[37]    In the result, I make the following order:

1.        The application for absolution from the instance is granted.

2.        The plaintiff is ordered to pay the defendant’s costs, such costs are to include costs of one instructing and one instructed counsel.

3.        The matter is removed from the roll and is regarded finalised.

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B  USIKU

Judge

APPEARANCES

PLAINTIFF:              GL Kasper

                                Of Murorua Kurtz Kasper Incorporated, Windhoek

DEFENDANT:           CE Van Der Westhuizen (with her A Naude)

Of Dr Weder, Kauta & Hoveka Inc., Windhoek