- January 20, 2023
- |Concise Law Reports (CLR), Contracts
Nampolo v Hollard Insurance Company of Namibia Ltd NAHCMD (20 January 2023)
Onus
In order to determine a claim based on a contract of insurance, the court had to determine the general principles applicable to the law of contract in general and insurance agreements. On the pleadings, the court was satisfied that the plaintiff and the defendant had a valid insurance agreement and that the specific terms of the agreement were properly pleaded. The defendant explicitly pleaded the terms of the contract and the manner in which the plaintiff failed to comply with his contractual duty. There was further no dispute that, on the evidence adduced, the plaintiff’s vehicle was involved in an accident and that it was damaged beyond economical repair and as a result, the plaintiff indeed suffered the losses that are envisaged in the insurance agreement.
Where the insurer denies liability in a policy on the ground of a breach by the insured of one of the terms of the policy, the onus is on the insurer to plead and to prove such breach (Sprangers v FGI Namibia Ltd 2002 NR 128 (HC) at 131 G-H). Therefore, once the court finds that the plaintiff has placed himself within the four corners of the insurance contract and that he has duly observed compliance with the terms and conditions as set out in the contract, then the onus is on the defendant to prove that it was entitled to repudiate the plaintiff’s claim.
The court was satisfied that the plaintiff brought his claim within the four corners of the insurance agreement. The next issue for determination was whether the defendant, had on a balance of probabilities proven that it was entitled to repudiate the plaintiff’s claim. The reasons advanced by the defendant for repudiating the plaintiff’s claim were based on the fact that the plaintiff failed to comply with his contractual duty, i.e., that he submitted a fraudulent claim for indemnification, failed to provide the defendant with truthful and accurate information upon submitting its claim for indemnification, and that he provided the defendant with false information as to how the accident occurred.
Mutually destructive versions
‘[90] …
“Where there are two stories mutually destructive, before the onus is discharged the Court must be satisfied that the story of the litigant upon whom the onus rests is true and the other false. It is not enough to say that the story told by Clarke is not satisfactory in every respect, it must be clear to the Court of first instance that the version of the litigant upon whom the onus rests is the true version . . . .”
[85] The approach to be adopted when dealing with the question of onus and the probabilities was outlined by Eksteen JP in National Employers’ General v Jagers as follows:
‘It seems to me, with respect, that in any civil case, as in any criminal case, the onus can ordinarily only be discharged by adducing credible evidence to support the case of the party on whom the onus rests. In a civil case the onus is obviously not as heavy as it is in a criminal case, but nevertheless where the onus rests on the plaintiff as in the present case, and where there are two mutually destructive stories, he can only succeed if he satisfied the Court on a preponderance of probabilities that his version is true and accurate and therefore acceptable, and that the other version advanced by the defendant is therefore false or mistaken and falls to be rejected. In deciding whether that evidence is true or not the Court will weigh up and test the plaintiff’s allegations against the general probabilities. The estimate of the credibility of a witness will therefore be inextricably bound up with a consideration of the probabilities of the case and, if the balance of probabilities favours the plaintiff, then the Court will accept his version as being probably true. If however the probabilities are evenly balanced in the sense that they do not favour the plaintiff’s case any more than they do the defendant’s, the plaintiff can only succeed if the Court nevertheless believes him and is satisfied that his evidence is true and that the defendant’s version is false.’
First National Bank of Namibia Ltd v du Preez (HC-MD-CIV-ACT-CON-2017/01020) [2019] NAHCMD 360 (06 September 2019; National Employers’ General Insurance v Jagers 1984 (4) SA 437 (E) at 440D.
[118] As pointed out by Ueitele J in Don v Hollard Insurance Company of Namibia Ltd (HC-MD-CIV-ACT-OTH-2019/02372) [2020] NAHCMD 217 (10 June 2020) at para 61, an insurance contract is based on utmost good faith. He further refered to Wilke No v Swabou Life Insurance Co. Ltd 2000 NR 23 (HC) wherein the Full Bench of our High Court stated as follows:
‘The contract of insurance is the primary illustration of a category of contracts described as uberrimae fidei, i.e. of utmost good faith. Misrepresentation made by an insured when claiming entitles an insurer to repudiate a claim.’
[119] I can do no better than that. Therefore for the reasons set out above I am satisfied that the defendant discharged the onus resting on it on a balance of probabilities and I find that the plaintiff breached the clauses in the agreement on which the defendant relied to repudiate the plaintiff’s claim. I am satisfied that the defendant showed that the plaintiff failed to provide truthful and accurate information upon submitting its claim for indemnification and that the plaintiff provided the defendant with false information on how the accident occurred.
[120] For these reasons, the plaintiff’s claim must fail and I dismiss it. On the other hand, as for the counterclaim, I am satisfied that the defendant should succeed and the counterclaim should be granted.’