Peter Johanne v Clarion Insurance Company and B. Mutize and T.B. Mutseta

### Preamble
1
HH 429-12
HC 7394/10
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PETER JOHANNE

versus

CLARION INSURANCE COMPANY

and

B. MUTIZE

and

T.B. MUTSETA

HIGH COURT OF ZIMBABWE

MATHONSI J

HARARE, 6 November 2012 and 14 November 2012

Civil Trial

P. Chiutsi, for the plaintiff

Ms F. Mupanduki, for the 1st defendant

MATHONSI J: This matter came before me as a special case in terms of Order 29 of the High Court of Zimbabwe Rules, 1971. At the pre-trial conference of the parties held before a Judge the parties identified the issue for determination as:-

“Whether the first defendant (the insurer) is contractually/statutorily obligated to pay the plaintiff the damages claimed and if not, the extent of the first defendant’s statutory liability”.

The parties then agreed that the matter proceeds in terms of Order 29 of

the High Court Rules. They also filed a statement of “Agreed and Undisputable (sic) facts” between them which are that on 5 October 2009, the second defendant, who is the owner of a commuter omnibus registration number AAF 3232 and the employer of the third defendant, took out a 3rd party motor insurance for his vehicle in terms of Part IV of the Road Traffic Act [Cap 13:11] (“the Act”).

The said third party insurance was for a limited insurance cover of US$800-00 and the insurance was for the period of 5 October 2009 to 30 September 2010. During that period, specifically on 11 May 2010, the vehicle which was being driven by the third defendant, a driver of the second, knocked down the plaintiff’s minor daughter Joyline Johanne.

The minor child sustained injuries as a result thereof requiring treatment for which the plaintiff now claims special damages in the sum of US$4 492-00 and general damages in the sum of US$9000-00.

The parties also identified the dispute as being whether the first defendant, being the insurer, is liable to pay the damages claimed by the plaintiff. I must add, for the sake of completeness, that on 29 June 2011 the plaintiff obtained default judgment against the second defendant in the sums I have already mentioned. Not content with that, he pursued the claim against the first defendant as the insurer.

Mr Chiutsi who appeared for the plaintiff submitted that the plaintiff derives his rights to sue the insurer directly from the provisions of s 23(2) of the Act. Section 23 provides:-

“23: Requirements in respect of statutory policies of insurance

A statutory policy shall be issued by a person who is approved by the Minister as an insurer for the purposes of this Part.

Subject to this section, a statutory policy shall insure such persons or classes of persons as may be specified in the policy in respect of any liability which may be incurred by them in respect of-

the death of, or bodily injury to, any person; and

the destruction of, or damage to, any property caused by or arising out of the use of the motor vehicle or trailer concerned on a road.

A statutory policy shall not be required to cover –

any contractual liability; or

liability in respect of the death of, or bodily injury to, persons who were being carried in or on or entering or getting on to or alighting from the vehicle or trailer concerned when the event out of which the claims arise occurred, to an amount exceeding –

one thousand dollars in respect of any one such person killed or injured; or

five thousand dollars (USD 5000) in respect of any one accident or series of accidents due to or arising out of the occurrence of any one such event, where the vehicle concerned is a vehicle other than an omnibus, or

ten thousand dollars (USD 10 000) in respect of any one accident or series of accidents due to or arising out of the occurrence of any one such event, where the motor vehicle concerned is an omnibus or a commuter omnibus;

or

……

……

Notwithstanding any other law, a person who issues a statutory policy shall be liable to indemnity the persons or classes of persons specified in the statutory policy in respect of any liability which the statutory policy purports to cover in the case of those persons or classes of persons”

Mr Chiutsi interpreted that provision to mean that the limit to statutory

policy cover only relates to those classes of persons referred to in subs (3), that is only those persons who were being carried in, or boarding or alighting from the vehicle concerned when they were either killed or injured. In his view, the use of the words “any liability in subs (2) means that the liability of the insurer in a statutory policy is unlimited where the person claiming does not fall under the category of people being carried, or entering or alighting from the vehicle. He strongly submitted that any other construction would fall short of the legislative intent.

According to Mr Chiutsi, the plaintiff’s daughter having been “outside” the vehicle is not subject to the limits set out in subs (3) and is therefore entitled to recover more than the amount of the insurance cover of US$800-00 given by the first defendant.

The plaintiff should therefore be awarded the special damages of US$4 492-00 and general damages of US$9000-00 which have already been proved to the satisfaction of the court against the second defendant.

Ms Mupanduki who appeared for the first defendant contested that interpretation. She submitted that s 23(3) should be read in conjunction with s 25 of the Act. Insurers are entitled to limit their liability in the insurance cover and where the third party’s claim exceeds the insured amount, the injured party must claim the excess from the insured. She conceded that the first defendant is only liable to the plaintiff only in the event that the second defendant is liable but only to the extent of US$800-00 aforesaid.

Section 25(1) of the Act is a clear and unambiguous provision. It provides:-

“25 Right of injured parties to proceed against insurers

A person who has a claim against a person insured or indemnified in respect of any liability in relation to which a statutory policy has been issued shall be entitled -

in his own name to recover from the insurer any amount, not exceeding the amount covered by the statutory policy for which the person insured or indemnified is liable;

and

to claim and recover from a person insured or indemnified only so much of his claim as exceeds the amount recovered by him from the insurer

Provided that –

the rights of any such person who claims directly from the insurer shall, subject to subs (2), be no greater than the rights of the insured against the insurer;

the right of recovery directly from the insurer shall become prescribed upon the expiry of a period of two years from the date on which the claim arose”.

Obviously stung by the foregoing provision, Mr Chiutsi sought to

argue that the plaintiff’s claim is not covered by s 25(1) as it has been made in terms of s23. I agree with Ms Mupanduki that the plaintiff cannot be allowed to approbate and reprobate at the same time.

Care must be taken, in interpreting the provisions of the Act which form the basis of this dispute, not to lose sight of the legislative intent. As stated by the Supreme Court in S v Nottingham Estates (Pvt) Ltd 1995(1) ZLR 253(S) 256E:

“The primary rule of interpretation is, of course, to endeavour to ascertain the intention of the law maker from an examination of the provision under consideration placed in proper context. A court will commence its enquiry by giving the word its grammatical signification, unless it is clear that the literal sense, when so applied, defeats the legislative intendment. In such event a deviation from the ordinary meaning is justified provided always that the word is sufficiently flexible to admit of another meaning by which such intention can be better effected”.

In my view in enacting Part IV of the Act, the law giver wanted to provide victims of accidents involving a motor vehicle driven on a road in Zimbabwe, whether they are on board or pedestrians as is the case in casu, a remedy to sue the insurer directly for recourse. The law giver then made it compulsory for such insurance to be issued before a motor vehicle can be driven on a road. An injured person is therefore entitled to sue the insurer for “any liability” be it in the form of special damages or general damages.

The use of the word “any” in that section simply means that the nature of the liability claimable in respect of a statutory policy is unlimited. To say that “any” means that the extent of the liability viz-a-viz the quantum, is unlimited, is to stretch the word to elasticity limit.

Clearly the plaintiff has proceeded against the insurer in terms of s 25(1) of the Act because it is that section which accords an injured person the right to proceed directly against the insurer. It is incorrect to say that the plaintiff’s claim is in terms of s 23 because that provision does not create an entitlement to sue.

To the extent that a person is suing an insurer directly in their own name, s 25 applies and the amount claimed under a statutory policy can be any amount “not exceeding the amount covered by the statutory policy”.

We have here an insurer who has issued a statutory policy limiting its liability to US$800-00 but the plaintiff wants to recover much more than that from the insurer when s 25(1)(b) specifically directs that any excess should be recovered from the insured. It makes no sense whatsoever to expect an insurer to be liable to an extent above the amount insured. If that was the case, insurers would therefore peg insurance premiums at very high levels to cover any eventuality. There are other forms of insurance cover available to a prospective insured which would cover much more than the statutory cover.

This application of s 25 has long been adopted by the Supreme Court in Eagle Insurance Co Ltd v Grant 1989 (3) ZLR 278 at 280H to 281A where it stated:

“Section 25 of the Act confers on a claimant the right to recover directly from the insurer, within a period of two years commencing from the date on which such claim arose, any amount not exceeding the amount covered by the statutory policy. The right to proceed against the insurer directly is purely a statutory provision given to a claimant who issues in respect of a statutory policy. It differs from the situation at common law where an injured third party cannot proceed against the insurer directly because there is no contract of insurance between the third party and the insurer” (The underlining is mine).

I therefore conclude that the liability of the first defendant is limited to

the amount covered, namely US$800-00.

Regarding the issue of costs I do not think the first defendant can escape that because it had the opportunity to make an unequivocal tender of that amount but elected to impose conditions in its plea. In fact there was no clear tender of that amount right up to the time the matter was argued. Only then did Ms Mupanduki tender the US$800-00. The plaintiff is therefore entitled to his costs even though his success is very limited.

In the result, it is ordered that:-

The first defendant shall pay the plaintiff the sum of US$800-00 together with interest thereon a tempore morae from the date of the summons to date of payment.

The remainder of the plaintiff’s claim is hereby dismissed.

The first defendant shall bear the costs of suit.

P. Chiutsi, plaintiff’s legal practitioners

Coghlan Welsh & Guest, defendant’s legal practitioners