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Transcript of dietmar Dannecker - Ejustice.moj.na - NAMIBIA … Court/Judgments/Civil/Dannecker... · Web viewNOT...
REPUBLIC OF NAMIBIA
HIGH COURT OF NAMIBIA MAIN DIVISION, WINDHOEKJUDGMENT
Case no: I 2909/2006
In the matter between:
DIETMAR DANNECKER PLAINTIFF
and
LEOPARD TOURS CAR & CAMPING HIRE CC 1ST DEFENDANTBARBARA HAUSNER 2ND DEFENDANTMANFRED HAUSNER 3RD DEFENDANT
Neutral citation: Dannecker v Leopard Tours Car & Camping Hire CC (I 2909/2006)
[2016] NAHCMD 381 (5 December 2016)
Coram: DAMASEB, JP
Heard: 20-22 November 2013; 25-28 February 2014, 13 March 2014 and 4 August 2014; 10-13 August 2015: 14-17 September 2015; 01-04 December 2015; 14 March 2016.
Delivered: 05 December 2016
Flynote: Law of contract - Plaintiff, a Swiss national, conducted negotiations
through email with defendants for the rental of a car to go on safari in Namibia – Plaintiff
involved in an accident with rented car while driving off-road and claiming that the
NOT REPORTABLE
2
defendants misrepresented to him that he had insurance when in reality he did not –
Plaintiff made to pay for damage to car by defendants on the basis that the risk
occurring was not covered – Plaintiff seeking to recover as against second and third
defendants (husband and wife) personally alleging that they represented that they were
a partnership and breached the Close Corporations Act 26 of 1988 and the Short-Term
Insurance Act 4 of 1998.
Held that plaintiff made out case that second and third defendants represented to him
that he enjoyed insurance and that the defendants assumed to have offered insurance
to cover loss arising from plaintiff’s driving of vehicle – Plaintiff bore onus to prove that
the negligent conduct on his part was not responsible for the loss but the
misrepresentations; plaintiff failing to discharge onus;
Held further that plaintiff established alternative claim of unjust enrichment but only
against the first respondent close corporation as plaintiff failed to allege and proof
personal liability of the second and third defendants either under the Close Corporations
Act or the Short-Term Insurance Act.
ORDER
1. The plaintiff’s claim against second and third defendants in their personal
capacities is dismissed with costs, such costs to include costs consequent upon
the employment of one instructing and one instructed counsel;
2. Plaintiff’s claim against the first defendant succeeds in part, and the first
defendant is ordered to pay the amount of N$ 168 963.41 less 15% to the
plaintiff.
3. Plaintiff is awarded interest on the amount of N$ 168 963.41 less 15% at the
legal rate of 20% per annum calculated from the 3 rd of July 2006 to date of
payment.
4. In respect of the order in paragraph 3 above, the plaintiff is awarded costs of suit
against the first defendant consequent upon the employment of one instructing
and one instructed counsel.
3
5. Plaintiff’s claim against first, second and third defendants for the recovery of N$
28 653 is dismissed.
JUDGMENT
Damaseb, JP:
[1] This judgment is divided into the following parts:
Part 1: The context, paras 2-4.
Part 2: The Pleadings, paras 5-12.
Part 3: Plaintiff’s evidence, paras 13-17.
Part 4: Evidence on behalf of the defendants, paras18-34.
Part 5: Submissions, paras 35-42.
Part 6: Issues to be decided, para 43.
Part 7: The burden of proof and the evidential burden, paras 44-45.
Part 8: Was there a misrepresentation by the defendants?, paras 46-52.
Part 9: Analysis, paras 53-60.
Part 10: The alternative claim based on unjust enrichment, paras 61-68.
Part 11: Should the Hausners be (personally) jointly and severally liable,
paras 69-72.
Part 12: Order, para 73.
Part 1: The context
[2] The first defendant, a close corporation, is in the car rental business and is jointly
owned by the second and third defendants who are husband and wife: Where I refer to
the second and third defendants collectively, I will refer to them as the ‘Hausners’. It is
common cause that the first defendant is registered under the Close Corporations Act
26 of 1988 (‘Close Corporations Act’) and has a legal personality separate from its
members.
4
[3] The plaintiff, a Swiss national, sues the defendants, jointly and severally, for the
repayment of moneys that he paid in respect of damage caused by him to a vehicle he
had hired for use while on a safari in Namibia. He had booked the vehicle online from
his homeland, Switzerland, having taken an interest therein based on a prospectus
published on the internet by ‘Leopard Tours’.
[4] It is common cause that the first defendant is the owner of the vehicle (‘the
rented car’) rented by the plaintiff for his safari in Namibia. It is also common cause that
the first respondent was at the material time not a registered short-term insurer under
the Short-term Insurance Act 4 of 1998 (‘Short-term Insurance Act’); neither did it hold,
in respect of the rented car, any insurance policy with a registered insurer to cover any
loss or damage that might be occasioned to the rented car by any person renting it for
use in Namibia.
Part 2: The pleadings
Particulars of claim
[5] The plaintiff alleged in his particulars of claim as follows:
‘6. In or about the 25th of January 2004, First Defendant represented by Second and
Third Defendants alternatively Second Defendant and Third Defendants personally representing
their partnership known as Leopard Tours made representations to the Plaintiff by way of their 8
page internet prospectus stating among other allegations the following:
6.1 that they were letting out 4x4 camping vehicles to tourist visiting Namibia;
6.2 that they are not the cheapest but the best suppliers of vehicles equipped for
safaris in Namibia;
6.3 that there are no “hidden or extra” costs if one enters into a contract with them for
the hire of a 4x4 camping vehicle;
6.4 that included in their all inclusive daily tariff there is a super insurance cover
including CDW, TLW and ACDW insurance cover providing a 95% protection and
a reduction of the excess to € 1500,00;
6.5 that the vehicles are specifically equipped for “Africa Tours”;
5
7. Relying on and being persuaded by First alternatively Second and Third Defendants
representations, Plaintiff entered into a hire contract with First alternatively Second or
Third Defendants for the hire of a 4x4 camping vehicle at a daily rate of € 148,90 for a
period of 28 days for the period 1 November 2004 to 28 November 2004 with the
purpose of using the said vehicle for a safari trip in Namibia.
8. Plaintiff took delivery of the said vehicle with registration number N 72140 W on the 1 st of
November 2004.
9. On taking delivery of the vehicle, Plaintiff was required to sign Defendants “rental
contract agreement”, a copy of the front portion thereof is annexed hereto marked
Annexure “A” and a copy of the rear portion is annexed hereto marked Annexure “B”.’
[6] The plaintiff alleged further that on taking delivery of the rented car he was
required to, and signed, the defendants’ ‘rental agreement’ which, amongst others,
stated that the rented car is ‘insured in terms of the provisions of the Motor Vehicle
Insurance Act and under an Insurance Policy …for loss and or damage to the vehicle’
on condition that the plaintiff was not negligent. The agreement goes on to state that
‘the renter shall be responsible for a first amount (excess) in respect to the vehicle…as
displayed on the current tariff card published by the owner’.
[7] The particulars proceed to allege that:
‘11.1 On Thursday, the 18th of November 2004, at approximately 11:00 AM Plaintiff in
attempting to cross a river at a place called “Baaidjie” got stuck with his vehicle in
the river. Subsequently, the river came down in flood and overturned the vehicle
and caused substantial damage to the vehicle.
11.2 Plaintiff was not negligent in taking the decision to try and cross the river in
particular for the following reason:
a) The river was not in flood at the time when the attempt to cross it was
made although there was some water in the river;
b) The vehicle was a 4x4 vehicle of which the Defendant had made
representations that it is suitable for safaris in the African bush which
includes the crossing of rivers;
6
c) Plaintiff walked through the river to test the road;
d) Plaintiff saw that other vehicles had passed through the river;
e) The damage to the vehicle was not caused by Plaintiff’s conduct but by
the subsequent event, namely that the river unexpectedly came down in
flood;’
12 . . . .
13 . . . .
‘14.A When making the representations contained in paragraphs 6.4 and 10 above, the
Defendants knew same to be false in that the Defendants knew that the First
Defendant had no such insurance cover which it could offer to the Plaintiff,
alternatively the Defendants were negligent in making these representations as
aforesaid in the First Defendant at all relevant times hereto was never registered
as a short term insurer.
14.B Further Plaintiff avers that any form of insurance so offered by the First
Defendant to the Plaintiff was invalid and/or unlawful in that it did not comply with
the peremptory provisions of the Short Term Insurance Act, 1998 inter alia for the
reason that at all relevant times hereto the First Defendant was never registered
as a short term insurer in terms of the said Act as a consequence of which it
could not offer and/or give any insurance cover to the Plaintiff.
14.C When the Defendants made this representation they intended the Plaintiff to act
thereon and to inter alia pay the First Defendant the rates so charged by it.
14.D In addition to the aforesaid the Defendants further made this representation and
on such basis induced the Plaintiff to pay the First Defendant the sum of
N$168 963,41 ostensibly because the Plaintiff’s conduct had the result that he no
longer enjoyed any insurance cover, well knowing that the Plaintiff had no cover
at all in the first place.
14.E Plaintiff was induced by the representation so made as aforesaid and
furthermore made the payment of N$168 963,41 whereas, had he known the true
facts, he would not have made any payment to the Defendants at all.
14.F In and as a result of the aforesaid misrepresentations the Plaintiff has suffered
damages in the sum of N$168 963,41.
15. The payments were made by Plaintiff as a result of Plaintiff’s bona fide and
reasonable but mistaken belief induced by Defendants that Plaintiff was under a
7
contractual, alternatively delictual obligation to pay the said sums referred to in
Paragraph 13 above to Defendants. After Plaintiff had paid the said amounts to
Defendant and after Plaintiff had obtained legal advice on Plaintiff’s contractual
and delictual responsibilities towards the Defendants based on the
representations made by Defendants and the facts of the case, it transpired that
Plaintiff had overpaid to Defendants the said amount of N$28 653,00 and
N$168 963,41 which amounts was not due and payable to the Defendants.
15(a) On the 3rd of November 2009, Plaintiff became aware for the first time that
Defendants repaired and renovated the said vehicle camper with
registration number N 72140 W at a cost substantially lower that the said
N$168 963,41 claimed by Defendants from Plaintiff and paid by Plaintiff
to Defendant as costs of repair of the vehicle.
16. In the circumstances, First alternatively Second and Third Defendants have been
unjustly enriched at the expense of the Plaintiff and Plaintiff is entitled to the
repayment of the said amounts of N$28683,00 and N$168 963,41, alternatively
the amount by which the amount of N$168 963,41 paid by Plaintiff to Defendants
exceeds the actual costs of repairs of the said vehicle.’
[8] The plaintiff seeks the following relief:
‘1. Payment in the amount of N$168 963,41;
Alternatively, the amount by which the amount of N$168 963.41 paid by Plaintiff
to Defendants exceeds the actual costs of repair of the said vehicle.
2. Payment in the amount of N$28 653,00;
3. Interest on the abovementioned amounts of N$168 963,41 and N$28 653,00 at
the legal rate of 20% per annum calculated from the 3 rd of July 2006 to date of
payment.’
Defendants’ plea
[9] The defendants’ plea to the plaintiff’s claim is, firstly, that the plaintiff hired the
rented car from the first defendant and that the Hausners were misjoined as they did not
contract with the plaintiff. It is denied that the Hausners acted in their personal
capacities nor that they contracted with the plaintiff as members of a partnership under
8
the name and style of Leopard Tours. The defendants plead that the plaintiff breached
the terms of the rental agreement which prohibited him from driving the rented car
through riverbeds or in water.
[10] The defendants’ plea is based on para 8 of the rental contract executed by the
plaintiff prior to taking possession of the car, which states that ‘Insurance excludes
damage caused because of driving through water’ and that the party having caused
such damage by driving through water will be responsible for the damage. It is further
pleaded that the plaintiff breached his contractual obligation by not adhering to ‘the
terms and conditions stipulating that no insurance cover exists in respect of damages
caused to the rented car ‘by driving through water’. The plea states that the ‘insurance
cover’ agreed between the plaintiff and the defendants ‘specifically excluded’ any
damage sustained to the rented car by driving through water and that the plaintiff was
therefore personally liable for the damage caused to the rented car.
[11] The obligation to compensate the defendants for the damages so caused was, it
is pleaded, not dependent on first defendant being a registered insurer under the Short-
term Insurance Act. It is denied, in any event, that the defendants made any
representation that they were short-term insurers. It is equally denied that any
representation made induced the plaintiff to pay the claimed amount. It is pleaded that
the payment made was based on an ‘assessment’ of damages provided by Mr Harry
Riegel at the plaintiff’s request. The payment made was, therefore, not in error,
alternatively such error was not bona fide, as plaintiff agreed to pay the claimed amount.
[12] The defendants admit that first defendant had no insurance cover with a
registered insurer but was ‘self-insured’ but that the fact that the first defendant was not
insured with a short-term insurer is irrelevant as it did not demand monthly contributions
and/or other levies or contributions and excess payments from the plaintiff which could
have the effect that the defendants acted contrary to andor in violation of the Short-
Term Insurance Act.
9
Part 3: Plaintiff’s evidence
[13] At the end of the plaintiff’s case, the defendants brought an application for
absolution from the instance which I dismissed because I was satisfied that there is
evidence upon which a court, applying its ‘mind reasonably’ to such evidence, could or
might find for the plaintiff. I had comprehensively summarised the plaintiff’s s evidence
in the absolution ruling and incorporate it as part of this judgment. The neutral citation
for that judgment is Dannecker v Leopard Tours Car & Camping Hire CC (I 2909/2006)
[2015] NAHCMD 30 (20 February 2015).
[14] The evidence adduced on behalf of the plaintiff established that the plaintiff had
dealings with the Hausners in their personal capacities prior to him arriving in Namibia
and taking possession of the rented car. I also found established prima facie that the
Hausners made misrepresentations to the plaintiff that insurance for his use of the car
was offered to him.
[15] As regards the misrepresentation, the plaintiff’s evidence established that the car
rental agreement between the parties was predicated on the understanding that the
plaintiff enjoyed insurance cover for his use of the car. I further found that the evidence
established a prima facie case of a breach of the Short-Term Insurance Act which
prohibits the offering of any short term insurance by any person who is not registered.
[16] I found that there was an inference in the plaintiff’s favour that the defendants
represented to him that he was covered by insurance according to the applicable laws
of Namibia. An inference in his favour is that he assumed that such insurance was
compliant with the only applicable legislation.
[17] That is the backdrop against which the defendants came to testify on their behalf.
Part 4: Evidence on behalf of the defendants
10
Mr. Hausner
[18] According to Mr. Hausner (third defendant), he and Mrs. Hausner (second
defendant) are the only members of the Close Corporation Leopard Tours and Safaris
CC whose trading name is Leopard Tours Car and Camp Hire. It was in January 2004
that the plaintiff contacted their office wanting to hire two vehicles. When the plaintiff so
inquired it was apparent to him from their internet prospectus what ‘tariffs and excess
payments they offered’ in respect of ‘insurance cover’. It would also have been apparent
to the plaintiff from the prospectus that he was dealing with a duly registered close
corporation. Mr Hausner stated that it was only in an email of 02 February 2004 that the
plaintiff enquired whether the price offered in the prospectus included comprehensive
insurance ‘with no hidden costs’. It was then made clear to him that there would be a
‘minimum self-contribution in respect of insurance cover required’ amounting to € 1500.
[19] He further testified that the plaintiff and his wife arrived in November 2004 and at
the defendant’s business premises completed ‘the necessary formalities’ to hire only
one vehicle. It was on this occasion that, according to the third defendant, he and
second defendant explained to the plaintiff ‘the more material terms of the agreement,
those that were regarded as essential at that stage’. According to him, they included
‘but were not restricted to’:
a) the rates pertaining to the rental agreement;
b) the type of vehicle rented;
c) the precautions the plaintiff had to heed in terms of routes to take and
those to avoid; and not during driving through water;
d) that damages caused by driving through water or by deviating from
national and or marked roads, were not covered by any insurance and
thus borne by plaintiff.
[20] The plaintiff then signed the rental agreement in the presence of his wife and Mr.
Lange, who also testified in these proceedings. Before he did so, according to Mr.
Hausner, Mrs Hausner enquired from the plaintiff ‘certain details as to the route they
intended to take and the like’. His attention was also drawn to the terms and conditions
set out on the contracts’ back page. With the contract, the plaintiff was also handed a
11
booklet on tips. The booklet warned plaintiff and his wife ‘of things to be careful about
and things not to do including that driving through water would be at their own risk.’ The
plaintiff then signed an acknowledgement of receipt of the booklet. They proceeded
outside where the third defendant explained to plaintiff and his wife the ‘specifics’
concerning the rental vehicle, including ‘precautions and specifics concerning the
vehicle.’
[21] On 18 November 2004 the second and third defendants received a distress call
from either plaintiff or his wife. The plaintiff narrated that they got stuck in a river in the
north and that they wanted to be assisted by the defendants. According to the third
defendant, it was clear to him that the plaintiff and his wife wanted the defendants to
assist them and to pay the defendants the expenses involved in doing so. The third
defendant secured the services of a Mr. Falken who went to extract the vehicle which
was a total ‘write off.’ The third defendant drove up to the north to fetch the plaintiff and
his wife. On the way he struck a guinea fowl resulting in damage to his vehicle. The
party spent the night in a hotel at Outjo.
[22] Third defendant testified that he made clear to the plaintiff that the damages to
the rented car would be for plaintiff’s account as that was not covered under the
insurance cover because of his negligence and not heeding the warning not to drive
through water. This the plaintiff accepted. On the assumption that the vehicle was a
‘total write off’ the third defendant informed the plaintiff that he had to pay defendants
the book value of the vehicle which then stood at N$ 300,000. Plaintiff opted to obtain
an assessment of the damages to the car and undertook to pay only for such assessed
damage. Plaintiff asked for such assessment from Mr. Harry Riegel which amounted to
N$ 168,963.41. Plaintiff then gave instruction to his bank to pay the damages as
assessed by Mr Riegel. The bank then gave a guarantee to pay the amount on the
plaintiff’s behalf as the defendants wanted security before plaintiff left. The plaintiff upon
his return to Switzerland sought to renege on the undertaking to pay the assessed
damage but the defendants were able to cash in on the security given by the plaintiff’s
bank.
12
[23] The third defendant denied that he or his wife told the plaintiff that the rented
vehicle was insured ‘via an official insurance company’. He stated that after the damage
occurred to the vehicle, he explained to the plaintiff that the defendants were ‘self-
insured’ which meant that:
‘we carried our own risk in respect of vehicles subject obviously thereto that certain
contributions and excluding excess payments had to be carried by the client or that certain
exclusions in respect of such cover applied if the client acted in certain aspects negligently or
contrary to the provisions of the rental agreement such as in this instance.’
[24] Mr. Hausner testified that this kind of insurance is ‘quite common in the industry’.
[25] Mr. Hausner testified that the first defendant was compensated by the plaintiff for
the costs associated with bringing the plaintiff and his wife back to Windhoek.
[26] According to Mr Hausner, the damages to the rental vehicle arose ‘as a result of
the plaintiff driving through water, whether standing, flowing, slowly flowing water or
whatever, which is a prohibiting clause in our agreement and an exception to the cover
regulated under our insurance cover, whether self-insured or not.’ The plaintiff’s alleged
breach is also said to be that he deviated from the terms of the rental agreement by not
staying on normal marked roads but took a route off the normal marked road. He said
that if the plaintiff took the ‘normal marked road, he would have possibly been able to
cross the river without difficulty.’
[27] The net effect of the third defendants’ evidence is that the first defendant had
assured all risks arising from the damage caused to the rented vehicle as long as the
plaintiff, as renter, complied with the terms of hire expressly spelled out in the rental
agreement. According to him, it was agreed by the parties, as signified by the plaintiff’s
signature of the agreement, that if the plaintiff acted in breach of the exclusions in the
contract, he would be liable for the loss arising from such breach.
13
[28] By reference to photographs of the scene at which the vehicle was found, Mr
Hausner testified that the plaintiff drove the vehicle on a rough terrain which had no
access road.
Mr Falken
[29] Witness Mr Lars Falken testified that he was the motor mechanic who was
contacted by the third defendant on 23 November 2004 to recover a 4x4 vehicle
belonging to the first defendant from a river in the Kaokoland area. He testified that he
took the pictures of the vehicle which indicates that where the vehicle was found lying
on its right side, there was no road, and was downstream in the riverbed.
Mrs Hausner
[30] Mrs Hausner (second defendant) testified that she and the third defendant are
members of the first defendant and that she was responsible for all the correspondence
between the plaintiff and the first defendant which also included the conclusion of the
rental agreement when the plaintiff and his wife arrived in Namibia. She testified that
she and the third defendant explained to the plaintiff and his wife the terms of the
agreement including the dangers involved in driving through water during the rainy
season; the consequence that any damages would be for the account of the plaintiff as
renter and that this would not be covered by the insurance.
[31] Mrs Hausner testified that she never made any representations to the plaintiff
that they were insured by an insurance company or that the plaintiff was fully covered
because the defendants could not offer such insurance. She however testified that it
was explained to the plaintiff that there was a certain excess allowance that the plaintiff
would have to cater for in the event of damages. According to her, in the car rental
industry, any damage arising from accidents would be borne by the renter personally.
Mrs Hausner testified that since the plaintiff deviated from the marked routes and roads
into an area which does not have any marked route/road and got stuck in a river which
14
had water in it, these qualified as one of the exclusions which are not covered by any
insurance.
[32] Mrs Hausner testified that the instructions to the plaintiff’s bank and insurance
company in Germany to pay for the damages were done freely and not under any form
of duress from the defendants. The plaintiff at that stage already knew that the
defendants were self-insured and that they carried their own risk and denied the
allegation that the plaintiff’s passport and that of his wife were kept by the second and
third defendant as an assurance that the damages to the vehicle would be paid for
before they could leave the country.
[33] Mrs Hausner admitted under cross examination that the first defendant’s
registered name was not properly reflected as a CC in all correspondences with the
plaintiff but that such omission was not willful and was done ‘not knowing’ that it is in
violation of the Close Corporation Act.
[34] It was established during cross examination that the amount paid by the plaintiff
was not based on a true reflection of the repairs done to the rented. No invoices of the
actual costs of such repairs were provided.
Part 5: Submissions
The plaintiff
[35] Mr Strydom appeared for the plaintiff. According to him the evidence presented
on behalf of the plaintiff has passed the evidential burden of proving his case on a
balance of probabilities. Firstly, the evidence shows that there is no way that the plaintiff
could have known that he was dealing with the CC since the internet prospectus, the
email correspondences from the defendants, the tax invoice rendered by the
defendants, the accounts into which the money was paid all depicted the personal
names of the defendants. This impression was strengthened by the evidence of the
second defendant which confirmed that the registered name of the first defendant did
15
not appear on any of the stationaries used. Counsel submitted that the second and third
defendant should be personally liable by virtue of the admitted contraventions of the
Close Corporation Act.
[36] Counsel submitted that since the second and third defendant are members of the
first defendant, the Close Corporations Act applies with regard to holding the members
personally liable in cases were the English name of the close corporation is used
without the abbreviation1; or where the business of the close corporation was being
carried on with fraudulent intentions2; where the name and registration number is not
reflected on all stationaries used3 as well as on all correspondences with third parties.4
[37] Secondly, counsel pointed out that the main reason why the plaintiff chose to do
business with the defendants is because of the type of insurance offered, ie ‘super
cover’ with reduces access that had to be paid. The true facts that the defendants were
self-insured were not disclosed at the relevant time and there was no way that the
plaintiff would have determined the true facts. Counsel submitted that the failure on the
part of the defendants to firstly disclose the true facts and secondly to rectify the terms
on the reverse side of the rental agreement, which indicated that the defendants were
insured by an insurance company, fraudulently induced the plaintiff into signing the
rental agreement. Based on these misrepresentations, counsel submitted that the
exclusions and prohibitions would therefore not apply.
[38] Mr Strydom argued that the evidence demonstrates that the defendants did not
comply with s 66 of the Short-term Insurance Act which required them to disclose all
material facts associated with the type of insurance offered, more so when they had the
opportunity to explain to the plaintiff the limitations included before signing the rental
agreement. Accordingly, any damages suffered as a result of such misrepresentation
should be borne by the defendants as stipulated under s 2, 66 and 68 of the Act.
1 Section 22(1) and 63(a).2 Section 64.3 Section 23(1).4 Section 23(2).
16
On behalf of the defendants
[39] The gravamen of Mr Mouton’s argument on behalf of the defendants is that (a)
the plaintiff’s causes of action as pleaded are not supported by the evidence; (b) that
the plaintiff’s claim does not assail the legality of the rental agreement based on
misrepresentation; (c) that the plaintiff did not plead violation of either the Close
Corporations Act or the Short-Term Insurance Act to found liability. In his written
submissions on behalf of the defendants, Mr Mouton steers clear of suggesting that any
insurance was offered on behalf of the first defendant to the plaintiff in either the
prospectus or the email correspondence. He was content to state that the
correspondence demonstrates that ‘the best insurance cover possible’ was the least of
the plaintiff’s concerns and that instead he was more preoccupied with getting the best
rental price for the car. According to Mr Mouton, at the time that the plaintiff paid over
the amount being claimed he was fully aware that the first defendant was ‘self-insured’
and paid that amount on the strength of an estimate of loss determined by Mr Riegel.
[40] Mr Mouton submitted that the allegation that the first defendant is a partnership
cannot be sustained because the abbreviations ‘CC’ appears both on the first and last
page of the website as part of the name Leopard Tours and Camper Car Hire CC and
that the plaintiff had seen this prior to coming to Namibia. Counsel added that the
plaintiff cannot rely on a contravention of the Close Corporations Act since this is not
part of his pleaded case but rather on a partnership to hold the second and third
defendant personally liable.
[41] As regards the rental contract, counsel submitted that since the validity and
enforceability of the contract is not challenged, the defendants were entitled to retain the
amount paid as a result of the damage to the vehicle resulting from actions clearly
prohibited by the agreement and determined in terms of an oral agreement based on
the report of Mr Harry Riegel regardless of the type of insurance provided and
irrespective of whether the first defendant ought to have been registered in terms of the
Short-term Insurance Act.
17
[42] As regards the enrichment claim, counsel submits that the plaintiff’s actions
caused loss and damage to the defendants as a result of acting contrary to the terms of
the rental agreement and as such, the defendants could not have been enriched in any
manner.
Part 6: Issues to be decided
[43] I have to decide, firstly, if the plaintiff proved that the defendants misrepresented
to him that he was being insured for his use of the rented car. Secondly, I must
determine just what was covered in such insurance. Thirdly, I must determine whether
the misrepresentations made to the plaintiff were the cause of his loss and damages. If
the plaintiff fails on the misrepresentation claim, I must finally decide if he made out a
case on the alternative claim based on unjust enrichment.
Part 7: The burden of proof and the evidential burden
[44] It is trite that he who alleges must prove. A duty rests on a litigant to adduce
evidence that is sufficient to persuade a court, at the end of the trial, that his or her
claim or defence, as the case may be should succeed. A three-legged approach was
stated in Pillay v Krishna 1946 AD 946 at 951-2 as follows: The first rule is that the party
who claims something from another in a court of law has the duty to satisfy the court
that it is entitled to the relief sought. Secondly, where the party against whom the claim
is made sets up a special defence, it is regarded in respect of that defence as being the
claimant: for the special defence to be upheld the defendant must satisfy the court that it
is entitled to succeed on it. As the learned authors Zeffert et al South African law of
Evidence (2ed) at 57 argue, the first two rules have been read to mean that the plaintiff
must first prove his or her claim unless it be admitted and then the defendant his plea
since he is the plaintiff as far as that goes. The third rule is that he who asserts proves
and not he who denies: a mere denial of facts which is absolute does not place the
burden of proof on he who denies but rather on the one who alleges. As was observed
by Davis AJA, each party may bear a burden of proof on several and distinct issues
18
save that the burden on proving the claim supersedes the burden of proving the
defence.5
[45] In South Cape Corporation (Pty) Ltd v Engineering Management Services (Pty)
Ltd1977 (3) SA 534 (A) at 548A-C, Corbett JA discusses the distinction between the
burden of proof and the evidential burden as follows:
‘As was pointed out by DAVIS, A.J.A., in Pillay v Krishna and Another, 1946 AD 946 at
pp. 952 - 3, the word onus has often been used to denote, inter alia, two distinct concepts: (i)
the duty which is cast on the particular litigant, in order to be successful, of finally satisfying the
Court that he is entitled to succeed on his claim or defence, as the case may be; and (ii) the
duty cast upon a litigant to adduce evidence in order to combat a prima facie case made by his
opponent. Only the first of these concepts represents onus in its true and original sense. In
Brand v Minister of Justice and Another, 1959 (4) SA 712 (AD) at p. 715, OGILVIE
THOMPSON, J.A., called it "the overall onus". In this sense the onus can never shift from the
party upon whom it originally rested. The second concept may be termed, in order to avoid
confusion, the burden of adducing evidence in rebuttal ("weerleggingslas"). This may shift or be
transferred in the course of the case, depending upon the measure of proof furnished by the
one party or the other. (See also Tregea and Another v Godart and Another, 1939 AD 16 at p.
28; Marine and Trade Insurance Co. Ltd. v Van C der Schyff, 1972 (1) SA 26 (AD) at pp. 37 -
9.)’
Part 8: Was there a misrepresentation by the defendants?
[46] I made it clear in the absolution ruling that the second and third defendants made
material misrepresentations in regard to the insurance offered to the plaintiff. In addition,
that they acted in breach of the Close Corporations Act in material ways. I do not wish
to burden this judgment with those findings which can conveniently be read in
paragraphs 32-50 of the absolution judgement.6 The second and third defendants
admitted under oath that the representation made to the plaintiff that they were insured
under the applicable insurance law, was false and say that it was not intentional.
5 Supra at 953.6 Dannecker v Leopard Tours Car & Camping Hire CC (I 2909/2006) [2015] NAHCMD 30 (20 February 2015).
19
[47] Besides, it became apparent during the cross-examination of the Hausners that:
a) The online prospectus on the strength of which the first defendant
allegedly dealt with the plaintiff was in the name of Leopard Tours Car and
Camping Hire CC, which is not the same name under which the property
registered Close Corporation (Leopard Tours Safaris CC);
b) The second defendant’s admission of the citation of the first defendant as
Leopard Tours Car and Camping Hire CC was improperly made;
c) None of the email correspondence written to the plaintiff by the second
defendant complied with the peremptory provisions of Section 22, 23, and
82 of the Close Corporation Act;
d) The payments made by the plaintiff in respect of the car’s rental were all
into the private account of the second and third defendants;
e) The invoices generated in demand of payment by the plaintiff for the car’s
rental were not in the name of the first defendant, and materially, were in
violation of the Close Corporations Act in that the registration number was
not stated, nor were the names of the members provided;
f) The document on which the defendants rely for the allegation that the
plaintiff was warned about not driving through water and to keep to the
marked roads, was not in the name of the registered close corporation.
[48] Upon being placed on their own defence, the second and third defendants
confirmed the breaches of the Close Corporations Act and say they did so in ignorance
of the law.
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[49] The defendants in their plea stated that the plaintiff by driving through water
forfeited the right to claim under 'the insurance policy' agreed by the parties in terms of
the rental agreement. Under oath they vehemently denied offering any insurance to the
plaintiff. They maintained that what they conveyed was that they were self-insured and
that the plaintiff would be covered only in respect of damage not due to his negligence.
Such a version is not supported by the email correspondence. The defendants denied
under oath that they represented to the plaintiff that they were a registered insurer or
that the rented car was covered under an insurance policy. The agreement proves the
contrary and they consistently in their email exchanges with the plaintiff conveyed to
him that they were offering him the ‘best insurance’. The defendants denied under oath
that the plaintiff was required to pay an excess as part of the insurance policy. The
agreement says the very opposite.
[50] What I find very disconcerting about the Hausners is that they strenuously
disavowed any suggestion that insurance was offered to the plaintiff when the objective
facts and the pleadings point in the opposite direction.
[51] I observed the Hausners in the witness box and it was clear that they tailored
their evidence as they went along to fit a version most favourable to them regardless of
what the objective evidence was. They gave contrived and implausible interpretations of
their actions and conduct on representations made to the plaintiff about insurance. They
quite simply were not credible witnesses on that issue and the version of the plaintiff is
to be preferred on the issue whether or not the defendants represented that he enjoyed
insurance for the use of the rented car.
[52] In the absolution judgment I made clear, and I repeat here, that a statement of
fact made without the honest belief of its truth, is fraudulent (para 41 of the absolution
judgment). On the defendants’ own version, the references in the rental agreement to
insurance were not true but they did not realise it was so. In other words, they were
clearly reckless as to the veracity of what they were representing. That qualifies as
fraud: Derry v Peek 14 AC 33, cited with approval in R v Meyers 1948 (1) SA 375 (A) at
382-383.
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Part 9: Analysis
[53] The plaintiff came to court on two causes of action: The first is based on the
allegation that the defendants misrepresented to him that they had insured him fully in
respect of any damage to the vehicle he rented from them. As part of that claim, his
case is that the defendants held out to him that he would have the benefit of an
insurance cover and that the deposit and payments he made to the defendants under
the contract included a premium in respect of an insurance that would cover him for the
damage that was occasioned to the vehicle he rented for his ill-fated safari in Namibia. It
is only after the damage to the rented car that he found out that the defendants in fact
had no insurance with an insurer and that, as they said, they were ‘self-insured’. He
therefore seeks to recover from the defendants the amount he paid over to them after
the damage to the vehicle as, according to him, he ought not to have paid it as the
damage to the vehicle was within the contemplation of the insurance offered by the
defendants and accepted by him.
[54] In the alternative, the plaintiff’s case is that the defendants repaired the vehicle
for considerably less than the amount that they demanded (and he paid to them) as
representing the value for the repairs to the vehicle.
[55] To succeed on his claim under misrepresentation, the plaintiff has to establish on
a balance of probabilities that he was offered insurance in respect of the rented car
which he accepted and the terms of that insurance. In addition, whether it is fraudulent
or negligent misrepresentation, that cause of action is delictual in nature although
arising from contractual terms and the plaintiff bears the onus to prove that the loss was
the result of the misrepresentation. (In respect of fraudulent misrepresentation, see
Caxton Printing Works (Pty) Ltd v Tvl Advertising Contractors Ltd 1936 TPD 209 at 215
and Ruto Flour Mills (Pty) v Adelson (2) 1958 (4) SA 307 (T) 310F; and in regard to
negligent misrepresentation: Bayer South Africa (Pty) Ltd v Frost 1991 (4) SA 559 (A) at
570D-F).
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[56] The plaintiff’s case appears to be that he was offered ‘full’ or ‘comprehensive’
insurance which would cover him for the loss to the vehicle from driving through a
riverbed. The difficulty facing him is that such a proposition is directly in conflict with the
very rental agreement on which he, amongst others, relies for the existence of an
insurance cover.
[57] I have seen the photographs presented in evidence as part of the defendants’
case depicting the location where the rented car got stuck in the river and was
overturned by the flash flood. It became quite clear to me that the route that the plaintiff
followed was most unsuited to drive through even if I were to accept that the insurance
covered him for driving through a riverbed. The evidence led by the defendants and
which remains undisputed is that the plaintiff entered the riverbed on an unmarked road
and at a point where there was no road or vehicle tracks.
[58] The only basis on which the plaintiff can succeed with his claim under an
insurance cover offered and accepted, for which he bears the onus, is that the
insurance cover gave him a carte blanche (without losing cover) to drive through
riverbeds and unmarked roads regardless of the dangers inherent therein and the clear
terms of the rental agreement which states the opposite. Such a term he has not proved
either based on the representations made or what is common practice in the industry.
[59] I am not prepared to accept Mr Strydom’s submission that the defendants should
be held liable under the provisions of the Short-Term Insurance Act, regardless of
whether the plaintiff breached the terms of the rental agreement, because that is not the
plaintiff’s case. In other words, as Mr Mouton correctly submitted, liability is not being
attributed in the pleadings on the defendants on the basis that the loss suffered by the
plaintiff resulted from the breach of the Short-term Insurance Act.(Van der Berg v
Chairman of the Disciplinary Committee (Oranjemund CDM (Pty) Ltd and Others 1991
NR 417 (HC) at 421B-C. Mr Strydom did not move the court, as his client was entitled to
do, for an amendment after the evidence to place reliance on the provisions of the
Short-Term Insurance Act to found liability in the terms that he submitted in argument. ( I
23
A Bell Equipment Company (Namibia) (Pty) Ltd // Roadstone Quarries CC (I 601/2013 &
I 4084/2010) [2014] NAHCMD 306 (17 October 2014), para 40 and 49).
[60] It follows, therefore, that the plaintiff has failed to prove that the insurance offered
by the defendants (and accepted by him through the representations made to him)
covered the loss to the vehicle arising from him driving through a riverbed, on an
unmarked road and at a point on the river where there were no vehicle tracks.
Part 10: The alternative claim based on unjust enrichment
[61] It is common cause that the plaintiff paid to the Hausners the amounts of N$168
936.41 and N$ 28 653, the latter before his return home and the former through his
bank in Switzerland. His particulars of claim state that he made the payments as a
result of a bona fide, reasonable but mistaken belief induced by the defendants that he
was under a contractual or delictual obligation to pay. He alleged that after he made the
payments he obtained legal advice suggesting that he ought not to have made the
payments as such amounts were not due and payable to the defendants.
[62] The particulars put the defendants on notice that the plaintiff seeks to recover
from them in respect of the amount paid for the estimated damages to the rented car
‘the amount by which the amount of N$168 963.41 paid by the Plaintiff to Defendants
exceeds the actual costs of repairs of the said vehicle.’ The defendants were afforded
ample opportunity both through the discovery process and during the trial to present
proof of the repairs done to the vehicle as a result of the damage caused to it whilst
under the plaintiff’s control and possession. None was forthcoming.
[63] The third defendant in fact testified that he ‘does not have the exact details of all
the costs containing the repairs to the vehicle’ and could not present the invoices to
prove the exact damage suffered. The exact cost of repair to the vehicle and by whom
the repairs were done is evidence peculiarly within the defendant’s knowledge. They
bore the evidential burden to show (a) that the vehicle was repaired, and (b) the costs of
the repairs. Had they done that, the evidential burden would have moved back to the
24
plaintiff (as part of his ‘overall onus’) to prove that the repairs were not necessary or
were not reasonable in the circumstances.
[64] The defendants’ failure to produce the proof of repairs justifies the inference that
they did not repair the vehicle and were therefore not entitled to the payment made to
them by the plaintiff. The amount paid was not a penalty by any description which the
plaintiff was required under law or contract to pay to the defendants; neither was it a
donation. Mr Riegel who provided the estimate of damages did not suggest that the
rented car was a write off and that the amount paid represented the replacement value
of the car.
[65] The reason for the payment was to compensate the defendants for the repairs
that were still to be done based on an estimate provided by Mr Riegel. If the repairs
were not done the justification for the payment did not exist. The third defendant
testified that he did a ‘few simple things’ by way of repairs and ‘cleaned’ the rented car
and that he did not remember who did the repairs to the vehicle.
[66] I am satisfied, therefore, that the plaintiff established on balance of probabilities
that the first defendant had not done repairs to the vehicle and was not entitled to the
payment it received for the repairs based on the Riegel estimate. The first defendant
was thus enriched at the plaintiff’s expense.
[67] The third defendant suggested during the trial, and it was not disputed by the
plaintiff, that the first defendant paid VAT of 15% to the Receiver of revenue from the
payment received from the plaintiff. Since the payment was not for goods or services
received from the plaintiff, it is not clear to me on what basis the amount paid attracted
VAT; but since the payment of VAT was not challenged I must accept that the first
defendant made it (rightly or wrongly) to the revenue authorities and that the plaintiff will
not be entitled to recover the full amount.
[68] That leads me to the amount of N$ 28 653 paid by the plaintiff to the Hausners.
The Hausners made clear that after the incident the plaintiff contacted them and
25
requested to be extracted from the place where the vehicle was overturned. They
incurred expenses to get there and hired a recovery vehicle to extract the vehicle from
the scene of the accident. They, as I understand the evidence, billed the plaintiff for the
expenses incurred which were clearly itemized by the defendants. How the plaintiff
could not be held liable for those expenses is beyond me and his refusal to accept
liability for those expenses is clearly meritless. He failed to make out the case for the
recovery of that amount.
Part 11: Should the Hausners be (personally) jointly and severally liable?
[69] The consequence flowing from the conclusion that the Hausners made fraudulent
misrepresentations about the insurance offered to the plaintiff is that the payments in
respect of the implicated transaction were made to the second and third defendants and
not to the first defendant. The plaintiff therefore established on balance of probabilities
that he was made to understand that those defendants were the contracting parties. But
that conclusion relates to the misrepresentations made in regard to the insurance. As
already pointed out, I am not satisfied that the plaintiff made out the case to found
liability based on the misrepresentation.
[70] Liability arising from the alternative claim for unjust enrichment falls on a different
footing. That claim relates to payments made for the repairs when the plaintiff was fully
aware that the defendants disavowed any responsibility to make good the damage
based on an insurance. The alternative claim is therefore unrelated to the
misrepresentation being attributed to the second and third defendants in their personal
capacities. It is common cause that the rented car is the property of the first defendant
and that the payment made was for the benefit of the first respondent. The liability for
the repayment of the amount paid by the plaintiff therefore attaches to the first
defendant and not the Hausners personally.
[71] It is arguable (but not pleaded) that, as suggested by Mr Strydom in argument,
the fact that the Hausners as members of the first respondent caused it to transact
business without the abbreviation “CC’ being subjoined to the name of the first
26
respondent in dealing with the plaintiff, could be a basis for attributing personal liability
to the Hausners in terms of s 63 of the Close Corporations Act. It states:
‘63 Joint liability for debts of corporation
Notwithstanding anything to the contrary contained in any provision of this Act, the
following persons shall in the following circumstances together with a corporation be
jointly and severally liable for the specified debts of the corporation:
(a) Where the name of the corporation is in any way used without the
abbreviation 'CC' as required by section 22(1), any member of the
corporation who is responsible for, or who authorized or knowingly permits
the omission of such abbreviation, shall be so liable to any person who enters
into any transaction with the corporation from which a debt accrues for the
corporation while he or she, in consequence of such omission, as not aware
that he or she is dealing with a corporation. . . ’(emphasis added)
[72] To succeed in attaching personal liability to the Hausners under the alternative
claim, (I agree with Mr Mouton that) the plaintiff would have had to allege in his
particulars of claim a violation, by the Hausners, of the Close Corporations Act such as
would render them personally liable for the debts of the close corporation as
contemplated in s 63 of the Close Corporations Act.( Van der Berg v Chairman of the
Disciplinary Committee supra). The plaintiff also had to prove that in regard to the
alternative claim the provisions of s 63 find application, in other words that the payment
was made to the close corporation without there being compliance with that provision;
and that the payment for the estimated damage was done to the first defendant with the
Hausners authorising or ‘knowingly’ permitting the omission of such abbreviation. He
also had to allege and prove as plaintiff that it was in consequence of such omission
that he was not aware that he was dealing with a close corporation. Such allegation and
proof is lacking.
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Part 12: Order
[73] I therefore make the following orders:
1. The plaintiff’s claim against second and third defendants in their personal
capacities is dismissed with costs, such costs to include costs consequent upon
the employment of one instructing and one instructed counsel;
2. Plaintiff’s claim against the first defendant succeeds in part and the first
defendant is ordered to pay the amount of N$ 168 963.41 less 15% to the
plaintiff.
3. Plaintiff is awarded interest on the amount of N$ 168 963.41 less 15% at the
legal rate of 20% per annum calculated from the 3 rd of July 2006 to date of
payment.
4. In respect of the order in paragraph 3 above, the plaintiff is awarded costs of suit
against the first defendant consequent upon the employment of one instructing
and one instructed counsel.
5. Plaintiff’s claim against first, second and third defendants for the recovery of N$
28 653 is dismissed.
___________________
PT Damaseb
Judge-President
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APPEARANCES:
PLAINTIFF J A N STRYDOM
ON INSTRUCTIONS OF ANDREAS VAATZ & PARTNERS, WINDHOEK
DEFENDANT C J MOUTON
ON INSTRUCTIONS OF MUELLER LEGAL PRACTITIONERS,
WINDHOEK