dietmar Dannecker - Ejustice.moj.na - NAMIBIA … Court/Judgments/Civil/Dannecker... · Web viewNOT REPORTABLE REPUBLIC OF NAMIBIA HIGH COURT OF NAMIBIA MAIN DIVISION, WINDHOEK JUDGMENT

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

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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.

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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.

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[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”;

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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;

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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

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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

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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.

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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

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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

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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.

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[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.

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[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

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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

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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).

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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.

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[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

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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.

20

[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).

22

[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.

27

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

28

APPEARANCES:

PLAINTIFF J A N STRYDOM

ON INSTRUCTIONS OF ANDREAS VAATZ & PARTNERS, WINDHOEK

DEFENDANT C J MOUTON

ON INSTRUCTIONS OF MUELLER LEGAL PRACTITIONERS,

WINDHOEK