LOBATSE STONE CRUSHERS (PTY) LTD v. I G I BOTSWANA LTD 1986 BLR 87 (HC)

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Citation: 1986 BLR 87 (HC)
Court: High Court, Lobatse
Case No:
Judge: O'Brien Quinn CJ B
Judgment Date: February 26, 1986
Counsel:
P. G. C. Collins for the plaintiff. D. A. Murphy for the defendant.
Flynote
Insurance - Motor vehicle insurance - Claim for compensation - Counter - claim - Plaintiff claiming P4 780 from defendant - Defendant acknowledging liability but counterclaiming P9 350 from plaintiff paid in respect of accident involving plaintiffs vehicle - Accident occurring in South Africa - Application of section 1](1) of Cap. 69:02 - Section limiting  C  liability of insurer to accidents occurring in Botswana - Undertaking by I.G.I. (South Africa) to be sued for accidents occurring in South Africa in same manner as if motor vehicle concerned insured in South Africa - Whether defendant under obligation to pay damages - Whether defendant right of recourse under section 15(1) of Cap. 69:02.
Headnote
The plaintiff sued the defendant for an amount of P4 780 plus interest at 10 per cent. a tempora morae, which  D  arose out of an insurance claim to which the defendant acknowledged liability. In reply the defendant counter-claimed against the plaintiff the amount of P9 350 which the defendant claimed had been paid by it in respect of an accident, involving a car owned by the plaintiff, which occurred in South Africa. The issue was whether under the Motor Vehicle Insurance Act (Cap. 69:02) (1973 Rev.), section 11, the defendant had been under an obligation to pay the abovementioned sum and whether it had the right of recourse in terms of section  E  15 of the Act.
Held: section 11(1) of the Motor Vehicle Insurance Act (Cap. 69:02) (1973 Rev.) obliged a registered company, such as the defendant was, to pay compensation in certain circumstances. One of the circumstances was that the accident should have occurred in Botswana. Only then could a company have the right of recourse under  F  section 15(1) of the Act. In the instant case however, the accident did not occur in Botswana and therefore, as there was no obligation on the defendant to pay compensation under the terms of section 11(1), it had no right of recourse under the provisions of section 15(1). Marine and Trade Insurance Co. Ltd. v. Haug 1961 (3) S.A. 658 (W) applied.
Cases referred to:  G
 (1)  Marine and Trade Insurance Co. Ltd. v. Haug 1961 (3) S.A. 658 (W).
 (2)  Erasmus v. Botswana Insurance Company Ltd. [1985] B.L.R. 107
Case Information
RULING on a special plea to defendant's counter-claim. The facts are sufficiently set out in the judgment.
P. G. C. Collins for the plaintiff.  H
D. A. Murphy for the defendant.
Judgment

O'Brien Quinn C.J. The plaintiff has sued the defendant for the sum of P4 780-00 plus interest at 10 per cent. a tempora morae, which liability arose out of an insurance claim in which the defendant acknowledged liability, but, despite the acknowledgement of liability

1986 BLR p88
O'BRIEN QUINN CJ
and despite an agreement to pay, the defendant has failed, or has refused, to pay to the plaintiff.  A
In reply, the defendant admitted that it was indebted to the plaintiff in the amount of P4 780, but counter-claimed against the plaintiff the amount of P9 350 which the defendant claimed had been paid by it in respect of an accident which had occurred in Johannesburg on 18 September 1979, when a vehicle owned by the plaintiff and driven by Mr. Kevin Baron collided with a vehicle driven by a Mr. Joel Ndlovu, in which Mr. Ndlovu suffered injuries  B  in respect of which, under the provisions of section 11 of the Motor Vehicle Insurance Act (Cap. 69:02) (1973 Rev.), the defendant paid out the sum of P7 250, and, itself, incurred costs to the sum of P2 100 in respect of the claim, the total claimed being P9 350 which the defendant sought to recover from the plaintiff under the provisions of section 15 of the Act.  C
In limine the plaintiff took exception to the counterclaim, or claim in reconvention, on three grounds, but only one ground was argued before me. The ground argued was:
 "In any event, even if prescription had not occurred it is pleaded that there was no duty upon the defendant to reimburse Joel Ndlovu in terms of the Act in that the collision in question occurred in the Republic of South Africa, while the  D  defendant's liability in terms of section 11(1) of the said Act arises only out of loss or damage arising out of the driving of an insured motor vehicle at any place in Botswana. In the circumstances, if no liability arises in terms of section 11 (1) of the said Act, then no right of recourse can arise in terms of section 15 of the said Act."
It was argued that the section of (Cap. 69:02) which makes it obligatory for an insurance company registered  E  under the Act to compensate any person injured by the driving of the insured motor vehicle, namely section 11(1), makes it clear that the driving and the injury must have taken place in Botswana. Therefore, it was argued, if the accident had taken place in the Republic of South Africa, as it was admitted that it had, then section 11(1) did not apply.  F
However, it was clear from the document produced by the defendant, which purported to be an undertaking by Incorporated General Insurances Limited, to which for convenience I will refer as I.G.I. (South Africa), to assume all the liabilities and obligations imposed upon an authorised insurer in respect of accidents involving motor vehicles bearing tokens issued in Botswana, in the Republic of South Africa, that I.G.I. (South Africa), that is the  G  parent company, undertook to permit itself to be sued in the same manner as it could have been sued had the motor vehicle concerned been insured in the Republic of South Africa.
The position would appear to be that under the South African Compulsory Motor Vehicle Insurance Act, 1972 (Act No. 56 of 1972), as read together with an undertaking by insurance companies to indemnify third parties injured  H  by vehicles insured by them in Lesotho, Botswana and Swaziland which was published in the South Africa Government Gazette No. 1529 under Government Notices Nos. 1350 and 1357 dated 9 September 1966, in accidents involving motor vehicles bearing proper insurance tokens issued in South Africa the insurance companies who are party to the undertaking will indemnify third parties involved in such accidents in Lesotho, Botswana and Swaziland.

1986 BLR p89
O'BRIEN QUINN CJ
That position still holds in the Republic of South Africa and I.G.I. (South Africa) is party to the undertaking.  A  However, in Botswana, I.G.I. (Botswana) has entered into a similar undertaking with its parent company in the Repulic of South Africa, I.G.I. (South Africa), whereby I.G.I. (South Africa) will undertake to permit itself to be sued in the same manner as it could have been sued had the motor vehicle concerned been insured in the Republic of South Africa.
Thus, while legally, I.G.I. (Botswana) is not obliged to pay any damages in respect of a motor vehicle legally  B  carrying its Botswana insurance token when it is involved in an accident in South Africa, it has agreed that I.G.I. (South Africa) will undertake its responsibilities in such cases. Therefore, if I.G.I. (South Africa) had undertaken to pay and had paid, in these circumstances action would lie against them in terms of the undertaking. But, in the instant case, I.G.I. (Botswana) appears to have paid the damages and costs which, by law, it had no obligation to  C  pay.
If, therefore, I,G.I. (Botswana) pays out money under the terms of section 11(1) of Cap. 69:02, which money it was not obliged to pay, the question is: Can it rely on the right of recourse given to it under section 15(1) of the same Act?
The right of recourse, as set out in section 15 of Cap. 69:02, refers only to compensation paid under the  D  provisions of section 11 or section 12. Section 11(1) obliges a registered company, such as the defendant is, to pay compensation in certain circumstances. One of the circumstances is that the accident should occur in Botswana. The accident, however, did not occur in Botswana. The defendant paid the compensation instead of permitting I.G.I. (South Africa) to pay it, in terms of the undertaking.  E
In Marine and Trade Insurance Co. Ltd. v. Haug 1961 (3) S.A 658 (W) the insurer's claim for recourse failed because it could not establish that the payment to the injured third party had been made in terms of sections 11 and 12 (which are the same as in Botswana). In that case the judgment was based on the terms of a discharge form signed by the injured third party in which he acknowledged that the payment had been made by the insurer  F  "without the admission of any liability but by way of an ex gratia payment in order to effect a settlement for the purpose of avoiding litigation." That judgment has been criticized but, nevertheless, the main point, apart from the ex gratia aspect, was that payment should have been made in terms of sections 11 and 12. In the instant case, can it be said that compensation was paid in terms of sections 11 and 12 when there was no obligation on the  G  defendant to pay compensation?
Having carefully considered the matter, I have come to the conclusion that, as there was no obligation on the defendant to pay compensation under the terms of section 11(1), he had no right of recourse under the provisions of section 15(1), and I allow the exception on this ground.
I would point out, however, that, had the insurance companies registered in Botswana, which have undertaken  H  the insurance of motor vehicles under the provisions of section 3(1) of Cap. 69:02, entered into an undertaking with the Minister of Works and Communications, as has been done in the Republic of South Africa, to indemnify token holders in respect of accidents occurring in the Republic of South Africa, Lesotho and Swaziland, an incident such as the present one would not have occurred. In this connection, I would draw the attention of all

1986 BLR p90
interested parties to the terms of South African Government Notices Nos. 1350 and 1357, dated 9 September  A  1966, which are conveniently to be found on pages 342 to 347 of the Law of Compulsory Motor Vehicle Insurance (2nd ed.) by Suzman and Gordon, where the terms of the undertakings entered into by insurance companies in South Africa are set out. This could be done, I venture to suggest, in the same manner as the annual Government Notice published in November each year under the terms of section 3(1) of Cap. 69:02, or could be made the subject of regulations under Cap. 69:02, as has been done in South Africa, in similar  B  circumstances.
In the meantime, the defendant is not without a remedy as he may take the' course which was taken in Erasmus v. Botswana Insurance Company Ltd. [1985] B.L.R. 107 where Hannah J. gave consideration to a point not dissimilar to that in the instant case.  C
Judgment for the plaintiff.
S. M. M-L.

 

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