20050406 TZCA Dar es Salaam 1

IN THE COURT OF APPEAL OF TANZANIA · AT DAR ES SALAAM (CORAM: LUBUVA, J.A., NSEKELA, J.A., And MSOFFE, J.A.) ' CIVIL REFERENCE NO. 5 OF 2005 BETWEEN ) ' 1. ALLIANCE INSURANCE CORPORATION LTD: ] 2. IMPERIAL INSURANCE COMPANY LTD,_ ] 3. LION OF TANZANIA INSURANCE COMPANY LTD. ] 4. PHOENIX OF TANZANIA ASSURANCE COMPANY LTD. ] 5. RELIANCE INSURANCE COMPANY (T) LTD. ] ...... APPLICANTS 6. ROYAL INSURANCE TANZANIA LTD. ] 7. STRATEGIS INSURANCE (TANZANIA) LTD. ] 8. TANZINDIA ASSURANCE COMPANY LTD. ] 9, THE HERITAGE A.I.I. INSURANCE COMPANY (T) LTD. J 10. THE JUBILEE INSURANCE COMPANY OF TANZANIA ] AND 1. COMMISSIONER OF INSURANCE ] 2. MINISTER FOR FINANCE ] ................................. RESPONDENTS 3. ATTORNEY GENERAL ] (REFERENCE from the Ruling of a Single Judge of the Court of Appeal of Tanzania at Dar es Salaam) (Munuo J.A.) dated the 14th day of February, 2005 in . Civil-ApplicationNo .. 18Rof 2004 RULING OF THE COURT LUBUVA, J.A.: This is a Reference from a decision of a single Judge of this Court in Civil Application No. 180 of 2004 dismissing an application for a restraint order pending the hearing and determination of the intended appeal to this Court. 2 The facts giving rise to the case may briefly be stated. The intended appeal related to High Court Miscellaneous Civil Cause No. 33 of 2004. From the High Court the applicants sought for the reliefs of certiorari and prohibition against the first and second respondents, namely Commissioner of Insurance and Minister for Finance respectively. On the basis of the provisions of section 7 of the Insurance Act No. 18 of 1996 the Tanzania Reinsurance Corporation (Establishment) Order (hereinafter referred to as TANRE) was published under Government Notice No. 35 of 2001. Under section 12 (1) of the Order every insurer is required with effect from the commencement of the Order, to reinsure with TANRE. In doing so, the insurer shall first cede to TANRE 25% of his liabilities for each policy issued and second, to cede to TANRE 25% of his treaty reinsurance business. In the cour:se of implementing the requirement of the law, the first Respondent wrote letters to the applicants requiring them to comply with the provisions of section 12 (1) of the Order. The applicants were given the 1st March 2004 as the deadline for complying with the law failure to which the 1st Respondent threatened to refuse renewing business licence to the applicants. 3 The applicants did not take kindly to the 1st Respondent's threats. So, in order to restrain the first respondent from carrying out the threat not to· renew the applicants' business licence and enforcing the directive to the applicants to cede their business to TANRE, the applicants applied in the High Court for the reliefs of certiorari and prohibition. As pointed out earlier, in High Court Miscellaneous Civil Cause No. 33 of 2004, the application was dismissed. Dissatisfied with the dismissal, the applicants filed a notice of appeal on 6.12.2004. Pending the hearing and determination of the intended appeal, an application for a "restraint order" was filed in this Court. The learned single Judge of this Court found no merit in the application which was dismissed and hence this reference has been made under rule 57 (1) (b). In this reference Dr. W. B. Kapinga together with Dr. Mwaikusa, learned counsel, appeared for the applicants. On the other hand, Mr. V.D.K. Lyimo, learned Principal State Attorney and Mr. Ngwebe, learned Senior State Attorney, represented the respondents, the 1st Respondent Commissioner of Insurance, Minister for Finance and the Attorney General. From the record it is apparent 4 that the respondents were represented by the same counsel at the hearing of the application before the single Judge. In support of the application before the single Judge it was strongly urged on behalf of the applicants that a restraint order was warranted on account of the following reasons. That the intended appeal has good chances of success, the applicants would suffer irreparable loss in monetary terms and risk to uninsured customers. if a restraint order is not granted on the balance of convenience and commonsense. For the respondents, it was contended that the restraint order sought should not be granted because, first, the directives complained of are reasonable. Second, the National Insurance Corporation of Tanzania and the Zanzibar Insurance Corpor.ation which are involved in insurance business have fully complied-with the directives relating to business concluded on 31.12.2004. Third, that with regard to the balance of convenience, the wider public interest should be taken into account. Upon consideration of these submissions, the relevant law and precedent, the learned single Judge found that the directives given . ,- I,' ,tf I 5 by the first respondent were not unreasonable and that the restraint order was unwarranted. Consequently, the application was dismissed . . In this reference the Court is urged to reverse the decision of the single Judge on the following grounds that: 1. the particular acts which the order of restraint was sought in the Notice of Motion are not the ones the Honourable single Judge addressed her mind to in dismissing the Applicatior:i. 2. the Honourable single Judge erred in ruling that the refusal of the application for an order of temporary restraint would not cause irreparable loss to the Applicants in the event the intended appeal succeeds, and 3. the Honourable single Judge.erred in dismissing the application without consieering the grounds for temporary restraining orders that had been addressed to in the application. Both Dr. Kapinga and Dr. Mwaikusa, learned counsel, took turns in addressing the Court in support of these grounds. To start with, when prompted by the Court counsel conceded that the decision of the trial High Court Judge of 3.12.2004 seeking: 6 prerogative and prohibition order was not capable of execution. For this reason Dr. Kapinga said rule 9 (2) (b) was not invoked in the application before the single Judge. Instead, counsel further contended, the application by notice of motion was made under rules 3 (1) and 45 (1) and (2). According to Dr. Kapinga, an application for a restraint order is neither an application for stay of execution nor an application for temporary injunction. In that s-ituation, there is no express provision in the rules which would be invoked under which to make the application for a restraint order. Consequently, rules 3 (2) and 45 (1) and (2) were invoked, he insisted. However Dr. Kapinga supported by Dr. Mwaikusa were firmly of the view that the same test and principles applicable in matters pertaining to stay of execution are also applied when a restraint orderis sought. He maintained that although the decision of the High Court, subject of the reference, was not capable of execution, nonetheless, the ap'plication before the single Judge was competent. He also said that the High Court could not deal with the application seeking the restraint order because there was an appeal pending in respect of which notice of appeal had been lodged. II ,I 7 Counsel then dealt with the grounds of complaint in the reference. First, he strongly criticized the single Judge in her decision to dismiss the application for certiorari and prohibition. He charged that it was an error on the part of the learned single Judge in dismissing the application on the basis of an aspect which was not in issue before the Court. Dr. Kapinga further submitted that the issue was related to the directive by the 1st Respondent to the applicants to cede to TANRE 25% of liabilities for each insurance policy issued. That is, ceding or giving away business to TANRE and not an attempt to avoid payment of mandatory taxes or cess as perceived by the single Judge, Dr. Kapinga insisted. Had the single Judge considered the issue before the Court in the application, counsel urged that the single Judge would have granted the application. Second, Dr. Mapunda submitted that the analysis and reasoning of the single Judge regarding public finance and the need for payment of taxes was sound and logical. However, he said this was not of any assistance in the determination of the application because as the matter was not in issue, it was irrelevant. Thirdly, Dr. Kapinga also criticized the single Judge in basing her decision 8 only on ground whether the applicants would suffer irreparable loss if the order sought was not granted. He said the rest of the grounds advanced in support of the application were not considered. This, Dr. Kapinga contended, was improper. Had the single Judge considered all the grounds in support of the application, the decision would have been different, he contended. Underscoring the underlying principles applicable in considering stay of execution, the Court was referred to the case of Tanzania Cotton Marketing Board v. Cogecot Cotton Co. S.A. (1997) TLR 63, Ignazio Messina and Another, Civil Reference No. 8 of 1999 (unreported) and Tanzania Electric Supply Company Limited and Three Others v. Independent Power Tanzania Limited, Consolidated Civil Application No. 19 and 27 of 1999 ( unreported). Mr. Lyimo, learned Principal State Attorney, for the first respondent, countered these submissions. First, he said the decision of the High Court dismissing the application for prerogative and prohibition orders was not capable of execution. So, with the dismissal of the application, there was, as it were, nothing. in respect of which either stay or restraint order could be issued, he ,.11 tJ 'l ' 9 further contended. Consequently, Mr. Lyimo went on in his submission as the decision of the High Court was not capable of execution, the ,application before the Single Judge, was incompetent, it should have been struck out. With regard to the competence or otherwise of the application before the single Judge, Mr. Lyimo was supported by Mr. Ngwebe, learned Senior State Attorney for the second respondent, the Minister for Finance and third respondent, the Attorney General. With regard to the merits of the application for reference, Mr. Lyimo submitted that there was no merit. He said the order sought from the single Judge to restrain the 1st Respondent from directing the applicants to comply with the mandatory requirement of the law related to the period ending in December, 2004. However, he concededthat the issue of mandatory Gess which the learned single. Judge considered was not raised before the Court. On this, Mr. Lyimo was supported by Mr. Ngwebe. On his part, Mr. Ngwebe learned Senior State Attorney briefly touched on the peculiarity of this matter. He said although the application before the single Judge was titled application for restraint order, in effect, it was an application for stay of execution. This was so, the Senior State Attorney further submitted, because the cases in support of the reference which were cited related to stay of . execution. Furthermore, he said although the application was titled application for restraint order, in effect as conceded by Dr. Kapinga, it was an application for stay of execution or temporary injunction. In that situation, Mr. Ngwebe wondered why rule 9 (2) (b) was not invoked instead of rule .3 which, in his view, was not applicable because there was an express rule providing for stay of execution. With regard to the remedy for temporary injunction, he said this was a remedy which is not known to the rules. In conclusion, Mr. Ngwebe stressed that although this aspect was not addressed by the single Judge, the application was incompetent. It should have been struck out. We shall first deal with the issue raised by Mr. Lyimo and ·Mr: Ngwebe, learned Attorneys for the respondents _regarding the competence of the application. The issue raised was that the High Court order of 3.12.2004 dismissing the application for prerogative order was not capable of execution. Section 12 (1) of the Tanzania National Reinsurance (Establishment) Order, 2001 was the legal basis upon which the reliefs of certiorari and prohibition orders were 11 sought by the applicants against the 1st Respondent. The Order was published under Government Notice No. 35 of 2001. Section 12 (1) _, reads: "Every insurer shall, on or after the commencement of this order reinsure with the Company and in doing so shall - (a) cede to TANRE 25% of his liabilities for each policy issued by him; and (b) in addition, cede to TANRE of his treaty reinsurance business." On the basis of these provisions of the law extracted above, it is apparent that the 1st Respondent by letters addressed to the applicants was enforcing the law by calling upon them to cede business to TANRE. Essentially the reliefs sought in the High Court pertained to two aspects. First, the letters addressed to the applicants to be quashed and set aside by order of certiorari. Second, the Minister for Finance, the second Respondent, to be restrained by order of prohibition from incorporating the Tanzania National Reinsurance Corporation (TANRE). The relief sought before the single Judge is reflected from the notice of motion which reads: ." . 12 Pending the hearing and determination of the intended appeal, the 1st Respondent be restrairted from demanding and/or directing the applicants to cede any portion of their policy liabilities and reinsurance treaty business to Tanzania National Reinsurance Corporation (TAN RE). From our reading of the notice of motion before the single Judge and the appltcation in the High Court it is dear to us that the applicants sought the same relief from the High Court and this Court before the single Judge. As the applicants were dissatisfied with the decision of the single Judge dismissing the application for the prerogative and prohibition orders, notice of appeal was duly lodged. After the notice of appeal was lodged and the appeal still pending in this Court, we do not think that it was proper for the applicants to seek from tb-~-------- Court in the application before the single Judge the same .refi~f-that /./ ( was refused by the High Court. At that stage, it was expected of the applicants to move the Court for stay of execution pending, the determination of the appeal against the order dismissing the application. To seek the same relief the refusal of which is the subject of the intended appeal would, in our view, amount to obtaining the relief from this Court through the· back door. To do so; 13 would, we venture to think, amounts to pre-empting the outcome of · the intended appeal. This we think is improper, it should not be allowed. It is an aspect which was not addressed by the single Judge apparently because her attention was not drawn to it. Furthermore, it is to be observed that the application before the single Judge was peculiar because although it was titled application for "restraint order", in effect, as_ conceded by Dr. Kapinga -and Dr.. Mwaikusa, it was an application seeking stay of execution or temporary injunction. In that ,situation, the application before the single Judge was fraught with the following problems which, with respect, were not addressed by the learned single Judge. First, is the propriety of the application before the single Judge. If in fact, stay of execution or restraint order as styled was what was sought before the single Judge, this had·_to be related to the decision .against which it was desired to appeal. Under the provisions of rule 9 (2) (b) after the prerequisite condition of filing. a notice of appeal, the Court is moved for an order of stay of execution of the decision or order of the High Court or subordinate court in exercise of extended jurisdiction, subject of the intended appeal,. In the instant case, the relief sought in the application before the single Judge has nothing to 14 do with the High Court decision of 3.12.2004. The High Court decision of 3.12.2004 dismissing the application for prerogative orders was not the subject of the application before the single Judge for stay. It was ari independent application. Therefore, it was an application which does not fall under the provisions of rule 9 (2) (b) pertaining to stay of execution. In the circumstances, it is our view that there \Vas no .basis upon which the single Judge was moved to make the orders sought in the application. As there was no foundation upon which the application was made, its competence was doubtful. We are live to the submission by Dr. Mwaikusa that because notice of appeal had been filed to lodge appeal to this Court, the applicants could not seek the relief from the High Court. It is now settled that once~a notice _of :appeal has been filed, the- High Court has no jurisdiction to entertain an application for stay of execution. On this, authorities are abound. Among others, see for instance, Aero Helicopter (T) Ltd. v. F.N. Jansen (1990) T.L.R. 142 where a single Judge of this Court inter alia held: Once appeal proceedings have been com~enced by filing notice of appeal to the • -- • f.) t l5 Court of Appeal of Tanzania, the law makes specific provision, relating to the stay of execution by the court, under rule 9 (2) (b) of the CoLJit of Appeal Rules. The Court further held: Once proceedings of appeal to the Court of Appeal of Tanzania have been commenced the High Court could not properly apply section 95 of the Code for the simple reason that the proceedings are no longer in the court as required by section 2 of the Code. From the decision of Aero Helicopter (supra), it is plainly dear that once appeal proceedings have been commenced in this Court by filing notice of appeal the High Court cannot entertain application for stay of execution. _At that stage, the Court of Appeal and not the High Court is seized of jurisdiction to deal with proceedings for stay of execution in terms of the provisions of rule 9 (2) (b). With great respect, we do not accept Dr. Mwaikusa's suggestion that because of the notice of appeal filed, it is open for the Court to entertain any application. Only applications for stay of execution which comply with rule 9 (2) (b) can appropriately be dealt with by the Court. In the instant case, the application before the 16 learned single Judge did not comply with the requirement of rule 9 (2) (b ). The order sought did not relate to the decision of the High • Court against which it was desired to appeal. The application was therefore incompetent. Had the learned single Judge considered the matter from this point of view, we think, with respect, she would have come to the conclusion that the application was incompetent wlth the result that it would have been struck out. On the other hand, even if it is accepted that the application before the single Judge was competent, its absurdity becomes even more apparent. It has already been observed that the relief sought, namely restraint order, both in the High Court and the single Judge was the same. Having failed to obtain the same from the High Court the avenue open for the applicants if dissatisfied, was to appeal against the order of dismissal. Pending the determ"ination of the intended appeal, the application was lodged before the single Judge seeking an order restraining the 1st Respondent from enforcing the directive to the applicants to cede insurance business to TANRE. Upon consideration and determination of the intended appeal, it would then be decided on appeal whether the trial High Court Judge was wron9 or otherwise in not granting the application. In this 17 situation, to grant the application for a restraining order as sought and not stay of execution, would amount to obtaining the relief, subject of the appeal through the back door, so to speak. That is improper, it should not be allowed. There is also the point raised by Mr. Lyimo and Mr. Ngwebe, learned Principal and Senior State Attorney respectively. That is that the orders of 3.12.2004 by the- learned trial High Court Judge Mihayo, J. was not capable of execution. As indicated earlier, although the application in the High Court was titled application for restraint orders, in effect it was one seeking stay of execution. Otherwise restraint or temporary injunction orders are not provided for under the rules. As said before, since the objective was to seek stay of execution, it was not proper to invoke rule 3 in filing the application in a- situation where there is specific provision in the rules providing for stay of execution. In the circumstances, it seems to us that this being an application for stay of execution, the court was not properly 'moved by citing an applicable rule. In a number of cases, this Court has held that wrong citation of the provision of the law render the application incompetent. The Court expressed this view in National Bank of Commerce v. 18 Sadrudin Meghji, Civil Application No. 20 of 1997, Almas Iddie Mwinyi v. National Bank of Commerce and Another, Civil • Application No. 88 of ·1998 and Harish Ambaram Jina by his Attorney Ajar Patel v. Abdulrazak Jussa Suleiman, ZNZ Civil Application No. 2 of 2003. In this case, we are satisfied that this being an application for stay of execution under the guise of an "application for restraint order" \Vas based on an inapplicable rule. In the same vein we think the application was incompetent. Had the learned single Judge considered the matter from this point of view, we are increasingly of the view that she would have found that the application was incompetent. On the other hand, Dr. Kapinga and Dr. Mwaikusa, learned counsel had raised one issue relating to the merits of the application. On this, both Mr. Lyimo and Mr. Ngwebe conceded ·as well. Dr. Kapinga contended that the learned single Judge erred·· in deciding the application on the basis of a single factor which, in any case, was not in issue in the application. With respect, we agree that the single Judge took the view that the bone of contention in the application was the payment of mandatory cess. What was in issue was the directive to the 19 application by the 1st respondent to cede their insurance business to TANRE in terms of the law. The question is whether if the learned single Judge had addressed the issue before the Court the decision would have been different. Dr. Kapinga maintained that the application would have been granted. It is hardly necessary to point out at once that to grant or not to grant stay of execution is discretion on the part of the Court. In the instant case, as already indicated the application before the single Judge was incompetent, we do not think that in the circumstances of the case consideration or otherwise of either of the· factors would be of any effect. The application being incompetent it would be struck out. It would therefore be unnecessary to consider any of the grounds raised. All in all therefore, we are firmly settled in our view that the application before the single Judge was incompetent. With respect, this aspect was not called to the attention of the learned single Judge. As a. result, the single Judge did not consider it in the ruling dismissing the application. Had the single Judge considered the issue, we think with respect, she would have come to the conclusion that the application was incompetent, it should have been struck out. As the application was dismissed and not struck out, for the 20 foregoing reasons, we are constrained to vary the decision of the •learned single Judge. In substitution thereof the application is ordered to be struck out. In effect therefore, the application for reference arising from an incompetent application, for the reasons stated, stands dismissed with costs. DATED at DAR ES SALAAM this 6th day of April, 2005. D.Z. LUBUVA JUSTICE OF APPEAL H.R. NSEKELA JUSTICE OF APPEAL J.H. MSOFFE JUSTICE OF APPEAL I certify that th.is is a true copy of the_originaL