NA TZCA Dar es salaam

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~. TA'NZlND.IA-ASSlJRANCFCOMPA:NY-LTD. -]- 9. =rHE HERITAGE A.I.I. INSURANCE COMPANY (T) LTD. l 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 Application No: -180•of 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 Jns.u.raoce_AcLNn..-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-course of implementi-o_g 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 giyen 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 ...... 1 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. l(apinga. 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 cownsel 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 Jnsurance Corp.oration which are involved in insurance business have folly 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 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 Application. 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 considering 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 situation, 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 ffrmly of the view that the same test and principles applicable in matters pertaining to stay of execution are. also applied when a -restraint order is sought. He maintained that-although the deGision of the High Court, subject of the reference, was not capable of execution, nonetheless, the application 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. 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_ i·n 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 respec:t of which either stay or restraint order could be issued, he 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 conceded that the issue· of-mandatory cess 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 10 so, the Senior State Attorney further submitted, because the cases in support of the reference which were cited related to stay of • execution. Further.more, 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 oLrnle 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 TAN RE 25% of his liabilities for each policy issued by him; and (b) in addition, cede to TAN RE . 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: