Bumaco Insurance vs Mussa Albert and ors

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA (SHINYANGA SUB-REGISTRY) AT SHINYANGA CIVIL APPEAL NO. 1444 OF 2024 (An appeal from the Judgment and Decree of the District Court of Kahama at Kahama delivered by C.L. CHOVENYE in a Civil Case No. 22 of 2023) BUMACO INSURANCE COMPANY LIMITED………………………… APPELLANT VERSUS 1. MUSSA ALBERTH 2. AMOS JULIUS NHAMIS ...………………………….……..RESPONDENTS 3. ROBERT JACOB 4. ELISHA KISHIWA JUDGMENT Date of Last Order 20.06.2024 Date of Judgment: 30.08.2024 MWAKAHESYA, J.: This is an appeal against the judgment and decree of the District Court of Kahama at Kahama (the Trial Court) where Mussa Albert (the first respondent) and Amos Julius Hamis (the second respondent) successfully sued Bumaco Insurance Company Limited (the appellant), Robert Jacob (the third respondent) and Elisha Kishiwa (the fourth respondent) and were awarded damages to the tune of TZS 20,000,000/=, the said damages to 1 be paid by the appellant. The appellant, being aggrieved with the judgment and decree has preferred this appeal. The brief background of the matter is that, the third respondent was employed as a driver of the fourth respondent who was the owner of a motor vehicle make TATA bearing registration No. T 376 DHB (the motor vehicle). The appellant was the insurer of the fourth respondent in respect of the aforementioned motor vehicle. On 07.07.2021 the third respondent, while driving the motor vehicle and thus in the course of his employment, was involved in an accident which resulted in bodily and material injuries to the first and second respondents. This is what prompted the first and second respondents to sue the third respondent, the fourth respondent and, rather strangely, the appellant for damages based on the tort of negligence. At the end of the trial, the trial court found the fourth respondent vicariously liable for the actions of the third respondent and since the fourth respondent had insurance cover with the appellant for third party risks, the appellant was ordered to “indemnify” the first and second respondents TZS 20,000,000/= as general damages. The appellant’s appeal is predicated on five grounds which are quoted verbatim: 2 1. The trial magistrate erred in law and fact by awarding the first and second respondent general damages without evidence of damage suffered by respondents; 2. The trial magistrate erred in law by awarding damages without considering the principle of awarding general damages; 3. The trial court erred in law and fact by ordering the appellant herein to indemnify the first and second respondent a total of TZS 20,000,000/= without proof of existence of contract of indemnity between the appellant and the said respondents; 4. The trial court erred in law and fact by ordering the appellant therein to indemnify the first and second respondent a total of TZS 20,000,000/= without proof of specific damages by the said respondents; and 5. That the trial court erred in law by ruling in favor of the first and second respondent before it despite the failure by the said respondents to prove their case on the standard required by law. At the hearing of the appeal, the appellant was represented by Mr. Andrew Luhigo, learned advocate, while the first and second respondents 3 were represented by Mr. Evodius Rwangobe, learned advocate and the third and fourth respondents enjoyed the services of Mr. Alex Chiliko, learned advocate. Mr. Luhigo opted to consolidate the first and second grounds of appeal, as well as the 3rd and 4th grounds. He started his submission with the fifth ground, and was of the view that, at the trial court the first and second respondents were supposed to prove their case on the balance of probabilities, the matter being a civil suit. He elaborated that the onus lay upon them to prove their claims in accordance with section 110 of the Evidence Act. The learned advocate cited the Court of Appeal decision of Paulina Samson Ndawavya v. Theresia Thomas Madaha, Civil Appeal No. 53 of 2017(unreported) to buttress his position. He went on to submit that, the basis of the first and second respondents’ case at the trial court was bodily injuries caused by the negligent act of the 3rd respondent. Therefore, the respondents were expected to advance evidence to the effect that they were injured and were thus supposed to be compensated for those injuries. Unfortunately, according to him, no such evidence was tendered. 4 On the consolidated first and second grounds of appeal, the learned advocate submitted that, the general damages awarded to the first and second respondents were improper. Since they were not able to prove bodily injury and going through the judgment it seems that the trial magistrate awarded damages because there was a conviction of the third respondent for having caused the road accident. In his eyes, the learned advocate submitted, it was a misconception on the part of the trial court because traffic proceedings and judgment, which are criminal in nature, cannot be used as conclusive evidence in civil proceedings. The learned advocate was also of the view that, the decision in traffic case contradicted the evidence adduced at the trial court since it showed that the respondents were knocked down by a vehicle driven by the 3rd respondent while in the civil suit it was testified that the third respondent knocked a tri-cycle where respondents were occupants. On the consolidated 3rd and 4th grounds of appeal, he submitted that, because the appellant was sued as an insurer, then the contract of indemnity was between him and the insured, that is the fourth respondent, and therefore if there was any person to be indemnified that was to be the 5 fourth respondent and not the first and second respondents. He emphasized that, this could only be possible if the first and second respondents had allowed the fourth respondent to bring the appellant to the suit by way of a third-party procedure under Order I rule 14 of the Civil Procedure Code. To “indemnify” according to Black’s Law Dictionary, 9th Edition, page 837 means “to reimburse another for loss suffered because of a third party’s or one’s own default”. This implies that, in order to indemnify someone, there must be some specific damages suffered and proved. In this case the first, second and fourth respondents did not prove any special damages for the trial court to order indemnification. In response, Mr. Rwangobe, submitted that, the first and second respondents proved their case on the balance of probabilities as required by law and that, general damages which were awarded by the trial court were was due to the fact that they proved their case. The learned advocate also submitted that, the trial court was proper to order the appellant to pay the first and second respondents as there was a contract between the appellant and fourth respondent. There was no need for the fourth 6 respondent to bring the appellant in the suit since the first and second respondents had stipulated on how the appellant was supposed to be part to the suit. Also, as the cause of action against him was stipulated clearly, there was no need for both respondents to prove special damages as what was claimed was general damages which is granted at the discretion of the trial court. The learned advocate rounded off his submission by stating that, there is no law which prohibited the first and second respondents from joining the appellant in the suit as they did, he beseeched this court to uphold the decision of the trial court and dismiss the appeal with costs. In response for the third and fourth respondents, Mr. Chiliko commenced his submission by observing that, general damages need not be specifically pleaded and the same may be asked for by mere statements or prayer of claim. He based his observation in the case of Cooper Motors Corporation Limited v. Moshi/Arusha Occupational Health Services [1990] T.L.R. 96. He submitted that, before awarding general damages, there must be established a prima facie case showing injury or loss to the claimant. He 7 was of the view that at the trial court it was proved that there was an insurance contract between the appellant and the fourth respondent and that contract was to the effect of indemnifying a third party should any risk of loss, damage or liability happens to that third party. He went on to submit that, during the trial it was observed that the third respondent had occasioned injury in respect of motor vehicle with registration No. T 376 DHB where the third respondent admitted that he was driving the motor vehicle recklessly and occasioned bodily injury to the first and second respondents. This was enough for the trial court to award general damages and so long as it was general damages there was no need of specifically proving injury. In rejoinder, Mr. Luhigo, learned advocate, submitted that, he supported the contention that general damages are awarded at the discretion of the court and need not be proved. However, he stressed that, the discretion has to be exercised judiciously and should not be granted when there are no damage/injuries caused or proved to have been caused to the claimant. 8 Having gone through the record as well as the rival submissions of the learned counsels for both sides to this appeal, I shall now proceed to determine the appeal. It is clear that, counsels for both sides have labored much on whether damages were proved, general damages to be precise, and whether the same were correctly granted by the trial court. In as much as the submissions are attractive I resist the temptation to dwell much on them as I feel that this whole matter rests on one important issue that needs to be determined, and that is: whether the first and second respondents could sue the appellant for the alleged injuries/damages they suffered as a result of the negligent driving of the third respondent. To start off, it is not in dispute that the third respondent was an employee of the fourth respondent and that he was involved in an accident with the first and second respondents. Likewise, it is not in contention that the appellant was the insurer of the fourth respondent with regards to the motor vehicle that was driven by the third respondent. Thus, there was an insurance contract between the fourth respondent and the appellant 9 covering third party liability. Lastly, it is also not in contention that all along the appellant has denied any liability to the first and second respondents. Insurance contracts are indemnity contracts in which an insurer undertakes to indemnify the insured against loss from liability to another person (a third party). In our jurisdiction third party insurance cover is compulsory for motor vehicles. This stems from the Motor Vehicles Insurance Act, precisely section 4. It reads: “4.- (1) Subject to the provisions of this Act it shall not be lawful for any person to use, or to cause or permit any other person to use, a motor vehicle on a road unless there is in force in relation to the use of the vehicle by that person or that other person, as the case may be, such a policy of insurance or such a security in respect of third party risks as complies with the requirements of this Act. (2) If a person acts in contravention of this section he shall be liable to a fine not exceeding one hundred pounds or to imprisonment for a term not exceeding six months, or to both such fine and imprisonment, and a person convicted of an offence under this section shall (unless the court for special reasons thinks fit to order otherwise and without prejudice to the power of the court to order a longer period of disqualification) be disqualified for holding or obtaining a driving licence for a period of twelve months from the date of the conviction. 10 (3) The provisions of subsection (1) of this section which relate to the use of a motor vehicle on a road shall not apply– (a) to any person lawfully using a motor vehicle owned by the Government or a public corporation; or (b) to any authorised person while he is lawfully using, in accordance with any provision contained in the Road Traffic Act, a motor vehicle owned by some other person, for the purpose of inspecting or detaining such vehicle or for any other purpose (whether similar to the foregoing or not) specified in such provision. (4) The provisions of subsection (1) of this section which relate to a person causing or permitting some other person to use a motor vehicle on a road shall not apply to the owner of a motor vehicle by reason only of its use by an authorised person, where such authorised person has taken charge of such vehicle under any provision contained in the Road Traffic Act * for the purpose of inspecting or detaining such vehicle or for any other purpose (whether similar to the foregoing or not) specified in such provision. (5) For the purpose of this section "authorised person" means any officer or person authorised under any provision contained in the Road Traffic Act to use a motor vehicle owned by some other person.” Insurance contracts (third party insurance inclusive) are subject to the normal rules regarding contracts, this also includes the doctrine of 11 privity of contract under which only parties to a contract are conferred rights or imposed obligations. The exception to this doctrine, in insurance contracts, is found in sections 15 and 58 of the Motor Vehicles Insurance Act and the Insurance Act, 2009, respectively. These sections are couched in almost similar terms. It will suffice to quote section 15 of the Motor Vehicles Insurance Act, which reads: “15.- (1) Where under any contract of insurance a person (in this section referred to as "the insured") is insured against liabilities to third parties which he may incur, then– (a) in the event of the insured becoming bankrupt or making a composition or arrangement with his creditors; or (b) in the case of the insured being a company, in the event of a winding-up order being made, or a resolution for a voluntary winding up being passed, with respect to the company, or of a receiver or manager of the company's business or undertaking being duly appointed, or of possession being taken, by or on behalf of the holders of any debentures secured by a floating charge, of any property comprised in or subject to the charge, if, either before or after that event, any such liability is incurred by the insured, his rights against the insurer under the contract in respect of the liability shall, 12 notwithstanding anything in any law to the contrary, be transferred to and vest in the third party to whom the liability was so incurred. (2) Where an order is made under section 120 of the Bankruptcy Act for the administration of the estate of a deceased debtor according to the law of bankruptcy, then, if any debt provable in bankruptcy is owing by the deceased in respect of a liability against which he was insured under a contract of insurance as being a liability to a third party, the deceased debtor's rights against the insurer under the contract in respect of that liability shall, notwithstanding anything in the Bankruptcy Act, be transferred to and vest in the person to whom the debt is owing. (3) In so far as any contract of insurance made after the commencement of this Act in respect of any liability of the insured to third parties purports, whether directly or indirectly, to avoid the contract or to alter the rights of the parties thereunder upon the happening to the insured of any of the events specified in paragraph (a) or paragraph (b) of subsection (1) of this section or upon the making of an order under section 120 of the Bankruptcy Act in respect of his estate, the contract shall be of no effect. (4) Upon a transfer under subsection (1) or subsection (2) of this section, the insurer shall be under the same liability to the third party as he would have been under to the insured, but– (a) if the liability of the insurer to the insured exceeds the liability of the insured to the third party, nothing in this section 13 shall affect the rights of the insured against the insurer in respect of the excess; and (b) if the liability of the insurer to the insured is less than the liability of the insured to the third party, nothing in this section shall affect the rights of the third party against the insured in respect of the balance. (5) For the purposes of this section, the expression "liabilities to third parties", in relation to a person insured under any contract of insurance, shall not include any liability of that person in the capacity of insurer under some other contract of insurance. (6) This section shall not apply where a company is wound up voluntarily merely for the purposes of reconstruction or of amalgamation with another company.” [Emphasis mine]. This exception in limited to times of bankruptcy/insolvency. The first and second respondents’ case, during trial, falling outside the ambit of section 15 of the Motor Vehicles Insurance Act, was subject to the doctrine of privity of contract, and therefore, the first and second respondents having impleaded the appellant erred as it was upon the fourth respondent to add the appellant as a third party under third party procedure provided for under Order 1 rule 14 of the Civil Procedure Code (the CPC). 14 What is glaring is that the first and second respondents knew this, as it can be seen in the plaint when they named appellant as a “3rd Defendant/Third Party.” Likewise, the trial court did too as the fourth issue framed read, “whether the 3rd defendant (third party) is liable to indemnify or contribute to the liability of the 2nd defendant”. Clearly, a defendant in the strict sense of the CPC is a different person altogether from a third party, as it is only a defendant who can join a third party to a suit and that is, after a formal application has been made as prescribed in Order 1 rule 14 of the CPC. Such an application was wanting at the trial court. This confusion, I stand to believe, not only disabled the appellant to mount a proper defence of the claims made at the trial court, but also misled the trial magistrate. I find merit in the submission by the appellant that, in actual sense it was the fourth respondent who was supposed to be “indemnified” after being found liable for damages to the first and second respondents. It was not up to the appellant to indemnify the first and second respondents as held by the trial magistrate. 15 Having found so, I find merit in the third ground of appeal and accordingly allow it. Since it goes to the root of the matter and having established that the first and second respondents did not have the right to bring an action against the appellant it suffices to dispose off the appeal, dealing with the remaining grounds becomes superfluous. In the upshot the appeal is allowed, with costs. DATED at SHINYANGA this 30th day of August, 2024 N.L. MWAKAHESYA JUDGE 16