20150528 TZHC Dr es Salaam

1

IN THE HIGH COURT OF TANZANIA

AT DAR ES SALAAM CIVIL CASE NO. 116 OF 2001 NATHAN KAFANABO & OTHERS ........ PLAINTIFFS V TANZANIA PORTLAND CEMENT ... 1 sT DEFENDANT

NATIONAL INSURANCE CORPORATION ......................... 2N° DEFENDANT

JUDGMENT Date of last Order 20/3/2015 Date of Judgment 28/5/2015 , I Shangwa, J. The plaintiffs in this case are former employees of Tanzania Portland Cement Company Limited. They are 102 in number. The list of their names is attached . ____ to._tbe_ amended plai_n_! _pre~~n_!~d _f_9r filing on 25 th . t \\.,, •"t\., •. 2 November, 2003. However, according to P.W.1 Zephania Marema 36 of them out of the list have already passed away. On 26 th October, 2001, Madame Bubeshi, J. (rtd) granted leave to Nathan Kithaneli Kafanabo, Joseph Michael Haule, Zephania Mlelwa -Malima ana~ -Thomas Am1n1e1-o siri to file a ' representative suit against Tanzania Portland Cement _ Company Limited Jl st defendant) and National· Insurance Corporation Tanzania Limited (2 nd defendant) which they did. Thereafter, the case continued to be mentioned on various dates. On 25 th November, 2003, the plaintiffs filed an Amended plaint after being granted leave to do so by Madame Bubeshi, J. (rtd). At paragraph 5 of the Amended plaint, the plaintiffs aver inter-alia that they are retired employees of 1st defendant Tanzania Portland Cement Company Limited and that they were under the SCHEME OF GROUP LIFE ASSURANCE entered in by the 1 st defendant and the 2 nd defendant in 1987. - - -- - -- - - - - - - - -- - - - - - - - - - - - At paragraph 6, the plaintiffs and all the persons listed in Annexture 'A' claim

different amounts of money from the 1st defendant and 2 nd defendant on grounds that they did not honour the Trust Deed made on 31 st May, 1989 for the reasons better known to themselves. At paragraph 8, the plaintiffs state that their claim is as indicated in annexture 'C' to the Amended plaint. At paragraph 10, the plaintiffs pray for ,.. 4 judgment and decree for payment of money as indicated in annexture 'c', interest at court rate, general damages and costs. Annexture 'c' to the Amended plaint is a computation made by the :glaintiff~s_rep-1:e.sen-ta-tive-s-,---- -- indicating the name of each retired employee, his basic salary, his total salary for 3 years and the amount that each of them prays to be paid by the defendants as emoluments from the scheme of group life Assurance which was established by the 1st defendant in 1987. Before hearing suit, there was an application to join one Iddi Gunza in this suit. I dismissed it on 25 th February, 2013. Thereafter, counsel for the 1st --- 5- -- ~ - defendant raised a point of preliminary objection that this court has no jurisdiction to try this suit. I overruled it on grounds that this court was functus officio to determine it because a similar point of objection had earlier before been raised by counsel for __the-1 st Gl@fenEl-a-n-t--bt:1.-t-i-t-was-overrulea.-oy my leat4~~~l_ brother Mandia J. as he then was in his ruling

dated 26 th May, 2005 by ordering that the suit should proceed to trial on merits. I started hearing this suit on 27 th January, 2014. Eight issues were framed for determination by the court. They are as follows:- _1.,, 6 1. Whether the matters covered in the claim form part of contract of employment between the plaintiffs and 1st defendant. 2.Whether there is a legally valid Trust Deed between the plaintiffs and the defendants and if yes wnetnertlie plaintiifscan enforce it against the defendants. 3.Whether the 1st defendant was the custodian of the proceeds of the Trust Deed. 4.Who are the parties to the Trust Deed. 5.Whether the 2 nd defendant paid the benefits of the Trust Deed (if any) to the 1st defendant.

6. What is the relationship between 1 st and 2 nd defendants and the plaintiffs. 7 7. What is the relationship between 1st and 2 nd defendants. 8.To what reliefs are the parties entitled to. Before determining these issues, let us first of all look at the facts of this_cas_e_Th-ese-facts-a-~g_a-s-f0l-l0w-s: , - - - - The plaintiffs are 102 in number. They are former employees of the 1st defendant. They allege that they retired on voluntary basis and were paid their terminal benefits except their life assurance package ) under the group endowment scheme which was established by the 1st defendant in 1987 to boost their terminal benefits and gratuity upon retirement or death. It is further alleged by the plaintiffs that the 1st 8 defendant formed a Trust Deed and appointed the Trustees. These Trustees are Mr. Harmer Laiti Kiwia, Mr. Abubakar Shebuge, Mr. Juma Mshihili, Mr. Gideon John Nassari and Mr. Mathew Sosten Kisinda. The plaintiffs claim that in breach of the rules of the --+FB.-s-t-Beecl,th-e-1-st-defendant ana2n°aefendantdid _ . not pay them their life Assurance package payable , under the group endowment Scheme totaling to Tshs 262, 216, 780. Before filing this suit, the plaintiffs served a demand notice to the defendants but they did not pay them their life assurance benefits. The defendants resisted their demand notice. Hence this suit. Let me now start to determine

the issues that this court has been called upon to determine. On the first f :\ 9 issue, this court is called upon to decide as to whether matters covered in the claim form part of contracts of employment between the plaintiffs and 1st defendant. As it will be shown herein below matters covered in the claim do not form part of contracts of employment fietween the plaintiffs and 1st defendant. First of all, the plaintiffs in this case are not claiming for their terminal benefits arising out of their employment with the 1st defendant when they reached the age of retirement. The 1st defendant did pay them their work benefits on retirement. As it was pointed out by Mandia, J. as he then was on 26 th May, 2005, the propriety of the suit between the parties hangs on the existence of a group Life Assurance Scheme which 10 cannot be linked to terminal benefits arising out of employer/ employee relationships. Secondly, the contracts of employment between the plaintiffs and the 1st defendant were entered into on the first day of their emQloy~m~e~n:_:!:_t~----------- Thirdly, the question of group Assurance Scheme came into existence later during the course of their employment in July, 1987 when the General Manager Mr. Basilida called a meeting of all workers which was addressed by the Administration Manager Mr. Abubakar Mshihili who informed them during his address that the 1st defendant

had designed a scheme known as group Endowment Scheme from ,II 11 which all of its employees will benefit by being paid 10%, 20%, 30%, 40%, 100% per annum depending on one's rank once they retire or die. Therefore, I answer the first issue in the negative. - ,__--'r-he--2-nd,3-rd,4-th-arrd-5 th issues tafl< about the Trust Deed. Let me begin with the fourth issue as to who are the parties to the Trust Deed. According to the evidence on record that is exhibit P 1, the parties to the Trust Deed is the 1st defendant Tanzania Portland Cement Company Limited and Mr. Harmer Laiti j Kiwia, Mr. Abubakar Shebuge, Mr. Juma Mshihili, Mr. Gideon John Nassari and Mr. Mathern Sosten Kisinda. 12 I think the next issue to be considered is the third issue on which the court is called upon to determine as to whether the 1st defendant was the custodian of the proceeds of the Trust Deed. In my opinion, the custodian of the proceeds of the Trust Deed are the , ~Trustees. The 1st Defendant was only the author of the Trust after declaring to the employees during the meeting called by its General Manager Mr. Basilida in July, 1987 that a Group Assurance Endowment Scheme is gona be established by it for their benefit either on retirement or death. The issue which I think should fallow to be determined is the second one. On this issue, the court is called upon to decide as to whether or not there is 13 a legally valid Trust Deed between the plaintiffs and the defendants and if yes whether the plaintiffs can enforce it against the defendants. The Trust Deed was tendered in evidence as exhibit Pl. It was contended by counsel for 1st defendant that in order for the Trust _D~~d to be legally y_alid, it must bLregister~d _with~_ RITA as per the Trustees Incorporation Act Cap. 318 R.E.

2002. She said, the Trust Deed in issue was registered at the Land Registry which is not the proper place to register Trust Deeds. She submitted that the TRUST DEED is invalid and not binding and that it contravenes S. 3 of the Trustees Incorporation Act Cap. 318 R.E. 2002 which provides inter-alia as follows:- 14 "... a trustee on trustees · holding properly in trust for any religious, educational, literary, scientific, social or charitable purposes who has not or have not been incorporated under any law or wnose incorporation is not provided by any law, shall apply for incorporation under this Act. " Furthermore, it was contended by counsel for the 1st defendant that even if the Trust Deed was valid j still the plaintiffs cannot enforce it against the defendants except the registered trustees. First of all, I wish to point out here that the Trust Deed was not between the plaintiffs and the 15 defendants. It was between the 1st defendant and the trustees namely: - Mr. Harmer Laiti Kiwia. Mr. Abubakar Shebuge. Mr. Juma Mshihili. Mr. Gideon John Nassari & Mr. Mathew Sosten Kisinda. Secondly, I wish to point out that S.3 of the Trustees Incorporation Act. Cap. 318 R.E. 2002 which was relied upon to invalidate the Trust Deed has nothing to do with the registration of Trust Deeds. It has something to do with incorporation of the Trustees under the Trust Deed. I agree with

counsel for the 1st defendant that the Trust Deed in issue '~. -· - . . -- ··- -- -· --· - - 16 ought to have been registered by the 1st defendant with the office of the Administrator General/RITA but a failure to register it does not render it invalid so long as it is signed by the author (1 st defendant) and the trustees. Its registration was a mere formality. The 1st defendant company loved the plaintiffs who were its former employees. As a team they generated billions of Tanzanian shillings for the company's owners. They did so under hot, noisy and dusty conditions of their cement production plant. So, the 1st defendant decided to form a Trust for their benefit on retirement or death. In my view, even if a failure to register it with the office of the Administrator General/RITA renders the 17 Trust Deed invalid, such a failure cannot make the plaintiffs lose their rights under it as it was non of . their business or duty to register it. The duty do so squarely lied on the 1st defendant who prepared it and registered it in a wrong place. It is also funny for the 1st defendant to declare its own document as invalid and not binding. As to whether or not the Trust Deed can be enforced by the plaintiffs against the defendants, I am of the considered view that it cannot be enforced by I J the plaintiffs against the 2 nd defendant but it can only be enforced by them against the

1st defendant who prepared it of its own will and the Trustees who accepted to hold their benefits under the trust. I wish 18 to point out here that non joinder of the Trustees in the suit does not render the suit against the 1st defendant incompetent. The next issue to be determined is the fifth one. Qn thi~ issue, the court is caIIea upon to aetermine as to whether or not the 2 nd defendant paid the benefits of the Trust Deed (if any) to the 1st defendant. In actual fact, the 2 nd defendant paid the benefits of the Trust Deed to the 1st defendant. The fact that the 2 nd defendant did so can be deduced from the ( l evidence of the 2 nd defendant's witness Mr. Henry Mwakisi who told this court that the 1st defendant did establish a Group Endowment Assurance Scheme with the 2 nd defendant, the National Insurance 19 Corporation of Tanzania Limited and that under the said scheme, the 1st defendant had to contribute money for its sustainability. That, he does not have evidence of how much money was contributed by the 1 st defendant to the scheme. It appears however that he.was reluctant to show how m1.1GhJ,V_as_p_9-id __ by the~ __ 2 nd defendant to the 1 st defendant for the benefits of the plaintiffs. This disposes of the 2 nd , 3 rd , 4 th and 5 th issues. Most of them have been answered in the positive. i I Let me now go to the sixth issue. On this issue, the court is asked to

determine as to what is a relationship between 1 st and 2 nd defendants and the plaintiffs. In my view, this issue is a mere academic 20 one. It is not in dispute that the plaintiffs are former employees of the 1st defendant. They all retired. Counsel for the 2 nd defendant submitted that apart from P.W.2 Thomas Usiri who tendered exhibit P4 to show that he retired, there is no evidence to show that __the rest of the plain tiffs actually retired in __Qrder t_o qualify for the scheme benefit. He said that they believe that the rest of the plaintiffs were terminated or entrenched or resigned from employment and that therefore they do not qualify for the scheme benefit. However, from the totality of evidence on record there is no doubt that all of the plaintiffs retired from employment. Thus, they all qualify for the scheme benefit. Moreover, the 1st defendant does not deny that they all retired from employment. The plaintiffs I ... , , .. 21 are related to the 1 st defendant as its former employees but they have no relationship with the 2 nd defendant the National Insurance Corporation Tanzania Ltd. This disposes of the sixth issue. On this issue, the court is asked to determine as to what is a relationship between 1st and 2 nd defendants. This issue is very simple. In terms of the relationship between the two, the 1st defendant was the client of the 2 nd defendant as an insurer

with whom it ' ( deposited its money under the Group Endowment Assurance Policy. This disposes of the seventh issue. The last issue is the eighth one. In this issue, the _e_outLis_asked_ to determine as to what reliefs are the . ,4-Y' • - --- - 22 parties entitleq to. In my opinion, the plaintiffs are _ entitled to ju_dgment in their favour as against the 1 st defendant only. The plaintiffs top ranking officers such as Fadhili Senkoro, Nathan Kafanabo, Saimon Malingo and Joseph Haule are entitled to 40% of their _salary_per annum with effe_ct from Ju.ly,_1987 to the_ date of retirement being their retirement benefits arising out of the Trust Deed. The plaintiffs low ranking officers such as P.Wl Zephania Marema who was a Miller and P.W.2 Thomas Usiri who was a driver are entitled to 30% of their salary per annum with effect from July, 1987 to the date of their retirement being their benefits arising out of the Trust Deed. The plaintiffs are also entitled to interest at court rate of - - - - - - - - - ------------------ - - - 23 7% per annum on the decretal sum from the date of filing this suit to full-- payment - .- of the decretc:l! ~um . - ·- --- -·- ,,. ·- - As from whom the ·plaintiffs are supposed to be paid their reti~ement benefits as between the 1st question is that the one who is supposed to do so is thel stdefendant who authored the scheme, undertook to contribute to

the scheme and stood to control and indemnify the Trustees with whom it deposited confidence to administer the scheme. In the final analysis, I enter judgment in favour of the plaintiffs as against the 1st defendant with costs -- - - - ... ---- --- -- - --••-' ---- - . --- - -- -· ·--· - - - • -- J -~ ,. l ~- / -'-",- -- 24 and I dismiss the suit as against the 2 nd defendant the presence of Miss Tausi for 1 st defendant and in the presence of some few plaintiffs but in the absence of counsel for 2 nd defendant. t-.:s~ ~ A.Shangwa i ;

JUDGE 28/5/2015