LUMBERG FINAL JUDGMENT

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA

COMMERCIAL DIVISION

AT DAR ES SALAAM COMMERCIAL CASE NO 132 OF 2023 LUMBARG GROUP LIMITED ……………………..……… PLAINTIFF

VERSUS

HERITAGE INSURANCE COMPANY TANZANIA……………………...…………1ST DEFENDANT IMPERIUM INSURANCE BROKERS ………………2ND DEFENDANT

JUDGMENT Date of judgment: 17.2.2025 A.J. MAMBI: J This judgment emanates from the claims made by the plaintiff LUMBARG GROUP LIMITED against the defendants (HERITAGE INSURANCE COMPANY TANZANIA & IMPERIUM INSURANCE BROKERS). The genesis of this Commercial dispute can be traced from the insurance contract between the plaintiff and the first defendant. The plaintiff in her plaint claims that the defendants breached the insurance contract that involved the Car type of Scania Model R 144, Chassis Number YS2R8X40001254637 with Registration Number T301 DYH which was Page 1 of 17 allegedly involved in an accident. The plaintiff claims against the defendant jointly and severely for the payment of Tanzania shillings 143, 200,000/=being payment for vehicle spare parts and 100,000,000/= payment of the loss of business including general damages. It is on the records that the plaintiff who is the owner of a car mark scania with registration number T 301 DYH had insured the said car with the defendant’s companies through the second defendant. The plaintiff further alleges that sometimes on 22nd March 2023 at around 4:48 hours the said car was involved in an accident at Mwembe Togwa Mashimoni, Dar es salaam. In her claim, the plaintiff also alleges that, as a result of the accident the vehicle sustained damages that included engine gear box, carbine complete chassis, wheel tire, diesel tank,

radiator and intercooler, battery and battery stand, airbag, air buster, front show, steering box and propeller shaft. The plaintiff also alleges that the accident damaged exhaust muffler, front axle complete, front leaf spring, mudguard, front lamp, tube housing and differential, tipper boom, Joost and plate, air cleaner housing, air cylinder, body repair and spray painting. The plaintiff in her plaint states that she reported the accident to the defendants but there was no response. The plaintiff claims that the first defendant has caused loss to her since she was using that car to generate income up to 500,000/= per day. Page 2 of 17 The defendants were served with the plaint but only the 1st defendant responded while the 2nd defendant could not show up and thus the case was determined ex-parte against her. In her written statant of defence (WSD) the 1st defendant disputed the allegations of the accident that was alleged to have occurred naturally since the accident appeared to have been planned. The 1st defendant in her WSD acknowledges that the plaintiffs’ car was insured by her but the insurance value was not tshs 180,000,000/= as claimed by the defendant. The 1st defendant in her WSD further stated that after being notified of the accident she hired an independent loss adjustment company called Spyglass Adjusters Limited for assessment. The first defendant in her WSD

further contends that after the investigation by the Spyglass Adjusters Limited for assessment it was revealed under the report the value of the car that was insured was tshs 43,835,750/=. The 1st defendant in her defence rises several doubts as the circumstances of the alleged accident. The 1st defendant wonder as to how comes the driver jumped from the car without any injury to him or others who were in the car. The 1st defendant also raised doubts as to why the driver did not report the accident apart from, rushing to his home. Before I proceed determining the issues, I wish to summarize the evidence by both parties. The first plaintiff witness was Luko Vegula ( PW1). PW1 in his testimony relied on some exhibits namely Exhibit L-1 Copies of the motor vehicles registration card (L-1), Exhibit L-2 A Copy of the cover note, Exhibit L- Page 3 of 17 3 A copy of the log book (L-5), Exhibit L-4 that is an abstract of the particulars of road accident from the police force, Exhibit L-5 that are Copies of the pictures which shows damaged parties of the Vehicles. Other exhibits relied by PW1 included exhibit L-6 A copy of the assessment from SIMEC Auto works limited, exhibit L-7 which is a copy of the Demand Letter, Exhibit L-8 that is a copy of the letter and print out. In his testimony PW1 testified that the said motor vehicle was insured by the 1st defendant through a broker 2nd

defendant. He stated that the value of the insurance for the care was Tshs 180,000,000/= and premium full paid of 9,027,000/= tshs. He stated that, the car involved in accident was registered for commercial purposes of carrying sand. PW1 testified that after the incident the matter was reported at the nearest police station. PW1 further testified that the car got damages on different parts as indicated under paragraph 8 of the plaint. On the other hand, the second plaintiff witness one Ramadhani Shabani (PW2) who was the driver during the accident, testified that for all the time while driving he was very careful and he did not foresee if the incident could have occurred. He stated that the accident was caused by vehicle malfunction. In their defence, the first defendant had a total of three witnesses. The first witness (DW1) namely Chaponda Chihoma testified that he is a senior claims officer of the 1st defendant. He informed the court that he was engaged in hiring Spyglass for investigating the matter and later Page 4 of 17 the NIT for mechanical investigation of the steering of the plaintiff’s car involved in an accident. DW1 testified that, the report revealed that the accident was premeditated hence not natural so the plaintiff could not be compensated. He stated that even if the accident could have been genuine the plaintiff could have been entitled to tshs

43,875,750/=. The second defence witness (DW2) one Paul Alex Akaro in his testimony testified that he is working with Spyglass Loss Adjuster the company which was hired by the 1st defendant to investigate the accident that involved the car of the plaintiff. He testified that he saw the car damaged and he also interviewed different people regarding the accident. He informed the court that he observed contradicting information which came to the conclusion that the accident was premeditated. On the other hand, DW3 Mr. Abel Masanja from National Institute of Transport (NIT) who testified on mechanical issues in his testimony concluded that the car steering had no any problem and thus the accident appeared to have been planned. Parties had also an opportunity to support their evidence with submissions. In this case the plaintiff enjoyed the legal representation of the learned advocate Mr Gadi Silas Kabhele, the 1st defendant enjoyed legal representation of the learned advocate Audax Kahendaguza Vedasto. In addressing the issue as to whether the accident occurred naturally, the Learned Counsel for the Plaintiff Mr Gadi Silas Kabhele submitted that the accident was genuine and not pre-meditated as the 1st Page 5 of 17 defendant claims. He averred that the plaintiff, through the testimony of PW1 believes that the company had no reason to pre-meditate an accident for the sake of

insurance benefits because the motor vehicle was still new and while operating it brought about huge profits each and every day. He was of the view that, one cannot purchase such an expensive motor vehicle, operate it to make huge amounts of money then after a few months after the purchase fake an accident just to obtain insurance benefits. Learned Counsel for the Plaintiff argued that the driver of the motor vehicle Ramadhani Shabani (PW2) testified that when he was on motion driving steering rod of the motor vehicle had malfunctioned and when driving it was taking him to a different direction and it was uncontrollable as the road was narrow and muddy, that is when the motor vehicle got an accident. He referred the Vehicle Inspection Report by the police (Exhibit P-4) and the pictures tendered in the court. He submitted that the evidence of PW2 (Driver Ramadhani Shabani) is clear that he lost control of the motor vehicle due to the said malfunctioning and he had to jump out of the Motor vehicle to save his life. He contended that having been notified by the driver, the 1st Defendant alleged to appoint risk and loss assessors, Spyglass Adjusters Limited to investigate, assess the said accident but there is no any record of such appointment tendered in court. The Learned Counsel for the Plaintiff averred that the spyglass Adjusters Limited conducted assessment while they had no

active license which is contrary to Section 61 (1) of the Insurance Act, No. 10 of 2009. He Page 6 of 17 further submitted that there are so many reasons to believe that the 1st defendant was not acting on the best interests of his client (the plaintiff). The learned Counsel argued that Mr. Chaponda Chihoma (DW1) on paragraph 6 of his witness statement stated that the 1st defendant had accepted the services of another entity to inspect the incident being officers from National Institute of Transport (NIT) but the defendant did so without informing the commissioner of Insurance as required by Guideline 3.4.3 of the Guidelines on Insurance Claims Management, 2022. He argued that it is without a doubt that there are damaged parts and accessories of the motor vehicle as a result of the said accident and the evidence submitted by the plaintiff that was admitted as Exhibit P4 which are pictures of the parts of the motor vehicle that were damaged. He was of the view that since the plaintiff was able to provide the police report and pictures of the said damaged parts of the vehicle as per to exhibit P4 and exhibit P5 respectively, the plaintiff proved its case as per the provision of Section 110 (a) of the Evidence Act, Cap. 6 [R.E. 2019]. Addressing the issue as to what reliefs are parties entitled to, the learned counsel submitted that the plaintiff is entitled to payment of

Tanzanian Shillings one hundred and forty-three Million (TZS.143,000,000/=) being payments for vehicle spare parts damaged due to the accident. In response, the first defendant through Audax Kahendaguza Vedasto briefly submitted that the plaintiff failed to prove her case as per the requirements of section 110 and 111 of the Evidence Act, Cap 6 [R.E. 2019] as the accident was not natural. He submitted that insurance Page 7 of 17 policy only covers natural accidents and not deliberate ones. He contended that the evidence of DW1 and DW2 is clear that the circumstances of the accident create a lot of doubts that it was not natural but appears to be planned. He referred the inspection report that is Exhibit PE4 (PF 90 Vehicles Inspection Report) by the plaintiff which show that there was no defect on the steering. The learned Counsel further averred that Exhibit D-4 that is the report of Spyglass Loss Adjuster Limited show that the steering that were examined by the National Institute of Transport (NIT) had no any defect that could cause any accident. He referred page 6 at paragraph 4 of the report where the report briefly stated that: “All comments on the system were in place and working properly and the system was able to turn the wheel. The examination team observed that there were no components broken down during the accident that may lead to accident”. The learned Counsel for

the defendant contended that the evidence of PW1 and PW2 had more contradiction on their statements. He referred the decision of the court in Jadili Muhumbi vs R. Crim Appel No 229 of 2021. He was of the view that the claim of the amount of 143,000,000/= was not justifiable since there was no any documentary proof admitted at the court. In their final submissions the 1st defendant insisted that the accident was not natural rather it was planned by the plaintiff and thus the plaintiff had no right for compensation. Page 8 of 17 Having summarized the evidence and submission by both parties let me now address the key issues. The main issue in my view is whether there was car accident as limed by the plaintiff that could make the first defendant who is the insurer liable. There is no doubt from the records that the plaintiff car was insured by the first defendant through the second defendant. In this regard there was contractual relationship between the plaintiff and the defendants. Before I determine whether there was an accident and whether the defendants are liable, I wish for further reference address an insurance contract and how can one prove and claim once his property is involved in an accident. Briefly, an insurance contract is a legal agreement between an insurance company and a policyholder. In other words, insurance contract defines the policyholder's rights and the

insurer's obligations. From the legal point of view, an insurance contract is a legal agreement between an insurer (the defendants in our case) and the insured (the plaintiff), which outlines the insurer's obligation to indemnify the insured against specified losses from particular contingencies or risks. In other words, an insurance contract is a type of agreement where an individual or entity pays a premium to an insurance company in exchange for financial protection against potential losses or damages. Indeed, this is a binding legal contract whereby a contract under which one party (the insurer) accepts significant insurance risk from another party (the policyholder) by agreeing to compensate the policyholder if a specified uncertain future event (the insured event) adversely affects the policyholder’. Page 9 of 17 Generally, these contracts are often considered contracts of adhesion due to the standardized terms and the power dynamics between the parties involved. This means the terms of the contract determine the claims the insurer is legally required to cover. It follows that, it is crucial to read and understand the policy thoroughly to know what is included and excluded. It is trite law that, an insurance contract must meet four conditions in order to be legally valid: it must be for a legal purpose; the parties must have a legal capacity to contract; there must be

evidence of a meeting of minds between the insurer and the insured; and there must be a payment or consideration. To meet the requirement of legal purpose, the insurance contract must be supported by an insurable interest and it may not be issued in such a way as to encourage illegal ventures. Coming back to the issues in this case, as I alluded earlier that there is no doubt that there was insurance contract among the parties and each party was duty bound to fulfil its obligations as per the terms and conditions of the contract. It should be born in mind that an insurance contract provides protection against damages that may occur. In other words, insurance is the financial support by the company acting as an insurer. This means that the insurance company, once committed, is bound by law to provide the insured with help, assistance and support at the time of need. It follows that, where the insured had an accident, the insurance company must provide all the services and coverage outlined in the contract signed by both parties. Having determined that there was insurance contract among the parties, the question to be Page 10 of 17 answered, has the plaintiff proved if her insured car had natural accident? If yes, did the insurer fulfilled her obligations of compensating the insured as required by the law? There have been rival submissions between the parties where by the 1st

defendant believes that the accident did not happen naturally instead it was planned while the plaintiff insists it was a natural accident and genuine accident. I have gone through the evidence by the plaintiff and observed the evidence of the plaintiff witnesses are full of contradiction. This is due to the fact that there is no any witness who indicated if there was an accident and the accident occurred there is no evidence support if such accident was natural. The evidence of the plaintiff witnesses (PW1 and PW2 ) and defence witnesses (DW1 and DW2) reveals that the circumstances of the accident creates a lot of doubts that it was not natural but appears to be planned. The plaintiff witness (PW2) who was the driver testified during accident he jumped from the car and went home. It is not known why PW2 did not immediately report the matter to the police and his insurer while there is no evidence if he was severely injured to the extent he could not do so. This creates doubts if PW2 was telling the truth about the alleged accident. Reference can also be made to the inspection report that is Exhibit PE4 (PF 90 Vehicles Inspection Report) which shows that there was no defect on the steering. I have gone through the PW2 witness statement which show that the cause of accident was vehicle malfunction which means a failure to operate or function in the normal or correct manner but

the report from the investigators shows that there was no any malfunction. As rightly Page 11 of 17 submitted by the learned Counsel for the first defendant that Exhibit D- 4 that is the report of Spyglass Loss Adjuster Limited show that the steering that were examined by the government institution that is National Institute of Transport (NIT) had no defect that could cause any accident. Indeed, that NIT report at page 6 at paragraph 4 reveals that: “All comments on the system were in place and working properly and the system was able to turn the wheel. The examination team observed that there were no components broken down during the accident that may lead to accident”. Reading between the lines on the above quoted paragraph of the report as commented by the investigator, one may conclude that there was no natural accident that could oblige the defendants to compensate the plaintiff’s claims. In this regard, the claim of the amount of 143,000,000/= by the plaintiff was not justifiable since there was no any documentary proof admitted at the court. It is trite law that like civil actions, in insurance claims the burden of proof as to any particular fact or claim lies on that person who (the plaintiff in our case) wishes the court to believe in its existence unless it is provided by law that the proof of that fact shall lie on any other person”. The court in NATIONAL BANK OF

COMMERCE LTD Vs DESIREE & YVONNE TANZAIA & 4 OTHERS, Comm. CASE NO 59 OF 2003( ) HC DSM, observed that:- “The burden of proof in a suit proceeding lies on their person who would fail if no evidence at all were given on either side”. Page 12 of 17 Therefore, since the plaintiff was claiming that his car was involved in an accident that needs compensation from the first defendant, it was the duty of the plaintiff to disclose all the facts under her plaint but she did not do so. I thus wish to make reference to the persuasive decision where Lord Denning in R v Paddington, Valuation Officer, ex-parte Peachey Property Corpn Ltd [1966] 1QB 380 at 400-1 had once observed that: "The court would not listen, of course, to a mere busybody who was interfering in things which did not concern him. But it will listen to anyone whose interests are affected by what has been done." In another persuasive decision, the Similar position was observed and laid down by Lord Justice James, a distinguished English Judge in the Ex P. Sidebotham case (Supra) [1880) 14 Ch D 458, [1874-80] All ER 588] to the effect that a man was not a ‘person aggrieved’ unless he himself had suffered a particular loss in that he had been injuriously affected in his money or property rights. In other words, a person cannot benefit from or take pleasure in something that he has not worked for or earned. Therefore, since the

plaintiff was claiming that his car was involved in a natural accident that qualifies for compensation from the defendants, it is the duty of the plaintiff to disclose all the facts on his claim but she Page 13 of 17 did not do so. See R v Paddington, Valuation Officer, ex-parte Peachey Property Corpn Ltd (Supra). My analysis of the evidence and records implies that the plaintiff did not prove her case since she failed to show her legal rights apart from just claiming that she was entitled to compensation for her damaged car without proof on the balance of probabilities. I am of the settled view that all claims by the plaintiff have no merit as she failed to prove her claims and all allegation on the balance of probabilities. It should be noted that in civil cases such as insurance claim the burden of proof always lies on the plaintiff and the standard of proof is on the balance of probabilities. In other words the burden of proving an allegation or fact rests on the party (the plaintiff in our case) who substantially asserts the affirmative of the issue and not upon the party who denies it for negative it is usually incapable of proof. This can be corroborated by the provision of the law that is section 112 of the Evidence Act, Cap 6 [R.E 2019] which is to the effect that the burden of proof as to any particular fact lies on that person who wishes the court to believe in

its existence. In other words, he who alleges any claim in civil or commercial case must prove his/her claim on the balance of probabilities in line with the requirements under section 112 of the Law of Evidence Act, Cap 6 [R.E 2019], which provides that: - “The burden of proof as to any particular fact lies on that person who wishes the court to believe in its existence unless it is provided by law that the proof of that fact shall lie on any other person”. Page 14 of 17 The gist of Section 112 can be read together with section 111 of Cap 6 which provides that: “The burden of proof in a suit proceeding lies on that person who would fail if no evidence at all were given on either side”. The above provision of the law was equally considered by the court in NBC LTD Vs DESIREE & YVONNE TANZAIA & 4 OTHERS (Supra) observed that:- “The burden of proof in a suit proceeding lies on their person who would fail if no evidence at all were given on either side”. In this regard, since the plaintiff was claiming that her car was damaged in accident and she was entitled for compensation from the defendant, it was the duty of the plaintiff to disclose all the facts under her plaint, but she did not do so. Indeed, this court had always been hesitant to listen to a mere busybody who was interfering in things which did not concern him and would be more justifiable to listen to anyone whose interests are affected by what has been done by the other. As I alluded that the evidence and records are clear that the plaintiff did not prove her claims on the balance of probabilities, I hold that all claims by the plaintiff are devoid of merit. From the foregoing reasons, I dismiss the suit in its entirety. Each party to bear own coasts. Page 15 of 17 A.J. MAMBI ,J

JUDGE 17th February, 2025 Judgment delivered this day of 17th of February 2025 before all parties DATED AT DAR-ES-SALAAM ON THIS 17rd DAY OF FEBRUARY 2025 ................................... A.J. MAMBI

JUDGE th 17 February, 2025

RIGHT OF APPEAL EXPLAINED Page 16 of 17 ................................... A.J.MAMBI

JUDGE 17th February, 2025 Page 17 of 17