ultimate security tanzania limited vs maxinsurance tanzania limited 2022 tzhccomd 82 22 april 2022

IN THE HIGH COURT OF THE UNITED REPUBLIC OF

TANZANIA (COMMERCIAL DIVISION)

AT DAR ES SALAAM COMMERCIAL APPEAL NO. 2 OF 2020 (Arising from RM's Court Civil No.306 of 2014) ULTIMATE SECURITY TANZANIA LIMITED..... APPELANT

VERSUS MAXINSURE (TANZANIA) LIMITED ...RESPONDENT Date of the Last Order: 08/03/2022 Date of the Ruling: 22/04/2022

JUDGMENT NANGELA, J.; This Judgment touches on ’’issues^ related to the K \ \ principle of subrogation rand the doctrine of privity of /) X //^ contract. The^contentious issues^iscussed by the parties herein arjse^from^a dedsioXof\the RM's Court (Hon. Nongji^^RM) in CiViHCase=:No.306 of 2014, dated 16th Novemb"er^O.|z-Eors clarity, I find it befitting to set out some^brief facts constituting the Appeal. Tne^Appellant herein had a contract with one Mukpar Kagera Ltd, a company in charge of godowns wherein various goods, belonging to M/s Excel Crop Care (Africa) Ltd (a third party), were kept. The said M/s Excel Crop Care (Africa) Ltd was a lessee of Mukpar Kagera Ltd. As such, M/s Excel Crop Care (Africa) Ltd had no contract with the Appellant. Page 1 of 26 However, on the basis of the contract between Mukpar Kagera Ltd and the Appellant, the latter provided security services to such godowns leased to M/s Excel Crop Care (Africa) Ltd. Since misfortunes never send an alert message to any, it happened that, a theft/burglary incident ensued and goods belonging to M/s Excel Crop Care (Africa) Ltd were stolen. Lucky was it, however, that, M/s Excel Crop Care (Africa) Ltd had an InsuranceSpolicy with the Respondent herein and, under their^ontrart^of insurance; Resporiden^a^ting-i under the doctrine of subrogation, instituted jXsultXthe RM's Civil Case No.306 of 2014, against'the

Appellant herein. In that suit, the Respondent claimed from the Appellant herein, a sum of USD ($) 50,587.00. It was alleged that, such a sum was the indemnification amount paid by the Respondent for the losses suffered by M/s Excel Crop Care (Africa) Ltd, who was insured by the Respondent (Insurer). Upon hearing the Parties, the trial Court granted judgment and decree in favor of the Respondent. Aggrieved Page 2 of 26 by the said judgment and decree of the lower Court, the Appellant preferred an appeal in this Court. The appeal at hand is premised on the following grounds, to wit, that: 1. The trial Court erred in law and fact for failing to hold that there was no privity of contract between the Appellant and the Respondent^ 2. The trial Court erred In fact andJn law by holding the \AppellanB responsible for the loss^by refemng^ a contract between Mukpar Kagera Ltd and Excel Crop^Lfd^wl^ere tiie Appellantewas^nota party^^ 3. The^rial Court errecHn law and fact /)by holding/'tfiat^Mukpar^Tanzanla Ltd y*/ vi t ' f• ^^was sui^diaryvtf^Excel Crop Ltd while therejwas no any, evidence to \ thare^ct^\^J) fl. The tria^Court erred in law and in ^Jact by ignoring the limitation of liability clause contained in the security services agreement.

5. The trial Court erred in law and tn fact by holding the Appellant responsible to a loss occurred based on Exhibit P2 without analyzing the contents and shortfalls of that Exhibit (investigation Report).

6. The Trial Court erred in law and in facts for failure to analyze properly Page 3 of 26 the evidence adduced during the trial, and in the course assumed evidence that were (sic) not adduced during trial.

7. The trial Court was biased in evaluating the evidence tendered in Court and, consequently, occasioned miscarriage of justice to the Appellant. Unfortunately, the record of the lower^Court could not reach this Court promptly. As sucnMhis.case could not x* //Vs proceed as quickly as anticipated Until when the record was brought to my attention onZihe T^NoVember 2021. On the zX \ material date, Mr^Pascal'^Kamala,^ learned advocate, appeared for the Appellant while Mr Simon Baro Lyimo /) X //'X Vz appeared fordtie Respondent. Orr that date, this Court orderedlhe^parties to dispose of tfcie appeal by way of filing hC X X ft written'submissions. \he,learned advocates for the parties dul^fbmpned^ithsthe/schedule of filing. I will therefore summarize%\he%arties' submissions before a render my X judgment. ft J) In the course of disposing of the grounds of appeal Mr Kamala chose to argue grounds 6 and 7 together. However, I think that, grounds 1 and 2 could/should have been argued together, as well, because they revolve on the issue of privity of contract. Submitting on the first ground, Mr Kamala was of the view that, ordinarily, it is only the parties to a contract who enjoys the rights and assumes the duties there Page 4 of 26 under with an exception of third party beneficiary contracts and assignments. He contended that, although the Appellant is aware that the Respondent had, in

the RM's Court in Civil Case No.306 of 2014, sued under the principle of subrogation, even so, that principle does not water down the doctrine of privity of contract. He further argued, rather, that, the principle of subrogation places an insurance company to a legal position which the insured had^ujhtte contract, or the right which the insured had in law’and equit^XX/ According to Mr Karbala,'ii^rd^^r^the insurer to exercise subrogation^rin^le^one has^tofirst of all establish whether the insuredyhad rights\protected by agreement or , . 3 V> j 2 / , H any law or in .equity againsKthe intended third party to be sued. He-surmised.thatSf theWiird party is not liable to the XX X X \\ insured/he likewise cannot bediable to the insurer by reason < X || XX ~ of subrogatidijV^-—> </ \to support<<his views, reliance was placed on the US cases of^MaryLand Trust Company vs. Poffenberger A.L.R, 546 and MacNeice vs. Eliasons (1894)78 Md.168, 27 A.949. Mr Kamala argued further that, since the Respondent alleged the right of the insured arose from an agreement under which the right to subrogate arises, then the Respondent had a legal obligation to establish that the insured was actually a party to that contract or had a right Page 5 of 26 to sue or claim under it, since it is not every one who benefits for the performance of a contract between other persons is entitled to sue as a third party

beneficiary. Mr Kamala held a view that, if one is to sue as a third- party beneficiary, the contract must have clearly shown intent to give direct benefits to the third party person as propounded in the Latin Maxim: Jius quaesitum tretio. He contended that, such was not the fact in tqe current appeal at hand. Referring to Pollock & Mulla/The LawofXontract, at page 50, he observed that/) ... the rulejs^hat, no onebutpaities to, contract between A & B cannot impose liability upon C. A person cannot be subject to the burden of a contract to which he is not a party. It is the counterpart of the proposition that a third party cannot acquire rights under a contract." Mr Kamala relied and referred also to this Court the authoritative statements by Treitel, the Law of Contract 11th Edn, which had a similar effect as the one proposed by Pollock and Mulla above. He concluded, therefore, that, the Page 6 of 26 trial Court erred as it failed to hold that there was no privity of contract between the Appellant and the Respondent. In response to the submissions on this first ground, Mr Jovinson Kagirwa, learned Advocate for the Respondent submitted that, grounds 1, 2 and 3 are essentially premised on the issue of privity of contract. He submitted that, facts regarding privity of contract were readily admitted by the Respondent witnesses and were, hena^undisputed and called for no long

narratives which ^contended wjere for academic purpose. In his submissions,ZW^Kaqirwa vstatedAhat, the Respondent's claimsrat triah^ere basedori' the applicability of the principle of subrogation. For more1 on that principle he A //X X referred to this/COurt. the South .African Case of Des O. 7A V \X^ Smith versus vk.K Banjo, k Case NO.AR290/10 in the //A \ X X Kwazul-Natal High Court, Pietermaritzburg. wzne^suomittg.d,-therefore, that, it is in line with what the principle of^subrogation is all about that the submissions by \ \\ * Mr Kamala because open to challenge. He contended that, according to page 28 of the typed proceedings of the trial Court, the Respondent was able to demonstrate her contract of subrogation between M/s Excel Crop Care (Africa) Ltd and her, and which was admitted as Exh.P3 as well Exp.P4 (the subrogation letter). As for him, Exh.P4 gave and assigned rights to the Respondent to recover from the Appellant herein what was Page 7 of 26 paid to M/s Excel Crop Care (Africa) Ltd. Mr Kagirwa contended that, as a matter of principle, the exception of a rule implies that there is a general rule in the first place. He submitted that, the Respondent was fully aware that, she had no direct contractual relations with the Appellant herein. However, it was his submission that, privity of contract as a general rule, has its exception, which exception, in his view, was

exhibited by Exh.P3 and P4 which wer<e un-objected by the Respondent. He as well contended that, ^ndePE£h?P3^e P4, M/s Excel Crop Care assigned its rights^^^the Appellant to the Respondent herein, anoXthat, iris.from^theitwo exhibits, X X the basis upon which the,Respondent sued arises. He also relied on the .testimony /oMPW-3 ywhich was to the effect that, tl^Appellannwasiq<hargXrf security at the bonded warehouse anPlot.No-.66 MboziyRd, Chang'ombe and had a b x (I Xz duty^of'care\to the-insured regardless of their contractual i X XX ~ standings. Mr Kagirwa argued, therefore, that, it was due to the Appellants failures to discharge her duty of care that theft occurred affecting the insured (Excel Crop Care (Africa) Ltd) whs had to be indemnified by the Respondent. Before I proceed further, let me state that, it is a well settled principle in law, that, the duty of the first appellate court is to reconsider and evaluate the evidence and come to its own conclusions bearing in mind, however, the fact that it never saw the witnesses as they testified. The cases Page 8 of 26 of Pandya vs. R [1957] EA 336; Selle vs. Associated Motor Boat Co [1968] EA 123, are supportive of that legal position. With that in mind, let me revert to the grounds and issues argued by the parties in this Appeal. In the first place I find it pertinent that I should start by addressing the issue of duty of

care. In its judgment, the trial court had approached the case under three issues, the first of which was whether the Respondent herein (Defendant in the lower Court) should^esheld^responsible. It a finding in the^K,cje^^c^i^ made Essentially^ duty of care which the affirmative.'itsfi^nclings^ar^tFierefore, exists where^iefejs proyisiomof^servfces have been widely /by the Appellant as bdrig^grroneobs. The question7 assailed discussed^ b$\ the^trialicourt to ask is: was Courts. The-Zcase of Donoghue erron^ous^as\he vs. Appellant contends? Was thereQucha dw^f care? Steyenson^[1932]~AG/‘532 is the most celebrated case which propounded and established the general principle of X a the duty of care concept in law. In Multiplex Construction Europe Ltd vs. Bathgate Realizations Civil Engineering Ltd & Ors [2021] EWHC 590, para.28, the Court was of the view, that: "a duty of care does not ...exist in the abstract. A plaintiff who sues for breach of a duty imposed by the law (whether in contract or tort or under statute) must do more than prove that the Page 9 of 26 defendant has failed to comply. He must show that the duty was owed to him and, that, it was a duty in respect of the kind of loss which he has suffered." See also the case of South Australia Asset Management Corp vs. York Montague Ltd [1996] UKHL 10 and the case of Galliford Try Infrastructure Ltd (Formerly Morrison

Construction Ltd and Morrison Construction Services Ltd) vs. Mott^fllacDonald Ltd [2008] EWHC 1570 (ICC), at [190(d)]^ In this Appeal, what Mr Kagirwa §eemst5)!to/argue is that, the Appellant had aydjuty §^a^^^^that; it was the Appellant's failures ^discharge thateAity^wnich made the Respondent to indemnify the LnsuredJM/s Excel Crop Care (Africa) Ltd). From that pgr^ctiye/and taking into account the principles relating ro^duty^of^care as elaborated in the MultipIex^Ccnstruction's-case (supra) the issue to corisider^here/itherefore, 7 is whether the Appellant had such \ \ v a duty^of car^e and^that it was one related to the kind of loss suffered^by M/s Excel Crop Care (Africa) Ltd, and which loss the Respondent seeks to recover in these proceedings having indemnified M/s Excel Crop Care (Africa) Ltd. In other words, did such duty of care extend to M/s Excel Crop Care (Africa) Ltd whom the Respondent indemnified? From the look of things, and, as correctly stated by Mr Kagirwa, since the claims made by the Respondent were made under the principle of subrogation, Page 10 of 26 insurance policy between the Respondent and Excel Crop implied duty of care towards M/s Excel\Crop\Care/'(Africa) . \ ‘ ' / Ltd. In other words, the duty ofscare wtiijcm^he^Appellant and, as I shall revert to this point later, such claims were justified. I hold it that way notwithstanding the undisputed fact

that, M/s Excel Crop Care (Africa) Ltd was not privy to the contract between the Appellant herein and Mukpar Kagera Ltd. In my view, since the Appellant had a contract to provide security services to Mukpar Kagera Ltd, the lessor to M/s Excel Crop Care (Africa) Ltd, the^Appellant had an Care (Africa) Ltd) proving, as the trial court correctly found, that, the Respondent had a duty to indemnify M/s Excel Crop Care (Africa) Ltd. Second is Exh.P4 which was proof that, the Respondent did indemnify M/s Excel Crop Care (Africa) Ltd to a tune of USD 50,586.65, and, that, M/s Excel Crop Care (Africa) Ltd subrogated all its claims and Page 11 of 26 rights to the Respondent. Third is Exh.P5 which indicated, under Clause 6.2 that, the lessor (Mukpar Kagera Ltd) undertook to provide necessary security to the lessee. Fourth, is the evidence of Pw3 and Exh.P8, which is the contract between the Appellant and Mukpar Kagera Ltd, is also worth noting piece of evidence to be relied upon. But things cannot be left as they are without providing a link between the Respondent's claims against the Appellant. In other words, one has^to ^respond/\to the . h 1- h • AX rl t question: under what basis then\should4the^Respondent claim from the Appellant while tKe^contraerfor the provision of security was betyyeen/thexAppeiraijt and Mukpar Kagera Ltd? As stated/in this appeal, itzwas fully established

in evidence^-thatfSl/s Exhel CropScare (Africa) Ltd had a contr^\^insurance^!!!^^\the Respondent whereby the latterziridemnified_the^former incase of events of theft or \ \ burglary in the godowns, a fact which it did. ^avirmbeen indemnified by the Respondent, it was made clear, as per Exh. P4, that, M/s Excel Crop Care (Africa) Ltd subrogated its right to the Respondent. Essentially, it is evident from Exh.P3, (the Insurance Policy between the Respondent and Excel Crop Care (Africa) Ltd) that, it did not waive the possibility to subrogate. Had that been that way, one would have a different story to tell because, any waiver of subrogation clauses in a contract of Page 12 of 26 insurance, creates an exception to the doctrine of privity of contract in circumstances where the third party beneficiary is not a party to the policy but falls within the contractual definition of those to whom coverage under the policy is extended. Such a scenario was well elaborated by the Canadian Supreme Court in the case of Fraser River Pile & Dredge Ltd vs. Can-Dive Services Ltd [2000] Lloyd's Rep 199. Although the facts in the Fraser's case (supra), do not V Z7 squarely apply to the facts in this Appeal, still the case has n considered principles that are of assistance in resolving issues related to the doctrine of privity of contract and its exceptions. The other case from which persuasive

considerations may be drawn along the lines of the Fraiser's case (supra) is the XZ Xk Q <7 Australian case of Woodside Petroleum Pty Ltd et vs. X X Vi H&R-E&Y Pty Ltd et. (1999) 20 WAR 380. £7 X U Z> ^iln that^Australian_case, the Full Bench of the Supreme Court of Western Australia held that, a defendant who is not a party to the contract of insurance that contains a waiver of subrogation clause can nonetheless enforce it against an insurer claimant that is trying to exercise its rights of subrogation and sue for damages. The point here is that, the waiver created a blockade or exclusion to the third party. A contrary view to the above cited cases, however, holds true, when one employs the same thinking in the context of the facts in this Appeal where there is no waiver of Page 13 of 26 subrogation clause. In the first place, and as I stated herein earlier, it was clear from the evidence and the facts of the case before the trial court that, the contract of insurance between M/s Excel Crop Care (Africa) Ltd and the Respondent did not waive the possibility to subrogate. The above fact means, therefore, that, the Respondent had a right of subrogation which it sought to exercise. The question that follows is: against whom should such a right be exercised? And, the answer would'Bbk exercise itagainst X M X/Z the person who was responsible foe theMpssMqdemnified. If x W x one goes

along with that line of^thpughtsy the culprit will be $ VXX X the one who was responsible for theprovisioji of security services definitely. But that pointing Of a finger will still A x. /? create discusstops in the^rndi^alfaculties of many, since, in In other''wqrds, the issue of privity of contract will the present scenario; itXyill mean^that the accusing finger is come into the surface X with X all \\ its harsh realities so far pointed^towards the^ppellanUa person who had a security y X Vsince acknowledged X# time immemorial. However, from such a cop^acfe^itXJ^ukpa^K^gera Ltd and not the Respondent. framework, a second scenario of discourse does also ensue, to the effect that, even if one is to derive a point from the premises of the contractual relations between the Appellant and Mukpar Kagera Ltd, still the results will be the same in that, the latter (i.e., Mukpar Kagera Ltd) was a lessor of M/s Excel Crop Care (Africa) Ltd, who stood as a third party Page 14 of 26 beneficiary of the contract which Mukpar Kagera Ltd had with the Appellant. Looked at fro a different standpoint, it would as well mean that, the parties to the contract which Mukpar Kagera Ltd had with the Appellant, had in mind the interests of the third party as well, when they concluded the contract to provide security services. And, under the principle of duty of care earlier considered here above, if

thfe^ppellant owed a duty to Mukpar Kagera Ltd, it implie'dty^ovred^e same to M/s Excel Crop Care (Africa) Ltd, the lKisee<of' thejgodowns The above scenario brings home tour mind the fact that, by and large, the development of tort principles has made it possibleSfor one to recovereconomic losses suffered due to the daimant stands to X X be a tpir^-pat^ty beneflciary.^R^is for such a reason I state earlier that in light of the facts herein, I am inclined to agree XT X <7 with the submissions of the Learned Counsel for the Respondent, that, the duty of care as propounded in the vase X J) of Donoghue vs. Stevenson [1932] A.C. 562 (H.L.) will definitely apply to hold the Appellant liable for the losses suffered by the third party even if that party was not privy to the contract between the Appellant and Mukpar Kagera Ltd. It follows, therefore, that, the trial court was right when it held that the duty of care owed to Mukpar Kagera Ltd impliedly extended to Excel Crop Ltd. Page 15 of 26 In essence, that is a sort of thoughts provoking conclusion as it brings to the scene the necessity to discuss the various devices which Courts have overtime used to circumvent the doctrine of privity of contract and provide relief to third parties in some cases though not many. In Darlington Borough Council vs. Wiltshier Northern Ltd (1994) 69 BLR 1, Steyn □ noted the following in his analysis of

the doctrine of privity i^a-uzsthe rights of a third party: "The case for recognizing a contractor V/ the benefit of a thirdjiartyMs simple and' 4/ 'Sv straightforward^ The autonpink of'the will o^e^^e^shoul^b^resp ’ecte^ The law of contracrshould givfe effect to logical, or policy reason why the law should deny effectiveness to a contract for the benefit of a third party where that is the expressed intention of the parties. Moreover, often the parties, and particularly third parties, organize their affairs on the faith of the contract. They rely on the contract. It is therefore unjust to deny effectiveness to such a contract." Page 16 of 26 The above observations were as well echoed in the Fraiser's case (supra) where the Court was of the view that: "Sound policy reasons exist for relaxing the doctrine of privity in these circumstances. Such an exception establishes a default rule that closely corresponds to commercial reality." In that Fraiser's case (supra), the Court did point out that, as a matter of general rule, privity of contract provides that, a contract can neither confer rights nor impose

X X D obligations on third parties. However, the Court was quick to Y7 note, that, there exists an applicable principled exception to the privity of contract doctrine, which is largely dependent upon the intention of the contracting parties. Of significance, however, is the fact that, the Court in zz <7 Fraiser^ case ^(supra^ noted^that, such principled exceptions to the doctrine, need to be determined on the basis of two critical but cumulative factors: (a) whether the parties to the contract intended to extend the benefit to the third party; and (b) whether the activities performed by the third party are the very activities contemplated as coming within the scope of the contract in general. I will now apply these to the context of the current appeal at hand. From a generalized perspective, I find that, the answers to the above two questions directly and positively apply to the scenario at hand in this appeal. I find it that way because, the godowns for which the Appellant's Page 17 of 26 attention was called upon for provision of security services, include those leased by Mukpar Kagera Ltd to the third party M/s Excel Crop Care (Africa) Ltd. That fact, as I stated herein earlier, meant that, there was a direct implication that the third party was to enjoy those services. This is to say that, the parties in the contract between Mukpar Kagera Ltd and the Appellant contemplated

the third parties who enjoyed the services provided by Mukpar Kagera x Ltd. Exh.P8 did indicate that the Appellant was to provide such X.K x D security services fulltime (24/7days). And, Exh.P 5 does show x v x ’ that, Mukpar Kagera did gurantee such security to its lesee, Excel Crop (Africa) Ltd. Secondly, the activities Care c "C X X ’ contemplated in the contract between the Appellant and Mokapr Kagera Ltd, (which generally included provision of z? a ^x z? security services to the godowns) had a direct bearing or falls x x % x within the scope of the very activities performed by the third nx w x xz? party and, therefore, generally contemplated in the contract x xa zz between Mukpar and the Appellant. \ \i X In view of all that, it is clear to me that, the two X D exceptions to the doctrine of privity will squarely apply, and more so even when they are to be considered in light of the principle of subrogation which is defined as the "substitution of one person or group by another in respect of a debt or insurance claim accompanied by the transfer of any associated rights and duties". Page 18 of 26 In the South African Case of Des O. Smith (supra) the Court defined this principle as follows: "Subrogation as a doctrine of insurance law embraces a set of rules providing for reimbursement of an insurer which has indemnified its insured under a contract of indemnity insurance.

The gist of the doctrine is the insurer's personal of recourse against its^ir^sured, in terms of which it is^^itled^to reimburse itself out of the proceeds off^ f) any claims that the insured mayZnave v against third partlesHn respect^ofkthe5^ loss." /£ As noted here above, under the doctrine of subrogation, an insurer is basically allowed to bring a claim against a third party responsible for a loss suffered by the insured in the insured's name; and can as well, claim from the insured any double recovery that has been made. Perhaps the Australian case of Bupa Australia Pty Ltd vs. Shaw (as Joint Executor of the Estate of Norman Shaw) & Anor [2013] VSC 507, does provide a good illustration regarding the insurer's right of subrogation and what occurs when an insurer makes a good faith payment under the policy of insurance. In that case, the Court, citing the decision of Mason J, in AFG Insurance Ltd vs. City of Brighton, (1972) 126 Page 19 of 26 CLR 655, at 633, (as also the case of Castellain vs. Preston (1883) 11 QBD 380, 401-2), held that: "The doctrine comes Into operation when the insurer meets his liability under the policy by making payment to the insured in respect of his loss. The insurer is then subrogated to the relevant rights of the insured. Unless and until the insurer makes good the loss the doctrine has no application^*.. The rationale of the doctrineiSjthe

A avoidance of a double IrfdOTiniw/^j. x/ In the context of this appeal at hand, it is clear that the Respondent claimed from the Appellant having first indemnified M/s Excel Crop Care (Africa) Ltd. And, as I stated earlier here above, the Appellant had a duty of care towards the Excel Crop Care (Africa) Ltd as well since, having undertaken its security provision services to the godown in which Excel Crop housed its goods, the Appellant had assumed a duty of care even to Excel Crop, a lessee of Mukpar Kagera Ltd as well. It is from that context that the later subrogated her rights to claim to the Respondent. To wind up this discussion, therefore, I am also fortified by the decision of the US Ninth Circuit Court of Appeal (certified also by the Washington State Supreme Court) in the case of Affiliated FM Ins. Co. vs. LTK Consulting Servs, Inc. 243 P.3d 521 (2010) 170 Wash.2d 442. The facts of the case were fairly brief. Page 20 of 26 Affiliated FM Insurance Company (AFM) was subrogated to the rights of its insured, Seattle Monorail Services Joint Ventures (SMS), for a fire that damaged the Seattle monorail. SMS sued LTK asserting that, LTK had provided negligent design advice to SMS, which ultimately caused the fire. LTK challenged AFM's interest in the Monorail System because SMS only had a contractual right to operate on the property owned by the City of Seattle. Furthermore,

LTK had argued that it was not in privity of contract with SMS, and therefore AFM could not sue LTK. In the course of its deliberations, the Court held that, LTK's duty encompassed SMS's legally protected interests in the monorail, and therefore AFM was free to subrogate and sue LTK for negligence. The Court concluded that, a subrogating insurer can sue a defendant for negligence for damage to property even though the subrogating insurer and the defendant were not in privity of contract. From the foregoing discussions, therefore, I would dismiss the 1 and 2nd grounds of appeal as having no merits. Although the Appellant seem to combine the 3rd ground of appeal with the 1st and 2nd grounds, I find It to be a bit difficult to do so since it has nothing to do with privity of contract. The 3rd ground of appeal is to the effect that: The trial Court erred in law and fact by holding that Mukpar Tanzania Ltd was Page 21 of 26 subsidiary of Excel Crop Ltd while there was no any evidence to that effect. Unfortunately, having gone through the judgment and the proceedings, nowhere in them was I able to find that the trial Court ever contemplated or discussed such a finding as contended by the Appellant. For that reason, I see no point in addressing the 3rd ground. I will thus move to the fourth ground which is to the effect that: v The trial Court erred in law and^in fact by ignoring the

limitation^of liability clause contained iiWthe' security services agr.eeqTen^^^^ According to the>AppellanvCcOntractants" do limit liability in their contracts at times and doing so is acceptable under the doctrine'of sanctity andAfreedom of contract. Reliance in support of'that facias placed in the case of Photo^Procution\Ltd vs^Securicor Transport Ltd [I9W3L1 AIIER^55^The^argument fronted .by the learned counsel fonthe'Appellant is that, the liability of the Appellant was limited [by ari agreement (Exh.P8, CLAUSE 25) and, thus, suctT'a'Iimitation of liability cannot be nullified. He has sought support from the English case of Susse Ant antique Societe D'armament Maritime SAV vs.RotterdamscheKolen Centrale [1966]2AI1ER 61. For his party, the Respondent's submission is that, the Respondent is not banking on the contract but on the issue of whether he is entitled to subrogation. He contended that, Page 22 of 26 the liability clause in the Exh.P8 has nothing to do with this case since the Respondent is not raising an issue of breach of the contract. In my view, I would agree with the Respondent's counsel. The case which was before the trial court was not a case relating to a claim for breach of contract. It was and even remains before this Court, a subrogation claim arising from an indemnification of a third party. In my opinion Clause 25 of Exh.P8 has no application to such a

claim. Since the central question was pr^ise^6oh^tne/issue of subrogation, that was, andOshduld^venMrikthis appeal, be the main focus. And, by subrogation^s defined or1 elaborated in some A j/w of the cases cited here^above^it means that, the Respondent insured?^ fact, which^the .trial-court found to be warranted J \ n X#' and^wliic^Ka^g-.sa.ngtton as I held herein earlier. Once indemnification of the insured is complete, the insurer, under the exercise of right of subrogation, is allowed to "step into the shoes of the insured" and claim against the relevant third party in order to recoup some or all of the indemnity payments made. That being said and since the Respondent proved that it indeed indemnified the third-party beneficiary of the contract between the Appellant and Mukpar Kagera Ltd, and, there being no other evidence that the insured had been Page 23 of 26 compensated by any other means possible, then the Respondent's claims cannot be subjected to the limitation clause. Perhaps the story could have been different if the Appellant was to base his argument on the any limitation clause in the insurance policy if there was such, in case the amount claimed was to be said to be higher than what the insurer had agreed as the limit in the insurance policy. That X. would have been a sensible issue because, if the insured had f \ yl X// contractually agreed to restrict or

lii^tthe,extent to which a third party is liable to th*e inSuredXheK the^insurer is similarly bound by tljat limitation. Ho\^ever> since that is not the case here, the fourth .ground of appeal should also fall A xk //^k Xz? and is hereby dismissed. /:/ VV // 1 J/A V NX The-5^ground of Appeals tq^the effect that: /A vi ThXrial CoLtrt^erred in law and in XZ fa** by^/holding the Appellant iT X>, 'is'risponslble to a loss occurred based \ \ on, Exhibit P2 without analyzing the H contents and shortfalls of that Exhibit (investigation Report). In his submissions on this ground the Appellant's counsel has argued that Exh.P2 was beset with shortfalls, hence, it was an unreliable piece of evidence. However, going through the record I see no where was this piece of evidence objected to or its authenticity challenged. As such, I would agree with the learned counsel for the Respondent Page 24 of 26 that, the ground is an unmerited afterthought. Since the Appellant had conceded to its appropriateness during trial, she cannot assail it at this later stage. I also decline to that ground. Finally, the last two grounds (6th and 7th Grounds) were argued jointly. The two grounds are as follows, that: "6.The Trial Court erred in law and in facts for failure to analyze properly the evidence^adduced during the trial, and in toe coui^^Sk/) assumed evidence tifet not adduced during'dxial. J) \X\

X 7.The trialACourt was Biased in\ </ X. X evaluating the evidence tendered in X Court and, consequently, occasioned /) \\ 7/% Xz/ .7/miscarriage? xafk justice to the /X. A^ </ Appellant;" In his submission regarding these two grounds, however, the Appellant has reiterated Issues of privity of contract which I have already labored with here above. In my view, there has been nothing substantial to show that the learned trial magistrate was biased as alleged or failed to evaluate the evidence laid before the Court. With such observations, I also find these two grounds to be lacking any merit. I thus dismiss them forthwith. All said and done, I find no merits all of the grounds of appeal and this appeal should fail. In the upshot, this Court settles for the following orders: Page 25 of 26 1. That, the Appellant's grounds of Appeal are hereby found to be of no merits and consequently dismissed.

2. The Appellant is to pay costs to the Respondent. It is so ordered. Right ofAppeal Explained. Page 26 of 26