Insurance Cases Privity of Contract Watende Omary v PSRC

IN THE HIGH COURT OF TANZANIA (DAR ES SALAAM DISTRICT REGISTRY)

AT DAR ES SALAAM CIVIL CASE NO. 117 OF 2005 WATENDE O M A R Y .............................................. PLAINTIFF

VERSUS

PARASTATAL SECTOR REFORM COMMISSION..................................................1st DEFENDANT NATIONAL INSURANCE CORPORATION....2 nd DEFENDANT SELEMAN MUSSA.......................................... .3rd DEFENDANT

RULING KALEGEYA, 3: ^ In their written statement of D e fe n d ^ach of the Defendants save 1st defendant, who fronted just one, raised a ctring of prsiinVmary objections. The i ;: Defendant urged that the suit be struck out for incompetence., namely failure to observe S.9(l) of Cap 25. The T ’: defendant prayed for same consequences because. ":) The P lain tiffs case against the 2 ld Defendant is tim e barred 2 The P la in tiff has no locus standi to sue directly the 2*d Defendant due to lack o f contractual relationship Hi) The p la in t is defective fq r m isjoinder o f p arties and m isjoinder o f causes o f action. iv ) ... the 2nd defendant's Corporation has been w rongly jo in ed in this-case without the P la in tiff first obtaining a leave o f the High Court". The 3rJ Defendant, on the other h.und fronts the fo!!owing:- '(i) The su it is tim e barred and ought to be dism issed (ii) The plaint is cofective in that, i)* it has no re lie f claimed,' in violation o f C. v ll Rule 7 o f the CPC. ii) no particulars o f negligence have been shown in violation o f O. VII Rule 4 o f the CPC. Hi) The statem ent o f the value o f the subject m atter o f the su it is not shown in violation o f O .VII Rule 1 CPC" gjp e preliminary objections were argued by way of written ■fesions. In their submissions, the 1st Defendant simply argued that they come into the picture because they are

Official Receivers of the 2nd Defendant by virtue of S.43(l) of The Public Corporations Act which placed 2nd Defendant under them having been specified and which act makes the securing of leave to sue imperative in terms of S.9(l) of Cap 25. They insist that as leave was not obtained the suit is incompetent. On the ctiiei hand, the 2nd Defendant submitted that ast he accdent occurred on 26/5/2001, filing the suit on 3/8/2005 was Deyonu the allowable period of three years in which a tortuous matter can be founded - Item 6 of the 1st schedule to the Law of Limitation Act and S.4 of the said Act. Again, though they did not detail a back-up, they referred also to Sera M usa vs M anji Ltd & others and Kuisum Sadrudin Banji 3iwa vs M anji's Ltd & others (HC, DSM), whose full citation they did not provide, urging a suit filed beyond six months7 period after appointment of Bcecutors should be dismissed. On 2nd preliminary objection, referring to various decisions including 1861 in Tweddle vs Atkison case, 123 ER at 762; \ Dunlop Preumatic Tyres Co. Ltd vs Selfridges & Co. Ltd (1915) AC 847 they argued that there is no privity of contract between Plaintiff and 2nd Defendant hence no cause of action. On the third ground, making reference to Peter & Co. Ltd vs Mangalji & Another (1^68) EALR 80; Barclays Bank D.C.O vs C.B Patel & otners (1959) EA 214 and Yowana Kahr*e vs Luneyo Estates Ltd

(citation not given), they submitted that while the Plaintiffs action against 3rd defendant is tortuous the nexus with others is unknown as the Insured took the policy on a different date and so is specification of 2nd Defendant and appointment of 1st Defendant as a Receiver. They insist chat there is a misjoinder of parties and actions. Regarding the 4th objection, they argued that no action could. be founded on 1st and 2nd Defendants without seeking and securing leave of the High Court in terms of S.9(l) of Cap 25 and made, reference to various cases including, (HC) Misc. Civil Appeal Wo.2001 (Tabora Registry) Geofrey Fanuei Makala vs TANESCO Ltd; Civil case No.120/99 Penford Mokiwa vsTCM B (DSM Registry); Civil Application N o.1/99, NMC vs Alice Mwskasak?. & others (TaLcra Registry); (CAT) civil Appeal Ko.40/2001, Mathias Eusehi Soka vs The Registered Trustees of Mama Clementina Foundation. John. Arnos UdumbG and NIC (T) Ltd; (Mbeya Registry) Civil Application ;No.y/2002, Asindikile N. B. Mwekasope vs NIC (T) Ltd and Misc. Civil Application No.2/2005, Kenneth M. Mwang'amba vs NIC of 0 ) Ltd. The third Defendant did not file any submission. The Plaintiffs' reply was simple. Dn leave, he fronted a copy of a ruling handed down by ■ ssati, J on 2/12/2003 which grants leave to sue the 1st and 2nd Defendants together with a third person in the name of Venance John. On Limitation

it is submitted that in terms of S.21(1) of the Law of Limitation Act 1971, Plaintiff could not sue as she was under disability., in that, leave to sue had not been obtained, and further that it was riot tii! 8/6/2005 that the wrong forum, where she had taken her case (Kisutu Resident Magistrates Court) finally declared that it ladccd jurisdiction. It is submitted that till then ?he was in another court and therefore time should start to run from that court's order (8.21(2). On joinder of parties, they submit that public policy provides that an Insurer as is the 2nd Defendant would step into the shoes or the Insured (Selerriani Mussa), the owner of the vehicle which caused the accident and which was being driven by one Venance Paulo when it comes to meeting liability and that therefore they should be joined 7 fees. While insisting that there is no misjoinder, they submit ft this is not fatal, cannot lead to a plaint being struck out adding that under "O. VII, Rule 13 CPC the rejection o f a p la in t does, not o f its own preclude the P la in tiff from filing a fresh Plaint, especially after m aking the necessary am endm ents." I will start with a question of leave to sue. As rightly submitted by the Dei?pdants and conceded to by the Plaintiff, a Specified Public Corporation as the 2r,il Defendant is cannot be sued withour seeking and^obtaining court's leave. Under S.43(l) o f

The P"blic Corporations Act 1992 as amended by Act 16 of 1993, each specified Public Corporation is automatically placed under PSRC (1st Defendant) as an Official Receiver upon specification. Vide GN 330 A of 1998 the 2nd Defendant was so specified. And, in terms of 5.9(1), of the Bankruptcy Act, a body so placed cannot be sued without leave being sought and obtained first. Although I should hastily add, to clear doubting elements raised by 8 Defendant's submission, that leave to sue which is required is p t in respect of the 2nd Defendant and not 1st Defendant, because -the latter is a legal entity that can sue and be sued. The question at hand is whether leave to sue 2nd Defendant was secured. Having carefully gone through the plaint and its annextures and the ruling of Massati J, of 2/12/2003, I am satisfied that leave was indeed secured. Although in the said ruling the third Respondent *s indicated as Venance >jhn ano’ in the Hnal police Report the name that appears is Ven?nce Paulo, what is obvious is that they relate to the Same person who was the driver of the accidented vehicle, Reg NO. TZR 3220, on 26/5/2001. ?* Vehicle whose owner is said to be 3rH defendant and which was insured by the 2"d .Defendant Next we turn to the limitation of time. Indeed the claim is tortuous hence time within which to rile a claim'is three years. Three years counted from 26/5/2001 land us

on 26/5/2004. This suit was filed on 5/8/2005, over a year after the prescribed time. In norma! of things the Plaintiff would indeed be barred. However, while don't subscribe to the argument by the Plaintiff that failure to secure leave is a disability legally recognized, I am satisfied that time wasted by a party in pursuing rights in a court of law is a factor which gives him buoyance on computation of time - S.21(2) of The \ Law of Limitation. As the Kisutu Resident Magistrate Court made an order of lack of jurisdiction in the matter cn 26/6/2005, filing the suit in August same year is within time. Next, I turn to joinder of partiec snd actions.. While I fully appreciate the principle of privity of contract, at the sametima 0.1, Rule 9 CPC is clear, "No su it sh a ll be defeated by reason o f the m isjoinder or non­ joinder o f parties, and the co u ii may in every su it deal with the m atter in controversy so far as regards the right and interests o f the parties actually before i t " The above apart, there is also 3 well known principle or procedural law that where possibie ail necessary parties should be 10 J lto avoid multiplicity of actions and cut down unnecessary costs p r the parties. In my considered opinion, it is very proper for a party to join the owner of the accidented Vehicle; the driver whose negligence or related caused the accident; the established Insurer

of the accidented Vehicle and who would eventually be liable to pay in the event of established liability. In our situation therefore the 2nd Defendant is 2 Necessary Party who claws :.n the 1st Defendant in the ^ame sense, being the official Receiver. I see no misjoinder of parties or actions in here, Thrt preliminary objection fails as well. ' ^ The above would have disposed of the matter but we have tne preliminary objections raised by the third Defendant who unfortunately mads no submissions in support thereof. The court however is entitled to take judicial notice of wanting points of law. Apart from the 1st - 3rd paragraphs which are the usual prefixes of a plaint in describing parties, the plaint before us has 4 other paragraphs running thus: The vehicle TZR 3230 M itsubishi Truck owned b y the 3 d Defendant caused serious accident on 2 tfh May, 2001 as a resu lt the p la in tiff was knocked down and became unconscious for two weeks.,.... The P la in tiff was unconscious and was adm itted at M uhim biii Orthopedic Institute... That apart from the genera! dam ages she m et som e costs to buy m edicine....... The P la in tiff claim s for a total o f 30,000,000/=- as elaborated hereunder 1. Spc.jp! damages - Accom m odation 7,000/= - M edicine 12,000/= 2. Genera! Incapacity - Permanent Incapacity 16,000,000/= - Partial Tem poiary " 8,000,000/= - Total Temporary "

3(891,000/= - Paid (?) and suffering 2,089,600/= 3 0 ,0 0 0 .0 0 0 /= That th is ... C o u rt has jurisdiction to entertain th is matter 12 iPutting other elements aside, what is obvious is that irprisingly no negligence or related is alleged at all in the whole body of the plaint. 3rd defendant's-quarrel on lack of particulars thereof therefore is not without merit. And, in fact the Plaintiffs concedes as much in his reply thus, > ... the prelim inary objection (i) (ii) and (Hi) cannot o f its own preclude the P la in tiff from filin g a fresh P lain t especially after m aking the necessary amendment to the Plaint after obtaining court." This is a glaring confession of the defects displayed. Consequences whicfvbefdii a plaint of the type under O.VII, Rule 11 include re^i^on but also in courts discretion an amendment can be ordered. Having taken into consideration the nature of defects in relation to the claims I am satisfied that this is a fit case in which a discretion should be exercised. O.VII, Rule 11 (a) proviso, runs as under, "Provided that where a plaint does not disclose a cause o f action or where the su it appears from the statem ent in plaint to 13 be barred by any law and the cou rt is sa tisfie d that if the P la in tiff is perm itted to amend the plaint\ the p la in t w ill disclose a cause o f action or, as the case m ay be, the su it w ill cease to appear from

the p lain t to be barred b y any law, the court may allow the P la in tiff to amend the p la in t subject to such conditions as to costs or otherwise as the cou rt m ay deem fit to \ im pose." I hereby exercise that discretion. The Plaintiff is hereby allowed to amend his plaint to be compliant v.'ith the law and have it filed within 2 weeks of delivery of this ruling. The preliminary objections by 1st and 2nd Defendants stand dismissed while those of 3rd Defendant stand allowed to the extent indicated. a '• I ms&m \x v \ • j* L. B. Kalagaya Wp ■- U, > « 8 / f 3UDGS Date: D/'7-/r20D5 Coram: Kalegeya,.J. For the Plaintiff - Mr. Omari representing For the Defendant - Absent.