watson kihaka ta lupelo bus investiment vs the national insurance corporation t ltd another 2004 tzhccomd 38 9 september 2004

IN THE HIGH COURT OF TANZANIA (COMMERCIAL DIVISION)

AT PAR ES SALAAM COMMERCIAL CASE NO. 65 OF 2003 WATSON KIHAKA t/a LUPELO (BUS) INVESTIMENT ............................................ PLAINTIFF

VERSUS

THE NATIONAL INSURANCE CORPORATION (T) LTD.....................................................1st DEFENDANT

THE PRESIDENTIAL PARASTATAL SECTOR REFORM COMMISSION.................................. 2nd DEFENDANT

JUDGEMENT KALEGEYA, J: Facts of this case are straightforward. The Plaintiff is the owner of M/V Reg. No. TZN 7275, a Scania Bus. The said Plaintiff comprehensively insured the said Vehicle with the 1st Defendant, a public corporation engaged in insurance business. The 2nd Defendant is a statutory Official Receiver of the 1st Defendant in terms of The Public Corporations Act, 1992 (as amended by Act 16 of 1993). On 25/11/2001 the insured Vehicle got accidented at Mangae - Mikumi area, along Morogoro - Iringa High way and sustained serious damages. The insured covered value was shs.25 million. At the time of accident the insured Vehicle was being driven by Clarence S. Mjukuu, owner of a driving licence No. 1093252 (Exh.P3) issued on 24/11/89. A driving licence has to have fees paid for renewal every after three years. On the fateful day, the three year period for Mjukuu’s licence had already expired. The requisite 2 renewal fee was paid on 27/11/2001 retrospectively covering the period of 24/11/2001 - 23/11/2004. When the Plaintiff presented the claims to the 1st Defendant for indemnity the latter refused insisting that as the driver had not renewed his driving licence this was breach of the cover policy terms and conditions contained in clause 6 of the general conditions of Exh.DI which absorb them from liability. The Plaintiffs’ prayers are: "(a) A declaration order that in

the circumstance the Plaintiff is entitled to indemnity against the damaged SCANIA Bus Reg. No. TZN 7275. (b) Payment of shillings Twenty Five Million (25,000,000) as indemnity/compensation for the damaged Scania Bus. (c) Interest on (B) at 21% annually from December 2001 to the date ofpayment in full. (d) General damages as pleaded in para 8 above. (e) Costs for this suit. (f) Any other relief(s) as the court deems fit to award. ” Plaintiff called one witness who tendered Exh.P 1, a power of Attorney empowering him to act on behalf of Watson Kihaka; Exh.P2, 1st Defendants’ 3 letter dated 17/2/3003 disclaiming liability due to the nature of Mjukuu’s licence and Exh.P3, the licence in controversy. On the other hand, the Defendants called three witnesses. DW1 (Godfrey), the 1st Defendant’s Principal Insurance Officer who tendered Exh.Dl, a motor Insurance policy which contains a clause upon which they rely to dispute the liability. DW2 (Masao) is a transporter who once worked with the Internal Revenue Office for 14 years. According to him an expired licence (i.e. that is the one not renewed) does not allow the holder to drive as it would be contrary to s. 25 (2) of The Road Traffic Act, 1973, adding that in handing over a motor vehicle to such driver the owner would be violating s. 19 of the said law. DW3 (Ashery), one of the 1st Defendant’s branch Manager and a claims committee

member substantially testified along same lines with the other witnesses. In his final submissions, Mr. Msechu, Advocate, for the Defendant very strongly argued that ss. 19 and 25 (2) of The Road Traffic Act make renewal of a driving licence mandatory failure of which no claim of a valid licence can be made and that this violated clause 6 of Exh.Dl. He made reference to New great Insurance Co. of India Ltd vs Lilian Evelyn Cross & Another EACA 1966 at 90; Modern Insurance Law, by John Birds, 2nd Edition at page 190 and Geisman vs Sun Alliance & London Insurance [1977] 2 Lloyd’s Rep.

62. He prayed for dismissal of the claim in entirety. Mr. Mdamu for the Plaintiffs charged that notwithstanding failure to renew, a driver’s licence is still valid unless five years have lapsed after its 4 issuance or renewal; that ss. 19 and 25 (2) should be read together with s. 23 (3); s. 25 (3) and 52 (a) and (d) of The Road Traffic Act; that there is no evidence that Exh.Dl was ever brought to Plaintiffs attention and that the cases cited are irrelevant. Issues framed during the 1st pretrial and scheduling conference are as follows: 1. Whether the driver of the accidented vehicle had a valid driving licence?

2. If the answer to issue one is in the negative, whether this factor disentitled the Plaintifffrom indemnity under the Insurance cover policy.

3. To what rights are parties entitled? For appreciation of the arguments let us look at the exact wording of sections of the law upon which the parties cut - throatingly argue. S. 19 of The Road Traffic Act, 1973 prescribe: "19.(1) No person shall drive any class of motor vehicle on a road unless he is the holder of a valid driving licence or a valid learner driver’s licence issued to him in respect ofsuch class of motor vehicle. 5 (2) No person who owns or who has charge of a motor vehicle or trailer of any category shall allow or permit any person to drive such motor vehicle unless such persons is the holder of a valid driving licence or a valid learner driver’s licence issued to him in respect of that class of motor vehicle or trailer’’, (emphasis mine) while s. 25 (2) and (3) have the following: “25. (2) A driving licence shall be valid for three years from the date of issue but may, or application being made in the prescribed form and on payment of the prescribed fee, be renewed for further periods of three years at a time. (3) Where a driving licence has for any reason not been renewed within a period offive years or more from the date of its issue or renewal (whichever date last occurs) the licence shall lapse and shall not be renewable, ’’(emphasis mine) S. 23 (3) though referred to by the Plaintiffs Counsel is irrelevant as it deals with the Registrar’s powers to test

an applicant for a driver’s licence though he may not be in possession of a learner driver’s licence. S. 52 in part provides:- 6 “52. Every person who drives a motor vehicle, whether with or without a trailer on a road or in any public place - (a) while disqualified from driving, or while he is not in possession of a valid driving licence or is in possession of a learner driver’s licence and is driving the vehicle while not accompanied by a person holding a valid driving licence in respect of that vehicle; (b) ........................................................................................... (c) ........................................................................................... (d) while in possession of a valid driving licence which is capable of being renewed but has not been renewed, shall be guilty of an offence. ” (emphasis mine) The above provisions of the law, as regards the issue at hand, should be read in light of clause 6 of Exh.Dl, under which the Defendants disclaim liability. The said clause reads: “No claim arising under the within policy shall be admissible (except so far as is necessary to meet the requirement of the legislation) unless the person driving the insured vehicle holds a driving permit which is in force at the material time the vehicle is involved in any accident giving rise to a claim against the Corporation and the vehicle is also

duly licensed to be on the road. ” While I am on all fours with Plaintiffs’ Counsel that both the Lilian case and Geisman case are not relevant as the ratio decidendi therein attach to different matters, I am not persuaded by the argument that Mjukuu had a 7 valid driving licence on 25/11/2001 when the accident occurred, which in terms of the insurance contract between the parties, would entitle the Plaintiffs to indemnity. The Act defines a “driving licence ” to mean “a licence issued under Part III of this Act”. Part III provides how a driving licence is obtained. Now, for one to drive a motor vehicle on a road not only should he have a driving licence but a valid driving licence. S. 19 as quoted is clear on this. S. 25 is very categorical - “a driving licence shall be valid for three years” subject to renewal. If however, it is not renewed for five years it automatically lapses (s.25 (3)). What I gather from this provision is that after three years without renewal but within five years, the licence is legally recognized as such but it is not valid for purposes of permitting the holder to drive a motor vehicle on public road. The position is not changed by the wording of s. 52 as seemingly orchestrated by the Plaintiffs. I am of the settled view that the word “valid” used in s. 52 (d) should be taken to have been inadvertently introduced by the legislature in view of the

wording in the proceeding provisions, and more particulary, s. 25 (2) as already quoted. I don’t subscribe to the Plaintiffs’ proposition that the said s. 25 (2) is for no other purpose but “mainly for ensuring an increase in the Government revenues through the renewal fees. ” 8 I hold that a valid driving licence is the one which still has a lifespan of within three years after issue or which has been renewed immediately thereafter. In terms of clause 6 of Exh.Dl, Mjukuu did not have “a driving permit” which was in force at the time (25/11/2001) when the insured vehicle sustained the accident. Issue one is answered negatively. The answer to issue 2 naturally flows therefrom - clause 6 of Exh.Dl bars recovery of any indemnity where the vehicle was being driven by a person not holding a driving permit in force at the time. Mjukuu’s permit (licence) was not in force at the time as the three year period had expired. I should pose here and observe that the Plaintiffs tried to challenge the relevancy of Exh.Dl. While I find no basis for the same and while 1 am satisfied that indeed this was served upon Plaintiffs, I am surprised by the Plaintiffs’ stance because without that contract they would have no basis at all for their claim. And, as it is a principal of law that he who alleges has to prove (s. 110 - 113 of The Evidence Act), if the Plaintiffs are disowning Exh.Dl, they were legally bound to produce the contract upon which they base their claims and challenge. For reasons stated the Plaintiffs’ claims stand dismissed with costs. L.B. KALEGEYA

JUDGE 9 Delivered l. b. kaeegey a

JUDGE 9/9/2004 i Certify that^t+rry-if a true and correct •ft the originaborder Judgement Railing 1,748 words s’*n________ Registrar Commercial Court Dsm. ...........