Francis Ngaire v. National Insurance Corporation of Tanzania Ltd., Civ. Case 130-DSM-70, 5/6/72, Biron, J.

Francis Ngaire v. National Insurance Corporation of Tanzania Ltd., Civ. Case 130-DSM-70, 5/6/72, Biron, J.

On 15 April 1968, plaintiff was involved in a car accident with a vehicle owned by one Mr. Mushi and driven by his driver, Mr. Mohamedi, and as a result lost his right arm. The driver was subsequently convicted of various traffic offences arising from the accident. On 6 arch 1969, plaintiff’s advocate, Mr. Chakera, telephoned the offices of the National Insurance Corporation (NIC) and was told by Mr. Mwaikambo, the clerk in charge of the motor claims department, that Mr. Mushi’s vehicle was insured as against third party risks with the NIC at the material time and was requested to send a copy of the police report, which was done on the same day. On 17 March 1969, the claims manager of the NIC sent Mr. Chakera a letter in which he stated: “As no information received by this office regarding the accident, we would suggest if you could contact the owner of the vehicle who will in turn if at all the vehicle was insured with us at the date of the accident will report to us.” Mr. Chakera took the step suggested with no apparent results. On 14 April 1969, the plaintiff instituted civil proceedings against Mr. Mushi and Mr. Mohamedi. The NIC was informed of this by letter on 15 April 1969, to which the claims manager replied in a letter of 3 June 1969 that “we would advise you that to – date we do not have any intimation from our insured and we are unable to confirm anything.” On 13 September 1969 judgment was rendered in favour of the plaintiff and his damages were assessed as Shs. 50,000/=, with neither Mr. Mohamedi nor Mr. Mushi being represented by counsel. Plaintiff subsequently attempted to recover these damages from the  NIC, as the defendants were not men of substance, but the NIC, in a letter of 15 December 1969, denied that he vehicle was insured with them on the material date and repudiated all liability. In fact the vehicle was insured with British India Insurance Company at the material time, but plaintiff’s claim against them was by now time-barred. Plaintiff then filed this action in tort against the NIC, claiming damages for the negligent mis-statements of their employees that the vehicle was insured with the NIC. The court found as a matter of fact that Mr. Mwaikambo, the claims clerk, in the telephone conversation of 6 March 1969 “categorically told, or at the very lowest, led Mr. Chakera to believe beyond and doubt, that Mr. Mushi’s vehicle was insured with the Corporation at the date of the accident.” The court further found that this was confirmed by the letter of 3 June 1969, in which the claims manager of the NIC referred to Mr. Mushi as “our insured”. As for the letter of 17 March 1969, in which the claims manager had said, “If at all the vehicle was insured with us,” the court held that , in the context, a reasonable man would construe this not as a reference to the possibility that perhaps the vehicle was not insured with the NIC, because this had already been confirmed, but rather as an intimation that the NIC could not as yet confirmed it liability, in that the negligence of the insured or his employee had not yet been determined. On these findings of fact, the court held as follows.

            Held: (1) “As remarked by Lord Macmillan in Doncghue (or McAlister) v. Stevenson (1932) A.C. 562, the categories of negligence are never closed. Although authorities have distinguished between injury or damage resulting from statements whether oral or written, and physical acts in this respect, I think, there is a divergence of view and attitude adopted by Australian courts, and the American courts are much more liberal than are the English ones, I must confess my inability to distinguish between statements and other physical acts, as after all, a statement is a physical act whether oral or written, and to quote the old adage, the open is mightier than the sword, to which I would add, that the tongue could be equally as mischievous as the pen. However, in England the matter has now, I think, been finally settled by the House of words case of Hedley Byrne  & Co., Ltd. v. Heller & Partners, Ltd. (1963) 2 All E.R. 575, a case incidentally, cited by both Counsel. Although Mr. Kinariwalla has quoted in extenso from this case, I think it is sufficient to quoted in extenso from this case, I think it is sufficient to quote from the headnote as follows: “If, in the ordinary course of business or professional affairs, a person seeks information or advice from another, who is not under a contractual or fiduciary obligation to give the information or advice, in circumstances in which a reasonable man so asked would know that he was being trusted, or that his skill or judgment was being relied on, and the person asked chooses to give the information or advice without clearly so qualifying his answer as to show that  he does not accept responsibility, then the person replying accepts a legal duty to exercise such care as the circumstances require in making his reply;

and for a failure to exercise that care an action for negligence will lie if damage results.” For the record I ought to add that, although English authorities are no longer binding on this Court, I see no reason for holding that the law as laid down by the House of Lords, is any different in this country, but on the contrary, I have not the slightest hesitation in holding that it is the same.” (2) “There is even statutory authority to the point. By section 123 of the Evidence Act, 1967: “When one person has, by his declaration, act or omission, intentionally caused or permitted another person to believe a thing to be true and to act upon such belief, neither he nor his representative shall be allowed, in any suit or proceeding between himself and such person or his representative, to deny the truth of that thing”. And we that I would add, that when that declaration is made by an employee in the ordinary course of his duties, his employer is liable for such declaration.” (3) “It cannot be gainsaid that Mr. Mwaikambo was acting in the ordinary accurse of his principal’s business or affairs when he gave the false information to Mr. Chakera, which incidentally, as I have demonstrated, was confirmed by the Corporation’s letter or the 17^th March, 1969, Exhibit ‘C’ I therefore cannot be gainsaid that having accepted Mr. Chakera’s question and taken it upon himself to reply to it, naturally on behalf of the Corporation, he was under a duty to take care to ensure that the information he gave was true and correct.” (4) “I would go even further. As an owner or a driver of a vehicle is compelled by law to take out a policy of third party insurance, as laid down in the Motor Vehicles Insurance Ordinance (Revised) (Cap. 169 – Supp. 60), and it constitutes a criminal offence for am owner or a driver of a vehicle to use the vehicle on a public road without there being in force a policy of third party insurance, and as this legislation is obviously intended for the benefit of any member of the public who may sustain injury or damage caused by a motor vehicle driven on the road, there is, to my mind, conversely an obligation oust on insurance companies to ensure that when such member of the public inquires from an insurance company as to whether the particular vehicle which caused the damage, is insured with it, to exercise the utmost care and diligence in giving correct information.” (5) “I would go even further still that, in view of the wording of section 10(2) (a) of the Ordinance referred to, that: “10(2) No sum shall be payable by an insurer under the foregoing provisions of this section (a) in respect of any judgment, unless before or within fourteen days after the commencement of the proceedings in which the judgment was given, the insurer had notice of the bringing of the proceedings;” there is a duty cast  on an insurance company from whom an inquiry is made as to whether a certain vehicle is covered by that company, to exercise the utmost care and diligence to five the correct information, as a failure to do so would occasion loss and damage to the inquirer. I would even go as far as to say that the law has established a relationship between the public and insurance companies and laid a fiduciary obligation on the part of insurance companies, to exercise all due care and diligence in giving proper and true information (6) “Therefore I have not the slightest hesitation in holding that the Corporation was under a duty to exercise due care and diligence in giving Mr. Chakera a true answer to his inquiry, as to whether the vehicle which was involved in the accident, which caused so much damage and injury to the plaintiff, was insured with the Corporation at the material time. And it cannot be gainsaid that Mr. Mwaikambo was extremely negligent in giving the false information he did, for according to Mr. Salehmohamed, all he ha to do was to look up the policy file where in it would have shown that the vehicle was insured by the Corporation only as from the 20^th April, 1968 to the 19^th April, 1969.” (7) “With regard to ……. Whether the plaintiff suffered loss and damage as a result of such negligence, as already noted, his claim against the British India General Insurance Company had become time-barred. Mr. Kinariwalla sought to raise a defence to this issue that the plaintiff could and should have applied or execution of the judgment he obtained, against Mr. Mushi and his driver, Mr. Mohamedi, and having failed to do so, he cannot claim from the Corporation. First of all, I doubt whether it is open to Mr. Kinariwalla to set up such a defence at all, in view of the provisions of Order V111, Rules 2 and 3 of the Civil Procedure Code, 1966 …… doubt very much whether this defence is at all open to the corporation, and if necessary I would rule to the contrary. Further, as submitted by Mr. Lakha, if such defence had been raised, he could easily have led evidence that not only the driver but the owner of the vehicle, Mr. Mushi, was also a man of straw, his assets being apparently limited to the vehicle involved in the accident, which vehicle as a result of the accident, was a write-off. Therefore, it would have been a waste of time and money to have proceeded to execution of the judgment against the defendants, Mr. Mushi and his driver, Mr. Mohamedi. I therefore without any hesitation reject such defence …….” (8) Damages of Shs. 50,000/- awarded.