Page 436 of [1968] 1 EA 428 (HCU)

court must have both feet firmly on the ground, bearing in mind local considerations. I am satisfied that
Mr. Angila acted as he did in sheer ignorance of his powers and duties. Doing the best I can in all the
circumstances, I consider that the sum of Shs. 14,000/- would be just compensation for the plaintiff for
the wrong done to him.
For the reasons I have given, the claim succeeds in part, and judgment is entered for the plaintiff in
the sum of Shs. 14,000/-, with costs.
Before I take leave of this case, I may be permitted to express the view that it might be considered that
the time has come for specific legislative provision to be made so that there is no room for argument as to
which authority should be sued when such torts as this are committed.
Judgment for the plaintiff accordingly.

For the plaintiff:

Benedicto Kiwanuka
Kiwanuka & Co, Kampala

For the defendant:

AV Clerk
AV Clerk, Kampala

As amicus curiae:
PJN Mugerwa (Solicitor-General, Uganda)

Ajwang v The British India General Insurance Co Ltd

[1968] 1 EA 436 (HCU)

Division: High Court of Uganda at Kampala

Date of judgment: 8 June 1968
Case Number: 346/1967 (95/68)
Before: Phadke Ag J
Sourced by: LawAfrica

[1] Insurance – Motor insurance – Third party risks – Compulsory third party insurance – Action by
third party injured by car – Car insured for “social, domestic and pleasure purposes” only but being
used unlawfully as private hire vehicle at time of accident – Clause in policy excluding liability –
Whether valid – Action against insurer – Traffic Act, ss. 98 (1), 99, 102, 104 and 110 (U.).

Editor’s Summary
The plaintiff’s husband was killed in a motor accident by the negligence of the driver of a car which was
insured with the defendant insurance company. The plaintiff successfully sued the owner and driver of
the car and obtained a decree. Her decree not having been satisfied, she brought this suit against the
defendant insurance company under s. 104 of the Traffic Act. The defendant sought to avoid liability on
the ground that, at the time of the collision, the car was being used in breach of the “Limitations as to
Use” contained in the policy in that the car was insured only for use for social, domestic and pleasure
purposes excluding use for hire or reward, but was in fact being used as a private hire vehicle for the
carriage of fare-paying passengers. It was argued for the defendant, inter alia, that this breach rendered
the policy ineffective so that it was not a policy “in force” at the material time under s. 98 (1) of the
Traffic Act; that the relevant term in the policy was a definition and not a condition within s. 102 of that
Act; and that the liability was not a liability covered by the terms of the policy within s. 104 (1) of that
Act.
Held – (following the New Great case (1))
(i) the policy of insurance was in force at the material time and the defendant company was not
entitled to avoid it;
(ii) the term in the policy as regards the Limitations as to Use was a condition and not a definition;
Page 437 of [1968] 1 EA 436 (HCU)

(iii) the condition was rendered ineffective by reason of s. 102 of the Traffic Act;
(iv) the liability of the defendant company to the plaintiff was a liability covered by the terms of the
policy.
Judgment for the plaintiff with costs.

Cases referred to in judgment:

(1) New Great Insurance Co. of India Ltd. v. Cross and Another, [1966] E.A. 90.
(2) Hardy v. Motor Insurance Bureau, [1964] 2 All E.R. 742.
(3) McLeod (or Houston) v. Buchanan, [1940] 2 All E.R. 179.
(4) Bright v. Ashfold, [1932] 2 K.B. 153.
(5) Gray v. Blackmore, [1934] 1 K.B. 95.
(6) Wyatt v. Guildhall Insurance Co. Ltd., [1937] 1 All E.R. 792.
(7) Jones v. Welsh Insurance Corpn. Ltd., [1937] 4 All E.R. 149.
(8) R. v. Harnam Singh (1950), 24 K.L.R. 101.
(9) Provincial Insurance Co. v. Morgan and Foxon, [1933] A.C. 240.

Judgment
Phadke Ag J: The plaintiff has instituted this suit under s. 104, Traffic Act (Cap. 342) Laws of Uganda
(hereinafter referred to as “The Traffic Act”) to enforce against the defendant company the judgment and
decree obtained by her against Hassani Mabonga and Mohamadi Kasiko in High Court Civil Suit No. 10
of 1967. The said decree, dated September 19, 1967 (annexture “B” to the plaint) is for the sum of Shs.
53,995/- with interest thereon at 6 per cent. per annum from that date, and agreed costs of Shs. 10,270/-.
The plaintiff prays for a declaration that the defendant company do pay to her the amount payable to her
under the said decree and also the costs of this suit.
The undermentioned facts were either admitted in the pleadings or satisfactorily proved by
unchallenged evidence:
(1) The plaintiff is the widow of one Anthony Nambudie (hereinafter referred to as “the deceased”) who
died as the result of a motor accident on February 1, 1966;
(2) On February 1, 1966 the deceased, who was riding his bicycle in the vicinity of mile 1 on Tororo/Jinja
road, was in collision with a Peugeot motor vehicle numbered USF. 343, owned by one Hassani
Mabonga and driven at the time by one Mohamadi Kasiko. The deceased was injured in the collision
and died as the result of the injuries;
(3) In High Court Civil Suit No. 10 of 1967 the plaintiff claimed damages against the said Hassani
Mabonga and Mohamadi Kasiko for causing the death of the deceased, and obtained against them the
judgment and decree hereinbefore mentioned;
(4) The aforesaid Peugeot motor vehicle USF. 343 was registered as and licensed for use as a private car
(see evidence of Stanley Kayindu Sengendo);
(5) Pursuant to the proposal for insurance made by the said Hassani Mabonga in respect of the said motor
 vehicle, the defendant company had insured it under its Private Car Policy numbered
U/EA/PM/8525/65 (Exhibit 1) for the period December 21, 1965 to December 20, 1966.

The Schedule (PM) in the said Private Car Policy contained the following “Limitations as to Use”:
“Use only for social, domestic and pleasure purposes. The policy does not cover use for hire or reward racing
pacemaking reliability trial speed testing commercial travelling the carriage of goods in connection
Page 438 of [1968] 1 EA 436 (HCU)
with any trade or business or use for any purpose in connection with the Motor Trade.”

Under s. II – Liability to Third Parties, of the said private car policy, the defendant company undertook to
indemnify the insured in the event of accident caused by or arising out of the use of the motor vehicle
against all sums including claimant’s costs and expenses which the insured should become legally liable
to pay in respect of death of or bodily injury to any person.
Clause 1 (b) (i) under the heading “General Exceptions” stated that “the Company shall not be liable
in respect of any accident loss damage or liability caused sustained or incurred whilst the motor vehicle
is being used otherwise than in accordance with the Limitations as to Use”;
(6) At the time of the collision between the deceased and the said motor vehicle, the vehicle was being
used as a private hire motor vehicle for the carriage of fare-paying passengers, for which the said
Mohamadi Kasiko (the driver) was prosecuted, convicted on his own plea of guilty, and fined in
Criminal Case No. MT/137/1966 in the magistrates’ court at Tororo (see evidence of Ebwonu Esolo
and Dev Raj Agnihotri). Mr. Nabudere, advocate for the plaintiff, conceded that the vehicle was so
used and that such user was unlawful;
(7) Before the commencement of the aforesaid High Court Civil Suit No. 10 of 1967 the plaintiff gave
notice to the defendant company (as insurer of the said motor vehicle) of the bringing of that suit.

The plaintiff gave evidence that she had not been able to recover the amount of the aforesaid decree from
Hassani Mabonga and Mohamadi Kasiko or either of them. Her claim against the defendant company is
that under s. 104, Traffic Act the defendant company is under a legal liability to satisfy the said decree in
her favour.
The defence is that the defendant company is not liable to satisfy the plaintiff’s claim on the ground
that at the time of the collision the insured vehicle was being used in breach of the “Limitations as to
Use” stipulated in the private car policy and therefore the policy was non-operative and/or ineffective at
the material time. Alternatively, the defendant company pleaded that it is not liable on the ground that by
reason of the breach the insured had become disentitled to be indemnified.
At the outset it is desirable to set out, at some length, certain relevant provisions of the Traffic Act
under the heading “Part IX – Compulsory Insurance of Motor Vehicles”.
Section 98 (1) – “Subject to the provisions of this Act, it shall not be lawful for any person to use, or
to cause or permit any other person to use, a motor vehicle on a road unless there is in force in relation to
the user of that vehicle by that person or that other person, as the case may be, such a policy of insurance
or such security in respect of third party risks as complies with the requirements of this Act”.
Section 99 prescribes the requirements to be complied with, and para. (b) provides that the policy of
insurance must be a policy which “insures such person, persons or classes of persons as may be specified
in the policy in respect of any liability which may be incurred by him or them in respect of the death of or
bodily injury to any person caused by or arising out of the use of the vehicle on a road”.
Section 102 – “Any condition in a policy of insurance providing that no liability shall arise under the
policy, or that any liability so arising shall cease in the event of some specified thing being done or
omitted to be done after the happening of the event giving rise to a claim under the policy, shall, as
respects
Page 439 of [1968] 1 EA 436 (HCU)

such liabilities as are required to be covered by a policy under s. 99 of this Act, be of no effect. Provided
that nothing in this section shall be taken to render void any provision in a policy requiring the person
insured to repay to the insurer any sums which the latter may have become liable to pay under the policy,
and which have been applied to the satisfaction of the claims of third parties”.
Section 104 (1) – “If, after a policy of insurance has been effected, judgment in respect of any such
liability as is required to be covered by a policy under para. (b) of s. 99 of this Act, being a liability
covered by the terms of the policy, is obtained against any person insured by the policy, then
notwithstanding that the insurer may be entitled to avoid or cancel, or may have avoided or cancelled the
policy, the insurer shall, subject to the provisions of this section, pay to the persons entitled to the benefit
of the judgment any sum payable thereunder in respect of the liability, including any amount payable in
respect of costs and any sum payable in respect of interest on that sum by virtue of any enactment
relating to interest on judgments”.
The words “liability covered by the terms of the policy” which appear in the above section are defined
in sub-s. (6) as meaning “a liability which is covered by the policy but for the fact the insurer is entitled
to avoid or cancel, or has avoided or cancelled the policy”.
Section 110 states – “Where a certificate of insurance has been issued under s. 101 of this Act to the
person by whom a policy has been effected, so much of the policy as purports to restrict the insurance of
the persons insured thereby by reference to any of the following matters:
(a) the age or physical or mental conditions of persons driving the vehicle; or
(b) the condition of the vehicle; or
(c) the number of persons that the vehicle carries; or
(d) the weight or physical characteristics of the goods that the vehicle carries; or
(e) the times at which or the areas within which the vehicle is used; or
(f) the horse power or value of the vehicle; or
(g) the carrying on the vehicle of any particular apparatus; or
(h) the carrying on the vehicle of any particular means of identification,

shall as respects such liabilities as are required to be covered under para. (b) of s. 99 of this Act, be of no
effect.”
The abovementioned provisions of the Traffic Act are identical with certain provisions of the
Insurance (Motor Vehicles Third Party Risks) Act enacted in Kenya (hereinafter referred to as “the
Kenya Act”) and they also closely follow the English legislation on the subject contained in the Road
Traffic Act 1930, and the Road Traffic Act 1934. The table given below shows the comparative position.
Traffic Act Kenya Act English Acts
Section 98 (1) Section 4 (1) Section 35 (1) – 1930 Act
Section 99 (b) Section 5 (b) Section 36 (1) – 1930 Act
Section 102 Section 8 Section 38 – 1930 Act
Section 104 Section 10 Section 10 – 1934 Act
Section 110 Section 16 Section 12 – 1934 Act
The provisions of the Kenya Act referred to above and those of the English Acts were considered and
compared in the decision of the Court of Appeal for
Page 440 of [1968] 1 EA 436 (HCU)

Eastern Africa in the New Great Insurance Co. of India Limited v. Cross and Another, [1966] E.A. 90, to
which I will have occasion to refer later in this judgment.
Mr. Nabudere, advocate for the plaintiff, relied upon the majority decision in the New Great case and
more particularly upon the judgment of Crabbe, J.A., and the decision of the English Court of Appeal in
Hardy v. Motor Insurance Bureau, [1964] 2 All E.R. 742, cited therein. He submitted that under the
Traffic Act any use of a vehicle was required to be covered by a policy of insurance in respect of liability
to a third party and that any limitation in the policy in respect of the use was a condition which was of no
effect by virtue of s. 102, Traffic Act. There was a policy of insurance in force as required by law and
liability to the plaintiff could not be denied by the defendant company.
Mr. M. A. Patel, advocate for the defendant company, submitted that the words “in force in relation to
the user of the vehicle” appearing in s. 98 (1) Traffic Act should be construed to refer to the use
permitted under the policy and not to any or every use whatsoever, and where a term of the policy limits
the use such term restricts the operation of the policy from its very inception with the result that in the
event of a breach the policy is non-operative and ineffective during the continuance of the breach. In this
case the permitted use of the vehicle under the policy was for “only social, domestic and pleasure
purposes” and use for hire or reward was excluded. Since the vehicle, which was not only licensed but
also insured for use as a private car, was admittedly used as a private hire motor vehicle in breach of the
relevant term as to user in the policy, the policy had become ineffective and was not a policy which was
“in force” at the material time within the meaning of s. 98 (1), Traffic Act (s. 4 (1) Kenya Act and s. 35
(1) English Act, 1930).
In support of his submission, Mr. Patel referred to two English decisions – McLeod (or Houston) v.
Buchanan, [1940] 2 All E. R. 179, and Bright v. Ashfold, [1932] 2 K.B. 153. In both these cases the
question for determination was whether a policy which insured against third party risks (as required by s.
35 (1) English Act, 1930) but contained a term limiting the use of the vehicle for a specified purpose
could be construed as an effective policy in respect of such risks when the vehicle was used in breach of
the limitations as to use. In McLeod (or Houston) v. Buchanan it was held that as the owner of the
vehicle had permitted its use in breach of the specified limitation he had failed in his statutory duty of
insuring against third party risks which might have been incurred at the time of the breach. In Bright v.
Ashfold it was held that as the insured motor cycle was used for carrying a passenger on a pillion without
a side-car being attached, contrary to a term of the policy, there was no policy of insurance in force in
respect of third party risks because the term limiting the user was not a condition which was of no effect
as respects liability to a third party under s. 38, English Act, 1930 (see s. 102, Traffic Act and s. 8, Kenya
Act).
Mr. Patel also referred to other English decisions, namely Gray v. Blackmore, [1934] 1 K.B. 95;
Wyatt v. Guildhall Insurance Co. Ltd., [1937] 1 All E.R. 792, and Jones v. Welsh Insurance Corpn., Ltd.,
[1937] 4 All E.R. 149, in all of which the insurer was held to be not liable to an injured third party on the
ground that at the material time the insured vehicle was being used in breach of the limitations as to use
specified in the insurance policy.
The abovementioned English decisions appear to support Mr. Patel’s submission but that, as I see it,
is not the end of the matter. In the New Great case, [1966] E.A. 90, the Court of Appeal for Eastern
Africa whose judgment, if applicable, is binding upon me, had occasion to consider the interpretation of
s. 8, Kenya Act (s. 102, Traffic Act and s. 38, English Act, 1930). In that case the insurer had denied
liability to satisfy the judgment obtained by injured third
Page 441 of [1968] 1 EA 436 (HCU)

parties against the insured on the ground that at the material time the insured vehicle had been driven by
a person disqualified from holding a driving licence and that such driving was in breach of a term of the
policy which excluded driving by a person so disqualified under a proviso in the Schedule in the policy
pertaining to “authorised driver”. The High Court of Kenya had entered judgment against the insurer in
favour of the injured third parties and the insurer had appealed against that judgment to the Court of
Appeal. Newbold, V.-P. (as he then was), who presided at the appeal, was of the opinion, for reasons
which I will not here repeat or paraphrase, that s. 8, Kenya Act, should be given a wider interpretation
than that given to s. 38 of the English Act, 1930, in the English decisions. He approved of the decision of
the Supreme Court of Kenya in R. v. Harnam Singh (1950), 24 K.L.R. 101, and held that the English
decisions in Bright v. Ashfold and Gray v. Blackmore (supra) are bad law and should not be followed in
East Africa. De Lestang, J.A. (as he then was) expressed a contrary opinion. He preferred a narrow
interpretation of s. 8, Kenya Act, similar to the interpretation given to s. 38, English Act, 1930 in the
English decisions. He referred with approval to Bright v. Ashfold, Gray v. Blackmore and Wyatt v.
Guildhall Insurance Co. Ltd. (supra). Crabbe, J.A., whilst he concurred with Newbold, V.-P., in
dismissing the appeal, did not specifically express any opinion on the interpretation of s. 8, Kenya Act.
This difference of judicial opinion between Newbold, V.-P., and De Lestang, J.A., on the interpretation
of s. 8, Kenya Act (which is identical with s. 102, Traffic Act) and the absence of any specific
pronouncement thereon by Crabbe, J.A., raises for me the difficult question of deciding whether or not
the opinion of Newbold, V.-P., is binding upon me by reason of the fact that his conclusion in dismissing
the appeal was concurred in by Crabbe, J.A. However, there is one observation in the judgment of
Crabbe, J.A., which is helpful in guiding me in the matter. He states ([1966] E.A. at p. 103):
“The restrictions which the insurers purported to put on the class of persons who should drive the car could
not, in my opinion, exclude the respondent’s independent rights under s. 10 to recover.”

I am inclined to construe this general observation as an expression of agreement with the opinion of
Newbold, V.-P., upon the interpretation of s. 8, Kenya Act, and therefore I hold that I am bound by this
interpretation of the majority of the court. In the result, I hold against Mr. Patel’s submission that the
policy of insurance (exhibit 1) in this case was not in force and therefore non-operative and ineffective at
the material time.
The next question which I have to determine is whether or not the term in the policy as regards the
Limitations as to Use was a “condition” of the policy within the meaning of that word in s. 102, Traffic
Act. Mr. Patel submitted that the term was a definition and not a condition. A similar argument was
advanced in the New Great case where it was urged that the proviso excluding from the “authorised
driver” any disqualified person was not a condition but a definition limiting the type of person who could
be an authorised driver. Mr. Patel drew my attention to an observation of Newbold, V.-P., in this
connection where the learned Vice President is reported as saying, (ibid., at p. 97):
“Whilst in other circumstances a proviso may have such an effect . . .”

In insurance law no distinction is made between a condition and a warranty as in most branches of the
law of contract. In Provincial Insurance Co. v. Morgan and Foxon, [1933] A.C. 240, Lord Wright
observed that the words “warranty” and “condition” are used as equivalent in insurance law. Therefore
some difficulty is bound to arise in determining whether a particular term in a policy of insurance is
fundamental or not. As no particular form of words has any special significance, reliance must be placed
on the general principles of interpretation.
Page 442 of [1968] 1 EA 436 (HCU)

In my opinion, the best test to apply in the circumstances of this case would be to examine the policy
of insurance as a whole in an attempt to ascertain the intention of the parties. The statement in the
Schedule regarding the limitations as to use has to be read in conjunction with cl. 1 (b) (i) of the general
exceptions (both of which are quoted in an earlier part of this judgment), and although the statement in
the Schedule gives at first glance the impression of being a descriptive or collateral term, such impression
is dispelled on looking at condition 10 under the heading “Conditions”. This condition states:
“The due observance and fulfilment of the terms of this policy in so far as they relate to anything to be done
or not to be done by the insured and the truth of the statements and answers in the proposal shall be
conditions precedent to any liability of the Company to make any payment under this policy.”

A condition precedent is a term which goes to the root of the contract and therefore a fundamental term
thereof. For these reasons, I do not agree with Mr. Patel’s submission and I hold that the term in question
was a “condition” within the meaning of that word in s. 102, Traffic Act.
Mr. Patel also referred to the words “being a liability covered by the terms of the policy” appearing in
s. 104, Traffic Act (s. 10, Kenya Act, and s. 10, English Act, 1934). He submitted that the plaintiff, in
order to succeed, must establish that not only was the liability required to be covered but was also in fact
covered by the policy. He referred to the observation by Newbold, V.-P., in the New Great case ([1966]
E.A. p. 99):
“I accept that this section applies where both the liability is required under s. 5 (b) to be covered by a policy
and the liability is in fact covered by the terms of the policy or would be so covered were it not for the fact
that according to the terms of the policy the insurer is entitled to avoid it. A liability may be required under s.
5 (b) to be covered by a policy and yet the liability may not in fact be covered by the particular policy. An
example of this is where a policy is taken out relating to the use of the vehicle by the insured only but in fact
the vehicle is used by another person.”

The meaning of the words “liability covered by the terms of the policy” is given in s. 104 (6) as “liability
which is covered by the policy or which would be so covered but for the fact that the insurer is entitled to
avoid or cancel or has avoided or cancelled the policy”. In this case, the liability to the plaintiff was
required to be covered under s. 99 (b), Traffic Act, and such liability was in fact covered under the
policy, and I have held above that the defendant company cannot avoid the policy on the ground that
there never was a contract of insurance in existence as the policy was not in force at the material time. I
hold, therefore, that the plaintiff has established her claim against the defendant company under s. 104,
Traffic Act.
To sum up, I hold as under:
(a) The policy of insurance was in force at the material time and the defendant company was not entitled
to avoid it;
(b) The term in the policy as regards the limitations as to use was a condition, and not a definition;
(c) The condition was rendered ineffective by reason of s. 102, Traffic Act;
(d) The liability of the defendant company to the plaintiff was a liability covered by the terms of the
policy.
Page 443 of [1968] 1 EA 436 (HCU)

For the reasons given above, I enter judgment for the plaintiff, against the defendant company for:
(i) Shs. 53,997/- being the principal amount of the decree obtained by her in High Court Civil Suit No. 10
of 1967, together with interest thereon at six per cent. per annum from September 19, 1967 to the date
of payment, and Shs. 10,270/- being the costs of the said civil suit; and
(ii) The taxed costs of this suit.

Judgment for the plaintiff.

For the plaintiff:

DW Nabudere
DW Nabudere, Mbale

For the defendant:

MA Patel and HQ Ganatra
Patel & Shah, Kampala

Express Transport Co Ltd v BAT Tanzania Ltd

[1968] 1 EA 443 (CAD)

Division: Court of Appeal at Dar-Es-Salaam

Date of judgment: 3 July 1968
Case Number: 12/1968 (101/68)
Before: Sir Charles Newbold P, Sir Clement de Lestang V-P and Law JA
Sourced by: LawAfrica
Appeal from: High Court of Tanzania – Georges, C.J

[1] Carriage by road – Common carrier – Insufficient packing of goods – Effect on liability of carrier
for damage to goods.
[2] Carriage by road – Common carrier – Who is – Law of Contract Ordinance, s. 103, (T.) – Measure
of damages against.
[3] Carriage by road – Common carrier – Limitation of liability – Whether carrier can limit his
common law liability – English Carriers Act 1830 and Carriers Amendment Act 1865 – Limitation can
only be by contract.
[4] Contract – Exemption clause – Carriage of goods – Small print on letterheads and term on printed
form “All goods at owner’s risk” – Whether carrier’s liability for negligent handling of goods excluded.
[5] Contract – Implied term – Whether term excluding liability for negligent handling should be implied
from course of dealing between parties.