Summary

The respondent sued his bank and broker after a 2014 fire destroyed stock in his wholesale shop; the broker impleaded the insurer as a third party under Order 1 Rule 14 CPC. The trial court awarded the respondent Tzs. 596,927,000 for stock loss, loss of profit at Tzs. 31,000,000 per month until payment, and costs. The insurer appealed on five grounds, arguing misapplication of third‑party procedure, lack of proof for loss of profit, and misevaluation of evidence. The Court of Appeal held that while third‑party procedure ordinarily concerns contribution/indemnity, this case was distinguishable because the insurer effectively accepted liability and only disputed quantum. The Court found the fire policy covered stock in trade but not business interruption; loss of profit is special damages that were not specifically pleaded or strictly proved, so that award was set aside. The Court accepted the respondent’s stock and debtors returns (exhibit P3) showing stock worth Tzs. 596,927,000 pre‑fire and upheld that award, dismissed the remaining appeal grounds, and awarded costs to the respondent. Issues Whether a third party impleaded under Order 1 Rule 14 CPC can be ordered to pay the plaintiff directly where the original defendants are exonerated or where liability is disputed only as to quantum? Whether the third party procedure is limited to contribution and indemnity or may result in a direct award to the plaintiff where the third party admits liability? Whether an award for loss of profit (business interruption) could be granted under a fire policy covering stock in trade? Whether loss of profit, as special damages, was specifically pleaded and strictly proved to justify an award from the date of the fire until payment in full? Whether the trial court properly evaluated the evidential weight of competing documents (insured's stock returns versus the adjuster’s investigative report and tax returns)? Held The Court reaffirmed that Order 1 Rule 14 CPC is principally concerned with contribution and indemnity between a defendant and a third party, and a third party is not normally to be treated as a defendant in the main suit; however, where the third party effectively admits liability and the dispute is confined to quantum, the third party procedure may properly result in the third party being ordered to pay the plaintiff. The Court distinguished the earlier Murji authority on the facts of this case. The Court held that loss of profit (business interruption) is not covered by a standard fire policy for stock in trade and that loss of profit is a form of special damages which must be specifically pleaded and strictly proved. The respondent failed to provide the necessary particulars or evidence to sustain the monthly loss‑of‑profit figure claimed (Tzs. 31,000,000). Therefore the trial court’s award for loss of profit was erroneous and was set aside. The Court found that the trial judge properly assessed the evidential weight of the documents and evidence. Exhibit P3 (stock and debtors returns) was credible and showed the respondent’s stock value at Tzs. 596,927,000 nineteen days before the fire; the adjuster’s report (exhibit D1) and other defence exhibits were given less weight. Accordingly the Court upheld the award of Tzs. 596,927,000 in favour of the respondent. The appeal was dismissed in all respects except that the award for loss of profit was set aside; the respondent retained the award of Tzs. 596,927,000 and was awarded costs before the Court of Appeal. Order That said and done, for reasons we have assigned; except for the third ground in respect of which we have found merit and allowed, the rest of them lack merit and are accordingly dismissed. In the end, the appeal fails. We uphold the trial court's award of Tzs. 596,927,000/= in favour of the respondent. We likewise award him costs before this Court.

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