PATEL
JCC: The
applicant, Tour Operators Business Association of Zimbabwe (TOBAZ),
is an association of registered tour operators. Among other things,
it buys and arranges insurance services for foreign tourists,
including motor vehicle insurance for foreign vehicles entering
Zimbabwe.
The
first respondent is named the Motor Insurance Pool (the MIP) and is
an association of insurers.
The
second respondent is the Zimbabwe Revenue Authority (ZIMRA).
The
third respondent is the Insurance and Pensions Commission (the I&PC),
a statutory body responsible for the regulation of insurance and
pension business in Zimbabwe.
The
Attorney-General is cited as an interested party who might wish to
intervene in these proceedings.
It
is common cause that foreign vehicles are required by law to have a
temporary import permit coupled with valid insurance cover for the
duration of the permit.
According
to TOBAZ, its members were previously entitled to arrange temporary
insurance cover and did in fact do so until February 2010, when the
MIP and ZIMRA concluded an agency agreement, with the tacit
concurrence of the I&PC, the purpose of which was to confine the
issuance of such cover to the MIP and ZIMRA. The latter then
published a notice to that effect and proceeded to issue insurance
cover on behalf of the former.
TOBAZ
avers that the MIP, as an association of insurers, cannot itself
issue insurance cover or authorise ZIMRA to do so as its agent. This
is because they do not qualify as licensed insurers under the
Insurance Act [Chapter
24:07]
or approved insurers under the Road Traffic Act [Chapter
13:11].
Their agency agreement is not only ultra
vires
those statutes but also creates a monopoly in breach of the
Competition Act [Chapter
14:28].
In
the constitutional context, the agreement operates to infringe its
members freedom of profession, trade or occupation as well as their
right to equal protection of the law. It also violates the freedom of
contract implicit in the freedom of association by imposing a
contracting party on foreign motorists.
The
relief sought by TOBAZ is a declaratur
that it and its members have been denied the above-mentioned
constitutional rights and that the agency agreement between the MIP
and ZIMRA is consequently null and void. TOBAZ also seeks a mandamus
compelling ZIMRA to accept insurance cover obtained from any
registered, licensed and approved insurer.
The
MIP is an association formed under an agreement concluded between
several registered insurers and executed on 16 December 1964.
Pursuant to its formation, a further agreement was concluded on 4
January 1965 between the MIP and the then Minister of Roads and Road
Traffic. In terms of this later agreement, nominated members of the
MIP were authorised to issue temporary insurance permits to motorists
entering the country. The effect of the agreement was to approve the
members of the MIP as issuers of policies of insurance in respect of
foreign motor vehicles, in terms of the precursor to section
23(1)(a)(i) of the Road Traffic Act, for the purposes of Part IV of
the Act.
The
MIP avers that its registered and approved members are legally
authorised to issue temporary insurance permits and collect premiums,
either directly by themselves or through ZIMRA as the duly appointed
agent of the MIP.
Insurance
cover for foreign motor vehicles represents a very small section of
the motor insurance market. Thus, its 2010 agency agreement with
ZIMRA does not constitute a monopoly, nor does it contravene the
Insurance Act, the Road Traffic Act or the Competition Act.
Moreover,
the members of TOBAZ are not brokers or providers of insurance in
terms of its own Constitution. Therefore, the agency agreement does
not in any way restrict their right to carry on any trade or
profession as brokers or insurers.
The
I&PC, in its opposing papers, abides by the grounds of opposition
advanced by the MIP.
ZIMRA
takes the point in
limine
that the administration of motor insurance cover for foreign motor
vehicles is the prerogative of the Minister of Transport who appoints
approved parties to implement the relevant provisions of the Road
Traffic Act. Consequently, he should have been cited as a party to
these proceedings, and the failure to do so constitutes a material
non-joinder.
It
is further averred that the MIP, acting through its members, acquired
the requisite statutory approval to issue temporary insurance cover
for foreign motor vehicles. Thereafter, it duly mandated ZIMRA as its
agent to issue insurance cover and collect premiums on its behalf.
In
contrast, TOBAZ and its members are not authorised to issue short
term insurance cover to foreign motorists. It should therefore apply
to the Minister of Transport for approval under the Road Traffic Act
if its members wish to venture into motor insurance.
In
its answering affidavit, TOBAZ adopts a more limited approach to its
insurance activities. It accepts that it and its members are not
registered insurers engaged in the business of issuing insurance
policies. Its members do not wish to issue such policies but merely
to arrange insurance cover for local and foreign tourists. It
contends that they have a right to do so and cannot be restricted in
that regard.
The
issues for determination in this matter, as I perceive them, are as
follows:
(i)
Whether the Minister of Transport (the Minister) should have been
joined in these proceedings.
(ii)
Whether TOBAZ and/or its members have the requisite locus
standi
to bring the present application.
(iii)
Whether TOBAZ and its members are entitled to the relief that they
seek.
(iv)
Whether the agency agreement between the MIP and ZIMRA operates to
violate the constitutional rights of TOBAZ, its members and local or
foreign motorists. (This question only arises for determination if
the first three issues are decided in favour of TOBAZ).
Non-Joinder
of the Minister
The
position taken by TOBAZ in this regard is that the failure to cite
the Minister as a party to this application is not fatal. This is
because it is not seeking any relief as against the Minister.
As
a matter of procedure, it is trite that a party instituting any legal
proceedings must cite every person who has a direct and substantial
interest in the matter or who is likely to be prejudicially affected
by the relief sought therein. The failure to do so is not necessarily
fatal in every case inasmuch as the courts have an inherent
discretion to cure any material non-joinder by giving such directions
as may be just and appropriate for that purpose.
This
is explicitly recognised in Rule 87 of the High Court Rules 1971.
It
is not in dispute that it was the Minister's predecessor who
granted the necessary statutory approval, through his agreement with
the MIP in 1965, enabling the members of the MIP to issue temporary
insurance cover for foreign motor vehicles.
One
of the complaints raised by TOBAZ is that the MIP per
se
cannot issue insurance cover and that, therefore, it cannot authorise
ZIMRA to do so as its agent.
In
my view, this contention does not impinge upon the continuing
validity or operability of the agreement concluded in 1965. In other
words, it does not call into question the Minister's authority or
the approval conferred by him under that agreement.
The
same applies to the substantive relief that is sought by TOBAZ as
against the respondents, viz.
that the agency agreement of 2010 between the MIP and ZIMRA be
nullified and that ZIMRA be compelled to accept insurance cover
outside the terms of its mandate from the MIP. Given that the 2010
agreement is not predicated on the 1965 agreement, none of the relief
sought has any direct bearing on the Minister's powers or the
exercise of his discretion under the Road Traffic Act.
In
the premises, I take the view that the Minister's interest in the
present matter is purely peripheral and that any relief that might be
granted in favour of TOBAZ will not have any appreciable impact on
his rights. It follows that the non-joinder of the Minister in
casu
cannot be said to be material and, therefore, cannot be held to have
been fatal. Accordingly, ZIMRA's objection in
limine
cannot be sustained and must be dismissed.
The
Applicant's Locus Standi
Section
85(1) of the Constitution delineates the categories of legal standing
available for the enforcement of fundamental human rights and
freedoms, as follows:
“(1)
Any of the following persons, namely –
(a)
any person acting in their own interests;
(b)
any person acting on behalf of another person who cannot act for
themselves;
(c)
any person acting as a member, or in the interests, of a group or
class of persons;
(d)
any person acting in the public interest;
(e)
any association acting in the interests of its members; is entitled
to approach a court, alleging that a fundamental right or freedom
enshrined in this Chapter has been, is being or is likely to be
infringed, and the court may grant appropriate relief, including a
declaration of rights and an award of compensation.”
Advocate
Uriri,
for the applicant, submits that this application is instituted on two
different bases recognised in subsection (1) of section 85.
The
first arises from paragraph (e) of that subsection, where TOBAZ is
acting in the interests of its members to protect their right to
equal protection and benefit of the law, under section 56, and their
freedom of profession, trade or occupation, under section 64.
The
second basis accrues from paragraphs (c) and (d), where TOBAZ is
acting in
the interests of a group or class of persons and in the public
interest to protect the rights of foreign motorists and the general
public to the freedom of contract, implicit in the freedom of
association under section 58, so as to contract with insurers of
their choice and thereby obtain cheaper insurance cover.
The
fundamental rights and freedoms invoked by TOBAZ are enunciated in
the Constitution as follows:
“56(1)
All persons are equal before the law and have the right to equal
protection and benefit of the law.”
“58(1)
Every person has the right to freedom of assembly and association,
and the right not to assemble or associate with others.
(2)
No person may be compelled to belong to an association or to attend a
meeting or gathering.”
“64.
Every person has the right to choose and carry on any profession,
trade or occupation, but the practice of a profession, trade or
occupation may be regulated by law.”
According
to Advocate Uriri,
the
violation of the rights enshrined in these provisions stems from the
monopolistic and restrictive arrangement between the MIP and ZIMRA,
which hinders the members of TOBAZ from obtaining insurance cover
specifically for their foreign clients. It also operates to restrict
access to insurance cover generally by members of the motoring
public.
As
regards the first basis proffered by TOBAZ for its legal standing in
this matter, it is necessary to consider the provisions of its own
Constitution which was adopted on 17 August 2012.
In
terms of clause 3(a), the principal objective of the association is
to promote tourism activities in the country and the business
interests of its members in the tourism industry. Its other
objectives elaborate this principal objective and are essentially
incidental to that objective. Under clause 4(a), the membership of
TOBAZ consists of companies, bodies or organisations and individuals
that are in the tourism industry.
As
is indisputably evident from the provisions of its Constitution, the
objectives of TOBAZ and the business of its members are confined to
the tourism industry. They are not registered insurers or brokers or
licensed insurance agents. They have no legal interest in the
issuance of insurance or insurance brokering or in any other form of
insurance activity. Their constituent instrument is entirely silent
in that regard.
To
put it colloquially, insurance is none of their business.
On
this premise, it is not possible to ascribe to TOBAZ any legal
standing to enforce its members right to equal protection and benefit
of the law or their freedom to trade in the specific sphere of
insurance.
As
for the second basis of legal standing, it must be assumed that the
freedom to contract is necessarily implied in the freedom of
association guaranteed by section 58 of the Constitution.
I
am somewhat disinclined to accept the correctness of this proposition
on my interpretation of that section as being concerned with the
formation and membership of voluntary associations and corporations
rather than the negotiation and conclusion of commercial contracts.
In
any event, the more critical question for present purposes is the
applicant's claim to represent the interests of foreign motorists
and the general motoring public.
Taking
a liberal and charitable approach, I am prepared to accept that TOBAZ
is not simply a vexatious busybody and is genuinely concerned about
the rights and interests of local and foreign motorists.
However,
what is absent in its founding and answering papers is any meaningful
evidence to support its contention that these motorists have been or
are likely to be prejudiced by the 2010 agency agreement between the
MIP and ZIMRA or that they are in any way aggrieved by that
agreement.
Very
crucially, there is no affidavit or other evidence from any foreign
or local motorist or from any organisation representing motorists to
substantiate the allegations made by TOBAZ.
This
deficiency is critical insofar as TOBAZ purports as it does to
represent the interests of the motoring public.
To
sum up, I take the view that the applicant has dismally failed to
establish the requisite locus
standi
to act in this matter in the interests of its own members or in the
interests of any class of persons or in the public interest.
Entitlement
to Relief Sought
Notwithstanding
the above conclusion on the absence of locus
standi,
I shall proceed, for the sake of completeness, to address the
propriety of the relief sought by the applicant in the context of the
Insurance Act and the regulations made thereunder.
Apart
from the constitutionality of the 2010 agency agreement, TOBAZ also
questions its legality under the Insurance Act, in particular as
regards the status of ZIMRA as an insurance agent.
Advocate
Magwaliba,
for the respondents, argues that there is no statutory registration
requirement in respect of an insurance agent such as ZIMRA. He also
argues that the members of TOBAZ have been operating as unregistered
insurance brokers in clear contravention of the Insurance Act.
It
is necessary to examine both of these aspects, even though they are
incidental to the constitutional issues before the Court.
An
“insurance agent” is defined in section 3 of the Insurance Act as
a person who,
on behalf of a registered insurer,
initiates
insurance business or does any act in relation to the receiving of
proposals for insurance, the issuance of policies or the collection
of premiums.
An
“insurance broker” is defined as a person who, on behalf of any
other person, negotiates insurance business with insurers.
Both
definitions exclude an employee of a registered insurer who receives
a salary.
It
is common cause that ZIMRA is mandated under its agency agreement
with the MIP to issue policies and collect premiums. There is
therefore no doubt that ZIMRA acts as an insurance agent rather than
as an insurance broker in the present context.
Turning
to TOBAZ, its own admission is that its members have previously been
buying and arranging
insurance services for local and foreign tourists, including
temporary motor vehicle insurance cover for foreign vehicles.
As
for the future, their prayer is to be allowed to arrange insurance
cover for foreign vehicles through any registered and approved
insurer who is not necessarily a member of the MIP.
It
therefore cannot be disputed that the members of TOBAZ have been
negotiating or brokering insurance business with insurers on behalf
of tourists and wish to continue to do so.
They
are clearly operating as insurance brokers and there has been no
attempt in the applicant's papers or by its counsel to gainsay that
position.
Section
7(1) of the Insurance Act requires that every insurer must be
registered, while section 35(1) mandates the registration of every
insurance broker.
Both
provisions make it an offence, attracting a maximum fine of level 14
and/or imprisonment for a period of up to 5 years, for any person to
carry on business as an insurer or insurance broker without being
registered.
Section
88 goes further to penalise any
person who holds himself out to be an insurer or insurance broker
whilst not being registered as such in terms of the Act. The
prescribed penalty for such conduct is the same as that stipulated
under sections 7(1) and 35(1).
It
is clear that the Act itself does not require the registration of
insurance agents.
However,
section 89(1) provides for the making of regulations
prescribing anything which under the Act is to be prescribed or which
is necessary or convenient to be prescribed for carrying out or
giving effect to the Act. In particular, section 89(2)(d) enables,
inter
alia,
the regulation, registration, licensing and control of insurance
agents.
The
Insurance Regulations 1989 (S.I. 49 of 1989), framed in terms of
section 89 of the Act, regulate the conduct of virtually every class
of insurance business and activity, including insurance agents.
Section
14 of the Regulations provides for the issuance of various insurance
agent licences, while section 15 enjoins every
agent who represents a registered insurer in respect of insurance
business to hold a valid insurance agent licence in the class of
business concerned. Additionally, section 15(5) stipulates that no
registered insurer or broker shall cause or permit any agent to
represent him in respect of any insurance business unless that agent
is in possession of a licence in respect of that class of insurance
business.
It
is abundantly clear from the foregoing that ZIMRA is acting in
contravention of the Insurance Regulations, by purporting to issue
motor insurance policies and collect premiums, without being licensed
as an insurance agent under the Regulations.
Conversely,
the MIP has also contravened the Regulations by permitting ZIMRA to
represent its nominated members as their insurance agent.
Both
parties were patently ill-advised in embarking on their agency
arrangement without regard to the licensing requirements of the
Regulations.
As
for TOBAZ itself, it is equally clear that its members have also
violated the peremptory provisions of the Insurance Act by not
registering themselves as insurance brokers or by holding themselves
out as brokers without being registered as such. In either event,
their offence is graver in that they have contravened an Act of
Parliament as opposed to purely subordinate legislation.
It
is implored on behalf of TOBAZ that the fact that its members have
contravened a law does not debar them from approaching a court for
relief in respect of any alleged violation of fundamental rights, as
is expressly affirmed in section 85(2) of the Constitution, and that
the Court is at large to make any order that is just and equitable,
in terms of section 175(6)(b) of the Constitution.
While
this may be perfectly correct, allowing TOBAZ to approach this Court
is one thing, but allowing it to succeed in this matter is an
altogether different proposition.
As
I have already stated, sections 35(1) and 88 of the Insurance Act
unequivocally and emphatically criminalise unregistered brokering.
What TOBAZ seeks to enforce on behalf of its members is the right to
persist in and continue their criminal conduct.
Thus,
by granting the constitutional relief that TOBAZ seeks, the Court
would not only condone its members flagrant violation of the law but
also sanction and perpetuate that illegality under the cover of their
alleged fundamental rights.
Equally
significantly, the principal fundamental right that TOBAZ relies upon
to ground its legal standing before this Court, viz.
the right of every person to choose and carry on any profession,
trade or occupation, is itself made expressly subject to the crucial
qualification that the practice of a profession, trade or occupation
may be regulated by law.
In
the present context, the right of its members to engage in business
as insurance brokers is regulated by the Insurance Act.
Unless
and until they are duly registered under that Act, it is patently
impermissible for them to invoke the right to carry on any activity
regulated by that Act in circumstances that are clearly not
countenanced by the Constitution itself.
In
short, TOBAZ and its members have no cognisable constitutional cause
of action.
Disposition
To
conclude, the applicant has no locus
standi in judicio
under section 85(1) of the Constitution. Additionally, the
declaratory and other relief that it seeks cannot properly be granted
by this Court.
This
application must accordingly fail on these procedural grounds.
Given
this conclusion, it is not necessary to delve into or determine the
remaining substantive issue as to whether or not the impugned 2010
agency agreement operates to violate the constitutional rights of
TOBAZ, its members and local or foreign motorists.
As
for costs, I am inclined to the view that this application was
manifestly ill-conceived, almost on the verge of amounting to an
abuse of court process. Nevertheless, as none of the respondents have
prayed for costs on the punitive scale, the order for costs will
simply follow the cause on the ordinary scale.
In
the result, it is ordered that the application be and is hereby
dismissed with costs.
CHIDYAUSIKU
CJ: I
agree
MALABA
DCJ: I
agree
ZIYAMBI
JCC: I
agree
GWAUNZA
JCC: I
agree
GARWE
JCC: I
agree
GOWORA
JCC: I
agree
HLATSHWAYO
JCC: I
agree
GUVAVA
JCC: I
agree
Chigwanda
Legal Practitioners,
applicant's legal practitioners
Atherstone
& Cook,
respondent's legal practitioners
