African Ivory Insurance Company Ltd & Ors V. Commissioner for Insurance (1997)

LawGlobal-Hub Lead Judgment Report

AYOOLA, J.C.A. 

The two short questions that have arisen on this appeal are:

i. whether the Commissioner for Insurance can be sued by using his

ii. whether the trial Judge was right when she held that an association which described itself as “Nigerian Insurers Association” was not a juristic person or has sued in a representative capacity”.

The questions arose this way: The appellants the first five of which are insurance companies and the sixth of which is Nigerian Insurance Association sued the Commissioner for Insurance claiming a declaration that the first five plaintiffs and the 6th plaintiffs members registered before the enactment of the Insurance Decree 1991 were not liable to pay the statutory deposit required by section 9 of the Insurance Decree Cap. 58 of 1991 and an order of perpetual injunction restraining the defendant “whether by himself, his officers, agents, servants or any of them or otherwise howsoever” from compelling the first five plaintiffs and 6th plaintiff’s members to pay the statutory deposit required by section 9 of the Decree.

The plaintiffs had obtained an order of interim injunction against the defendant but before pleadings were filed in the case, the defendant filed a notice of preliminary objection wherein it applied that the action be struck out on two grounds namely:

(a) that defendant was not a proper person to be made a party to the action and

(b) that the 6th plaintiff lacked locus standi as it was not an interested party or parties concerned or affected by the provisions of the decree “being sought to be interpreted.”

After she had heard counsel on the preliminary objection the learned Judge (Ukeje J) ruled in favour of the defendant and struck the action out in its entirety. Her reasons for upholding the preliminary objection summarised are first; that the office of the Director of Insurance (as the office was then known) was “unknown for the purposes of a civil suit” and therefore “the plaintiffs have failed to prove that they have the right to sue (as they have done), the defendant in his official title, contrary to section 40 of the Decree” and, that, the defendant not being a juristic person was not a proper party to be sued; and, secondly that the 6th plaintiff not being a body clothed with juristic personality could not sue in its own name and having not complied with pre-requisites prescribed by rules 1 and 3 of Order IV of the Federal High Court Rules could not sue in a representatives capacity. She had erroneously described the 6th plaintiff as “the Nigerian Insurance Association” to which reference had been made in section 65 of the Insurance Decree 1991 (“the Decree”).

The appellants (herein in this judgment described as “the plaintiffs”) have appealed from the decision of the judge on the grounds that she erred in all the reasons she had given for upholding the preliminary objection. The Commissioner for Insurance had not filed any brief, notwithstanding that the plaintiff duly filed and served on him; their appellants’ brief of argument. The appeal was heard pursuant to Order 6 and 10 of the Court of Appeal Rules on the appellant’s brief which I acknowledge was carefully prepared.

Section 40 of the Decree established the office of the Director of Insurance. The nomenclature of that office had since been changed by the Insurance (Special Supervision Fund (Amendment) Decree 1992 (No.262 of 1992) to the Commissioner for Insurance but the change neither affected the functions and powers of the office nor is it of any material significance to the issues on this appeal. Subsection 1 of section 40 as it originally stood provided that

“There shall be appointed by the President, Commander-in-Chief of the Armed Forces, a Director of Insurance for the purposes of this Decree whose office shall be in a department of the Ministry.”

Subsection 3 of section 40 prohibited the Director and, such other officers as are appointed pursuant to subsection 2 as may be necessary for the administration and enforcement of the Decree from interfering “unreasonably with the affairs of a person affected by his activities.” Section 40(4) provides that

“A power conferred on the Director by this Decree may be exercised by the Deputy Director or any other Public Officer who produces an instrument signed by Director or Deputy Director authorising him, either generally or on any special occasion, to exercise the power on his behalf and references to the Director in his Decree shall he construed accordingly.”