Sero Lease & Finance (SELFINA) & Another vs Hilda Amos Mayenga & Others (Civil Appeal No. 864 of 2025) [2026] TZCA 624 (3 June 2026)

IN THE COURT OF APPEAL OF TANZANIA AT MBEYA ( CORAM: MKUYE. J.A.. FELESHI. 3.A. And NANGELA, J.A.^ CIVIL APPEAL NO. 864 OF 2025 SERO LEASE AND FINANCE (SELFINA) ....... ................. 1 st APPELLANT VICTORIA KISYOMBE .................................. ....... ......2 nd APPELLANT VERSUS HILDA AMOS MAYENGA (As Administratix of the Estate of the Late FATUMA TERRY) ......... . ......... ........ . ................ 1st RESPONDENT JULIANA MWATONOKA .......................... . ..................... 2 nd RESPONDENT ASHA JASTON SAANANE (As Administratix of the Estate of the late AHOBWIKE MWAKAGALI) .................. 3 rd RESPONDENT AMANI MWAKABAGA................................................... 4™ RESPONDENT ABDUL NGWALE.................................. . .................... . 5™ RESPONDENT (Appeal from the decision of the High Court of Tanzania at Mbeya) (ligangaUU dated the 06th day of March, 2025 in Misc. Labour Application No. 24647 of 2024 JUDGMENT OF THE COURT 8th May & 3rt June, 2026 MKUYE, J.A.: The appellants herein, Sero Lease and Finance Ltd (SELFINA) and Victoria Kisyombe (1s t and 2n d appellants), have lodged an appeal against the decision of the High Court of Tanzania at Mbeya in which it lifted the corporate veil of the 1s t appellant and thereby held the 2n d appellant personally liable; and allowed the respondents to proceed with execution against her personal assets to satisfy the TZS. 76,095,600.00 debt. i

In order to appreciate the background of the appeal at hand, we find it appropriate to set out albeit, briefly, the facts of the case. The respondents were employees of Sero Lease Finance Ltd (SELFINA), a limited liability company registered in Tanzania whose employment were terminated. Following their termination from their employment, they initiated a Labour Dispute No. CMA/MBY/92/2018/AR.37 against the 1s t appellant (employer) at the Commissioner for Mediation and Arbitration (the CMA). On 10/12/2019, the CMA issued on ex-parte award in favour of the respondents and awarded them TZS. 76,095,600.00 as salary arrears. Aggrieved, the 1s t appellant filed a Labour Revision No. 11 of 2021 at the High Court (Labour Division) challenging the CMA's award, however the same was on 16/5/2022 dismissed for lack of merit. In order to execute their award, the respondents filed three Execution Applications, to wit, No. 39 of 2022, No. 15 of 2022 and No. 4979 of 2024. However, despite such concerted efforts the directors of the 1s t appellant refused to comply with the court's orders. It transpired later that the 1s t appellant apparently owned no movable or immovable properties that could be attached for execution. It was alleged that the company assets were being concealed under the 2

name of the 2n d appellant, Victoria Kisyombe, whom the respondents identified as the Sole Director and Shareholder of the 1s t appellant. This culminated into the respondents' moving the High Court to exercise its inherent powers to lift the 1s t appellant's corporate veil and hold the 2n d appellant personally liable for the company's debt. The issue before the High Court was, therefore, whether the respondents had advanced sufficient grounds for the Court to grant an order lifting the corporate veil of the 1s t appellant and hold the 2n d appellant personally liable for the company's decretal debt. In its decision, the High Cort observed that the 2n d appellant, while admitting to be a director of the 1s t appellant, failed to prove the existence of any other directors. That, her failure to honour the court award issued over five years ago suggested that she was either concealing the company's properties or wilfully refusing to disclose them. The High Court also emphasized that, allowing directors to ignore court orders would undermine public confidence in the judiciary. It further held that where directors fail to satisfy the decree, the court may shift liability to them. The High Court, then lifted the corporate veil, as alluded earlier on, and held the 2n d appellant personally liable, thus allowed the respondents to execute their award against her.

Aggrieved with the High Court decision, the appellants have filed this appeal on four (4) grounds of appeal as hereunder: "1. That, the trial Judge grossly erred in law by allowing the application without consideration that the respondents had failed to establish any o f the grounds commonly relied upon to lift the corporate veil o f the 1st appellant 2. That, the trial Judge erred in law for delivering a biased decision contrary to evidence adduced in court; he only based his decision on the reason that the respondents have made so many futile efforts to trace the assets o f the 1st appellant company but in vain. 3. That, the trial Judge erred in law when failed to consider the submission o f the counsel for appellants, when evidenced that respondents failed to indicate special circumstances to warrant the trial court to invoke the inherit powers by lifting the corporate veil o f the 1st appellant 4. That, the trial Judge grossly erred in iaw by finding of concealment and evasion of legal obligation by the 2n d appellant without a proper anaiysation and evaluation o f the evidence adduced by the appellants hence reached into a wrong decision against the appellants/' When the appeal was called on for hearing, Mssers. Daniel Lawrence Muya and Kelvin Kuboja Gamba, both learned advocates, represented the appellants and respondents, respectively. 4

On being invited to expound on the grounds of appeal, M r. Muya, sought first to adopt the grounds of appeal and the written submission filed earlier on to form part of oral submission. He, then, sought to clarify grounds No. 1 and 3 together. Submitting in relation to grounds nos. 1 and 3 together, the learned counsel for the appellants contended that, the learned Judge lifted the corporate veil of the 1s t appellant while the respondents failed to establish the grounds for lifting the corporate veil. That, the 2n d appellant could not own the 1s t appellants' assets, a company which is registered and has its office. See: Solomon v. Solomon and Co. Ltd (1997) A.C. 22. It was further submitted that, although the commonly known grounds for lifting the veil are fraud, where the company is a sham or fagade, instrumentality rule, alter ego doctrine, concealment and evasion, there was no evidence from the respondents supporting such grounds. Moreover, it was argued, there was no proof that the 1s t appellant had no properties capable of being attached and yet the respondents made several attempts to attach the 2n d appellant's properties by ill motive. It was the appellants' view that, the respondents failed to prove their claim as required by section 110 of the Evidence Act, [Cap 6 R.E. 2023] they being claimants ought to prove their claim. 5

In relation to the 2n d ground of appeal, that the learned Judge was biased, it was the appellants' argument that the learned Judge misconstrued the evidence adduced and came to his own conclusion that the respondents had taken all reasonable steps necessary to execute the award of CMA against the 1s t appellant but the same was not effective attributing to the 2n d appellant's acts who was a sole director. M r. Muya contended that, the appellants had never refused to comply with the Court order. That, according to the Court record, the respondents had not taken all reasonable steps to execute the award of CMA against the 1s t appellant and that the 2n d appellant never concealed the 1s t appellant's assets. The appellants, were of the view that, what is reflected in this matter is that the learned Judge determined the matter on assumptions rather than on the balance of probabilities, a standard of proof in civil matters. With regard to the 4th ground of appeal faulting the learned Judge by finding that the 2n d appellant concealed and evaded her legal obligation without proper analysis and evaluation of evidence, the learned advocate for the appellants submitted that, despite the fact that the alleged concealment of the company's properties and evasion were denied in their counter affidavit, and the respondents admitted that there is no proof that the 2n d appellant refused to honour the CMA's award by concealment, the learned Judge is vividly seen to have not

considered the appellants' defence which culminated into misapprehension of evidence which is prejudicial leading to a wrong decision. While relying on the case of Alfeo Valentino v. Republic, Criminal Appeal No. 92 of 2006 (unreported) in which the Court reproduced the principle from the case of Salum Bugu v. Mariam Kibwanga, Civil Appeal No. 29 of 1992 (unreported), the learned counsel urged the Court to interfere with the lower court's finding as it misapprehended the evidence. In the end, M r. Muya implored the Court to find that the appeal has merit and allow it. In reply, M r. Gamba opted to respond on the grounds of appeal generally. Regarding the argument that there was no justifiable ground to grant the application, it was his argument that there were justifiable reasons for granting it. He cited the case of Yusuph Manji v. Edward Masanja and Another [2006] TLR 127, where factors for lifting a corporate veil were listed as follows:-

1. There must be a concealment of property by directors.

2. The directors must be directors of the company concerned.

3. There must be denial to execute the orders of the court by a company which the corporate veil is sought to be lifted. The learned counsel argued that all these factors were proved by the respondents in their respective affidavits. In elaboration, M r. Gamba contended that, in para 4 (v) of the said affidavits it was averred that the properties of the 1s t appellant were concealed by the 2n d appellant. That, whenever the respondents tried to execute the CMA award by attaching properties, the 2n d appellant surfaced and claimed that they were her properties. ^ Regarding the 2n d criteria, it was M r. Gamba's submission that, the respondents mentioned in para 4 (iv) of their affidavits that the 2n d appellant was the managing director of the 1s t appellant. As regards, the appellants' failure to comply with the courts' order, he contended that it was stated in para 4 (iv) of the respondents' respective affidavits. He wrapped it up that, factual matters deposed in the affidavit must be controverted by counter affidavit and not from the bar as the appellants did. To support his argument, he referred us to the case of Rashidi Abiki Nguwa v. Ramadhani Hassan Kuteya and Another,

[2021] TZCA 658. Otherwise, failure to do so connoted acceptance to the facts deposed by the respondents, he argued. On being asked on the claim by appellants that they were unaware of the execution, M r. Gamba argued that, even in their counter affidavit they did not depose anything to that effect except for a general denial. On the proof of concealment of properties, it was argued that para 4 (v) of the respondents' affidavits stated that the properties were owned by the 2n d appellant. In this regard, M r. Gamba urged the Court to find that the appeal is devoid of merit and dismiss it in its entirety; and allow the respondents to proceed with execution against the 2n d appellant. Having examined and considered the grounds of appeal, the record of appeal and the submissions from either side, we think, the whole matter hinges on the issue whether there were sufficient grounds warranting the High Court to lift the corporate veil of the 1s t appellant. Lifting of corporate veil is a common law principle. It entails a situation where the court disregards a company's separate legal personality and hold shareholders or directors personally liable for company's debts or wrong doing. We do not have qualms with the principle enunciated in the celebrated case of Solomon (supra) that, where the company incurs 9

any debts or contravenes any law, the corporate veil will protect the directors or shareholders from being held liable for such faults of the company. This was clearly stated in the case of Solomon (supra) as quoted in Yusufu Manji's case (supra) as follows: "The Company is at faw a different person altogether from the subscribers..., and\ though it may be that after incorporation the business is precisely the same as it was before, and the same persons are managers, and the same hands receive the profits, the company is not in iaw the agent of the subscribers or trustees of them. Nor are subscribers as members iiabie, in any shape or form, except to the extent and in the manner provided by the Act." However, there is an exception to the above general rulein which the Court can lift the corporate veil and make the directors and/or shareholders liable for faults incurred by the company. This is by virtue of the principle of lifting the veil of incorporation which, in essence, would allow the court to disregard the separate legal personalities of the company and directors or shareholders and require the later to bear liabilities of the former. This principle was stated in the case of Yusufu Manji's (supra) as hereunder:- "The principles enunciated in Solomon (supra) would apply to the contrary once special and 10

exceptional circumstance is shown. Here, as just shown such circumstance is premised upon the fact that the appeiiant was the managing director of the Company. The appeiiant was aiso alleged to be involved in concealing the identity and assets o f the company. In that capacity, and as held by the learned judge, we agree that the appellant was in a better position to know the trend o f affairs regarding the alleged concealment o f the company's assets•* What is gathered from the above cited case is that, the common grounds warranting the Court to lift the corporate veil are, among others, the concealing the identity of the assets of the company by the director of the Company. In this case, while the appellants contend that the respondents failed to established such grounds for lifting the corporate veil of the 1s t appellant, the respondents maintain that they were able to establish them. Our perusal of the court record has revealed how the respondents proved it. As was submitted by M r. Gamba, the respondents in paragraph 4 (iv) and (v) of their respective affidavits concentrated on their efforts to prove the same. In order to appreciate what was averred 11

in the said affidavits, we leave one of the affidavits at page 13 of the record of appeal to speak for itself: "4(iv) The CMA's Award was issued on lf f h day of December, 2019 which is about three solid years from the day it was so deiivered and it has not been honoured even by a single cent by the judgment debtor company and even by its directors. That, the applicants have been conducting measures to ensure that the 1st respondent is complying with the CMA's A ward through application for Execution No. 39 of 2022, application for execution No. 15 o f2022 and application for execution No. 4979 of 2024 but all that efforts were a/i in vain, as the directors refused to comply and honour the CMA's Award hence blocking the company from performing its statutory obligation. (v) That, the 1st respondent owns nothing in terms of movable and immovable properties since all company's properties are owned and concealed in the names of 2n d respondent respectively and she is the sole director of the respondent" [Emphasis added.] 12

On the other hand, the appellants (then respondents) in their joint counter affidavit as shown at pages 77 to 78 of the record of appeal, replied to the averments above as follows:- "(1) That I am the 2n d respondent and the Director o f the 1st respondent authorised to represent the 1st respondent in this application and to swear this joint counter affidavit, thus very conversant with the facts I am about to depose hereunder "4 (ii) Paragraph 4 (iv) is strongly disputed, the 1st respondent being the private limited liability company, managed through the Board of Directors. However, no proof has been shown indicating that the 1st respondent as a limited liability company refused to honour the CMA's Award; the execution against the incorporated company is well known under the law. The applicant is put to strict proof of the allegations raised. (iii) Paragraph 4 (v) is vehemently denied, the applicants are put to strict proof o f the allegations raised." [Emphasis added.] It is cardinal principle of law under section 110 of the Evidence Act that, whoever desires the Court to give judgment as to any legal right or liabilitymust prove that those facts exist. And, the standard of proof in civil matters, as the matter at hand, is in the balance of probabilities. 13

(See: Anthony M. Masanga v. Penina (Mama Mgesi) and Another [2015] TZCA 556.) Having examined the rival submissions, we have noted that the respondents, advanced sufficient grounds warranting the Court to grant their prayer. This is so because the respondents showed the required factors from the pleadings i.e the affidavits on how the 1s t appellant failed to honour the award. In particular, they showed the concerted efforts they made to execute the award by lodging three execution applications Nos. 39 of 2022, 15 of 2022 and 4959 of 2024 all of which proved futile. All the applications were against the 1s t appellant to which she was not prepared to honour the CMA Award. In fact, the 1s t appellant did not deny over the existence of the said applications (see: para 4 (ii) of the joint counter affidavit) or that she was unaware of them except for a claim that she was not aware which was raised from the bar. This could be translated to have acted in evasion of legal obligation. But again, there was evidence that on their (the respondents) attempts to execute the award, wherever they attempted to attach the asset considered to belong to that 1s t appellant, the 2n d appellant surfaced and claimed the asset to belong to her. The 2n d appellant being the director of the 1s t appellant as per her averment in para 1 of their 14

joint counter affidavit, and as a sole director of the 1s t appellant known to the respondents, and since she did not show existence of any other director, she can be taken to have done so while concealing the assets subject to attachment. In the absence of any other evidence regarding the where abouts of the 1s t appellant's assets the claim that the respondents' attempt to attach the 2n d appellant's asset with evil mind cannot stand. The other crucial factor is that the respondents had spend more than five years making efforts to execute the CMA's Award as evidenced by various applications made that is, Applications for Execution No. 39 of 2022, No. 15 of 2022 and Nos. 4979 of 2024, but the efforts proved futile. The claim that the High Court Judge might have been biased or failed to evaluate the appellants' evidence, in our view does not appeal since it is undisputed fact that was averred by the respondents. Even the contention that the 1s t appellant was unaware of the executions cannot hold water as it came from the bar instead of being countered by their joint counter affidavit. The appellants never made counter averment against such claims having regard that they gave a general denial which remain as a mere statement form the bar not worthy of being acted upon. 15

It is cardinal principal of law that, factual matters averred in the affidavit can only be controverted by a counter affidavit but not from the bar as was stated in Rashid Abiki Nguwa (supra) as follows: "The Court has times and again stated that the factual matters deposed in the affidavit have to be controverted by counter affidavit, short o f it, the averment countering the deposed facts remain to be mere statements from the bar which the Court cannot act upon," As regards the factor concerning failure by the 1s t appellant to comply with the Court order (award), the respondents clearly stated in paragraph 4 (iv) of their respective affidavits but the appellants just gave a general denial only to bring it from the bar that the 1s t appellant was not aware of the execution applications or efforts made by respondents to execute the award. The appellants stated that there was no evidence that they refused to honour the award without saying anything on the three execution applications which were lodged by the respondents against the 1s t appellant. In our considered view, all efforts made by the respondents depict how the 1s t appellant was not prepared to comply with the court's order. In relation to the issue of concealment of the 1s t appellant's properties by the 2n d appellant, despite the fact that it was pleaded by the respondents in paragraph 4 (v) of the respective affidavits, the 16

appellants in para 4 (v) of the joint counter affidavit (page 78 of the record of appeal) gave a general denial demanding strict proof without elaboration on how those properties did not belong to the 1s t appellant as one would have expected. The circumstances of this case may lead to the conclusion that the 2n d appellant, indeed, engaged herself in concealing the 1s t appellant's assets. We say so due to the clear evidence that the respondents were unable to execute the award for about a period of five years despite the fact that they had lodged three execution applications but failed. There was evidence that all concerted efforts to execute the award could not succeed due to the 2n d appellant, the known sole director's actions of barring the execution to be carried out. It is in evidence that whenever the respondents attempted to attach the property purportedly belonging to the 1s t appellant, the 2n d appellant blocked it claiming to belong to her. The 2n d appellant's acts not only depict that she did not honour the award but also she concealed the 1s t appellant's properties as she did not avail to the respondents the whereabouts of the 1s t appellant's properties. We also note that the 2n d appellant denied to be a sole director of the 1s t appellant however, construing from paragraph 1 of the joint counter affidavit, it is clear that the existence of other directors does not

feature. Also, she did not counter that she was a sole director as was pleaded by the respondents. With the foregoing, we are satisfied that the respondents advanced sufficient grounds justifying the High Court Judge to lift the 1s t appellant's corporate veil and hold the 2n d appellant liable and thereby allow the respondents to proceed with the execution. In the event, we find the appeal to be devoid of merit and it is, accordingly, dismissed with costs. DATED at DODOMA this 29th day of May, 2026. R. K. MKUYE JUSTICE OF APPEAL E. M. FELESHI JUSTICE OF APPEAL D. J. NANGELA JUSTICE OF APPEAL Judgment delivered Virtually this 3rd day of June, 2026 in the presence of M r. Daniel Lawrence Muya, learned Counsel for the appellants, M r. Kelvin Kuboja Gamba, learned Counsel for the Respondents and M r. Elias Nkwabi, Court clerk, is hereby certified as a