General Manager National Milling Corporation vs K.A.A. Mwaisanila and 26 Others (DC Civil Appeal No. 31 of 1999) [2000] TZHC 485 (17 October 2000)

( ---· IN Till~ HIGH COuR'l' OF TANZii.l'i IA AT, MBEYA. DC CIVIL APPIAL liOo. 31' OF 1999 TH:8 GENEPJ';,.L F.tANAGEH NATIONAL MILLING CORPOiUtTION K.AoAo NWAISAiULA & . 26 OTHERS JUDGMENT ivJACKANJAi Jo APPELL.LJ-JT .dESPONDEN'r . ·-'· .. This appeal 0rigc;i_nates from- a su-i t that was instituted· by the • ,. Labour Officer at Iringa in terms of sections 132 and 134- of the Employment Ordinahte 1 Cap. 366., '.1 1 his was done by w of a report in which KoA~ Mwaisanila ; r and 26 others former employees of the defendant claim redundany .Lbnefits. The report shows that the defendant issued a directive to all mill managers in Tanzat,ia in circular le Her· with Ref. Noo NHC/GM/CIR/NPD/98/2 dated· 27th January, 1 1998, instructing them to ,_.,.ompute henefits to be paid to prospective retrencees bef6re 13th FebtuarY, 1998. '1:hat was done and the coi11puta:tions having; beeii received by: th~ Gei1eral Manager 9 he forwarded them to the Presidential Parastatal Sectoi-''Beform Commission. (PSIW). It is ! .. ,:':: t :}_ averred in the Labour Officer's report to the trial magistrate that PSRC appro ved arid remitted the fu.hds to ti;e defend.2.J.'it who duly gave notice t~/id.s mill managers. It seems that the trade union leadereihip querried the formular . ! ~ { ·: that was applied in computing the benefits. The intervention by the trade union, 'YlJICO, lead to the rejection of the computations that were worked out by the managemEint and, as a result, c2Jne up with their own which, in tuxn, were rejected by the employer. Hence the suit. •rhe defendant, in its written ,statement of defence denied the claim ~~(~ .. .,. . . and prayed that the suit be dismisseda The written defence was filed on 12th July, 1999. On 5th August, 1999, the defence filed in court a notice of three prelimary objections which were simultaneusly served on :;he plaintiffs, namely:- .1>.t.: · ;. -,:·.r 2 ..,.

2 • • •,' I (a) ·d.tat the suit is untenable as it offends the mandatory proyisions of s. 43 (l)(b) of the Public Corporations (Amendment1 Act 1 No.·16 of 1993 and so 9 of the Bankruptcy Ordinance, Cap.25; (b) that the.suit cannot be. enterta:i.ned as it·offends the legal requirements under Order· l rule· IJ of· · the Civil Procedure Code in that the defE:JJ.d,ant being a specified corporation in terms of section 43 (I)(b) of the Public Corporations (Amendment) Act, the Pye is a necesfary party to the suit; and .;: (c) that the suit is bad in law as it is barred at law in terms of the first preliminary objection hence the plaint should be rejected under Order ··· VII rule 11 (c) of the Civil Procedure Code. Having heard both parties the learned trial magistrate in an alla- borate a.-rid well reasoned rulin,g rejected the preliminary objections. She refused the first objection essentially becau_ie no leave is .require(l for a·· suit which is instituted under section 132 of Cap. 366. By necessary inference, therefore, employment causes are exempt from the application of So 43 ·(1) (b} cited above uhlil<e other suits to which procedural requiremer,ts must be complied with when filling a plaint in ordinary sui t_so She was of this considered view because as she says at page 3 of what clearly appears to be a computer print out, that:- "•••'" It is my considered opinion that such proceedings '· under the Employment Ordinance cannot be subjected to the leave of the High Court because if that was the case it would mean either before the Labour Officer reports to the Magistrate would have to obtain leave of the High Court or in the alternative the magistrate would have to seek leave of the High Court before dra- wing up a plaint. If .this was to be the case then the whole intention of Parliament to simpljfy the proceedi- ng~ under the Employment Ordian•0 would be defeated ••• ii• .. : Upon the foregoing observations the learned trial Resident Magistrate reached the conclusion that proceedings filed under Cap. 366 do not required leave of the High Court like ordinary suits

• 3 ". •, · .. '

3 •rhe second objection was rejected because,, in the view of the trial court, there is no statutory requirement that PSRC must be made a party to any civil action· to whic1 a specified corporathm is implea- ded as a defendant. She reao:hed,t}lis decision relying'on the decision of this Court, Kalegeya, Jo, in SaidiJ•=!-E.Eo & Others V, State Travel & Others, Civil Case No. 296 of 1997 (unreported~ bar es .Salaam Registry). :·- --- The defn_d;t-i-iav'iITl?t·'-b~-Ei.Gved inisti tuted this appeal 'l'he

• , . . . ~ -- --- ··---- - .. .::. L.-~- -· •.. memorandum_of appeal contains two ground,$, namely:-

1. _ that the l~;ined· trfo.l Magistrate erred in law . . . ' and in· fa.ct in,oyer;r:llli:q.g the defendantPs ,preli- minary objections ori the lgal:i.ty and locus .standi oJ the r,espondents, in' that being ~ specified company the 0 defendant cannot be sued without joining_ the PSRC as a.party; and 2o that the learned trial hagistrate erred in law and iri fact in overp;Ling the defendant's preliminary objections p1f:fi~:;legality, mo.y be the tenability, of the ;s -'i-' t?t:i.led befo'i~~ 6btaining the leave of the Court __ 'l'p.e appeal, like the preliminary objection, was argued by way of written aubmissionso Hr. Ademba Gamba, leari:;ied co1msel for the appellants, prqsecuteci the appeal while ·Hr. _Justinian l'-1ushokc/rwa, learned counsel fqr the respondent, arg,--ued the defence. , Mro Ademba Gomba, lel:i:i'ned. o,ounsel for the appellant begins with the l;:iw under which PSRC was establiihed, its functions and responsibil~- ties and the undisputed fact that the defendant is a specified corporation . _ <!f:r the Public Corporations ii.ct, 1992 as amendedo Of particular rlevance ·---- .. , - .- : .. ,-·-- .i·.: •·-. ... ·: to this matter learned cl?-.a.s also cited section .43 (1) of the. said ~~ ~ -~ -~--~~~(. ~- Act,:;Jhich provides that:--- .... ----:... ii ( 1) noh1i ths tan ding ax1y o.thr law to the con tr.ary, ---.,.•~·-..... ' ... ___ _ with effect frog} the date of publication of ,.· an Order d~claring '-public corp·oration to be a specified public corporation the Commission (PSRC) shall: 4 "

4' (a) without further assurance on appointment to have power to act as the official rece-- i ver of the ·spe-dfied pub-1-ic: -co:rpora_tion; and (b) have the powe+ and all the rights of a rece- iver appointed in accordance with or pursuant to the Bankrul)tcy Ordinance." It is, therefore, Mr. Adeniba Gomba I s submission that upon designating the appellants as a specified public:; cor:pora.tion, PSRC becari1e' the official receiver with powers and all rights of a receiver i_n accordance with or pursuant to the Bankruptcy Orclinance. Learned counsel relies on the decisiori of thi..s Court in the case of Said tfaimbo & Others V. State Travel & Others (supra) for• the proposition that an official receivei~ under the Bank.:cptcy Ordinance has wide powers, all 9f whih are_ geared towards the protection and preservation of both debtorvs and creditors' interests. He has powers and duty to investigate the conduct of the debtor, and to ensure that the estate is not wasted, for which he can act as manager or trustee. That these are some of the powers and duties of the PSHC over the appellarit, not to .mention other incidental powers arid privileges which are not relevant to the matter at" hand. It is learned counsel 1 s contention that what can be termed special

• .. receivership under Act No. 16 of 1993 a.11d under the B3.l1kruptcy Ordina,nce, Cap. 25 1 two points arise under this part, namely, that the procedures under which all debts anci liabilities ago.inst a receiver are enforced is provided for II under section 37 of the Bankruptcy Ordinanc·e, read together with the 2nd sche- dule thereto. __ Briefly, the effect of the provision is that debts must be proved by the Heceiver; and that the l'SRC has neither advertised nor has it. issued a notice of proof of the debts in back.ruptcy a..YJ.d, therefore, that the respondents could not file the suit in the trial .aMrto Learned counsel for the appellant has made the point that the respondent• could not sue the fff)i'.)ellant without joining the receiver ma,.,ager o Learned counsel, for.,~-the above proposition qf law, relies on William Kimaro & 75 Others Vs. Cooper§ &-L1brar_1d as_jQ:i..nt Liquidators of Zambia - Tanzania road Services Ltd.,(~ivil -appeal Nool95 of 1989 (C.A .. ). (unreported) where the Court stated. that er.editors.:._ claims O.l.ght to be 5

i 5 !)roved in liquidation before the claimant goes to courto It i8~ therefore, his submission that the suit before the trial·.court was filed prematurely. VJhen arguiiig the secod ground of appeal Mr. Ademba Gamba contends \ that'.under section 9 (1) of the Bankruptcy Ordinance, Cap. 25, applied in this 1atter by section 43 of Act No. 16 of 1993 provides to the effect that after the estate or property of a.debtor has been placed under an Official ·Receiver,no creditor to whom the debtor is indebted in respect of any debt prcivable in bankruptcy shall llay_e b any remedy against the property or person of thEi debtor in respect of the. de.bt or 'shall commence any action or other legal proceedings lu1less with - leave of the Court and on such terms as the ,G6urt may impose. It is learned counsels argumen't that c0ntrary to the above mandatory provision of the law, the respondents instituted this suit without obtaining leave of the Court. For his argument that this requirement is manda- tory he has cited as authority the caso of aid I•Inimbo and Others Vs. ,·state Travel Services Ltd., 11?- Tourism Services 'i'anzania, and PSEC, High Co_~~~- Civil Cae;e'.:it·-29C·;f-i997 (t page 17) .unrpr:t-ed}-iit~hih;-~~~her, Kalegeye., J •, foui1d that section 43 of tct Noo 16 of 1993 created a special receiver in the form of PSRC under which all specified public corporations Here placed in terms of section 9 of the Bankrupcy Ordina11ceo In conclusion learned counsel moves the Court _to accept his pursuation that the trial court erred in law in holding that +>the respondent could file a suit aga.inst the appellMt, which is a specified eompa11y, without obtaining prior leave from this cour'to The suit was, therefore, prematurely filed before the trial court. }Jr,. Justinian Mushokorwa, learned counsel, for the respondents, has made an equally spirited argument. He begins by joining issue with learned ... counsel for the appellant that by operation of the laws cited; the Presidential Parastatal Sector Refo1m Commission (PSHC) became a special receiver in respect of the National· Milling Corporation which was declared a specified_ corporation by virtue G .. N. 23 of 1995 which he found no .. cause-to·recite. He also noted the ~- cited authorities which applied the relevant lawa and with wlii•h he raises no eye brows. He, however, hastens to take the position that he will be bound to hon honour them if they are on all fours with the case at hand. It is then that he repeats his earlier position which has always been that this case is disti- nguishable; hence the authorities cit2d are not binding on the subordinate court

6 whose rulling, the subject matter -of this appeal, was therefore correct ax1d, in conseque,nce, he is all out o to defend it upon the reasons he gives~ I should have thought that the duty of lec!Ined coW1sel does not include to defend decisions of the court but to do so in respect of his clients intere- sts which are founded on a decision which the· other side will be impugning •. ... Be that as it may, it is Mr •. Hushokorwa I s contention that his client.';s case is an employment cause arising from a report by a Labour Officer to the court made under section 132 of the 11nploym.0nt Ordinance, Cap. 366. - He laments that the Ordinance does not define what we term ll labour or employment·: cause but that the use of th~s cle,signaticn qr title is so notorious in our court system such that it has acquired legal recognitiono. _ fl'h.9-tsuch cases fine;, their way in -'· ::. · .. :. · ......... ._: __________ , ... ·-----,---··-- .. courts of law, and the Ordinanc.e seems __ 19:.fQDfii:J.e ... th-Bm·::b-the-1Jtl'itf1c"t":. Cot; --- --- -

• ; • • •• ----· .· -.1· .• by way of a report to the cou.r,t by & Labour Officer., He argues that this (: category of cases diff;ars from other types of.civil cases"which are filed in court by individual persona or oy of persons otlJ.cr than by the initiative of Labour Officers under section 1_32 of C9.p. 3660 'l'hat there is such distinction was highlighted by this court in the case of !:'!:~al_ 7 Simanjiro Animal Hysban,dry Vacational Trading Centre Vs. Arnold l•Jalcinda (1997) TLR 1600 Another distinct feature of La.bour cases is that these cases a.re instituted without plaints or payment of fees as required for the other type of cases as provided under sections 13!:t, and 143 of the Ordina-rice., It the further contentio_n by lettrned cou...11sel that even the pecuniary jurisdiction of the District Court is unlimited in labourcauses as shown under section 133 of tlrn Ordinance. He submits that under this section the court ca ... '1 act notwith- standing any restrictions/impendiments imposed by any other law in any aspect besides pecuniary jurisdiction hence· the broad wording i7nothwi thstanding anything to the contl'.ary contained in a..11y t,rdinai1ce • • •• ·; 1 found therein.. It is his submission, therefore, that the cited provisions under the Public Corporations "' Act and the Bankruptcy Ordinai."1.ce are riot applicable to labour causeso
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• 7 Learned counsel is not ur1aware of a somewha.t similar saving in section 43 (1) of the Public Corporations Act (as amended). This he says poses a constructional problem of the two seemingly opposing legislations. But on his part he can readily solve this problem by saying that the saving under section 133 (1) of Cap .. 366 is broader and wider than that under section 43 (1) of the Public Corporations, /l.ct No .• 2 of 1992, and the latter should be subject to the former., But perhaps one has to search for what was the intention of Parliament in both these legislation iri order to appreciate his line of r~ashing, he sayse While he agrees with the proposition· that by creating PS.RC ai.,d , . placing specified corporations under its.control Parliament intended to protect the interests of both creditors and debtors, 'r.fro Mushokorwa contends that the same Parliament in ena,yting• the Employment Ordi11ance and by providing for a simplified and cheaper manner of seekh1g remedy from thc court as submi- . . ,\ tted abd.ve, also intended to expedite dispute settlement between workers and their employer as a matter of priority in public policy and that this intention, as observed by the late M.r. Justice Mwakasendo ,-;ay back in 1978 in the case of h vs.! _Saewan Singh 1972 n,. 32, should not •b& thwarted b;y legal technicalities which are more appropriate and hcwe their use in other branches of the law .. Mr. Mushokorwa, learned ~ounsel, is,not prepared to believe that Parliameμt has now subjugated the welfare of workers, who form the main stratum of the national economy harbingers or performers, simply because of the recentli introduced:_policy of ·economic liberalisation. 1 .rhat Parliament still 1;tpholds the · view for the need for en informal and speedy defermination of. labour grievances by vesting a somewhat exclusive jurisdiction to labour officers and the lower -· judiciary was echoed by Mr .. W .. B .. L. Kapinga, then a Lecturer in law at the Unive- rsity of Dar es Balaam in his paper published in the Eastern Africa Law Heview, Vol. 18 (no. 2j at page 188. ·rhc learned author comments further that ·•'the view l was that prolonged labour displinary proceedings were likely .to hamper production a,.-id enhance industrial disharmonyi•• 8

~ I 8 Mr. Mushokorwa has made the point that to require retrenched worfrers to observe the labourious and highly technical procedure of seeking lenve of the High Court ur1der section 9 of the Bankruptcy Ordinance would surely defeat the good ii;itention:of parliament, namely, to promote · tho welfare of workers e2..1Jedi tiously and at low cost possible. It is his view that one may also argue with justification that by vesting unlimited -jurisdiction to the District Courts Parliament meant to confer exclusive jurisdiction to such courts in the filing of Sltch case:S to the exclusion of the High Court,· because District Iv1agistrate mention0d · in section 132 and 133 of Capo 366 cannot include a Judge of the High Court .. Hence, in his view, a labour. cause can not, i'n the first place, .secure registration in the High Court., Tnat to require one to comply with the provisions of section 9 of Cap. 25 is tentar:r1ou11t to requiring one tu submit to the junisdiction of the High Court .. In any-case, by appointing PSRC as official receiver contemplated under the Bankruptcy Ordinance, necessarily means any proceeding against a specified corporation, which perhaps thereby assumes the status of·a bankrupt, should be aken under the Bankruptcy Ordinance and which must be taken befor8 the High Court and not a subordinate courto If he is correct in this approach, • and he believes he is, then this means that District Magistrates cease to enjoy jurisdiction to try .labour causes a.nd the ·provisions in sections 130 and 134 Cap,. 366 are, therefore, superflous,. Ha'1 Parliament intended this to be the case, he says, then it would easily have said so when it established PSRC. '1.11.is was not done an.d the.cited provisions are still in the statute, and in his view, the fact is,that labour causes should continue to be routed to District Courts without recourse for leave from the High 9ourt, even where specified corporations e.re concerned. And such cases can be filed directly against the corporation without joining PS:RC because_at law many of such corporations still enjoy legal existence until they are _formaly wound up. ,· NNC is yet to be woud up, hence it is still operating and it is known in many cases to sue in its own name withot using P.SRC. He cited as a case in point the Iringa District Cow~t Civil Case No. 31/99, NMC vs. K.A. Mwaisax1ila and. others whGreby the corporation sued its ex-employees for 9

9 vacant possession of its houses9 It is counsel's contention that the law can not operate on double standards. In 2.J.1y case, he argues that one would also wish to recall that section 9 of Capo 25 excepts secured creditors from seeking leave cf the court it-1 order to sue. He argues that the term secured and unsecured creditors is not defined by the Or.,dinance. Since the ppeirent corporation adrni ts the liability tow2 . .rd 9 ,the respondents, but defending thern- selves that the money· lies with PSRC, ho submits that such terminal benefits in favoμr of tho resp'on·dents should be. taken on_ th; same footing as secured liai+ities or secured •redftors; hence there is no need for seeking leave . . of the High Court to SUE: the''ctebtor, in this case the appellant corpoation. ··,., :---, If this view is accepted~ this in itself would be enough reason to dismiss the appeal. In winding up his q.I'gument Mr. Mushokorwa contends that all the autho- ri ties decided by the High Co-μr;t _which were cited by learned counsel for the appellant do not relate to employrn@t causes as the present case~ - - 'I1'i1€! _plaintiffs f ... themselves went to court and sued in a normal mrumero 'l'hus he says tha:t this marks - a significimt difference from the present Cal3eo So one can not argue to say that those cases 1vere -decided bearirig in mind labour causes hence, 'as _he submitted at the outset, they are distinguishable and did not bind' the lower court., In his rejoinder learned counsel for the appellant contends that I •• • • the respcindent 1 s submission raises strange legal propositioriso· The ,require- ment that the type-of case.at hand shoU3::d be lodged in the District·court, that it is is lodged by·wa:y of a report as opposed to a plaint, tht-filing fee is not paid does t1ot make the suit to be any different from any other sui to Save for specific ex<3mpiorg, accorded by law the suit still has to ·~ -~ . comply with·a11,other statutory requirements which are not expressly waived by statute. According to him the requirement that this type of suit has to be •-::imme:if,ced in the District Court does not waive any other statutory requi-. rement that leave of this Court has to be obtained prior to institution of this suit which will then: be -inptit_uted in the District Court~ · He goes on to argi:i.e ,,that the ·rider clause i11;,~ection 133 of the Employment Ordinat"1cc to the effect that 11 notwi thstanding anytping to the contrary contai.ndd in any Ordinance. o i! 10

10 is also, on the respondent's 01:m ad.mission, contaihed in section 43 (1) of the Public Corporatio~s · (Amendment) Act.. It is one of the canons · of statutory interpretation he ays·, that when there is simi·lar restri- · ction between two provisions the latter provision prevails over the former. Going by the theory of legislative intention, the legislature ·- must have intended tha.t'section 43 (1) of the Public Corporations (amendment) Act should prevail over section 133 of Th!ployment Ordinance 'since the latter was enacted with the former irimind while when the former was enacted the latter had not been enacted. • Mr. Ademba Gomba cqntends that the argument that seeking leave of this Court under section 9 of the Ba11.kruptcy Ordinance would defeat expo- di tions justice is devoid of merits, and he further submitts that the requ- irement of seeking leave of the High Court does not usurp the exclusive jurisdiction of the District, the case would still be filed in the D:i.strict Court for there is neither alterations nor impairment of section 130 and 134· of Cap .. 366. He argues that definition of nsecured Creditors" adopted by the RespondentVs learned counsel is very strange .. An admission, even where judgment has been entered, does not malrn the decree holder a il.Secured · Credi toro n He defines a 11 Secured Credi torn to be one who has a security issued by the debtor in favour of his creditor or is deemed to be one by virtue of statutory provision, e.g. government taxes. In this case the respondents have no security issued in their ;Eavour by the a.ppel1ant and a2 such they are not 11 secured credi tors 1 .. And while it is true that the decisions cited by the appellnnt do not concern labour matters, Mr .. Ademba Gomba argues that it is also equally true 1 as admitted by the res_pondents, that the decisions were made regarding similar issues, that leave of this Court has to be sought before institution of a suit against a specified company under the Public Corporations (Amendment) .Acto Had Parliament intended that suits under the employment Ordinance to exempted from the requirement of seeking leave, it would have expressly provided so. 11 . " ,.

ll 'l'he foregoing were the arguments. From them the issue that flows from the first ground of appeal is whether or not PSRC is either a proper or necessary party to these proceedingso I have considered the scholarly arguments which have been made by both learned counsel and I have formed the firm view that the answer resides in a correct interpretation and application of section 1+3 (I') of the Public Corporations (Amendment) Act, Noo 16 of 1993, hereinafter. to be referred to a.!3 the Ac.t. By that section ' .. once a public corporation has been declared a specified corporation, as indeed is the case with the appellant corporation, PSRC (to be referred to as the Commission) shall have the power to act as the official receiver of that corporation. T'.ats power is vested into the Commission without further assurance and notwithstc'.:.nchng'any other law to the contrary with effect from the date of publication of the order declaring a public corpoFation to be a specified 00rporation,. Since it is commoa ground that the order declaring the appellant corporation was published on thel_3th January, 1995, as Government Notice No .. 23, the Commission became its official receiver henceforth without any further assurance ax1d notwithstanding the provisions of any other law to the contrary. The law does not end there. For sub- section (1) (b) of section 43 of the Act provides further that the Commission as the official receiver shall - 19 (1) (b) lw_ve the power and all the rights of a receiver appointed in ac~ordance with or pursuant to the BarJa'uptcy Ordina:.i'1ceo:' 17 In order to acquaint oneself with the powers and functions of q receiver under the Bankruptcy Ordinance, hereinafter to be referred to as the Ordinance, it would be worthwhile to trace the procedure under which he can be appointed. Ih that regard, it is worth noting that the appoint- ment of such reo3iver is preceded by what in bankruptcy proceedings is called a receiving order as provided for under section 5 of the Ordinance which states thus:- 11 5e Subject to the conditions herein 8pecified if a debtor commits an act of bankruptcy the Court may, on a bankruptcy petition being presented 12

l2 either by a creditor or by the debtor, make . · an order, in this Ord.i.."1EU1ce called a receivi- ng order, for the protection of the estate. 11 Once a receiving order· is made', 'an official receiver will be appointed, and his powers are laid down ..:urider section 9 of the Ordinance, a title · which is referred tq,iu section 43 (1) of the Act. Section 9 of the· Ordinance provides thus:-- • 1 9 (1) · On: making a receiving order the official '. receiver shall thereby be consitituted receiver of the property of .the debtor,·and thereafter, except as directed by this Ordinance, no creditor to.whom the debtor is indebted in respect of any debt provable in bankrup:tcy shall have any remedy against the property or person of the.debtor inrespect of the debt, or shall commence any action or other legal proceedings, unless with the leave of the Court and on such terms as the Court may impose.· ' (2) But this section shall not affect the power of 2.ny secured cr.edi tor t_o realize or otherwise deal with his security in the s-ame manner as he would . ha.ve been entitled to realize or deal with it if this section had not been passed." By the above provisions, the duty of the Commission is to protect the property of c:, specified corporation in respect of all ux1secured debts which are pro~able in bankruptcy. D.ebts which are provab!e in bankruptcy arid which shall be protected by the official receiver and, therefore, th(:) Commission, are provided for uI1der section 35 of the Ordinance namely:-:- i735o (3).ooo all debts wd liabilities, present or future, certain or contingent, to which the debtor is subject at the date of the receiving f)rder, or to which he may become subject before his discharge by reason of ru1y obligation incu- rred before the date of the receiving order, shall be deemed to be debts provable in bankruptcyoou 13 ·O

... 13 - (.4) An. esti111ate shall be mmade by the trutee o·f the value of any debt or liability 'provable as afor,sa_id., ~ ( which by reasori of its being subject to ro1y contingency or contingencies, or for 00 any other reason, does riot bar a certain value. (5) Any person aggrieved by any estimate made, by the trustee as aforesaid may appeal to the Court (6) If, in the opinion of the Court, the value of the debt or liability is incapable of being fairly estima- ted, the court may-make an ,order to that effect, and thereupon 1 th·e · debt or liability shall, for the purpdses of this Ordinance, .. be _ deen1ed to be a debt not provable in banfrruptcy. (7) If, in the opinion of the Court, the value of the debt or lJabili ty is capable of being fairly estimated, the court may assess rthe value, 2nd the amount of the value.when asi3essed shall be deemed to be a debt prova- ble: in:;bq,Ukruptcy. (8) 1 'htiabili tyi• shall, for the purposes of this Ordinro1ce, include - (a) a'Yly compensation for work or labour done; (b) any obligation or possibility_ of an obliga- tioi1 to pay money or money 9 s worth on the breach oi' any express or implied covenant, contract, _agreement, or undertaking, whether the breach does or does not occur,.or is or I is not likely to occur or capable of accurring, before th12 cl.ischarge of the debtor; (c) generally, any express or implied engage- ment, agreement, or undertaking, to pay, or capable of resulting in the po.yment of, money or m6ney 1 s worth; whether the payment is, as respects a.i"l'lopp.t,, fixed or unliquidated; e.B re.sI?ects time, present or fut~_e,. er_tain o:r ___ :_. _dependent on any one contingency or on two .or more cont'ingencies; as to mode of valuation, capable of bfing'ascertained by fixed rules or as matter of 0piniort Ii

14 'l'he mode of proving u.YJ.secured d?bts is pr9.vided fore under paragraphs 1,2,3,4,5,6,7, and 8 of the Second Schedule to the Ordinance, and, in particular, as relates to wages, Rule 213 (1) of the Bankruptcy Hules is us'efully instructive. It states thus:- ilin ro:1y case, in which it shall appear from the debtor's statement of affairs that there are numerous claims for wages by wor:Y..men and others employed by the debtor, it shall be sufficient if one proof for all such claims is made either by the debtor, or his proof shall have annexed . . thereto, as forming part thereof, a schedule . . ' . . . . setting forth the names of the workmen and others, and''the ar;1ou.nts severally due to them. Any proof made in compliance with this rule shr-y.l have the same effect as if separate proofs had been made. by each of so.id workmen arid others. ,i The state of the law being as I have shown, is the Commission a necessary party or a proper party to these proceedings? I would say . ) that because as official receiver it has the duty to protect the property of a specified corporation for the benefit of the latter's.creditors EUld to ensure that such property or estate is not wasted through fraudulent dispositions or preferential settlement schemes with.some creditors behind the backs of equally deserving creditors, the Commission becomes a necessary party without whose. joinder the su:i, t will not be finally and effectually determined. Indeed,. as the official receiver the Commission becomes a lcind of special owner of the' property of a specified corporation whose duty it is to ensure that such property is not wasted. And, as it was decided by this court about fifty years ago, an official receiver may be aggrieved by a decision ove:r an estate for which he is receiver in a civil action in which he was not join&d as a def(;)ndant: Official Receiver v. Nerssrs Ukamba Service Store, 20 E.A.C.A. 19 (1952). In that case several appeais were consolidated because thy involved the same points of law and arose from the same: transaction. Learned cou.YJ.sel, for the respondents rised certain objections in limine . .which, if were found.to be valid, would apply· to all appeals.

The objections were asf follows:-.

1. that the appellant had no locus standi to lodge the appeal; and 2o that no appeal lies from the order of the High Court.,." Because ·of the relevance of this case to the matter at hru'.ld T •will reproduce the decision of the erstwhile Court of Appeal for Eastern Afr.ica in extenso as it appears at page 20, viz:- ·:·_,iNetither o.f these points was t.:::i...l{.en in the. Court below but it is said that they go to the question of jurisdiction and can,.thcrcfore, be taken here for the first time. Under the first head (though Mr. Na.ster argued it under the second). I would prefer to dispose or Mro Master 1 s contention that the Official Receiver is not a ilperson aggrieved• 1 within the meaning of section J.00 (2) of the Bankruptcy Ordi:μance ., .. u . .,. Iri ex- , '. . ··• ;ea.rte Bidebothm (1880) 14 Ch., D. 458 it was said by J?nes, LoJ•,:• thc1.t 0 person aggrieved must boa person who has suffered a legal grieva..rJ.ce, a man against whom a decisio:n has b;n prono- 'unced which has wrongfully deprived him _of something, 'Or has .... wrongfully refused him somethinc; or wrongfull;y afft:,cted his title. to .. something; and this has been recently adopted as the , .. -·· -- definition of a 'person ·aggr:ie.ved i by a Di visio:r"1tl ·court Of the Qti.een' s Bench in Hegina V., Nottinfiham Quarter Sessions: ,ex-parte Harloi.v. (w .. 1. ~- 13th June, 1952)., See also ex J?te Official eceiver: in re Ree·d, Bowen &: Co. 1 (1887) c. Ao 19 QBD. 174 where Lord Esher, MoHo said of this definition •. This is not an exhaustive definition but _it j. an,affirmative definition of a person who may appeal, and at all events it inqludes a person who has asked for a: d eision for which he had a right to ask and has been wrongfully refused. In that case the majority of the Court held that the Official Heceiver was a person aggrieved by the refusal or adjournment of an appli-. cation for an immediate adjudic'ation of bankruptcy against a debtor. I have no doubt that in the present instance the Official :Receiver comes within the definition :for he, as tru-. stee of the bankruptcy's estate, is aggrieved by an order which has _wrongfully affected his ti tle'.to certain goods or their vaJ.v_e now in the. hands. of the respondents. ,i 16

16 By necessary inference from the above authority, __ the Commission as receive:r, is a necessary party to these proceedings.·· . :. .,. ___ ,. ___ - .... ·__,:,_ ... '._ I have, however, not lost cognizance of Mro Mushokorwa's forceful argument that wages and salaries do not fall within the powers of the Official Receiver. Although he has pursued his arguments with considerabl:, verve, I am not persuaded that he is correct in point of law .. For as section 35 (8) (a) of the Ordinance shows, compensation for work or labour done is a liability which j_s provable in bankruptcy o ·I'hat being- the posi- tion the Commission as r,;;ceiver has a.duty to protect the nppellant's property against that l•iabili ty in terms of its powers under section 43 (1): of the Act. I would, upon the foregoing observation~, allow the first Ground of appeal. As regards the second ground Mr. Mushokorwa has argue"d·tnat-the requiremetlt 'uhder s. 9 of the Ordinance that.no suit shall b~_instituted unless the High Court has granted leave to the.plaintiff does not affect the applicants because they claim employment benefits. _I-havereproduced at length Nro Mushokorwa I s arguments and the rival propositions of Mr., . . . Ademba Gomba 6n ·t11is point. · It seems--t0 .. foG-- to .. be __ a cor:rect approach, ------·. --·-·- --~ . . ·.,:z .. . - .. -..:: .. __ · .... however, that when Parliament stated in section 43 (1) of.the ll:ct·th"at -·-·· .... __ . ' . . . . . • 1 Notwi thstanding ru1y other iaw. to, the Gontrary •. o o. : 1 it declared so in its undoubted widsom being a.ware of th0 existenu: of section 133 bf the Employment Ordinance, Cap. 366. In my judgm,mt, therefore, the former and new piece of legislation overrides the latter and old. piece of legisla- tiona In that drcumstance l am purs·uaded by V1r •. Ademba Gomba when he contends that when·thc-re is a similar, and I would add, an identical, restriction in two statutory provisions the lo.tter provision- prevails because, if Parliament intended to subordinate the latter legislation to the former ~tatute it would •·•· . a have said soa In that context, and in:view of the clea_r language of section 43 (1) of the Act as read together with section 9 of the Ordinance, salaries f' .':) and wages, being liabilities which ure provable in bankruptcy, fall in the category of liability in resi,ect -0f-- which leav..e..,0f this Court must be sought and 17

17 .... obtained before a suit in which they are claimed is instituted in any court of competent jurisdiction. Indeed, leave must be sought because salaries and other employment benefits are not secured debtse· Secured debts are claims by secured creditors. Section 2 of the Ordinance clefnies ,' • V .) ,,1 • tho term 11 secured cred~toril to rriean - ' H. •. a person holding a mortage charg·e or 'lien on. - the property of the debtor, or any part thereof, as a secur:i,ty for a debt due to him from the debtor." • The respondents h"'.-ve not shov,rn that they fall in that group of creditors. So there appears to be some confusion in the respondent's case regarding the diference betir{een E:;ecured debts and preferred debts. Wneres secured creditors can-sue.without the leave of the Court, preferred debtors must ob"k§a-i.n_th_ye ,before they can commence their proceedings. 'rhe learned -----~~~ authors of Halsbury 1 s Laws of fugTarfd;·Third··¥dition, throw some light on what preferred debts are all about in paragraph (:)63.of Volume 2 of their -· -·· '. - . wo_rk. I will, in order to remove the apparent· confusio~·:-·~;o-~i:2-;;:-wFi.a'c"·-.:. __ ;:: : .. ~ ·There are certain 'unsecured debts which· -are given :priority after they are proved; over other debts, if thei:c realization affects property which is protected by /3- receiver under section 9 of the Ordinance. 'l'he learned a:lthors of Halsbury' s Laws ·of £.11glan.d. say this about those debts:- 11963.. Preferred d.ebtso _ .Subject to the foregoing provision c:nd'. · ,:/ithou t prejudi_cing priority in parti.,;. ,; cular cases o •• •.o, there are certain debts ·which, poth in bankruptc;j:es ••• and :Lri the administration of the estates of deceased insolvents; whether in bankruptcy •••. or in Chancery or-out of court ••oa, must b paid in full in priority to the other debts of the bankrupt, unless the, assets. are insufficient, in whi-ch case they are to abate in equaJ. proportions amongst themselves (g). These preferr_ed debs are as follows • ••• .,., (1) Rates 2nd tuxes, i.e.· all ·parochiaJ. or other local rates ••• due from the bankrupt or insolvent at at the date of the receiving order or tha death, and ·-r8

18 -· and having become due and payable •o• within twelve months next before that time; .,. • u, and . ( · all assessed taxes, land tax, and prbperty or income tax: assessed on the bankrupt or insolvent •• • preceding the receiving order ·or the death and not exceeding in the whole one year 1 s assessment ooo, and sums due at _ the date of the receiving. order or death from the bax1.krupt or insolvent as an employer on account of tax deductions under Sci.1edule E for the ., · twelve months next before that date (2) alaries, i.,e. a11 wages or sala.ry (o); 1y1hether or not earned wholly or in po.rt by way of •01i1rnission •••• , of any clerk or serv&...'1.t in respect .. of services rendered to .the bankrupt or insolvent ·· during four months before the date of the receiving 01:cler or death ., ••• ii . ······--'···· In England, as indeed in our COUtJ.try, the preforred debts are to be paid forthwith subject to the retention of such sums as may be necessary for the costs of administration or otherwise,. Secured creditors,in bnnkruptcy are not affected: See the English case of Richar:d.s v Kidderminster Overseers,._ Richards v. Kidderminster Corpn., (1986) 2 Ch., 212). And in order to qualify as preferred debts tho wages or salary must be in respect of personal services rendered by the clerk or servant, not those which he pays someone else to render (cairney v. Back, 1906) :2 K.B. '?46). From the above position of the law, then, whEJ,t the respondents.claim are preferred debts 'in respect of which they must obtain leove of .th~ High Court in order to be able in law to institute a civil action to recover them .. Under. the• Bankruptcy Ordinu.nc~, of which section 9 forms part, the Court is the High Court. By necessary inference, when leave is sought to challenge the statutory power of the Commission over property belonging to a spesfied corporation, if granted the suit must be instituted in [i court with competi:mt jurisdiction over estates in bankruptcy, which is the High Court. A Court of Resident Magistrate, or a District Cou.::.'t is not seised of jurisdiction to try such cases in as_rnuc~-a:s they are governed by the provisions of the Ordinance. 19

... 19 There is,, however, authority for sayinG that under section 94 of the Ordinance the functions of the Court having jurisdiction in bankruptcy, the High Court, may, by order of the Chief JLJ,stice be delegato3d IV ooe to any subordinate court either generally or for the purpose of any pexticular case or class of cases.} 7 If follows, therefore, that since the powers of the Commi?sionunder section, 9 of the Ordin,ance can only be, thcllenged under bankruptcy procedures as laid • '' ... :, ,l' down in the Ordinance, and tliere being no delegation of bankruptcy jurisdiction having been made to the trial 'Court,' that '•::i;urt did not act, intra vires its .. powers when it set upon trying the sace whch is the gensis. of this appeal., Ii'or authority on this, if any is-requirod Set::: Official Heceiver Vo Mer.ssrs Ukaba Service Store ---------•-,--- (supra) at pnge 213 where it was held that:- "Mr_~ Master argued that a 1-)i 9 trict Hegistrar has no jurisdiction to' make a receiving order a.nd·ref'ii-rel ,, to section 94 of. th0 Baillfruptcy Ordinance which reads:- mrhc Court having jurisdiction in bankruptcy shall be the High Court: provided that the .. Chief Justice may by order delegate all or any part of the jurisdiction of the High Court in bankruptcy to any subordinate- court', either generally or for the pur:;,,ose of any particular case or class of cases. Under section 5 of the OrdinDJ1ce only a "Court.i can • make a receiving order, and i 1 Court; 1 by definition in (C, the Ordin~nce means a "Courti 1 ho.vine jurisdiction ,in bankruptcy ar1d, in the Hules, includes a subordinate court exercising jurisdiction in chambers. 'Ihe effect of these provisions one: delegations, it is said, is to confer jurisdiction to make a receiving order upon the Resident Magistrate, Ta-rJ.ga, in his capacity as Resident Magistrate and not in his ca.paci ty as District Registrar, 2J_though it is concedod that it is a necessary corollary that hG should be also the District Registrar for , the District Registry of Tanga. 20-

... 20 'l'he jurisdiction of a District l{egistrar in bankruptcy is limited to h1.xinG costs and making an interim rcceivinc order in the circumstances prescribed :in rule 8 (d) of the Hic;h Court Registries (Subsidiary Legisl?-tion, Vol. v. pages 156 .Thus since in the instant case where the Chief Justice has not made .my dei;ti:oii of-jurisdiction in J;i~<ruptcy to the trial· court, the ! ,-: proceedings in that court are a nullity.- Consequently I would allow the second grouns··of ·a-pp-ettl as..:w_eJ~. Upon the fore,5oing considerations a..11.d observations, and upon the reasons filld grounds' canvassed herein, the appeal i:::, allowed with costs • . Dcli,vered. J.M. MJ.i.CKANJA, JUDGE Mr. Ademba Gomba, .1dvoco.te: For li.ppellant Mr .. Mushokorwa, 1dvocate: 17/10/2000 !. Appellant - cc1bs-:mt Respondent - l:c. J·,:--nas For Hespondents. ,. Jud_cm211t cJ.::livered in the chambers this 17th coy October, 2000 in the ,1:;~cs,.::nce 0f i.:r. Jonas, .Senior Lr:fo':ur (dficer, hnlding , . f A I . . orie Ic-r ri:ngn appellants. office and in the 0 ahsc,1cc· :::::f the? Sgd. Ag. D.R. 17 /10/2noo Certified true copy of the original,judgment. ' DISTRICT RCciIST1ffiR l'B:SYA