Serafim Antunes Afonso vs Tangol Fishing Company Limited and Others (Commercial Case No. 19 of 2000) [2000] TZHC 332 (3 October 2000)

4 , IN THE HIGH COURT OF TANZANIA (COMMERCIAL DIVISION) AT BAR ES SALAAM COMMERCIAL CASE NO.19 OF 2000 SERAFIM ANTUNES AFONSO ------------ PLAINTIFF VERSUS TANGOL FISHING COMPANY LIMITEDI JAQULINE PRIVA MTEMA J DR. EDUADO VIEIRA PEREIRA J ESTELATO MTEMA WILFRED KILl WA ] GEORGE MJEMA J CALLISTUS MTEMA J DEFENDANTS. JUMA SHITTA VICTOR MANUEL ALEGRIA FRANCO ] SPIROS MERIANO 1. I JOACHIM BURCARD NGONYANI ] REGISTRAR OF COMPANIES J R U L I N G NSEKELA, J. S This is an application for security for costs brought by Wilfred Kiliwa; Victor Manuel Alegria Franco; Spiridon Spiros Merianos and Joachim Burchard Ngonyani who are the 5th ; 91h; 10 " and 11th defendants respectively, in Civil Case No.19 of 2000 instituted by one Serafim Antunes Afonso (respondent). The respondent is apparently not within the jurisdiction of this Court. He is in Lisbon, Portugal. The Vt defendant in this suit is a limited liability company incorporated in Tanzania under the Companies Ordinance, Cap 212. The crucial issue in the pleadings seems to be the ownership and transfer of shares in the Vt defendant. The respondent, according to the plaint, was a majority shareholder in the 1st defendant. The four applicants named above have made this application under Order XXV rules 1 and 2; sections 68(e) and 95 of the Civil Procedure Code (CPC) in which they seek, inter alia, the following order that - !

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1. The plaintiff be ordered to give security to the amount of Tanzanian Shillings Six Hundred Million or any other amount the Honourable Court shall deem appropriate being security for payment of all costs incurred by the fifth, ninth, tenth and eleventh defendants din this cause within a time specUled by this Honourable Court, default of which the suit be dismissed with costs." The affidavit in support of the application was sworn by one Brigadier General Joachim Burcard Ngonyani. The said affidavit in paragraphs 2 and 3 disclose that the respondent is not resident in Tanzania but lives and works for gain in Lisbon, Portugal and the fact that the respondent does not possess any immovable property within Tanzania. The Counter-affidavit, sworn by one Julio Manuel Pires Da Costa, the respondent's recognized agent in these legal proceedings, does not in any way counter these factual allegations. Order XXV Rule 1 (1) of the Civil Procedure Code, 1966 is in the following terms - Where, at any stage of a suit, it appears to the court that a sole plaintiff is, or (when there are more plaintiffs than one) that all the plaintiffs are residing out of Tanzania and that such plaintiff does not, or that no one of such plaintiffs does, possess any sufficient immovable property within Tanzania other than the property in the suit, the court may, either of its own motion or on the application of any defrndant, order the plainljff or plaintiffs, within a time fixed by it, to give security for the payment of all costs incurred and likely to be incurred by any defendant. "(emphasis supplied). It is evident from this sub-rule that if the respondent in this case is resident outside Tanzania and does not possess sufficient immovable property within Tanzania, then the court may make an order for security for costs to be paid by the respondent. On the face of it, the respondent is surely a candidate for the application of Order XXV Rule 1(1) quoted above. Dr. Nguluma, learned advocate for the respondent has very candidly admitted in his written submissions that the respondent resides outside Tanzania and that he has no sufficient immovable property in Tanzania. The learned advocate has valiantly raised a number of matters which should be taken into consideration in the exercise of my judicial discretion as to whether or not the respondent should provide security for costs. These include the applicants' alleged admission of all facts which means that there are no triable issues; that the amount of secujity demanded is in his own word "extortious" and AZ IN 2

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is meant to stultify the respondent's bona fide claims against the applicants; that paragraph 10 of the written statement of defence is not a defence to the claim but a Counter-claim. The learned advocate referred me to Sarkar's Law of Civil Procedure (8t edition) at page 1216 and a decision of this Court (Mapigano, J) in the case of Colgate Palmolive Company v Zakaria Provisions Stores & 3 Others. Civil Case No.1 of 1997 (unreported) D'Salaam Main Registry. Mr. Malimi, learned advocate for the applicants has very correctly drawn my attention that the object of this rule is to provide for the protection of the applicants where in the event of success, they may have difficulty in realizing their costs from the respondent. He has also submitted that litigation in this suit is being conducted by a person with a purported power of attorney and questioned the bona fides of the respondent in general. There are two matters to be resolved in this application. The first one, is on what principle should security for costs be awarded. The answer to this lies in the wording of Order XXV Rule 1(1) itself. In the case of Farrab Inc. S.A. v. The Ottoman Bank {1968} HCD n 356 Platt J held, inter alia, that - "under Order 25 rule 1 security for costs might not be required if the plaintiff had sufficient immovable property in Tanzania, apart from the property in suit, to cover the costs likely to be incurred by the defendant; but plaintiff's property was not sufficient here." And the court proceeded to order security for costs. In the instant case, the respondent has no immovable property in Tanzania at all. I think this is one of the factors to be taken into consideration when exercising my discretion. I have taken into account Dr. Nguluma's submissions but I feel I should not be reluctant to order security for costs in cases which fall under the rule. Looking at the matter as a whole, I have decided that on balance, I ought to make an order for security for costs. Having reached this conclusion, I come to the second matter, namely on what basis should the amount of that security be determined? It is, of course, for the party seeking an order for security to put before the court material that will enable the court to make an estimate of the costs of litigation. The amount of security given is in the discretion of the Court. The learned advocate for applicants has put the figure at Shs. Six Hundred Million, and his colleague has labelled the figure as "preposterous." My complaint however is the fact that the learned advocate for the applicants' has not furnished the court with any materials at all Ie °" ,

• t L to assist me in this task. In the Supreme Court Practice, 1991, Vol.1 page. 421 paragraph 23/1 - 3/29, there is the following note on Order 23 under the heading "Amount of Security. " It reads as follows - "The amount of security awarded is in the discretion of the court, which will fix such sum as it thinks just, having regard to all circumstances of the case. It is not always the practice to order security on a full indemnity basis. If security is sought, as it often is, at any early stage in the proceedings, the court will be faced with an estimate made by a solicitor or his clerk of the costs likely in the future to be incurred, and probably the costs already incurred or paid will only be afraction of the security sought by the applicant ... ... ... ... ... ... It is a great convenience to the court to be informed what are the estimated costs, and for this purpose a skeleton bill of costs affords a ready guide." Unfortunately, I do not have the benefit of such a ready guide. The applicants S have put forward a global figure of Shillings Six Hundred Million which is said to be the total capital of the Company. I am not so sure how accurate this is and its relevance in making an estimate of costs actually incurred or likely to be incurred by the applicants. As far as I am concerned, the applicants were expected to provide with the court with material that would enable the court to exercise its discretion in an informed maimer. As matters stand now, I am groping in the dark. Even without the benefit of such material, the figure put forward by the applicants is astronomical. At the same time, the sum of Shs Five Hundred Thousand suggested by the respondent is certainly on the low side. The respondent being the owner of eight hundred ordinary shares at Shs 600,000/ each (he is the majority shareholder) would in my estimation suggest that at the very minimum that he has some means and is able to conduct this litigation by proxy. Doing the best I can under the circumstances, I do hereby order that the respondent deposit in court as security for costs the sum of Shillings Three Million to be paid within thirty days from the date hereof. It is accordingly ordered. CoueICia Court /1