Stanbic Finance TZA Ltd vs Giuseppe Trupia and Another (Commercial Case No.42 OF 2000) [2000] TZHC 333 (3 October 2000)

,1 • IN THE HIGH COURT OF TANZANIA (COMMERCIAL DIVISION) AT DAR ES SALAAM ii. COMM. CASE NO.42 OF 2000 STANBIC FINANCE TZA Ltd.......PLAINTIFF/RESPONDENT VERSUS GIUSEPPE TRUPIA........1 st DEFENDANT } APPLICANTS CHIARA MALAVASI..... 2 nd DEFENDANT Counsel: Capt. Kameja for the plaintiff Prof. Fimbo for the Defendant / RULING BWANA, J. In a joint Written Statement of Defence filed by the defendants ,a preliminary objection is raised that the suit is incompetent and should be struck out /dismissed on the ground that the plaint does not disclose a cause of action. Three points are shown in support of the above averment. It is averred that the plaint does not disclose a cause of action because- (iF ( 4 4 'I,. -• s• '. II r

i. There were no contracts of guarantee between the plaintiff as creditor and the defendants as sureties/guarantors or any one of them; ii. It is not pleaded that the plaintiff has failed to realise the principal securities for the company's indebtedness, that is to say: first floating debenture jointly with the plaintiff over all the company's assets including stocks; deposit with the plaintiff of original registration cards of the following assets:- iii. There was/were no valid letter(s) of demand from the plaintiff to the defendants or any one of them. In his written submission in support of the averments, Prof. Fimbo has cited several cases inter alia the following - Jeraj Shariff and Co vs. Chotaji Fancy Stores (1960) E. A. 374; John Byomabalirwa vs Agency Maritime Internationale (T) Ltd (1983) TLR 1 Reid vs NBC (1971) HCD No. 340 With great eloquence Prof. Fimbo equally cited excerpts from text writers such as Messrs C. B. Drover; R. W. B. Bosley; and P. J. M. Fidler in their (1972) Sheldon's Practice and Law ofBanking; and J. Milnesttolden in his 1971 Securities for Bankers Advances . He also relies on Ss.78 and 97 of the Law of Contract Ordinance, Cap.433. (IJL 60

In his written submission in reply, Capt. Kameja also cites the same cases of John Byombalilwa; Jeraj Shariff and Reid, cited above. In addition he cites Chitty on Contracts Vol. 1 at p.21 as well as the following cases - Grayson & Co. Ltd vs A. H. Wardle (Uganda) Ltd (1963) E. A. 582; African Overseas Trading Company vs Tansukh S. A. Charya (1963) E. A. 468; and Mukisa Biscuit Manufacturing Co. Ltd vs. West End Distributors Ltd (1969) E. A. 696 et seq. He strongly contests the averments advanced by Prof. Fimbo and prays to this court to rely on the provisions of Order VII R 1 (e) of the CPC and dismiss the preliminary objection. His main point of contention is that the defendants are mixing up two different concepts of on the one hand, a plaint failing to disclose a cause of action and, on the other hand, a plaintiff having no cause of action against the defendant. Indeed, having examined the averments before me, it is apparent that the issue is to determine what does the plea in limine litis entail? Before I do so, its is important to state, albeit briefly, what is the law on such issues. It is settled law that any party is entitled to raise by his pleadings, any point of law. It is then preferable that a point so raised, should be disposed of at the earliest stage of the proceedings unless the parties themselves agree to its being heard at a later stage or the court orders so. It is also the law and practice that preliminary objections are raised where in the opinion of the party doing so expects/requests the court to make a decision which disposes of the case. In other words, in the opinion of the court, if such a decision substantially disposes of the whole cause of action (or ground of defence, counter claim or set off) thenthuit..should be dismissed. In the case of

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Mukisa Biscuits (supra) to which Counsel have made reference, the words of Law, J. A. are very clear: "So far as I am aware, preliminary objection consists of a point of law which has been pleaded, or which arises by clear implication out of the pleadings and which if argued as a preliminary point, may dispose of the suit" In the same case, Sir Charles Newbold, P, had the following to add: "a preliminary objection is in the nature of what used to be a demurrer. It raises a pure point of law which is argued on the assumption that all the facts pleaded by the other side are correct..." It is my view that Prof. Fimbo is just applying for that - the suit be dismissed because it discloses no cause of action. However on further examination of his submission, it appears that he has entangled himself with a further view as submitted by Capt. Kameja. The rejoinder filed by Prof. Fimbo, reconfirms his earlier views. What does "disclosure of cause of action entail"? A cause of action - as frequently defined, is (per Black's Law Dictionary, 6th Ed) "thefact or facts which give a person a right to judicial redress or relief against another." It was stated by the Seychelles Court of Appeal (in the case of Simone Emanuel & others vs Edison Jubert, C. A. 49/96) that A cause of action is: • that particular act (or omission) on the part of a defendant which gives thcpIaintff his cause of complaint ". 4 i11l / I 1. • .7

A cause of action arise when, in my view, facts exist which give rise or occasion to a party to make a demand or seek redress, all depending on the kind of claim. In other words, a cause of action arise when facts on which liability is founded do exist. In the old case of Chand Kaur vs Partap Singh (1888) 16 Calcutta, 98, Lord Watson had this to say:- "the cause of action has no relation whatever to the defence which may be set up by a defendant. Nor does it depend upon the character or the reliefprayed for by a plaint iff It refers entirely to the grounds set forth in the plaint as the cause of action, or in other words, to the media upon which aplaintff asks the court to arrive at a conclusion in his favour." Briefly considered therefore, it may be said that a cause of action reflects the claims as presented in the plaint and not as weighed against the defence statement. This court (per Kalegeya, J) had a recent opportunity of restating what the position of the law is when it stated in the case of Serafin Antunes Affonso vs Portan Entreprises and others (Corn. C. 17/2000) thus: "the trite position of the law is that when deciding on whether or not a cause of action is disclosed, we only have to cast our eyes within the four corners of the plaint. We only have to peruse the plaint alone together with its annexure, if any ... ...... With this limited ambit, we do assume that the factual allegations thus made, whether expressly or impliedly are true.. " (emphasis mine) OF '-4 I •1'

I consider the foregoing to be a correct interpretation of the law, as supported by the cases of Jeraj Shariff and the Overseas Trading Co. (Supra). In the instant case, (going by the claims as contained in the plaint), the defendants entered into a Lease Agreement with the plaintiff through which the latter accorded banking facilities in form of lease finance in the amount of shs.55,000,000I=. The plaintiff annexed copies of the said Lease Agreement. Likewise the plaintiff annexed documents (ann. SF13 and 4) which purport to show that the two defendants guaranteed the payment of all the above sums of money on the terms as specified. The plaintiff avers that the debtor failed to meet his obligations. The two defendants (together with the debtor) were then notified of that failure by a letter dated 17th1 January 2000. The plaintiff demanded settlement of the said debt. The debtor and defendants have reftised, neglected or otherwise failed to pay the sum demanded or any part thereof, hence this suit wherein the plaintiff prays for payment of shs.1 15,747,548/60 due; interests and costs of this suit. All this information is contained in the plaint. Going by the authorities cited above, particularly the words of Kalegeya, J and Law, J. A, it is clear that the facts of this case as summarised above do disclose a cause of action, as required under Order VII of the CPC. It is stated, particularly under para (e) of the said Order VII R. 1 that - "The plaint shall contain the following particulars :- (a)........ (e) the facts constituting the cause of action and when it arose; (i'!lphasis.nne) r_ . id 4 ñ • • •.'••• •. • / • / c•• .

As stated in the Byombalilwa case, the expression "cause of action" is not defined. However, I have done so above. It is important to add the words of the court - just to emphasize the point - in the Jeraj case (supra) wherein it is stated: "the question whether a plaint discloses a cause of action must be determined upon perusal of the plaint alone together with anything attached so as to form part of it and upon the assumption that any express or implied allegations offacts in it are true.. " (emphasis mine) Therefore, examining the preliminary objection in light of the above authority, I am of the view that what the defendants are asking this court to do amounts to making this court peruse beyond the plaint and its annexure. That stage is yet to come in the course of these proceedings. The court should not at this stage, determine whether it is correct, or not that the debt was guaranteed by the defendants; or whether or not such guarantees were valid. Likewise, the court is not required to establish at this stage, the validity of the demand letter. The defendants may wish to prove and indeed they have attempted to do so in their Written Statement of Defence that they have a defence against each and every allegationlclaim raised by the plaintiff against them. That is, however, different from saying that the plaint discloses no cause of action - the issue at hand. Therefore all the above considered in their totality, I am of the considered view that the plaiitii.tspresent form and on the basis of the 0,0 EIA Tj RcP a

law and cited authorities, does disclose a cause of action against the defendants. It was stated in Dyson vs Attorney General (1911) 1KB 410 thus: "The plaintiff should not be driven from the judgment seat without the court having considered his rights to be heard, excepting in cases when the cause of action was obviously and almost incontestably bad..." That is not the case now. My view is that the statement of claim, as raised by the plaintiff, discloses some cause of action. Further, it raises questions and issues which ought to be decided by the court at an appropriate stage of the proceedings. For now, the plea in limine litis does not provide the appropriate and just avenue to do so. The preliminary objection therefore fails and is accordingly dismissed with costs. 3 CertfTt this is R tra edge Ø &egStEaT COMM Wdak Cou U. J. Bwana JUDGE 3/10/2000 A V 'I V I []