Intermarine Ltd and Another vs Geriard Hockmuith (Commercial Case No. 2 of 1999) [2000] TZHC 311 (26 September 2000)

!! • IN THE HIGH COURT OF TANZANIA (COMMERCIAL DIVISION) AT DAR ES SALAAM COMMERCIAL CASE NO. 2 OF 1999 INTERMARINE LTD .......................... 1ST APPLICANT NUNZIO D'ESPOSITO ...................... 2ND APPLICANT VERSUS GERIIARD HOCKMUITH .................. RESPONDENT 1TTT TTr1 Cm KALEGEYA,J: By way of chamber summons the Applicants/Defendants are before this Court armed with twin applications couched as follows:- "1. That an extension of time be granted to the applicants within which to file an application for leave to appeal to Court of Appeal. 2. That leave be granted to the applicants to appeal to the Court ofAppeal of Tanzania against the Ruling and Order of this Court, Hon. Kale geya J dated 22nd day of June, 2000." The said Applications are supported by the affidavits of Capt. Nunzio Desposito (1St Applicant/Defendant) and Malimi, Advocate, of MK Partners Advocates. ( The background thereof is as follows. The Respondent/Plaintiff sued the Applicants jointly and severally for repayment of a loan. What he seeks from the Defendants can best be appreciated by quoting the prayers as contained in the plaint. The Plaintiff prayed "for judgement and decree against the Defendants jointl'and or severally as follows: i. Repayment of the Loan amount of USD 150,000 and payment of the outstanding monthly earning remittances in excess of USD 56,000. I V

A. 2 i Interest on the said loan and remittances from the date the cause of action arose to the date ofjudgement at the commercial rate. Interest on the decretal amount from the date ofjudgement to the date the same is fully paid at the court rate Costs be provided by the Defendants V. Interest on the costs from the date of the award thereof at the rate of 7% per annum until the same iffully paid vi. Any further or other relief(s) this honourable court may deem fit and just to grant." The plaint alleges that the sum claimed was extended to 1st Applicant/Defendant as a loan and that the 2nd Applicant/Defendant stood as a guarantor. In a joint written statement of Defence the Applicants/Defendants admit receipt of the loan and so is non-payment. They however plead for a "set off' which, for full appreciation, should be fully reproduced. Starting from para.5, the written statement of offence runs: 5. That the First Defendant entered into the said agreement and indeed purchased and registered 4 units for the itself and initiated forwarding of goods. 6 That the First Defendant paid back to the Plaintiff 96, 000 USD part of the loan. That further repayments were interrupted in Rwanda, the main route for both parties, due to conflicts which ensued there and then. That the conflict resulted into the vehicles being stranded for 6 months, partly at the General Magazines of Mugerwa and others remained idle for want of business. That the Defendants suffered heavy losses as a result thereof as there was war in Rwanda as there was no more recoveredfrom bills and frustration of the business. That the Plaintiff took over running the administration of the vehicles the subject matter of the loan for his own benefits submitting no accounts to the Defendants for a period of one year.

That the Defendants have not been able to run business Commercially and the Second Defendant is placed under liquidation and all assets have been forfeited by creditors. That the Defendants pray for full discharge of the contract due to frustration of the contract as a result of war in Rwanda and liquidation of the Second Defendant." As is the procedure under the law, when pleadings were ready, mediation proceedings set in. Though still admitting liability mediation ended unsuccessfully because the exact sum to be paid by Defendants was not agreed upon. Thus, the matter was set on a track for hearing on merits. Again, as is the procedure, the brother Judge to whom the case had been assigned right from the time it was filed and who took it through mediation process, could not still proceed with it at that stage hence its re-assignment to me. At that point the Defendants decided to change Advocates. Ms Malimi of MK Partners Advocates took over from Mr. Mwengela, Advocate. When parties came before me for the purposes of framing issues and setting dates for hearing (on 16/6/2000) Mr. Malimi made an application for leave to amend the written statement of Defence allegedly because new facts had just been discovered. After hearing the parties the Court decided against Mr. Malimi holding that although O.VI, Rule 17 of the Civil Procedure allows amendment of pleadings at any stage, on the facts of this case, he was very late in the process (pleadings had been completed by 15th February, 2000). The Court had yet another ground for its refusal to the prayer:- "...under ADR mechanism, whatever transpires there, is totally under confidentiality. The system would be condoning unfairness if while orchestrating the confidentiality principle it aids one of the parties to take advantage of what was revealed during mediation. With the introduction of ADR mechanism in our system a party should not be allowed to amend the pleading after mediation has been held and failed unless there are very exceptional and compelling circumstances, which do not exist in the present case."

The ruling was delivered on the same day the application was heard: 16/6/2000. Dissatisfied with the ruling the Applicants filed the current applications on 3/7/2000. The Applications were argued by Mr. Kadago of MK Partners Advocates, while Mr. Mchome, Advocate, throughout, represented Plaintiff/Respondent. In his submissions, Mr. Kadago adopted the affidavits filed in support of the applications. The sole ground for not having filed the application for leave to appeal within 14 days can be fully gathered from paragraph 5 of Mr. Malimi 's affidavit which states:- "5. That on 30" June, 2000 the applicants' application was ready for filling and was presented to Court. However the same day happened to be the closing day of the financial year of the Court and thus all services related to filing of documents in Court were not available. The registry although assessed the relevant Court fees the said application, advised us to come the next day for payment and hence filing of the application." As regards grounds advanced for being entitled to leave to appeal to the Court of Appeal, the 1st Applicant's affidavit deserves revisiting at length and that can ably be done by reproducing relevant paragraphs thereof:- "4. That upon discussion with our newly instructed Advocate, Mr. SENI MALIMI and on the perusal of the pleadings (our defence) our Advocate advised us that the defence filed in Court do not reflect the true facts available on the alleged transaction between the defendants and the plaint iff 5. That,further to that, new facts have been revealed or found that the alleged transaction never took off. And the alleged signed agreement about eight years ago was a mere intent, which did not materialise or take off. 6...................................................................

"I 5 That Jam advised by my Lawyer Mr. SENIMALIMI, ADO VATE that the new facts revealed in the case are meritous groundfor amending the pleadings to reflect and set out the real issues in controversy for determination of the Court without prejudice to the other party. 11...................................................................... 12. That Jam further informed by my Attorney, Mr. SENI MALIMI, that the effect of the ruling and order of the court of the 16' day ofJune, 2000, refusing to grant leave to amend the defence have the efftct offinally determining the matter albeit on the basis of the wrong and unsupportive admissions offacts wrongly pleaded in the defence." (emphasis mine) As already stated, Mr. Kadago adopted the affidavits ftilly in his submissions. He insisted that the admissions as presented in the written statement of Defence have the effect of finally determining the matter. This was an observation made in clarification when asked by the Court to comment on S. 5(2)(d) of Act 15 of 1979, The Appellate Jurisdiction Act, as amended by Act 10 [Written Laws (Miscellaneous Amendment)] of 1999. He also insisted that unless an amendment of the written statement of Defence is allowed (which he expects to secure from the Court of Appeal) an uncompensatable loss would be incurred by Defendants, and referring to George Shambwe vs Attorney

• General and Others (1996) TLR 21 he argued, that the existence of such factor is a ground for allowing an amendment of a pleading. On the other hand, Mr. Mchome for Plaintiff/Respondent vehemently argued that the applications are misconceived because Applicants could have paid the filing fees in the main Registry of the High Court as the Court is one, the Commercial Court being just a Division of the High Court; that the ruling of this Court did not finally determine the suit entitling Applicants to appeal; that the admissions in the written statement of Defence notwithstanding the matter has yet to be finally determined as no judgment has

6 so far been entered, and lastly that the new facts allegedly uncovered have not been disclosed. Now, for the analysis of the arguments. I will start with the first application. On this I will not waste time because although one can argue that the Applicants should hold themselves to blame for acting late in the process in that they fell in slumber only to be activated on the 14th day, the last day within which they should have effected an application, when computing time for the purposes of giving effect to the Law of Limitation the period allowed by the law is taken as a whole. For that matter, a party would have at his disposal, as a sufficient cause, if on the last day of the period allowed and when he intended to file the application, an intervening factor beyond his control, prevents him from effecting the filing. In this case we are unopposedly told that the application would have been filed on 3oh but for the fact that the Registry was not accepting any fees due to closure procedures of the financial year 1999/2000. The day following was a Saturday hence the filing of the application on 3/7/2000. Mr. Mchome's argument that the filing could have been done in the main Registry of the High Court cannot be bought because procedural closure of the Government's financial year rule uniformly in each of its departments and sections such that the main registry obviously was at the time visited by a similar handicap. I am satisfied that this was a sufficient cause and the prayer for extension of time is accordingly granted, retrospectively to 311 July when the application was filed. The above brings us to the merits of the 2 application - whether leave to appeal to the Court of Appeal should be granted. Again, here the issue before me is a simple one. The question is not whether there is purely a point of law or a point of law mixed with a point of fact fit to be decided upon by the highest Court of the Land, the Court of Appeal, but rather whether at this stage the ruling of this Court dated 16/6/2000 is appealable. In my view, here we are not concerned with the merits or demerits of the ruling. The question is whether at this point

S 7 the Applicants can knock at the doors of the Court of Appeal by way of appeal, thus whether the green light for the purpose sought from this Court can be granted. Having carefully considered the facts and the law, with respect to Mr. Kadago and Malimi, I have no hesitation in going with Mr. Mchome's argument that the application is misconceived. I have so concluded because of the following. I took the pains of detailing the background and quoting extensively from the pleadings and affidavits purposely. Parties completed their pleadings. Mediation process failed. The suit was re- assigned to another judge for trial. The Defendants applied to amend the written statement instead. The prayer was refused. What then is the status of the case? It is obvious that it is still on the track for full trial. Issues should be framed, witnesses called and heard followed by ajudgement. Applicants may have been dissatisfied with the ruling delivered on 16/6/2000. Appreciatingly, generally, a party may appeal against a decision given in a preliminary or interlocutory application but in matters which come before the Commercial Division of the High Court that procedure has been taken away by The Act No. 10 of 1999 which amended S. 5 of Act 15 of 1979 (The Appellate Jurisdiction Act). The said Act 10/99, added paragraph (d) as follows:- "5 (2(a).................................................................. .................................................................. .................................................................. no appeal shall lie against any preliminary or interlocutory decision or order of the Commercial Division of the High Court unless such decision or order has the effect offinally determining the suit." The above wording is very clear. A decision of the Commercial Division at a preliminary or interlocutory stage which can be appealed against is the one which finally determines the suit. The section refers to the decision of the Court and not anything else.

8 It does not refer to pleadings or to what parties may have in their minds as arsenals with which they intend to launch and counter-attack the adversary's camp. In this case it is the ruling delivered on 161h June, 2000. It is not the admissions contained in the Applicant's written statement of Defence nor the intended amendments as argued by Mr. Kadago. Without going into other arguments as it is unnecessary the only question therefore is whether the ruling on 16th June finally determined the suit between the parties. The answer is very obvious. It didn't. As rightly put by Mr. Mchome it couldn't because as glaringly indicated on page two of the ruling the suit is still going on. It has now to proceed to full trial. The applicants may wish to change tactic as exemplified in Mr. Nunzios's affidavit but that is not an issue at this stage and this cannot enable them circumvent paragraph (d) of S. 5 (2) of Act 15/79 as amended. The Applicants are asking this Court to give blessings to the doing of something which the law has prohibited! Without intending to castigate the Applicants' Counsel I should honestly and with respect say that I am deeply surprised that they even had the audacity of prosecuting let alone filing this application. For reasons discussed the application is dismissed. L.B. KALEGEYA Delivered to Mr. Kadago and Mr. Mchome. L.B. KALEGEYA 19/7/2000

1 c '. S Order: B/C Hearing on 31/7/2000 L.B. KALEGEYA JUDGE 19/7/2000 CetiY th S a true an otcect Of t or na , ens n e 4 Sttar Coer Court D1t es Sa1aafl' I.