CRDB Bank Limited vs Arboghast Mkahe Oiso t/a Auto Assessors Company (Commercial Case No. 11 of 2000) [2000] TZHC 314 (29 May 2000)

• • ,. 1 • IN THE HIGH COURT OF TANZANIA COMMERCIAL DIVISION AT DAR ES SALAAM COMMERCIAL CASE NO.11 OF 2000 I.. •4, CRDB BANK LIMITED ............... PLAINTIFF VERSUS ARBOGHAST MKAHE OISO t/a AUTO ASSESSORS COMPANY .......... DEFENDANT RULING KALEGEYA, J: Mr. Eustace, Advocate, for the Defendant has raised a preliminary objection as follows: - "(a) At the first hearing of this suit the defendant shall raise a preliminary objection on the point of law that the prayer for sale of mortgaged properly on plot number 306 Mikocheni Phase 11 area comprised in certUlcate of title number 30783 registered in the name of the defendant is unmaintainable as the same is also a subject matter in another High Court Civil Case number 270 of 1999 at Dar es Salaam Civil Registry. (b) In the alternative to objection (a) above this suit be stayed pending determination of Civil Case number 270 of 1999 or the two cases be consolidated for avoidance of contradictory findings, judgment and decree." Mr. Mwandambo, Advocate, appears for the plaintiff. The following facts stand undisputed. Sometime in 1998 the plaintiff advanced an overdraft facility to Defendant in form of a working capital in his business of

-- - I importing Automobile Motor Vehicle Spare parts. This totalled to Tshs.20,000,000/= As a security, the Defendant Mortgaged property on plot No. 306, Phase II, Mikocheni with certificate of Title No. 30783. The Agreement was entered into on 16/3/98. The expiry period was fixed in March 1999 and the overdraft attracted an interest of 21% per annum. On 3/4/2000 the plaintiff sued the Defendant for recovery of Tshs.28, 161,210/84 being the outstanding balance made up of the principal (20,000,000/) and interest. The plaintiff prayed for judgement and decree against Defendant, among others, for: "(a) Payment of Tshs.28,161 ,2 10/84... (b) Sale of mortgaged property ...... On 2 1/7/99 however, the Defendant's wife, Veneranda Ludovic Oiso, had landed both the present plaintiff and defendant in the High Court, in Civil Case No. 270 of 1999 praying for judgement against both Defendants jointly and severally, among others, as follows: "(z) a permanent injunction restraining both Defendants or either of them, their employees agents or whomsoever from selling, transferring or in any way disposing of the suit premises a declaration that the suit premises is matrimonial propety in which the Plaintiff has an inalienable right; an order that the mortgage concluded between the Fist Defendant and the second defendant without the consent and knowledge of the plaintiff is void." On the sameday the Plaintiff in that case (Veneranda) secured an interim order - restraining the present plaintiff (CRDB) (2nd Defendant then), its employees or agents from selling or disposing of the property described as Plot No. 306, Mikocheni phase II until "disposal of the application for temporary injunction inter parties or until further orders of' the Court. Since that date (2 1/7/99) neither the application for temporary injunction nor the main suit has ever been heard. Suffice to state however that 6 months

3 having elapsed since the issuance of the order and without being renewed the same has legally already been spent (0. XXXVII, Rule 3 as amended by GN 508/9 1). Now, let us turn to the arguments. Mr. Eustace, Advocate, for Defendant vehemently argued that this case before the Commercial division is unmaintenable because of the existence of the other case, No. 270/99, which he insists, deals with the same subject matter; that otherwise this may lead to conflicting if not contradictory decisions; that this kind of situation under S. 8 of the Civil Procedure Code leads to stay of the case that was subsequently filed, in this case, the one at hand, and seeking support from Mulla on Code of Civil Procedure, Vol. I, 151h Ed; 1995 at Page 86 submitted that the only test on such matters is whether the resultant decisions would conflict; that however, in view of the amendment to 0. IV, Rule 3 of the Civil Procedure Code by GN 140/91 the question of stay was removed such that now it is mandatory that such case should not be maintained at all. He went further to say that it matters not that all parties in both cases are not the same. As to the subject matter in Civil Case No. 270/99 he sees it as purely commercial as it deals with discharge of a mortgage. In response, Mr. Mwandambo, Advocate, for Plaintiff, insists that the objection is misconceived because the plaintiff has exercised its powers under the overdraft facility agreement and mortgage deed and carmot be precluded from taking measures to recover its entitlement; that the plaintiff is a total stranger to those agreements; that plaintiff in Civil Case No. 270/99 has no interest in the property as her name does not appear anywhere in the certificate of title No. 30783; that GN 140/9 1 aims at barring a party from embarking on parallel mechanism to realise his claim; that the issue in Civil Case No. 270/99 is not commercial; that he is surprised that the Defendant is taking case No. 270/99, which is against him, as a shield and that if Veneranda believes to have an interest in this case she should apply for leave to be joined as a party. I will start by referring to the provisions of the law relied upon S. 8 of the CPC prescribes;

"8. No court shall proceed with the trial of any suit in which the matter in issue is also directly and substantially in issue in a previously instituted suit between the same parties, or between parties under whom they or any of them claim litigating under the same title where such suit is pending in the same or any other court in Tan ganyika having jurisdiction to grant the relief claimed." while 0. IV, Rule 3 as added by GN 14Oi9 states the following, "(3) No suit shall be instituted in the Commercial Division of the High Court concerning a Commercial matter which is pending before another court or tribunal of competent jurisdiction or which falls within the competency of a lower court." As to the definition of a commercial case, Rule 2 of The HIGH COURT REGISTRIES RULES (UN 23 of 1984) as amended by GN 141 of 1999, has the following to tell, "Commercial Case" means a Civil case involving a matter considered to be of commercial signficance, including but not limited to: the formation of a business or Commercial Organization; the governance of a business or commercial organization; the contractual relationship of a business or commercial organization with other bodies or persons outside it; the liability of a commercial or business organization or its officials arising out of its commercial or business activities; the liabilities of a commercial or business person arising out of that person commercial or business activities; the restructing or payment of commercial debts by or to business or commercial organization or person; the winding up or bankruptcy of a commercial or business organization or person; the enforcement of commercial arbitration award,

5 the enforcement of awards of a regional court or tribunal of competent jurisdiction made in accordance with a Treaty or Mutual Assistance arrangement to which the United Republic is a signatory and which forms part of the law of the United Republic, admiralty proceedings; and arbitration proceedings" What do the quoted provisions of the law convey to us? While S. 8 of the CPC gives an allowance for stay of proceedings, that is, if a case has already been filed, it should be stayed, the latter ( 0. IV, Rule 3 CPC) prohibits the filling of the same at all. On this, I am on all fours with Mr. Eustace that, once the matter is found to be of "Commercial" nature and if it is further found that it has already been filed before another Court or Tribunal of Competent jurisdiction, it should not be entertained by the registry of this Commercial Division. That being the case, we should start by asking ourselves whether the matter before this Court and in Civil Case No. 270/99 are the same and of commercial nature. Outrightly I should state that the issue of recovery of the principal sum of Shs.20,000,000/= which is before this Court is not before the High Court in Civil Case No. 270/99. This needs no discussion as the pleadings speak for themselves. That issue therefore was properly entertained by this registry. The 2' issue however, that is, the sale of the mortgaged property, is not without difficulty. In Civil Case No. 270/99 one Veneranda, Defendant's wife; who is not a party to the present proceedings, nor a party to the overdraft facility agreement or the mortgaging of the disputed property sued for a declaration that the property in question is a matrimonial property hence its mortgaging was void and therefore it can't be sold under the agreement. In that case the present Defendant never filed a written statement of Defence but the plaintiff did and prayed for dismissal of the suit and declaration that it is saleable. On its face value therefore one may be tempted to conclude that the matter is commercial and are the same in both cases. One may be made to reason that it falls

me under paragraphs (iv) or (v) of the definition attached to Rule 3 of the High Court Registries Rules as quoted above. However, in my considered view they are not. The said paragraphs refer to the liability of the parties to each other in relation to their commercial or business activities. In there (Civil Case No. 270/99) there are no triable commercial issues between Defendant (husband) and plaintiff (wife, Veneranda). To be exact there are no commercial or business activities between the two. Triable issues on commercial liability do exist between the present plaintiff (CRDB), 2" defendant in the other case, and the present Defendant who is also 1st Defendant in the other case. Neither is there scintilla of any commercial or business transaction whatsoever between plaintiff in this case and plaintiff in that case. What links the plaintiff (wife) in that case and Defendant (husband) in this case is a matrimonial issue regarding the alleged ownership of a matrimonial property. The dispute in that case is not whether there was no business transaction or business liability between Defendant(s) and plaintiff or whether there was no mortgaging of the property. All that Veneranda is saying is that "I have an interest in this property as a matrimonial asset." There is no commercial liability element in that alleged relationship. By whatever extension of interpretation that one may exalt I cannot associate myself with the proposition that this falls under paragraph (iv) and (v). Why? The plaintiff in that case could still raise same issue in whatever relationship Defendant (husband) could have entered into with a third party in relation to the property. Defendant could have put it up in a football betting, would that be commercial or business transaction? He could have surrendered it in lieu of dowry to get a second wife, if his religion or customary stands allow it. There are various ways in which the Defendant could have encumbered the property sparking on the application for a declaratory order as fronted by the wife. What all this means is that the declaratory order sought in Civil 270/99 is not of commercial or business activity as fronted by Mr. Eustace. On those grounds, the mandatory provision of 0. IV, Rule 3 CPC which prohibits a commercial dispute already instituted before another court or tribunal from even knocking at the doors of the Commercial Division is inapplicable.

7 What about Mr. Eustace's argument in respect of S. 8 CPC? The answer to this is simple. Plaintiff in Civil Case No. 270/99 has her main claim in a prayer just for a declaratory order. In the present case an order for sale sought by plaintiff is just ancillary to the main claim. It is just one mode or means, if a decree is secured in the main prayer, of satisfying the liability. It is not the only means. S. 8 CPC concerns main issues and not those which are ancillary. Prayers for severability of prayer (a) from (b) or stay of prayer (b) let alone consolidation have no legal base on which they can be entertained. Other minor arguments raised by parties need not be discussed in view of the above findings. For reasons discussed the preliminary objection is dismissed. L.B. KALEGEYA JUDGE Date: 29/5/2000 Coram: Kalegeya, J. Mr. Mwandambo for Plaintiff Mr. Eustace for Defendant Order: Ruling delivered. L.B. Kalegeya Judge 29/5/2000 Court:- The present session, by consent of the Counsel is reconstituted into 1st pre-trial and scheduling conference.

L.B. Kalegeya Judge 29/5/2000 3 Order:- (i) Matter fixed at speed track one (ii) Mediation on 8/6/2000 at 10.00 a.m. I, V L.. flu Certify that this is a true and Correct of the er3 nao e ut9ena ttuiing Co4iitnercia' Cowt D*tc &..o .