ACB v UAP

1 IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA COMMERCIAL DIVISION AT DAR ES SALAAM COMMERCIAL CASE NO. 24 OF 2018 AKIBA COMMERCIAL BANK PLC……………………………………….........PLAINTIFF VERSUS UAP-TANZANIA COMPANY LTD…………………………………………….DEFENDANT RULING May 3rd 2024 and July 5th, 2024 Morris, J The Court of Appeal (CoA) directed this Court to rehear this case. The subject directive is through the CoA’s ruling in Civil Appeal No. 135 of 2022 which emanated from the above case. Prior to adjudicating the appeal, it was apparent to the former Court that determination of this suit was previously marred with procedural and ethical errs. Apparently, the lawyer who then acted for the above defendant was found with conflict of interests. That is, his law firm was part of the breaches of contracts that were complained of against the defendant. Hence, the CoA nullified and quashed the entire proceedings of this Court save for the amended plaint. 2 Pursuant to the directives stated above, the parties appeared in this Court for subsequent orders. On the first day of their appearance, the plaintiff obtained the Court’s leave to, once again, amend the plaint. Hence, parties were ordered by this Court to lodge the requisite pleadings. The defendant lodged the written statement of defence (WSD) which included a preliminary objection (PO): alleging that the suit is incompetent for both non- joinder of party and mis-joinder of cause of action by the plaintiff. The PO was to be determined first. Both parties were represented by advocates. Whereas Mr. James Bwana represented the plaintiff Messrs. Dennis Malamba and Jerry Edward acted for the defendant. For the PO, Mr. Malamba started by submitting that the amended plaint filed on 13th March 2024, left out necessary parties. To him, instead of also suing the borrowers who defaulted payment, the plaintiff only sued the insurer-defendant. He appreciated that Order I Rule 9 of the Civil Procedure Code, R.E. 2019 (the CPC) states that the suit cannot be defeated by non-joinder or misjoinder of parties. However, he argued that such provision is not applicable in all cases including the present suit which falls within the exceptions. He expounded that, in this matter, 21 principal 3 debtors who allegedly defaulted to discharge their obligations in the loan facilities are a must-parties. That is, even if they were covered under the defendant’s payment guarantee bond, joining the said borrowers would assist the court to know if the loans were indeed issued or not; or the amount issued; or outstanding debt for each of them. Buttressing his argument, the defendant cited the cases of Tang Gas Distributors Ltd v Mohamed Salim Said and other, Civ. appl. no 68 of 2011; Abdulatiff Mohames Hamis v Mehbob Yusuf Othman and another, Civ. Rev. 6 of 2017; Farida Mbaraka and Farid Mohamed Mbaraka v Domina Kagaruki, Civ. Appeal No 136 of 2006; and CRDB Plc Ltd v UAP Insurance Co. Ltd, Civ. Appeal No 32 of 2020 (all unreported) to the effect that the intervener (necessary party) should be added to the suit if his proprietary rights are affected to avoid multiplicity of suits; facilitate passing of complete decisions; and lead to smooth execution processes of orders thereafter. Regarding the consequences of non-joinder of parties, he relied on CRDB Plc Ltd v UAP Insurance Co. Ltd,(supra, p.13) that when the principal borrowers are not joined the proceedings must fail. Hence, he prayed that the first ground of PO should be sustained. 4 In reply, Mr. Bwana contested this ground. He submitted that; paragraph 4 of the amended plaint is evident that, the parties above entered into contractual relationship knowing that the plaintiff would lend money to different borrowers against which the defendant gave respective bonds guaranteeing such loans. Hence, in the event of default, the plaintiff acquired the cause of action against the guarantor of such loans. To him, the plaintiff is suing the defendant because the latter covenanted to pay in case of the borrowers defaulted. It was also argued by him that, since the bonds were the independent security, the plaintiff need not join any borrower-defaulter. Opposing to the defendant’s argument regarding existing of diverse loans and details thereof, Advocate Bwana argued that all necessary annexures have been attached to the plaint. But if the court analyses them, then it will delve into evidence and thus the PO will be defeated for want of pure point law. Consequently, he argued that authorities cited by the defence were irrelevant to this matter or distinguishable. That is, facts and circumstances in cases of Tang (supra), Abdulatif (supra), Farida(supra) and CRDB v UAP (supra) are incongruent with 5 the matter at hand enough for this Court to disapply the holdings therein in the PO. Thus, to him the first ground fails. In respect of the second ground of PO, Mr. Malamba submitted that the case is suffering the misjoinder of causes of action. He invited the Court to work on the basis of the definition of misjoinder of cause of action as per Webster Dictionary (2022 edition); and Victor Nestory Ndamgoye & Another v Sinda Geteba, Comm. Case 4 of 2021 (unreported). Therein, the term was held to imply several causes of action being joined together wrongly. Consequently, where there is no common point of law/fact, the suit becomes incompetent. On that basis, the defendant contended that the present suit is substantially defective because all 21 borrowers not joined hereof had different types of loan facilities; payment guarantee bonds; time and places of issuance; and loan amounts and payment obligations. Thus, in his view, it was improper for the plaintiff to place 21 borrowers with different causes of action in a single suit. Hence, he prayed that this suit should be struck out with costs. On his part, Mr. Bwana found no serious problem in the alleged misjoinder of causes of action. To him, paragraph 4 of the plaint succinctly 6 describes the nature of relationship between parties herein from inception. Further, as the bonds bear similar terms and conditions, the plaintiff can join the causes of action in line with Order II Rule 3(1) of the CPC. Reacting to the definition in Victor Ndabagoye’s case (supra), he submitted that the same is in support of this suit than otherwise. He thus, prayed for the PO to be overruled with costs. In an unconventional approach, however, Advocate Bwana introduced a contention which was not before the Court by then. He argued that the PO proceedings were inappropriate. The foundation of his view was that similar grounds of PO were raised in this case (before it escalated to CoA) and the same were dismissed by this court (Mwandambo, J. - as he then was) on December 11th, 2018. He asserted that the directive of CoA under Civil Appeal No. 135 of 2022 was for this Court to continue from the stage of filing of the amended plaint. Thus, as the subject amended plaint was filed subsequent to the said ruling (on 17.06.2019); as far as this court is concerned, its decision on the alike PO is still in place and undisturbed. That is, this Court is accordingly functus officio. 7 Mr. Malamba countered the foregoing submissions by arguing that, the PO can be raised at any time. Hence, the decision of this Court regarding the PO in the previous proceedings cannot bar the parties from raising the PO. To him, the current PO is both appropriate and sound. Rejoining on the appropriateness of these proceedings (PO), advocate Bwana stated that indeed the PO may be raised at any time. However, when it is raised and fully determined by the court, the same court becomes functus officio. Unless, this court is first invited to do a review, and it does so by rectifying or vacating its previous orders therein, its previous decision remains wholly binding. With adequate dispassion, I will now consider the above rival submissions. However, I will start with the preliminary legal concern raised by Mr. Bwana, learned advocate for the plaintiff. In the course of responding to the main submissions of the defence, he stated that the PO was inappropriate because the same was previously raised and fully determined by this very Court on December 11th 2018. Ordinarily, the Court would otherwise be loath to consider such ‘concern-turn-PO’ at this stage. Instead of raising the so-called contention in the form of preliminary objection at the 8 earliest, he has presented it in his reply submissions meant for hearing of the opposite party’s PO. That is, he raised a ‘PO’ over the PO. For various reasons, the foregoing tactic is professionally unhealthy and unacceptable. First, the approach tends to surprise the opposite party. Given the fact that it is raised at the spur of the moment, the opposite party against whom ‘notice of the PO’ was not served; is without adequate time to prepare and respond accordingly. Consequently, his right of being heard and/or fair hearing is prejudiced. Second, such party will submit over the matter not before the court. Third, the party engages the court and/or the opposite party with afterthoughts and extraneous matters thereby distracting the coherence of the proceedings. Fourth, the objective of the PO is being defeated. Ordinarily, a successful PO leads to defeating the suit/trial without wasting time by determining the merit of the matter. When the purported PO is raised inordinately late, the mischief is far from being cured. Fifth and most serious of all, the party raising and arguing such ‘PO’ is illegitimately usurping the powers of the court by giving himself the mandate to submit on the matters not before the Court. 9 The above observations notwithstanding, I will address the raised aspect on the basis of three points. One, matters covered under the functus officio are jurisdictional in nature. In law, the question interrogating the court’s jurisdiction can be raised at any stage of the proceedings [Yazidi Kassim t/a Yazidi Auto Electric Repairs v AG, Civ. Appl. 354/04 of 2019; Masasi Construction Co. Ltd v Permanent Secretary, Ministry of Agriculture & Food Security, Civ. Case No. 100 of 2009 (both unreported). Two, the point challenging the jurisdiction of the court takes precedent. This philosophy is unpretentious to understand. The attack on the court’s jurisdiction interrogates its powers to determine any other aspect associated with the matter before it; be it a point of law or a factual-based row. Three, the defence was accorded an opportunity to be heard on the same. I am mindful of the fact that, the respective counsel had an option of imploring the Court to shelf the raised issue and/or seek adjournment in order for him to make necessary preparations before responding to it. Nonetheless, by preferring to respond instantly instead, he exhausted such remedy. 10 The foregoing foundation having been laid, I now proceed to determine whether or not the Court is seized with requisite mandate to determine the defendant’s PO. By way of recap, the PO is to the effect that the suit is incompetent for both non-joinder of party and mis-joinder of cause of action by the plaintiff. I started by reading the ruling of this Court handed down by His Lordship Mwandambo, J (as he then was) on December 11th, 2018. Out of the four points of objection raised by the defence, two (2) are identical to the present PO. The corresponding grounds of the previous PO were as follows: 1. …… [Inapplicable] …. 2. The plaintiff’s suit is incompetent for non-joinder of defendants 3. The plaintiff’s suit is incompetent for mis-joinder of causes of action 4. …… [Inapplicable] …. In dismissing the defendant’s PO, the Court held that: “According to the learned Advocate all defaulters should have been joined in the suit and failure to join them is fatal on the authority of Tang Gas Distributors Limited v Mohamed Salim Said and Others, Civil Revision No.68 of 2011 (unreported). As to misjoinder of causes of action, it is the learned Advocate’s 11 submission that in so far as the bond is payment guarantees are distinct from each other, each constitute a separate and independent cause of action from the other and so they cannot be tried in one suit.…Without further ado, I find no merit in the point that the suit is incompetent for non-joinder of defendants.... I do not see myself any difficult or inconvenience uniting the causes of action in which the defendant appears to have a common defence against the plaintiff in respect of payment guarantees. I would in the premises not agree with Mr. Swai that there is a misjoinder of causes of actions and in consequence dismiss the preliminary objection” (bolding is rendered for court’s emphasis). The above excerpt in perspective, it is apparent that the Court is now being moved to determine the very grounds of PO that were determined previously. Hence, the pertinent question remains to be: did the remand of the record to this Court by the CoA after it quashed the previous proceedings of this suit amount to quashing the ruling of Hon. Mwandambo, J (as he then was) as well? To me, the answer is in the disaffirmation. I will explain. Firstly, when the CoA quashed the proceedings of this Court, it was categorical that: 12 “In the circumstances, we are inclined to exercise our revisional power under section 4(2) of the AJA, and quash the entire proceedings of the High Court except the amended plaint which is left intact and set aside the judgement and decree that ensued from the null proceedings. Consequently, we remit the original record to the trial court with an order that, the case file be placed before another Judge to preside over the matter in accordance with the law from the stage of filing the amended plaint” (emphasis supplied). It requires no rocket science to decipher the foregoing CoA’s decision and directive. The starting point for the fresh proceedings herein is the amended plaint. As correctly argued by the plaintiff, such pleadings were filed following the unsuccessful defendant’s PO. Hence, to rummage in the record previous to the amended plaint is analogous to clothing this Court with oversize outfits not tailored in accordance with the order of the CoA above. Secondly, unless the decision of this Court is vacated or overturned/quashed the ruling handed down on December 11th, 2018 is still a valid and binding law; its correctness or otherwise notwithstanding. Thirdly, as the subject decision was made for and in presence of both 13 parties herein, this Court’s hands are yoked in the squares of the functus officio principle. See, Mohamed Enterprises (T) Limited v Masoud Mohamed Nasser, Civ. Application no. 33 of 2012; Maria Chrysostom Lwekamwa v Placid Lwaikamwa & Another, Civ. Application No. 549/17 of 2019; North Mara Gold Mine Limited v Penina Mhere Wangwe & 31 Others, Misc. Land Appl. No. 29 of 2023(all unreported); and Bibi Kisoko Medard v Minister for Land, Housing & Urban Development & Another [1993] TLR 250. Consequently, I refrain from reopening the proceedings which were finally determined by this Court in 2018. As this finding suffices to establish the incompetence of the PO, I will not discuss its grounds. 14 In fine, the objection is overruled. I order that the matter should accordingly proceed to the next stage. Each party will bear own costs. It is so ordered. C.K.K. Morris Judge July 5th, 2024 Ruling delivered this 5th day of July 2024 in the presence of Advocates James Bwana and Jerry Edward for the plaintiff and defendant respectively. C.K.K. Morris Judge July 5th, 2024