angelo fernandes and another vs jitesh jayntilal walji ladwa 2020 tzhclandd 2290 25 september 2020

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA (LAND DIVISION) AT DAR ES SALAAM LAND CASE NO. 75 OF 2020 ANGELO FERNANDES _.......................................... 1st PLAINTIFF SHAHISTA ADAM................................................... 2nd PLAINTIFF VERSUS JTTESH JAYANTILAL WAUI LADWA...................... DEFENDANT RULING. S.M, MAGHIMBI, J; The plaintiff in this suit has sued the defendant for unlawful and forceful eviction from the suit property known as Apartment No. "F5" on 2nd Floor "F" Wing, over the developed land property on Plot No. 78/1-4 located at Mzimuni Street, Msasani Beach, Kawe area within Kinondoni Municipality of Dar-es-salaam city ("the suit property"). In their plaint, the plaintiff prayed for judgment and decree against the defendant for the following orders: a) A declaration that, the plaintiffs are the lawful owners and residents of the suit property known as Apartment No. "F5" on 2nd Floor, "F" wing over the developed landed property on Plot No. 78/1-4 located at Mzimuni street, Msasani Beach, Kawe areas, Kinondoni Municipality, Dar es Salaam held under the Certificate of Title of the Right of Occupancy No. 9616; b) A declaration that, forceful eviction or otherwise or removal of the plaintiffs with their personal belongings and the entire family i from the suit premises in the absence of any court order whatsoever was done in contraventions of the law and policy, it follows, therefore, the eviction in question was unlawful; c) An order that, the Defendant is a trespasser and stranger to the Sale Agreements thus has to quit and deliver up vacant possession of the suit premises, d)That, plaintiffs to immediate enjoy full reoccupy of their matrimonial residential suit premises, e) An order restraining permanently all the Defendant and his agents, servants, assignees whosoever from evicting interfering or whatsoever to the suit premises. f) An order that, the Defendant in the absence of any mandate through a Board Resolution of the Company who sold the suit premises to the plaintiffs, with no locus since is a mere stranger to the Sale Agreement of the suit premises be permanently restrained from interference eviction, trespassing whatsoever to the suit premises g) An order for payment of Tshs. 400,000,000.0 being compensation of the damaged furniture, loss of personal belongings including and not limited to personal identifications and working tools of the plaintiffs such as a pilot license, NHIF card, Ipad, various electronic equipment, valuable items including gold chains, rings, expensive watches, ATCL's uniforms, cash money Tshs. 450,000.0 and USD 15,000.00 h) General damages to be assessed by this honorable court, costs of the suit be paid by the defendant, 2 i) An order the plaintiff to engage separate security guareds for their suit premises. j) Any other reliefs the honorable court may deem fit to grant. k) Costs of this suit be paid by the defendant. While filing their Written Statement of Defence, the defendant, duly represented by Mr. Sisty Benard, raised a preliminary objection on point of law that the Order sought in the suit are untenable and unmaintainable in law for the Plaintiffs have sued the wrong party. By an order of this court dated 25/08/2020, the objections were disposed by way of written submissions were both parties filed their submissions accordingly hence this ruling. The plaintiff submissions were drawn and filed by Mr. Alex Balomi, learned Senior Counsel while Mr. Sisty drew and filed the defendant's submissions. In his submissions to support the objection, Mr. Sisty first pointed out that the preliminary objection raised fits squarely the case of Mukisa Biscuit Manufacturing Co. Ltd Vs West End Distributors Ltd [1969]1 EA 696. He then submitted that this suit is essentially premised on paragraphs 9, 10, 13 and 15 of the Plaint where the Plaintiffs claimed to have bought the suit premises from a company known as Houses and Homes limited f’TAe Company'} and that they were in occupation of the house up to the time they purport to have been evicted by Defendant through his agents. Emphasising that the parties are bound by their pleading; he pointed out that in paragraph 4 of the Plaint, the Plaintiffs pleaded that the Defendant is the Director and shareholder of the company. That as per the law, a company is 3 separate entity from it's shareholders and that all suits by or against the company shall be brought under the company's name. He argued that it's wrong to sue the director of the company on the claims against company founded on contract. Mr. Sisty went on submitting that the pleaded facts in paragraphs 4, 13, 10 and 15 of the Plaint bind the Plaintiffs in that they chose to sue the defendant separate from the Company. That it is apparent on the face of record the suit is founded on contract and not tortious claim. He argued that under the circumstances, suing the Defendant as the director based on the act done by him while holding his office as such is wrong and that the corporate veil ought to have been lifted first. He supported his submissions by citing the case of Bank Of India (Tanzania) Limited Vs Fomcom International Ltd And 2 Others, Commercial Case No. 19/2018, where Her Ladyship, Fikirini, J had this to say at page 17: "a company becomes separate entity from its shareholders, directors who own and/or act for the company. However, the principle has nonetheless its exceptions, and the court when called upon to act can in actual fact intervene by piercing or lifting of a corporate veil. And in so doing, the court will consider among other things, where the person/s controlling a company have acted fraudulently, the company is considered as sham or where a company is used to avoid an existing legal duty, before lifting the corporate veil" Mr. Sisty submitted further that based on the plaintiff's own pleadings, it is undisputed fact that the Plaintiff has sued the defendant who is a 4 director and shareholder of the Company without any leave to lift the corporate veil. That worse enough, there is no particulars of fraud pleaded as per Order V Rule 4 of the Civil Procedure Code Cap 33 R.E 2019 ("The CPC") to have committed by the defendant to warrant him to be dragged in the present suit like the Plaintiffs did. He further cited the case of Solomoni Vs Solomoni & Co. Ltd [1897] AC 22 HL which set a principle that where the shareholders and directors owned and acted for the company, a company becomes separate from its shareholders/ directors. He argued that the principle clearly depict how important the requirements of the principle of corporate personality are, therefore suing the defendant the way the plaintiffs did in noncompliance of the law, the suit should be dismissed with cost. His conclusion was that that being the shareholder and Director of the company, the 1st and 2nd Plaintiffs ought to have followed legal procedure of lifting corporate veil before institution of the suit against the Defendant. That since the procedures were not followed, it renders suit unmaintainable and untenable in the eyes of the law and should be dismissed with costs. Mr. Sisty then introduced another point of objection on the verification of the plaint and since the objection was not pursuant to Order VIII Rule 2 of the CPC, it will not be discussed not discuss it. In reply, Mr. Balomi submitted that the objection is misconceived, not properly raised and devoid of merits and it offends the principles of Order I Rule 13 of the CPC which requires an objection on the non­ joinder or misjoinder of parties should be taken at the earliest 5 opportunity unless they have subsequently arisen. He argued that the matter has been in court for sometimes now and the defendant chose to abandon the objection in application for injunctive orders. I need not dwell much on this point raised hence I should settle it at this instant. The argument that the abandonment of objection in the application for injunctive orders bars the defendant to raise this objection is absurd. The Misc. application and the suit are two different matters and the plaintiffs should not drag the two to mean the same. The only question is whether the objection was raised on time, Mr. Balomi is attempting to convince the court that it was not filed on time, the argument has surprised me. The objection has been raised by the defendant while filing his written statement of defence as per the requirements of the Order VIII Rule 2 of the CPC. I don't know which earliest time Mr. Balomi meant when he was referring that the same was not lodged on time, maybe before the suit was filed in contemplation of the action to be brought? All in all, this point of argument has no merits at all. Mr. Balomy then submitted that the objection is on the wrong joinder of party of which legal consequence cannot defeat the instant suit. He argued that in his defence, the defendant is admitting to be the Shareholder and director of the company which actually executed a sale agreement with the Plaintiffs, and the plaintiff has paid substantial amount of money towards the acquisition of the suit in dispute. That the other three shareholders are in good terms with the plaintiff and it is the minority shareholder who in his own volition alleges the plaintiff 6 to be occupying the suit property illegally and employed unlawful eviction of the plaintiff using bouncers without consent of the company. That the rest of the shareholders are sympathetic with the plaintiff and that in his defence, the defendant does not dispute conducting these illegal activities. Mr. Balomi also submitted that on para 2 of his WSD, the defendant did not bring any proof to show that he is deriving these ultra vires powers in the Company in which he acknowledged to have role and position with unlimited rights and obligations. That legally speaking, the company is no longer the owner of the suit property as the plaintiff has acquired the same and a single director cannot singly exist and demand the ownership or control of the suit property in breach of corporate personality. He also argued that the objection can be cured under the overriding principle of civil litigation under Section 3A of the CPC. He submitted further that under para 2 of the WSD, the defendant did not attach any proof to demonstrate where he is deriving these ultra vires powers in the company in which he acknowledged to have role and position with unlimited rights and obligations. That the position the defendant is taking is not known in the Corporate law world not is it in the MEMATS of the company. He argued that the defendant does not deny the illegal eviction of the plaintiff as he only alleged to assume the roles by his position in the company. Mr. Balomy then admitted that this is the proper case to lift the corporate veil so the court can find that he is personally liable to the complained acts. He concluded that there is no requirement of lifting corporate veil of incorporation first in 7 are in good terms with the plaintiffs, this does not defeat the fact that one cannot separate the acts of the defendant from those of the company unless the corporate veil has been lifted. As for the case of Yusufu Manji (Supra) cited by Mr. Balomi, it is also defeating his own arguments. In that case the court made it clear that the court may go beyond the purview of Solomon Vs. Solomon (Supra), but that can only be done by lifting the corporate veil. In that case, the court held: "Having regard to the relationship of the company, at the time with the appellant as the managing director, the alleged concealment of the assets of the company by the appellant, which was not denied by way of counter affidavit, this was a proper case in which to apply the principle of lifting the veil of incorporation." As for the case at hand, the plaintiff has directly sued the defendant as an individual, alleging that he acted without any mandate through a Board resolution of the Company. The pleadings also reveal that the defendant is a director and shareholder of the company. This means there has to be proof on whether the defendant was acting on behalf of the company or as an individual director and this could be done by either suing the company or lifting the corporate veil and sue the individual director, which in this case, none of the two circumstances prevail. In conclusion, since the defendant is sued in his capacity as a "biased director" then under the principle laid down in the case of Solomon Vs. Solomon, in the absence of leave to lift corporate veil, the plaintiff 9 has no cause of action against the defendant as an individual director. The suit is therefore struck out with costs. Suit Struck Out Dated at Dar-es-salaam this 25th day of September, 2020. JUDGE 10