asami nemoto and another vs alex david silaa and another 2021 tzhc 5770 24 august 2021

IN THE HIGH COURT OF TANZANIA (DAR ES SALAAM DISTRICT REGISTRY) AT DAR l-S SALAAM MISC. CIVIL APPLICATION NO. 153 OF 2021 (Arising from Misc. Civil Cause No. 57 of 2020. In the Matter of the Companies Act, CAP 212 and in the matter of Japan Tanzania Tours Limited)

BETWEEN 1. ASAMINEMOTO.................................................................... 1st APPLICANT 2. ABDALLAH DICKEMLA.................. ....................................... 2ND APPLICANT

VERSUS 1. ALEX DAVID S1LAA............................................................ 1st RESPONDENT 2. JAPAN TANZANIA TOURS LIMITED................................... 2nd RESPONDENT

RULING 9/6/2021 & 24/8/2021 L.M. Mlacha, J. The applicants, Asami Nemoto and Abdallah Dickemla filed an application under section 95 of the Civil Procedure Code act, Cap 33 R.E. 2019 against the respondents, Alex David Silaa and Japan Tanzania Tours Limited, seeking the following orders: - 1. That, this Honourable Court be pleased to Order that the it (sic) vacates its orders issued and dated 20h November2020 where the 1st Respondent was granted Orders permitting him to call, hold and conduct meetings of the 2nd Respondent Company. i 2. That, this Honourable Court be pleased to Order that the Applicants be allowed to bejoined as interestedparties in Misc. Civil Cause No. 57 of 2020, the said Applicants being the lawful legal representatives of the deceased Directors and Shareholders in the 2Pd Respondent, namely Nemoto Toshimlchl and Salum Ngubi. The other reason is that the Applicants have filed Miscellaneous Civil Application 351 of2019 between the Applicants together with Yoko Lizuka versus the 1st and 2nd Respondents herein, a Petition under the Companies Act (currently pending before Hon. Mlyamblna, J) in which the Applicants are seeking the Intervention of the Court to force the 1st Respondent to include the Applicants in the management of the 2fd Respondent.

3. The Honourable Court be pleased to order that the present matter be remitted to and form part of the Proceedings in Misc. Civil Cause No. 351 of 2019 since the matters herein are directly and substantially in issue as those pending before Hon. Mlyamblna, J.

4. Costs of this Application be provided for.

5. Any other relief the Honourable Court will deemjust and fit to grant. The application is supported by the affidavit of Asami Nemoto and Abdallah Dickemla stating the grounds upon which the application is based. Attached to the affidavit are a drawn order of Miscellaneous Civil Cause No. 57 of 2020, a copy of the Petition of Miscellaneous Civil application No. 351 of 2019 and a copy of the 2nd Respondent's reply to the petition. The respondents in this application and the respondents in Miscellaneous Civil 2 Application No. 351 of 2019 are the same. Upon service, the respondents filled counter affidavits and notices of Preliminary objections which were similar. They read thus; 1. That, the applicants lack locus to file the application.

2. That, the court is functus offido. Mr. Peter Kibatala appeared for the applicants while Mr. Kisusi Rashid Chacha and Mrs. Lucy Nambuo appeared for the respondents respectively. With leave of court, counsel were allowed to make a joint submission for the preliminary objections and the application. I had time to go through. I enjoyed reading them. Before going to examine the counsel submission, a bit of the background may be useful. The problem between the parties started on 10/2/2020 when the court received Miscellaneous Civil Cause No. 57 of 2020. It was a petition lodged by Mr. Alex David Silaa (1st respondent) against Japan Tanzania Tours Ltd (2nd respondent). It was made under section 137 (1) of the Companied Act, Cap 212. It was under a Certificate of Urgency. The petitioner had the services of Mr. Kisusi Rashid Chacha while the respondent had the services of Mrs. Lucy Nambuo. It was stated in the petition and later in the oral submissions that the respondent company had four directors but three were 3 etitioner as the only surviving director. That, the Articles ired a minimum of three directors to hold a meeting to conduct meetings and the business of the company this court. Counsel for the petitioner requested the court nder section 137 (1) directing the petitioner who is the le, to call, hold and conduct the meeting of the company. who represented the company had no

objection. She er. law and authorities supplied in support of the prayer, of objection from Mrs. Lucy Nambuo, the court granted directed the petitioner who was the only Director of the ce, to call, hold and conduct the meeting of the company. t the minutes and decisions to be kept as minutes and pany. The petitioner was further directed to act fairly in sts of the directors who were dead and supply copies of istrar of companies and this court for record purposes. not please the applicants who lodged the present application seeking to set the order aside in the manner indicated above. 4 It was the submission of Mr. Kisusi for the 1st respondent that, the applicants have no locus standi to challenge the decision because they are neither Administrators/Executors nor legal heirs of Nemoto Toshimichi (Japanese) and Salum Ngumbi (Tanzanian) both deceased shareholders of the second respondent. He referred the court to Articles 26 and 27 of the memorandum and Articles of Association saying that the applicants have never caused their names to be registered as shareholders nor elected to be shareholders following the death of the deceased. If they were administrators/executors, counsel submitted, they could file the inventories something which they did not. Counsel proceed to say that Miscellaneous Civil Application No. 315 of 2019 has three petitioners; Asami Nemoto, Yoko Izuka and

Abdallah Seif Dickemla contrary to what is in this application which has Asami Nemoto and Abdallah Dickemla only. He argued that Abdallah Seif Dickemla is different from Abdallah Dickemla. He refereed the court to Ally Ahmad Bauda vs. Raza Hussein Ladha Damji, said omary said and Tambaza Auction Mart and General Brokers, CAT Civil Application No. 525/17/of 2016 for reference. Submitting on functus officio, counsel for the first respondent said that in compliance to the court order, the first respondent has written a letter with 5 reference JATA/BRELA/20/05 with attachments which included minutes of the court sanctioned Extra Ordinary General Meeting dated 16/12/2020 to the Registrar of companies and copied to the court as ordered. Counsel submitted that the court is functus officio, it cannot reopen the matter. He said that the principle of functus officio is to the effect that once a judge or magistrate has performed his officio duty, he is precluded from reopening the decision. He referred the court to Kamundu v. Republic (1973) E.A 540 where it was said that, the court becomes functus officio once it has made an order which finally determines the matter. He made further reference to the case of Malik Hassani Suleiman v SM2 (2005) Court of Appeal page 237 and Mukisa Biscuits Manufacturing Company Ltd v. West End Distributors Ltd [1969] E.A. 696 on the same

principles. Submitting on locus standi, counsel for the second respondent said that the ruling of court have already been delivered and orders made implemented. She said that, there is no living issue for decision by this court. She went on to say that the applicants were neither shareholders nor directors of the second respondent which could give them mandate to present the present application. She said that the applicants must show that they are legally entitled to bring the matter, which they have not. Making reference to Lujunna Shubi Ballonzi Senior v. the Registered Trustees of Chama 6 cha Mapinduzi [1996] TLR 203, he said that, locus standi requires a person who bring a matter to court to show that his right or interest has been breached or interfered with. She proceeded to submit quoting from the case of Gregory and An v. Landon Borough of Camdem (1967) ALL E.R. 196, page 203 where it was held thus; '"There are many acts which cause loss which give no legal rights. Before one can come to court of Law, one must suffer an injuria as well as damnum, one must have suffered a legal wrong as well as an actual loss ofmoney or amenity or something else." Submitting on functus officio, counsel for the second respondent said that the court cannot change the decision once it is made. That, the judge becomes functus officio once he has made his original order for he cannot depart

from it in the absence of an application for review. She refered the court to Laemthong Rice Company Limited v. Principle Secretary Ministry Finance [2002] TLR. 389, James Kabalo Mapalala vs. British Broad Casting Corporation [2004] TLR 143 and Malik Hassan Suleiman (Supra) to support her position. Counsel for the applicants, Mr. Peter Kibatala addressed the objections one by one. He then proceeded to make his submission on the main application. 7 Submitting on the locus standi, counsel referred the court to the case of Addax B.V. Geneva Brach v. Kigamboni oil Co. Ltd, Commercial case No. 72 of 2008 pages 4 and 5 where it was said that, locus standi is very rarely entertained as a point of preliminary objection in law. He said that, the respondents are missing the point. Counsel submitted that, the locus standi of the applicants is the interest which they claim in the second respondent company, which they allege have been usurped by the first respondent through the order which they procured by withholding vital information from the court. He said that their interest has been sufficiently shown in the affidavit supporting the application. He proceeded to say that the respondents have not submitted that Abdalah Dickemla (with or without seif) is not the lawfully appointed Administrator of the estate of the late Salum Ngubi, deceased director and shareholder of the second

respondent or that, Asami Nemoto is not the lawfully appointed Administrator of the estate of the late Nemoto Toshimichi, Deceased Director and Shareholder in the second respondent. Counsel proceeded to submit that the case Ally Ahmad Banda (supra) is wholly distinguishable because of 4 points; (i) The matters were not in the same High Court, same registry as is in the case at hand; (ii) The anomaly was not in the names of the applicant, but of the deceased whose identify 8 constituted the applicant's right to sue; (iii) There were 3 different names as opposed to the present application which has more than one applicant, the first applicant whose anomaly cannot defeat the entire application; (iv) Substantive justice was not pleaded, hence not considered by the Court of Appeal. Counsel relied on the decision of the Court of Appeal in Hammers Incorporation Co. Ltd v. The Board of Trusteed of Cashewnut Industry Development Trust Fund, Civil Appeal No. 213 of 2014 page 4 where it was held that the omission of the word "Fund" in describing the respondent was inconsequential. Counsel went ahead and referred the court to the case of Gasper Peter v. Mtwara Urban Water Authority (MTUWASA), CAT Civil Appeal No. 35/2017 pages 13 and 14 on the supremacy of substantive justice particularly where there are serious allegations of fraudulent procurement of a court order to prevent the course

of justice. Counsel proceeded to say that the applicants have locus stand because they are lawfully administrators of the estate of the deceased who were shareholders and directors. He went and said that, even the order which they are now challenging, recognize Asami Nemoto, Aizana Toshiaki and Hamisi Mkomwa. Submitting on Functus Officio, counsel for the respondent said that, the court is not functus officio because the court has power to vacate its orders where 9 the same have been reached through forgetfulness, procured by fraud or misrepresentation or where it did not take into account some important facts which have new been available to it. He relied on MULLA CODE OF CIVIL PROCEDURE, 16th Edition, pages 1066 and 1067 and the case of COTWO (T) Ltd and another v. Honourable Iddi Simba and another [2002] TLR 88 at page 91 and 92. Counsel proceeded to say that setting aside an order made by the court itself is a discretionary remedy provided under section 95 of the Civil Procedure Code. He referred the court to TANESCO v. Independ Power (T) Ltd (IPTL) [2002] TLR 324 where it was said that section 95 can be used to invoke the inherent powers of the court in an appropriate instance; especially since the Companies Act is silent on any remedial steps versus an order issued under section 137 (2) and (3) of the Companies Act. Counsel proceed to submit that the order made by this

court did not give any permanent right to the first respondent on any property, directorship or shareholding rights in the second respondent and cannot therefore be said to be an order which have finally and conclusively determined the rights of the parties. That type of an order, counsel submitted, is subject to scrutiny by the same court and the same judge who made it. Counsel referred the court to portions of the order which read; io "(iv) The applicant is directed to act fairly in securing the interests of die directors who are dead, (v) Copies of the minutes to be supplied to the Registrar of Companied and this court for record purposes" He argued that the language and import is clear that the court retained the measure of interest and control in the manner in which the first respondent exercised the temporary powers given to him. He concluded that the submission is misconceived not only of the principles of functus officio but on the order itself. He argued the court to dismiss the preliminary objections. While adopting the contents of the affidavit of Asami Nemoto and Abdalah Dickemla, counsel for the applicants raised five question; (i) Did the first respondent disclose all information when he approached the court? (ii) Was he under a duty, particularly because he is represented by counsel, to act in utmost good faith and disclose that there was a matter pending before

Hon. Mlyambina Judge, a matter that was filed first in time and which had the subject matter relating to the second respondent (claims of ascendance to the Directorship and shareholding thereof)? (iii) Would this court have issued the orders if the first respondent had disclosed all the information? (iv) Did the second respondent, equally represented by counsel, discharge its duties to the court to disclose full information, including that it has been sued by 11 claimants of rights to its share and directorship to enable the court to properly evaluate the exercise of its discretionary powers to issue the orders? (v) Why did the first respondent choose to quietly come before me (Mlacha) as opposed to filling the matter before Mlyambina J. who had the conduct of a similar matter? Counsel submitted that the answers to these questions suffice to dispose the application in their favour. Counsel proceeded to refer the court to Rule 6 (i) and 55 (2) of the Advocates (professional conduct and Etiquette) Regulations GN 118 of 2018 and prayed for the orders of this court issued on 2/11/2020 to be vacated. Submitting in rejoinder to the preliminary objections and reply to the application, counsel for the respondent attacked the submission of the applicants saying that it was filed out of time. He cited cases to support the position that it should be rejected. He thereafter reiterated his

earlier position on the preliminary objections and argued the court to uphold them. Submitting in reply to the application, counsel for the first respondent argued that the application should be dismissed for lack of reasons to substantiate the submission. He referred the court to Gervas Masome Kurwa v. Ruturning Officerand others [1996] TLR 32, Khalid Mwisonyo v. M/S UNITRANS (T) Ltd, Civil Appeal No. 56 of 2011, section 110 of the 12 Evidence Act, Cap 6 R.E. 2019 and Barelia Karangirangi v. Asteria Nyalwambwa, Civil Appeal No. 237 of 2017 to support his view. He argued the court to dismiss the application. Like the counsel for the first respondent, the counsel for the second respondent reiterated her earlier position on the preliminary objection and argued the court to dismiss the application. She was also not happy with the approach of the applicant in his submission who raised questions without answers. He argued the court to dismiss the application. Submitting in rejoinder and reply, counsel for the applicant said that his submission was lodged on 25/5/2021 as per the court order. It was thereafter served to the defence counsel who filed their submissions. There was no delay, he said. He proceeded to say that the approach of questions is not new in our jurisdictions. He went ahead and said that submissions merely supplement legal aspects in pleadings that is why people who

are unrepresented, who do not have submissions, can still get justice in court. He added that a court operate primarily on pleadings. Counsel ended by saying that his questions are only theoretical and lead to only one set of conclusion, that the first respondent has perhaps with the aid and abatement of his counsel, and connivance of the second respondent 13 and its respective counsel, mislead and with held information from the court. He reiterated his submission on the duty of counsel as provided under Rule 6 (i) and 55 (2) of the Advocates (Professional Conduct and Etiquette) Regulations, GN 118 of 2018. He invited the court to act accordingly. He concluded by repeating his prayers that the orders of this court issued on 26th November, 2020 should be vacated and set aside. I will start with the Preliminary objections beginning with locus standi. It was submitted that the applicants do not have locus standi because they are neither Administrators/Executors nor legal heirs of Nemoto Toshimichi and Salum Ngumbi, both deceased shareholders and directors of the second respondent. It was also said that the parties in Miscellaneous Civil Cause Application No. 315 of 2019 are not the same as the parties in this case. That, whereas the parties in the present application are Asami Nemoto and Abdalah Nickemla, the parties in the former application are Asami Nemoto, Yoko lizuka and

Abdalah Seif Dickemla. The controversy here was on the number of parties and the word 'seif'. The case of Ally Ahmad Bauda (supra) was cited as authority on the effect of the word 'seif'. It was also argued that the applicants were supposed to prove locus standi as explained in the case of Lujuna Shubi Balonzi Senior (supra). That a person who files a case must show how his right or interest has been breached or 14 interfered with. The case of Gregory and An (supra) was cited in this regard. That, before one comes to court must have suffered a legal wrong and actual loss, monetary or others. In opposing the views on locus stanci, it was said that locus standi is merely entertained as a point of preliminary objection. The case of Addax B.V. Geneva Brach (supra) was cited to support this view. It was further said that locus standi of the applicants rs the interest which they claim in the second respondent company. That, the applicants as lawfully appointed administrator of the estate of the deceased directors and shareholder, have locus to present the application. The case of Ally Ahmed Bauda was said to have different facts and thus distinguishable. As to the omission of the world "seif", counsel relied on the cese Hammers Incorporation Co. Ltd (supra) which said that the omission of the word "Fund" was not fatal. I had time to study the pleadings ard put a critical eye to the

submissions. I think this aspect should not detain us so long as it is not disputed that the applicants are the lawfully appointed administrators of the deceased directors and shareholders. Once a person is dead leaving behind properties, whether physical or shares in a company, the one who has the legal mandate to collect them is the administrator of the deceased estate. He can also sue or be sued (see Hadija Said Matika v. Awesa Said Matika, (PC) Civil 15 Appeal No. 2 of 2016 High Court Mtwara). As to be the omission of the word "sheif", having read the two decisions, and examined the circumstances of this case, I am in agreement with the position that the omission of the word "seifu" is not fatal. It was a mere slip of the pen. I also agree that the facts in the case of Ally Ahmad Bauda (supra) are different from the facts of this case making the case distinguishable. The objection based on locus standi, with respect, is found to be baseless and dismissed. Next for consideration is the objection based on functus officio. It was submitted that the respondents have already acted in compliance to the court order. The court cannot reopen the matter again. Three cases were cited to support this view; the case of Kamundu (supra), the case of Mukisa Biscuit Manufacturing Co. Ltd (supra) and the case of Laemthong Rice Company Ltd (supra). To the contrary, it was submitted that the

court has power to vacate its orders where the same have been reached through forgetfulness, procured by fraud or misrepresentation or where it did not take into account some important facts which are now available. MULLA 16th Edition (pages 1066 and 1067) and the case of COTWO (T) Ltd (supra) were cited to support the view. It was also said that the orders can be vacated safely under section 95 of the Civil Procedure Code as applied in the case of TANESCO (supra) because the Companies 16 Act do not have a provision to govern the situation. It was further said that, the wording of the ruling reflected that, the order was not final and conclusive. The court retained some powers. I had time to reflect on this aspect. Going quick and lightly, one can be moved to believe that the court is functus officio and must not go back again. But, given the background of the matter which show clearly that the order was procured by fraud (ulaghai) for failure on the part of the respondents to disclose the existance of another application pending before the court and on the strength of authorities cited by counsel for the applicant, I think the court is not functus officio. This is rather a fit case where section 95 and 68 (e) of the Civil Procedure Code Act can be invoked stop the abuse of the court process and the ends of justice form being defeated. If I may recall well, the first respondent

stood before me very cool and down as a person who has lost his fellow directors, all dying leaving him alone and unable to run the company. He could not access the funds to pay employees. Neither did he have capacity to call meetings and make decision. He was backed by two lawyers who also appeared humble and genuine. They then asked the court to invoke its powers under section 137 (1) of the Companies Act to make the orders which were later made allowing the first respondent 17 to call and hold the meeting alone. Neither the first respondent nor the counsels told the court of the existance of a matter before Mlyambina J. involving the applicants on issues touching the second respondent. None of them told me that the deceased directors and shareholders have legal representative in place who were seeking to be joined to act in the affairs of the company. The first respondent then silently conducted the meeting and made decisions affecting the applicants without involving them while knowing that they are administrators of the estate of the deceased directors and shareholders and parties to the pending case. I think this is nothing but an abuse of the legal process of the highest order. Now, these people are now coming before me who was the judge in the former case, requesting me to refrain from touching what they had mislead me to do, on grounds of functus officio! I think that

is not what we should conduct the legal practice. With what have been revealed above, it is clear on my side that, the authorities cited by counsel for the respondent are distinguishable, for the facts in this case are not only different but unique. The court can, and should invoke the provision of section 95 and 68 (e) of the Civil Procedure Code Act to prevent the abuse of the legal process and the ends of justice from being defeated. The application of the Civil Procedure Code Act is necessary 18 because the Companies Act has a lacuna. It has no provision to govern a situation like this one. I think the legislature should take this as an example and put a provision allowing the court to vacate orders made under section 137 (1) of the Act once it is proved that it was mislead. But further to that, as rightly explained by counsel for the respondent, reading through the ruling of this court, it is reflected that the orders were not final. The court sensed the possibility of future litigations. But, I must say that, I never expected litigations of this type. My worry was on whether the first respondent could act fairly and make an equal distribution of funds to the heirs of the deceased directors and shareholders for the devil is always close to funds. That is the reason why I taxed him to furnish reports to the court and the registrar of companies to keep the records of the

transactions. That said, the objection based on functus officio, with respect, is dismissed. My discussion on the second objection have made my discussion on the application easy. As hinted above; the counsel for the applicants raised questions but could not give answers. It was said that his application should be rejected for failure to give reasons in support of his application. In reply it was said that, cases are not decided based on submissions but pleadings. It was added that this is the reason why people who are not represented, who do not have submissions can still get justice. 19 I have tried to weigh and reason out carefully. I am in agreement with the submission of counsel for the applicant that cases are not decided based on submissions. They are decided based on pleadings and evidence. Submission is merely a chance to give elaboration to facts contained in pleadings and evidence. And the style may differ from counsel to counsel. If the counsel for the applicant have decided to raise questions and leave them to the court without answers, that is his style. I see no problem with it. The challenge he can get is where those questions fail to meet the intended purpose. But looking at them, I don't think that they are useless. In this application the court is requested to vacate its orders made on 26/11/2020. It is also requested to make an order to join the applicants

as interested parties in Miscellaneous Civil Cause No. 57 of 2020 as lawful legal representatives of the deceased shareholders and directors. It is also requested to make an order remitting Miscellaneous Civil Cause No. 57 of 2020 to form part of the proceedings in Miscellaneous Civil Cause No. 351 of 2019. The orders are sought on the strength of reasons contained in the supporting affidavit which has 12 paragraphs. Counsel for the applicant prayed to adopt the contents thereof as part of his submission. The gist of the contents of the affidavit is that the respondents while knowing the existance of Miscellaneous Civil Cause No. 351 of 2019 in which the parties 20 in this application are parties, filed Miscellaneous Civil Cause No. 57 of 2020, mislead the court and obtained the order which is complained of. They thereafter took steps to defect the interests of the applicants in the second respondent company and in Miscellaneous Civil Cause No. 351 of 2019. That, if the orders in the application are not granted together or in part, the interest of the applicants in the said application will be greatly jeopardized. Let us now go to examine the questions possed by the counsel for the applicants and see if they have any assistance to the court. I will try to answer them. The first question is answered in the affirmative on the strength of reasons contained in the affidavit and

annextures for it is clear that the respondents did not disclose to the court that they have a case with the applicants pending before Mlyambina J. The second question is answered in the affirmative for the respondents who had the services of experienced counsel, had a duty to disclose to the court that there was a case pending before another judge involving the parties on the same subject. The third question is answered in the affirmative for this court could not have issued the orders if it had knowledge of the existance of the other case. The fourth question is answered in the affirmative for the second respondent had a duty to disclose to the court that it had been sued by people who claim shares and directorship in the company. The fifth question ask the reason as to why 21 the first respondent remained silent and declined to tell the court what was going on in the other case. The answer is simple. I think he had an evil mind, seeking to get orders to defeat the ends of justice in the other case. That said, what should be done? I think, as it has been hinted above, this is a clear case in which the court can invoke its inherent powers under section 95 and its powers under section 68 (e), both of the Civil Procedure Code Act, to prevent the abuse of the court process and the ends of justice in Miscellaneous Civil Cause No. 351 of 2019 from being defected. Now, acting under

section 95 and 68 (e) of the Civil Procedure Code Act, on the reasons stated above, the court act as under; 1. I find and declare that, the ruling of this court made in Miscellaneous Civil Cause No. 57 of 2020 dated 26/11/2020 was obtained illegally, through concealment of two material facts; the existance of Miscellaneous Civil Cause No 351 of 2019 between the parties on the same subject matter and the status of the applicants who are administrators of the estate of. the deceased directors and shareholdres.

2. I vacate and set aside the ruling of this court madate in Miscellaneous Civil Cause No. 57 of 2020 dated 26/11/2020. 22 3. I direct Miscellaneous Civil Clause No. 57 of 20202 to be remitted to and form part of the proceedings in Miscellaneous Civil Cause No. 351 of 2019.

4. All what was done by the first respondent in compliance to the orders of this court made n Miscellaneous Civil Cause No. 57 of 2020 are declared illegal. The rights of the parties in respect of what was done by the first respondent to be determined in Miscellaneous Civil Cause No. 351 of 2019.

5. The applicants shall have the costs. L.M. Mlacha Judge 24/8/2021 Court: Ruling delivered in the presence of Mr. Omari Msemo, advocate for the appellants and Miss Lucy Nambuo, advocate for the respondents through virtual court. The judge is in Kigoma High Court while the parties are in Dar es Salaam High Court. L.M. Mlacha Judge 24/8/2021 23