20070905 TZHC Dar es Salaam

,; ',• .. ..; ~ . IN THE HIGH COURT OF TANZANIA (LAND DIVISION) AT DAR ES SALAAM LAND CASE NO. 9 OF 2006 BISH INTERNATIONAL B. V ........................... ~ ......•.... l sr PLAINTIFF RUDOLF TEUNIS VAN WINKELHOF........................ .. 2N°-PLAINTIFF VERSUS CHARLES YAW SARKODIE ................................... 1sr DEFENDANT BISH TANZANIA LIMITED ...................................... 2N° DEFENDANT RULING Rugazia, J. The defendants in this case, through their advocate Mr. Nge.leshi, raised four preliminary objections which are as hereunder: i) That the rt Plaintiff has no legal capacity to sue in its name following its striking off the Register in its country of incorporation; ,= ·. ii) The· suit. is incompetent for want of authorization by the .,I! ~ .. 1t plaintiff's bdard of directors; -,... \ iii) The agreement on record is bad in law as shareholders are not legally entitled to divide among themselves the assets of a company such as the rt plaintiff before 1 commencement and completion of the winding up process; iv) The :zid plaintiff and the 1st defendant are not privy to the agreement on record •· The defendants' Counsel submitted at length in support of the pr~iiminary objections but plaintiffs' Counsel was of the view that the preliminary objections raised did not at all meet the test. The law on preliminary objections which is widely followed ,, is as was laid down in the case of Mukisa Biscuit Manufacturing .\ Co. Ltd vs West End Distributors Ltd (1969) E. A. 696 at p. 700 I ,I wherein Law, J. A. had this to say: u So far as I am aware, a preliminary objection consists of a point of law which j: has been pleaded, or which arise by clear i implication out of the pleadings, . and which if argued as a preliminary point • may dispose of the suit.... " '.:' , I \ - ... '"~. ._Counsel for plaintiffs had to so react following a claim by -~-. l Mr. Ngeleshi that the first plaintiff was suspended in 2001 from operating as Consulting Engineers and was eventually de- 2 ( registered as such by the Engineers Registration Board in April, 2004. That on l st February, 2006 the 1st plaintiff was struck off the Register in the Netherlands, its country of incorporation, thereby ceasing to exist as a corporate entity. The order striking it off was annexed. Mr. Ngeleshi submitted further that this action was filed on l 8th January, 2006 while the l st plaintiff was still in existence. However, he asserted, after being struck off the Register, the first plaintiff ceased to have any legal existence and by reason thereof the suit abated in the absence of any juristic person to prosecute the same. He contended also that the cause of action did not survive the demise of the first plaintiff and in consequence thereof this action has to be struck out. Counsel invited me to revisit the case of Banque Internationale de Commerce Petrograd vs Goukasson (1923) K. B. 621 at p.691 where it was held: " ... If the artificial ·person is destroyed in ifs country of origin, the country who~e, law creates it as. a person, it appears to me it is destroyed' everywhere ,. as a person. I cannot ,~ conceive a company, whose existence and : I 'I attributes arise solely from the laws of Russia, continuing to exist when the laws of Russia say it is dissolved.... '' 3 r 0 Counsel submitted that since the l st · plaintiff no longer exists, it follows, just as night follows day, that it loses its legal personality to maintain an action. In view of this, it was prayed that the suit be struck off for being incompetent. •· ,.. In respor)se, Counsel for the plaintiffs submitted that the preliminary objections raised do not meet the test set. In the first place, it was submitted that it is wrong and improper to annex . documents to the submissions which are materials of evidence. The said annextures include what is referred to as the purported striking order and purported Memorandum and Articles of Association. I was referred to the case decided by this court where the practice of attaching annextures was discouraged and, ~onsequently, all annextures expunged from the record - See Vocational Education Training Authority vs Ghana Building Contractors and Another Civil Case No. 198 of 1995 HC - DSM (unreported). I think that is good law because, allowing a party to _,~ attach annextures to the submissions, is like allowing production .,. . of evidenae 'at a prernature stage. And what is worse is that -.,... \ such documents cannot be tested by the adversary party say, by cross-examination. By any yardstick, I think this is a practice which should be discouraged. Only authorities referred to in the 4 ) submissions should be annexed. That said, I now order that all such documents be expunged and returned to Counsel. As it was held in the Mukisa Biscuit case (supra), the point could not have been made clearer; this is what wc:ts said: "'.. A preliminary objection is in the nature of what used to be a demurrer. If raises a pure point of law which is argued on the assumption that all the facts pleaded by the other side are correct. If cannot be raised if any fact has to be ascertained or what is sought is the exercise of judicial discretion" I can say it without the slightest doubt that the preliminary objections as raised do not meet the test. It is clear that they are to be ascertained. .,--- :, One point I consider to be crucial in view of the second preliminary . objection J . is need for authorization by the Board prior to comme·ncement of legal proceedings. This authority becomes even more important in view of the allegation (though challenged), that the l st plaintiff no longer exists. Since 5 (j· ) as we are told the power to commence legal proceedings is i ' giveh to the board by virtue of Article 12(3)(1) of Articles of f I Association, it is only imperative that such authority be produced to clear any shadow of doubt. •· st In view of the foregoing, the 1 plaintiff is ordered to pro,9uce the so.me a month from the date of delivery of this ruling. Failure to abide by the order will result in the striking out of the suit. i iI I The preliminary objections succeed to that extent only otherwise they stand dismissed. Costs to be in the cause. I - . / //· J .· / 007 6