caltex t ltd vs patrick ngiloi ulomi ta ngiloi enter 2005 tzhccomd 5 1 july 2005

IN THE HIGH COURT OF TANZANIA (COMMERCIAL DIVISION) AT DAR ES SALAAM COMMERCIAL CASE NO. 90 OF 2003 CALTEX TANZANIA LIMITED................. PLAINTIFF VERSUS PATRICK NGILOI ULOMI t/a NGILOI ENTERPRISES.......................... DEFENDANT Counsel: Mr. Mbuya for Plaintiff Mr. A. Shayo for Defendant Date for Final Submissions: 15 June 2005 Date of Judgment: 1 July 2005 » JUDGMENT Dr. BWANA, J: 1. The Plaintiff is a limited liability company incorporated in Tanzania under the companies Ordinance, Cap 212. It conducts the business of selling petroleum products in the country. The Defendant is a natural person who carries on business under the style and firm name of Ngiloi Enterprises. The defendant used to purchase petroleum products and lubricants from the plaintiff supplied on 30 days credit. The said credit facility availed to the Defendant were up to shs. 100,000,000/-. 1 2. The said supply of petroleum products and lubricants were made against tax invoices and delivery notes for products supplied from Dar es Salaam and with tax invoices but without delivery notes for supplies collected from Moshi, where the Defendant is based. 3. Initially the Plaintiff claimed from the Defendant a total sum of shs.449,419,851/38, as at 19 May 2004. However eventually that sum was reduced (following reconciliation of their accounts) to shs. 168,118,000/- - a sum claimed by the Plaintiffs to be outstanding still. However that claim is strenuously denied by the Defendant. According to the latter’s averment (supported by Exh DI to D3), the sum still outstanding is shs.68,933,561/80. The Defendant also challenges the Plaintiffs claim of interest at 25% per annum (or at all), stating that interest wds never stipulated in their agreement and that there is no proof that the plaintiff has suffered loss. 4. The following issues were framed for the determination by this court:- 4.1. Whether the Defendant owes the Plaintiff the sum of shs. 164,453,851/; and 4.2. What reliefs the parties are entitled to. I must note at the outset that the figures for the sums claimed tend to differ/fluctuate depending on the evidence adduced by a witness or a document relied upon. That being the case then, this Court has to be careful in deciding which figure should be relied upon. 2 The Plaintiff called Yusufu Hamis and Mbeki Loshilu Millya as its witnesses PW1 1 and PW2 respectively. The Defendant on its part, called one witness namely Patrick Ngiloi, the Defendant. 5. On 18 July 2003, one A. M. Ndunguru had written to the Defendant a letter which he termed as a “Final Demand Notice”. Because of its importance, I reproduce it wholly hereunder (Exh.Dl):- 18th July 2003 Mr. Ngiloi Ulomi Enterprises P.O. Bix 6644, MOSHI Tel.027 2750908 Dear Sir, RE: FINAL DEMAND NOTICE YOUR BOUNCED CHEQUES TOTALING TSHS.236,678,000/00 We hereby demand payment within 8 (eight) days from the date of this demand notice to replace the equivalent amount of your dishonoured cheques indicated here below by either cash payment or banker’s cheque. Cheque No. Date Amount (Tshs.) 121354 19/5/2003 20,000,000.00 12819 24/3/2001 18,290,000.00 700211 27/3/2003 12,760,000.00 700216 4/4/2003 43,708,000.00 81513 14/9/2001 17,085,000.00 81519 21/9/2001 12,558,000.00 81516 17/9/2001 15,054,000.00 81522 23/9/2001 15,054,000.00 700214 1/4/2003 42,090,000.00 81518 21/9/2001 21,428,000.00 81825 6/8/2001 18,651,000.00 236,678,000.00 Be informed that your file has been handed over to Tina & Company who will be instructed by us to press for criminal charges against you in event you fail to replace the bounced cheques with cash within 8 days of the date of this demand notice. Please note that, this does not exclude Tina & Company to institute civil case against you. Yours truly CALTEX TANZANIA LIMITED A.M. Ndunguru MANAGER EXPORT SALES It is evident from Exh DI therefore, that as at 18 July 2003, the outstanding sum claimed is said to be shs.236,678,000/- and not shs.449,419,851/38 as stated in the plaint. That is not all. It is also uncontroverted that between that time and even after this suit had been instituted, the defendant made payments to the plaintiff thus reducing further the amount due. The Defendant avers for example, that he paid the sum of shs.20,000,000/- “ before the start of hearing” of this case. That fact is uncontroverted. The other uncontroverted fact is the two payments effected by the defendant in favour of the Plaintiff through “SAFARI CARGO” (Exh D5) totaling shs.90,837,566/82 (i.e. shs.63,413,835/- and 27,423,731/82) added together). The parties had also agreed not to consider the sum of 4 shs.6,540,000/38. It is therefore, my considered view that all the above figures drastically reduce the amount claimed. 6. The parties were at issue in respect of the sum of shs. 18,290,000/- claimed by the plaintiff. It is averred that payment of that sum has not been effected because a cheque issued to that effect - Exh D3 - bounced. The bank sent it back to the Plaintiff with a note “ REFER TO DRAWER”. That note is dated 31 March 2001. The defendant denies the origin of that cheque. He disclaims it and its signature. It is his evidence that the plaintiff never supplied products worth that sum as there are no supporting documents to support it i.e. in the form of copies of tax invoice or delivery notes. It is further averred by the defendant that had that “bounced” cheque been genuine, there was no reason preventing the plaintiff from sending back the said bounced cheque to the defendant,. requiring him to issue another cheque for the equivalent sum or correct the errors on the face of that cheque. 7. I do concur with the defendant. The signature allegedly belonging to the defendant is visibly different from the defendant’s signatures on other exhibits. In the absence of other documentary evidence supporting the averment that the defendant did receive petroleum products from the plaintiff worth that sum (of shs. 18,290,000/-), I am inclined to hold that the said cheque was not issued by him and further that there was no petroleum products and/or lubricants supplied by the plaintiff to the defendant, valued at that sum. 5 8. I equally do concur with the defence case that following Mr. Ndunguru’s letter, Exh DI, no further delivery of fresh petroleum products and/or lubricants was affected to the defendant. Therefore the defendant’s liability, if any, is up to that date, i.e. 18 July 2003. In fact according to Exh DI, the last cheque issued by the Defendant and which is said to have bounced, is the one dated 19 May 2003. The procedure for the supply and delivery of products has been described as follows. Whenever the defendant made an order for the supply of fuel, the Plaintiff would issue tax invoices on which the amount of fuel was to be shown. Upon collection of the fuel, the driver would sign the tax invoice or delivery note and the vehicle registration number indicated on the document. Some of those documents were tendered as Exhibits in support of the plaintiffs case. The defendant was then to issue post dated cheques for the value of fuel supplied. Those cheques were to be banked at the expiry of the 30 days credit period. It is also not in dispute that the defendant’s credit was limited to shs. 100,000,000/-. Although the plaintiffs case now shows that the credit limit was a mere internal arrangement which did not prevent the defendant from receiving credits above that limit, the defence case controverts that “modified” version of the terms and conditions. I am inclined to hold that the said term was valid and adhered to. 9. All the above considered and the arithmetical calculations analysed, I have come to the considered conclusion that the defendant is liable in the sum of shs.68,933,561/80. That was the sum that is owing to the plaintiff, as at the date of filing of this suit. 6 10. Is the plaintiff entitled to interest? Both parties seem to admit that in the credit facility agreement the issue of interest was not stipulated. This admission is advanced inspite of the fact that interest is claimed by the plaintiff in its plaint. The foregoing notwithstanding, it is my considered view that the plaintiff is entitled to claim interest on the sum awarded. This view is fortified by relevant provisions of the law as well as by authoritative decisions of courts. 11. Section 29 of the Civil Procedure Code, 1966 states:: “ The Chief Justice may make rules prescribing the rate of interest which shall be carried by judgment debts and without prejudice to the power of the court to order « interest to be paid up to the date ofjudgment at such rates as it may deem reasonable, every judgment debt shall carry interest at the rate prescribedfrom the date of the delivery of the judgment until the same shall be satisfied.” The above quoted provisions of section 29 were further amplified by the decision of the Court of Appeal of Tanzania (per Nyalali C. J., as he then was) in the case of Njiro Furniture Mart Ltd vs TANESCO (1995) TLR 205 thus: “Under S.29 of the Civil Procedure Code, a court has a power to order interest to be paid up to the date of judgment at such rates as it may deem reasonable..It is apparent from the provisions of S.29 of the Civil Procedure Code read together 7 with rule 20 of Order XX of the same Code, that interest is payable on a judgment debt from the date of delivery of the judgment until the same shall be satisfied...” In the instant case and as per prevailing practice and case law, any interest to be chargeable has two dimensions. First is one charged from the date of filing of the suit up to the date of judgment. In commercial transactions such as the instant one, a preferable and reliable practice is one which equates such a rate with the rates chargeable by commercial banks. Currently banks in Tanzania charge interest rates at between 13% and 18% per annum. The second dimension is interest on the decretal sum which is calculated from the date of judgment until full payment of the decretal sum. This practice, as stated by Nyalali, C.J. (Supra), stems from the provisions of Order XX R 21 (1) of the Civil Procedure Code which state: “ The rate of interest* on every judgment debt from the date of delivery of the judgment until satisfaction shall be seven per centum per annum or such other rate, not exceeding twelve per centum per annum as parties may expressly agree in writing before or after the delivery of the judgment or as may be adjudged consent. ” I am mindful of the fact that the parties hereto never stipulated on the issue of interest. That notwithstanding, I entirely agree with Lord Herschell, L.C. in the London, Chelhan and Dover Railway Coy. vs South Eastern Railway Coy. (1893) AL 429, case thus: “.. I think that when money is owing from one party to another and that other is driven to have recourse 8 to legal proceedings in order to recover the amount due to him, the party’ who is wrongfully withholding the money from the other ought not in justice to benefit by having that money in his possession and enjoying the use of it when the money ought to be in the possession of the other party who is entitled to its use...I should certainly be disposed to give..... anybody in a similar position in terest upon the amount withheldfrom the time of action brought at all events... ” No wonder that the decision of Lord Herschell meted out over a century ago, is still relevant today as Forbes J, states in T.V.L. Food and Distribution vs Greater London Council (1982) 1 WLR 149: “ I do not think that modern law is that interest is awarded against the defendant as a punitive measure for having kept the plaintiff out of his money. I think the principle now recognized is that it is all part of the attempt to achieve restitution in integrum. One looks therefore, not at the profit which the defendant wrongly made out of the money he withheld. This would indeed involve the scrutiny of the defendant’s financial position - but at the cost to the plaintiff of being deprived of the money which he should have had. I feel satisfied that in commercial cases the interest is intended to reflect the rate 9 at which the plaintiff would have had to borrow the money to supply the place of that which was withheld....the correct thing to do is to take the rate at which plaintiff in general could borrow money....... ”(emphasis added). All the above considered therefore, I am inclined to find that the plaintiff is entitled to interest on the amount awarded. 12.In conclusionjudgment is entered in favour of the plaintiff to the extent shown herein. The defendant is ordered - 12.1. To pay to the plaintiff the outstanding sum of shs.68, 933,561/80. 12.2. The said sum to carry an interest of 13% per annum from the date ' of filing of this suit until the date hereof. 12.3. The said decretal sum to carry an interest of 7% per annum from the date hereof until payment in full. 12.4. Each party to bear its costs of this suit. It is accordingly ordered. Dr. SJj. Bwana / / JUDGE 1/7/2005 2,211 words 10