CATA MINING CO

IN THE HIGH COURT OF TANZANIA (COMMERCIAL DIVISION) AT DAR ES SALAAM. COMMERCIAL CASE NO. 29 OF 2017 BETWEEN CATA MINING COMPANY LIMITED............................... PLAINTIFF VERSUS VEHICLE AND EQUIPMENT LEASING (TANZANIA} LIMITED ................................ DEFENDANT JUDGMENT B.K. PHILLIP, J The plaintiff lodged this case against the defendant praying for the following reliefs:- (i) A declaration order that the Defendant breached the contract which was between the Plaintiff and the Defendant therein; (ii) Payment of Tshs.296/280,000/= being the amount which has not been remitted by the Defendant to Tanzania Revenue Authority; (iii) Payment of general damages which is to be assessed by the court from the acts of t he defendant; (iv) Costs of this suit; (v) Interest on the total amount at the Court rate from the date of judgment to the date of full settlement hereof; 1 (vi) Any other relief(s) that this Honourable Court shall deem fit to grant. Upon being served with the plaint, the defendant filed its written statement of defence together with a counter claim, praying for judgment and decree against the plaintiff as follows:- (i) Dismissal with costs of the original suit in its entirety. (ii) Declaration that the plaintiff is in breach of the rental agreement. (iii) An order to surrender to the defendant all equipments leased to the plaintiff. (iv) An order that the plaintiff pay the amount of USD 563,746.57 and Tshs. 1,755,594.027.56 being the rental arrears due and owing to the defendant as of March, 2017. (v) An order that the plaintiff pay the amount of USD 75,000.00 being unpaid balance out of USD 200,000.00 which the plaintiff committed to pay on behalf of NCL. (vi) Interest at Commercial rate of 25% on the principal sum due from when it became due to the date of judgment. (vii) Interest on the decretal sum at court rate of 12% from the date of judgment to the date of full satisfaction. (viii) General damages for breach of contract. (ix) Costs of the suit. (x) Interest on the costs at Court rate of 12% from the date of judgment to the date of payment in full. (xi) Any other or further as the Court may find just to grant. 2 It is the defendant's case in the counter claim that, on 10th July, 2014, the plaintiff took over the rental agreement between the defendant and Nyakirangani Construction Limited ("NCL"), the plaintiff's affiliate. The rental agreement was entered into on 6/7/2013. The plaintiff took over the entire agreement including the rental schedules thereto. It is stated in the counter claim that, as a condition for the take over the plaintiff further committed to pay USD 200,000 as part settlement of USD 391,506.27. At the time of filing this case the plaintiff had only paid USD 125,000/= out of USD 200,000/=. It is alleged further that, the plaintiff defaulted to pay the rentals soon after the takeover, despite numerous correspondences for request for the payment of the outstanding rentals. Furthermore, the defendant states in the counter claim that, for the three years of engagement with the plaintiff, only USD 1,105,000/= and Tshs. 300,000,000/= have been paid by the plaintiff whereas the total rental amount ought to have been paid is USD 1,668,746.57 and Tshs. 2,055,594,027.05. The sum of USD 563,746.57 and Tshs. 1,755,594,027.56 is still outstanding in contravention of the express fundamental terms of the rental agreement that the plaintiff shall pay rental charges without fail. The defendant contends that the plaintiff has neglected and/or failed to honour the terms of the rental agreement, hence has breached the express terms of the rental agreement. 3 On the 28/5/2018, when the case was called for Final Pre Trial Conference the plaintiff and his advocate Mr. Augustine Kusalika did not enter appearance, only the defendant's advocate, Mr. Godwin Nyaisa appeared in court, consequently, the predecessor judge in this case my brother Songoro, J as he then was, dismissed the plaintiff's case for non- appearance pursuant to Rule 31(1) of the High Court (Commercial Division) Procedure Rules 2012, strike out the plaintiff's defence and the ordered exparte hearing of the counter claim. The issues drawn for determination of the counter claim are as hereunder; (i) Whether there was a contractual agreement between the parties. (ii) Who between the parties is in breach of the terms of the contract (iii) Whether the defendants action of reprocessing the vehicles leased to the plaintiff was lawful. (iv) To what reliefs are the parties entitled to. To prove its case, the defendant called one witness ('PW1'), Joyce Mutahi who was a country manager of the defendant at the time the agreement behind the dispute at hand was entered into between the plaintiff the defendant. In the witness statement this witness stated that, her responsibility among others were to oversee and surpvise rental issuance and vehicle operations, and making follow up on all outstanding payments to ensure are paid and if not paid to ensure necessary measures are taken to the lessee. 4 The witness stated further that, on 10/7/2014 the plaintiff took over rental agreement between the defendant herein and Nyakirangani Construction Limited (NCL) who is the plaintiff's affiliates, in its entirety including rental schedules thereto. The plaintiff committed itself to pay USD 200,000/= by 30th July, 2014 as part settlement of USD 391,506.57 being arrears due to be paid to the defendant. The plaintiff failed to honour its commitment aforesaid as by March, 2017, the amount of USD 75,000: remained unpaid out of the USD 200,000/=. Furthermore, the witness stated as follows; that, the plaintiff has only paid USD 1,105,000/= and Tshs. 300,000,000/= for all the three years of engagement, whereas the total rental amount that ought to have been paid to the date of filing this suit is USD 1,668,746.57 and Tshs. 2,055,594,027.05, as such by March, 2017 of sum of USD 563,746.76 and 1,755,594.027.56 was unpaid. Numerous correspondences were made but the plaintiff neglected and/or refused to pay the outstanding amount. The defendant is entitled to repossess all vehicles leased following plaintiff's constant breach of the agreement. The defendant has been a good tax compliant and has been issued with the certificate of tax clearance by the relevant tax administrative body. The witness tendered six exhibits to wit; Exhibit Pl, a commitment letter, Exhibit P2 the rental agreement, Exhibit P3-rental schedule forms admitted collectively, Exhibit P4-invoices and statement of accounts admitted 5 collectively, Exhibit P5-invoices admitted collectively and Exhibit P6 - email correspondences admitted correctively. Having analysed the facts of the case and the testimony of the defendant's sole witness, let me start the determination of the issues. Starting with the first issue that is; Whether there was a contractual agreements between the parties, the witness tendered in court exhibit P2 which is a duly signed rental agreement between the defendant and Nyakirangani Construction Limited, fNCL') dated 6/7/2013. In her testimony in chief the witness said that on 10/7/2014 the plaintiff took over the above mentioned rental agreement between the defendant and NCL. That fact is supported by exhibit Pl, which is a commitment letter dated 10/7/2014 signed by the plaintiff. Exhibit Pl stipulates the plaintiff's commitment for the payments of USD 200,000/= and states that the plaintiff essentially took over the lease from NCL and shall ensure all future rental are paid on time. In addition to the above Exhibit P6, which comprises of the correspondences between the plaintiff and defendant, shows that there was a contractual relationship between them. It is my findings that, the defendant has established through exhibits Pl, P2, and P6 that there was a contractual relationship between the parties in this suit. The aforesaid contract has met the ingredients of a valid contract, 6 that is offer, acceptance, full consent, lawful object, consideration and competence of the parties to enter into agreement. The second issue is, who between the parties is in breach of the terms of the contract. In determing this issue the first thing to look into are the terms of the contract, that is what were the terms of the contract? The contract between the parties herein was a rental agreement. The terms of the contract were that, the defendant rented the plaintiff's equipments upon request. Another important term in the contract was the mode and interval of payments of the agreed rental fees in accordance with the rental schedule forms, which were admitted collectively as exhibit P3. Exhibit P3 shows that, the defendant did rent the plaintiff a number of equipments. The rental terms and rental fees are indicated in the rent schedule "form" and the same are duly signed by the parties. Exhibit P3 at Article 9.1(a) provides that all rentals installment have to be paid in time. Exhibit P4 and P5 comprises of invoices, credit, debit notes and statement of account, all these show how much was charged and the outstanding amount. Exhibit Pl the commitment letter, by the plaintiff states categorically that the plaintiff have been in arrears of payment of the rental fees, the same is revealed in exhibit P6. With what I have pointed out herein above, I am satisfied that the defendant has brought sufficient evidence to show that the plaintiff has not paid the rental charges as 7 agreed thus, the answer to the second issue is straight forward that, it is the plaintiff who breached the terms of the agreement for failure to pay the rental charges as agreed between them. The third issue is whether the defendant's action of repossessing the vehicles lessed to the plaintiff was lawful. The answer to this issue is found in the exhibit Pl and exhibit P3. Clause 11 of exhibit P3 provides as follows; "Repossession of vehicle and/or equipment: we reserve the right to responses any and/or all of our vehicles and/or equipment rented by you, due to the non-performance or breach of any of your obligations to us under this Rental Schedule. This repossession will be at our discretion and without any further notice to you, and will be carried out at your own expense". Paragraph 2 of exhibit Pl provides as follows; "We, Cata Mining Limited acknowledge that Nyakirangani Construction Limited (NCL) and VAELL entered into a lease agreement dated &h July 2013 and subsequently leased an assortment of assets which are currently under operation NCL have been in arrears of a total of USD 391,506.27 (Three Hundred and Ninety One Thousand, Five Hundred and Six Shillings and Twenty Seven Cents)". From the foregoing, it is my finding that, the defendant is justified to repossess the equipment rented to the plaintiff since the plaintiff breached 8 the terms of the agreement which are in a simple and unambiguous language. The last i ssue is to what reliefs are the parties entitled to. Before I make the determination on the last issue let me point out here that I noted that at page 2 of the witness statement it reads that the unpaid money in Tshs. is 101,657,444.25 while, in all other pleadings and documents the amount claimed is indicated as Tshs. 1,755,594,027.56. The learned Advocate for the defendant in his final submission submitted that the figure appearing in the 2nd page of the witness statement that i s Tshs. 101,651,44.25 is due to typo error and should not be taken as a contradiction in the witness's testimony since all other documents in this case show that the outstanding amount is Tshs.1,755,594,027.56. He referred this court to the case of DP and Company Limited versus National Housing Corporation & 3 others Land case No. 3/2004 (unreported) in which Kileo, J as she then was, she was confronted with a similar case whereby a party gave wrong description of the suit premises by mistakenly writing No. 4 instead of 5 in the description of the location of the suit premises and she held that, what happened is a mere typing error, since all the evidence throughout show the correct description, likewise in the instant case, the defendant's pleadings and documentary evidence show the amount due to be Tshs.1,755,594,027.56 therefore, I am inclined to agree with the defendant's advocate, what happened is a typing error. Having made a finding that the plaintiff is the one who breached the contract and exhibit P3 (The statement of account) shows clearly that the outstanding amount as at March, 2017 is USD 563,746.57 and 9 Tshs. 1,755,594,027.56, it is my finding that the defendant has proved its case to the standard required by the law. I hereby grant judgment and decree in favour of the defendant in the counter claim as follows:- (i) The Plaintiff has breached the rental agreement (ii) The plaintiff is ordered to pay the defendant USD 563,746.57 and Tshs.1,755,594,027.56 being rental arrears due as of March, 2017. (iii) The Plaintiff is ordered to pay the defendant USD 75,000/= being unpaid balance out of the arrears of rental charges. (iv) The plaintiff shall pay the defendant interest at Commercial rate of 25% on the principal sum due from the date it became due to the date of judgment. (v) The plaintiff shall pay the defendant interest on the decretal sum at court rate of 12% from the date of judgment to the date of full satisfaction. (vi) The plaintiff is ordered to surrender all equipments leased to the defendant. (vii) The plaintiff shall bear the costs of the suit. io