20151124 TZHC Dar es Salaam

1 IN THE HIGH COURT TANZANIA AT DAR ES SALAAM CIVIL CASE NO. 69 OF 2008 CHRISTOTHER APOLINARY RUTATIKA} NGOSENGWA DANIEL·MCHOME }PLAINTIFFS MABELE MPIGAHODI & 13 OTHERS } v. PERMANENT SECRETARY MINISTRY OF INDUSTRY, TRADE · AND MARKETING ••••••••••...••••••.••••.•.••• 1 sT DEFENDANT CONSOLIDATED HOLDING . CORPORATION ................................ 2No DEFENDANT PERMANENT SECRETARY, MINISTRY OF FINANCE ................... 3R0 DEFENDANT THE ATTORNEY GENERAL ............... 4TH DEFENDANT JUDGMENT Date of last order ~- 30/10/2015 : Date ofJudgment : 24/11/2015 · Shangwa, J. This · case was presented for filing on 7th May, 2008. It was presented by the plaintiffs' ., 'Ii. 2 representatives' after being granted leave to do so by this Court Mwarija, J as he then was on 14th August, 2007. The plaintiffs are 16 in number including their representatives namely Christopher Apolinary Rutatika, Ngosengwa Daniel Mchome and Mabele Mpigahodi. The plaintiffs are former employees of the former National Shipping Agency Company Ltd (NASACO). They used to work in NASACO'S three subsidiary Companies namely Victoria shipping Agencies Company Ltd, Azania shipping Agencies Company Ltd and Oceanic shipping Agencies Company Ltd. They are claiming against the defendant jointly and severally for payment of a total sum of Tshs 45,533,755/= as salary in arrears and general damages of Tshs 500,000,000/=. '\ I\ • 3 Mediation was conducted on 3 rd May 2011 by Mgaya, J but it failed. On 8 th March 2013, counsel for the plaintiffs informed this court that there was intention to settle the matter out of court. The court gave the parties sufficient opportunity to settle the matter out of court. On 21 st November, 2013, the court was informed by the plaintiffs' representatives that settlement out of court failed. On 2 nd June, 2014, the speed track of this case was re- fixed at speed track 3 as the earlier speed track had expired. I started hearing this suit on the same day and five issues were recorded for determination by this court. Mr. Mwarabu led the plaintiffs' case and Mr. Mwakahesya and Anna Malealle led the defendants' " 4 case. The issues which were recorded for determination are as follows:- 1. Whether the Board's decisions following the directive of National Shipping Agencies co; Ltd had the effect of extending the period of tenure of office of the Plaintiffs. 2.Ifthe answer to issue No. one is in the affirmative whether the said decisions needed the consent or approval from the Presidential Parastatal sector Reform Commission. . 5 3. Whether the plaintiffs were given a limited time span in carrying out the duties under the winding up process of the subsidiary . companies. 4. Whether the limited time span stated in issue No 3 above was extended by the defendants. 5. To what reliefs are the parties entitled. Before determining these issues, let me state the facts behind this case. They are as follows:- " 6 In July, 1997, the National Shipping Agencies Company Ltd hereinafter to be referred to as NASACO was declared to be a specified public corporation by GN NO. 543 of 1997. It was so declared by the Minister for finance under sections 38 ( 1) and 44 ( 1) of the Public Corporations Act, 1992. NASACO had four subsidiary Companies namely Victoria shipping Agencies Ltd, Azania shipping Agencies Ltd, Oceanic shipping Agencies Ltd and Worldwide shipping Agencies Ltd. Each subsidiary company had its Board chairman and members. These subsidiary companies were liquidated by the Government. Thereafter, the Presidential Parastatal Sector Reform Commission hereinafter to be referred to as PSRC appointed a care taker Manager to NASACO and to each subsidiary 7 company and instructed them to hand over all assets and liabilities to NASACO Holding before or on 19 th · December, 2003. PSRC also appointed one Bartholomew Samson Kayira and Ernest Nassoro Ngaliluwula to be joint liquidators and appointed the Loans and Advances Realization Trust (LART) as liquidation consultants to NASACO subsidiary companies. In December, 2002, there was mass retrenchment of employees in NASACO subsidiary companies. A skeleton staff was retained in each subsidiary company to safeguard the companies' assets and to assist the Government in the winding up process of NASACO subsidiary companies. Finding that there was need to discuss among other things ... 8 the tenure of office of the skeleton staff, the care taker Managers convened a meeting of the Boards of all subsidiary companies to discuss about it. During the meeting, it was agreed that the tenure of office of the skeleton staff (plaintiffs) should at least be from January, 2003 to February, 2004. PSRC did not interfere with the Boards decision with regard to the tenure of office of the skeleton staff as above mentioned. When the said period of tenure of office of the skeleton staff expired, the handing over process of assets and liabilities by the care taker Managers to NASACO Holding was not complete. So, the skeleton staff (plaintiffs) in consultation with the care taker Managers continued with their duties of safe guarding " 9 the assets and clearing the liabilities of their respective subsidiary companies up to July, 2004. During the period in which the plaintiffs continued with work that is between March 2004 and July, 2004, they were not paid their monthly salaries by PSRC totalling Tshs 45,533,755/=. The plaintiffs' cause of action arose . from the refusal by the Government relevant authority to pay them the said total amount of their monthly salaries for the work done. That is the end of the facts behind this case. Let me mention in passing that when this case was presented for filing seven years and six months ago todate, the second defendant was Consolidated Holding Corporation, the successor of PSRC. 10 Recently, the duties and responsibilities of the said defendant were assumed by the Treasury Registrar. So, for the purposes of this suit, the second defendant has to be read as the Treasury Registrar instead of Consolidated Holding Corporation. I now go to the issues which this court was called upon to determine. Issue No I and 2 are interrelated. Also, issue No 3 and 4 are interrelated. I will accordingly deal with them. On the 1st and 2 nd issues respectively. The court is called upon to determine as to whether the Boards decisions following the directive of NASACO had the effect of extending the period of tenure of office of the .., 11 plaintiffs and if the answer to issue NO. 1 is in the affirmative whether the said decisions needed the consent or approval from PSRC. First of all, let us look at the facts which are not in dispute. They are as follows:- One, that NASACO was declared to be a Specified Public Corporation by GN NO. 543 of 1997. Two, that NASACO had four subsidiary companies namely Victoria shipping Agencies Ltd, Azania shipping Agencies Ltd, Oceanic shipping Agencies Ltd and Worldwide shipping Agencies Ltd. Three, that each subsidiary company had its Board chairman and members with authority to make decisions and pass 12 resolutions on various matters related to its business affairs including resolutions to sue the debtors and direct the way forward whenever such need arose. Four, that the aforesaid subsidiary companies were liquidated by the Government. Five that PSRC appointed one Bartholomew Samson Kayira and Ernest Nassoro Ngaliluwula to be joint liquidators of NASACO subsidiary companies and appointed the Loans and Advances Realization Trust (LART) as liquidation consultants to NASACO subsidiary companies. Six, that in December 2002, there was mass retrenchment of employees 1n NASACO subsidiary companies and that a skeleton staff was retained in each subsidiary company to safeguard among other things the company assets. Seven, that . ,..) 13 PSRC appointed a care taker Manager to NASACO and appointed care taker Managers to its subsidiary companies with instruction to hand over all assets and liabilities to NASACO Holding before or on 19 th December, 2003. After looking at the facts of this case which are not in dispute, let me resort to what the court has been called upon to determine on issue NO. 1 and 2. On these issues, I should hurriedly say that the Boards decisions had the effect of extending the period of tenure of office of the plaintiffs. If one looks at the minutes of Azania shipping Agencies Ltd Board meeting held on 25 th February, 2004 at 1015 hours at NASACO Board Room, it will be seen that the Board 14 members observed that the skeleton staff that was retained to perform various functions during the company's winding up process had done its job as instructed by PSRC and NASACO and noted with great concern that PSRC had not paid them their remunerations and it was recommended that the cut off date of remunerating them should be the date when PSRC pays them their remunerations. In my opinion, the said recommendation by the Board members had the effect of extending the period of their cut off date. Had that not been the case, the Board members would have recommended that they should hand over their business to NASACO care taker Manager immediately. I am of opinion also that the decisions of the Boards were independent and they did not need the consent or approval from PSRC. 15 This dispos~s of the 1st and 2 nd issues respectively which are partly answered in the positive and partly in the negative. On the 3 rd and 4 th issues respectively the court is called upon to determine as to whether the plaintiffs were given a limited time span in carrying out the duties under the winding up process of NASACO subsidiary companies and whether the limited time span was extended by the defendants. It is. not in I • dispute that the plaintiffs were retained to do various duties during the winding up of NASACO'S subsidiary companies with effect from January, 2003 to 16 February, 2004. However, the plaintiffs who were committed to work continued to work up to July, 2004 which was beyond the period of their retention as skeleton staff. When this happened, neither the care taker Manager of NASACO Holding nor PSRC nor the joint liquidators wrote them a letter to question them as to why they were continuing with their duties beyond the period of their retention as skeleton staff. Therefore, I think that the defendants refused to pay them beyond the period of their retention in office on ; I ' mere bureaucratic grounds with the effect of denying them their constitutional right. In connection to this, whether the defendants expressly extended the period of their retention or not so long as they worked beyond the said period as expressed by the Board members 17 and by the Managing Director of NASACO just as it will soon be shown when determining the 5 th issue, to deny them payment of their salary in arrears would be unlawful and contrary to the grand norm. This disposes of the 3 rd and 4 th issues which are answered in favour of the plaintiffs. On the 5 th issue, the court is called upon to determine as to what reliefs are the parties entitled. This issue is very simple and I will answer it in the following way. It is an international grand norm which is very well established that every individual has to be remunerated for work done. I do believe that the plaintiffs' representatives who testified before this court namely P.W. l Christopher Apolinary Rutatika ..... " 18 and P.W.2 Ngosengwa Daniel Mchome who are senior retired officers could not tell lies that they worked together with the rest of the plaintiffs beyond the period of their retention for a period of five months from March, 2004 to July, 2004. I found them to be truthful witnesses. Moreover, there is a letter exhibit Pl in support of the claim of their salaries for the said period dated 8 th October, 2014 with ref. No 001/24/27 written by the ' ',· Managing Director of NASACO Mr. D. R. M Lwimbo addressed to the Principal Secretary, Ministry of Industry, Trade and Marketing confirming that they worked beyond the period of their retention and that ..,. 19 they deserve to be paid their salaries for the said period as follows:- Azania - 18, 939, 030. 00 Oceanic - 10, 640, 920. 00 Victoria - 15, 953, 805. 00 Total Tshs 45,533,755/=. Under such circumstances, justice demands that the Treasury Registrar who is the successor of Consolidated Holding Corporation should immediately pay the plaintiffs the aforesaid sum of money as of their right. ,_ 20 Let me now consider as to whether the plaintiffs are entitled to Tshs 500, 00, 000 / = as general damages. They claim that during the Period of their unpaid salaries, they suffered financial loss and Psychological torture. Although, I entirely agree with them that during the five months' Period without salary for the work done did cause them to suffer Psychological torture, I do not entirely agree with them that they suffered financial loss. Their argument that they suffered financial loss because they could have used their unpaid salaries to do some petty business to generate income is not tenable. Looking at page 8 of their written submissions in support of their claims, it will be seen that they used to earn hand to mouth monthly salaries which could not have ., 6, 21 enabled them to do business had they been paid by the Government as expected by them for the services they rendered to NASACO subsidiary companies from March, 2004 to July, 2004. In my judgment, the plaintiffs are justified in their claim of general damages for Psychological torture. Certainly, during the five months period of unpaid salaries running from March 2004 to July, 2004, they could not confortably meet their financial demands to care for their families which made them fall into awful and stressful situations. In addition to that, they felt bad that the Government was denying them their right for the work done on flimsy grounds of lack ofa formal letter from the relevant Government authority • t 22 extending their tenure of office beyond February, 2004. This sort of Psychological torture entitles them to an award of general damages. However, despite the fact that they are entitled to general damages, I think the amount of Tshs 500, 000, 000/= prayed by them in respect of the said damages is extremely on the · high side. I reduce it to Tshs 48,000,000/= only. Therefore, each plaintiff is awarded Tshs 3, 000,000/= as general damages to be paid by the Treasury Registrar. The plaintiffs are also entitled to interest on the decretal sum at the Court rate of 12% per annum from the date of judgment to full payment plus costs of this suit. This disposes of the fifth issue. After disposing of the five issues which the Court was called upon to determine, I finally declare that -~ . -~ , · ~ ...tr t 23 judgment is entered in favour of the plaintiffs with Costs. - ~ A.Shangwa JUDGE 24/11/2015 Court in the presence of Mr. Mwarabu, Advocate for the plaintiffs and Mr. Mwintasi, State Attorney for the defendants this 24 th day of November, 2015. A.Shangwa JUDGE ., 24/11/2015