JUDGMENT Clara Jones Mwansasu vs

THE UNITED REPUBLIC OF TANZANIA JUDICIARY IN THE HIGH COURT OF TANZANIA MBEYA SUB - REGISTRY AT MBEYA CIVIL APPEAL NO. 36 OF 2023 (Originating from the Decision of the District Court of Mbeya at Mbeya in Civil Case No. 7 of 2022) CLARA JONES MWANSASU .…….………..…...………………..…………. APPELLANT VERSUS THE MANAGING DIRECTOR OF ADAM CHINA SUPPLIERS COMPANY ………………….……………... RESPONDENT JUDGMENT Date of last Order: 9th August, 2024. Date of Judgment: 20th August, 2024. KAWISHE, J.: The appellant, Clara Jones Mwansasu, being aggrieved with the ruling of the District Court of Mbeya at Mbeya (the trial Court) in Civil Case No. 07 of 2022, filed an appeal before this court with four grounds of appeal reproduced hereunder regardless of the errors therein: 1. That, the District Court Magistrate erred in law and fact by failure that the respondent has no locus standi. 2. That, the District Court Magistrate erred in law and fact by deciding that the appellant has no locus standi without considering the appellant’s evidence which proofs his interest and right has been breached in the case. 1 3. That, the District Court Magistrate erred in law and fact by disregarding the evidence adduced by appellant herein which proves that there was an agreement between appellant and respondent herein and named one Grace Kapula was only used as agent of the appellant and it was known by both parties that Grace Kapula was only agent of appellant (The Principal). 4. That, District Court Magistrate erred in law and fact on relying to the weak evidence adduced by the respondent which finally led to unfair decision. Briefly, the factual background of this case as gathered from the original case records are to the effect that: The appellant was the plaintiff before the trial court in a suit filed against the respondent herein claiming for recovery of Tanzanian Shillings six million nine hundred and sixty-five thousand (TZS. 6,965,000/=). Her claim was based on breach of contract for purchase of face mask through the respondent. When the matter was scheduled for hearing before the trial court, the respondent raised two points of Preliminary Objections, which are: First, that the District Court had no jurisdiction to entertain the matter and Second, that the plaintiff had no locus standi to sue the respondent. The trial court found the second ground of preliminary objection with merit and proceeded to dismiss the suit. Dissatisfied with the said decision, the appellant preferred the instant appeal with four grounds of complaint. 2 Upon the parties’ agreement and an order of this court, the appeal was heard by way of written submissions. The court set the schedule and the parties complied with it. The appellant was represented by Mr. Barnaba Pomboma while, the respondent appeared under the service of Ms. Irene Mwakyusa, both learned counsel. Submitting on the first ground of appeal, Mr. Pomboma appellant’s learned counsel argued that, the respondent’s status was not justified on the proceedings of the trial court. That, it was not stated who was supposed to be sued between the Director and the Managing Director of Adam China Suppliers Company and one Grace Kapulula (the agent). He further argued that, the latter is a legal person while the former is a natural person. Thus, failure of the trial Court to distinguish the two makes the whole decision null and void. Mr. Pomboma added that, the appellant being a third party was instructed by the agent to order face masks on behalf of the respondent herein. He continued that it is trite law that, the principal can be liable for an act or omission done by the agent in the course of performance of his duties as instructed by the principal. In support of his argument, he cited section 178 of the Law of Contract Act (Cap. 345, R.E. 2019) and the case 3 of Machame Kaskazini Corporation Limited (Lambo Estate) vs. Aikaeli Mbowe [1984] T. L. R. 70, which was cited in the case of Emmanuel Mgaya vs. Charles Busumabu, Civil Appeal No. 25 of 2021. Arguing the second ground, the learned counsel submitted that the appellant clearly disclosed sufficient reasons to prove that she has locus standi to sue the respondent and showed the court that her rights and interests where infringed, as a contract she entered with the respondent through Grace Kapula was not considered. For emphasis, he cited the case of Kanan Said vs. Nenumba Mbando, Misc. Land Appeal No. 81 of 2021 (unreported) which cited the case of Lujuna Shubi Ballonzi vs. Registered Trustees of Chama cha Mapinduzi [1996] T. L. R 203. With regards to the third ground, Mr. Pomboma insisted that the principal (respondent) is liable for claims by the appellant for the agreement made in good faith with his agent. He submitted further that it is a settled principle of law that the agent’s liabilities are based on his duties to the principal in which the principal is liable for all acts of the agent. Thus, the trial court failed to consider that Grace Kapula was an agent of the respondent. 4 On the fourth ground, the counsel was of the view that the respondent adduced weak evidence that there was no contract between him and the appellant, while Grace Kapula entered into an agreement with appellant on behalf of the respondent. That the respondent is liable for the omission or act done by his agent. To cement his argument, he cited the case of Berelia Karangirangi vs. Asteria Nyalwambwa, Civil Appeal No. 237 of 2017, which was cited in the case of Ziad Mohamed Rasool General Trading Co. vs. Anneth Joachim Mushi, Civil Case No. 21 of 2020. In her submission in reply to the submission made by the appellant’s learned advocate, Ms. Mwakyusa argued the first and second grounds of appeal together. She argued that, before one approaches the court, must first demonstrate his or her legal capacity. In that regard she cited the case of Lujuna Shubi Ballonzi vs. Registered Trustees of Chama cha Mapinduzi (supra). She added that, the appellant stated in paragraph four of the plaint, that the defendant and Grace Kapula contracted for delivery of a cargo of mask from China, worth Tanzania Shillings 6,965,000/=, meaning the appellant and respondent herein had never contracted on doing business. She went on submitting that, the appellant’s 5 counsel contention that Grace Kapula was an agent of the respondent is an afterthought as the respondent denied to know the same as his agent, but rather a client. With that, the respondent is not bound by consequences of the agent’s contract as the respondent never contracted with the appellant. The third and fourth grounds of appeal were also argued together whereby Ms. Mwakyusa insisted that the plaint does not name Grace Kapula as the agent of the respondent. She stated that, an agent is a person who has been legally empowered to act on behalf of another person or entity. In his rejoinder submission, Mr. Pomboma argued that legal capacity is of great importance before approaching the court. He added that, in the instant suit, the trial court decided in favour of the respondent who is not a legal nor natural person since Adam China Supplies Company is a legal person that can sue and be sued under its own name, as provided for under section 15(2) of the Companies Act (Cap. 212, R. E. 2002), and not by the name of the managing director. He submitted further that, for a company to be sued, there is a need to have a special resolution but such resolution was never produced before the trial court. 6 On the issue of locus standi, the appellant’s counsel insisted that the appellant has locus standi to sue as a natural person as her rights have been infringed by Grace Kapula who had a contractual relationship with the respondent. Mr. Pomboma submitted further that, it is undisputed that the contract was between the respondent and one Grace Kapula (agent), where the appellant was in agreement with the agent to order face masks from China and the payment of the claimed amount was to be paid in the bank account bearing the respondent’s name. He contended that, the appellant had interest on the contract between the agent and the respondent as seen in paragraph 4 of the plaint. He averred that, the appellant has shown sufficient reasons to sue the respondent that there is breach of contract by the conduct of his agent and the respondent never denied that there was a contract between her and her agent and the appellant had a contract with the agent. Summing up his submission, Mr. Pomboma argued that, an agent can act for his principal without affecting the legal relationship between the principal and the third party as provided under section 134 of the Law of Contract Act (supra) and there is no dispute that, money was transferred from the appellant to the respondent. 7 From the submissions made by both parties, I find there is only one issue upon which this court is called to determine in this appeal. The issue is whether this appeal has merits. In his argument, Mr. Pomboma has two main points in respect to locus standi. First, that the respondent being a company, is a legal person and should sue and be sued in its own name and not through the managing director. Second, the appellant has locus standi to bring her claims because she has interest on the matter and her rights were infringed by the respondent. Kicking off with the former as observed from the second paragraph, page two of the rejoinder submission by the appellant’s counsel, I agree with the appellants’ counsel submission that a company can sue and be sued in its own name since it is considered to be a legal person. This can be drawn from the provisions of section 15 (2) of the Companies Act (supra). However, there are circumstances when the veil of incorporation is lifted, and members of the company are sued in their individual capacity without involving the company. In particular, the law allows lawsuits against Directors or Managers when it is alleged that they are inappropriately exploiting their positions. Claimants may also bring a 8 lawsuit against any person whom they feel is prejudicing the affairs of the company. On the second limb, that the appellant has locus standi to bring her claims. That, she has interest on the matter and her rights were infringed by the respondent. It is trite law that, it is in the discretion of the plaintiff to choose who to sue depending on the nature of the claims sought. In the famous case of Lujuna Shubi Ballonzi (supra), it was stated that: “In this country, locus standi is governed by the common law. According to which, a person bringing a matter to court should be able to show that that his right or interest has been or interfered". The trial court dismissed the appellant’s suit on the ground that, the appellant’s claim that she deposited money in the respondent’s bank account does not make her to have power to sue the respondent. This finding is positioned at page 8 of the trial court’s ruling. A perusal through the plaint, a normal eye finds that the appellant attached a copy of bank pay in slip bearing the appellant’s name and the respondent’s bank account number with his name. This is crystal clear that the appellant has interest in the case before the trial court. In my view, the trial court was supposed to allow the parties to argue and find out why the money was deposited to the respondent’s account. If the respondent owes the appellant some 9 money, then the appellant has a locus to sue the respondent. It needed evidence to prove their relationship. Thus, the second ground of appeal has merit. Accordingly, for a preliminary objection to be sustained, it must be on pure point of law and not the basis of matters requiring factual proof. This golden principle was celebrated in the case of Mukisa Biscuts Manufacturing Co. Ltd vs. West Ends Distributors Ltd (1969) E.A 696 and Karata Ernest and Others vs. The Attorney General, Civil Revision No. 10 of 2010 (unreported). In the latter case; it was stated that: “At the outset we showed that it is trite law that a point of preliminary objection cannot be raised if any fact has to be ascertained in the course of deciding it. It only consists of a point of law which has been pleaded, or which arise by clear implication out of the pleadings …” With that principle and having scrutinized the submissions made by both parties, I find out that there are some factual issues which are needed to be proved on whether the appellant has claims against the respondent or not. The trial court’s order for the dismissal of the suit on the ground that the assertion that the appellant deposited money in the respondent’s bank account was not enough to bring the suit. In my view, this was not 10 correct. I hold so firmly inclining to the provisions of article 107A(2)(b) and (e) of the Constitution of the United Republic of Tanzania of 1977. It provides: (2) In delivering decisions in matters of civil and criminal matters in accordance with the laws, the court shall observe the following principles, that is to say – (a) N/A (b) not to delay dispensation of justice without reasonable ground; (c) N/A (d) N/A (e) to dispense justice without being tied up with technicalities provisions which may obstruct dispensation of justice. The Constitution which is the grundnorm requires courts to dispense justice without unreasonable delay. When vacillating in deciding matters occasions injustice. In avoiding such delays, the Constitution demands that courts are not to be tied up with technicality provisions which may obstruct dispensation of justice. The same posture with the appeal at hand the respondent raised a preliminary objection technically to delay dispensation of justice. There is an evidence that the appellant deposited the amount claimed in the respondent’s account but still one does not see that the appellant has interest and a right in the matter. That being the case, it was 11 proper for the matter to be heard on merits. Hearing the matter on merits is not an automatic gear that the appellant has to succeed in the suit. What is required is substantive justice rather than a triumph celebrated from technical points. Thus, I am inclined to the appellant’s learned counsel submission that, the trial court erred when it dismissed the suit since the preliminary objections raised by the respondent does not qualify to be points of preliminary objection. The point of preliminary objection raised needed evidence to prove the same. The issue raised is answered in the affirmative. In the event, this appeal is allowed with costs. Subsequently, the trial court’s decision is hereby set aside. The suit filed by the appellant is ordered to be heard from the stage it was before the objections were raised. It is so ordered. DATED and DELIVERED at MBEYA this 20th day of August, 2024. E. L. KAWISHE JUDGE 12 Court: Judgment delivered virtually before Mr. Pomboma and Japhet both learned counsel for the appellant and in absence of the counsel for the respondent E. L. KAWISHE JUDGE 20/08/2024 13