DIAMOND MOTORS LTD VS NAM ENTERPRISES LTD COMM CASE NO

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA (COMMERCIAL DIVISION) AT PAR ES SALAAM COMMERCIAL CASE NO. 122 OF 2023 BETWEEN DIAMOND MOTORS LIMITED............................................. PLAINTIFF VERSUS NAM ENTERPRISES LIMITED............................................ DEFENDANT DEFAULT JUDGMENT Date of Last Order: 06/06/2024 Date of Judgment: 19/07/2024 GONZI, J. This is a Default Judgment arising out of breach of contract between the parties herein wherein the plaintiff agreed to sell a new motor vehicle to the defendant. The agreement was entered into between the plaintiff and the defendant breached her contractual obligations. It was stated in the Plaint that on the 30th October 2017, the Plaintiff and the Defendant entered into an agreement wherein the plaintiff agreed to sell to the defendant a new motor vehicle with registration number T.918 DJW with chassis no. MEC2411BLHPO36404 and engine NO.400950D0036785 at an agreed price of United States Dollars Seventy Six Thousand Six Hundred Eight Three (USD 76,683). Following the said Agreement, the Parties 1 Agreed that the agreed purchase price would be paid in instalments where the defendant would make a down-payment of Thirty Six Thousand Five Hundred and Eighty Five United States Dollars (USD 36,585). The parties further agreed that the remaining balance of (USD 40,098) would be paid in 7 instalments, that is the first instalment of USD 6,585 would be paid upon delivery of the said motor vehicle in January 2018 and the remaining amount would be paid in equal monthly instalments USD 5000. Soon after the said motor vehicle was delivered to the Defendant, the defendant failed and or refused to pay the outstanding instalments and ended any further communications with the plaintiff even when demand letters from the plaintiff's lawyers were written and served upon the defendant. The same were never respondent to. The plaintiff continuously followed up with the defendant orally and in writing for payment of the said balance but the defendant ignored to heed to the plaintiff's lawful requests and demands. That in early 2022, the plaintiff instructed debt collectors to pursue the debt. When a demand notice was written by the plaintiff's debt collectors, it is when the defendant responded with an acknowledgment of the debt and proposed to pay the debt in four equal instalments of USD 10,000 in April, May, June and July 2022. After receiving the letter of acknowledgment, the plaintiff responded to the proposed amounts as well as the mode of 2 payment and made a counter proposal of USD 12,000 per month to carter for the legal and debt collector's costs. From then on, the defendant stopped any further communications which prompted the plaintiff's Board to resolve to take the matter to Court for redress. During this entire period, the plaintiff has on numerous occasions, been forced to hire legal and debt collectors' services whose cost are over USD. 20,000. The Plaintiff alleged further that she has also suffered general damages for wasting a lot of precious time and energy in following up repayment of the debt. In this regard, the plaintiff prayed for the Court to grant general damages at the tune of USD 15,000. From the foregoing cause of action, by way of plaint, the Plaintiff instituted the instant suit against the Defendant praying for Judgment and Decree containing the following orders, namely: - a) That the Honourable be pleased to order the Defendant to pay the Plaintiff the outstanding principal sum of USD 40,098 as pleaded in paragraphs 4 & 5 of the Plaint. b) That the Honourable Court be pleased to order the defendant to pay the Plaintiff interest on the aforesaid sum accruing at the rate 12°/o from January 2018 when all the total instalments became due to the date ofJudgment. 3 c) The Honourable Court be pleased to order the Defendant to pay the Plaintiff the sum of USD 20,000 being costs and charges as pleaded in paragraph 10 of the Plaint. d) That the Honourable Court be pleased to order the Defendant to pay the Plaintiff interest on the decretal sum at the Court rate of 12% from the date of the Judgment to the date offinal payment and/or satisfaction in full of the decree. e) That the Honourable Court be pleased to order the Defendant to pay the Plaintiff the sum of the USD 15,000being general damages. f) Costs of the suit. g)Any other order and /or reliefs that the Honourable Court may deem fit andjust to grant. The Defendant was duly served but defaulted to enter appearance. Even after substituted service by way of publication in Newspaper was affected, the Defendant remained passive. As per the Court records, several summonses were served upon the defendant. Four (4) summonses for appearance and filing Written Statement of Defence were served upon the Defendant. There is the first one dated 6/11/2023, the second one dated 12/12/2023, the third one is dated 4/03/2024 and the fourth summons is dated 15/4/2024. Summons for Notice for Necessary Orders dated 02/05/2024 was also served upon the Defendant. There is 4 a summons served by the Court process server which includes the affidavit of proof of service of the Court Process Server one Athman Hassan which is dated 15/03/2024. The affidavit of proof of service of summons show that the defendant was duly served. But all the efforts made by the plaintiff to serve the defendant were in vain and proved to futile. Substituted service by publication in Newspaper was also used. After which the case proceeded without the Defendant's involvement. When the suit was called on for necessary orders on 15/04/2024, no Written Statement of Defence had been filed and therefore the learned advocate for the plaintiff Mr. Yiga Joseph, prayed that he be allowed to proceed with the hearing of the case by filing an application for default judgment under the provisions of Rule 22(1) of this Commercial Court Rules. In the circumstances, his prayer was granted. It was against this backdrop that this Court the Plaintiff filed the application for default Judgment vide Form No.l accompanied by an affidavit of proof of the claim. In proving the claim, the plaintiff filed in this Court, Form No. 1 accompanied by the affidavit sworn by one, FRANKEN LUBELEGJE who is the principal officer of the plaintiff Company. 5 The Plaintiff attached Exhibit DML-1 i.e. a copy of the statement of account signed by the Defendant. Exhibit DML-1 evidence that the amount which was paid by the defendant to the Plaintiff was only USD 40,098. The plaintiff attached Exhibit DML-2 which was a copy of the letter by the Defendant acknowledging the debt and a proposal to pay it by USD 10,000 four monthly installments. It proves that the Defendant acknowledges the debt and made a proposal to repay the debt in four equal monthly installments of USD 10,000 in April, May, June and July 2022. The plaintiff attached Exhibit DML-3 which is a copy of the counter proposal issued by the Plaintiff counter-proposing for the monthly payment of USD 12,000 so to carter for the legal and debt collectors' costs by the defendant. Copy of the Plaintiff's Board resolution was also attached to show that the Board of Directors of the plaintiff Company allowed the filing of this suit. Having carefully gone through the affidavit of proof of the claim and exhibits DML 1-3 which were tendered by the Plaintiff in this suit, parties entered into a valid Car Sale Agreement and that the Defendant does not dispute existence or validity of that agreements and its terms. It is also clear that the Defendant has not honoured her contractual obligations hence is in breach of the contract for the amount that remains unpaid in 6 it. The Plaintiff has not been able to recover the outstanding balance under the contract with the Defendant and has taken great efforts and encountered a lot of trouble in attempting to make the Defendant heed to her contractual bargain. These efforts included sending demand letters through lawyers and debt collectors. Filing the present suit was also part of his efforts to hold the Defendant responsible for his contractual obligation. The contractual arrangement under consideration was a business or commercial undertaking on the part of the Plaintiff. The Plaintiff has been prevented from making profitable commercial use of his money tied up in this suit by the Defendant. In the cases of NITRO EXPLOSIVE (T) LIMITED v. TANZANITE ONE MINING LIMITED, COMMERCIAL CASE NO.118 OF 2018 (HC) DSM (Unreported) this Court explained the implications of Rule 22 (1) of the Commercial Court Rules, as amended. The Court held that, for the plaintiff to enjoy fruits of justice under Rule 22, the following cumulative ingredients must be proved, namely; 1. Proof of the service to the defendant but who has failed to file written statement of defence. 2. The plaintiff must make an application in the prescribed Form No. 1- to the First Schedule to the Rules. 7 3. That the said application in Form No. I must be accompanied by an affidavit in proof of the claim. In the instant suit, there is no dispute that the defendant was served in accordance with the law. However, no written statement of defence was filed nor any application for extension of time to file one was made. Equally, it is not in dispute that the plaintiff has made an application in prescribed Form No. 1 and the same was accompanied by the affidavit of proof of the claim. In short, I find that on the balance of probabilities, the suit for breach of contract has been sufficiently proved by the Plaintiff to the standard required in civil cases against the defendant. I enter Judgment and Decree in favour of the Plaintiff against the Defendant as prayed and proceed to make the following orders: a) The Defendant is hereby ordered to pay the Plaintiff the outstanding Principal sum of USD 76,683 as pleaded in paragraph 4 & 5 of the plaint. b) The Defendant is hereby ordered to pay the Plaintiff interest on the aforesaid sum accruing at the rate 12% per annum from January 2018 when all the total instalments became due to the date of delivery of Judgment and Decree. 8 c) The Defendant is hereby ordered to pay the Plaintiff the sum of USD 5z000 being costs and charges as pleaded in paragraph 10 of the plaint. d) The Defendant is hereby ordered to pay the Plaintiff interest on the decretal sum at the Court rate 7% per annum from the date of Judgment to the date of full and final payment and/or satisfaction thereof. e) The Defendant is hereby ordered to pay the Plaintiff the sum of the USD 5,000 being general damages. f) Costs of the suit to be borne by the Defendant. I further Order that the decree emanating from this suit shall not be executed unless the decree holder has, complied with the provisions of Rule 22 (2) (a) and (b) High Court (Commercial Division) Procedure Rules, 2012 (as amended, 2019). It is so ordered. JUDGE 19/07/2024 9 This Default Judgment delivered in Court this 2nd August, 2024 before Hon. J. M. Minde Deputy Registrar, in the presence of Mr. Mr. Yiga Joseph the Counsel for the Plaintiff. 10