euro poultry t ltd vs pollo italia t ltd 2023 tzhccomd 188 20 april 2023

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA (COMMERCIAL DTVISION) AT PAR ES SALAAM MISC. COMMERCIAL APPLICATION NO. 214 OF 2022 BETWEEN EURO POULTRY TANZANIA LIMITED........................... APPLICANT VERSUS POLLO ITALIA TANZANIA LIMITED........................ RESPONDENT RULING Date of last order: 28/03/2023 Date of ruling: 20/04/2023' AGATHO, J.: This ruling isi in respect of an application for discovery of documents: (books of account/audited financial statements) alleged to be in the possession of the adverse party.The Applicant brought the application through chamber summons supported by an affidavit deponed by Kahoza Nicholas, legal counsel of the applicant. She is asking this court to order discovery of documents (financial accounts reports of the Respondent) to reveal the names of the respondent's directors Who are said to have executed the impugned settlement deed. The respondent protested the application by filing her counter affidavit sworn by Eva Ndewalia Joseph Nangela, the representative of the respondent authorised through the power of attorney. The.background of the application is that the respondent has filed a suit (Commercial Case No, 62 of 2022) against the applicant challenging the decree of this honourable court (Commercial Case No...) on the ground that it was fraudulently procured. That the person who executed the deed of settlement was not a director of the Respondent. That irked the applicant who now is seeking to impress this Court to order the discovery of documents from the Respondent that would reveal the capacity of the person who executed the deed of settlement. The .parties were under legal representation. Whereas Mr. Rico Adolf represented the applicant, Mr Juventus Katikiro appeared for the Respondent. Following completion of the pleadings, the hearing of the application was conducted orally on 28/03/2023. The hearing began by the Applicant's counsel Mr Adolfto make his submission in chief. As starting, point heprayed to adopt the content of the affidavit to form part of the submission. He thereafter submitted that the respondent has filed a suit against the applicant challenging the decree of this honourable court on the ground that it was fraudulently procured. And that case is pending before this court. Mr Adolf argued that since the allegation thereon are mainly on the issue of capacity of the people who executed the deed of 2 settlement, the applicant decided to file this application for discovery of various documents which will assist the court and the parties in determining who had capacity and therefore answer the question in dispute. The counsel added further that looking at the counter affidavit, the respondent has not disputed the existence of the requested documents.But has been maintaining that the documents are not in their possession up to the date of filing their counter affidavit. It was the Applicant's submission that the documents are within the respondent's powers. According to Mr Adolf that is due to the following basis: As per section 151 of the Companies Act, the company is required to keep its books of accounts including the audited financial statements that have been requested in the chamber summons. Mr Adolf continued to submit that the MEMARTs together with form 14 A both are internal documents of the company, and the company being the custodian cannot say they are not in their possession. He cautioned the court to be mindful that a mere allegation that one is not in possession of the document is not sufficient to convince the court not to issue an order for discovery, in the case of Melchisedeck Sangalali Lutema v The Tanzania Federation of Cooperative Limited, Misc. Land Application No. 353 of 2021 HCT at DSM at page, Makani, J., 3 observed that when the affidavit does indicate on whose possession the documents are, then the court proceeds to grant the order for discovery. The .learned counsel went on cautioning that the court should be mindful that Section 458(l)(b) of the Companies Act, provides that if the documents are not in the possession of the respondent, he had an option to request the registrar of companies for certified copies of extract of all the documents that were mentioned in the chamber application. The Applicant submitted that the Respondent has deliberately decided to conceal the documents, the application at handis the means to get them as provided for under the law and therefore the court should order discovery. On reasons as to why the applicant has requested discovery, Mr Adolfsubmitted that according to annexture EPl (the plaint) to the affidavit in support of the application, the respondent has disputed that Pedrelli AlferO is unknown. But the applicant has maintained that he was the director of the company. According to section 158 of the Companies Act, the audited financial statements are signed by the directors. Therefore, the financial statement will show who was the director during the signing of deed of settlement. The counsel referred the Court to Section, 14(2)(b) of the Companies Act, which states that the 4 information in respect of the first directors of the company are provided for under, form 14A. Therefore, it was Mr Adolf's view thatthrough production of form 14A the court will be able to ascertain who were the directors of the company. In summing up, he submitted that if these documents are produced during discovery chances of the matter coming to an end before hearing will be high as those who had capacity will be clearly known. He prayed that the court grant prayers in the chamber summons. Mr Katikiro Advocate's of the responded in his reply to the counsel for applicant's submission, he opposed the application to be granted on the reasons and grounds thatfirst and foremost, he prayed" to adopt the counter affidavit sworn by Eva Ndewalia Joseph Nangela, being the representative authorised through the power of attorney to be part of his submission. He submitted that in the counter affidavit filed by the respondent it is clearly indicated at paragraph 3 that at the date of filing the counter affidavitthe respondent was not in possession of the requested documents/ He invited the court to look at the prayers sought by the applicant through the chamber summons. He argued that it is clearly indicated that the applicants are seeking for certified copies of the 5 requested documents to be produced by the respondents before this honourable' court. Mr Katikiro submitted that the certification of documents in respect of companies is a matter not within the authority or power of the respondent, but rather it is within the power of the Registrar of Companies. He submitted that requesting the certified copies of the document from the respondent who has no power to certify the same is as if the applicant ais seeking the documents which they are aware that the respondent has no power to produce them before this honourable court. He added that the office of the Registrar of companies is always there to assist the parties or anyone who intends to verify some information in respect of existence of any company. Along that Mr Katikiro was of the view that the application has no merit, as the applicant herself can visit the office of the Registrar of companies and access the information requested in the chamber application. Referring to the supplied copy of the ruling of Melchisedeck Sangalali Lutema s case, the counsel argued that this ruling is distinguishable from the matter before this court as the document, requested in the ruling was solely in the custodian of the respondent, who in turn testified that the said document was seized by the government for investigation purposes. But she did not mention the 6 department that seized the document for the applicant to verify information from that department. Mr Katikiro insisted that the case cited is distinguishable to our case at hand because the applicant herself has the right to seek the assistance from the office of the Registrar of companies to verify and get copies of the documents requested in the application; The respondent's counselto voice his protest submitted that there is.a pending suit, Commercial Case No. 62 of 2022 before this court in which the applicant is a defendant, and she has a right before full trial to prepare herself to get this document from responsible authority to make her good defence during hearing. In that regard the applicant prayed the application be dismissed with costs for lacking merit. Mr Adolf, the applicant's counsel made a brief rejoinder to the submission by the respondent's advocate. He submitted that the respondent's counsel has not disputed the fact that the requested document will show the persons with capacity to execute the deed of settlement. However, the counsel has submitted that the certification of documents is solely done by the Registrar of companies without citing any legal provision. It is the applicant's submission that the certification 7 could be done by advocate of the respondent or notary public could certify the requested documents, that is the audited financial statement. On the ground that the respondent cannot produce the document, the applicant's counsel reiterated Section 458(1) of the Companies Act which enable any person including the respondent to procure the copies of the requested documents from the Registrar of companies. He then reacted to the respondent counsel'ssubmission that the applicant could have exercised her right before full trial by requesting the documents from the Registrar of companies. Mr Adolf opined that the said right is being exercised in this application as discovery is a mechanism which allows parties to the case to access all relevant documents that may assist them in determining the question in controversy. And therefore, the applicant has properly exercised her right. In the end he prayed that the order of discovery be issued, and the respondent vide Section 458(1) of the Companies Act may access the requested documents and produce them before this Court as per parameters of Order XI Rule 10 of the Civil Procedure Code [Cap 33 R.E. 2019]. This application raises pertinent questions, as to what documents can be discovered, who has the right to apply for discovery of documents, when can discovery of documents be ordered, whether a 8 document in possession of the authority can be discovered from the adverse party? It is common ground that there is a pending suit between the same parties to this application. The crux of the matter being allegation of the consent judgment and decree fraudulently obtained. The settlement deed is alleged to have been signed by Pedrelli Alfero, a person who the respondentdispute's to be her director. There is only one way to know the truth.That is, to bring to this Court the audited financial statements of the respondent in which the names of the directors are included. The respondent claims that she does not have such documents. She may either be unwilling to do so. Or indeed she does not have such document. But by the law she ought to have such document. Is it proper to make application for discovery or would it bebetter to do so in the main .suit? in my view, it does not matter whether discovery is done in the main suit , or separate application if that discovery will help in resolving the real issue between the parties. The implication of the respondent's refusal to disclose her financial statements by saying that she does not have them is that one may assume that she breached the law as she is required to prepare and 9 submit such reports to the Registrar of Companies at BRELA. This though is hot our concern now. More pertinent though is whether anybody can access the respondents financial statements at the Registrar of companies office? The answer to the latter question is negative. The financialaccounts reports are not accessible to everybody. It is the respondent who is privy to that document. Therefore, even if the applicant goes to BRELA and knock at the Registrar of companies' office she will be denied access to the said financial statements. It follows that the respondent is the one that can access such document at the Registrar of Companies. Considering that the applicant cannot access the said document from BRELA, the respondent is the one ought to. follow up at the Registrar of Companies and supply the document to the court and to the applicant. That is in accordance with Section 458(1) of the Companies Act she may access the requested documents and produce them before this Court as per parameters of Order XI Rule 10 of the Civil Procedure Code [Cap 33 R.E. 2019]. Despite distinction of facts in the case at hand and the case of Melchisedeck Sangalali Lutema v The Tanzania Federation of Cooperative Limited, Misc. Land Application No. 353 of 2021 HCT at Dar es sajaaml concur with the views ofMakani, J in that case 10 that when, the affidavit does indicate on whose possession the documents are, then the court proceeds to grant the order for discovery. I hold such view because the respondent is by the law required to have the audited financial statements. If she does not have it is her obligation to tell the whereabout of such documents. Again, say the document is with the Registrar of Companies, by its nature such documents cannot be accessed by the public or anybody unless there is court order or the respondent herself want to access it. Regarding the issue of certification of financial statements, who can certify it, in my view this is non-issue. Our concern is not really about certification of that document(s). As rightly pointed out hereinabove, the issue is who possesses that document, and who can access it.. These have been answered needless to spill more ink over the same. In lieu of the foregoing I find the application to have merit. I proceed to grant it. Since there a pending suit between the parties, each party bear its costs. It is so ordered. 11 DATED ES SALAAM this 20th Day of April, 2023. m U. J GATHO w w JUDGE 20/04/2023 Date: 20/04/ Coram: Hon. U. J. Agatho, J. For Applicant: Rico Adolf, Advocate For Respondent: Juventus Katikiro, Advocate. C/Clerk: Beatrice Court: Ruling delivered today, this 20thApril 2023 in the presence of Rico Adolf, counsel for the Applicant, and Juventus Katikiro, the Respondent's counsel. U. J. AGATHO JUDGE 20/04/2023 12