godwin george simba vs shooters restaurant limited 2022 tzhcld 1106 8 december 2022

IN THE HIGH COURT OF TANZANIA

LABOUR DIVISION

AT PAR ES SALAAM MISCELLANEOUS APPLICATION NO. 188 OF 2022 (Arising from the Judgement of the High Court of Tanzania, Labour Division at Dar Es Salaam in Consolidated Revision Applications No. 60 of2021 and 79 of2021, 18th February 2021 Hon. Rwizile J.) GODWIN GEORGE SIMBA.............................................................. APPLICANT

VERSUS SHOOTERS RESTAURANT LIMITED........................................ RESPONDENT < •

RULING . X "W K.T.R. MTEULE, J 01st December 2022 & 08th December 2022 ■ ■ This Ruling concerns a preliminary objection raised by the respondent challenging the competence of this application. The Applicant has lodged X \5 this application praying for this court to lift the corporate veil against the Directors of the Respondent and any other order the court deems fit to grant. £ From what I gather from the affidavit, the applicant is a decree holder in the Consolidated Revision Applications No. 60 of 2021 and 79 of 2021 which issued a decision against the Respondent. It is deponed in the applicant's affidavit that when the applicant wanted to lodge an application for execution, he was hindered by lack of any property i owned by the applicant. According to the applicant, all the properties are in the name of the directors of the respondent. In response to the application, the respondent raised a point of preliminary objection to the effect that the application is filed prematurely. The preliminary objection was heard by written submissions. The Respondent was represented by Mr. Arnold Peter, Advocate while the applicant was represented^^lr. S^apo Anthony, Advocate. Arguing to support the preliminary objection, Mr^ Arnold submitted that the application is prematurely filed because the applicant ought to have exhausted other modes of execution before seeking remedies against the

directors of the company. According to Mr. Arnold, lifting of corporate veil comes as a last resort and since the respondent had already indicated intention to settle the decree on instalments, then the applicant could exhaust the remedies available under normal execution. To support his argument, Mr. Arnold cited the case of Bernard Thomas Caconco versus Kombat Security Services Ltd (Misc. Labour Application No 15 of 2021 which addressed the effects of non-exhaustion of all other modes of execution which is to render the application premature. 2 According to Mr. Arnold, no execution has ever been filed by the applicant against the respondent. He is of the view that a Company being a legal entity, its liability cannot be born by the directors unless the applicant proves that the respondent has no income at all to the extent of being unable to meet its liabilities. Mr. Arnold challenged the existence of any enabling law cited in the application as all the provision cited therein are not in conformity with the application. In response, to the respondent's submission, Mr. Sigano submitted that it is a matter of law for a decree holder to state the mode of execution ■■ as per Order XXI Rule 10 (2) (j) of the Civil Procedure Code, Cap 33 of 2019 R.E. He maintained that, having missed any asset of the Ik lb respondent, the application is not premature. Mr. Sigano challenged the

preliminary objection for having not identified any^ provision of law violated contrary to the position in Mukisa Biscuits < Manufacturing Company Ltd versus West and Distributors Ltd (1969) EA 696. He quoted the words of that court to the effect that a preliminary objection raises a pure point of law. 3 Mr. Sigano further cited some cases which show the power of the court to lift the corporate vail of a company to hold the directors liable for the debts of the company. Responding to the relevance of the enabling provisions cited in this application, Mr. Singano is of the view that Section 94 (1) confers wide jurisdiction to this court over various applications for purpose of implementing labour laws. Having heard submissions by the parties, I feel obliged to start by addressing the points of laws raised by each party in their submissions. I will start with the respondent's argument that the enabling provisions cited by the Applicant in the chamber summons are not relevant to the application. I agree with the applicant that Section 94 gives power to the High Court to hear any application for the purposes of facilitating implementation of labour laws. This is together with the inherent powers 1 conferred to the High Court to enable justice dispensation. In this IL S? regard, it is my holding that the application is legally founded. Regarding to the tenability of the preliminary

objection not being on point of law, the respondent has cited the case of Bernard Thomas Caconco which addressed prematurity of applications. I am of the view that since there is a case law which sets a position, then the preliminary 4 objection contains a point of law. By itself, prematurity of a matter is primarily a point of law and not factual points which need evidence to be ascertained. I therefore find the preliminary objection to be based on a point of law. Coming to the merits of the preliminary objection, the point of debate is centred on whether the applicant ought to have filed an application for execution against the applicant before seeking any redress against its directors. The applicant is contending that there could be no application for execution since there were no assets owned by the applicant which could be attached. It is not disputed that a company is a legal entity separate and distinct from its directors. This means, burdening the responsibilities of a company to its directors needs to be exercised carefully because it is like holding someone responsible with liabilities of another person. It is further not disputed that in some circumstances, the court may lift a ->■ . corporate veil to allow recovery of debts of a company from its directors or shareholders. In the instant matter, the applicant is seeking for lifting of the corporate veil of the

respondent so that a decree against it can be executed against its directors. The argument of the respondent is that 5 the applicant should have opted other modes of execution apart from attachment of the assets of the respondent's Directors. Modes of execution of decree are provided for under Order XXI Rule 10 (2) (j) of the CPC which provides:- "the mode in which the assistance of the court is required, (i) by the delivery of any property specifically decreed; W' (ii) by the attachment and sale, or; by the sale without attachment, of any property; % (Hi) by the arrest and detention in prison of any person; (iv) by the appointment of a receiver; or (v) otherwise, as the nature of the relief granted may require". ■ From the above provision, delivery of any property specifically decreed is the first mode of execution, a decree holder may opt. It is not disputed that the applicant has not filed any execution against the respondent. I agree with the respondent that starting to lodge the application for execution against another person should be the last resort. It is on this reason I will agree with the Respondent that the matter is prematurely filed. 6 From the above finding, I uphold the preliminary objection and hold the instant application prematurely filed. The application is therefore struck out. It is so ordered. Dated at Dar es Salaam this 8th Day of December 2022 7