GUANZOU VS A ONE PRODUCT AND BOTTLE LTD MISC

IN THE HIGH COURT OF TANZANIA (COMERCIAL DIVISION) AT PAR ES SALAAM MISC. COMMERCIAL APPLICATION NO. 93 OF 2018 (ORIGINAL COMMERCIAL CASE NO. 105 OF 2017) GUANZOU TECHLONG PACKAGING MACHINERY COMPANY LIMITED...................................... ^APPLICANT HONG KONG HUA YUN INDUSTRIAL LIMITED...................................................... 2nd APPLICANT VERSUS A-ONE PRODUCTS AND BOTTLERS LIMITED....................... RESPONDENT 18/09/&18/10/2018 RULING MWANDAMBO, J.: This matter has had a somewhat chequered history raising interesting factual and legal points as will become apparent later. The Applicants who are Defendants in Commercial Case No. 105 of 2017 have instituted the instant application for extension of time to file a written statement of defence under section 93 of the Civil Procedure Code, Cap 33 [R.E 2002] henceforth to be referred to as the Civil Procedure Code. The application is supported by an affidavit deponed by Mr. Gasper Nyika learned Advocate which is hotly contested by the Respondent through a counter affidavit of Dr. Masumbuko Lamwai learned Advocate. The chronology of events resulting into this application has been given in the supporting affidavits on which there is little dispute except for the reasons for the Court's exercise of discretion for the order sought. As indicated earlier, the Applicants are Defendants in Commercial Case No. 105 of 2017 (the main suit) in a dispute arising from a contract. Upon being served with a summons to appear and 1 answer the claim pursuant to Order V rule 1 (a) of the Civil Procedure Code, the Applicants appeared through their Advocate on 7th September 2017 and prayed for time to file a written statement of defence in answer to the claim. My brother (Mruma, J) readily granted the prayer and ordered the Applicants to file their written statement of defence within 21 days expiring on 28th September 2O17.Instead of filing the defence prayed for and ordered by the Court, the Applicants saw it fit to enforce a submission in the underlying contract by having the dispute referred to arbitration. Accordingly, they filed a petition for stay of the main suit under section 6 of the Arbitration Act, Cap 15 [R.E 2002] pending reference to arbitration before an arbitration tribunal named in the said submission. A petition for stay was filed on 27th September 2018 just a day before the expiry of the time for filing the written statement of defence. Be it as it may, after exchange of pleadings in the petition and hearing of it, the Court dismissed that petition in a ruling delivered on 14 February 2018 with an order directing the Applicants to file their written statement of defence within 14 days from the date of the ruling. Aggrieved, the Applicants sought to challenge that ruling and order by way of an appeal to the Court of Appeal. Accordingly, on 19th February 2018 they lodged a notice of appeal in this Court simultaneous with a letter requesting for copies of ruling, drawn order and proceedings for the purpose of the intended appeal. As a result, the, Court's order for filing the written statement of defence went un-complied with yet again. However, that did not deter the Court from proceeding with the main suit despite the prayer for the stay of the main suit made on 9th March 2018 pending determination of intended appeal from the order refusing to stay the suit pending reference to arbitration. For clarity, Mruma, J felt unprepared to stay the suit pending determination of the intended appeal until the record had been called by the Court of Appeal. Finding themselves in that situation, the Applicants have now applied for extension of time to file their defence while at the same time pursuing an appeal against the Court's order refusing to stay the 2 main suit pending arbitration. Para 9 of the affidavit explains the reason for the delay in filing the defence being honest belief and understanding that the notice of appeal had the effect of taking away the matter from the jurisdiction of the Court and that filing a defence would have constituted taking a step in the suit thereby depriving their right to continue pursuing the dispute through arbitration. That averment has been vehemently disputed by the Respondent who contends that disagreement with a Court order or a wrong impression by a party on the implications of such an order cannot constitute sufficient ground for extension of time. Prior to the oral hearing the learned Advocates filed their respective skeleton arguments pursuant to rule 64 of the High Court (Commercial Division) Procedure Rules GN NO.250 of 2012 (the Rules) each urging the Court to determine the application in his favour. The skeleton arguments raise points of law touching on the interpretation of the Rules as well as the Civil Procedure Code as will become apparent later in this ruling. In a nutshell, Mr. Nyika contends in his skeleton and oral arguments that the Applicants resorted to invoking section 93 of the Civil Procedure Code because the Rules do not provide for extension of time to file a defence in circumstances peculiar to them. The learned Advocate argues that rule 20 of the Rules was not invoked because the Applicants had already utilized it on 7 September 2017 and so it was no longer available to them. The learned Advocate argues that section 93 of the Civil Procedure Code grounding the application does not prescribe conditions to be met by Applicant but the Court has to exercise its direction judiciously as stated in William Shija V. Fortunatus Masha [1997] TLR 213 and Mumelo V. Bank of Tanzania [2006] EA 227 (CAT).AII the same, the learned Advocate argues that the Court has to consider whether the Applicants have disclosed sufficient cause explaining away the delay in the light of Tanga Cement Company Limited Vs. Jumanne D. Massangwa and Another, CAT Civil Application No. 6 of 2011 3 (Unreported) underscoring factors to be taken into account to establish sufficient cause in applications for extension of time. It is the learned Advocate's submission that the Applicant's affidavit has disclosed sufficient cause for the delay demonstrated by (i) belief that filing the defence as ordered by the Court on 7th September 2017 could have deprived their right to petition for stay of suit to refer the dispute to arbitration, (ii) belief that as the Applicants were pursuing an appeal against the Court's refusal to stay the suit the Applicants could not file their defence following the Court's ruling made on 14th February 2018 as doing so would have constituted taking an act in the suit thereby depriving their right to refer the suit to arbitration and (iii) the Applicants had a right to appeal against the Court's ruling refusing the petition for stay of the suit pending arbitration on the authority of Tanzania Motor Services Limited and Another V. Mehar Singh t/a Thaker Singh, CAT Civil Appeal No. 115 of 2005 (unreported) and that the Court ceased to have jurisdiction to preside over the suit after lodging a notice of appeal which prompted a prayer for stay of it despite which the Court declined it and hence the application for extension of time. Dr. Lamwai opposes the application addressing the following grounds. One, the Applicant have wrongly invoked section 93 of the Civil Procedure Code instead of rule 20(2) of the Rules because the Applicant never applied for extension of time before or after expiry of the time for filing the same pursuant to the Court's order made on 14th February, 2018. The learned Advocate submits that by invoking section 93 of the Civil Procedure Code, the Applicants are circumventing the consequences spelt out under rule 20 (2) which gives power to the Court to extend time for not more than 7 days having the same logic as Order VIII rule 1 (2) of the Civil Procedure Code discussed by the Court of Appeal in Tanzania Harbours Authority vs. Mohamed R. Mohamed [2003] TLR 76. That decision interpreted Order VIII rule 1 (2) of the Civil Procedure Code to the effect that the Court's power to extend time for filing a written statement of defence is limited to 21 days 4 following the expiry of the original period of 21 days. The learned Advocate submits that the Court's power to extend the period for filing a written statement of defence under rule 20 (2) of the Rules is limited. It is the learned Advocate's submission that either way, be it under the Rules or the Civil Procedure Code, the Court's discretion extending time is limited and so the application ought to be dismissed. Mr. Nyika's arguments in rebuttal on this point was that rule 20 of the Rules must be read together with rule 15 and so the correct provision under the circumstances is section 93 of the Civil Procedure Code cited in the chamber summons. With respect I am inclined to agree with Mr. Nyika. It is plain that rule 20 of the Rules can come into play if and only if a summons for filing a written statement of defence is issued under rule 15 of the Rules. That appears to be plain when one examines rule 20 (1) of the rules. Although that rule makes reference to rule 14 of the Rules, it is clear that the correct rule is 15 for that is the only relevant provision dealing with summons to file a written statement of defence. It is evident from the affidavit that the initial summons to the Applicants were not issued under rule 15 for filing a written statement of defence. The summonses were issued under Order V rule 1(a) of the Civil Procedure Code to appear and answer the claim and that explains why the Applicants appeared on 7th September 2017 through their Advocates and prayed to file their written statements of defence within 21 days from that date. That they filed a petition for stay of suit instead of filing their defence as ordered by the Court is a matter which could only be dealt with in a petition for stay of suit rather than in this application. My cursory glance at the ruling in the petition does not show that the Respondent had any objection to the petition on the ground that the Applicants had taken steps in the suit and so that cannot be a ground in this application. Be it as it may, following the refusal of the petition for stay of the suit, the Court ordered the Applicants to file their written statements of defence within 14 days. 5 That period was not made under rule 20 (1) of the Rules and so it was not open for the Applicants to seek extension of time under rule 20 (2) of the Rules. That being so, it was open for the Applicants to resort to section 93 of the CPC for extension of time to file a written statement of defence upon expiry of 14 days period fixed by the Court on 14th February 2018. Unlike Dr. Lamwai learned Advocates for the Respondent, the filing of the application in the manner it has been done did not mean to circumvent the Rules because, as seen above rule 20 (2) of the Rules is not applicable. It follows thus the learned Advocate's argument pegged on Tanzania Harbours Authority vs. Mohamed R. Mohamed (supra) falls away on the face of the peculiar circumstances of this application. Having so held, the next issue for my consideration is whether the Applicants have disclosed facts to justify the grant of the orders sought. Dr. Lamwai has taken issue with the Applicants' explanation in the affidavit as well as the skeleton and oral arguments. The learned Advocate argues in principle that the Applicants are to blame for not filing their defence within the prescribed period manifested by disobeying the Courts' order for filing the defence on two occasions prior to and after the dismissal of the petition for stay of suit pending reference to arbitration. It is the learned Advocates' further argument that disagreeing with a Court order as the Applicants did in this application by lodging a notice of appeal instead of filing written statement of defence cannot constitute a sufficient cause for extending the time. Furthermore, it is also argued that the order refusing to stay the suit pending arbitration was interlocutory which is not appealable under section 5 (2) (d) of the Appellate Jurisdiction Act, cap 141 [R.E 2002]. Mr. Nyika rejoined and advanced the following arguments. One, the Applicants had a right to refer the matter to arbitration according to the agreement and so they filed a petition for stay of the suit. Two, the order refusing to stay the suit was 6 not interlocutory as the Applicants had a right to appeal on the authority of Tanzania Motor Services Company Limited and Another vs. Mehar Singh t/a Thaker Singh (supra) I have given due consideration to the arguments for and against the application. I must confess that the circumstances surrounding the application are not usual and that will explain how tricky the arguments were. All the same, everything boils down to the fact that this is an application for extension of time to file a written statement of defence which is subject to the Court's discretion. It is trite that such discretion has to be exercised judiciously as against personal whims whether an application is preferred under section 14 (1) of the Limitation Act, Cap 89 [RE 2002] or under section 93 of the Civil Procedure Code. In whatever case, a party seeking enlargement of time must satisfy the Court that the delay is an excusable one by disclosing facts explaining the reasons, lengthy of the delay, promptness in making the application and any other relevant fact consistent with decided cases represented by Sebastian Ndaula vs. Grace Rwamafa, CAT (BKB) Civil Application No. 4 of 2014, Saidi Ambunda V Tanzania Harbours Authority, Civil Application No. 177 of 2004 and Abood Soap Industries Ltd V Soda Arabian Alkali Limited, Civil Application No. 154 of 2008 (all unreported). Subjecting the above to the facts in the instant application, I think there is no longer any dispute regarding reasons for the delay. In my judgment, the relevant period of the delay is from 28th February to the date on which 14 days period for filing the written statement of defence pursuant to the Court's order made on 14th February 2018 to 25th April 2018 the date on which the Applicants filed this application. It is common ground that four days after the Court's order refusing to stay the suit, the Applicants lodged a notice of appeal in this Court challenging that decision and this they were entitled to on the authority of Tanzania Motor Services Company Limited & Another Vs. Mehar Singh t/a Thaker Singh (supra) 7 independent of section 5 (2) (d) of the Appellate Jurisdiction Act. It is plain from that decision that the Court of Appeal held that a petition to stay a suit pending reference to arbitration is a suit of its own kind and an order refusing the same is not interlocutory and so it is not barred under section 5 (2) (d) of Cap 141. Indeed this is what happened in that case. Unlike Dr. Lamwai, I hold the view that having regard to the above cited decision as well as the rule in Aero Helicopter (T) Limited vs. F.N Jansen [1990] TLR 142, it was not a disobedience of the Court's order for the Applicants to fail to file a written statement of defence as they did. As submitted by Mr. Nyika learned Advocate, an unsuspecting litigant would have genuinely believed that the Court was no longer seized with jurisdiction to preside over the matter the moment they lodged a notice of appeal and this explains the application for stay of proceedings made on 9th March 2018. Indeed, my brother (Mruma, J) accepted as such though he held the view that the Court would only cease to have jurisdiction over the matter upon the record being called by the Court of Appeal. Whether that view falls within the rule in Aero Helicopter (T) Limited vs. F.N. Jansen's case (supra) is beyond the scope of my discussion in this application. What appears to be obvious is the fact that the Applicants appeared to have relied on available precedent with regard to the right to appeal against the order dismissing their petition and the Court seizing to have jurisdiction automatically upon lodging a notice of appeal. If I may add, that being the case it seems to be logical that in the ordinary course of things they need not pray for stay of proceedings pending determination of the intended appeal. In the light of the foregoing in mind, the next issue is whether the Applicants have accounted for each day of delay. It is settled law that a party who seeks extension of time must do so with promptness and should for that purpose, account for each day of delay. The Court's order refusing to stay the proceedings was made on 12th April 2018. The instant application was filed on 25th April 2018,13 days after the order. I 8 have scanned through the affidavit in support of the application and have not seen any single paragraph explaining away the delay of 13 days in filing the application the moment the Court refused to stay the proceedings. With respect, I do not think the Applicants have placed themselves within the decision of the Court of Appeal they have relied in the skeleton arguments in Tanga Cement Company Limited vs. Jumanne D. Masangwa & Another (supra) which underscored the Applicants duty to show that application has been brought promptly and lack of diligence. On the other hand, the Applicants have not accounted for each day of delay between 12th to 25th April 2018. It will be asking too much from this Court to expect that the Court will exercise its discretion in their favour. Doing so will be tantamount to acting not judiciously but capriciously which a Court of law is not expected to be doing. In the event I hold that the Applicants have failed to explain away the delay in filing the written statement of defence following the Court's refusal to stay the proceedings in the main suit pending determination of the intended appeal against the ruling made on 14th February 2018 dismissing their petition for stay of the suit pending reference to arbitration and so their application must be and is hereby dismissed with costs. Order accordingly. Dated at Dar es salaam this 18th day of October 2018 9