20151026 TZHC Dodoma

AT DODOMA MISC. CIVIL APPLICATION NO. 10 OF 2015 (Arising from Civil Case No. 812014 pending before his Honorable Court) KIBAIGWA FLOUR SUPPLIES LTD ......................................... APPLICANT VERSUS RURAL LIVELIHOOD DEVELOPMENT COMPANY (RLDC) HELVETAS SWISS INTER COPERATION (HIS) . RESPONDENTS ........ SWISS CONTRACT (SC) A. MOHAMED, J. RULING The 1st, 2nd and 3rd respondents in this application have raised a preliminary objection ("the PC") on the following points of law;- The application is fatally defective in that the prayers sought are not supported by the prbvision of law. is fdtdll deféctië for séekihg drdersagainsf Daniel Kalimbiya, Margret Mashaji, Tumaini Nkonya and senior officials of the second and thud respondents, who are not parties to the chamber summons 3 The orders sought in the chamber summons are premature 4,. 4. The supplementary affidavit which is additional evidence has been filed without leave of the court. On 28/4/2015 when the matter came up for hearing, Mr. Machibya and Mr. Mwalongo counsel for the applicant and respondents respectively, submitted at length on the PC. Having gone through the respective contentions and the law, I will confine myself to two pertinent questions for consideration. In support of the respondent's first and second grounds of the PC, Mwalongo argued that there is no enabling provision in law in support of neither the applicant's first prayer on piercing the veil of incorporation against the 1st respondent nor his second prayer of joining the 2ndand 3rd respondents in Civil Case No. 8 of 2014. The learned counsel cited the case of Almasi lddiye Mwinyi Vs. the National Bank of Commerce and Mrs. Ngeme Mbita [2001] TLR 83 where the Court of Appeal of Tanzania held that;- "If a wrong citation of law renders the application to be incompetent. I have not a flicker of doubt in my mind that non citation of law is worse and equally renders an application incompetent." In resisting these contentions on the ]st and 2nd grounds of the PC, Mr. Machibya for the applicant argued that he cited the relevant enabling provisions for the 1st prayer to wit sections 3(b), 15 (2) and 345 (1) (2) of the Companies Act. He couhtered the respondents' claim that these provisions apply only in circumstances of negligence, default breach of duty or breach of trust and the I 4-. applicant's counsel had failed to furnish them. The counsel argued these elements are shown in paragraphs 5, 6, 7, 8, 9 and 10 of the applicant's affidavit. At this juncture, it is pertinent to note that both parties have in principle agreed that the application contains two sets of prayers; the first on lifting the 1st respondent's corporate veil and the second of joining the 2nd and 3rd respondents as parties in Civil suit No. 8 of 2014. The second set of prayers thus hinges on this court's granting the applicant the first set of prayers. I will first deal with the applicant's second prayer; that of joining the 2nd and 3rd respondents to the main suit. I concur with the respondent's contention that indeed the applicant failed to cite the enabling provision of the law which is order I Rule 3 of the CRC. As such this court cannot be moved to entertain it as it is trite law that non citation of the enabling provisions of the law renders an application to be incompetent. I accordingly dismiss the second prayer as it offends the law. Inow move to the first prayer; that of lifting the corporate veil in respect of the ]st respondent. Both counsels submitted at length arguing on the presence or absence of the relevant enabUng provisions of the law in respef of the prayer. With respect, I will desist from consideration of their respective contentions as it would be a futile exercise in respect of this prayer It is evident the concept and practice of piercing the corporate yeil in both ourjurisdiction and the position as pertaining in the United Kingd om are basically similar. 4 It is clear the principle laid down in the case of Salomon Vs. Salomon and Co. Ltd. (1897) A.C. 22 is sacrosanct; that a company is a distinct legal person from its members. In this landmark case members, including Mr. Salomon, were not held liable by the court for the company's debts. In regard to the application of the principle of lifting the corporate veil and pursuant to provisions of section 345 of the Companies Act, in our jurisdiction it is seen at the stage of execution of a decree. In the case of Yusufu Manji Vs. Edward Masanja and Abdallah Juma, Civil Appeal No. 78 of 2002, CAT, the court held that;- "In summary therefore, having regard to the relationship of the company at the time as the managing director, the alleged concealing of the assets of the company by the appellant which was not denied by way of counter affidavit, we are satisfied that this was a proper case in which to apply the principle of lifting the veil of incorporation." After, the, foregoing, I find the applicant's first prayer, though cogent, premature and I hereby dismiss it. -, 'In this regard, the applicant's third to eighth prayers being contingent upon the success of the first two, have to collapse having no feet to stand on after dismissal of the first two prayers I accordingly sustain the preliminary objection and strike out the application Each party is to bear its costs It is so Ordered. I A. MOHAMED 1 JUDGE 26/10/2015