20070615 TZHC Dar es Salaam

IN THE HfGH :;ouRT OF TANZANIA (COl\L',lE ~CIAL DIVISION) AT DJ: :.1. ES SALAAM MISC. COMM::~)~~- AL CASE ~JO. 34 OF 2006 IN THE MATTt~·R CF COMPANIES ACT, 2002 AND IN THE MATTER OF A PE''.,,•.iTl >N FOR WINDING UP OF KILOMBERO l-ff:-LD ,~GS LIMITED l ~TWEEN RUFIJI BASIN DEVELOPWU,:NT i\UTHO~ITY .................. PETITIONER /ERSUS KILOMBERO HOLDINGS LL-.iI'. ED .............................. RESPONDENT ::.<. JLIKG 1. Date of Last Submi:-:sit ns - 11/6/2007 2. Date of Hearing - l.i"i/C _/2007 MASSATI, J: There is before me, '..m application for leave of the court to serve interrogatories_ to Lh'. Respondent. The application is· supported by the affid;:·. :i1. of BAHN/\BAS JAMES KABUZYA and is presented by M/S LE:(GLOBL LL.P (Advocates). . 2 The application is resisted by the Respondent through a counter affidavit taken out by Dr. George Mlingwa and is represented by MS. F.K. LAW CHAMBERS. According to parag:-aphs 3, 4 and 5 of the affidavit, the purpose for v,,hich inter.-ogatories arc sought out is to elicit facts from the Respondc.-r1t. that ,,vould make the court decide on the Respondent's soh·cncy status and thereby be able to decide whether the Respondent is able to pay its debts as they fall due. In his submissi.m, Mr. Dindi, learned Counsel for the 'Petitioner has argued thr,t the dc]jvcry of the interrogatories was necessary in order :.o establish the petitioner's case

that the Respondent ,vas insc-lvcnt hence liable to be wound up. It would be cu1nbersome for the Petitioner to establish this fact if leave is not granted. .··/Ir. Dindi referred the court to the dictates of 0. XI of the C ;.,,i] Procedure Code Act and the cases of AGGARWAL VS OFF1 ;IAL RECgJVER j 1967] EA 585 and D'SOUZA VS FERRAU I 1969 I EJ\.1000 as quoted by B.D.CHIPETA in his booL "CIVIL PROCEDURE IN TANZANIA'' A STUDENT'S MANUAL. In his counter affic:: .vi1, Dr. George Mlin~va, states that 1 the questions raised ir: the intended interrogatories were irrelevant as the Respor..:-tcnt ha~: consistently shown that he was ready and v.rilling t:c. pay the rent claimed. Besides, the answer to the petition h,.:, gone into such details as to render ,. 3 the proposed interrogat.t·-rics unnecessary. Furthermore the Respondent has no intention of recovering the rent but has filed the petition merely :.:s a gesture of his malicious intention to dispose of the farm Lo a third party despite the heavy investments undertaken by the Re~;ponden t in developing the farm. Arguing for the l<espondcnt, Mr. Duncan learned Counsel submitted that :he interrogatories are irrelevant and unnecessary. The facts ,:licited by lhe Petitioner would better be ascertained in the co· ,;·sc of conducting the hearing of the winding up petition and not othcn:_;isc. To seek to get those facts at this stage,

,:vr,.::; nothing but malice, and would perpetrate the malice of :.he Petitioner in filing the winding up proceedings in the first ;)lace. It was the learned Counsel's view that by mere logi< . the fact that the Respondent was continuing with the L·.rrning ,:ctivitics at the farm was sufficient evidence to c::tai)lish its financial soundness. In support, Mr. Duncan bc::.s also relied on AGGRAWAL'S case. He therefore prayed for t:) ,;-; ciismissa·1 01 the application. By way of rejoinder Lhc Petitie;ncr/ Applicant filed both a reply to the counter aJrid,1vit and a rejoinder submission. In the reply to the counter :.1ffidavit, l\-1r. Kabuzya has denied any knowledge of agreed po~;. ;>onemei 1t. ()i' the pay1nent of rent. It is further averred tbai. i.. hc conm~cnccmcnt of v.rinding up proceedings followed the collapse cf lhe discussion with the Respondent's shareho1dc-i's and thc,L it. is not known why Dr. 4 George ·Mlingwa should ,. ppcar to oppose the winding up when the shareholders of U c Respondent Company have not opposed it. They anll:xcd a copy of the letter from the shareholders to ask thc1 ,1 not to clt:ai with Dr. Mlingwa. Mr. Kabuzya further counters that if there is any investment, these would be expenses and not assets, capable of being · seized to realize money. He insist,.:c! that: the interrogatories were necessary in orc\.:r Lo as:;i:;i. the court to

establish whether the RespondGn ·. ,•.:as able to pay its debt. In his rejoinder submission, IVL·. Dindi ha:=, argued that according to 0. XI rule 1 of the Civi Procedure· Code Act, interrogatories can be used in any type >i' ~;uit and th(.1.t they are not intended to preempt hearing of U .:_: rriain :,:ud., but only to shorten the trial. In his view, intern gaLories arc necessary where there is a deliberate concealrn :nt of ;'act'.:; to obtain necessary information, and short c·1 !:rials. ·TJic learned Counsel also referred to several En,:! ish a1r h, ,rd_ics to the effect that interrogatories are said . 101 to be c:ir::cted lo facts when they are aimed at matters of c pinion o:· f:)r discovering the evidence available to the other si, :;. The ca~:c:-; of IC.NAPP VS HARVEY [1911] 2 KB. 725 and ~- :Pi,;~iRIO'i'_\r,:: __ CHAMBERLAIN [1886] 17 QB. 154 were referrcc to as i1lus1r:~Lions of those principles. In conclusion, Mr. Dine 1 tmbmitt.cJ that the interrogatories were necessary and nor prolix ar,d oppressive. He reiterated his prayers for leave ·6 serve th-'..: Respondent with the interrogatories. 5 ,. As to whether or -not this court has power and discretion to grant leave to deliver interrogatories. there is no dispute between the parties. For purposes of emphasis and clarity 0. XI rule 1 of the Civil Procedure Code Act 1966 provides: - "(i) In any suit the Plaintiff or

Defc-:.n.da.nt by leave of the court may deliuer interrogatories in writing for the examination of the opposite parlies or any one or more of such parties, and sucl: interrogatories when delivered shall have a note at i h.e foot thereof stating which of such interrogatories ench of such a person is required to o.n swer. " As to what type of quesLior1s are allowed in I.he interrogatories, the proviso to 0. XI ruJc J :Jrovides the an;;;\vcr: - "Provided also tho t interrogatories 1.uhich do not relate to any rnatters in question in t.h.e s1.:.it shall be deemed irrelevant, notwith:.:;ton.ding thot theJJ rnight be admissible on the oral cross exom.ination of a wiu1..e.ss." Under rule 5 of 0. XI, objection cat1 also be taken to interrogatories that a.re sca.ndalous, irrelevant and not exhibited bona fide for the purpose of the suit, or that the matters inquired are nof. sufficiently maL:rial at that stage, or, 6 on·-any other ground t:J··.,:,i. may be taken n1 the affidavit 1n answer. The above general j:i-:nciplei~ vvc,c judicially reasserted in AGGARWAL VS OFFICL·,}., RECEIVIJ?-: [J 967] EA. 587, a case acknowledged by both :uu-ned Cuun!_:;cl, as easily, the leading authority in East Africa nr: the ;:;ubj~:ct. It was held in that case that: -- "The general pri;:.ciple fcllo1,ued zs to allow such interrogatories as r uy be nec.:,:.:.:sary either for disposing 1 fairly or more

expec ;·::ously c.f t.h.e case or for the purposes of souing costs." In India, where 1:J1c;·•. : is a ~,imilar prov1s10n, it has also been held that interr,: . 1 '.., :.ories :·1.rc.· ::.::lrnissible which go to support the applicant.\; ·u.se or L: impeach or destroy the opponent's case, and th·.·· convenier:1 Lest of the validity of an interrogatory is - wo1..li<, the an:,,,vcr be relevant if given in chief? "The only question:, !:":at are ,·ei-::1..'unt c1s interrogatories are those relating le .-'any rr:e:u.ers m question ... The interrogatories shov ·.-: he dir,~c1::.d to ascertain actual facts bearing upon the is _.;,.:.es ari~:inq in the case, but not as to / 7 conclusions of law. or.}i:!rence frm:'!. the facts or construction of words or docume; :: s." SARKAR ON CODE O?_ ·~._:TVIL P:.~C-~'..EDURE 10th Ed. (2005) Vol. l p.

1145. It has also been he i :; Lhat in i..crrogaiorics in the nature of fishing enquiry cannot. J,; allowed. (SARKAR - Supra - p. 1143). So, with the abc-v: principle:, rn rnind, I now turn to consider the pre sen i. 1;)plica; icY:-1, m which the rival contentions are whether Lhc intcrrug,,Lorics are relevant and necessary at this stage ; : ,d whc1 he,· they would reduce costs of litigation or scandalcL:; .,rnd/or m:::,h:iously preferred? I have looked at iJ1c- ;Jroposcd :n Lcrrogatories. They seek to elicit clarification :::·: the Rcsuondcnt's answers to paragraph 8 of the pc·, :on. ))arr./;·aph 8 of the petition asserts: - « 8. The Responcf.t:~· i. LS ins,.>lueu t. and unable to pay its debts when lh :_; fall due.,. The Respondent retort::: that accu;-:;alion in paragraph 23 of the Answer: 8 "23. That the contc:·1.:s of porc;:;:-uph 8 of the petition are strongly disrr. .. ·.,· ·:,! a.nd lh.t' Petit.ioner is put to strict proof thereof , 'he Respunden.l asserts that it zs a financially s01..: :.cl busine3s entity with assets that evidently exce,~(:f the lic:.biiit.ie.s stated in the petition, which is suj/ic:'c ;1t indicat:c;n that they can discharge t.h.eir .fina.ncicc , rbilities ir::o:/udin.9 the payment of the rent in quest;,), .. ·' The questions ra.i::>t:r'. by the ?clitioncr to ascertain the financial soundness of t: ,· · Responc.:·:·tll ,ffc definitely relevant, but I

think they do not:.,:.::: into acc,:.unt the other contentions raised by the Respondcih. For instance m '.i1c next paragraph (i.e. 24) the Respondent alleges, th.:.1i. i·. is ... "... Currently carryin_~- :xu.t a.gric1...'rum.I production at Mngeta Farm Complex wl·1ert;· :2000 o.cr,.::::, of land has been cleared and planted with ,-;,,·!cly, irr;gn.tion uJ.n.als of 2 kilometers long have been l :--: · ublished... In canying out these activities, the R0~: ,_ xident c'epends on finance and discharges all the L:, !Jflities an:/ out.goings concerning the day to day operatiu; << .. '' the Petitioner 1n its Reply to the coun:.cr affidavit, and he • positively asserts in paragraph 11 (b) of the Reply:- "(b) The Respondent is hopelessly insolvent and a defacto dead entity. It has no assets, its bank account, is dormant, and its ba 1! Jeer is supporting the winding up petition. .. " It is a bit surprising to me, for the PetiticFHT to be positive that the Respondent is "hopelessly insolvent and a defacto dead entity" on the one hand, and to seek fvrLhcr information by way of interrogatories to establish that Sc.Enc fact, on the other. To be able to come to that conclusion t:hc Petitioner must definitely have some evidence to support it.? ff that is so, then what is the purpose of the interrogatories? The Petitioner also disputes the con\:_:nts of paragraph 24 of the Answer in which, as

may be rec;,;kd, the Respondent alleges that it has developed 2000 a.c· :s of the farm and 0 planted paddy, and thereby also dischn-:-ging its day to day operational expenses. Of course, the u·;_1i.h will have to be ascertained in the course of the hearing ci· the petition. To me, the determination of this issue would a} :-,o be relevant to the determination of the issue in controversy !·~dween the parties - which is whether the Respondent is '.·1<.)pelessly insolvent because in my v1evl, SC)hrcncy is nol determined by liquid assets held in financial institutions r:done. The above analysis l :ads me : :, conclude that, although the intended interrogat o i, ·s may :.x rclcvan1., they are neither necessary nor v.;ould h1.~_- serve a;,y useful purpose at this stage, because the Pct.i ..i 1 Jncr is al:·eady equipped ,vith the answers that he is tr_yi.1'~ !o get 1.h:·ough interrogatories. On the premises I a111 also .(· i to belie'. c that the interrogatories are not bona fide, but _;..1st an a;;n1css fishing expedition, which \Vould only incrca.-;,; costs ar:ci \Vastc the precious time of this court and the pw·i i1 s t hemsc>·cs. For the above reascn3, I ,vo1.dc .-n..1si.am the Respondent's · objections to the inter.reg .1 :..ories a1.~i proceed to dismiss the application \V-ith costs. Order accordingly.

JUDGE 1,861 words