FINAL DEFAULT JUDGMENT Lake Pipes Limited v Plancon cc 9164 1

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA (COMMERCIAL DIVISION) AT DAR ES SALAAM COMMERCIAL CASE NO 9164/2024 BETWEEN LAKE PIPES LIMITED……….……………………………………….…. PLAINTIFF VERSUS PLANCON (T) LIMITED…………………………………………….…DEFENDANT DEFAULT JUDGEMENT Date of last order:21/10/2024 Date of Judgement: 15/11/2024 GONZI, J. The Plaintiff sued the Defendant claiming for Judgment and Decree for Orders that: i. That the Honourable Court be pleased to order that the Defendant is in (continuous) breach and default of the agreement for supply of construction finishing goods, to wit, HDPE Pipes class C and D. ii. That the Honourable Court be pleased to order the Defendant to pay the Plaintiff TZS 96,005,283.91/= (Tanzania Shillings Ninety-Six Million, Five Thousand, Two Hundred Eighty-Three and Ninety-One Cents) being the 1 outstanding purchase price for the HDPE Pipes supplied to the Defendant by the Plaintiff. iii. That the Honourable Court be pleased to order the Defendant to pay the Plaintiff interest on the decretal sum at the commercial rate of 19% per annum from the date of the breach to the date of delivery of the judgement. iv. That the Honourable Court be pleased to order the Defendant to pay the Plaintiff interest on the decretal amount at the court’s rate of 12% per annum from the date of judgment to the date of full and final satisfaction. v. General damages as will be assessed by this Court. vi. Costs of the suit vii. Any other relief as the Court may find just, convenient, and equitable to grant. According to the plaint, the Plaintiff claims against the Defendant for continuous breach and default of the agreement for supply of construction finishing goods. The quintessence of this matter is that sometimes in 2023 the Defendant approached the plaintiff, requesting to be supplied with construction finishing goods, to wit, HDPE Pipes class C and D. Upon successful negotiations, the Defendant filled in the KYC Form ready to 2 commence the business. It was a fundamental term of the agreement between them that the Defendant should deposit a certain amount of monies prior to the supply of the goods and in case the supply exceeded the deposit made, the Defendant would immediately make payment for the exceeding amounts. In compliance to the said term, on 8th April 2023, the Defendant deposited to the Plaintiff`s account TZS 80,000,000/= (Tanzania Shillings Eighty Million Only). On 12th April 2023, the Defendant placed an order and was supplied with goods worth TZS 88,652,324.01/= (Tanzania Shillings Eighty-Eight Million, Six Hundred and Fifty-Two Thousand, Three Hundred and Twenty-Four and Five Cents) thus the deposit of TZS 80,000,000/= (Tanzania Shillings Eighty Million Only) made on 08th April 2023, was utilized to set off the purchase price of the supplies made on 12th April 2023, leaving the outstanding amount of TZS 8,652,324.01 (Tanzania Shillings Eight Million, Six Hundred and Fifty-Two Thousand, Three Hundred and Twenty-Four and Five Cents Only). As the Plaintiff was waiting for the Defendant to clear/settle the amount that had exceeded during the first supply, on 11th May 2023, the Defendant placed another order, and was supplied with the second consignment worth TZS 87,352,959.90 (Tanzania Shillings Eighty-Seven Million, Three Hundred and 3 Fifty-Two Thousand, Nine Hundred and Fifty-Nine and Ninety Cents Only). However, the Plaintiff asserts that, to date, the Defendant has not paid for the second consignment in addition to the amount that had exceeded the deposit made during the first consignment, hence making the total outstanding amount of TZS 96,005,283.91/= (Tanzania Shillings Ninety-Six Million, Five Thousand, Two Hundred and Eighty-Three and Ninety-One Cents). The Plaintiff made several reminders to the Defendant to settle its outstanding dues but in vain. On 15th March 2024, the Plaintiff issued a 14 days’ demand letter and notice of intention to sue to the Defendant, which was received on 18th March 2024. However, the Defendant did not respond hence, the Plaintiff’s effort were rendered futile causing it to suffer significant financial damages. This prompted the Plaintiff’s Board to resolve to take the matter to court for redress. Upon the institution of this suit, the Court ordered the Defendant to be served with summons to file the written statement of defence within twenty-one days from the date of service. Following the failure of the normal means of service, the Defendant was duly served through 4 substituted service by way of publication through Mwananchi Newspaper of 05/09/2024. However, the Defendant did not file the Written Statement of Defence, hence the case proceeded without the defendants’ involvement. When the suit was called for necessary orders on 09/10/2024 no Written Statement of Defence had been filed, therefore, the learned Advocate for the plaintiff, Mr. Robert Mosi, prayed to be allowed to proceed with the hearing of the case by filing application for default Judgment under the provisions of Rule 22(1) of this Commercial Court Rules. In the Circumstances the prayer was granted. The plaintiff filed the Application for Default Judgment vide Form No.1 accompanied by an affidavit of proof of the claim sworn by one, Macrina Chale, a Principal Officer of the plaintiff Company. Through the affidavit, the Plaintiff tendered Exhibit LPL-1, a copy of KYC Form for business commencement. She also attached Exhibit LPL-2 being the Bank Statement and affidavit of authenticity evidencing that the Defendant had deposited TZS 80,000,000/= only to the Plaintiff’s bank account. Exhibit LPL-3 is a copy of The invoice and EFD Receipt, as evidence that the goods supplied to the Defendant worth TZs 5 88,652,324.01/=. Exhibit LPL-4 is a copy of the Delivery Note, Invoice and EFD Receipts as evidence for the second consignment worth TZS 87,352,959.90. Exhibit LPL-5 is a copy of the General Ledger and affidavit of authenticity evidencing the outstanding amount of TZS 96,005,283.91/=. Exhibit LPL 6 is a copy of the Demand Letter and Print- outs of WhatsApp messages and an affidavit of authenticity evidencing the reminders from the Plaintiff to the Defendant. Exhibit LPL 7 is the Board Resolution authorizing the institution of this suit. The suit was proved by way of an affidavit of proof in line with Rule 20(1) of the Commercial Court Rules. An affidavit is a substitute for oral evidence. This is the rule in the case of Uganda v. Commissioner of Prisons, Ex parte Matovu (1966) E.A.514. Where the Defendant does not file a counter affidavit to dispute the contents of an Affidavit, he is deemed to have admitted the factual statements contained in the Affidavit of the adverse party. This was stated in Fatuma Ally Mohamed vs Mohamed Salehe [2020] TZHCLand 2320 (TANZLII) at page 2 and I quote: 6 “The position of the law on failure to file a counter affidavit it is settled. The Respondent is deemed to have not contested on the factuality of the affidavit. The suit at hand is premised on allegations of breach of agreement for the supply of construction finishing goods to wit, HDPE Pipes Class C and D. For the claims of breach of a contract to succeed, inter alia, the court must make a finding as to whether there was a valid agreement between the Plaintiff and the Defendant; and, if that issue is answered in affirmative, whether there was breach of the said agreement? Further the court should find whether there are damages suffered by the innocent party and the extent thereof. Undoubtedly, as per Exhibit LPL-1, which is a copy of KYC Form for business commencement, the Plaintiff has evidenced existence of an agreement for sale on credit between the Plaintiff and the defendant proving that there was a valid contract between the two hence the first issue is answered in affirmative. Secondly, Exhibit LPL-2 is the Bank Statement and affidavit of authenticity evidencing that the Defendant had deposited TZS 80,000,000/= only to the Plaintiff’s bank account while Exhibit LPL-3 is a copy of the invoice and EFD Receipt. These evidence that 7 the goods supplied to the Defendant were worth TZS 88,652,324.01/= which exceeded the amount that had been deposited by the Defendant. Exhibit LPL-4 is a copy of the Delivery Note, Invoice and EFD Receipts as evidence for the second consignment worth TZS 87,352,959.90 being delivered to the Defendant but which was never paid for by the Defendant. The foregoing prove that the Plaintiff performed the contractual obligations by supplying the agreed goods to the Defendant. Further, Exhibit LPL-5 is a copy of the General Ledger and affidavit of authenticity evidencing the total outstanding amount of TZS 96,005,283.91/= consisting of both the initial debt of 8,652,324.01 and the second consignment debt of TZs 87,352,959.90. Exhibit LPL 6 is a copy of Demand Letter and Printouts of WhatsApp messages and an affidavit of authenticity. Through Exhibits LPL 5 and LPL 6 the Plaintiff has evidenced that the Defendant is in breach of the agreement since the Defendant has failed to pay the demanded amounts for the goods supplied to him under the agreement. The Plaintiff therefore has suffered a net loss of TZS 96,005,283.91/= consisting of both the initial debt of 8,652,324.01 and the second consignment debt of TZs 87,352,959.90. This was claimed as specific damages and has been strictly proved by the Plaintiff. The reminder letters and Board resolution 8 entail the efforts done by the Plaintiff to recover its money from the defendant. The inconveniences suffered attract general damages in favour of the Plaintiff. Given that the transaction between the parties was a business or commercial transaction, commercial interest at the commercial rate of 19% per annum for the outstanding amount is payable to the Plaintiff. Therefore, having carefully gone through the affidavit of proof of claim and exhibits LPL 1-7 which were tendered by the Plaintiff in this suit, I am satisfied that Parties entered into a valid agreement for the supply of construction finishing goods to wit, HDPE Pipes Class C and D. Also, it is clear that the Defendant has not honored her contractual obligations, hence is in breach of the said agreement and consequently the Plaintiff has suffered both specific and general damages. For the foregoing reasons I enter Judgment and Decree in favour of the Plaintiff against the Defendant as prayed and proceed to make the following orders: i. It is hereby declared that the Defendant is in continuous breach and default of the agreement for supply of construction finishing goods, to wit, HDPE Pipes class C and D. 9 ii. The Defendant is hereby ordered to pay the Plaintiff TZS 96,005,283.91/= (Tanzania Shillings Ninety-Six Million and Five Thousand, Two Hundred Eighty-Three and Ninety-One Cents only) being the outstanding purchase price for the HDPE Pipes supplied to the Defendant by the Plaintiff. iii. The Defendant is hereby ordered to pay the Plaintiff interest on the decretal sum at the commercial rate of 19% per annum from the date of delivery of the second consignment of goods on 11th May 2023 to the date of delivery of judgement. iv. The Defendant is hereby ordered to pay the Plaintiff interest on the decretal sum at the court’s rate of 7% per annum from the date of judgment to the date of full and final satisfaction thereof. v. The Defendant is hereby ordered to pay the Plaintiff general damages at the tune of TZS 15,000,000/= for inconveniences suffered. vi. Costs of the suit shall be borne by the Defendant. I further Order that the decree emanating from this suit shall not be executed unless the decree holder has complied with the provisions of Rule 10 22 (2) (a) and (b) High Court (Commercial Division) Procedure Rules, 2012 (as amended, in 2019). It is so ordered. A.H.GONZI JUDGE 15/11/2024 Judgment is delivered in Court this 15th day of November 2024 in the presence of Ms Beatha Telly, Advocate for the Plaintiff. A.H.GONZI JUDGE 15/11/2024 11