mbezi luxury resort ltd another vs national bank of commerce ltd another 2018 tzhclandd 20 14 february 2018

IN THE HIGH COURT OF TANZANIA (LAND DIVISION) AT PAR ES SALAAM MISC. LAND APPLICATION NO. 145 OF 2017 MBEZI LUXURY RESORT LIMITED............................................1st APPLICANT YOHANA HILARIOUS NYAKIBARI........................................... 2nd APPLICANT VERSUS NATIONAL BANK OF COMMERCE LTD................................... 1st RESPONDENT BANI INVESTMENT LIMITED............................................... 2nd RESPONDENT The date of last Order: 21/12/2017 The date of Ruling: 14/02/2018 RULING Makuru. J.: By way of chamber summons, the Applicant has moved this court under section 68(c) and Order XXXVII Rule 2(2) of the Civil Procedure Code, Cap 33 R.E. 2002 (CPC) seeking for the following orders: a) The Honourable court may be pleased to open the veil of incorporation of the Respondents and hold that their principal officers namely, EDWARD MARKS (for the 1st Respondent) and Gerard Kamanyile (for the 2nd Respondent) guilty of contempt of court for disobeying a lawful order of injunction. b) The Honourable court may order the detention of the principal officers of the Respondents, namely Edward Marks l and Gerard Kamanyile as civil prisoners at Ukonga Maximum Security Prison for the maximum period of six months for breaching and disobedience of the lawful injunctive order. c) Costs be ordered to be in the due cause. The application is supported by the affidavit deponed by Mr. Lucian Peter Kwai, the Principal Officer of the 1st Applicant and Mr. Yohana Nyakibari, the second Applicant. However, Mr. Malimi learned counsel for the Respondents has attacked the application by filing a notice of preliminary objection on points of law that:- 1. The application is defective for non-citation of proper provisions of the law. 2. That the affidavit is incurably defective for having a defective jurat of attestation. 3. That the verification clause does not disclose the source of information and belief. Mr. Mnyele, learned counsel from Mnyele, Msengezi & Co. Advocates represented the Applicants while the Respondents were represented by Mr. Malimi learned counsel from K & M Advocates. With leave of the court both the preliminary objections and application were argued together by way of written submissions. I will determine the preliminary objectins first because it is trite law that points of law ought to be determined first. This principle was established in the case of Thabit Ramadhani Maziku and Another Vs Amina Hamis Tyela and Another, Court of Appeal Civil 2 Appeal No. 98 of 2011 (Unreported) whereby Othman CJ. (as he then was) had this to say:- " The law is well established that a Court seized with a preliminary objection is first required to determine that objection before going into the merits or the substance of the case or application before it " In the course of his submission Ms. Queen, learned counsel from K & M Advocates abandoned the second preliminary objection and proceeded to argue the first and third preliminary objections. Submitting in support of the first preliminary objection Ms. Queen argued that, the Applicants have not cited the enabling provision for this Honourable court to pierce the veil of incorporation. Hence, it renders the application incompetent. Citing the cases of Almas Iddie Mwinyi Vs National Bank of Commerce and Another (2001) TLR 83 and National Bank of Commerce Vs Sadrudin Meghji (1998) TLR 503, the learned counsel contended that the application is incompetent. Thus, it ought to be struck out. On the third preliminary objection Ms. Queen stated that the affidavit of Yohana Hilarious Nyakibari wholly confirms and adopts the affidavit of another deponent's knowledge as his own and verifies such other person's knowledge as true to his own knowledge and belief. It is therefore the learned counsel's submission that the affidavit is defective for failure to disclose the source of information as required by Order VI Rule 15 (2) of the CPC. According to her, paragraphs 7 and 8 of the affidavit are based on information which cannot be of the deponent's knowledge, but can only be 3 from his advocate. She cited the cases of Salima Vuai Foum Vs Registrar of Cooperative Societies and others (1995) TLR 75 and Saybook Ltd Vs Hasham Kassam & Sons Ltd (1972) HCD 228 in support thereof. In reply to the 1st preliminary objection Mr. Mnyele submitted that, the Respondents have not cited the provision of law that would be applicable. Citing the provisions of Order XXXVI Rule 6 of the CPC, Mr. Mnyele contended that it was not necessary to put a prayer in the chamber summons because even in its absence, the Principle Officer will be liable for disobedience. The said provision reads: "An injunction directed to Corporation is binding not only on the Corporation itself, but also members and officers o f corporation whose personal actions seeks to restrain." He further argued that there is no provision which invites the court to grant orders to pierce the veil of incorporate of the Respondents. Hence, the issue of no citation or wrong citation cannot arise. He prayed that the first preliminary objection be dismissed with costs. As for the third preliminary objection it was submitted that Mr. Yohana Hilarious Nyakibari is a Co-Plaintiff and Co-Applicant with Mbezi Luxury Resort Limited, whose Principal Officer is Mr. Lucian Peter kwai. Therefore, he argued that Mr. Nyakibari is conversant with whatever was going on in this case. Thus, familiar with what is stated in Lucian's affidavit. Mr. Mnyele went further to submit that what Mr. Nyakibari was confirming or verifying was to the best of his knowledge as deposed by him. 4 In rejoinder, Ms. Queen reiterated her submission in chief and insisted that the Applicants have failed to cite any enabling provision in moving the court to grant the prayers sought. According to her, section 95 of the CPC is the provision which ought to have been applied by the Applicants in their application. The learned counsel further insisted that the affidavit of Mr. Yohana Nyakibari is defective. Therefore, it should be struck out. I have considered the rival submissions of learned counsel for both parties. On the first preliminary objection, it should be understood that, what is before this court is an application for contempt of court in which the Applicant is seeking for this court's order for the Respondents' Principal Officers to show course as to why they should not be arrested for disobeying lawful orders of the court. For the purpose of clarity let me reproduce the provisions of Order XXVII Rule 2(2) of the Civil Procedure Code Cap 33 R.E. 2002 provides that: 6. An injunction directed to a corporation is binding not only on the corporation itself, but also on all members and officers of the corporation whose personal action it seeks to restrain. Basing on the above cited authorities it is apparent that the court can hold the Principal Officers of a corporation liable for contempt of court with or without being moved to lift the corporate veil. Under the circumstances therefore the court has been properly moved to grant the orders sought. Therefore, the first preliminary objection is without merits. As for the third preliminary objection. I have had an opportunity of thoroughly perusing between the lines the three paragraphs of the 5 affidavit. In order to appreciate the determination of this preliminary objection, I think it is better to reproduce the three paragraphs of Mr. Nyakibari's affidavit which are as follows: 1. I am the Applicant in the matter hence conversant with what I am about to depose to. 2. I have seen, read and understood the contents o f the affidavit sworn by Lucian Peter Kwai in support o f the chamber summons. 3. I adopt and confirm the contents therein as forming part o f this affidavit sworn by myselfin support o f the chamber application. From the wording of these paragraphs it does not need a legally trained mind to understand that Mr. Nyakibari is the Co-Plaintiff of Mbezi Luxury Resort Limited for which Lucian Peter Kwai is the Principal Officer in Land Case No. 117 of 2014. Having also gone through the affidavit of Mr. Lucian Peter Kwai which was adopted by Mr. Nyakibari who is also the co­ applicant in this application it is obvious that, Nyakibari is conversant with the facts stated in Mr. Kwai's affidavit. Further to that, the deponent (Mr. Nyakibari) has clearly stated under paragraph 3 that he adopts and confirms the contents of the affidavit of Lucian Peter Kwai. I think this suffices to know the source of information. Hence, the deponent need not restate the same. Also, in the verification clause of the affidavit of Mr. Yohana Hilarious Nyakibari he has verified the three paragraphs of his own affidavit and stated that what has been stated therein is true to the best of his 6 knowledge. I do not think he needs to verify the contents of the affidavit of Mr. Lucian Peter Kwai because he has already stated in paragraph three that he adopts the contents thereof. Again the third preliminary objection is devoid of merits. Having found that the preliminary objections are without merits, I now embark on the main application. Submitting in support of the application Mr. Mnyele contended that in determining this application the court will have to determine the following issues: 1. Whether the injunctive order granted by the court on 18th March, 2016 was still subsisting at the time the Respondents exhibited in the newspaper and advertisement to sell properties on the 15th day of February, 2017. 2. Whether the Respondents are liable by breaching and disobeying a lawful court order (injunction) for these conducts of initiating the sale while the injunction is still subsisting. In answering these issues in the affirmative Mr. Mnyele contended that the Respondents disobeyed the lawful orders of the court. Therefore, this court was within the ambit of the law when it granted an injunction pending determination of the suit as it had discretion under Order XXXVII Rule 1 of the CPC. It is therefore Mr. Mnyele's submission that the first issue is answered in the affirmative. 7 Having answered the first issue in the affirmative Mr. Mnyele contended that the Respondents disobeyed the lawful orders of the court. Thus, they deserve to be penalized as per the chamber summons. Mr. Mnyele also argued that there is a misconception in the legal fraternity that an injunction subsists for six months and be renewed only for an aggregate of one year. Citing the provisions of Order XXXVII Rule 3 of the CPC, Mr. Mnyele stated that the rule applies only where the suit is adjourned generally. According to him, that is not the case in the present suit because the same has not been adjourned generally. Lastly, the learned counsel submitted that the prayers made in the chamber summons be granted and the Principal Officers of the Respondents be jailed for a term of six months without an option of fine. In reply thereto, Ms. Queen submitted that the interim order of this court dated 18th March, 2016 expired upon lapse of six months pursuant to the provisions of Order XXVII Rule 3 of the CPC. According to her it expired on 18th September, 2016 and that the Applicant has through Misc. Land Application No. 746 of 2016 applied before this court to have the said expired order be extended. To support her argument the learned counsel cited the case of African Trophy Hunting Limited Vs Attorney General and Four Others (1999) TLR 407. In rejoinder, Mr. Mnyele reiterated his submission in chief and insisted that the order of this court dated 18th March, 2016 still subsists. Having considered the contending submissions of the learned counsel of both sides, what is on record and the relevant provisions of the law, I will 8 start with the first issue on whether the injunctive order granted by the court on 18th March, 2016 was still in subsistence at the time the Respondents exhibited in the newspaper and advertisement to sell properties. Order XXXVII Rule 3 of the CPC provides that: "3. Procedure where no application is made on suit adjourned generally G.N. NO. 508 o f 1991. In addition to such terms as the keeping o f an account and giving security, the court may by order grant injunction under rule 1 or rule 2 and such order shall be in force for a period specified by the court, but not exceeding six months:" The above provision clearly stipulates that such order shall be in force for a period specified by the court, but not exceeding six months. Thus, the period should not exceed six months. The proviso to Rule 3 further provides that; "Provided that the court granting such injunction may, from time to time extend such period for a further period which in the aggregate shall not exceed one year, upon being satisfied, on the application o f the holder o f such court injunction that the Applicant has diligently been taking steps to settle the matter complained o f and such extension sought is in the interest ofjustice, necessary or desirable" With respect, I agree with Ms. Queen Allen, learned counsel for the Respondents that the case of African Trophy Hunting Limited Vs 9 Attorney General and Four Others (1999) TLR 407 is relevant, whereby at page 414 it was stated that: Secondly, the law in Tanzania under which the relief was granted[ specifically provides for an order o f this kind to be in force for a period not exceeding six months by virtue o f Government Notice No. 508 o f 22 November, 1991, Order XXXVII Rule 4 was amended in order to introduce a maximum period o f six months when an interim order or injunction would be in force." Considering the above quotation and the provisions of Order XXXVII Rule 3 of the CPC, I am of the considered view that in the case under consideration as there is no application made for extension of time of the order dated 18th March, 2016 which expired on 18th September, 2016 when the six months period ended, by operation of law, from 18th September, 2016 the order ceased to have any legal force, it elapsed. Mr. Mnyele, learned counsel for the Applicant was aware that time had elapsed and he filed Misc. Land Application No. 746 of 2016 for extension of time. However, he decided to withdraw the same. Apart from being no application for extension of time, no diligent steps have been taken by the Applicants to settle the matter complained of. Thus, the first issue on whether the injunctive order granted by the court on 18th March, 2016 was still in subsisting at the time the Respondents exhibited in the newspaper on the 5th day of February, more than a year later, is answered in the negative. 10 From what has been stated herein above, I join hands with counsel for the Respondents that no contempt has been committed by the Respondents' Principal Officers, Mr. Edward Marks and Mr. Gerard Kamanyile. Having answered the first issue in the negative, the second issue on whether the Respondents are liable for breaching and disobeying a lawful court order (injunction) for their conduct of initiating the sale while the injunction is still subsisting also fails. All in all, and for the above stated reasons, this application is dismissed with costs. C.w. maKuru JUDGE 14/ 02/2018 Court: Ruling delivered in court this 14th day of February, 2018 in the presence of Ms. Levina Kagashe, learned counsel for the Applicants and Mr. Malimi, learned counsel for the Resf C.W. Makuru JUDGE 14/ 02/2018 li