MPS OIL TANZANI LTD VS CITIBANK T LTD MISC

IN THE HIGH COURT OF TANZANIA (COMMERCIAL DIVISION) AT PAR ES SALAAM MISCELLANEOUS APPLICATION NO. 248 OF 2014 MPS OIL TANZANIA LIMITED AMRAN MOHAMED TALIB I ............................. APPLICANTS ASILE SLEYUM MOUSUD VERSUS CITIBANK TANZANIA LIMITED.............................. RESPONDENT 25th February & 4th March, 2015 RULING MWAMBEGELE, J.: The three applicants in this application are judgment debtors, following a judgment and decree which was entered against them in Commercial Case No. 80 of 2013 and by which they were ordered to pay the respondents a total of United States Dollars Two Million Six Hundred Thirty Five Thousand Seven Hundred Thirty One and Cents Seventy Five only (USD 2,635,731.75) inclusive of legal costs, court fees and accrued interest as well as interest thereon. They have preferred this application under sections 38 (1), 68 (e), 95 and Order XLIII rule 2 of the the Civil 1 Procedure Code, Cap. 33 of the Revised Edition, 2002 (henceforth "the CPC") seeking for orders as follows: (i) This honourable court be pleased to make an order to lift and raise the order of attachment dated 2nd September, 2014 and allow the Applicants to satisfy the Decree by 31st December, 2015 per the decree; and (ii) Any other orders as this honourable court deems just and fit to grant. In order to appreciate the nature of this application and the reasons to be canvassed hereinbelow, I find it compelling to narrate the factual background giving rise to this application. In Commercial Case No. 80 of 2013, the plaintiff bank, Citibank Tanzania Limited (the respondent herein) sued the three defendants - MPS Oil Tanzania Limited, Amran Mohamed Talib and Asile Sleyum Mousud - (the applicants herein) for the recovery of United States Dollars Two Million Five Hundred Sixty Five Thousand One Hundred Fifty and Cents Fifty Four only (USD 2,565,150.54) being an outstanding sum of an overdraft facility, in aggregate, advanced to the defendants. That suit was compromised by the parties filing a Compromise of Suit signed by advocates for both parties and filed in court on 06.11.2013. Accordingly, under the provisions of Order XXIII rule 3 of the CPC, the Compromise of Suit was registered and formed the basis of a decree of the court enforceable at law. Under the terms and conditions of the decree, the defendants 2 were, jointly and severally, as already stated, ordered to pay the plaintiff the sum of United States Dollars Two Million Six Thousand Thirty Five Seven Hundred Thirty One and Cents Seventy Five only (USD 2,635,731.75) inclusive of legal costs, court fees and accrued interest. This amount was to be paid in instalments and on conditions appearing in paragraph 2 of the decree as follows: The defendants shall pay the said Decretal Amount in the sum of US $ 2,635,731.75 as follows:- (1) An initial payment of One Billion Tanzania Shillings (TZS 1 billion) inclusive of such amounts as shall be received by the plaintiff from Jubilee Insurance Company of Tanzania limited to be paid on or before 30th November, 2013; (2) The parties agree that the said sum of TZS 1 billion equates to US$ 621,118.01 at the exchange rate of 1,610 prevailing on the date of this Compromise; (3) The balance of the Decretal Amount namely the sum of US $ 2,014,613.74 shall be paid by the Defendants to the plaintiff in 24 equal monthly instalments of US$ 83,942.24 each to be paid on the 30th day of each calendar month or the next working day in the event the 30th day of month 3 falls on a Sunday or a public holiday, commencing December, 2013. (4) The Defendants shall pay interest on the Decretal Amount at the agreed rate using the formula of one month LONDON INTER BANK OVERNIGHT RATE PUBLISHED ON REUTERS (LIBOR) prevailing on the 30th day of each month + 5% per annum on the reducing balance to be paid monthly in addition to the agreed monthly installment under paragraph 2(3) above; (5) The Defendants shall make payments on account of interest pursuant to paragraph 2(4) above as per interest scheduled attached to this COMPROMISE and the parties will make any upwards or downward adjustment of interest arising from fluctuation of the one month LIBOR RATE during payment of the final interest installment. (6) If the Defendants default in any one or more of the monthly installments or interest payments due on the Decretal Amount under paragraphs 2(3) and (4) above, the whole of the balance of the Decretal Amount which accrued interest then outstanding shall become due and payable immediately. 4 (7) The Defendants Counterclaim shall stand dismissed with no order as to costs. (8) The terms of this Compromise be recorded as a final non- appeable decree of this Hon. Court and to be fully enforceable as such. So much for the background facts, now back to the present application. The second and third applicants swore a joint affidavit wherein they basically state that they have continued to deposit money in the respondent's account in satisfaction of the decree to the tune of Tshs. 629, 764,385/= and further that in the event the warrant of attachment issued by the court broker is executed the applicants will be frustrated and their capacity to pay will be ruined. A counter affidavit sworn by one Nellyana Mmanyi contradicts the statements made in the affidavit particularly with respect to the amount already deposited. It is stated instead, that the amount deposited already is Tshs. 573, 647,383/= and not Tshs. 629, 764,385/= as alleged by the applicants. He finally depones that the respondent does not consent to the postponement of the payment of the decretal amounts due from the Judgment debtors. At the hearing of this application, Mr. Daffa learned Counsel represented the applicants while the respondent had the services of Mr. Dilip 5 Kesaria, learned counsel. Both learned counsel for the applicants and respondent had filed their respective skeleton written arguments which I had an ample time to peruse before they could argue their respective positions orally. Mr. Daffa counsel for the applicants prayed and adopted the affidavit, reply to the counter affidavit as well as the skeleton arguments filed ahead of the hearing. He then went on to submit on behalf of the applicants that they have been trying very hard to satisfy the decree as agreed in the compromised suit but unfortunately their business has not been doing well. It was for this reasons, he submitted, the applicants were seeking to be given time up to 31.12.2015. He stated that if an order to attach the applicants' property is not lifted, the capacity to pay will be ruined. Mr. Daffa made an alternative prayer from the bar to the effect that the applicants should be given three months within which to pay the defaulted arrears and thereafter proceed to pay the decretal sum as per the Compromise of Suit and decree thereof. In reply, Mr. Dilip Kessaria made a detailed, lengthy submission, in line with the skeleton arguments earlier filed. He attacked the application from what can be briefly summarised as three angles. The first, mainly, is that the applicants have defaulted in their own obligations per the decree of this court following a compromise of suit between them and 6 the respondents. That, out of Tshs. 2.5 Billion which they ought to have paid, they had paid only 20% of the total amount due. Secondly, he submitted, the relief sought by the applicants is an equitable one and the court, in granting the same, should do so judiciously. In this respect, he submitted, the applicants have only deposited Tshs. 29,000,000 for the whole of 2014 and since the filing of the application they have not made any deposits. It is his argument that this conduct demonstrate that the applicants have not come to court with clean hands and therefore do not deserve this remedy. Thirdly, Mr. Kesaria submitted on the applicants statement to the effect that their business is not doing well and that they shall be able to pay by 31.12.2015 that they are self contradictory in that they have not shown the source of money to discharge the said amount. He states that these are bare assertion from the bar without particulars upon which this court can act. Regarding the prayer made by the counsel for the applicants in the alternative to the effect that they should be given three months within which to pay the arrears, it was his argument that it being not one of the pleaded reliefs, cannot be granted by this court. In the alternative, he argued that it being yet a discretionary remedy, it cannot be granted because it is already five months since the application was filed and no single payment has been made therefore this prayer should not be allowed. 7 Mr. Kessaria learned counsel went on to address this court that the applicable law is Order XX rule 11 (1) of the CPC which gives power upon this court, at the time of passing the decree, to order for satisfaction of the decree by instalments. He went on to state that after the decree is passed the court becomes functus oficio and in the absence of an application for review, it cannot review its own order. To buttress his argument, he cited to me decisions of the Court of Appeal in the cases of Zee Hotel Management Group & Others Vs Minister of Finance & Others [997] TLR 266 and Laemthong Rice Company Limited Vs Principal Secretary, Ministry of Finance [2002] TLR 389, and surmised that since there is no application for review before me, this court remains functus oficio. Mr. Kessaria did not stop there. He went on to unleash missiles at the application submitting that it is incompetent for violation of the provisions of rule 25 (2) and (3) of the High Court (Commercial Division) Procedure Rules, 2012 - GN No. 250 of 2012 (henceforth "the Rules") which require that the request for time to pay should be supported by a statement of the financial position of the applicant as well as details of his all bank accounts. It was his further submission that under rule 27 of the Rules the applicants' right to pay by instalments has been abrogated by their failure to pay the instalments and the respondent is entitled to execute the decree without further notice. 8 In his final lap, Mr. Kessaria fronted an argument that in terms of Order XX Rule 11 (2), there should be consent of the decree holder for the judgment debtor to pay by instalment. Referring me to paragraph 8 of the respondent's counter affidavit, he stated that the respondent has not and does not intend to consent to such arrangements. On those grounds, it was his invitation for me to dismiss the application with costs. I have keenly heard the arguments for and against the application as fronted by both learned counsel for the parties to this application. I appreciate their zeal and candour each has injected in guarding and fighting for the interest of their respective clients. Indeed, their arguments have shade much light into my ruling and I must admit, their rich research has much eased my task of composing this ruling. Without much ado, I must state at the outset, that this application is wanting in merit. In my view, the correct position of the law is as stated by Mr. Kesaria, learned counsel for the respondent and as elucidated in the Zee Hotel Management Group and Laemthong Rice Company cases (Supra). This court, having finalised the case and a decree recorded, it became functus oficio and therefore lacks legal basis to grant an application of this nature which, in effect, seeks to disturb its previous order. 9 The question as to when does the court becomes functus officio was the subject of discussion in the Court of Appeal in the case of Tanzania Telecommunications Co. Ltd & Three Others Vs TRI Telecommunications Tanzania Ltd Civil Revision No. 62 of 2006 (unreported). In that case the court relied on in its earlier decision in John Mgaya & Four Others Vs Edmund Mjengwa & Six Others, Criminal Appeal No. 8 (A) of 1997 (unreported) and the East African case of Kamundi Vs R [1973] EA 540 as well as the decision of an English case of S. (an infant) Vs Manchester City Recorder [1969] 3 All ER 1230 and approved the following position in Manchester City Recorder and followed in Kamundi. "A further question arises, when does a magistrate's court become functus officio and we agree with the reasoning in the Manchester City Recorder case that this can only be when the court disposes of a case by a verdict of not guilty or by passing sentence or making some orders finally disposing of the case" In Zee Hotel Management Group, the Court of Appeal also discussed as to when the court becomes functus officio. Briefly, the facts in that case were that the appellants had applied in the High Court of Zanzibar for certain orders relating to the issuing of entry permits or special passes. The learned judge granted an order against the 11th respondent io ordering him to issue an entry permit for two years and adjourned the matter for a few days to satisfy himself that the order has been complied with. On resumption, the judge approved a modification in terms of which renewable three months passes would be granted. On appeal to the Court of Appeal against this subsequent order, it was held, and I quote from the headnote, thus: "The judge was functus officio once he had given his original order and in the absence of an application for a review of his earlier decision he had no authority to so review it." Likewise, in Laemthong Rice Company one of the issues with which the Court of Appeal was seized was whether a judge can revoke and replace his ex parte judgment: "A judge becomes functus officio once he has given his original order and cannot depart from it in the absence of an application for review". In the present application, the applicants pray for an order that this court's order of attachment dated 02.09.2014 be lifted and raised so that the applicants are allowed to pay the decretal sum in instalments up to 31.12.2015 or, alternatively, they be given three months within 11 which to pay the outstanding instalments. This is not application for review. As rightly submitted by Mr. Kessaria learned counsel for the respondent, and as stated in the Zee Hotel Management Group case, the prayers to the effect that the previous order of this court be lifted and raised as prayed in the chamber summons or that they be given three months' time within which to repay the outstanding instalments as prayed from the bar by Mr. Daffa, learned counsel for the applicants, are not maintainable. This court, as was held in Laemthong, having recorded the Compromise of Suit and a decree extracted therefrom, it became functus officio. The only avenue through which the prayers by the applicants in the chamber summons or that of their learned advocate from the bar, can be entertained by this court, is through a review; of course upon grounds for review being satisfied. As alluded to above, the present application in not one for review. It is for this reason, I find this application to be without merit. The foregoing disposes of this application and I would have rested in peace if it were not for some other flaws which I propose to discuss them hereinbelow for academic purposes. The flaws and arguments thereof, really, were canvassed quite appositely by Mr. Kesaria, learned counsel for the respondent and I feel they should not pass without adding my ink on. Let me start with Mr. Daffa's alternative prayer from the bar to the effect that the applicants should be given three months within which to 12 pay the outstanding instalments which they have defaulted and thereafter they should proceed to pay the outstanding sum in accordance with the decree. This prayer has two major flaws. First, it has been made from the bar and, secondly, it goes contrary to instalments scheme as prescribed in the compromise of suit and its ultimate decree. On the first flaw, the affidavit and reply to counter affidavit which the applicants' counsel sought to rely and adopt as forming part of his arguments at the hearing, are silent on this alternative prayer. I have dispassionately gone through these documents; that is, the affidavit and reply to counter affidavit as well as the chamber summons and the applicants' skeleton arguments. In all these documents, I have not been able to glean neither expressly nor impliedly the prayer respecting satisfaction of the amount defaulted in three months. The chamber summons, essentially, contains only one prayer: to lift and raise the order of attachment dated 02.09.2014 and allow the applicants to satisfy the decree by 31.12.2015. There is another usual general prayer: any other order the court may deem just and fit to grant. In the circumstances, the prayer to the effect the effect that the applicants should be allowed to repay the defaulted instalments in three months is just a statement from the bar which is not acceptable. While still on this point, I wish to add that the alternative prayer goes against the principle that parties are bound by their pleadings. It is a well established principle of law that relief not founded on the pleadings 13 will not be given. Thus, cases must be decided on the issues on the record - see Blay Vs Pollard & Morris [1930] 1 KB 682, Captain Harry Gandy Vs Caspar Air Charter Limited (1956) 23 EACA 139 and James Funke Ngwagilo Vs Attorney General [2004] TLR 161. These cases dealt with pleadings in a suit but I have no flicker of doubt that the principle is applicable in the present situation as well, for in applications, the chamber summons and affidavits thereof are pleadings within the meaning envisaged by the term in suits generally - see Leila Jalaludin Haji Jama! Vs Shaffin Jalaludin Haji Jamal Civil Appeal No. 55 of 2003 (CAT unreported). In the case at hand, parties are bound by what they stated in the chamber summons and affidavits supporting it and affidavits countering it. On the second limb of this argument, the prayer is unacceptable as granting it will be going against the compromise of suit and decree which bind the parties. The discussion on this point (supra and infra), are applicable here. I need not repeat them here. As rightly pointed out by Mr. Kesaria, the law applicable in the present instance and which, it appears, relied on to order payment of the decretal sum by instalments, is Order XX rule 11 (1) of the CPC. For easy reference, I take the liberty to reproduce the sub-rule as under: "Where and in so far as a decree is for the payment of money the court may, for any 14 sufficient reason, at the time of passing the decree order that payment of the amount decreed shall be postponed or shall be made by instalment, with or without interest, notwithstanding anything contained in the contract under which the money is payable." [Emphasis supplied]. From the reading of the foregoing sub-rule, it is clear that the court has, at the time of passing the decree, power to order that the decretal sum be paid by instalment. The court thereafter becomes functus officio. However, after passing such decree, the court may, on application of the judgment debtor and with the consent of the decree holder, change the terms and conditions of the decree so passed. This is the tenor and import of sub-rule (2) of the same rule. Again, for ease of reference, I take the liberty to reproduce the same as under: "After the passing of any such decree the court may, on the application of the judgment debtor and with the consent of the decree-holder, order that payment of the amount decreed shall be postponed or shall be made by instalments on such terms as to the payment of interest, the attachment of 15 the property of the judgment debtor, of the taking of security from him, or otherwise, as it thinks fit". [Emphasis added]. In the instant application, the decree holder has been categorical in its counter affidavit, skeleton arguments and oral arguments before me that he has not and is not ready to give consent to have the terms and conditions in the decree changed. Simply put, in the present application, only one condition has been satisfied; the judgment debtor has brought an application to have the terms and conditions in the decree earlier issued varied but the decree holder has withheld such consent. In the premises, the application brought by the applicants without the consent of the respondent, in terms of sub-rule (2) of rule 11 of Order XX of the CPC, cannot be allowed to stand. There is yet another flaw which I wish to discuss. This is the glaring fact that the applicants' ability to repay the monies as structured by the Compromise of Suit and the ultimate decree, even if the application is allowed, is seriously doubtful. The respondent stated in the counter affidavit particularly at para 7 to the effect that the applicants have lied under oath when they stated at para 4 of the affidavit that they have deposited Tshs. 629,764,385/= in the respondent's account. The amount deposited by the applicants is an aggregate sum of only Tshs. 69,000,000/= excluding the payment of US$ 313,445.58 received from 16 the insurance company, the respondent claims. Counsel for the respondent repeated the allegation in the skeleton arguments and in his submissions before me when arguing the application. In all these, the applicants have not controverted the statement. In the circumstances I take it as true that what the respondent states; that the applicants are not honest and that their ability to pay is doubtful, as but true. This is exacerbated by the fact that the applicants have not complied to the letter with sub-rule (3) of rule 25 of the Rules which requires that the request for time to pay shall be supported by a statement of his financial position including his bank accounts. Having taken this stance, the ability for the applicants to pay leaves a lot to be desired. Their credibility, as well, is put under serious accusation. In the premises, this being an equitable remedy, it needs the applicants to have clean hands to be granted the same. This is enshrined in the doctrine of equity that goes he who goes to equity must go with clean hands. While still on the point, I wish to underscore that the applicants have confessed that their business is not doing well. This worries the respondent as to whether they can at all satisfy the decretal sum because, in the absence of the disclosure as to the source of money satisfying the decretal sum when granted the application, the business with which they could get the money to satisfy the decretal sum is dwindling. This court shares the respondents sentiments. If at all the 17 applicants have not paid anything from the moment this matter started and they have stated before me through their advocate that their business is not doing well, in the absence of any assurance to this court as to the source of the money to satisfy the decree sum if the application is granted, their ability to satisfy the decree is seriously doubtful. In the premises, it becomes more appropriate to allow the respondent to enjoy the fruits of litigation by enforcing the decree. That is all with the arguments on the application. However, by way of postscript, I wish to underscore the tenor and import of rule 64 of the Rules. My point on this is predicated upon Mr. Kesaria's prayer fronted on 24.02.2015 urging this court to proceed to compose a ruling on the basis of the skeleton arguments filed by both counsel without hearing the parties to the application. Under the Rules, all submissions must proceed orally preceded by skeleton arguments which are filed in court at least three days before the date of the hearing or oral submissions. This is the requirement of rule 64 of the Rules. Further to this, under the dictates of the same rule, failure to file the said skeleton submissions cannot be a ground for adjournment and a party is not allowed as a matter of right to seek extension of time within which to file the same. Thus, hearing shall proceed regardless of the absence of the said skeleton submissions. Apparently, the filing of skeleton arguments cannot stand in lieu of the oral submissions. This is quite different where the application is argued 18 by way of written submissions. Simply put, skeleton arguments are not written submissions and therefore appearance and oral submissions are mandatory regardless of the filing of the skeleton arguments. Therefore, while the practice of filing submissions is similar to a hearing and therefore failure to file written submissions has been equated to non- appearance or want of prosecution, failure to appear and make oral submission, even after filing skeleton arguments, is tantamount to failure to prosecute the application and the same becomes fit for dismissal for want of prosecution where the defaulting party is the plaintiff or applicant and or ex parte hearing where the defaulting part is the defendant or respondent. That is the reason why I refused to grant Mr. Kesaria's prayer to proceed composing the ruling on the strength of skeleton arguments. In the end of it all, for the reasons stated hereinabove, the application filed by the applicants is hopelessly wanting in merit and is consequently dismissed with costs. Order accordingly. DATED at DAR ES SALAAM this 4th day of March, 2015. M. MWAMBEGELE JUDGE 19