josephat muniko vs north mara gold mine ltd 2020 tzhccomd 22 30 march 2020

IN THE HIGH COURT OF TANZANIA (COMMERCIAL DIVISION) AT MWANZA COMMERCIAL CASE NO.9 OF 2019 MR JOSEPHAT MUNIKO (suing under the constituted special powerof attorney conferred to him by Mr. Mwita Makindya and Mrs. Mwita Anthony Wambura)...................................................................PLAINTIFF VERSUS NORTH MARA GOLD MINE LIMITED............................ DEFENDANT RULING B.K.PHILLIP,J This ruling is in respect of a point of preliminary objection raised by the defendant's Advocate, the learned Advocate Jonathan Wangubo, which is couched as follows; "To the extent that the plaintiff claim or cause o f action is the alleged breach o f contract by the defendant and to the extent that the cause o f action is said to have arisen in 2011 when the defendant is alleged to have commenced mining operations within the area subject o f the claim. This suit and specifically the claims at paragraphs 9 and 10 o f the plaint are time barred for being filed out o f the statutory prescribed time contrary to item 7 o f part I to the Schedule o f the Law o f Limitation Act [Cap 89 R.E. 2002]." A brief background to this case is that Mr. Mwita Makindya and Mrs. Mwita Anthony Wambura ( the donors of the power of attorney in this case, henceforth "the donors") are original joint holders and beneficial owners of the mining rights under the Mining Act 1979 with claim Title No. 41493 over the land situated within the defendant's special mining licence No. 18/96 in Tarime District. In 1999 the donors entered into agreement with the defendant whereby the donors agreed to transfer and surrender their mining rights over the aforesaid land to the defendant on the following considerations; i) Payment of USD 2,000 which was paid at the date of execution of the contract. ii) Payment of revenue royality of 1% of all gold extracted from the land transferred/surrendered by the donors.This was supposed to be paid upon the defendant's commencement of underground mining. Furthermore, it was agreed that, the aforesaid revenue royality of 1% was supposed to be paid quarterly and calculated at the last day of the quarter at the London spot gold price. It is the plaintiff's case that, ever since the defendant commenced the mining operations in the plaintiff's claim title in 2011 he has not paid the donors any royality as agreed, thus the plaintiff alleges that the defendant breached the contract.The plaintiff has enumerated all the incidences of breach of contract and the amount of money that stands unpaid. In paragraphs 9 and 10 of the plaint which are the basis of the defendant's above mentioned point of preliminary objection, the plaintiff states as follows; "9. That for the year ended June 2012, the defendant declared to the Tanzania Extractive Industries Transparency Initiative (hereinafter referred to as "TEITI') extraction o f 164,107 ounces (OZ) o f gold worth US$ 277,727,765. In that regard the Donors are entitled to US$ 2,777,277.65 being 1% revenue royalty as per the aforesaid contract for the year ended 3Cfh o f June 2012. Extract from cover page and page 56 o f the Reconciliation Report o f TEITI date June 2014 are attached hereto and collectively marked "Annexure - MW 3" forming part o f this Plaint. 2 10. That, for the year ended June 2013 the defendant dedared to TEITI extraction o f 244,833 ounces {OZ) o f gold worth TZS 592,317,323,000 which was equivalent to US$ 372,995,795 at the then exchange rate o f US$ 3,729,957.95.00 being 1% revenue royalty as per the aforesaid contract for the year ended 3Cfh o f June 2013. Extract from cover page and page 11 o f the Fifth Final Report o f TEITI dated November 2015 are attached hereto and collectively marked "Annexure - MW 4" forming part o f this plaint." Now, back to the point of preliminary objection, I ordered this preliminary objection to be disposed of by way of written submissions.Submitting in support of his preliminary objection, the defendant's advocate started by pointing out that this point of preliminary objection is in respect of the alleged breach of contract in paragraphs 9 and 10 only .The defendant's advocate proceeded to submit that the pleadings show that the breach of contract in paragraph 9 of the plaint occurred on 30th June 2012,while the one in paragraph 10 occurred on 30th June 2013.He contended that the plaintiff's claims basing on the aforementioned breach of contract in paragraphs 9 and 10 of the plaint are time barred as they have been filed out of time in contravention of the provisions of item 7 part I of the schedule to the law of Limitation Act, Cap 89, R.E 2002 which provides that the time limit for suits arising out of contract is six (6) years only .The defendant's advocate explained that the limit for suing in respect of the breach of contract in paragraph 9 expired on 30th June 2018 while the one in paragraph 10 expired on 30th June 2019. Relying on the provisions of section 3(1) of the Law of Limitation Act Cap 89, R.E 2002, the defendant's advocate invited this court to dismiss the plaintiff's claims stated in paragraph 9 and 10 of the plaint. Section 3 (1) of Cap 89 provides that a suit that is instituted after the expiry of the time limit prescribed in the schedule thereto shall be dismissed whether or not limitation has been set up as a defence, contended the defendant's Advocate. In rebuttal, the learned Advocate Mr.Heri Louis Kayinga who represented the plaintiff, submitted that the provisions of section 3(1) of Cap 89 are not 3 supposed to be read in isolation.He argued that the section itself provides that its application is subject to other provisions in the Act,which means that it should be read together with other provisions in the Act, in particular section 7 of Cap 89 which caters for circumstances involving continuing breaches and wrongs. Thus, he was of the view that in this case there was continues breach of contract and the plaintiff's claims in paragraphs 9 and 10 are within the time limit prescribed by the law for instituting cases arising out of contract.To cement his arguments he cited the case of Thomas NgawaiyaVrs The Attorney General and three others, Civil Case No 177 of 2013, in which this court said that the provisions of section 3(1) of Cap 89 have to be read together with the provisions of section 7 which provides that;" where there is a continuing breach o f contract or a continuing wrong independent o f contract a fresh period o f limitation shall begin to run at every moment o f the time during which the breach or the wrong, as the case may be co n tin u e sMr. Heri prayed for the dismissal of the preliminary objection with costs. In rejoinder the defendant's advocate refuted the contention raised by the plaintiff's advocate that there was a continues breach of contract.He contended that the case of Ngawaiya (supra) is distinguishable from the case in hand, since in that case there was no periodical payments of the claimed amount, while in the instant case there was periodical payments in which each default in payment in a particular period constituted a cause of action. He insisted that the plaintiff's claims in paragraph 9 and 10 should be dismissed for being time barred. Having analyzed the submissions made by the learned advocates appearing herein, I have noted that both sides are in agreement on the law applicable as far as the time limit for institution of suits arising out of contract is concerned. In my understanding the issue here is the interpretation of what has been pleaded by the plaintiff in the plaint. First, I think it is necessary to know the plaintiff's claims in this case. In this case plaintiff wants this court to grant him the following reliefs. 4 i. An order for payment of US$ 19,540,405.00 or equivalent in Tanzania Shillings being the Donors entitlement to revenue royalties up to 30th June 2016. ii. An order compelling the Defendant to pay theDonors the sum of royalties revenue of 1% as per thecontract for the gold produced up for the years 2017, 2018,2019 and years to come up to the closure of the mine. iii. Interests at court rates from the date of judgment and decree to the date of final payment of the amount claimed. iv. General damages for breach of contract. v. Costsbe provided for. The law requires the plaintiff to state his/her case by giving particulars of the claim in a concise and brief manner. (See Order VI Rule 3 of the civil procedure code, Cap, 33, R.E 2002).Those concise and brief particulars are normally stated in the paragraphs in the body of the plaint and at the end the plaintiff states his claims, that is the reliefs sought from the court. In this preliminary objection the defendant prays for the dismissal of the plaintiff's claims in paragraph 9 and 10 of the plaint. In my settled view this point of preliminary objection is misconceived, what are found in paragraph 9 and 10 of the plaint are just brief facts/ background on the plaintiff's claims which are stated at the end of the plaint as relief prayed by the plaintiff. With due respect to the defendant's advocate, the contents of a plaint have to read together in their totality including the annextures attached thereto. In this case annexture MW 3 ( reconciliation report for the period Between July 2011 to 30th June 2012) and MW4 ( 5th report of the Tanzania extractive Industries Transparency Initiative for the year that ended 30th June 2013) to paragraph 9 and 10 of the plaint respectively were reteased in June 2014 and November 2015. As per the pleadings, the plaintiff relies on annexture MW3 and MW4 to support what is stated in paragraphs 9 and lO.The plaintiff's claims of the said revenue royalty of 1% is based on article 2.2. of the contract between the plaintiff and the donors which is attached in the plaint as annexture MW1 and the same reads as follows; 2.2 In further consideration o f the grant o f the option under Clause 2.1 AMGM agrees that: 2.2.1 AMGM wiii not to use its rights under this Agreement to conduct any surface mining o f the former Claim area; and 2.2.2 if AMGM commences underground mining operations on any part o f the former Claim area: (1) The Claim Owner will be entitled to a revenue royalty calculated as 1% o f all gold produced from that part o f the land. (2) The payment o f the royalty in (1) will be made quarterly and calculated as at the last day o f the quarter at the London spot gold price. According to Article 2.2.2 of the contract, the starting date for the payment of revenue royalty was not fixed. It was dependent on the date the defendant would start underground mining operations.The contract does not state the modality under which the donors would be informed on the commencement of the underground mining in their land.Consequently, the date in which the donors became aware that the defendant commenced underground mining has to be established by giving evidence as the pleadings are silent. It has to be noted that as per the facts of this case the cause of action arose when the donors became aware that the defendant had commenced underground mining. With this observation, this point of preliminary objection lacks the qualification of being a valid one as evidence is required to establish that the cause of action arose in 2011. 6 On the other hand and without prejudice to my observations herein above, on the face of the record since the reports that show the amount of gold extracted by the defendant (annextures MW3 and MW4 ) were issued in 2014 and 2015, then , at least it can be assumed that by the year 2014 the donors had knowledge that the plaintiff commenced underground operations not 2011.That means the cause of action against the defendant arose from 2014 and the donors7rights to sue on the contract accrued from that year ( 2014). From the foregoing and without prejudice to my observation on what constitutes the plaintiff's claims, it is my settled view that according to the facts of this case, it is not correct to assume that the cause of action against the defendant accrued from 2011. As regards the application of section 7 of cap 89 in this matter ,with due respect to the plaintiff's advocate, unfortunately in his submission he failed to give clear explanation on how that section is applicable in this matter.However, in my considered opinion, under the circumstances of this case the provisions of section 7 of Cap 89 cannot be applicable, since the pleadings do not show that there was any continuity of the breach as envisaged in section 7 of Cap 89. In the upshot the point of preliminary objection is hereby dismissed. Costs will be in course. Dated at day of March 2020. B.K.PHILLIP \\ .K \ * Ifrh \\ A V ftV JUDGE ' ■ * 7