ms kalambo contractors ltd vs weston sahawela 2015 tzhc 2263 13 august 2015

IN THE HIGH COURT OF TANZANIA AT MBEYA MISC. CIVIL APPEAL NO. 4 OF 2013 (From Chunya District Court, Misc. Civil Application No. 1/2012. Original civil case no. 4/2014) MS KALAMBO CONTRACTORS LTD ............................APPELLANT VERSUS WESTON SAHAW ELA............................................... RESPONDENT JUDGMENT Date o f last Order: 14/07/2015 Date o f Judgment: 13/08/2015 A.F. NGWALA, J. This Appeal arises from the Ruling of the District Court of Chunya, at Chunya. The Appellant, M/S Kalambo Contractors Ltd, who was the, Respondent in the District Court, being dissatisfied with the Ruling of the Chunya District Court, delivered on 30th day of November, 2012, has come to this court for redress. In his Memorandum of Appeal, the Appellant listed three (3) grounds of appeal namely 1. That the learned Magistrate erred both in points of law and facts when it ordered for the inspection of the properties of Brown Kabelege without investigation as the said person was not one among the share holders of M/S Kalambo Contractors Limited. l 2. The learned Resident Magistrate erred both in points of Law and facts when he ruled out that the said Brown Kabelege was liable and his properties be traced anywhere and his account for the purpose of executions without affording him an opportunity to be heard. 3. That the whole Ruling was not based on evidence on record. At the hearing of this Appeal, the Appellant was represented by Mr. Mwakolo, the learned Counsel, while the Respondent was unrepresented. This Appeal was argued by way of written submission. The learned Counsel for the Appellant, submitted that, the Appellant who was the Respondent had filed a Counter Affidavit and a Notice of Preliminary Objection to the effect that the application was bad in law for being brought under inapplicable provisions of the law and the clause of attestation is bad in law for contravening the provision of Section 8 of the Public Notaries and Commissioners for Oath Cap. 12 R. E. 2002. He was of the view that, if the trial Magistrate would have sustained their Preliminary Objection, then he would have struck out the Application for alternative execution by the Respondent. The Respondent in response submitted that, it is a trite law that, written submission in this country cannot be appended with annexture which on its nature tend to introduce evidence. The counsel has attempted to introduce new evidence in his submission an act which amount into abuse of court process. In particular, he cited the case of Tanzania Union o f Industrial and Commercial Workers (TUICO) at Mbeya Cement Company Ltd vrs. Mbeya Cement (T) Limited and National Insurance Corporation (T) Limited (2005) TLR, Page 41. The learned Counsel for the Appellant submitted that, the Respondent in his Application for execution has prayed for the Court to Order for inspection of the properties of Brown Kabelege and any debtor for execution of the Decree, dated 21st day of February, 2012. He submitted further that, it is unfortunate that, the said Decree was not drawn and annexed to the Affidavit to support his claim. He was of the view that, the fact that, there is no any decree drawn and served to the Appellant, is tantamount to say that, the Application for execution was pre-maturely done. In this regard, the Respondent submitted that, in the foregoing manner that, it was inevitable for the corporate veil of the Judgment debtor to be pierced, so as to expose the true owrners of characters as one of directors of the Applicant that is, one Brown Kabelege was the one who personally influenced the Respondent to inject his money forward to the company. In relation to the wrong provision of the law, the Respondent was of the settled view that, the subordinate court was properly moved, however, it has to be appreciated that, the court was not necessarily bound by mere technical issues, in the procurement and administration of substantial justice. In fortifying his submission, he cited Article 107 (A) of the Constitution of United Republic of Tanzania, 1977, together with the decision of the late Biron J, In Marketing Co. Ltd A.A. Shariff (1980) TLR. Where in, the Judge in page 65 provided that “Rules of procedures are handmaid of justice and should not used to defeat justice” . P'or this reason, he prayed for the dismissal of the written submission with costs. In rejoinder, the learned Counsel submitted that, it is not true, when there is an order of the court to pursue an interlocutory matter or an appeal by way of written submission, there is nothing which can prevent a party submitting to append relevant laws and case laws in support of his submission. That is not introducing new evidence and is not abuse of the court process. Further submitted that, when Affidavit fails to meet the requirement of Section 8 of the Notary Public and Commissioner for Oath, Cap. 12 R.E. 2002, it renders the whole Affidavit to be incompetent and the trial Magistrate ought to have struck out the Application for violating the provision of the law. Having reviewed the law and the submissions by the Counsels for the parties, In my view, I would like to point out that, the Applicant, one Wetson Sahawela, was granted a Judgment and Decree in Civil Case No. 4 of 2004, in order to execute a Decree. More so, the Applicant made an Application before Chunya District Court to inspect the properties of one Brown Mbubile, so as to effect the execution. It is evident that, the Appellant has made effort to conceal the assets and properties of the company, so as to make execution impossible. In dealing with the Application, the learned trial Magistrate took the view that it was in the interest of justice to apply the principle of “lifting the veil of incorporation”. It is also clear from the record that, the Respondent or Judgment Debtor is a Company registered under the Companies Act, Cap. 212 R. E. 2002. That being the case, as a General Rule, it is a separate legal entity, distinct from its members. It has an independent corporate existence that is assets of the company are not assets of the members. In short, it enjoys separate legal personality. This principle, it is to be observed, as was held in the case of Solomon versus Solomon [1897] A.C.22, where the house of lord at page 49, inter alia held that:- “The company is at law a different person altogether from the subscribers .. and though it may be that after incorporation the business is precisely the same as it was before and the same persons are managers and the same hands receive the profits, the company is not in law the agent o f the subscribers, as members liable in any shape or form, except to the extent and in the manner provided by the act”. As already observed, it is apparent on the face of it, that the Appellant in this case at hand wants to bulwark his interest behind the corporate veil. Given the fact that the Appellant, Brown Mbunile was an Assistant Managing Director of the M /S Kalambo Contractors Ltd and in fact engineered the said transaction with the Respondent, and definitely, he did it under the umbrella of the company; it is my considered opinion that, so long as there is evidence that, the Appellant was an Assistant Managing Director of the Company, and he was involved in concealing the assets and properties of the company, in my view, this is the case where the court should go beyond the principle established in Solomon versus Solomon (supra), and impose the personal liabilities to the Appellant, who is hiding behind the corporate veil, in this particular, I would like to make reference to the decision of the Court of Appeal of Tanzania, in Yusufu Manji versus Edward Masanja and Abdallah Juma (2006) TLR, at page 128, where the court inter alia observed that:- “Having regarded to the relationship o f the company, at the time with the appellant as the managing director, the alleged concealment o f the assets o f the company by the appellant which was not denied by way o f counter affidavit this was a proper case in which to apply the principle o f lifting the veil o f incorporation Applying the principle to the case at hand, in the premises, it is abundantly obvious from the facts that, the Respondent, Weston Sahawela, would be left with an empty decree as it were, against the Company, M/S Kalambo Contractors Ltd, if this honourable court would not apply the principle of “lifting the veil of in corporation”. I hold so because, it is the Respondent who will suffer great hardship, if this honourable court will allow the Appellant, to hide behind the veil of in corporation. Fore the foregoing, reasons, I do hereby dismiss the Appeal, with usual consequences as to costs. That is the Respondent is allowed to trace the Appellant personal properties any where, for the purpose of executing the decree of the court. The Appellants should pay the costs of this Appeal. - A.F. NGWALA JUDGE 24/08/2015 Date: 24/08/2015 Coram: A. F. Ngwala, J. Appellant: Present Respondent: Present. Court: Judgment read in court the presence of the parties. Right of Appeal to Court of Appeal of Tanzania explained. A.F. NGWALA JUDGE 24/08/2015