national furnishers ltd another vs exim bank ltd another 2019 tzhclandd 17 17 september 2019

IN THE HIGH COURT OF TANZANIA (LAND DIVISION) AT PAR ES SALAAM LAND CASE NO. 413 OF 2016 NATIONAL FURNISHERS LTD .1st PLAINTIFF KAWE APPARTMENTS LTD 2nd PLAINTIFF VERSUS EXIM BANK TANZANIA LTD ,1st DIFENDANT KISHE ACTION MART, 2nd DIFENDANT in law for contravening provisions of Order II Rule 2 of the Civil Procedure Code (Cap 33 R.E 2002). The preliminary objection above was raised by the 1st defendant in this suit (Exim Bank Tanzania Ltd) in his Written Statement of defence. The parties in this suit through their respective counsels presented their arguments in respect of the objection by way of written submissions. Mr Denise Tumaini, counsel for the applicant submitting in support of. the preliminary objection argued that, the plaintiff's plaint is irreparably bad in law, that, allowing it would lead to multiplicity of suits or result into a decision that would be conflicting with the settlement terms in the land Case No. 210 of 2015. This is because plaintiffs claim under paragraph 5 of i their plaint was well in their knowledge and would have been incorporated in the land case No. 210 of 2015. Mr. Tumaini continued to submit that, the key issue in the Land case No. 210 of 2015 was a loan facility which the plaintiff is complaining was obtained fraudulently. However, this unlawful act was never mentioned nor raised by the 1st plaintiff until when the defendant commenced execution proceedings. Therefore, it is an afterthought which is strictly forbidden under the law. He continued to maintain that, Order II Rule 2 of the Civil Procedure Code (Cap 33 R.E 2002), requires that, if the plaintiff omits to sue in respect of or intentionally relinguishes any portion of his claim, he or she cannot sue for the claim so relinguished or omitted after that, Since the 1st plaintiff was fully aware of this loan since when it was being recovered for the first time and when she sued for it in the land case No. 210 of 2015 and intentionally omitted to mention the fact that there was fraud in obtaining the said loan, now she cannot sue for that claim under a fresh suit. He contended that the 1st plaintiff is suing for matters that were resolved in the former case, (Land Case No. 210/2015), as shown in paragraph 6 of the plaint, and that, even the relief sought by the said plaintiff are the same which were to be sought in the earlier mentioned case hereinabove, therefore making an adverse decision towards such property might result into a conflicting decrees by this same court. The learned Advocate contended further that, if the 1st plaintiff wants to challenge the deed of settlement he may do so by way of review or file a fresh suit of which the 2nd plaintiff will not be a party thereof. And if the 2nd 2 plaintiff has a claim against the 1st defendant as pleaded in the plaint, she should have instituted a fresh suit of her own as the relationship between the 1st defendant and the 1st plaintiff constitutes a different cause of action and the 2nd plaintiff cannot be accommodated under the same claim in her capacity as a borrower of the 1st defendant, therefore this court should find out that, the plaintiffs' plaint is untenable in the eyes of the law for failing to adhere to the rules of procedure, Order II Rule 2 of the Civil Procedure Code (Cap 33 R.E 2002). Submitting for the plaintiffs in opposing the preliminary objection, Mr. Joseph Nuwamanya argued that, the preliminary objection is misconceived, devoid of merits and should be dismissed with costs. He argued that, the plaintiffs' suit is based on fraud committed by the 1st defendant in the loan facility to the 1st plaintiff and it is apparent therefore that, the deed of settlement and the decree issued in the land case No. 210 of 2015 is under attack and the plaintiffs are very clear in the reliefs as appearing at page 12 and 13 of their plaint that, the same be declared null and void owing to fraud and or illegalities. That, under these circumstances, the provision of Order II Rule 2 of the Civil Procedure Code ( Cap 33 R.E 2002), cannot apply. The plaintiff's counsel maintained that, the 1st defendant's counsel in his submission is missing the point by arguing that, this suit has nothing to do with a party failing to include a claim or intentionally omitting to include any claim in a suit. He contended that the suit is centered on the whole proceedings in the Land case No. 210 of 2015, the deed of settlement and the decree attached to it, as they are tainted with fraud or illegalities and 3 thus, be declared null and void. He argued that, the plaintiffs' suit is a separate suit, challenging the deed of settlement and the decree issued in the aforementioned case on grounds of fraud and is procedurally proper to do so and cannot be faulted as the issue of fraud and illegalities arise in this new suit and forms a separate cause of action. The counsel for plaintiffs maintained further that, fraud vitiates everything including judgments and orders of the court. He continued to submit that, a transaction made fraudulently cannot stand when questioned in a court of law. His further argument is that whether there is fraud being complained in the suit or not is a matter of evidence and thus, goes to the merit of the case, hence, it cannot be dealt with at the stage of a preliminary objection. His arguments are based on the rules established by courts in Mukisa Biscuits Manufacturing Co. Ltd v West End Distributers LTD(1969) E.A. 696, and the case of COTWU (T) OTTU Union and Another v Honourable Idd Simba , Minister for Industries and Trade and Another, (2002), T.L.R 58, CAT where the court held that:- "A preliminary objection should raise a point o f law which is based on ascertained facts, not on a fact which has not been ascertained, and if sustained, a preliminary objection should be capable o f disposing o f the case" The learned counsel further maintained that, the proper method for impugning a judgment obtained fraudulently is by an action as held in the case of Flower v Llyod (1879) 10 Ch.327 and also as stated by Kerr in 4 his book "The Law of Fraud and Mistakes, 7th Edition. New Delhi 2005 at page 417 where he wrote V /7 order to sustain an action to impeach a judgement, actual fraud must be shown, mere constructive fraud is not, at ail events after long delay, sufficient The court has jurisdiction to set aside a judgement obtained by fraud in a subsequent action brought for the purpose, the proper remedy being an original action and not a re hearing..." As for the 2nd plaintiff to be joined in the suit with the 1st plaintiff, the learned counsel submitted that, the 2nd plaintiff is part and parcel of the cause of action by the 1st plaintiff, therefore cannot be separated, as the plaint itself is self-explanatory that, the suit is not limited to challenging the deed of settlement and decree of Land case No. 210/2015 only. He argued that, the defendant if so wished, could have raised the issue of misjoinder of plaintiffs and not a preliminary objection that he brought in, and that, even misjoinder of parties cannot stand. The counsel for the plaintiffs ended his submissions by inviting this court to consider his arguments insisting that, the proper procedure to challenge a consent judgment is by bringing a fresh suit citing the case of Mohamed Enterprises (T) Limited v Masoud Mohamed Naser, Civil Application No. 33/2012, decided by Court of Appeal of Tanzania. Further, he pointed out that, a consent judgment can be set aside for fraud as decided in Motor Vessel Sepideh and Another v Yusuph Mohamed Yusuph (Civil. Application No. 237/2013, Unreported). In the first case it was held that " ... the only option open to the respondent was to file a fresh suit appropriate to the particular remedy. He did not do so. Instead he came before Twaib, J. by way o f an application. That was not proper. We agree with DR. Lamwai that matters o f fraud coercion or misrepresentation do vitiate a consent decree. It is imperative therefore that evidence be adduced in support o f such factual claims. Proofby affidavit is not enough" He therefore argued that this Preliminary object is worth a dismissal with costs for lack of merits. In his rejoinder, Mr. Tumaini maintained his position that, the objection has merit in that the suit is short of requirements of the law to be entertained by this court, therefore should be dismissed in its entirety with costs, he added that, if there was fraud involved in the facility as currently claimed by the 1st plaintiff, the same was to be raised in the former Land case No 210/2015, as of now the plaintiff is precluded from bringing it at the later stage of the suit. He insisted that, the 1st plaintiffs' arguments and position of the law is ectopic and argued out of the context. If the 1st plaintiff's concern is on the illegalities of the settlement deed, that ought to be in a separate suit based only on the issues related to the means applied to reach to the said agreement between the 1st plaintiff and the 1st defendant, and doesn't involve the 2nd plaintiff because she was not part of the Land case No. 210/2015. 6 Moreover, the counsel for the applicant pointed out that, since the suit by plaintiffs is a joint suit and both are seeking for orders that the 1st plaintiff ought to have raised in the Land case No. 210/2015, and out of her own volition opted not to do so and since the 2nd plaintiff was never a party to the said case, then she is incompetent to sue the 1st defendant's in respect of the settlement deed and decree obtained in the Land case No. 210- 2015. Further, the cases used by the plaintiff to support his submissions would have been useful if the 1st defendant's objection was on the plaintiff's capability to institute a fresh suit against the deed of settlement. However the 1st defendant's objection is only on the claims omitted which are being brought up in the current fresh suit. Having examined the records as well as considering the submissions by both parties, I now proceed to determine the merit or otherwise of this preliminary objection by the 1st defendant Before I go any further, let me reproduce the provisions of Order II Rule 2 of the Civil Procedure Code (Cap 33 R.E 2002) which is the center of this preliminary objection. The said provision provides;- 2-(l) Every suit shall include the whoie o f the claim which the plaintiff is entitled to make in respect o f the cause o f action; but a plaintiff may relinquish any portion o f his claim in order to bring the suit within the jurisdiction o f the court. (2) Where a plaintiff omits to sue in respect o f or intentionally relinquishes, any portion o f his claim,, he shall not afterwards sue in respect o f the portion so relinquished. 7 (3) A person entitled to more than one relief in respect o f the same cause o f action may sue for all or any such reliefs; but if he omits, except with the leave o f the court, to sue for all such reliefs, he shall not afterwards sue for any relief so omitted. The question now is, whether the present suit contravenes the above mentioned provisions of the law. To answer this question, I had to go through the plaintiffs' plaint at page 2, paragraph 5 and page 3, paragraphs 6-9 and also the settlement deed in the Land Case No. 210 of 2015 (annexure P-7 (a)), at page 2, paragraph A (i-viii). Upon careful examination of the two documents mentioned herein above, I found that, the present case by the plaintiffs does indeed contravene the provisions of law as contended by the 1st defendant in her objection. The primary reason for my observation and finding is on the fact that, the current suit has different but legally related claims and or causes of action, different from the ones in the former Land Case No. 210 of 2015. The claim in the present case as shown in page 2 paragraph 5 and page 3, paragraphs 6-9 is based on alleged fraud and illegalities attached to the loan facility by the 1st defendant to the 1st plaintiff. At the same time the same loan facility issue extended to the settlement deed and decree issued in the Land Case No. 210 of 2015. In other words, the subject matter of the present case, alleged fraud in issuing the credit facility, was impliedly waived by the first plaintiff when she opted to challenge only the appointment of the then second respondent, Marcus Investment, as an auctioneer is selling his property pledged as security over the same credit facility. Thus, the dispute over the same credit/loan facility is the one that led to the existence of the consent decree in the Case No. 210 of 2015 in which the first plaintiff agreed to discharge the same. Based on this observation, I concur with the submissions by the respondents counsel that, the provisions of Order II Rule 2 of the Civil Procedure Code (Cap 33 R,E 2002) was indeed violated as the a plaintiff who was a party to the settlement approached this court with new claims or seeking reliefs which are partially or substantially the same with those already claimed and given in the Land case No. 210 of 2015, but which he chose to omit or relinquish in the former suit. In the circumstances therefore the first plaintiff is bared from bringing the claim or claims, she opted to relinquish in a fresh suit. She can file a new suit challenging legality of the settlement, not loan facility of which existence resulted in the settlement as argued by the counsel for the first defendant. This restraint, in my view, cannot be circumvented by joining a third party in the fresh suit. Therefore, since the same claim in the present case has effect in the consent decree of the court in the Land Case No 210 of 2015, then there is no way one can challenge the same, claiming it to be a new cause of action without touching the settlement in the former case. 1st plaintiff can only institute a fresh suit challenging the settlement (See Mohamed Enterprises (T) Limited Versus Masoud Mohamed Naser, Civil Application (Supra). However that is only possible, in exclusion of the second plaintiff who was not a part to the settlement in Land Case No 210 9 of 2015. It is only the first plaintiff who was a party to the settlement who is allowed to bring a claim relating to the settlement. This does not bar the second plaintiff to institute a suit against the first defendant on any claim he might have in relation to the whole transaction, but yet this must be in exclusion of the fist plaintiff who is already barred by the provision above. Given the circumstances of this case, they cannot have joint claim in that regard as they did in this suit. I therefore find merit in the preliminary object as raised by the 1st defendant in this suit, it is upheld. Consequently, it is stuck with costs. It is so ordered. M. P. OPIYO JUDGE 17/9/2019 10