NGORIKA BUS TRANSPORT CO LTD VS KAPESA BENEDICT MBERESERO

THE JUDICIARY OF TANZANIA IN THE HIGH COURT OF UNITED REPUBLIC OF TANZANIA MOSHI SUB REGISTRY AT MOSHI CIVIL CASE NO. 02 OF 2022 NGORIKA BUS TRANSPORT COMPANY LIMITED ......... PLAINTIFF VERSUS KAPESA BENEDICT MBERESERO A.K.A PATRICK BENEDICT MBERESERO ...............… DEFENDANT JUDGMENT 24/02/2025 & 24/03/2025 SIMFUKWE, J. The Plaintiff is a registered company, established by Benedict Mberesero, also known as Alli Mberesero together with his two sons Stanley and Stephen, in the 1990s. Benedict Mberesero managed the company until 1 his demise intestate in 1997. Following his demise, the family members unanimously agreed that some members of the family would manage the properties of the company in trust, for the benefit of the Plaintiff. It has been stated that the Defendant was appointed as the manager of the Plaintiff and entrusted with overseeing its properties. His appointment was subject to the condition that he would manage the Plaintiff’s business and provide an annual account of the profits. However, the Defendant failed to fulfil this obligation. The Plaintiff’s properties included ten (10) buses, parking yards in Moshi, one Toyota Land Cruiser, one motorcycle, and a truck. The Plaintiff claims ownership of the noted properties and claims against the Defendant that he should return the said properties to the Plaintiff. The Plaintiff further demands from the Defendant a true account of the profits earned from operating the buses from December 2015 to January 2022. The basis of the claim is misappropriation of the Plaintiff’s properties, the cessation of bus operations, the abandonment of the buses at the Defendant's yard and the Defendant’s failure to render the required financial accounts. Based on the foregoing claims, the Plaintiff has instituted the present suit, seeking the following reliefs: 2 a) An order directing the Defendant to hand over ten buses, parking yards at Moshi, Toyota land cruiser, motorcycle and truck, the properties of the Plaintiff in good condition and as a running concern. b) In the alternative to the above prayer (a) an order to compel the Defendant to pay Tshs 1,275,800,000/- being equivalent of the value of the Plaintiff's properties. c) An order directing the Defendant to render true account of the profit of the Plaintiff business from December 2015 to January 2022. d) An order compelling the Defendant to pay the Plaintiff a total sum of Tshs 750,600,000/ - being proceeds of unremitted profit for the period of six years. e) An order for payment of general damages to be assessed by the Honourable Court of at least Tshs. 500,000,000/- f) Interest on the decretal sum at Court's rate of 7% per annum from the date of judgment to the date of full satisfaction of the decree. g) Costs of the suit be borne by the Defendant. 3 h) Any other or further relief(s) this Honourable Court may deem just and fit to grant. The Defendant contested the Plaintiff’s claims by filing a Written Statement of Defence. The Defendant admitted that the Plaintiff is a registered company and that Alli Mberesero was a major shareholder. However, he contended that following the demise of Alli Mberesero, no official transmission of shares or appointment of directors was made until 2020, when Sabas and Chivawe effected changes to the Plaintiff’s company. Regarding the ownership of the disputed buses, the Defendant averred that they were originally owned by the Plaintiff. However, he asserted that the Plaintiff ceased operations due to an injunction issued by the High Court, Commercial Division, which effectively grounded its business activities. Furthermore, the Defendant deponed that he was removed from the company’s management in 2017. He also contended that the proceedings concerning the previous shareholders were never finalized, and no official appointment of new directors was made. On that basis, the Defendant prayed for the following reliefs: 4 a) A declaration that the termination of the Defendant as a Director of the Plaintiff is null and void b) A declaration that the appointment of the new Directors and Secretary of the Plaintiff has been made fraudulently hence be declared null and void. c) A declaration that any transfer or transmission made therein be null and void. d) Termination of the Defendant as signatory of the Company be declared null and void as the same was made fraudulently. e) General Damages to be assed (sic) by this Honorable court. f) Costs of the suit be borne by the Plaintiff. g) Any other relief(s) this Honourable Court may deem just and fit to grant. The Registered Trustees of Alli Mberesero Foundation was joined as a third party in the suit. It subsequently filed its Written Statement of 5 Defence, in which it was stated that it is the majority shareholder of the Plaintiff’s company. The Foundation further contended that it has no contract of indemnity or contribution with the Defendant and, therefore, any relief claimed by the Plaintiff should be borne solely by the Defendant. During the trial, the Plaintiff was represented by Mr. Dickson Ngowi, learned counsel. The Defendant was represented by Mr. Daniel Lyimo, learned counsel and the Third Party was represented by Ms. Sikitu Mtikile, learned counsel. Prior to the commencement of the hearing, the following issues were framed and duly agreed upon by all parties: 1. Whether the plaintiff’s company was in operation upon the demise of the late Ally Mberesero and Stephen Mberesero as directors and shareholders of the company. 2. Whether the Defendant was the employee of the Plaintiff’s company. 3. Whether the Defendant is in possession of the properties of the plaintiff’s company? 6 4. Whether the plaintiff is entitled to the reliefs raised in the pleading. 5. To what reliefs are the parties entitled to? The Plaintiff had two witnesses and tendered eight exhibits in support of her case. The Defendant, in turn, called one witness and tendered one exhibit to prove his case. A summary of their evidence is as follows: PW1 Sabath Benedict Mberesero, testified inter alia that Ngorika Bus Transport Company Limited was incorporated in 1970 and registered at BRELA in 1990, with three original shareholders: Benedict Mberesero, Stanley Benedict Mberesero and Stephen Benedict Mberesero. That, the son of Benedict, the defendant herein was employed by the Plaintiff in 1991 and terminated in 2017. The company owned buses which were used for transportation. He tendered motor vehicle registration cards to form part of his evidence. Ten motor vehicle registration cards and one motorcycle registration card were admitted as Exhibit P1 collectively. PW1 explained that following the deaths of the original directors, the company remained under supervision of the Defendant and the trusteeship of Ali Mberesero Foundation which was registered in 1999. He said that the appointed new directors were PW1 (Sabath Benedict 7 Mberesero) who took over the shares of Benedict Mberesero, Charles Benedict Mberesero who took over the shares of Stanley Benedict Mberesero, Lilian Stephen Mberesero and Mariamu Simbano taking over the shares of Stephen Benedict Mberesero. A new certificate of registration showing new directors of the company, was tendered and admitted as Exhibit P2. Concerning the Defendant herein, PW1 testified that he worked with all directors as their assistant. His title was a manager, handling administration, financial issues and preparation of reports. The Defendant was obliged to submit the reports to the Board of Alli Mberesero Foundation. PW1 tendered a letter written by Kapesa (Defendant herein) applying for a job at the Plaintiff company. It was admitted as exhibit P3. To prove the positions which the Defendant held in the company, PW1 tendered three letters which were admitted as Exhibits P4, P5 and P6 respectively. PW1 continued to state that Alli Mberesero Foundation was formed after the demise of Alli Mberesero for administering his estates. PW1 was the chairperson of the Foundation from 1999 to 2022. The Foundation was not responsible for daily management of Ngorika Bus Transport Co. Ltd. 8 The Foundation had a duty of receiving reports from supervisors of different businesses. It had four meetings per year, if there was no emergency meeting. It was disclosed that the last report of Ngorika Company was received in 2014. PW1 tendered the letter dated 12/06/2015 with the heading “TAARIFA YA BIASHARA 2013 - 2014” which was admitted as exhibit P7. Also, a profit and loss statement of 01/01/2024 to 31/12/2014 was admitted as Exhibit P8. PW1 testified further that after failing to submit reports from 2014 as required, the Defendant was directed to do so in vain. Then, they resorted to file a suit before Commercial Division where they filed Commercial Case No. 176 of 2017. The Court ordered the Defendant to park all buses of the Plaintiff at Kisangara yard pending determination of the case or for three months. Moreover, the court ordered that the share system of the company be formulated afresh. The new Board of Directors made effort to require the Defendant to remit the buses. The same was done through mediation unsuccessfully. PW1 alleged that after suing the Defendant, the orders of Commercial Court were not executed. PW1 said that they believed that the buses are still with the Defendant because according to their practice, the Defendant was the custodian of 9 the buses. Hence, the dividends to shareholders of Alli Mberesero Foundation have been affected as half of the profit which used to be submitted to the Foundation came from the Plaintiff. It was asserted that most of the beneficiaries are children and widows of the deceased shareholders. Concerning the amount claimed in the plaint at the tune of TZS 750,600,000/=, PW1 explained that the same was estimated from the profit presented in the report of 2014. PW1 stated further that ceasing operation of Ngorika Bus was done by the Defendant purposely for the sake of collecting capital for starting a new bus company dubbed “Kapricon” which resembles Ngorika Bus; second, was to compete with Ngorika Bus in the same routes by using Kapricon buses. That, the buses were shifted from Kisangara to the garage at Moshi town. Thus, the Defendant allegedly used the resources of the company to establish Kapricon bus, a competing transport business which led to the end of Ngorika Bus. Therefore, PW1 prayed this court to order that the properties be handed over if they are still in good condition or cash in lieu thereof if the buses are right off. It was concluded that it goes without saying that the buses 10 are very old. Thus, PW1 prayed to be paid new buses at the current market value. During cross examination, it was confirmed that PW1 joined Ngorika Bus Company in 2022. The company operated without directors until then but was managed by the Defendant. PW1 acknowledged Defendant’s entitlement as a beneficiary but insisted that company shares were transferred legally. He explained that the 2017 case sought the return of company assets, but execution of court orders was unsuccessful. PW1 maintained that the Foundation’s ownership of the company was lawful and sought court assistance in recovering the buses or their equivalent value. PW2 Mohamed Said Mganyo, testified that he was previously employed by Tanzania Shoe Co. Ltd from 1976 to 1990 before joining Ngorika on 22nd April 1990. His duties at Ngorika included preparing company accounts, assisting the manager on insurance issues, processing NSSF contributions, and maintaining the company’s registry. PW2 stated that he knew the Defendant because he received and stamped his application letter for employment on 28th November 1991. The application letter was referred to the director, the late Ali Benedict Mberesero who 11 ordered the manager to assign work to the Defendant. The Defendant was hired as a conductor and later promoted to be a manager. He was responsible for supervising workshops at Kisangara and Moshi and preparing payment vouchers to all creditors who were owing the company. He was registered with NSSF in 1996. PW2 testified further that Ngorika Bus Transport Company Limited was dealing with transportation of passengers and had lorries, Landcruiser and a motorcycle. He said meanwhile, the buses, lorries and motorcycle are under Kapesa Patrick Benedict Mberesero. The motorcycle was at Moshi office, the Landcruiser was being used by the manager and a lorry was brought to Moshi for maintenance. It was explained that when the director passed away, a lorry was not working. The buses three Yutong and seven Scania were attached by the Defendant for the reasons known by him, causing the Plaintiff company to cease its operation. PW2 elaborated that when he joined Ngorika Company, the directors were: Alli Benedict Mberesero, Stanley Benedict Mberesero and Stephen Benedict Mberesero. All of them passed away, and new directors were appointed from Alli Mberesero Foundation. PW2 was still working as a registry clerk and office cleaner, his salary being paid by Alli Mberesero 12 Foundation. PW2 explained that he is affected together with 35 other employees by the company’s closure. He prayed this court to grant the reliefs sought. When cross-examined, PW2 stated that he had not tendered the documents proving Defendant’s managerial role, as exhibits. He stated that Ngorika’s headquarters is at Mangara village, Lembeni Ward in Mwanga district. That marked the end of the plaintiff’s evidence. The defendant, was the only witness, his version of the story was as follows: DW1 Kapesa Benedict Mberesero, testified that he operates his business in Kilimanjaro and Arusha Regions, transporting passengers and parcels. He acknowledged that Ngorika Bus Service was registered in 1970. However, it was his testimony that the Company ceased operations in 2016 following the death of its last director, Stephen Benedict Mberesero, his brother. That, although he was a signatory of the company, he had no shares. Other directors included his father, Alli Benedict Mberesero, and Stanley Benedict Mberesero. 13 DW1 continued to explain that after Stephen’s death, the so-called Alli Mberesero Foundation filed a case against him at the High Court Commercial Division at Dar-es-Salaam, claiming ten buses and operation of bank accounts. The court decided that the company was dormant due to the deaths of all directors. They were ordered to go back home and discuss how to operate the business. The court also found him innocent. By then Alli Mberesero Foundation had no role in the company. He tendered a copy of the judgment of Commercial Division, which was admitted as Exhibit D1. It was DW1’s further testimony that at the time, Ngorika Company had sixteen buses, but with no supervision. He agreed that before the operation of the buses had ceased, the buses were supervised by him and the late Stephen Benedict Mberesero. He explained that the operation of the buses was ceased by the order of the High Court Commercial Division. Moreover, the Defendant acknowledged the Alli Mberesero Foundation but alleged that it was dormant, as no administrator was appointed to administer the estates of the late Alli Mberesero. That, the ten first registered trustees of the Foundation were his family members from three mothers. However, they were not in good terms as they were required to collect properties of the deceased, open an account, work together etc. 14 Based on misunderstandings, division of the estates of the deceased has never been done. Those who were supervising Alli Benedict Mberesero Foundation were benefiting from the properties of the deceased until in 2016 when another director of the foundation passed away. The Defendant stated the reason of being sued together with his siblings Wilfred Benedict Mberesero and George Benedict Mberesero, was that they were working with their father. DW1 stated further that, meanwhile, Ngorika company is supervised by Charles Benedict Mberesero, Sabas, Irene Stephen, Mariam, Lilian and Chevao their secretary. He elaborated that Mariam is the wife of the late Stephen Benedict Mberesero, Irene and Lilian are daughters of Stephen. The children of the late Stanley and the widow Beatrice have no shares in the company. Also, it was contended that, currently, the company has no buses, even a single bus. There is one pick up and one canter which are used by Charles. Concerning the claims before this court, the Defendant said that the same were previously instituted by Sabas. He insisted that Ngorika Company could be operating if that was not the case. 15 During cross-examination, DW1, stated among other things, that he was the Manager of the Plaintiff and his responsibilities included supervising routes of the buses, overseeing services and procuring spare parts. He further stated that the Company remained operational until 2016. He explained that the workshop in Moshi was under the supervision of National Housing and that no one was taking care of the buses. Having summarised the parties’ evidence, I proceed to determine the raised issues. In civil cases, it is a fundamental principle that he who alleges must prove. The standard of proof is always on balance of probabilities. This principle is provided for under section 110(1) of the Evidence Act [CAP 6 R.E 2022]. Times without numbers Courts have expounded further on this principle by emphasizing that the burden of proof never shifts to the adverse party until the party making the allegation has discharged his burden. The position has been affirmed in numerous decisions, including the cases of Jasson Samson Rweikiza vs Novatus Rwechungura Nkwama (Civil Appeal No. 305 of 2020) [2021] TZCA 699 (29 November 2021), Tanzlii, Ernest Sebastian Mbele vs Sebastian Mbele & Others (Civil Appeal 66 of 2019) [2021] TZCA 168 and Barelia Karangirangi vs Asteria Nyalwambwa, Civil Appeal No. 237 of 2017; to mention just few. 16 To commence with the first framed issue for determination Whether the plaintiff’s company continued to operate upon the demise of its directors and shareholders, the late Ally Mberesero and Stephen Mberesero; in quest to prove that the company remained operational, PW1, stated that after the demise of Stephen Benedict in 2016, the company continued under the supervision of the Defendant. Moreover, PW1 asserted that the company was under the trusteeship of Alli Mberesero Foundation, which had been established in 1999. Furthermore, it was testified that new directors were appointed after the demise of the former directors. Exhibit P2 was tendered as proof of appointment of new directors. In rebuttal, the Defendant contended that the company ceased operations after Stephen’s demise in 2016. He contended further that in 2017, a case was instituted against him before the High Court, Commercial Division, and the judgment of that matter was admitted as Exhibit D1. The Defendant argued that while he had previously supervised operation of the buses, they were left without supervision following the order of the Commercial Court. 17 In its decision, the High Court, Commercial Division raised significant issues regarding the status of the Plaintiff company. At pages 11 to 14, Hon. Mruma, J discussed the status of Ngorika Company (the plaintiff in this suit). At page 14 of the judgment, the Commercial Court concluded that the company was a sham company after the last surviving director Stephen Mberesero had passed away in 2016. Further, Hon. Mruma, J noted that, since the deaths of Ally Mberesero in 1997 and Stephen Benedict in 2016, the company had been operating unlawfully and in contravention of legal requirements. The judgment identified several irregularities, including first, illegalities in the increase of share capital; second, non-compliance with the Companies Act, from 1997, following Benedict Mberesero’s death, the company had only one director, contrary to Section 3(1) of the Companies Act; third, lack of directorship from 2016 onwards. After Stephen Mberesero’s demise, the company was left without any director. Since a court of competent jurisdiction has already determined the company’s status, upon the deaths of its former directors, determining this issue will violate the legal principle prescribed under section 9 of the Civil Procedure Code, CAP 33 R.E 2019 which prohibits adjudicating matters with the same parties or their privies on the same 18 subject matter, that have been conclusively adjudicated by a competent court. The Plaintiff may argue that the present suit involves different parties from the prior Commercial Court case. However, it is evident that the company addressed in the Commercial Court judgment is Ngorika Bus Company Limited, the same company which has instituted this suit. During re-examination, PW2 acknowledged that Ngorika Company is an associate company of Alli Mberesero Foundation (the Plaintiff in Commercial Case No. 176 of 2017). The Plaintiff’s argument that new directors, namely, Mariam Ally Simbano, Lilian Stephen Mberesero, Charles Benedict Mberesero, and Chevawe Charles Mberesero were appointed to oversee the company is misleading. Notably, the appointment of the new directors occurred in 2020, after delivery of the Commercial Court judgment in 2019 and after the Defendant’s termination in 2017. PW1 confirmed that the appointment of the new directors was done in execution of the Commercial Court’s decision. Therefore, Exhibit P2, which purports to confirm the appointment of new directors, does not substantiate the claim that the company was operational after the demise of the former directors. How 19 can a sham company be determined whether it was operating or not? Accordingly, the first issue is answered in the negative. The Plaintiff’s decision to institute this suit appears to have been prompted by the Commercial Court’s finding that the company was operating unlawfully. However, the Plaintiff’s evidence suggests an attempt to attribute this illegality to the Defendant, a position that this court does not find persuasive. This conclusion leads this court to the second and third issues on, Whether the defendant was employed by the plaintiff and whether the defendant is in possession of the plaintiff’s properties respectively. Starting with the issue as to whether the Defendant was employed by the Plaintiff; according to the adduced evidence, this issue is undisputed as the parties are in agreement that the Defendant worked with the Plaintiff in the positions of the conductor and Manager respectively. The same was cemented by Exhibit P4, P5, and P6, which are different letters that were written by the Defendant while holding the position of Manager in the Plaintiff company. The same was confirmed by the Defendant during cross-examination. 20 Regarding the issue whether the Defendant is holding the properties of the Company; on the outset, the Plaintiff has moved this court to determine the same issue which was determined by the High Court, Commercial Division. At page 17 last paragraph of the judgment in Commercial Case No. 176 of 2017 (exhibit D1) the court held that: “...The Plaintiff has also failed to prove that the Defendant is holding and /or misappropriating the assets of the company or that he has caused any tear and wear of buses the property of Ngorika Bus Transport Company Limited. The suit is therefore dismissed.” Emphasis added With all due respect, the fact that the present suit is an abuse of court process cannot be gainsaid. As already said herein above, it is contrary to the law and practice, to re-institute the claim which has already been determined by the court of competent jurisdiction. I hesitate to believe that after the decision of the Commercial Court on 04th April 2019, another cause of action arose against the Defendant. Meaning that the Defendant came into possession of the disputed buses and other properties of the Plaintiff afresh, after the Commercial Court had ruled that the Plaintiff had 21 failed to prove that fact before it. For the sake of clarity, at page 3 of exhibit D1, the 2nd and 3rd prayers of the Plaintiff were, I quote: “2. An order that the Defendant is holding the assets of the company (i.e the buses) wrongfully and unlawfully; 3. And (sic) order directing the Defendant to release and hand over buses and other assets of the company to the Plaintiff.” Emphasis supplied At page 4 of exhibit D1 the 3rd and 4th framed issues were: “Whether or not the Defendant is wrongfully holding and using the properties of Ngorika Bus Transport Company Limited; and Whether or not the of (sic) continuous use of the buses by the Defendant has caused them wear and tear.” Moreover, in the instant matter, among the reliefs which were prayed by the Plaintiff against the Defendant were: a) An order directing the Defendant to handle (sic) over ten buses, parking yards at Moshi, Toyota Landcruiser, motorcycle and truck all properties of the Plaintiff in good condition and as a running concern. 22 b) In the alternative to the above prayer (a) an order to compel the Defendant to pay Tshs 1,275,800, 000/- being equivalent of the value of the Plaintiff’s properties.” Based on the fact that the above quoted reliefs and issues before the Commercial Court and before this court are similar, I hesitate to determine them as they may render my decision a nullity/unlawful. In other words, this court is functus officio. Even the grievance that the Defendant collected capital for establish a parallel company by the name of Kaprikon, is misplaced due to the fact that before the Commercial Court, the Plaintiff failed to prove that the Defendant was in possession of the properties of the Plaintiff. The same applies to exhibit P7 and P8 which were produced to prove the position of the Defendant in the Plaintiff company and substantiate the claimed damages, the exhibits had already been declared insufficient by the High Court, Commercial Division. The act of reintroducing them in these proceedings is akin to a betting exercise, attempting to rely on evidence that has already been declared inadequate by the Commercial Court in its decision. 23 In the case of Barclays Bank Tanzania Limited vs Phylisiah Hussein Mcheni (Civil Appeal 19 of 2016) [2021] TZCA 202 (17 May 2021), at page 13 while discussing the issue of time limitation, the Court quoted the following principle which applies to the matter at hand, that: “(i) The interest of the State requires that there should be an end to litigation (interest reipublicae ut sit finis litium). “ Also, see Salehe Ramadhani Othman @ Salehe Bejja vs Republic (Criminal Application No. 47/01 of 2021) [2024] TZCA 369 (16 May 2024) at page 11. Guided by the cited authorities, I hereby remind the parties in this case whom my learned brother Hon. Mruma, J discovered that they have never been at harmony since the demise of their father, that it’s high time that they should finalise pursuing their purported rights. They should agree to disagree. Otherwise, whatever colour of right they are purporting to claim, they are violating the public economic policy. They cannot be productive economically while pursuing cases originating from a probate which is more than 25 years. 24 That said, it is the considered opinion of this court that the fourth issue whether the plaintiff is entitled to the reliefs sought in the pleadings collapse naturally. Concerning the reliefs claimed by the Defendant, except for the prayer for costs, the remaining reliefs particularly those related to the termination of directorship, the appointment of new directors, termination of the Defendant as signatory of the Company and general damages were unsubstantiated and were not the subject of discussion in this suit. In light of the above findings, I hereby dismiss the suit in its entirety. Since the parties are siblings, I make no order as to costs. It is so ordered. Dated and delivered at Moshi this 24th day of March 2025. X S. H. SIMFUKWE JUDGE Signed by: S. H. SIMFUKWE 24/03/2025 25 26