T LTD VS AFRICA GEOPHYSICAL SERVICES LTD MISC

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA (COMMERCIAL DIVISION) AT PAR ES SALAAM MISC. COMMERCIAL APPLICATION NO.14437 OF 2024 PAN AFRICAN ENERGY TZ LIMITED................................. APPLICANT VERSUS AFRICA GEOPHYSICAL SERVICES LIMITED...............RESPONDENT RULING Date of hearing: 06/08/2024 Date of ruling: 09/08/2024 AGATHO, J.: The applicant filed the present application seeking an order for security for costs against the respondent. The application was by way of chamber summons preferred under Section 95 and Order XXV rule 1 of the Civil Procedure Code [Cap 33 R.E. 2019] and it was supported by an affidavit and reply to counter affidavit both of Mwinshehe Said Kibao, Finance Director of the applicant. To protest the application the respondent filed a counter affidavit deponed by William MacDonald, Country Manager of the respondent. It is on record that the parties enjoyed the services of learned counsel. Whereas Mr. William Mang'ena appeared for the applicant, Mr. Alex Mgongolwa represented the respondent. The hearing of the application was done orally on 6th August 2024. Mr. Mang'ena for the applicant began to submit in support of the application. It was his submission that on the 30th July 2024 the applicant i filed her skeleton arguments as per Rule 64 of HCCD Procedure Rules of 2012 as amended in 2019. The same was served upon the respondent on 2nd August 2024. Mr. Mang'ena adopted the skeleton arguments to be part of his submission. Thereafter he told the court that he finds them sufficient to support their application. He thus prayed for the application to be granted. His adversary Mr. Mgongolwa took a different stance. He opposed the application and bluntly submitted that the application was misconceived. And he consequently prayed that it be dismissed with costs. The basis and reasons of his submission and prayer were not farfetched. He submitted that the application before the Court was made under among other provisions, Order XXV Rule 1 of the CPC. It was his submission that this provision contains Court's discretionary powers to grant an order for security for costs upon fulfilment of certain mandatory provisions. Mr. Mgongolwa convincingly submitted that the major condition under Order XXV Rule 1(1) among other fundamental conditions is that the plaintiff who is the respondent herein must be residing outside Tanzania. It was his view that this condition is fundamental. He thereafter referred to paragraph 6 of the affidavit supporting the application, which states that the respondent is a local registered company. That means the respondent is residing in Tanzania. The respondent's counsel submitted that this clear admission of the fact negates the entire application the effect of which is to make this application not to meet the first fundamental condition that the respondent is residing outside Tanzania. Mr. Mgongolwa went on pondering that the conditions which are stated in Order XXV Rule 1 of the CPC must be met cumulatively. Failure of one condition renders the entire application not fit or desirable to be granted. 2 It was his submission that the purpose of Order XXV is to guarantee the applicant that should she be successful in the main case, she should be able to recover her costs because the same will have been deposited in Court. And the mischief which is intended to be cured is that the plaintiff should not leave the jurisdiction of the court without paying the costs to the defendant if she fails her case. To cement his arguments Mr. Mgongolwa cited the case Abdul Aziz Lalani and two others v Sadru Mangalji, Misc. Commercial Cause No. 8 of 2015, HCCD at Mwanza at page 6 the conditions for security for costs are: one, the plaintiff should be residing outside Tanzania; and two that she does not possess sufficient immovable property in Tanzania other than the property in suit. At this juncture the respondent's counsel turned to the applicant's skeleton arguments. It was his view that the applicant has tried weakly to seek shield under Section 95 of the CPC on inherent powers of the court. Mr. Mgongolwa's take from that is that the applicant is doing a fishing expedition. The learned counsel firmly argued that, that section is specifically applicable where there is no specific provision catering for that particular situation. It is a saving provision. It was his further submission that the interpretation of Section 95 of the CPC was given in the case of Tanzania Electric Supply Company Limited (TANESCO) v Independent Power Tanzania Limited (IPTL) and Two Others [2000] TLR at page 324, particularly at page 327 in holding (iv). In summing up his submission, Mr. Mgongolwa was of the view that the application, affidavit in support and skeleton arguments lack substance and there is no doubt that this application has no merit to warrant the court to use its discretionary powers to grant an order for security for costs. In view of the authorities cited as well as the interpretation of the law given, he submitted 3 and prayed that the application be dismissed with costs. He opined that the application serves no other purpose than abuse of court process. In rejoinder submission, Mang'ena submitted that it is not true that Section 95 of the CPC is only applicable where there is no provision to cater for a particular issue. He thus invited the Court to draw inspiration from the Court of Appeal of Tanzania (CAT) decision when it applied a more or less similar provision which is Rule 4(2)(a) and (b) of the Court of Appeal Rules which gives inherent powers to the CAT and granted an application for stay of execution while there was no notice of appeal lodged or an appeal pending. It was a stay pending an application for extension of time. According to Mang'ena that was done in the case of UAP Insurance Tanzania Limited v Yuda Thomas Shayo and 5 Others, Civil Application No. 611/18 of 2022 CAT. In granting its application his Lordship Issa, JA was of the view that despite the fact that under Rule 11 of the Court of Appeal Rules, an order for stay can only be granted where there is notice of appeal among other conditions, but the CAT can grant it despite the fact that there is no notice of appeal under Rule 4(2)(a) and (b). That holding is found under page 9 last paragraph through page 10 of that ruling. To sum up based on the above CAT decision the applicant's counsel prayed that despite the fact that the applicant has not met the first condition for grant of security for costs but considering the circumstances of this application which have been adduced in the affidavit and reply to counter affidavit which are the respondent's troubling finances (annexture P-4 respondent's financial statements for year ending 31st December 2022) and the fact that the majority shareholders are not residing in Tanzania (as per annexture P-3 respondent's BRELA search report), and the company does not have any property in Tanzania, this honourable court to use its inherent 4 powers under Section 95 of the CPC to cure the injustice which may be occasioned to the applicant by not being able to recover his costs in case the suit is dismissed. Having traversed the affidavit, counter affidavit and reply thereto, skeleton arguments and having heard the parties' submissions, and considering the relevant law, this court is now in position to determine whether the order for security for costs should be granted or not. But generally, and even prudence requires this Court to consider whether the conditions for granting an order for security for costs have been met. As rightly submitted by learned counsel Mgongolwa, the law under Order XXV rule 1(1) of the CPC is crystal clear that an order for security for costs can be granted under the following mandatory conditions: that the plaintiff who is the respondent must be residing outside Tanzania. Mr. Mang'ena for the respondent was kind enough to admit that the applicant failed to meet the said condition. On this admission alone, it is sufficient to dismiss the application at hand. I have not been persuaded by the counsel for the applicant's attempt to extrapolate principles of law when he invited the Court to adopt the interpretation of the Court of Appeal Rules by the apex Court in MAP Insurance Tanzania Limited (supra) at page 9 last paragraph through page 10 granted an application for stay of execution despite the fact that under Rule 11 of the Court of Appeal Rules, such an order is only granted where there is notice of appeal among other conditions under Rule 4(2)(a) and (b). In my view that will be stretching this Court's discretionary powers too far and it will be otiose in the circumstance of this case to do so. With due respect to the applicant's counsel, these laws (Order XXV rule 1 of the CPC and Rule 4(2)(a) and (b) of the Court of Appeal Rules) 5 are distinct and serve very different purposes. I thus decline Mr. Mang'ena's invitation. Before closing I should say a word or two on Mr. Mgongolwa's submission on Section 95 of the CPC, much as his view may be correct, I would hold that the said Section serves more than saving. I however agree that it provides for inherent powers of the Court to cater for issues that would otherwise have had lacked a specific provision in the CPC [Cap 33 R.E. 2019]. In the case at hand there was no harm in citing that provision. After all the application was not brought solely based on the provision of Section 95. I have noted that the applicant cited Order XXV Rule 1 of the CPC as well. Aside from that, I have observed that Mr. Mang'ena in his rejoinder pointed out issues that were not in his submission in chief or in Mr. Mgongolwa's reply submission. These are issues of the respondent having its directors residing abroad and that she does not have any property in Tanzania. But I have seen them in the affidavit. Nevertheless, and that these points in my view cannot override the conditions set in Order XXV Rule 1(1) of the CPC that the respondent must be residing outside Tanzania. That said and done the application fails for lacking merit. The respondent shall have her costs. Order accordingly. DATED at DAR ES SALAAM this 9th Day of August 2024. 6 Date: 09/08/2024 Coram: Hon. U. J. Agatho, J For the Applicant: Rwekamwa Rweikiza, Advocate For the Respondent: Kennedy Mgongolwa, Advocate; B/C: E. Mkwizu Court: Ruling delivered today in the presence of Rwekamwa Rweikiza, Advocate for the applicant and Kennedy Mgongolwa, Advocate for respondentj^x>*^r7<^\ GATHO JUDGE 09/08/2024 7