PRESTIGE INVESTMENTS SA VS NOMURA

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA (COMMERCIAL DIVISION) AT PAR ES SALAAM MISCELLANEOUS COMMERCIAL APPLICATION NO 015497 OF 2024 PRESTIGE INVESTMENTS SA......................................................... APPLICANT VERSUS NOMURA TRADING PTE LIMITED............................................. RESPONDENT RULING Date of last Order: 26/08/2024 Date of Ruling: 06/09/2024 GONZI, J. The application was brought under sections 93 and 95 and Order 43 Rule 2 of the Civil Procedure Code CAP 33 of the Laws of Tanzania read together with Rule 2 of Commercial Court Rules. The Applicant prayed for enlargement of time to deposit the security for costs pursuant to the order of this court dated the 13th day of June 2024 in Misc. Commercial Application 172/2023, out of time. It was supported by two affidavits sworn by Mr. Boniface Mwikomo, Principal Officer of the Applicant Company and Mr. Seni Songo Malimi, learned Advocate for the Applicant. During the hearing, the two affidavits were adopted and formed part of the Applicant's submissions. The Applicant was represented by Mr. Seni Songo Malimi, learned Advocate while the Respondent was represented by Mr. Makori Lucas Makori, learned Advocate. i Whereas this Court had granted the Applicant 14 days to deposit security of costs in the main case, the Applicant failed to deposit the amount in the court account on time. According to Boniface Mwikomo's affidavit, the delay was for one day. In its Ruling dated 13th June 2024, the applicant was given 14 days to deposit 20,000 USD. The 14 days therefore started to run as from date of delivery of the Ruling. The Applicant stated that following delivery of the Ruling, there was a delay on the part of the Applicant to obtain the Court order itself up to 18th day of June 2024. By that time 5 days had already expired. After receipt of the Ruling and Drawn Order, the Applicant made efforts to deposit the amount timely, but until 27th June 2024 which was the last day for the Applicant to deposit the security for costs, the Applicant realized that he could not make be able to deposit the same because the Principal Officer of the Applicant was in Nairobi, Kenya and the court's online system for payment was not accessible to him without difficulties. The Principal Officer of the Applicant, therefore, transferred the funds to Mr. Seni Songo Malimi, Advocate for the Applicant who was in Dar es Salaam so as to deposit in court the amount as security for costs on behalf of the Applicant Company. The money was transferred on the 27th June 2024 which was the last date of the 14 days granted by the Court. Therefore, Mr. Malimi, learned Advocate, submitted that the delay was occasioned by reasons beyond control of the Applicant. It was caused by delay in getting copy of the Ruling, the travel from Dar es Salaam to Nairobi of the Principal Officer of the Applicant Company and technical issues preventing the Applicant from being able to deposit in the court's account the amount of security for costs while the Applicant's Principal Officer was abroad. 2 Mr. Malimi, learned Advocate, submitted that the application at hand was officially admitted as filed on 2nd July 2024. However, it was brought to court for filing on 28th June 2024. He argued that immediately as from 28th June 2024, the application was already in Court and was pending admission. Therefore, he argued, the application was brought promptly within one day after expiry of the time and that the delay was minimal and negligible. Further, it was submitted that the Respondent is not in any way prejudiced by the delay as there is no procedural abuse. Mr. Malimi, learned Advocate, submitted that the application for enlargement of time is in the discretion of the Court. He prayed that the discretion be exercised in favour of the Applicant. He relied on Mobrama Gold Corporation LTD versus Minister for Energy and Minerals (1998) TLR 425, where there was a delay in filing a document and it was very negligible delay. The Court held that the courts will always grant an extension of time where the delay does not constitute a procedural abuse or a contemptuous process and where no prejudice is occasioned on the respondent. Generally, the Court will consider if the case will be stifled or not. Mr. Malimi, learned Advocate, prayed for this court to be inspired by the cited decision. He argued that if the application is denied, the main case will be dismissed and therefore be stifled as it will mark an end of the Applicants case. He submitted that dismissal of the Applicants main case for being denied to deposit security of costs on time will have negative consequences to the justice of the Applicant. Mr. Malimi, learned Advocate, cited the case of Mashaka Juma Shabani and 42 others versus the AG, Civil Application No. 279/01 of 2016, CAT DSM, which is also available on TANZLII 3 website and data base. He submitted that the Court of Appeal in that case gave considerations in applications for enlargement of time. They include the length of the delay; the reasons for delay; whether there is accounting for delay for each day; the degree of prejudice to the other side; the delay not being inordinate and diligence by the applicant and not apathy, negligence or sloppiness. He submitted that the Application before the Court meets all these tests. He submitted that in the case at hand the delay is minimal and not in ordinate. It is just a one-day delay. He argued that the two affidavits in support of the Application have accounted for each day of the delay and that the respondent will not be prejudiced except for costs which the court may grant. He added that there is no prejudice upon the respondent if the application is granted. Mr. Makori Lucas Makori, learned Advocate made reply submissions. He adopted the counter affidavit of Mr. Nuhu Mkumbukwa, advocate for the Respondent. He submitted that the respondent is challenging the application on the ground that the applicant has failed to show a good cause for extension of time to deposit the security for costs. He submitted that it is settled principle that in order for the court to exercise discretion, there must be a good cause including accounting for each day of delay. The affidavit by the applicant supporting the application has not accounted for each day of delay. Specifically, under paragraph 6 of the affidavit of Seni Malimi, the applicant averred that they failed to initiate the process for depositing the security for costs because the order of the court was supplied to the Applicant late. He argued that it is not a good cause because it lacks evidence and it has not been supported by any legal provision. He argued that the 4 Applicant has failed to show that obtaining a copy of the Ruling was necessary for them to process the transfer of funds after the court order. Mr. Makori, learned Advocate, submitted that there is no evidence tendered as to when the Applicant applied for the said Ruling and order, assuming that the same was necessary for them to transfer the funds. Mr. Makori, learned counsel, submitted that the applicant has failed to account for the period from 19th to 24th June 2024 as required by the law. He argued that the requirement of showing a good cause has been stipulated in many cases. He cited the case of Maulid Musa Kibai and 5 others versus Imam Taqwa Mosque, (2021) which is available on Tanzlii. He argued that at page 5 and 6, the Court of Appeal stated that an applicant for extension of time must show good cause for extension of time like illegality or the reason for the delay. He submitted that what constitutes a "good cause" was stated in Lyamuya Construction Co.Ltd versus Board of Trustees of Young Women Christian Association of Tanzania (2010). The Court of Appeal at pages 6 and 7 laid down some factors to be considered in showing the good cause. They include accounting for all period of delay; there should have been no inordinate delay; Applicant should have shown diligence and not apathy, negligence or sloppiness; and illegality. He submitted that the applicant has failed to meet the requirements as stipulated in that case since they have not accounted for all the period of delay. Mr. Makori, learned Advocate, submitted that the Applicant has failed to show diligence in terms of complying with the court order. Since the 5 applicant has failed to comply with order of the Court and has no good cause, the application should be dismissed with costs. He concluded in alternative that if the court finds that the application deserves to be granted, then respondent deserves to be awarded costs because the applicant caused the Respondent to incur costs of this application by preparing and filing court documents and attending the court for hearing sessions. Mr. Malimi made rejoinder submissions. He argued that the two affidavits in the application have shown the good reasons for the delay. Also, he argued that in all the cases cited by the Respondent and by the Applicant on enlargement of time, the rule is that an applicant is required to account for "each day of the delay". He submitted that the delay to be accounted for is for each day of the delay not for the days which the court had given the parties an allowance to perform the order. In this case, the two affidavits the applicant show what he was doing within the time that was allowable. That was not explaining delay as there was no delay by then. He argued that the period of time spent in waiting to be supplied with certified copies of the Ruling, the travel abroad and communication between the client and her advocates in Tanzania should be taken to be explaining how the Applicant consumed the allowed time. The principles should not apply for that period as the Applicant was not yet outside the time allowed by the Court. On lack of evidence as to when the Applicant had obtained the Ruling and the Drawn Order, he submitted that the applicant averred that there was a delay in issuance of ruling and court order. The Applicant was not 6 thereby accounting or Explaining the delay but was showing diligence and follow up. He submitted that it was necessary for the Applicant to get the ruling because that is the only formal means of communication to the applicant by his advocate on what had transpired in Court. The applicant is based in a foreign jurisdiction in Burundi. The Applicant needed the formal order of the court to understand clearly what was to be done. Mr. Malimi submitted that the delay should be counted from 28th June 2024 after the 14 days had elapsed on 27th June 2024. Counted that way, the delay was of only one day and hence minimal and negligible hence not inordinate. The application was done timely and the applicant was not sloppy or negligence but due to human challenge. That is the Applicant due to their incompetence to use the system, they failed to meet the deadline. It is nowhere near the procedural abuse. He concluded by repeating his prayers. The application is seeking for an extension of time for the Applicant to deposit USD 20.000.00 as security for costs in Commercial Case No. 130/2023 between the parties herein. In its Ruling dated 13th June 2024, this Court held that: (a) I do hereby issue an order compelling the Respondent to deposit in Court security for costs amounting to USD 20,000.00 (United States Dollars Twenty Thousand only) or its equivalent in Tanzanian Shillings as per the prevailing exchange rates of the date of this Order in respect of 7 Commercial Case No. 130 of 2023 between the parties herein. (b) The Respondent shall deposit the costs in (a) above within 14 days from the date of this Ruling. (c) Each party to bear its own costs in this application It is the above order that the Applicant failed to comply with and has presented the present application for extension of time so as to be allowed to deposit the amount ordered as security for costs outside the time prescribed by the Court. As the Order was given on 13th June 2024, the 14 days period expired on 27th June 2024. The Applicant presented for filing in court the present application for extension of the next day that is 28th June 2024. The Applicant stated that the money to be deposited as security for costs was wired to the Advocate for the Applicant on 27th June 2024 at 14:36hrs. To what extent was the Applicant late to deposit the money? Obviously, the delay was of one day. That is the period of delay that the Applicant was bound to account for. The Applicant cannot be required to account for all the days from the issuance of the Court Order on 13th June 2024 as he was not yet out of time to deposit the amount as security for costs. The duty to account for the delay, as well argued by Mr. Sen! Songo Malimi, learned Advocate, was with respect for the days constituting the delay and not for all the days prior to the institution of the application for extension of time. The Applicant for extension of time has no duty to account for all the days prior to institution of the Application because they do not 8 constitute days of the delay. Therefore, in the present case the delay was of one day. I have asked myself whether there is a good cause for the delay or for enlargement of time in the present case. I have taken note of the reasons advanced by the Applicant that he was experiencing technical problems to effect payment directly to the court account while he was in Nairobi Kenya. Also, I have taken note of the fact that his Advocate upon receiving the amount in bank account in Tanzania, the amount was not immediately available for transfer or withdrawal until the next day. There was no opposition from the respondent in respect of this account by the Applicant. The fact that the Applicant transferred the amount as security for costs to his Advocate in Tanzania to be deposited in court, shows the willingness and readiness by the Applicant to comply with the Court order. The amount of costs is security for the Respondent's likely costs in relation to the main case between them. The respondent will not be prejudiced but secured, if the extension of time is granted for the Applicant to deposit the amount as security for costs in favour of the Respondent in the event that the respondent wins the main case is awarded costs. On the other hand, the Applicant stands to suffer if this application is not granted as he risks the main case being dismissed for failure to deposit security for costs as ordered by the Court. I am alive to the rule that the purpose of security for costs order is just to protect the Defendant from being dragged into a case which he is not able to recover his costs. The aim of security for costs order is not to stifle the claims or counter claims. In the main case, the Respondent has been sued by a foreign entity and has successfully applied for costs. It is 9 through the extension of time in the present case that the costs can be deposited in the court's account to secure the likely costs to be incurred by the Respondent in the main suit. Where the party ordered to deposit security for costs is willing and able to deposit the same except that he is late to do so by a short period of time like in the present case, and where the main case has not yet been dismissed for failure to deposit the costs, I am of the view that he should be granted an extension of time where he applies for it and satisfies the necessary conditions, so as to enable him to comply with the court order. I am alive to the principle that in applications for extension of time, like the present one, there is no hard and fast rule as to what amounts to "sufficient cause". Each case should be determined on its own merits bearing in mind the prevailing circumstances of the case. This rule was restated in the case of REGIONAL MANAGER, TANROADS KAGERA V. RUAHA CONCRETE COMPANY LTD CIVIL APPLICATION NO.96 OF 2007 (CAT unreported), where the Court held that: "What constitutes sufficient reasons cannot be laid down by any hard or fast rules and this must be determined by reference to all the circumstances of each particular case". In the circumstances of the present case, the Applicant has in this case I find that the delay was not to be inordinate. It is just a one-day delay. The Applicant showed diligence by immediately seeking an extension of time upon delay of one day by filing the present application. 10 Although I have held that the Respondent will not be prejudiced by the granting of extension of time, I must hasten to say that the delay has naturally occasioned costs to unconcerned parties and the court. The problems which faced the Applicant thereby causing him to delay to deposit the amount of security for costs, affected the Applicant and the consequences thereof should befall the Applicant alone. It would be unfair for the court to distribute the risks upon the other party to this case, that is, the Applicant's problems, misfortunes and hardships which prevented the Applicant from depositing the amount of security for costs on time. Loss lies where it fell. The peculiar circumstances resulting into failure to deposit security for costs befell the Applicant and the Applicant only. Costs of this application must therefore be borne by the Applicant despite having emerged victorious in the application. Costs will not follow the event. Thus, the Respondent shall have costs of this application. Without much ado, I hereby grant this application. I grant the application for extension of time and make the following orders: 1. The Applicant is granted 7 days extension of time from the date of this Ruling within which to deposit security for costs pursuant to the order of this Honourable Court dated the 13th day of June 2024 in Misc. Commercial Application 172/2023. 2. The Respondent is granted costs of this application. It is so ordered. ii Ruling is delivered in Court this 6th day of September, 2024 in the presence of Mr. Ibrahim Kibanda, Advocate for the Applicant and Mr. Makori Lucas Makori, Advocate for the Respondent. A. H. GONZI JUDGE 06/09/2024 12