RAMANI

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA (COMMERCIAL DIVISION) AT DAR ES SALAAM COMMERCIAL CASE NO. 89 OF 2023 RAMANI.IO COMPANY LIMITED............................... PLAINTIFF VERSUS MARY DORIN KIMARIO........ .................................... DEFENDANT JUDGEMENT GONZ1, J. Date of Last Order: 15/04/2024 Date of Judgement: 10/05/2024 According to paragraph 3 of the Plaint, on 16th April 2022 the plaintiff and the defendant entered into an agreement known as Distributor Revenue Sharing Agreement which the Defendant has breached. The Plaintiff, consequently, is claiming against the defendant for payment of TZS. 172,622,155.00 as an outstanding sum in accordance with the terms and conditions of the said Distributor Revenue Sharing Agreement. In the Plaint, the plaintiff prays for judgement and decree against the defendant for: - 1. A declaration that failure by the defendant to pay the entire outstanding sum in accordance with the distributor revenue sharing agreement executed Page 1 of 10 between the plaintiff and the defendant amounts to breach of that agreement by the defendant. 2. An order for the defendant to pay the plaintiff the sum of TZS.172,622,155.00; say Tanzanian shillings one hundred seventy two million six hundred twenty two thousand one hundred fifty five only being the sum outstanding and due to be paid to the plaintiff as of 21st June,2023 in accordance with the distributor revenue sharing agreement executed between the plaintiff and the defendant. 3. An order for the defendant to pay the plaintiff interests on the above sum at the contractual rates from the date of default to the date of judgement. 4. An order for the defendant to pay interest on the decretal amount at the rate of 12% from the date of judgement to the date of full and final payment. 5. An order that if the defendant fails to repay the claimed payments, the plaintiff be allowed to sell the defendant's assets used as security for the defendant's obligations as created by the hypothecation agreement as well as seizing, taking possession of the inventories as per the hypothecation agreement and auctioning of other assets of the defendant in order to recover the total sum amount which the defendant owes the plaintiff in accordance with the distributor revenue sharing agreement. 6. Cost of the suit to be borne by the defendant. Page 2 of 10 After completion of pleadings, the First Pre-trial Conference was conducted on 02/11/2023 and thereafter the matter was scheduled for mediation before the Hon. Deputy Registrar. When the matter was called before the Mediator on 28/11/2023, the Hon. Deputy Registrar scheduled the date for conducting mediation on 01/12/2023. On 01/12/2023 the plaintiff appeared for mediation while the defendant and her advocate who were aware of the date of mediation, did not enter appearance in court. Mediation could not take place and the matter was rescheduled for mediation on another date and the Defendant and her advocate were notified. On 06/12/2023 when the matter was called for mediation, once again, neither the defendant nor her advocate entered appearance before the Mediator. Following the series of non-appearances of the defendant and her advocate, the mediation was marked Failed by the Mediator and the file was returned to me as the Trial Judge for next steps. When this matter was scheduled for necessary orders on 15/02/2024, the Learned Counsel for The Plaintiff Miss. Prisca Nchimbi appeared in this court and addressed the court that she was in contact with the learned counsel for the Defendant who had notified her that the defendant had opted not to take part in the mediation and that the defendant was seeking for adjournment to another date for the Final PTC. Ms. Prisca Nchimbi, on her part stated that she was not objecting to the prayer by the Defendant's counsel. Upon being prompted by the Court on the legal requirement for parties to attend mediation, Ms. Prisca Nchimbi learned advocate for the Plaintiff stated that the defendant had defaulted for not attending the mediation sessions and as a result the consequences under order VIII Rule 29 of the Civil Procedure Code should follow namely that the Written Statement of Defence should be expunged. Following the address by Ms. Prisca Nchimbi, learned advocate, the Court pronounced an Order that although the learned counsel for plaintiff had made a prayer that the defendant be given the last chance but Rule 36 of High Court Commercial Division Rules GN.250/2012 as amended in 2019 required that where the defendant does not attend mediation his WSD shall be struck out. The court Page 3 of 10 therefore invoked the provisions of Rule 36 of High Court Commercial Division Rules GN.250/2012 as amended in 2019 and struck out the Written Statement Defence. Following that eventuality, it was ordered by the court that the hearing of the matter should proceed ex-parte the defendant. The plaintiff was ordered by this court to file an affidavit of proof of the case within fourteen (14) days. Pursuant to the order of this court dated 15/04/2024 made under Rule 22(1) of the High Court Commercial Division Rules GN.250/2012 as amended in 2019, the plaintiff filed an application Form No. 1 and an affidavit affirmed by Mr. Adrian Maro along with documentary exhibits which were attached to the affidavit. The exhibits filed include; RCL-1. Which is Distributor revenue sharing agreement between the Plaintiff and the Defendant. The agreement contains the terms and conditions which the parties committed themselves to strictly adhere to. It has schedule 1 which is made up of the operative conditions and schedule 2 which is the hypothecation agreement. The hypothecation agreement contains a letter of hypothecation as annexure 1 thereto making reference to the defendant having executed the distributorship revenue sharing agreement. The Schedules are also signed by the Defendant who affixed her rubber stamp on 6th April 2022 to signify her willingness to be bound by the terms and conditions thereof. RCL-2 which is an invoice from TBL and three swift confirmations of transfer from CRDB bank PLC. These documents evidence that on 23rd April 2022, the plaintiff paid TBL the sum of Tsh.69,266,400.00 through her bank account Number 0150553864800 maintained and operated at CRDB Bank PLC and further that on 16th May 2022 the Plaintiff paid TBL the sum of Tshs. 199,909,800.00 on the same account. These payments were made in inventories submitted to the plaintiff for payment by Mary Kimaro, the defendant herein. RCL-3 which are copies of invoices collectively attached to show that the plaintiff had complied with the terms and conditions of the agreement by making the payments to TBL on behalf of the Defendant under their agreements, and thus the plaintiff was issuing three invoices to the defendant for the sums paid by the plaintiff to TBL Page 4 of 10 claiming for refund of the purchase price paid by the plaintiff as the principal amount plus the one percent (1%) commission as agreed in distribution revenue sharing agreement. These are invoices dated 22nd April 2022 whose due date was 2nd May 2022 for Tshs. 59,287,342.37; invoice dated 6th May 2022 whose due date was 2nd June 2022 for Tshs. 171,109,235.59 and invoice dated 26th May 2022 whose due date was 5th June 2022. RCL-4 is a Demand notice dated 11th Jolly 2022 which shows that the Defendant had made some payments outside the due dates set out in the invoices and that she had paid the sum of Tsh.30,000,000.00. on 8th June 2022, Tsh.40,000,000.00 on 11th June 2022, Tshs. 20,000,000.00 on 27th June 2022, Tshs. 15,000,000.00 on 13th July 2022 and Tsh.2,000,000.00 on 13th August 2022. The demand notice stated that the remaining amount by 11th July 2022 stood at Tshs. 117,922,818.00. RCL-5 is Defendant's account statement extracted from the plaintiff's system on 21st June 2023 evidencing that the defendant became defiant and refused to heed to the demand notice, whereby by 21st June 2023 her account statement stood at Tshs. 172,622,155.00 which included principal sum paid for purchasing the beer, plus commissions and charges for late payments. RCL-6 is the Board Resolution of the Plaintiff company dated 10th November 2022 evidencing that when the situation had worsened to that extent, the company decided to initiate a court action for recovery of the Tshs. 172,622,155.00 from the Defendant. RCL-7 is the Written Statement of Defence filed by the Defendant in this case evidencing that the defendant has not disputed under paragraph 4 that there is a distributor revenue sharing agreement which she signed with the Plaintiff company on 16th April 2022. This being a case based on breach of contract, the court has to consider whether or not the Plaintiff has substantiated the elements of the cause of action? In a typical case for breach of contract, the plaintiff is required to prove existence of a valid agreement and that the Defendant has unjustifiably breached that agreement Page 5 of 10 thereby occasioning damages on the part of the Plaintiff. Through the affidavit sworn by Mr. Adrian Maro and the exhibits attached thereto, the plaintiff has managed to prove before this court that there exists a valid agreement between the Plaintiff and the Defendant namely the Distributor Revenue Sharing Agreement together with its schedules which consist of the hypothecation agreement signed by the parties on 6th April 2022. The Distributor Revenue Sharing Agreement together with its schedules were tendered in Court as Exhibit RCL-1. As per exhibit RCL-1 the terms of that agreement were stipulated that its performance began from 5th April 2022. Under the agreement the defendant as the distributor would request the plaintiff to pay for the products purchased by the defendant from the supplier. According to schedule 1 to the agreement which is the operative conditions, the supplier is Tanzania Breweries Limited and the products in question are Beers. Therefore it was agreed that once the defendant pressed for orders of beers in bulk and was issued with invoices by Tanzania Breweries Limited (TBL), the Defendant would present the invoices to the Plaintiff who would pay the supplier directly on behalf of the Defendant and then the Plaintiff would reclaim the amounts paid under the invoice with commissions, charges and interests as well as penalties in case of delays. According to clause 5.12 of the distributorship revenue sharing agreement read together with schedule 1 thereto (operative conditions), after reselling the products to retailers, the defendant was required to repay back the monies on due dates, together the agreed commission. According to schedule 1 the defendant was required to pay back the money within ten days from the date of delivery of beer together with one percent (1%) commission on the purchase price paid by the plaintiff. In the event of late payment, it was agreed that the sum due would attract a late payment contractual interest at the rate of 1% for every date that the payment remained overdue, on the outstanding sum. The Plaintiff through the evidence in the affidavit of Adrian Maro and the Exhibit RCL-2 has managed to show that the Plaintiff paid for and on behalf of the Defendant for the supplies received by the Defendant from its suppliers (TBL). The Page 6 of 10 Plaintiff has proved that the Defendant has failed to timely and fully effect the payments to the Plaintiff. The failure by the defendant to repay the loan amount pursuant to the terms of the loan agreement constituted breach of the contract and inevitably negatively impacted the plaintiff whose business for the purpose of distributorship agreement was to raise revenues by lending money with interest to the defendant. If the money granted to the defendant in their agreement had been timely repaid, the plaintiff would have been able to use the sum in its other business transactions and generate more income. Like it has been shown herein, the plaintiff has spent much efforts in an attempt to claim the money back, but in vain, and without any response from the defendant despite her acknowledgement in writing of receiving the demand notice. Having established that all the necessary ingredients for a successful suit based on breach of contract exist in this case, the next issue which I am supposed to determine is whether the plaintiff is entitled to the prayers and reliefs sought in this court against the defendant? Since the Written Statement of Defence (WSD) was struck out by this court due to non-appearance of the defendant in the mediation session. The effect is the same as if the written statement of defence had never been filed in court. In the cases of NITRO EXPLOSIVE (T) LIMITED V. TANZANITE ONE MINING LIMITED, COMMERCIAL CASE NO.118 OF 2018 (HC) DSM (UNREPORTED) AND A-ONE PRODUCTS AND BOTTLERS LIMITED V. TECHLONG PACKAGING MACHINERY LIMITED AND ANOTHER, COMMERCIAL CASE NO. 105 OF 2017 (HC) DSM (unreported), in the interpretation of Rule 22 (1) as amended, this court held that for the plaintiff to enjoy fruits of justice under Rule 22, the following cumulative requirements must be met, namely; (a) Proof of service to the defendant but who fails to file his written statement of defence. (b) The plaintiff must make an application in the prescribed form no. 1- to the first schedule to the Rules. Page 7 of 10 (c) That the said application in form no. 1 must be accompanied by an affidavit of proof of the claim. In the instant suit there is no Written Statement of Defence (WSD) as it was struck out in accordance with the law. Hence the defendant does not contest the suit. Equally it is not in dispute that the plaintiff has complied with the requirements of the court order dated 15/02/2024 by filing an affidavit of proof of the claim by making an application in the prescribed form no. 1 accompanied with an affidavit of proof. Having said so in terms of rule 22(1) of the High Court (Commercial Division) Procedure Rules, GN No.250 of 2012 as amended by G.N.107 of 2019, this court does hereby enter judgement by default against the defendant in favour of the plaintiff and orders as follows: - 1. It is hereby declared that the defendant has breached the distributor revenue sharing agreement entered into between the plaintiff and the Defendant on 6th April 2022. 2. The defendant is hereby ordered to pay the plaintiff the sum of TZS.172,622,155.00; say Tanzanian shillings one hundred seventy two million six hundred twenty two thousand one hundred fifty five only, being the sum outstanding and due to be paid to the plaintiff as of 21st June, 2023 in accordance with the distributor revenue sharing agreement executed between the plaintiff and the defendant on 6th April 2022. 3. The defendant is hereby ordered to pay the plaintiff contractual interests at the rate of 1% for every' day that the payment remains overdue, on the outstanding sum in (b) as reflected in Schedule l(Operating Conditions) to the distributor revenue sharing agreement executed between the plaintiff and the defendant on 6th April 2022, from 21st June, 2023 to the date of judgement. 4. It is hereby ordered that under the powers conferred upon the Plaintiff by the Defendant under clauses 10 and 11 of their Hypothecation Agreement Page 8 of 10 which constitutes Schedule 2 to the to the distributor revenue sharing agreement executed between the plaintiff and the defendant on 6th April 2022, if the defendant fails to repay the decreed amounts in full, the plaintiff is empowered, for the purpose of, and to the extent necessary for, the satisfaction of the decretal sums, sell or otherwise dispose of the products and inventories and to assign, transfer or negotiate any delivery orders, warehouse receipts or other document of title or security without notice to the Defendant and without the plaintiff having an obligation nor being liable for any loss occasioned by delay or failure to sell. 5. The defendant is hereby ordered to pay general damages to the Plaintiff at the tune of TZS 10,000,000/= for unlawful breach of contract. 6. The defendant is hereby ordered to pay interest on the decretal amount at the rate of 7% per annum from the date of judgement to the date of full and final satisfaction thereof. 7. Costs of the suit be borne by the defendant. It is further ordered that the execution of this decree should comply with the provision of rule 22 (2) (a) and (b) of the commercial court rules. The decree awarded herein shall not be executed unless the decree holder has, within a period of ten (10) days from the date of this judgment published a copy of the decree in at least two (2) newspapers of wide circulation and after a period of twenty-one (21) days from the date of expiry of the said period of ten (10) days, it is so ordered. JUDGE 10/05/2024 Page 9 of 10 Judgment is delivered in Court this 10th day of May 2024 in the presence of Mr. Afrika Mazoea and Mariam Ismail Advocates for the Plaintiff and in the absence of the Defendant who was duly served with notice of date of delivery of the default Judgment but has not attended. A.H. GONZI JUDGE 10/05/2024 Page 10 of 10