robert philipo masangwa vs nida textiles mills 2017 tzhc 2130 15 december 2017

(MWANZA REGISTRY)

AT MWANZA (PC) CIVIL APPEAL NO.16 OF 2015 (Arising from Civil Appeal Case No. 20 o f 2014 o f the District Court o f Sengerema; Original Civil Case No. 157 o f 2013 at Sengerema Urban Primary Court) ROBERT PHILIPO MASANGWA.... ............................. APPELLANT

VERSUS NIDA TEXTILES MILLS........................................... RESPONDENT Last Order: 12/09/2017 Exoarte Judgment: 15/12/2017

JUDGMENT MAKARAM BA, J.: This Judgment is on appeal from the decision of Sengerema District Court in Civil Appeal Case No. 20 of 2014 dated 28th November, 2014 before Hon. Ndyekobora £s^RM. Briefly, in 2013, NIDA TEXTILES MILLS, the Respondent herein, instituted a suit before the Sengerema Urban Primary Court in Civil Case No. 157 of 2013 against ROBERT PHILIPO MASANGWA, the Appellant herein, claiming for the payment of Tshs.l,667,140/= being a deficit of the amount advanced to the Appellant as an agent of the Respondent to buy cotton seeds. The suit ended in favour of the Respondent where the Appellant was ordered to pay Tshs. 1,667,000/= being the outstanding balance and costs of the suit to the tune of Tshs. 50,000/ =. The Appellant having been dissatisfied with such decision, unsuccessfully appealed against it before^'fffe District Court of Sengerema in PC. Civil Appeal No.20 of 2014.' The Appellant was aggrieved by that decision and has come before i t o Court on second appeal on the following grounds, namely; 1. That, the Appellate Court grossly erred in law in dismissing the appeal and confirming the decision o f trial Court which entertained a civil matter involving company disputes while jurisdiction there to has been expressly exclucjj^g from that court by virtue o f the provisions o f the Companies Act, No. 12 o f2002.

2. That, the Appellate^ al Court grossly erred in law and fact in entering Judgment ^against the Appellant in person while the Respondent has nojgf^ standi to sue on behalf o f the company.

3. That, the Appellate District Magistrate erred in law by delivering the Judgment in favour of the Respondent in absence o f the valid contract which establishes the obligations and rights between the Appellant and the Respondent.

4. That, the Appellate District Magistrate erred in law by contradicting herself in reaching the decision.

5. That, the Appellate Court grossly erred in law and fact in entering Judgment against the Appellant in person while whatever was alleged against him was done in performance o f his official duties as assistant agent of the Respondent for only buying cotton at Nyanzaga center. The Appellant prayed before this Court that the appeal be allowed with costs. The Appellant appeared in person to prosecute the appeal. The Respondent despite being served by affixing the Court summons at the door to the house of the Respondent's company did not enter appearance to defend the appeal. This Court, upon prayer by the Appellant for leave to proceed exparte against the Respondent, duly granted it and also granted the Appellant's prayer to argue the appeal by way of written submissions, with which the Appellant duly complied and hence this Judgment. On the 3rd of October, 2017, the Appellant duly lodged his written submissions before this Court as ordered. However, in the course of making his submissions the Appellant elected to abandon the 1st and 5th grounds of appeal and proceeded to argue the 2nd, 3rd and 4th grounds of appeal. On the second ground of appeal, the Appellant stated that, the person who had instituted the suit case against the Appellant at before the trial had no locus standi to institute the suit on behalf of the Company. The Appellant stated further that, in order to

institute a suit on behalf of a Company, there has to be a Company Resolution authorizing such person to institute such suit. The Appellant buttressed his submissions on this point by referring this Court to the decision in the case of S t Benard Hospital Co. Ltd vs. Vr. Linus Lu/a Chuwa, Commercial Case No. 57 of 2004 (unreported), where a person who had instituted that suit, did not show any Company Resolution in Court authorizing him to institute the case and it was held that, lack of authorization from the Company before instituting the suit rendered all the proceedings and Judgment of the trial Court a nullity. In the instant appeal, the Appellant has submitted that this Court should also similarly so find as was the case in S t Benard Hospital Co. Ltd vs. Dr. Linus Lula Chuwa that Shija Lusafija lacked the requisite Company Resolution to institute the suit on behalf of the Company, with the attendant legal consequences. The Court record shows that, the suit giving rise to the instant appeal was instituted by fhe Respondent's Company itself, NIDA Textile Mill (T) Ltd. In that suit, Shija Lusafija, addressed himself as the agent of the Respondent's Company, Nida Textile Mill (T) (Ltd) as evident in the record of the trial Court where he testified as a witness (SMI). The record of the trial Court has no indication whatsoever that, Shija Lusafija had instituted the suit on

behalf of the Respondent's company. In the eyes of the law, a registered company being an artificial person has the legal capacity to sue or being sued in its own name. I am alive to the decision of my learned sister Judge S.E Mugasha (as she then was) in the case of Fiona (T) Limited v. Kyeeri Rural Co-Operative Society Ltd & 2 Others, Land Case No. 2 of 2010, (High Court of Tanzania at Moshi), where her Ladyship held that; "In the matter at hand, Fiona being a registered Company is thus a legal person capable to sue or being sued. Fiona has come to court to enforce legal rights pertaining to the lease agreement which does not require them to present evidence showing that\ the Board has resolved for the matter to be brought in court." In the instant matter and on the persuasive authority Fiona (T) Limited case (above), the Respondent's Company having brought the suit against the Appellant under it's on corporate name, it did not require any authority by way of Company Resolution to bring the action against the Appellant. Understandably, much as a company being an artificial person without its own mind, however it speaks through its directors, who are held to be held accountable for the authorized acts and dealings of the company. The pertinent issue before this Court is whether the Claimant Form instituting a suit was signed by a person not authorized by the Company.

Unfortunately, the Claimant Form was not signed by the Respondent's company since neither of the officers from the Respondent's company signed it. Instead the Claimant Form filed in the trial Court on 04/12/2013 was only signed by a Court Clerk but in the section in which ought to have been signed by an officer from the Respondent's company was left blank. In the premise, it is uncertain as to who instituted the suit on behalf of the Respondent's Company. Even more strangely, as per the proceedings of the trial Court, the Respondent's company has been shown as appearing in person as if it was a natural person. I am of the considered view, that the suit against the Appellant was not properly instituted and similarly the proceedings of the trial Court were improperly recorded. In the premise, the suit ought to have been struck out those grounds. On the 3rd ground of appeal, the Appellant stated that, it was improper for the trial Court and the District Court to decide the case in favour of the Respondent while the Respondent did not produce in Court the contract which alleged to have established the contractual relationship between the Appellant and the Respondent. The Appellant stated further that, the absence of such contract raises a doubt as to whether the Appellant owed any duties to the Respondent. According to the Appellant, the Respondent did not prove her case on a

balance of probability. As for the arguments by the Appellant in respect of the third ground of appeal, the record of the proceedings of the trial Court shows at page 7 that, the impugned contract was produced and admitted in evidence as Exhibit "B." The only problem with the record trial Court is that, the contract, Exhibit "B", is not in the Court file, a fact which was also confirmed by the Appellate District Magistrate. In the absence of the contract giving rise to the suit, there is nothing meriting this Court on appeal to consider as forming the basis of the cause of action between the disputing parties. In the absence of the document (Exhibit B) evidencing the terms and conditions of the contractual agreement between the disputing parties, this Court has not been satisfied as to the correctness of the two decisions by the two lower Courts with regard to the issue of breach of contract which gave rise to the award now being contested in this Court. It is for the above reasons this Court finds that, the third ground of appeal has merits. It is hereby allowed. On the fourth ground of appeal, the Appellant stated that, the learned Appellate District Magistrate contradicted herself in delivering the Judgment at the Appellate stage, which contradiction according to the Appellant, is noted at page 4 of the typed Judgment where the District i Magistrate stated as follows; "The

record o f the trial Court evidence adduced by the Respondent shows that the parties entered in a contract but we find that no contract was tendered to support this argument That is to say this Court has find (sic!) that there was contract between the parties they agreed themselves, that there was contract." The Appellant stated further that, the District Magistrate satisfied herself that there was no any contract tendered in court to prove the existence of contractual relationship between the Appellant and the Respondent, yet she decided the case basing on such unfounded contract. The District Appellate Magistrate was expected to allow the Appellant's appeal due to failure of the Respondent to prove her case on a balance of probability, the Appellant surmised. I am at one with the submissions by the Appellant indeed the Appellate District Magistrate contradicted herself in making a finding that, there was no contract which had been tendered in evidence to support the Respondent's case but proceeded to make a finding that there was contract between the parties simply because the parties had agreed themselves that there was a contract. In the first place, it was not true that, there was no contract tendered before the trial Court, As per the record of the proceedings of the trial Court, the contract was admitted in evidence as Exhibit "B."As I intimated to earlier in this

Judgment when traversing the third ground of appeal, the problem was not whether the contract was admitted in evidence to prove its existence but it was that the said contract (Exhibit "&') is not in the Court file. I am of the considered view that, the contradiction created by the Appellate District Magistrate has occasioned an injustice to the Appellant. This will therefore make the decision on the appeal by the first appellate instance court, the District Court, to have been improperly arrived at. Given that the said contract was an essential part of evidence by the Respondent to prove its case against the Appellant, its absence from the court file leaves the case by the Respondent against the Appellant to have been left without proof. Consequently, the learned Appellate District Magistrate having correctly noted the absence of the said contract from the court file albeit having been indicated to have been admitted in evidence as Exhibit B3, the appellate Magistrate failed to properly re-evaluate the evidence which made her arrive at a wrong decision thus occasioning an injustice to the Appellant. In the absence of the said contract, it has made it extremely difficult for this Court to entertain the appeal before it on its merits. .It is for the above reasons this Court finds that, the fourth ground of appeal has merits. It is accordingly allowed. In the whole and for the

above reasons, the appeal is hereby allowed. The decision by the District Court of Sengerema in Civil Appeal Case No. 20 of 2014 and the decision by the Sengerema Urban Primary Court in Civil Case No. 157 of 2013 are hereby quashed and set aside. In the circumstances of this appeal, I shall not make any order as to costs. The Appellant shall bear its own costs in this appeal. It is so ordered. R.V. MAKARAM BA

JUDGE 15/12/2017