SB MERALI AND CAMUSAT TANZANIA LIMITED RULING COMMERCIAL CASE NO

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA (COMMERCIAL DIVISION) AT DAR ES SALAAM COMMERCIAL CASE NO. 19039 OF 2024 SB MERALI COMPANY LIMITED…………………………………………..PLAINTIFF VERSUS CAMUSAT TANZANIA LIMITED……………………………………………DEFENDANT RULING Date of last order: 11/10/2024 Date of Ruling: 25/10/2024 GONZI, J. The plaintiff instituted this suit praying for judgment and decree of the Court against the defendant for several reliefs as follows: i. That the Honourable Court be pleased to order Defendant to pay a total sum of TSH. 158,957,800/=, (Say One Hundred and Fifty- Eight Million, Ninety Hundred and Fifty-Seven Thousand and Eight Hundred] arising from breach of Master Lease Agreement being amount outstanding and remaining unpaid in respect of the Plaintiff’s supply of vehicles to the Defendant 1 ii. That the Honourable Court be pleased to order Defendant to pay interest on the Outstanding Amount at the rate of 30% per annum computed from the date that each particular payment became due and payable under its respective terms of lease to the date of filing the suit; iii. That the Honourable Court be pleased to order Defendant to pay specific losses and damages arising from the material breach amounting to TSH. 250,000,000/=, [Say Two Hundred and Fifty Million Tanzania Shillings]. iv. That the Honourable Court be pleased to order Defendant to pay punitive damages amounting to TSH. 150,000,000/=, [Say One Hundred and Fifty Million] arising from the losses caused by the delayed payments. v. That the Honourable Court be pleased to order Defendant to pay general damages, costs and expenses including legal fees and expenses incurred by the Plaintiff as a result of the Defendant’s failure to heed to the terms and conditions of the supply and delivery, and other resultant costs and expenditure incurred by the Plaintiff, the facts and particulars of which are given hereunder. vi. That the Honourable Court be pleased to order Defendant to pay interest at the commercial rate prevailing at the date of judgment, or at such other rate as the Honorable Court may deem fit and just, accruing and computed from the date of 2 filing the suit to the date of judgment on the amounts mentioned in paragraphs above. vii. That the Honourable Court be pleased to order Defendant to pay interest at the commercial rate prevailing at the date of judgment, or at such other rate as the Honorable Court may deem fit and just, accruing and computed from the date of filing the suit to the date of judgment on the amounts mentioned in paragraphs (a), (b) and (c) above viii. That the Honourable Court be pleased to order Defendant to pay of costs of this Suit ix. Any other relief(s) as the Honorable Court may deem fit and just to grant. On 12/08/2024 this Court ordered the defendant to be served with summons to file the written statement of defence (WSD) and the suit was scheduled for 23/09/2024. On 23/09/2024 the matter was attended by Hon.Deputy Registrar and was scheduled for First Pre-trial Conference on 11/10/2024.The Plaintiff was represented by Mr. Simon Mayenga, Learned Advocate, while the Defendant was represented by Mr. Aron Koyugi, Learned Advocate. On 11th October 2024, Mr. Koyugi orally prayed for extension of time to file Written Statement of Defence relying on Rule 20(2) of High Court 3 Commercial Division Procedure, Rules 2012 as amended on 2019. The reason given for the failure to file the WSD on time was that the Defendant's Officer who received the Court documents on 14 /08/2024 only forwarded the Plaint but did not forward to the relevant department of the Defendant Company, the Initial Orders and Summon to file WSD. He submitted that it was on 19/09/2024 when the defendant’s desk officer became aware that there was also an Initial Order and Summons to file WSD on her desk which she had not submitted to the relevant department alongside the Plaint. She forwarded them accordingly to the relevant department. The next date on 20th September 2024, the Learned Counsel was instructed to act in this case. Mr. Aron Koyugi, Learned Advocate, stated further that upon being instructed and upon perusal of the court documents, he discovered that the case was scheduled to be called next in Court on 23/09/2024. He stated that on that date the parties appeared before Hon. Deputy Registrar as the trial Judge was absent. He stated that on 23rd September 2024, he orally made an application for extension of time to file the Written Statement of Defence, however the Hon.Deputy Registrar declined to grant it as she had no jurisdiction. Mr.Koyugi, Learned Advocate, therefore, prayed in this Honourable Court for the Defendant to be granted an extension of time to file WSD within 7 days. Mr.Simon Mayenga, Learned Advocate, submitted in reply that there was admission from the Plaintiff's counsel that indeed the Court documents were received by the Defendant’s Company on time hence they were properly served. He submitted further that the Defendant’s Counsel did not 4 disclose the alleged department within the defendant’s company that had received the court documents. He further argued that as the Learned Counsel for the defendant had admitted to have received the Plaint, that should have been enough to trigger the Defendant’s mind that there is a Court case and take necessary action to follow up for Summons and Initial Orders in court. Mr. Mayenga, Learned Advocate, submitted that there was negligence on the part of the defendant that resulted into failure torespond to the Plaint that had been received earlier. He further submitted that Rule 20(2) of Commercial Court Rules does not favour the defendant in any way. He argued that by calculations the plaint was served on 14/08/2024 along with the summons to file WSD whereby the 21 days expired by 4/09/2024. He added that under Rule 20(2) of the Rules an application for extension of time must be made before the expiry of the original time of 21 days or within 7 days of expiry of initially prescribed time. He contended that from 14/08/ 2024 when the Plaint was served to 11th October 2024 when the application for extension of time to file WSD was being made, the maximum statutorily fixed period had lapsed and that after the lapse of the 28 days period since the defendant was served with WSD, an application for extension of time to file WSD could not be granted by the Court. Mr. Mayenga, Learned Advocate, concluded his reply by seeking for leave to apply for default Judgment under Rule 22(1) of the Commercial Court Rules. 5 In his rejoinder Advocate Aron Koyugi reiterated that the court documents served upon the Defendant were received by the company's receptionist. He submitted that the delay to file WSD was not due to the negligence on the Defendant’s company but a human error that any one may forget to act upon some documents while acting on others. He submitted that as soon as the Summons to file WSD and the Court’s Initial Orders were discovered by the Defendant’s receptionist on 19/09/2024, the Defendant acted swiftly by instructing an advocate to act on its behalf. On the applicability of the Rule 20(2), Mr. Aron Koyugi, Learned Advocate, relied on the case of PUMA Energy Tanzania Limited versus Kazim Aziz Barji , Misc Co Application No.161 of 2019 at page 10 and 13, where Hon. Nangela, J. held that Rule 20(2) accommodates all circumstances. He submitted that it is proper to make the present application under the above Rule and concluded by opposing the application for default Judgment as that would condemn the Defendant without being given the opportunity to be heard thus lead to the violation of the principles of natural justice. I have considered the submissions by both parties for and against the extension of time to file WSD. I have revisited Rule 20(2) of the Commercial Court Rules. It provides as follows: “A judge or a Registrar, may upon an application by the defendant before the expiry of the period provided for filing defence or within seven days after the expiry of that period showing good cause for failure to file such defence, extend time within which the defence has 6 to be filed for another ten days and the ruling to that effect shall be delivered promptly.” It is undisputed by both parties that the summons to file WSD was correctly served upon the Defendant on 14/08/2024. The 21 days time limit for the Defendant to file the WSD ended on 4/09/2024 and the 7 days within which the defendant could apply for extension of time ended on 11/09/2024. The Learned the counsel for the defendant appeared before the Deputy Registrar on 23/09/2024 where for the first time he made an application for extension of time to file WSD. By that time the 28 days maximum allowed time for a person to apply for extension of time to file WSD had already elapsed. In the case of Primi Aloyce Mushi vs Kasinde Said Mzee ( civil case 231 of 2022) 2023 TZHC 17095 (Tanzlii) when the High Court (Hon. Pomo, J.) was faced with a similar situation in relation to interpretation of Order VII Rule 1(1) & (3) of the CPC which is in pari materia with rule 20(2) of the Commercial Court Rules, at page 5 the High Court relied on the position taken by the Court of Appeal of Tanzania in Kalyango Construction and Building contractors Ltd v China Chongquin International Construction corporation (cico), Civil Appeal No.85 of 2009, (unreported) where it was held that: “On the issue of the written statement of defence being filed out of time, our starting point is Order VIII of the Civil Procedure Code, 1966, as amended by GN 422 of 1994. It reads as follows: - 7 “(1) Where a summons to appear has been issued, the defendant may, if so, required by the Court, shall within seven days before the first appearance, present a written statement of defence. (2) Where a summons to file a defence has been issued and the defendant wishes to defend the suit he shall, within twenty-one days of the date of service of the summons upon him present to the Court a written statement of defence. “Provided that the Court may, within twenty- one days of expiration of the prescribed period, grant an extension of time for the presentation of the written statement of defence on application by the defendant”. Having reproduced the above provision of the law, the Court of Appeal went on to state thus: - “A plain meaning of this rule is that if a defendant fails to file a written statement of defence within twenty-one days, the Court may only extend time if the defendant applies for it within twenty-one days after the expiration of the prescribed period.” Applying the above interpretation of Order VIII rule 2 (now order VIII rule 1(3) of the CPC) to the facts of the case before it, the Court of Appeal stated thus; 8 “In the present case, the record reflects that when the appellant appeared in Court in the person of Mr. Long Yu- on 5/10/2004, he informed the Court that he was served with summons to file a written statement of defence, on 21/09/2004. By a quick reckoning, the first twenty-one days expired on 12/10/2004. The defendant had until 2/11/2004, within which to make an application for extension of time. However, it was on 3/11/2004 when the defendant’s counsel, Mr. Ngatunga appeared and asked for and was granted extension of time to file his written statement of defence. A perusal of the original record shows that the defence was filed on the same day, 3/11/2004. In our view, after the expiration of the next twenty-one days, the defendant was shut out from filing his defence or apply for extension of time.” The Rule stated in Kalyango Construction and Building contractors Ltd v China Chongquin International Construction corporation (cico) (supra) reflected the 42 days rule that reflected the then prevailing position of the law. That is to say a Defendant could not be granted an extension of time to file WSD if the Defendant failed to do so within 42 days from the date of being served with the Plaint and summons to file the WSD. I find that the same spirit prevails under Rule 20(2) of the Commercial Court Rules, which governs the present application by Mr. Aron Koyugi, Learned Advocate for the Defendant. The 42 days rule has now 9 become the 28 days rule but with the same implications. I subscribe to the position taken in the case of Primi Aloyce (supra). I find that after the lapse of the prescribed period of 28 days, the Court has no jurisdiction now to grant an extension of time to file WSD. The law has statutorily fixed the period of 28 days. The provision is clear and attracts a plain meaning to be ascribed to it. I have also considered the reason for delay advanced by Mr. Aron Koyugi, Learned Advocate for the Defendant. In my view, even if the Court had the requisite powers to grant the extension of time, the reason for delay would not have sufficed to warrant the court to exercise its discretion in favour of the Defendant, in the circumstances. The Defendant was duly served with the Plaint, Initial Order and Summons to file WSD by the Plaintiff. Negligence or carelessness of some internal departments of the defendant company to convey the correct court documents from one department to another could not at any stretch of imagination be a good cause for delay. To recognize such excuses would tantamount to the court processes being subjected to the efficiency and deficiency in the corporate governance of the Defendant Company. It would enable a wrongdoer benefit from his own wrongs. At any rate, all the allegations made by the Learned Counsel were merely statements by a counsel from the bar, unsubstantiated by an affidavit. Therefore, the defendant’s prayer for extension of time is hereby denied and I proceed to grant the prayer by Mr. Simon Mayenga, Learned Advocate for the Plaintiff, that the Plaintiff be allowed to make an application for Default Judgment under Rule 22 of the Commercial Court Rules. 10 It is so ordered. A. H. GONZI JUDGE 25/10/2024 Ruling is delivered in Court this 25th day of October, 2024 in the presence of Ms. Magori Nyamoyo Advocate for the Plaintiff and Mr. Aron Koyugi, Advocate for the Defendant. A. H. GONZI JUDGE 25/10/2024 11