20041015 TZHC Dar es Salaam

·1·"~ l •;•·u1;· JJJ· ,··,H c··,(·)·:• ., .o .... :I. . j ,. -· ll•n•r I"•.~ (•l? •·.{' -,·· . •½. . A. r·•·< I Nrz ·,1.~\ (COl\IMERC!AL DIVISION) -----·---~ b T OAR ES ......... ~ SAI..AA,M __ . ______· ST. HERNAD'S HOSPTTAL COMJ'ANY L!MITl~D ......... PLAli\'T/Ff-' '. I VERSUS ' !. ·-------------------------------····--·--- t 1. Dt:h.:nciant.s prci;rnin:try objecfrons: ·· di.spute which llie P!ui11:[ffc1Ju/d t1or fudge in th.is ... i.:oun ,, . {,Dj '{'/· . ' {/· ' 1(11 . .!I~, ,\l/U . ., n . . 1ilCOl1l;H.fc:.l : .. ~ . . .. •., 1, ,Lt/<1 •. ' , . ,,, ' l () :,'1 t.. (,.l,:,r??.d,\I:.{, . . .,' lt. ' ,_,,.,g11, : .,. : .,. . r , because its con·zrr:,:!ti.cemenr 11-as nor sanctio,u:..-J bJ• a n-:solW/r:,1 passed eitht!r at (\nnpa.ny or Board o/Direczors m.:-::etin.g " "t..:..,_......., _____ ~ __ ---;:::;::-·--~1r~••:;IJ,"'...,:i.".. --.. -•..-:=._ .. ,____ ,____ _ Mr. Sha yo, vehemently argued tint the Plaintiff v,,as try1.ng !. n:rn, )',•,:: 1) . rr"' . . . . . . . · -__)wsp,t.al but the post itself. ·He: referred the Couc1 lo (CA'l') Civil . • ' . f' t• • I ! No. 33/2000, Tambueni Abd-.al.Jah a-nd- 89 others vs NSS1◄. On the 2 1111 Preliminary objection, Mr. Shayo insisted that the suit \V;ts filed without the resolution of the Comp~y. · He argued that the Principal Officer who filed it made no reference to a back up by such resolution and made reference to CC l03/2003, Tanzania Glue -- La1:.n htdustries and Sc.an (T) .Ltd & anotlier vs Bjorn Sehi:lu & 5 others :1nd Bugerere Coffee Growers Ltd vs Sebadduka & Another [1970] EA 147. ( ; 1n response, Mr. Kariwa argued that the suit. is not ba:ied on pCJSt ;,'.~ sue.Ii but leg°ality and that. the Defendants have not di.splayed e.!ernenrs l>f Employer/Employee relationship. He charged that the objection that the action is a trade dispute is misconceived, branding the.,cas·es . .cifed' :.\~-: in-elevant and concluding that this is a Commercial dispute ansmg fro;n mismanage:menl of a coq)orate entity. On the 2nd preliminary objection, l\,'lr Kariwa, argued that there is nu law which requires fj!ing of a suit upon resolution by the who.le Board, · .) adding that m any case th.is is a question :,vbich requlies pro.du,:.:tion of evidence. ln rejoinder, Mr. Shayo insisted that prayers have to M read together (one and four); that in any case it is the Plaintiff who should g-ive evidence regard,ing the existence of a resolution and that if indeed !iuch resolution existed it should have been pleaded. .I'. \ ! --ii-~ • I In paragraph 3 of Lhc Plaint the gist of the ~uit is :1ptly put: " ... the P/aint~jTs claim against the D[;fendwll is for the Declauaun: Order that the Afeetingof the Cornpa,t},' 's Board 0 / Direc:tors dated 4 1,., Sept, 2004 which relieved the Defendant functional duties of the Direcwr General (f the Sr. Bernard·...- Hospital l1.•as lawful and ihe Defendant be ordered· i111er aha. adhere to the terms of the Board Resolution, hand over the operations. cash collections and assets 1'.!f the Company to the newly appointed A1anagement and reji-ain ji·om dealing with the {{/./airs of the Com;'Janr • and remain as ordin.ar\! .T shareholder l?{ tire ( '0111pa11y. " The..: above apnn, what\,-~ further gather !i·t)rn the ptairn and il:i annexturcs is th;1t ever since 20/8/l 9<)7, upt)\1 in(orporatinn. 1he Pia inti ff "has been in business of providing medical services to vanvus Corporate and Individual patients under the Directorship of the defendant; that. upon concluding that rhe Hospital was expenencmg managerial J problems and bad business relationship clue to Defendant's breach of tnis: and poor administration 1)f ti1e Hospital in his capacity as a Director General, on 4/9/2004, the Plaintiff's Board of Directors unanimously resolved LO remove him from the ~:;aid Directorship; that however the Defendant has not only refused to hand over the affairsJassets of the C01npany but .holds n11, declaring to the g1t~neral public that he is still in the shoes of the posL, disowning the newly appointed l\4anagemen-t. The pleading further charges that the Defendant':-; :h:tion~ are seriously jeopardizing the Company·s I ! ., ' . . ' J • • • rlrnsim:ss including llSL'. ol' the [Link loan focil:ty'thcy secured for Huspi1:i! devciopmental/expansinn purposes. should hastily add rllar tli1..· Memorandum and Articles of Association. a copy of ,,vhich is an annexturc to the Plaint, and to which no spec of challenge is fronted anywhere in the written statement of Dcfc..:ncc, show that .the Defendant is one among th1..: scv._:n promoters/subscribers of the Pla111tiff who have equal shares, in Io uni ts each. As regards prayers they have the following: ( j "(i) A decfara/01:1: Order thaL 1/w meeting o_f the Board of Directur.'i 1 dated 4 ;' Sep!lin1bcr. 2004 which removed the d1..~,fenda111 /n)/JJ . the pos( of Director General <~( St. Bernard's Hospital is valid and thus hindin,'.~ 011 the defendant. (ii) The De(emlanr he ordered tu hand over the affairs and assers u( the Compuny to the new appointed A1anagemenl led by rh,. · Acting Chief Executive O.fj'icer. Dr. Elias A1rutu.. r· _J (iii) The Defendant be ordered to surrender forthwith or unbanked cash and cheque payments held in his custody. (iv) The Defendant be ordered to refrain forthwith to usurp or interfere (sic!) in any way whatsoever with the p0wers of the acting Chief. Executive Officer and remain an ordinmy shareholder of the Company with all the rights and obligations ullachcd 10 his r1:s11ecri1-·c/idl /Wid 11p shores ( v1,I c-1.osts ........... . IJ Armed with the above, 1et us turn to the centre of contention before Starting with the first preliminary objection, in my considered opinion this is a trade dispute envisaged under the Industrial Court Act. S. 3 thereof defines the term Trade Dispute as follows: - "nny dispurc /Jen1'£'.Cll an emplOJ-'l:T and employees or an employee i11 the employrneul (~r thllt employer comtectcd \-Vilh lhe employme,u 01 11011 employment or the terms of the employment. or with 1hc conditions uf /,,/.>(>?ii' or any rf those en1pioyees or Slli."h (I}/ employee ... " The definition as it is, clearly covers the cunent situation. Tile Defendant is the Plaintiff's sharehol.der yes, but as a Director General he. i:.; r its employee at the s:rnictime. And as clearly reflected in the pleadings . • .J there is a dispute betv.,,·een the Employer and Employee. The former is charging !hat the lallcr has failed to perfom1 his duties and comrnitti11:_2 disservice to it instead hence his resolution to remove l1irn a.nd the l:.1tter counters by insisting that h.e committed no wrong and that his being relieved of his powers is wrongful. w.~ gr.-eatest respec.t to :tvir. Kuiwa, :f fail to see how this situatiou can be removed from the general web ~ n by the ciefinition of a Trade Dispute defined above. And once we hold that it is a Trade Dispute, dearly thL· ·c oun, let aloni::' the Commercial Court, beconK·, :, -. .. • I .• , ··~-=-,-))Ilg forum in ,vhicli lo originate the action. The Court of Appeal 11~1,; IJ<.i1.v I lt1id :.it rest the long time Cl)ntention of Court's jurisdiction over Tr:idc f)ispules, in its recent. decision, aiso 1'eforrcd to by Counsel, {CAT) Civil /\ppeal No. 3J of 2000 between Tambueni Abdallah & 89 othtrs v:; NSSF, thus, "ft is clear to us that trade disputes have to follow that pn:scril1cd procedure and there is no room for going to the fligh Court strni,~~lll. The High C'ourr has no original jurisdiction to entertain n·udc ( l; disputes. ·· Thus, v,round 011t.: o!' the Prclirninarv obiections stands allowed. ·-· J -~ ·ru.rning to lh,: ::,:,'. :::'.-ruund of lJbjecrion, ! musl confess Lk1t :hi.; i::~· exercised my mind. f'v1y hopes to get assistance frori1 the ncit~hh< ,ur< _jurisdictions on similar issue have been thrown asunder as nu11H.Tiiu:--; promises to send me relevant literature after contacts I n1a.de havt" pn.iv(:d futile:, and the matter has definitely to be brought to an end. I have no doubt 1n my mind that ac6ons inch1ding filing of suits on behalf of a corporate body must be taken or embarked upon vvirh the r eo.uisite .,. authority . Such authority should be express and not merely p, ~rceived. The logic behind this is the most obvious. Left unconlrolied, I Coi. 11panies v,rould find themselves in ii.1tii.e and costly disputes corn.rncnced at the . whims of enatic (ur those v.1 itl1 personal grudges to quench) officers in I their em 1 Dloyment. I I '· •· ,-.,, The positil>ll or th(: law 011 this wa~ aptly re stated in the Tan:r.:rnia : . ,. } ·-· Gluc Industries Ltd case (a decision of this Court) which properly dirt'dcd itself and adopted what was stated in Bugerere Coffee Growers Ltd case., both cases (being relevant and not irrelevant a charged by r✓i.r. l(ari wri) rightly referred to by the Defendant's Cc>Linsei. ln the latter case, the· Cour! nbservcd, ·· J1ifien Comp,:11·11cs authorize !he conwwncement cf legal proceer/m 1_,_.,_ ct resolution or resolwions have ro he passed e/ther at r:i C'on1.1h11 .: 1 1,1· Board of Director ·s meeting and recorded in minutes ... " ( This is the type or :1uthorization to the Company's f\1anagemcnl \d1.ich would mandate it to rnou11t a suit like the present one. That said however, what has exercised my. mind i~-. \\'hethl:, : ;i:,-'. express authority should be reflected in the pleading short of which I.be ~uit should be thrown out. Having carefully considered tbe rnarter ! :1ave reached a ,<c:Uit.:t.l conclusion that indeed the pleading (Plai1~t) shouid cxpres:;ly refltL:, 1:1:1 1 there is a resolution authorizing the fiiing of an action. A Con1pany which does not do so in its pleading risks itself to the dangers of being faced by an insunnountable preliminary objection as is the one at hand. J should hunied-ly add however that in my view· the resolution shouki be of a genera! nature, that is, it is 110! necessary that a paJrticular fin11 or per:,un ht'. specifically appointeJ tu do the task. It ~;uffices if lhe resolution l:rnp1H\ cT:, the Company rv1anagcmc11t tu takt the 11ccc:-;~;.:1ry action. I arn niaki1n2 1111:, I '\r-# -.. • ., ~, • ' ,--_ X last insistence bc.cau::;c. rru111 the wording in Bugerei-e case one rnav., be led in hcli~vc that the rcsolulion should poi11t out a parttcular person or l'irm. Therein, the Court, in parl, on the issue stated: " ... whereas in the /Jresent case I find no Company or Board A1eetings \11ere held ... apo rt frorn the extraordinary general meeting 1-vh ic/1 certain(}' did not authorize Messr~ Parekhji & Co to start these or 11111 , proceedings on heha/f(fthe Company ... " [····, ,J In my view, the. Court so stated because the said finri was the \ 111c \Vhich commci1ced the r1c1iun (naturally, un lx:i11g i11s1.ructed by a11 urfi:. -l.T ,_,r some kind in the Cnrnp.:i.ny) but did not mean that they shu1.i!d )1;_1\·\: specifically been appt1inted in the resolution. [1 suffices to have ::i ,~cii•-T;il permitting resolution. In the present case, nowhere in the pleading is it stated le! ~dune I,._ suggested that such resolution was ever passed. And indeed: it \VOtild seen] . .J so, because if it ever existed, the Plaintiffs would not. have kept silent about it once the preliminary objection was raised. The obvious is thill !ht: preliminary objection by the Defendant remain unscratched. In conclusion both preliminary objections stand upheld &nd tl1e suit i~ 1 dismissed accordingly with costs. () • L.B. KALEGEY A JUDGE l)elivered in the presence of f\fr. Kariwa :md Sha yo. L.B. KALEGEYA JUDC;E 20/5/2005 ,;. ;~:f"'!," ~ ;., ...., :;.:~-r:. ' •-. ..... 16 .. . • 9:1¥- 11.altoi en 25/10/2004 for further orders. N.P.KIMARO, JUDGE r( " ': ·._ ),, . / : 15/10/2004. ......... 4,561 -Wl?(ds . . jd. . . 0