tansino quarries vs grand tech t limited andanother 2021 tzhccomd 3369 29 october 2021

N THE HIGH COURT OF THE UNITED REPUBLIC

OF TANZANIA (COMMERCIAL DIVISION)

AT DAR ES SALAAM COMMERCIAL CASE NO. 54 OF 2021 TANSINO QUARRIES................................... PLAINTIFF

VERSUS GRAND TECH (T) LIMITED 1st DEFENDANT ATU PATRICK MWAKITWANGE........... DEFENDANT 20th September, 2021 29th October, 2021 \\ V RULING<\

NANGELA againsjt^the hearing and determination of this suit. The Plaintiff iittffis'suit is praying for judgment and decree as follows: - (1) Specific payment of TZS 150,488/885.00 being the outstanding purchase price for the aggregate supplied to the Defendants. (2) Interest on item (1) above at the commercial rate of 15% Page 1 of 13 per month from the date of February 2019 till the date of judgment. (3) Interest on above items at commercial rate of 12% from the date of judgment/Decree till the final payment. (4) General Damages to be assessed by the Court. (5) Costs of this Suit. (6) Any order of the Hon. Court deems just to grantrx. \\ Before going to the root of^the^Applicant's Defendant,secompany^iuly registered under the laws of Ta£izar^^ \\ Yi Sometimes in the year, 2019, the Plaintiff supplied aggregates to the Defendants' construction site projects from its quarries in Lugoba area of Dar- es-Salaam. It is averred that, under the terms and conditions of their supply agreement, the Defendants were obliged to pay for the goods within 30 days of the delivery. Page 2 of 13 However, the Defendants failed to pay a total of TZS. 150,488,885.00/- for the supply and, that, the amount has remained unpaid for a long period of time. On 15th January 2019, the Defendants issued post­ dated cheques to the Plaintiff which ended up being dishonoured. In an effort to have the monies

paid, however, on 28th May 2019, the Plaintiff sent afeminder note which, although the Defendants^respondedTo it"on the 26th June 2019 promising^to^^^thg outstanding monies in four ins^1kne^\t^\Defendant did not honor that commitment either. At the end of the day, the matterendedjjp coming before this Court as a suit for ^covdiv^of^monies arising from the parties' transactiortas^narrated here above. The defendants filed a Written Statement of Defense (WSD) and, in that defense they have raised a preliminary objection, to wit that: "The Plaintiff does not disclose any cause of action against the 2ld Defendant." On 20th September 2021, when the matter was called on for its hearing, Mr Fraterine Munale, learned Page 3 of 13 Advocate, represented the plaintiff while Ms Salha Mlilima, learned Advocate, provided her legal service and representation to the Defendants. In her oral submission, Ms Salha submitted that, as a matter of law, a Plaint must disclose facts constituting the cause of action. She relied on Order IV Rule 1 (e) together with Order VII Rule I of the Civil Procedure Code, Cap.33 R.E 2019,-s. Relying on the case of Salomon/Vs^Salornon x W. \ ■ under the doctrine .of corporate Megal personality, the company^ajegal^p^^rf^ separate to its members or directorKlnjher view, that is also meant that, the liabilities, obligation or rights of the Company and those

of^th^directors or shareholders are distinct as the later are responsible only to their capital contribution. She contended that, therefore, that, in law, a Company can be sue or sued on its own. Relating her submission to the case at hand, Ms Salha told this court that, the Plaintiff has failed to show any cause of action against the 2nd Defendant, Page 4 of 13 who is a Managing Director of the 1st Defendant. She contended that, the Plaintiff does not clearly show the 2nd Defendant how is accountable for the acts done by him in his capacity as the Managing Director of the 1st Defendant, or which were done or should be imputed to him in his own capacity as an individual. In the view of the above, the learned counsel for the Defendants concluded her submission.by stating that, the suit does not disclose any\cause^oraction against 2nd Defendant, fa^u^^ it open to being struck out^h costs'bythe Court. In rebuttal sto the> Defendants' counsel's submission^Mr) Eraterine Munale, the Plaintiff counsel, criticized the ^Defendant's submission. He stated emphatically>that, the Plaint does disclose cause of action against the 2nd Defendant since it applies to both Defendants. He referred this court to paragraphs 4 to 11 of the Plaint arguing that those paragraphs apply to all Defendants and, hence, clearly show the cause of action for both. Page 5 of 13 To strengthen his submission,

reliance placed on the case of John M Byombalirwa vs. Agency Maritime [1983] TLR, 1 and the case of Musanga Ng'andwa Andwa vs. Chief Japhet Wanzagi and Eight Others [2006] TLR 351. He submitted that, what the Plaintiff is required by the law is to illustrate facts which discloses the cause of action. As for him, paragraphs 4 ^ap^^Qf^thePlaint show that both Defendants ^are Yable> because the supply of goods was made?and>delivered to both of them and, also, theymade^promises to pay after the delivery of the^goods^as disclosed in paragraph 6 of the Plaint?\\) ^^^OTRtended further that, to effect payment the 1st Defeqdantxissued a cheque which was issued by was dishonored. He also stated that, some of the materials supplied, were supplied to the site of the 2nd Defendant. According to Mr. Munale, to establish the liability of the 2nd Defendant, evidence will be required. He contended that at this stage, it will be premature to Page 6 of 13 say that the 2nd Defendant is not liable. He relied on the Vodacom Tanzania Ltd vs. Registrar of Company, Misc. Commercial cause No. 24 of 2020 (unreported). Mr Munale submitted further that, under Order I Rule 1 of the Civil Procedure Code, the law allows for the joinder of the parties where the cause of action In conclusion\Mr Munale relied on Order VII Rule 14 (e^o^heCi\?jL Procedure Code, which allows the Plaintiffs© bring in further

documents not attached % to the plaint/^and, on that basis, he contended that, the objection does not have merit. In a brief rejoinder, Ms Salha maintained that although the Plaint contains facts which suggest that the Defendants are jointly sued, none of the facts have touched the 2nd Defendants liability in his personal Page 7 of 13 capacity. She insisted that the suit should be dismissed as against the 2nd Defendant. I have objectively considered the rival submissions of the learned counsel for both parties. The issue which I am confronted with is whether the preliminary objection is of any merit. In law, a cause of action refers to a set of facts sufficient to justify suing to either obtain money,^profbrty, or the enforcement of a legal right against another-par-ty. The principle for^deterqiinin^^hgther a Plaint discloses a cause of/Sion oibnob<are also well settled. (f \\ V </v\ X> The iegal^posit^or^^^^^ien deciding whether or not the pl'aintdisclose^ie cause of action, one had to look^t^e^plaint as a whole together with its annexure^Jtany. The case of John M Byombalirwa and tha case of Musanga Ng'andwa Andwa (supra) and Lucy Range v Samwel Meshack Model and Others Land case No. 323 of 2016 (unreported) confirm that legal position. In the current case, it is clear to me that, the Plaint and its annexure do not disclose how the 2nd Page 8 of 13 Defendant is, specifically,

liable for the claims made by the Plaintiff. Besides, looking at paragraphs 4 to 11 of the Plaint which the Plaintiff's counsel contends that they show general claims directed to both Defendants, there is nothing that reveals that the supply was made to the 2nd Defendant in his personal Capacity so as to disentangle him from the supply made to the 1st Defendant, a Company in which the 2ndsDefendant is said to be a Director. In particular, if Icma^uofexfron^ paragraph 4 alone, the Plaint reads as follows: ^^iat>^m^e year 2019, the N^pla intiff has been ,suppling the Defendants with aggregate from its quarries in Lugoba to the Defendants' construction sites for Nyuki projects and others. The said goods were delivered and utilized by the Defendants for road construction." Page 9 of 13 From that paragraph, one may gather that the goods supplied were to both Defendants for the purpose of constructing a road. However, since it has been sated that the 2nd Defendant is a mere Director of the 1st Defendant, does such a disclosure allow that he also be joined in the suit or do such facts sufficiently disclose that he should be sued on his personal capability? In my view, I tend tgag^exwm^esubmissions made by Ms Salha tha^XttVe\2nd^D3fehdant being a mere Director of the ^Defendant5 cannot be sued in his pers^ak^apa^^^ there facts that disentanglesshim'-from^the Company and makes him

to standxon his\)wn\personal capacity. The company has 'xx^ )) its own legal-personality distinct from its directors and shareholders, and, as argued by Ms Salha, there has never been a lifting of the Corporate Veil. In his submissions, the Plaintiff's learned counsel tried to argue that, some of the building materials supplied to the Defendants, were also supplied to the 2nd Defendant's site. However, nothing of that sort is Page 10 of 13 ascertainable as a fact neither the Plaint nor the annexure to it. In his submission, the counsel for the Plaintiff did contend as well that, the issues raised by the 2nd Defendant would necessitate the calling of evidence to establish the liability of the 2nd Defendant and reveal that the cause of action as well pertains to him. Reliance was placed on the case,ofMukisa Biscuits Eastern Africa set dut.whaba preliminary objection is and whatxit snould\cpntain. At page 701, of the reported case, me Court observed that: "A preliminary objection is in the nature of a demurrer. It is a pure point of law which is argued on the assumption that all facts pleaded by the other side are correct. It cannot be raised if any fact has to be Page 11 of 13 ascertained or if what is sought is the exercise of judicial discretion. While I agree that a preliminary objection has to be a pure point of law and should be argued on assumption that all facts are

correct, and while I agree that such an objection should not call for evidence to establish it, in the case at hand, I a5n^absfied that what was raised by the 2nd DefendeFnfsiSsa point^f law sufficient to dispose of^the\case^against that Unlike what \the ^laintiff'§> counsel alleged, no zAKT) evidence/isxrequiredKto-ascertain whether the Plaint discloses^cause ©fraction in respect of the 2 Defendant. As h stated, the mere looking at the Plaint itself and the annexure to it, if any, is what the Court is supposed to do if it is to decide if a Plaint discloses a cause of action or not. That is what this Court has done, and, I am satisfied with the findings that the Plaint does not disclose a cause of action against the 2nd Defendant. Page 12 of 13 In other words, the Plaintiff does not have a claim or legal right against 2nd Defendant, but rather against the 1st Defendant as a Company. In the upshot, this court settles for the following orders, that: (i) The 2nd Defendant's preliminary objection has merit, and it is hereby upheld. (ii) The Case against the 2nd Defendant is hereby struck out with costs. (iii)The Case shall proceed to its next stage of hearing against the 1st Defendant. It is so ordered. DATED at DAR ES SALAAM ON 29th OCTOBER, 2021

DEO JOHN N GELA JUDGE, h Court of the United Republic of Tanzania (COMMERCIAL DIVISION) Page 13 of 13