tanzania karatasi associated industries limited another vs edson mkisi another 2007 tzhc 50 27 june 2007

1 IN THE HIGH COURT OF TANZANIA AT PAR ES SALAAM CIVIL APPEAL NO. 177 OF 2005 (Originating from Housing Appeals Tribunal No. 42 of 2004) 1. TANZANIA KARATASI ASSOCIATED INDUSTRIES LIMITED 2. PRESIDENTIAL PARASTATAL SECTOR REFORM COMMISSION - APPELLANTS VERSUS EDSON MKISI & SWAI t/a S.M.W. MANAGEMENT CONSULTANTS-RESPONDENTS Date o f last order - 30/4/2007 Date o fJudgment - 27/6/2007 JUDGMENT Shanawa, J. This appeal is against the judgment and decree of the Housing Appeals Tribunal delivered on 2nd September, 2005 by Kajeri, Chairman in Appeal No. 42 of 2004 which originated from Dar es Salaam Regional Housing Tribunal Application No. 569 of 1996. The Appellants have raised 2 four grounds of appeal. The first two are the most important to this appeal. They read as follows: 1. That, the learned Appellate Chairman erred in law and fact in ignoring to appreciate and uphold the pertinent fact alleged by the Applicants that as a matter of law the Dar es Salaam Regional Housing Tribunal lacked jurisdiction to hear and determine Application No. 569 of 1996. 2. That, the learned Appellate Chairman erred in law and fact when he upheld the trial Tribunal's decision awarding special damages to the Respondents whereby the same was neither prayed for in the Application nor proved as required in law. Learned counsel for the Appellants and the Respondents themselves presented lengthy and detailed written submissions and arguments on the four grounds of appeal. However, I will only consider the first two grounds that I have listed above and which I said are the most important to this appeal. The said grounds are sufficient to dispose of this appeal. On the first ground of appeal, counsel for the Appellants MS. Law Offices of Chipeta & Associates submitted that while Application No. 569 of 1996 was pending in the Dar es Salaam Regional Housing Tribunal, the Minister for Finance issued GN No. 543 of 1997 which was published on 22/8/1997 and in which the 1st Appellant was declared to be a Specified Public Corporation and that from the date of Publication, the 1st Appellant was placed under the official receivership of the 2nd Appellant (PSRC). It was further submitted by counsel for the Appellants that under S.9 (1) of the Bankruptcy Act, [Cap.25 R.E. 2002) read together with S. 43 ((1) (a) and (b) of the Public Corporation Act, [Cap. 257 R.E. 2002] when a public corporation is declared to be a specified Public Corporation, no proceedings can be commenced and or be continued against such Specified Corporation without leave of the High Court, and that the Respondents did not obtain leave of the High Court to proceed with Application No. 569 of 1996. Counsel for the Appellants contended that as the Dar es Salaam Regional Housing Tribunal seized to have jurisdiction to preside over and determine Application No. 569 of 1996 when the 1st Appellant was specified as a Public Corporation on 22/8/1997, its proceedings, ruling, judgment, order and decree are a nullity. Furthermore, it was contended that the question as to whether or not the Dar es Salaam Regional Housing Tribunal had jurisdiction to deal with Application No. 569 of 1996 was laid to rest by S. 10 (3) of the Public Corporations (Amendment) Act No. 17 of 1999 which provides thus: "A Specified Public Corporation shall be exempt from all or any of the provisions of the Rent Restriction Act, 1984 [Cap. 339 R.E 2002]/' It was further contended by counsel for the Appellants that as the Dar es Salaam Regional Housing Tribunal had no jurisdiction to proceed and determine Application No. 569 of 1996, the Housing Appeals Tribunal erred in upholding its decision which was made without jurisdiction. In reply, the Respondents submitted that the Dar es Salaam Regional Housing Tribunal had jurisdiction to try and determine Application No. 569 of 1996 and that the Housing Appeals Tribunal did not err in upholding its decision. They submitted also that G.N. No. 543 of 1997 which declared the 1st Appellant to be a specified Public Corporation has no legal force as the Minister for Finance did not appoint a date of its commencement. In my view, counsel for the Appellants are wrong in submitting that the Dar es Salaam Regional Housing Tribunal seized to have jurisdiction to hear and determine Application No. 569 of 1996 when the 1st Appellant was declared by the Minister to be a Specified Public Corporation by GN No. 543 of 1997 which was published on 22/8/1997. Similarly, the Respondents are also wrong by submitting that GN No. 543 of 1997 is bad in law and has no legal force on mere ground that the Minister for Finance did not appoint a date of its commencement. They are also wrong in saying that the 1st Appellant has never been a Specified Public Corporation in the eyes of the Law as the date of commencement of GN No. 543 of 1997 has never been appointed. Again, in my view, although the Minister for Finance did not appoint a date of commencement of the PUBLIC 7 CORPORATIONS (DECLARATION OF SPECIFIED PUBLIC CORPORATIONS AND SPECIFIED GOVERNMENT MINORITY SHARES) Order, 1997 GN No. 543 of 1997, this order has a legal force and the 1st Appellant is a Specified Public Corporation as indicated in GN No. 543 of 1997. As correctly submitted by learned counsel for the Appellants, by virtue of S. 37 (1) (b) of the Interpretation of Laws Act, [Cap.l R.E. 2002] all subsidiary legislations come into operation on the day of Publication of such legislation. This means that the aforesaid Order came into operation on 22/8/1997 when it was published under GN No. 543 of 1997. As a matter of fact, Application No. 569 of 1996 was filed in the Dar es Salaam Regional Housing Tribunal before the 1st Appellant was declared to be a Specified Public Corporation. This means that by the time it was filed, no leave of the High Court was required to enable the Dar es Salaam Regional Housing Tribunal to hear and determine it. I think that the Respondents' act of applying before the trial Tribunal to join PSRC (2nd Appellant) in the rent Application when the 1st Appellant was declared to be a Specified Public Corporation was the correct thing to be done in terms of procedure. Under S. 9 (1) of the Bankruptcy Act, [Cap.25 R.E. 2002], leave to sue a Specified Public Corporation is required before suing it. But where a Public Corporation is declared to be a Specified Public Corporation after it has been sued such as is the case here, no leave of the High Court is required to continue with the proceedings against it. I think also that lack of leave of the High Court to sue a Specified Public Corporation does not take away the jurisdiction of the Regional Housing Tribunal or court to hear and determine any case before it in cases where such leave is required by law. It merely renders such case incompetent. The jurisdiction of the Regional Housing Tribunals to try rent Applications is conferred upon such Tribunals under S. 12 of the Rent Restriction Act, 1984 [Cap.339 R.E. 2002]. In my opinion, S. 10 (3) of the Public Corporations (Amendment) Act, No. 17 of 1999 which exempted Specified Public Corporations from all or any of the provisions of the Rent Restriction Act, 1984 is not applicable to the present case. This is because application No. 569 of 1996 was filed in the Dar es Salaam Regional Housing Tribunal on 6/11/1996 and the said Act came into operation more than three years later from the date when the said Application was filed. Had the hearing of the said Application been speedily conducted by the trial Tribunal, it would have been decided long before the Public Corporations (Amendment) Act No. 17 of 1999 was enacted. The provisions of the said Act have no retrospective effect so as to take away the 10 jurisdiction of the trial Tribunal in respect of cases which were pending in the trial Tribunal before its enactment. This disposes of the first ground of appeal which fails. On the second ground of appeal, counsel for the Appellants submitted that the prayers which were made by the Applicants in Application No. 569 of 1996 and the reliefs awarded by the trial Tribunal are different. The Respondents resisted this submission. In my view, it is true to some extent that the reliefs which were prayed for in Application No. 569 of 1996 are different from the reliefs which were awarded by the trial Tribunal. In that application, the Applicants prayed for the following reliefs and I quote: "1. A declaration that payment of rent in advance for one year contravenes the provisions o f the Rent Restriction Act, 1984. 11 2. Refund of shs.300,000/= with interest at 40% per annum from 15/9/1987 till date o f judgment by way o f special damages. 3. Genera! damages at the rate of shs.10,000/= per day for loss o f use o f the suit premises from l( fh October, 1996 till date o fjudgment 4. Costs o f this suit" The reliefs which were awarded by the Dar es Salaam Regional Housing Tribunal are as follows and I quote: "1. The Respondents to pay the Applicants - (a) US$7,200. (b) Interest on Us $ 7,200 at the rate o f 20% per annum from the date 12 o f signing the lease agreement (2/10/1996) to date. (c) US $ 5,000 as general damages for hardships and inconveniences caused following the breach of lease agreement 2. The Applicants shall have the costs. As it can plainly be seen from the above quotations, the money reliefs which were prayed for are somehow different from the reliefs which were awarded by the Dar es Salaam Regional Housing Tribunal. First of all, the said tribunal did not address itself to the first relief prayed for by the Applicants. So, no declaration was made by it as to whether or not payment of rent in advance for one year contravened the provisions of the Rent Restriction Act, 1984. In my opinion, the said Tribunal was wrong in not addressing itself to the said issue. Secondly, the trial Tribunal awarded USD 13 2,200 which were paid by the Respondents to the 1st Appellant in October, 1996 as advance rent for one year. However, the said sum was not prayed for. What was prayed for is the refund of shs.300,000/= which the Respondents paid to the 1st Appellant as advance rent with interest at 40% per annum from 15/9/1987 till date of judgment by way of special damages. But, although the refund of USD $ 2,200 was not prayed for, it appears to me that the Respondent omitted to pray for it. I say so because in their pleadings, the Respondents pleaded that they paid the said amount of US Dollars to the 1st Appellant as another advance rent payment after signing the lease agreement. Evidence of payment of that amount is receipt No. 2132 dated 14/10/96. Its copy was attached to the application. Evidence of payment of shs.300,000/= which were prayed for by the Applicants before the trial Tribunal is receipt No.0875 dated 15/9/1987. Its copy was also attached to the application. 14 In his judgment, the Dar es Salaam Regional Housing Tribunal Chairman equalled shs.300,000/= which were paid as advance rent in September, 1987 to USD 5,000 as per the exchange rate on the date when that payment was made. By then, Tshs.60 were equivalent to 1US Dollar. The said sum was added to USD 2,200 which were paid by the Respondents to the 1st Appellant in October 1996 which came to USD 7,200. In his discretion, the Dar es Salaam Regional Housing Tribunal Chairman ordered for payment of the said sum plus interest at the rate of 20% per annum from the date of signing the lease agreement on 2/10/1996 to the date of judgment. On my part, I think that the order for the refund of advance rent in the sum of USD 7,200 by the Appellants to the Respondents was based on the pleadings and evidence. I find that the reasoning of the trial Tribunal's chairman in ordering for payment or refund of the said amount by the 15 Appellants to the Respondents is proper. Therefore, the Housing Appeals Tribunal was correct in upholding the decision of the Tribunal below in so far as the refund of USD 7,200 by the Appellants to the Respondents is concerned. However, I think that the Housing Appeals Tribunal was wrong for not interfering with the rate of interest of 20% on USD 7,200 per annum from the date of signing the lease agreement on 2/10/1996 to the date of judgment. I myself think that the rate of 20% on USD 7,200 per annum is on the high side. Therefore, I reduce it from 20% to 12%. Payment of the said rate of interest should not start from the date of signing the lease agreement on 2/10/1996. It should start from the date when shs.300,000/= were paid that is on 15/9/1987 and from the date when USD 2,200 were paid that is on 14/10/1996 to the date of judgment that is on 4/10/2004. 16 Another fact which demonstrates the difference of the reliefs which were prayed for and the reliefs which were awarded is that before the trial Tribunal, the Respondents prayed for general damages at the rate of shs. 10,000/= per day for loss of use of the suit premises from 10th October, 1996 till date of judgment. In its decision, the trial Tribunal awarded USD 5,000/= as damages for hardships and inconveniences. The Housing Appeals Tribunal upheld the said award. I wish to say here that the type of damages that were awarded by the trial Tribunal are not special damages as stated by counsel for the Appellants on the second ground of appeal. They are general damages for breach of a lease agreement signed by the parties on 2/10/1996 in which the 1st Appellant agreed to lease its premises to the Respondents for a term of one year commencing from 1/10/1996. These premises are in the Appellants' building 17 located along Azikiwe Street within Dar es Salaam City Centre near the new Post Office. In his judgment, the trial Tribunal's chairman was of the view that the 1st Appellant committed a serious breach of the lease agreement which caused hardships and inconveniences to the Respondents. He then ordered the 1st Appellant to pay USD 5,000 to the Respondents as general damages. It is not in dispute that the 1st Appellant breached the lease agreement when its manager took away the keys of the lease premises from the Respondents and blocked them from entering into those premises which they had started to renovate and partition for purposes of creating office rooms. It is undeniable that the said breach caused hardship and inconveniences to the Respondents and disturbed their plans as they lost use of those premises. However, the amount of general damages of USD 5,000 which were ordered by the 18 trial Tribunal to be paid by the Appellants to the Respondents and upheld by the Housing Appeals Tribunal is on the high side. I reduce it from USD 5,000 to USD 2,000. This disposes of the second ground of appeal which has partly succeeded and partly failed. For these reasons, I allow this appeal to the extent as mentioned in this judgment. Each party should bear its own costs. Delivered in open court this 27th day of June, 2007 in the presence of Mr. Ogunda for Miss Kirethi for the Appellant and Mr. Edson Mkisi. A. Shangwa JUDGE 27/6/2007