19970203 TZHC Dar es Salaam

,I IN THE HIGH COURT OF TANZANIA AT D1·R ~·s S"T ---4,._~. H~ AU"ili! r,~K MISC~ cry. APP, NO. 167 /96 TANZANIA LEATHER. ASSOCIATED INDUSTRIES? •••• ; •..•• : .......... P.PPLICANT Versus A1I._NURU LEMA .••••••••••.••.••• : RESP ON DENT .. _.) - - ~ - · . -·KYANDO, J~ In this matter the respondent successfully applied to the court b~low for Gxecution of a judgment/decree in appeal paased _- - ~ by the High Court 1 at .A.rusha. The judgment was against Tanza- nia Tanneries Ltd and the respondent came to Dar es Salaam to execute it (the.judgment) against The Tanzani~ Leather Associ- "~t_e_cl ~Ind~;~;;~e-~ ( TLAI) • He~ f oun~ a vehicl~ ~ which he s~ys . ..... - at thet:._me was being used by the General Manager of ICLAL, at the hea~iquarters pf TLAL and asked the court below to attach it in execution of the decree deferred to above. The vehicle, Reg. No, TZE 8305 was attached but the applicant says that vehicle b~longs to Morogoro Canvas 1\/Ji•lls Ltd, another company associa·::;ed with TL!-iL. The respondent coritends that both Tanzan~-1 Ta:lneries Ltd and Mcrogoro Canvas Mill Ltd are sub- -~ sidiari ?s of T~JU:,. The applic;:mt- st3tes th8.t by virtue of ss.20 and· 27, cf the Public Corporations ./-I.ct, 1992, the two compan:1.·?s, Tanzwiia Tanneries Ltd and Morogoro Cenv£s Mills Ltd, ar2 no long~r subsidiQries of TLAL and the latter is no longer their hold~pg corporation~ The applicant contends there- fore that ~he cour1. below v-:as -wrong to direct excution against TL.M, or to seize the vehicle of r-1orogoro Canvas Mills Ltd. In fact, it is contended by the applicant and not disputed by the respond.ent, 'I'anzania Ta'-!lneries Ltd, has been privatised and is no longer in existencc9 As for the payment of claims owed, to crec?itors of Tanzania '1.anneries Ltd, Mr. Lugua for the applicant has availed this court with copies of two notices, published in the 'Daily News' of 26.5.93 and 19.8.93 respecti ......· . ,I( -vely, ·which outline the procedure for settlement of such claims • . . ·.·. ·. . /2 , j = 2 = The contents of the two notices have been summarised in a letter, which I requested as confirmation of the procedure, from the General Manager of TL/-1.L. The letter is as follows: - :i Ref. No. TLAI/R/1396 Tanzania Leather Asso- Telex No. 41172. ciated Industries, P • 0 • Box o 5640, DAR ~~SALAAM. 30/1/1997. The Registrar, High Court of Tanzania, P.O. BOX. 9050~ PAR ES SALj\J:iJ\•I. Dear Sir, RE: TERMINAL B:SNEFITS OF TANZANIA TANNERIES COMP Al'JY LIMITED, EX-EMP I-,QXS~S !. We would like to report that the terminal benefits of ex-employees of Tanzania Tanneries Company Ltd, were paid by .funds from the Mini- stry of Finance after verification of their accuracy by Tanzania Leather Associated Industries. - . ___ ~ (TLAI).. -- - TLA's role of receiving and verifying claims of creditors (including ex-employees) of Tanzania Tanneries was sti1;uL:ited in the Ministry of Finance Notice of 1993 which appeared in the local news papers. In. the notice it was stipulated..~ conditions o.f submitting claims and type of claims together with necessary documents to substantiate the claims. Also claiments were given specific time to submit their claims. Despite the limit of time and type of claim, we have been receiving other claims than those stipu- lated in the Notice and we were forwarding them to the Ministry of Finance. The Ministry of Finance have been honouring some of the claims for example, claims of ex-employees of Bora Shoe Company were paid in September, 1996. We had already advised Mro Alinur Lema vide our letter Ref. No. TLAI/M/OI/TTL/9 of 14th June, 1995 to the District Sec:eetary-OTTU to advice Mr. Alnour Lema the Labour Officer and Mr. M.E.K Jengo, then Acting Geberal Manager of Tanzania Tanneries to reconcile his claims according to the High Court's ruling before TLAI could submit them to the Treasury.. - lone.. -We urge. hir::i. to · •• ,. 0 • /3 = 3 = This was not done. VJ e urge him to comply to our advice. Yours faithfully, TANZANIA LEATHER ASSOCIATED INDUSTRIES. (Sgd) Y. J. MW ),.ILOLO ACTING GENERAL MANAGER 11 Two magistrates dealt with the application to have the attachm~nt lifted in the court below. The first one was Kiye- yeu (SR111) and later Kiwango (R.M) Earlier on, Kimaro (PRM) had madE:i the attachment order, After Kiyeyeu had made his ruling the present applicant applied for a review of the ruling. Kiyeyeu disqualified him self from dealing with the review application and so +he application was assigned to Kiwango, R.M, Kiwango R.M said attachment had already been ordered by Kimaro PRM and the applicant had already deposited monies in court, Kiwango thenefot9 ruled that the review application 11 has been overtaken by events and the court caru1ot indulge in proceedings that have now becone but merely academic: 1 • That mag~strate ordered exe- cution tJ proceed. The applicant was aggrieved and lodged the present appli- cation with this court. In the applicatior what is sought is a revision 11 of' the orders and ruling of Kiwango R.M passed on 25th November 1996 11 • This is as per the chsmber summons taken out by the applicant. The ruling of Kiyeyeu SR.il\ll is brief and .:. t is as f'ollows:- "In my view the motor vehicle was proper:.y attached According to my litcle knowledge about the applicant ccmpany it is abbreviated as TLAI meanir.g Tanzania Leather Associated Industries. It is also abbre- viated as Tanneries or Tanzania Tanneries. Moshi Tanneries is just a subsidiary of the mother company TLAI. And so is Morogoro Canvas Mills Ltd. That is why the General Manager had access to use the said vehicle. For this reasons I find the application is rnisconcei ved and I hereby dismiss i t· 1 • \ = 4 = Now, the relationshi~ between a holding corporation or company and its subsiciary is an area in which there has been considerable limitation on the·recognitin.g of the separate pesso- nality of each individual company as enunciated in the eldbrated case cf Salmon v. Salmon &_C.o. Ltd (1897) A.C. 22. (See generally Gower; :vroDERN COMP ANY LAW, 3rd Edn. PP 194-217); But concer- ning tr:: present case, as rightly contended by Mr.~ Lugua for the apr:.icant corporation, relationship of holding and subsidiary corpora~ion/compantes as between TLAI on the one hand and Tanza- nia Tanneries Ltd and Morogoro Canvas Mills Ltd on the other was ter:ninated by staute o This is per ss. 208 27 of the Pblic CJrporation Act referred to above. Section 20 of the Act provides:- 1120- (1) All the shares subscribed by the Government in any public corporation through another public corporation which was a holding corporation before the effective date share, after the effective date, be transferred to ~e the Treasury Registrar by the said former holding public corporation and such shares shall rest in the Treasurey Registrar without further assurance. And Section 27 (1) provides:- "27 (1) Any public corporation which was a holding public corporation in relation to any other public corporation before the effective date shall, with effect from the effective date cease to be a holding corporation in respect of that public corporation but, may with effect from that date provide consultancy services to the other ~tublic corporations and to other .mav er persons. i:t'.l/.l)ertaining to its functions 11 • By GNo 38/92 the effective date is 1603.92. There is the- refore no more relationsijip of mother corporation" and subsi- diary company between TLAI and Morogoro Canvas Mills Ltd and Tanzania Tanneries Ltd. • = 5 = And by the notice P ublished in the IIDaily News" of 19.8.93 d t . zania Tanneries Ltd. "are require o claimants against Tan .. t f Finance through Tanzania it their claims to the Minis ry o Leather Associated Indus tries subm . (TLAI) which will scrutnize . ththe authenticity of th e C laims and recommend to the 'freasucy .e ing . - ~ . . gemine claims for paym ent". It is clear then from the forego . . hicle belonging ~~ that the attac h men t ma de in tnis case, fo 1 aveAll the orders of .f C Mills Ltd was wrong u • ~ 1- ~- 'c:c.Mo_rogoro anvas tt chment therefore, inclu- din -tn~dinate.court effecting the a a .. g - --, ~imar;i,Rl1 , are, by an order in revision, hereby quashed and S"!.-:::- ~-.rle s t'i l l in attachment, to -, . .f released immediate1.-y,• The vehicle, i ~~ The respondent is acivl'.;::,. t ~+-o follow the procedure ac lined in the letter of the Genera::,,.·-•--,q'.lager TLAI reproduced above and a~ notified in the notices publisfre::'---,,. w the Ministjty o.f Finance in the "Daily News" 0£ 26, 5 • 9 3 anci' l"'-q. 3 in pussu:i,pg 9 his claims against Tanzania Tanneries Ltd. The ~PP~-:.cant ,·says that tne §l'Db~nt the decree has been wrongly computed by inclU• ding e±effi~e elements which the court in its judgment did not award. But the court of the Resident Magistrate, at Moshi, endo'rsed _that amount by issuing its certificate under 0.21 r.6 01· the Civil Procedure Code, 1966. The executing court could not have hag the power, then to vary that amount. If this j_s still the complaint of the applicant, the same shou1Q :~ be made to the court issuing the decree and not the executing court. I grant the application, but I make no order for costs against the respondent in view of his app.earantc impecumious- ness, L.A.A. KYANDO JUDGE .DAR ES SALAAM. 3rd February, 1997. Delivered in the presence of the parties.