Ruling Tanzania Post Corporation v Tambuli Group of Company 27123

THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA (COMMERCIAL DIVISION) AT DAR ES SALAAM COMMERCIAL CASE NO. 27123/2024 BETWEEN TANZANIA POSTS CORPORATION.………………………………………. PLAINTIFF ATTORNEY GENERAL………………………………………………………...PLAINTIFF VERSUS TAMBULI GROUP OF COMPANY LIMITED……………………………DEFENDANT RULING Date of last order: 02/10/2024 Date of Judgement: 22/11/2024 GONZI, J. The Plaintiff sued the Defendant claiming against him for Judgment and Decree for Orders that: i. That the Honourable Court be pleased to order the Defendant to pay TZS 73,500,000.00 being principal sum and interest arising from accumulated outstanding amount from 10/06/2022 to 10/12/2022 1 ii. That the Honourable Court be pleased to order the Defendant to pay interest at commercial rate of 30% of (i) above from the date of instituting this Suit to the date of delivery of Judgment. iii. That the Honourable Court be pleased to order the Defendant to pay interest on all overdue amounts payable at a rate of 2% per month reconning from the date when the payments fell due. iv. That the Honourable Court be pleased to order the Defendant to pay interest at the Court rate of 12% on the decretal sum from the date of judgment to the date of full payment v. General damages to be assessed by this Court, vi. Costs of this suit be borne by the Defendant, vii. Any other order (s) that this Honorable Court May deem fit and just to grant. The quintessence of this matter is that the Defendant was served with the plaint on 27/03/2024. On 16/04/2024, the Defendant filed the Written Statement of Defence. When the matter was called for First Pre-Trial Conference on 29/05/2024, the defendant made a prayer before this Honourable Court to amend the Written Statement of Defence in order to include a Counter Claim. The Court gave the following orders. 2 i. Defendant to file amended Written Statement of Defence within seven days and serve the Plaintiff. ii. Plaintiff to file Reply to the Amended Written Statement of Defence within seven days after being served. iii. Plaintiff to file Written Statement of Defence to the Counter Claim within Twenty-One days from the date of service. iv. Defendant to file Reply within seven days v. Mention on 02/07/ 2024 The amended Written Statement of Defence was filed on 04/06/2024 and on 02/07/2024 the Plaintiff filed the Reply to the amended Written Statement of Defence together with a Preliminary objection to the effect that: i. The cross-suit is hopelessly time barred for being brought beyond twenty-one days contrary to Order VIII rule 6 (1) of the Civil Procedure Code [Cap 33 R. E. 2002] When the case came for hearing of preliminary objection on 30/08/2024 the Court ordered that the preliminary objection be disposed of by way of written submissions. 3 Mr. Mathew Fuko, Learned State Attorney for the Plaintiffs, submitted that the preliminary objection raised on the time limitation is a pure point of law in conformity with the conditions set in the landmark case of Mukisa Biscuits Manufacturing Co. Ltd v. West End Distributors Ltd [1969] 1 EA 696 at page 700 where it was held that: "...a preliminary objection consists of a point of law which has been pleaded, or which arises by clear implication out of pleadings, and which if argued as a preliminary point may dispose of the suit. Examples are an objection to the jurisdiction of the Court or plea of limitation, or submission that the parties are bound by the contract giving rise to the suit to refer the dispute to arbitration. “ He submitted that on 29/09/2024, the Court gave an order for the Defendant to amend her Written Statement of Defence in order to include a Counter Claim. However, the Defendant in paragraph 7 of the Amended Written Statement of Defence came up with a set-off thereby twisting it as a “cross suit” praying for this Honourable Court to set-off the amount of TZS 74,936,500.00. He submitted that the “set off” was brought contrary to the Court’s order and beyond the prescribed time limit as per Order VIII rule 6 (1) of the Civil Procedure Code [Cap 33 R. E. 2019]. 4 He submitted that this Honourable Court was very specific and clear in its order that the Defendant was allowed to amend his Written Statement of Defence and include a “Counter Claim”, but the Defendant went contrary to the Court order and instead brought a set-off. Mr. Mathew Fuko, Learned Counsel, submitted further that, in law, a claim by set-off must be brought within the period of twenty-one days of being served with the summons to file the Written Statement of Defence where one is required to present a written statement containing the particulars of the debt sought to be set-off. He referred the Court to Order VIII rule 6 (1) of the CPC. He submitted that the amendment done was never prayed for initially. He cited the case of Onesmo Nangole vs Dr. Steven Lemomo Kiruswa and 2 others, Civil Appeal No. 129 of 2016, at page 8 and 9 where the Court defined the word: amendment” and the effect of going contrary to Court’s orders. He submitted that the alleged claim for set-off was brought contrary to Court’s order and made beyond the prescribed time. Thus he prayed for the dismissal of set-off with cost. Mr. Bwire Johnson, Learned Counsel for the Defendant submitted that the preliminary objection is misconceived and that the Cross suit was filed timely as per the Court’s order. He relied on the order of the Court that was 5 issued on 29/05/2024 which allowed the defendant to amend its Written Statement of Defence within seven days from the date of the order. He further submitted that the said amendments as prayed, were with regard to filing a counter claim within the Amended Written Statement of Defence. He submitted that the Defendant complied with the order and he made reference to paragraph 7 of the Amended Written Statement of Defence which stated thus: “By way of Cross Suit, the defendant calls for the 1st Plaintiff to set off the amount of 74,936,500 being monies owed to the plaintiff upon new arrangement that made variations to the Rental agreement in which the Defendant incurred both operational and maintenances costs as follows…” Mr. Bwire, further submitted that from the above quoted paragraph, two things are clear: one, there is a claim by the Defendant against the Plaintiff signified by the wording “Cross suit” which means “Counter Claim;” and two, in the said counter claim or (cross suit), the defendant is claiming for set off of the amount of TZS 74,930,500/=. He referred to Order VIII Rule 9(2) of the Civil Procedure Code, CAP 33 RE.2019 which defines a 6 Counter claim using the word “Cross suit”. He argued that the two are synonymous. He quoted Order VIII Rule 9(2) of the CPC that: “Where a counter claim is set up in a Written Statement of Defence, The Counter Claim shall be treated as a Cross suit and the Witten Statement shall have the same effect as the Plaint in cross suit…” He made reference further to the Black’s Law Dictionary 2nd Edition at page 565 that defines a cross suit to mean: “in code practice, whenever the defendant seeks affirmative reliefs against any party relating to or depending upon the contract or transaction which the action is brought or affecting the property to which the action relates, he may in addition to answer file at the same time or by permission of the Court subsequently a cross complaint.” He argued further that the filing of the Amended Written Statement of Defence with a Counter Claim on 4/06/2024 was made properly as per the Court’s order that had granted the Defendant seven days from the date of the order on 29/05/2024 and thus the seven days lapsed on 4/06/2024. Mr. Bwire, Learned Counsel, submitted that the Plaintiff’s Counsel has 7 misled himself by submitting that the Defendant brought a “set-off suit” instead of a “counter claim”. He reiterated that paragraph 7 of the Amended Written Statement of Defence clearly uses the words: “By way of Cross Suit” meaning the mode in which the Defendant is bringing its action is through a “Cross suit” which is synonymous with a Counter Claim. Mr.Bwire, Learned Counsel, submitted that the decision in the case of ONESMO NANGOLE VS STEVEN LEMOMO KIRUSWA AND 2 OTHERS CIVIL APPEAL NO 129/2016, is irrelevant as the order was not complied with in that case but in the case at hand the Defendant diligently complied with the court order by timely filing the Counter Claim. He prayed for the Preliminary Objection to be dismissed with costs. After going through the submissions from the Learned Counsel for both parties, before determining the preliminary objection it is necessary to differentiate between a set-off and a Counter claim. “Set-off” is referred to under Order VIII Rule 6 (1) of the Civil Procedure Code which provides thus: “6.-(1) Where in a suit for the recovery of money the defendant claims to set-off against the plaintiff's 8 demand any ascertained sum of money legally recoverable by him from the plaintiff, not exceeding the pecuniary limits of the jurisdiction of the court, and both parties fill the same character as they fill in the plaintiff's suit, the defendant may, within period of twenty-one days of being served with the summons present a written statement containing the particulars of the debt sought to be set-off...” It is further defined in Mulla Code of Civil Procedure Code, 16th Edition at page 1975, where the learned author writes the following in relation to set-off: “According to its original and strict sense, set off is a plea in defence pure and simple, which by adjustment would wipe-off or reduce the Plaintiff’s Claim.” Further, in the case of Gotham C.K Mbele v Efatha Foundation Limited & Another, [2020] TZHC 627, the court laid down essential elements for one to prove set off. At page 7 thereof, Hon. S.M. Kulita, J., stated that: “In order for the person to claim set-of he must prove essential four points which are; 1. The suit must be for the recovery of money. 2. The set-off 9 must be for an ascertained sum of money which is legally recoverable by him from the plaintiff. 3. The amount of the set-off does not exceed the pecuniary jurisdiction of the Court. 4. That both parties fill the same character as they fill in the plaintiff's suit. As to the issue at hand I am going to address the fourth principle of set off that both parties must fill the same character. The same character here means that the set -off, like the main claim itself, must be in respect of the same parties, and they must not be totally unconnected claims.” On the other hand, a Counter Claim is referred to under order VIII Rule 9 of the CPC which provides that: “Where in any suit the defendant alleges that he has any claim or is entitled to any relief or remedy against the Plaintiff in respect of a cause of action accruing to the Defendant before the presentation of a written Statement of his defence the defendant may, in his written Statement of his defence, state particulars of the claim made or relief or remedy sought by him: Provided that, a written statement of defence shall not state- 10 a) Any particulars of claim where the suit is brought for the recovery of taxes, duties or penalties; b) Particulars of any claim to repayment un respect of any taxes, duties or penalties.” It was further defined in Mulla Code of Civil Procedure Code, 16th Edition, at page 1990, where the learned author writes the following in relation to a counter claim: “Though the Code does not provide for a counter claim, there is nothing to prevent a Court from treating the counterclaim as a plaint in a cross suit and hearing the two suits together, provided the requisite Court fee on the counter claim has been paid.” Looking keenly at the two it is clear that a counter claim and a set-off materially differ in that whereas a counter claim is in the form of a claim or demand by the Defendant against the Plaintiff for the Plaintiff to pay the Defendant the claimed reliefs or remedies, a set-off, on the other hand, offers a defence or justification for the Defendant not to pay the plaintiff altogether or to pay him a reduced amount of the plaintiff’s claim. As Mulla 11 said above, a set off is a plea in defence which, by adjustment, would wipe- off or reduce the Plaintiff’s Claim against the Defendant. The question is whether the “Cross- suit” brought by the Defendant under the Amended WSD amounts to a set-off or a Counter Claim? The content will make this clear. According to paragraph 7 of the Amended Written Statement of Defence, the Defendant stated, and I quote verbatim, that: “By way of cross suit, the Defendant call for the 1st Plaintiff to set-off the amount of TZS. 74,936,500 being monies owed to the 1st Plaintiff upon new arrangements that made variations to the rental agreement in which the Defendant incurred both operational and maintenances costs as follows…….” The wording of paragraph 7 of the Amended WSD is to say the least very ambiguous. The Defendant purports to advance the defence of “set off” by way of a “cross suit” which is essentially a counter claim. The Defendant purports to set off or demand by way of a counter claim, a sum owed to the Plaintiff, meaning that the Defendant is the one obliged to pay that sum to the Plaintiff. Whereas the wording of Paragraph 7 of the Amended WSD bears features of a counter claim, no details of counter claim are contained 12 in the Amended WSD. Reading Paragraph 7 of the Amended WSD in context, it is clear that the Defendant is giving justification as to why he should not pay the Plaintiff the stated amount because of the “new arrangement that made variations to the Rental agreement in which the Defendant incurred both operational and maintenances costs”. In other words, the Defendant wants the expenses incurred for operational and maintenances costs deducted or rather set-off from the Plaintiff’s claims against the Defendant and thereby wipe-off or reduce the Plaintiff’s Claim. That is purely a set-off, not a counter claim. For avoidance of doubt, reading through the entire Amended Written Statement of Defence, there is no counter claim in it. There are no material facts constituting any cause of action for a counter claim. There are no reliefs claimed for the counter claim. In short apart from what is stated in paragraph 7, there are no other facts constituting a cross suit. The Amended Written Statement of Defence does not contain a Counter Claim but rather in an ambiguous way, contains a set off. The Defendant was of the view that the phrase consists of both set off and counter claim. It is impossible for the two to co-exist in one paragraph. With regard to Counter Claim the law is very clear on pleadings and how they ought to be drafted a counter claim has its own wording, prayers and 13 the manner in which it ought to be drafted since it has the same effect as plaint, as provided under order VIII Rule 9 (2) of the code. “Where a counterclaim is set-up in a written statement of defence, the counterclaim shall be treated as a cross-suit and the written statement shall have the same effect as a plaint in a cross suit and the provisions of order VII shall apply mutatis mutandis to such written statement as if it were a plaint” It is my considered view that the phrase used in the Amended WSD does not in whatsoever manner align with the pre-requisites under order VIII Rule 9(2) of the Code, thus it does not constitute a counter claim. It is a set off. Looking into the phrase it is undisputed that it amounts to be set off in the phrase is for recovery of money which is ascertained that is TZS. 74,936,500 which is allegedly recoverable by the Defendant from the Plaintiff. The amount does not exceed the pecuniary jurisdiction of the Court. The claims are connected. 14 Parties are bound by the Court orders. The order of the Court was for the Defendant to file a counter claim. However, a set off was unilaterally filed instead. In the case of Maduki Sozi Company Limited v The National Microfinance Bank Plz, [2023] TZHC 17973 at page 6, CHABA, J cited the case of Mhamal & Co.(T) Limited v Adil Bancorp limited and others , civil case no 102 of 1999 (unreported) “When Court gives limited rights of amendment, the said amendment should always be limited to the authority given by the Court. The amendment should not be allowed to introduce new things...this leads to me to conclusion that the amendment in the plaint had exceeded the authority given by the Court and such amendment must relate only to the motor vehicle TZJ 3698 s per the order of the Court made on 13th August 1999” [Emphasis added] The Court stated further at page 9 and I quote: “In my considered view, failure to notify this Court concerning the extra amendments done by the plaintiff and without seeking or obtaining leave to do that, was against the Court’s Order and if I will add 15 such an act seriously is equivalent to contempt of Court.” It is vivid that the Defendant amended beyond the Court’s Orders as it brought a set-off instead of a counter claim. Additionally, the law is very clear on the period within which set off is to be brought before the Court. Under Order VIII Rule 6 (1) of the CPC, the defendant after being served with summons to file his defence, within not more than twenty one days he should present a written statement with particulars of debt that ought to be set-off. That is not what happened in this case. The Defendant had filed the initial Written Statement of Defence within the said 21 days but did not include in it a set off. The set-off was later on filed as embedded in the Amended Written Statement of Defence which was filed way beyond the 21days from the date the Defendant was served with Plaint and summons to file Written Statement of Defence. I, therefore, concur with Mr. Mathew Fuko, Learned State Attorney, that indeed the Defendant’s set-off is time- barred. As I conclude, I find that the set off is time barred and the amendment done by the Defendant was in violation of the court order that had allowed the Defendant to amend the WSD so as to incorporate a Counter Claim and 16 not a set-off. What is the effect of these two anomalies? As to the set off being time barred, the same deserves to be dismissed. I dismiss the set off with costs and therefore I expunge the whole of Paragraph 7 of the Amended Written Statement of Defence within which the set-off is contained, from the rest of the Amended Written Statement of Defence. As to the amendment going contrary to the Court Order, that is also an anomaly. Court orders must be respected. I would have struck out the entire Amended Written Statement of Defence. However, since the offending element of the Amended Written Statement of Defence (irregular and time barred set-off) has already been punished, I find it is prudent to apply the Overriding objective principle envisaged under Article 107 A (2) ( e ) of the Constitution of the United Republic of Tanzania 1977, and section 3A and 3B of the Civil Procedure Code [Cap.33 RE 2019] which were brought by Rule 4 of the High Court (Commercial Division) Procedure (Amendment) Rules and therefore leave intact the rest of the Amended WSD. The preliminary Objection is upheld with costs. The matter shall proceed with the Amended Written Statement of Defence excluding the whole of Paragraph 7 of the Amended Written Statement of Defence. It is so ordered. 17 A. H. GONZI JUDGE 22/11/ 2024 18