20070530 TZHC Dar es Salaam

I I IN THE HIGH COURT OF TANZANIJ\ (COMMERCIAL DIVISION)

AT DAR ES SALAAM I COMMERCIAL CASE NO. 19 OF 2007, I I : ' THABIT K.T. ABRI ........................................ ~LAINTIFF '

VERSUS I OILCOM (TANZANIA) LIMITED ...................... D~FENDANT ------------------------------------------ 1

RULING 1. Date of Hearing - 29 / 5 / 20Q7 I 2. Date of Ruling - 30 / 5 / 2007! MASSATI, J: I ' The Plaintiff claims from tJe Defendant t~e sum of USD 41,919.00 as money lent and tlnpaid, interest thereon, and I , general damages. The Defendant denies the claim, but has at I I • the forefront also claimed that, ifi at all, the suit, is time barred and so not maintainable; and ~sked for its dismissal with I costs. Mr. Muganyizi, and Mt. Mhango learned Counsel, I I represented the Plaintiff and the Defendant respectively. I ! Mr. Mhango, submitted that the debt, havipg arisen from I . a contract ought to have been claimed within 6 years in terms I of item 7 of the First Schedule to the Law of Limitation Act ' I I 1971. He painted OU t that if the loan was extended in 1999, the 6 years elapsed in 1995. Without an express extension of time from the Minister, or an express written acknowledgment of the debt, the suit cannot be maintained. It 'was his view, i I 2 that none of the above conditions is available ip the present case. So he prayed for the dismissal of the suit ~ith costs. On the other hand, Mr. Muganyizi had different views. He submitted that the Plaintiff had pleaded that the Defendant had "assigned" the debt to TIOT in 2002 as per annexure Al to the plaint. According to him, this amqunted to an acknowledgment of that debt. So in terms of Si 27 (3) of the ; Law of

Limitation Act, this had the effect of rewinding the clock so that the prescribed time began to run in 2002 and since the suit was filed in 2007 it was filed within time. However, he was quick enough to point out that whether or not Annexure Al was an acknowledgment in, fact, was a matter of evidence that had to be determined in tihe course of a trial and not in a preliminary objection. Hel said this in response to the Defendant's plea that the letter was a mere instruction for debt collection. · For this he cited TCC VS BURUNDI TOBACCO COMPANY LTD & MASTERMIND TOBACCO CO. LTD (Comm. Misc. Civil Cause :No. 7 of 2004) ' ' (unreported). So he prayed for the dismissal of t}!ie preliminary I I objection with costs. In a brief rebuttal, Mr. Mhango, learned Counsel, submitted that the Plaintiff's claim is based on debt collection, and not an assignment thereof. He said th~se were two I different causes of action. In his view, Annexq.re A 1 is only I I ! I. 3 • I binding between the Defendant and TIOT, 1f there was any assignment at all, and if the cause of action a~ose from the I assignment. He went on to poirr out that in [his case, the Plaintiffs cause of action is t};lat he lent rponey to the i . Defendant in 1999 and that the issue j was not when was the debt assigned, but when the suit for debt rec9very ought to I I have been instituted. He was c¢rtain that his objection

was1 i meritorious and ought to be upheld. I I I think the learned Counsel are not disputing that the prescribed period of limitation for~ a suit to reco~er a debt, is 6 I years under the Law of Limitation Act. The're is also no I dispute that in this case the Plaintiff alleges thcit he lent USD 41,919 to the Defendant in 1999:. Therefore, p~ima facie, six years therefrom elapsed in 2oosJ These facts are pleaded in I I paragraphs 3, 4 and 5 of the plaint. However, c~gnizant of the ! legal position, and in obedience to the dictates of Order VII ' ' rule 6 of the Civil Procedure Code 1966, the Plaintiff pleaded I I in paragraph 6 of the plaint: - "6. The Defendant however did not heer the promise and pay the outstanding sum and follow ups by the Plaintiff were of no success, and eventually sometime I I ~n the year 2002, the pefendant assigned the debt to TANGANYIKA INVESTMENT OIL AND TRANSPORT I • COMPANY LTD (TIOT) to pay the Plain1iff on behalf of I . ' 4 I the Defendant. Annexyd hereto marred A-1 lS a letter whereupon the D~fendant assigned the said debt to .. ... (TIOT) ... '' r, I, l Annexure A - 1 referred to above reads as follows· -

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II I "RE: OUTSTANDING AMOUNirl: OF USD 41,919 ' I I ................. I We wish to infonn yo4 that the abo~e amount is outstanding for payment f o~ more than tHree (3) years now. I I 'I I We advice (sic) you to pay this outstar,ding amount on our behalf to Mr. Thabit K. ~- Abri..... " I ) I, I This letter was written by i:011 COM (T) iLIMITED (the

II I Defendant herein) addressed to Tanganyika Inv~stment Oil & c Transport Co Ltd, dated 15 th August 2002 dnd copied to

I JI THABIT K.T. ABRI (the Plaintif~. The partie.s are not in dispute as to the genuiness of thiJ letter. 1 ",, I' 11 Order VII rule 6 of the .Civil Procedurf Code 1966 requires that if a suit is institutid after the ex~iration of the period prescribed by the law o~ limitation, thie plaint shall show the ground upon which th~ exemption fro/b such law is claimed. In the course of subrrtission, it was !clear that the I , I i i 5 Plaintiff was relying on one of the exemptions shown in the Law of Limitation Act and in particular s. 27 (3). of the Act. The issues boil down to whether, t~e letter I have' just quoted I above amounts to an acknowledgement of the debt, and whether such an issue could be det~rmined at this, stage. I do not agree with Mr. Muganyizi that the question I . whether or not the letter amounted to an acknowledgment should be left to be determined aJ the trial. This is because I according to MUKISA BISCUITS MANUFACTURING CO. LTD I VS WEST END DISTRIBUTORS LTD [1966] EA. 696, which was applied by Kimaro J (as shb then was) in TANZANIA CIGARRETE COMPANY LTD caJe, cited by Mr. Muganyizi, learned Counsel, an objection can be raised and argued if the facts are not in dispute. In that case (i.e. MUKISA'S) SIR l NEWBOLD P (as he then was) observed on p. 701: "A preliminary objection ... raises a pure point of law j which is argued on the assumption that all the I .[acts

pleaded by the other are correct. It cannot I be raised if any fact has to be ascertained or if what is sought is the exkrcise ofjudicial discretion." In the present case, and as observed above, the letter in question and its contents are not disputed by the parties. So, a preliminary objection can be determined on its basis. • 6 Having held so, the next question is whether the letter was an acknowledgement of the debt? Under s. ~8 (1) of the Law of Limitation Act, every acknowledgment under section 27 must be in writing and signed by the person making it or by his agent duly authorized in that behalf. Annexure Al is in writing and there is no dispute that it is signed by the Defendant's Director. It is dated 15 th August 2002 which is 3 I years from 1999; therefore made before the expiry of the period of limitation. Section 28 (4) of the Law of Limitation Act was therefore complied with. The letter was addressed to TIOT and copied to the Plaintiff; but according to s. 28 (5) (d) of the Law of Limitation Act, that would not render the acknowledgment ineffective. And to seal it off the wording of the letter speaks the loudest: - "We advice (sic) you to pay this outstanding amount on our behalf to Mr. Thabit K. T. Abri." It is my view that this sentence is a sufficient acknowledgment of the debt by the Defendant as due to the Plaintiff. So this was more than an assignment of the

debt. It was an instruction to TIOT to pay to the Plaintiff, the 'sum which is now the subject of the present suit. If it was not an acknowledgment why was the letter copied to the Plaintiff? In • ... 7 I any case, I do not think the word "assigned" in paragraph 6 of the plaint was used in its technical sense. Legally it is not j possible to assign obligations under a contract from the ' I ' original contracting party to the shoulders of a third person 1 except, possibly by means of a novation whereby a new I contract is substituted for the original one. This is not the case in the present case. II I j j : For the above reasons, I am satisfied that annexure A-1 I to the plaint has all the trappings of a written acknowledgment 1 of the debt. Therefore the Plain tiff has succeeded in showing I that the suit is exempted from tlie provisions of the Law of I Limitation Act. I would in the event hold that the suit was filed within time. I Accordingly I find that the preliminary objec'tion is devoid of merit. I will accordingly dismis~ it with costs. Order accordingly. S.A. MASSATI

JUDGE 30/5/2007 1,471 words