REGENCY PARK

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA (DAR ES SALAAM SUB-REGISTRY) AT DAR ES SALAAM CIVIL CASE NO. 102 OF 2023 THE BOARD OF TRUSTEES OF THE PUBLIC SERVICE SOCIAL SECURITY FUND............................. PLAINTIFF VERSUS REGENCY PARK HOTEL ............................................DEFENDANT JUDGMENT 2+' Sept & 22Pd Neve, 2024 MKWIZU,J : The plaintiff is a corporate entity established under the Public Service Social Security Fund AcE, No. 2 of 2018. Its purpose is to manage contributions and the payment of social security benefits for employees. The organisation has evolved from the former PSPF, GEPF, PPF, and LAPF, acquiring all associated assets, liabilities, powers, rights, privileges, duties, and obligations. This includes the authority to pursue ongoing ieqal 1 proceedings in any court or tribunal. The plaintiff is currently suing the defendant and seeks a judgment, decree, and orders as follows: a) TTle Defendant to pay the Plaintiff the statutory amount of TZS 802,357,356.81 say, Tanzania Shillings Eight Hundred Two Million Three Hundred Hi-Ly Seven Thousand Three Hundred Fifty Six and Eighty One cent only Cents Only as of 31st January 2019, being a debt arising from: unremitted statutory contributions and accrued penalty. b) The Defendant to pay the Plaintiff accumulated statutory penalties accruing from the claimed amount commencing February 2006 until the debt plus the accrued interest is paid in full; c) Interest on the Court rate of the claimed anrour,t from the date of instituting this suit to the date of delivery of the Judgment. d) Interest on 'the Court rate of the decree sum from the date of Judgment to the date of final settlement. e) Costs of this suit; and f) Any other and further relief as this Honorable Court shall deem fit and just to grant. 2 The defendant is a limited liability company incorporated under the laws of Tanzania and is a registered employer with the plaintiff Fund, obligated to remit monthly contributions to the Fund. ne suit was initially instituted under the Summary Procedure as delineated in Order XXXV of the Civil Procedure Code, Cap 33 R.E. 2002, read together with Section 62 of the Public Service Social Security Fund Act, 2018. After filing the suit, the defendant successfully petitioned for leave to defend the suit and duly filed d written statement of defence. Tbroughout the preliminary proceedings, the defendant was duly represented by leqal counsel; however, her representation lapsed following the mediation processes, wherein :he parties reached a partial settlement of the Qlaims. This development necessitated an order for an ex-parte hearing to address the unresolved claims. TIe plaintiffs' case was blessed with two WItnesses. PWI, MORDGARD LUMBANGA, the Principa! eompliance Officer of the Public Service Social Security Fund, is currently involved in lnembel' registration, contribution collection, and inspections. In Lhis case, he con,rift'ned his familiarity with the defendant, a registered member contributing to the Fund. He stated that the defendant's involvement with the Fund began in 2006 when she was registered with what, was then known as the PPF. He highlighted that 3 the defendant operates within the hotel services sector. After her registration, the defendant registered all her employees and has been remitting their contributions at a rate of 20%. She provided a list of her employees and their respective salaries, which the Fund inspected and incorporated into her contribution staEer,rent. He described a membership statement comprising the names of contributing members, their salaries, and the total 20% contribution, which is equa Jiv divided between the member and the employer indicated in exhibit PI and tendered the defend.ant’s Arrears of Contribution Analysis Sheet, with the employees list, their salaries and conLributjons, revealing an outstanding amount of TZS 392,758,000 indicating that the emp:cye!’ had failed to remit contributions for 156 months, .covering the period from February 2006 to January 2019. He explained that they contacted the defelrdanl via mobile phone, visited hdr at her office, and organized a meeting in December 2021 between representatives of the Scheme and the defend,Int at Golden Jubilee Tower. Mr. Nzalo, the fnanagel’, and Mr. Jerome/ [ ile Director/ repfe$ented the defendant with the primary purpose of addressing the unremitted contributions, which totaled 392,758/000/ plus a . penalty. of 409/599/356'81.. During the meeting, they agreed that the defendant 4 would appoint a representaLive to recot'tcile the data within two weeks. ne defendant was also tasked with providing the payroll register, all employment contracts, and termination letters for the employees. The minutes of the meetinq held on December 14, 2021, signed by Nikenda Kileo for the plaintiffs and Said Nzalo fOI- the defendants, were submitted as Exhibit P2.. PWI further testified that the defendant did not adhere to the agreed terms. ConSequently, a demand notice (exhibit P3) was issued to the defendant in March 2023, reminding her of her liabilities, including the Drincipai amount of 392,758,000/= and penalties of 409,599,356.81/L PWI clarified that while the penalty was initiaily calculated at 5%, it was discounted by 1.5% during the meeting. He said Line demand notice required the defendant to pay the totai al-nount '. ,'itF: in 14 days, followed by ini[iating a suit in May 2023, seeking pa-in- lent of the outstanding amount and. associated penalties. After filing the suit, PWI said, tIre defendanl agreed to pay 93,000,000 as part of the outstanding surn, which was formalised in a settlement deed, stipulating tha't this' payment would be made within 24 months and that the defendant has continued LO acknowledge tFle claim. In November 2023, the defendant subn--litted a let:[er dckno~.'"gjedging the claim, which 5 was titled "Request to Pay PSSSF Members Contribution Amounted to TZS 392,758,000 on Installment (exhibit P4). Despite ongoing requests for payment, the defendant only agreed to comply with the amount stipulated in the settlement deed and nothing beyond that. Referring to a letter from the defendant dated December 14, 2023 (exhibit P6), PWI urged the court to grant the relief sought in the plaint, to[allif-tg 802,357,356.81, minus the 93,464,000/= already settled through rr,ediation, thereby reducing the outstanding unrernitted statutory contribution to 17S 299,294,000/= plus HS 409,599,356.81 pena:tics. Anastasia Mateza; the defendant’s employee WHO served as a room attendant since January 2016, EesLified before [he court regarding her employment and salary details. She recounteo that her employment contract was signed on Decernber 28, 2015, as indicated in exhibit P7 and was later terminated in 2021 due to a decline irt bLlsiness, a fact reflected in exhibit P9. She stated that her monthly salary "„as 200,000, from which 20,000.was deducted for her social security f Jr,d ,=oF-ttf-ibution to the PPF, as evidenced by her salal"y slip, en[ered as =xi ,ibit i'8. However, she alleged that only a 'portion of her PPF contribul ic,’.s had been paid to her, asserting that her, employer had not remittea tile l-emainder to the scheme 6 Further elaborating on her situation, Anastasia mentioned that she had made multiple follow-ups with the plaintiffs regarding her contributions and in September 2023, she received a Contribution Summary Report (exhibit PII), which indicated that no contributions had been remitted to the social security scheme by her empioyel-. Aft;Ii' pet-sistent inquiries, she stated that her employer eventually remitted one year’s contributions covering 2016. She.clarified her contributions, say'i i -,g Llrat her amount was 20,000, which her el-np:oy’er nlatcFled, brif ,qillg the tota! monthly contribution to 40,000. She lastly urged the cobrc ko grant the pla.intiffs' requests. I have considered He pleadings and tIle plaintit f:s evidence. It is essential to note the legal principie concerning the burden of proof in civil matters provided for under section 110 (1) and (2) oF Che Civil Procedure Code, Cap 33 R.E. 2019, which establishes tirat Ehe burden of proof lies on the party who asserts the existence of arl*/ facE. ll ius, in Ehis case, the onus of proof is firmly on the claimant, the plaIntiff, Eo substantiate the clairns made in the plaint. The scandard of proof in civ;I cases is always guided by the doctrine of the balance of probabilities. 1:1 LFlis context, the plaintiff is tasked with providing convincing evidence h support their assertions, regardless of the defendant’s inability Lo prese,it a defence.Failure to do 7 so not only weakens the plaintiff's claims bl it may also result in the dismissal of the case. Three issues were framed before the commencer11ent of the trial in this matter. 7. Whether the defendant is indebted to the piaintiff to the sum of 708,893,356.81 being an outstanding unremitted contribution and penalty 2. Whether there is non-renrission of the mandatory contribution by the defendant to the pialiIEiff 3. To what relief ErIe parties are entitled Lo Regarding the first issue, the plaintiff, througll PWI, one Mordgard Lumbanga, tendered exhibit Pl. This was the *~Arrears of Contribution Analysis Sheet" showing the number and names of employees and the defendant company's remittance status. It p.-gged the unremitted contribution areas cover-ing the period fronl i=ebi-uary 2006 to January 2019, which is 156 rnonLns, raisinq a total outsEanding unremitted amount of. VS 392,758,000/ = plus WS 409,599'356.81 as a statutory penalty. 8 Exhibit P2 is a minute of a meeting held bet",veen the two parties herein on 14th December 2021, deliberating on the outstanding debts, where the above amounts were shared on page 2 of the said exhibit. In that meeting, the defendant was represented by Mr Said Nzarc:, and it was agreed that the verified amount would be paid while th. Ly.t' pirties worked on an unverified sum. It seems the defendant '.vas reiucLant to cooperate in verifying the debts, culminating in a denrand notice by Plaintiff dated lst March 2023 (exhibit P3), where the defendant hIS required to pay the mentioned sum above within seven days. This was after several efforts to verify. the data failed' as evidenced by the cc!’l’espondence letters in exhibit P3. The institution of this suit followed the above demand notice. During mediation, the parties arrived at a partial settlement mutually. While acknowledging the entire outstanding sum, the deFendant agreed to settle the 93,464,000/=, the already verified amount, while waiting for the verification of the urlverified amount of tlis ex-'ernployee5. Ttris is confirmed by her letter to the plaintiff dated 17t“ :,ovember 2023 (exhibit P4)., where in the last thI-ee paragrapi IiI of Lite T':l'st page, the defendant explicitly acknowledges the debt, pron-,ising to col,tin Je paying the same. Tbe paragraphs read : 9 ' We managed to have a meeUilg with some of our ex employees who are also beneficiaries Lo whom their pension contributions are unremitted. These beneficiaries are those actively work towards the iI'otu:,! sett;enlent of their pension contributions During the meeting, we nlanaged to verify their unremitted pension contribution to the tune of TZS 93,464,000. Ttre verification process for the rest of the ex- staff is in progress Our request. It is our intention to seEtIe the aforementioned pending contributions in Full, i.e. TZ$ 392,758,000; however, due to unforeseen financial difficulties which led to the closure of the hotel, it is not possible to SILt Ie tile tvllole amount at once. In this regard, we are requ',.'stin g che seLL ling of the verified amount of TZS 93/464/LDa in 2g nionthly instalments/ equivalent to TZS 3,894,333.33. Ti lc, JafLer, we wiiI proceed with the rernainiirg balan'.-r ’.':.'tIlle !<cip updating the .fund progression report regularly . 10 This admission is further supported by the defendants' letter, referenced as No. REGENCY /PSSSF-2023/03 (exhibit P6), which was written in response to the plaintiff's leEter dated December 12, 2023 (exhibit P5). This clearly indicates ttrat the defendant owes tile claimed amount, excluding the settled a£-nount of TZS 93,':+64,oc)o that was agreed upon through mediation', This analysis addresses Lt-le first issue affirmatively. The second issue is also unequivocally established: the defendant has acknowledged the debt and made an express commitment to settle the outstanding amount after verifying her lapses in remitting certain contributions to the Plai!-,Eiff Fund. This indebte::if-,css is corroborated by the testimony of PW2, the defendant’s former enlpioyee, who was able to present her social security contribution hisLcry, Exhibits P8, PW9, and PW:L:L indicate that although conEributions were deducted, these funds were not-remitted to the plairltiff, thereby cc,nlp iicat ing the process for her to access her.entitienlents after the terrninatiori of her employment. Considering the absence of any contradictory e\';Jence to conEest .the aforementioned assc II’tion S, I Z,in CQlnpC lied :_u conclude th al the defendant has failed .,to Fulfil hei- legal obilgatic,„ LO remit the monthly social service contributions to the plaintifF. 11 The third issue for collsidcr'ation pertains to the reliefs to which the parties are entitled. A thorough analysis of the evidence and financial records led to an unavoidable conclusion that the plaintiff is entitled to the total outstanding amount of TZS 708,893,356.81 con-Ipl-ising an outstanding principal amount of unrenritted statLttory conLribution of TZS 299,294,000 /= and ns 409,599,356.81 statucory penalties. Ibis figure is derived from the initial claim of 175 802,357,356.81, as set forth in the plaint, minus 17S 93,“!6':T,00C), which \',as seEtled Lt'lrough mediation. Tlre defendant is also ordered to pay the plaintiff i11[erest on a decretal sum at the court's rate oF -/'/. per annum from the date of judgment until full payment and the cosEs of the suit under Section 30 of the Civil Procedure Code, Cap. 33, R.E. 2019. Dated at Dar es Salaar-n this 22%{ day of November 2024 GE 12