zanzibar resort real estate another vs industrial fund for developing countries alias ifu 2015 tzhc 2204 24 march 2015

IN THE HIGH COURT FOR ZANZIBAR

HOLDEN AT ZANZIBAR CIVIL APPLICATION NO. 10 OF 2014 FROM ORIGINAL CIVIL SUIT NO. 20 OF 2013 ZANZIBAR RESORT & REAL ESTATE

ZANZIBAR DOLPHIN VIEW PARADISE RESORT LIMTIED ----- APPLICANTS VERSUS. INDUSTRIAL FUND FOR/bEVELOPING COUNTRIES Alias IFU ' ........ RESPONDENT. RULING. MWAMPASHI, JUDGE. A default judgment was on 25/11/2013 entered by the High Court Registrar (Mr. George Kazi) in the High Court Civil Suit No. 20/2013 under Orders VIII rule 10 of the Civil Procedure Rules, Cap. 8 of the Laws of Zanzibar against 1 * i- the Applicants i.e. Zanzibar Resort and Real Estate and Zanzibar Dolphin View Paradise Resort Limited. The said default judgment was entered in favour of the Respondent the Industrial Fund for Developing Countries alias IFU. Being aggrieved by the judgment the Applicants have filed this application under S. 129 of the Civil Procedure Decree and Order VI rule 14 of the Civil Procedure Rules, Cap. 8 of the Laws of Zanzibar praying for orders in the following form:- 1. That this Honourable Court be pleased to grant a leave to the Applicants to file an application of setting aside a default judgment entered against them out of time. A 2. That this Honourable Court be pleased to set aside a default judgment entered against the Applicants of Civil Case No 20 of 2013, before Hon. Mr. George Kazi - High Court Registrar, on 25th November, 2013.

3. That this Honorable Court be pleased to allow the Applicants to file a Written Statement of Defence of such Civil Case No. 20 of 2013, out of prescribed time.

4. Costs of this application to be provided. ' 5. Any other order(s) that the Honorable Court may deem *• i .<•' fit. In support of the application the applicants have filed an affidavit of one Mr. Dennis Harboe Friis the director and I , chairman of the applicants' Board of Directors. On the other hand the respondent has filed a counter affidavit affirmed by her counsel Mr. Omar Iddi Omar. Together with the counter affidavit, the respondent has also filed a notice of preliminary objection on a point of law, the.subject of this ruling, praying for the application to be dismissed with costs on the following ground; 1. That the application is incompetent and bad in law as it contravenes the provisions of Order XLVII Rule 1(b) and Order LI rule 1(2) of the Civil Procedure Decree, Chapter 8 of the Revised Laws of Zanzibar. The hearing of the preliminary objection proceeded by way of written submission whereby the counsel for both parties filed their respective submissions for and against the preliminary objection within the time fixed by the Court. In his submission in support of the objection it has been argued by Mr. Omar Iddi Omar learned counsel for the respondent that the application is bad in law because the applicants ought to have filed an appeal and not the application for the said default judgment to be set aside. It has been explained by him that under Order XLVII

rule 1(b) of the Civil Procedure Rules, Cap 8 of the Laws of Zanzibar where a judgment is pronounced against a party failing to J. f present a written statement under rule 10 of Order VIII of the Civil Procedure Rules, the right course for such a party to take is filing an appeal and not filing an application for the said judgment to be set aside. Mr. Omar has also pointed out that Order XLVII rule 1(b) is couched in mandatory terms i.e by the use of word 'shall' which under S. 4 of the Interpretation of Laws and General Provisions Act, 1984 has to be construed as imperative. It has further been submitted by Mr. Omar that the application is bad in law because under Order LI rule 1(2) of the Civil Procedure Rules, Cap 8 any person who is dissatisfied with any order made against him by the Registrar, other than pronouncing judgment, may apply to a judge for the order to be set aside. He has insisted that under that provision the right to apply for such an order to be set aside does not extend to orders relating to pronouncing judgments or passing decrees. t Mr. Omar has therefore argued that the application which is for the default judgment to be set aside is therefore incompetent y •* and bad in law as the applicants by filing their application under Order XI rule 14 of the Civil Procedure Rules, Cap 8 have failed to properly move the court. As to whether the court can be moved

under S. 129 of the Civi! Procedure Decree, Cap 8 which has also been cited by the applicants as another enabling provision, it has been submitted by Mr. Omar that the court should not allow its process to be abused by allowing the applicants to proceed with their \ application under S. 129 because there is, a specific statutory provision under which the application ought to have been filed. To cement his argument Mr. Omar has referred the Court to the case of Tanzania Electric Supply Company (TANESCO) vs. Independent Power Tanzania Ltd (IPTL) and Two Others [2000] TLR 324, where the Court of Appeal when referring to the application of S. 95 of the Civil Procedure Code [ cap 33 R.E] of ^ • the Laws of Tanzania which is pari materia with S. 129 of the Civil Procedure Decree held among other things that S. 95 of the Code does not confer any jurisdiction on the High Court or subordinate courts and that the power granted by the section is intended to supplement the provisions of the Code, and not to evade or ignore them or to invent a new procedure according to individual sentiment. Mr. Omar has also cited the case of Kibo Executive Lodge Ltd and Vicky Ansilo Swai vs. CRDB Bank Limited and 3 Others, Commercial Case No. 16/2013 (unreported) where Makaramba, J, prescribed to the same view as held by the Court of Appeal in the case of Tanzania Electric Supply Company (TANESCO. In his

submission against the objection the learned counsel for the applicants Mr. Isaack Msengi has started by raising his concern in regard to the propriety of the preliminary objection taken by the respondent. He has argued that the preliminary objection has not been properly raised because the respondent has failed to cite the provision of law under which the objection is being taken. For that reason Mr. Msengi has therefore prayed for the objection to be dismissed. Turning to the objection on its merits it has'been submitted by Mr. Msengi that the objection is baseless because no provision of the law has been contravened by the applicants as argued by the respondent's counsel. He has insisted that the application is properly before the court because under Order XLVII rule 1(b) of the Civil Procedure Rules, Cap 8 an appeal is not the only recourse for the party aggrieved by the default judgment. Mr. Msengi has further argued that the default judgment was V? ' | pronounced in the absence of the applicants and in violation of the proviso to Order VIII rule 10 of the Civil Procedure Rules, Cap 8 under which a default judgment cannot be pronounced in suits by a moneylender or an assignee for recovery of money lent by the moneylender or enforcement of any agreement or security relating to any such money. He has pointed out that the respondent's suit was a moneylender suit which could

not be disposed by way of a default judgment under Order VIII rule 10 of the Civil Procedure Rules, Cap 8. It has further been submitted by Mr. Msengi that under Order XI rule 14 of the Civil Procedure Rules, Cap 8 where a decree is passed ex parte in favour of the plaintiff the defendant may apply to the court by which the decree is passed for the decree to be set aside. Mr. Msengi has therefore insisted that the . applicants' application is properly before the court because the default judgment in question was pronounced by the Registrar in the absence of the applicants and therefore that the judgment is an ex parte judgment. Mr. Msengi has finally point out that the Registrar, in the first place, was not supposed to pronounce the default judgment as he did. He has argued that the Registrar ought to have sent the matter to the judge for the default judgment to be pronounced by the judge because the Registrar had no jurisdiction to pronounce the default judgment under Order LI rule 1(2) of the Civil Procedure Rules, Cap 8. In his rejoinder Mr. Omar Iddi Omar the learned counsel for the respondent has firstly attacked the objection or the concern raised by Mr. Msengi in regard to the propriety of the preliminary objection raised by the respondent. He has argued that it is improper for Mr. Msengi to raise his preliminary objection to pre-empty the notice of preliminary

objection already lodged by the respondent. To substantiate his argument Mr. Omar has referred the Court to the Court of Appeal decision in African Marble Company Limited (AMC) vs. Presidential Parastatal Sector Reform Commission (PSRC), Civil Application No. 47/2007 (unreported). It has further been argued by Mr. Omar that in the absence of 1 4 any particular provision or procedure in raising preliminary objections in applications, the jurisdiction of this court to determine the preliminary objection raised by the respondent is automatic mainly because the objection is on a pure point of law. Mr. Omar's rejoinder in as far as the argument by Mr. Msengi that the judgment passed by the Registrar was an ex parte judgment hence falling within Order XI rule 1-13 of the Civil Procedure Rules, Cap 8 has been that the judgment in question is not an ex parte judgment but a default judgment under Order VIII rule 10. He has explained that there is a difference between an ex parte judgment and a default judgment because in the former case the judgment is pronounced where the proceedings are conducted in the absence of the defendant following the failure by the defendant to appear when the suit is called for hearing while in the latter the judgment is pronounced where the defendant fails to present a written statement of .defence within the time fixed by the court. He has Jr therefore

insisted that because the default judgment was t pronounced under Order VIII rule 10 then the only recourse for c J the aggrieved party was filing an appeal as provided under Order XLVII rule 1(b). ( t It has also been submitted by Mr. Omar in his rejoinder that the arguments by Mr. Msengi that the decision by the Registrar is illegal because the suit was by the moneylender is irrelevant. He has submitted that not only that such an argument requires evidence to be established but also that such an argument should only be relevant in an appeal if any or in the main 'jf application should the court overrule the preliminary objection. On these same reasons Mr. Omar has prayed for the argumenlj by Mr. Msengi that the Registrar had no power to pronounce # K * the default judgment to be disregarded as irrelevant. It has therefore been concluded by Mr. Omar that where a defendant is seeking a relief on the ground that a judgment was' ».f entered against him on default of presenting a written statement of defence under Order VIII rule 10 of the Civil Procedure Rules, Cap 8, he shall proceed by way of an appeal as provided under Order XLVII rule 1(b) and not by way of filing an application for the judgment to be set aside under Order XI rule 10 14 of Cap 8. Mr. Omar has therefore prayed for the application to be struck out with costs for being incompetent. I would start with the

complaint or concern raised by Mr. Msengi that the preliminary objection be dismissed because the respondent has not cited the provision under which the preliminary objection has been raised. Apart from Mr. Omar's arguments that the applicants should not be allowed to raise a counter preliminary objection which is intended to pre empty the preliminary objection taken by the respondent, the complaint by Mr. Msengi is of no merits for three main reasons. The first reason is that since neither in our Civil Procedure Rules, Cap 8 nor in any other law there is a specific provision under which a preliminary objection on point of law can be taken against an application which is considered to be incompetent, then the procedure adopted by the respondent i.e filing the notice of preliminary objection alongside her counter affidavit, cannot be said to be improper. Secondly, where it is considered by a party against whom an application is filed in court that the application has to fail for being 1L * - -r incompetent on a pure point of law\filing the notice of 'V- .. * f preliminary objection questioning the propriety and the maintainability of the application is an acceptable procedure and a better practice. The notice is intended to not taking the other party by surprise and it is filed for purposes of observing the principle of fair hearing as it allows the other party to know before

hand that the propriety of his application is going to be questioned on a point of law. The notice therefore enabies him to get well prepared in defending his application. Thirdly and lastly, filing the notice of preliminary objection questioning the propriety of an application does not in any way occasion any failure of justice or cause any injury to the applicant. For the above reasons the argument by Mr. Msengi that the notice of preliminary objection filed by the respondent is not oroperly ,■ i 1* before the court only because no provision of law under which j it is taken has been cited fails in its totality. Next are the arguments by Mr. Msengi that the High Court Registrar Mr. George Kazi who passed the default judgment i •• had no jurisdiction and that the decision itself is not justifiable 1.1 as the suit was a moneylender suit and by the moneylender. Once again and as correctly submitted by Mr. Omar, the arguments are not only made prematurely but they are also baseless and irrelevant. Since the question at hand is not on the v: merits of the decision made by the Registrar but on whether or not the application filed by the applicants is competent or properly before court then it cannot be argued at this stage that the Registrar had no jurisdiction to pass the default judgment or that the decision itself is not correct. Such arguments have to wait till when the

application is heard on its merits should the preliminary objection raised by the respondent fail. For the sake of making the facts clear it has to be pointed out at this juncture that the default judgment passed by the Registrar came as a result of the applicants' failure to present their written statement of defence within the time fixed by the court. The judgment was pronounced under Order VIII rule 10 of the Civil Procedure Rules, Cap 8 where the law provided as follows;- l . i Where any party who has been ordered to present a written statement or other pleading fails to present the same within the time fixed by the court, the court may pronounce judgment against him, or make such order in relation to the suit as it thinks fit; Provided that in the moneylender suit o r " In pronouncing the default judgment in question the Registrar derived the jurisdiction from Order LI rule l(l)(e ) of the Civil procedure Rules, Cap 8 of the Laws of Zanzibar under which it is provided as follows;- 1(1) A Registrar may exercise the powers and duties of i a judge or of a magistrate and may pronounce judgments, pass and sign decrees and make orders and transact the business of the High Court or the court of a magistrate in the cases referred to in the following Orders and Rules;- I' 14 (e) Order \/III Written Statement and set off; From the above reproduced provision i.e Order LI rule l(l)(e

) of the Civil Procedure Rules, Cap 8 it is clear that all the cases or matters under Order VIII i.e cases or matters relating to written statement and set off are among the cases or matters that the Registrar is empowered to handle on behalf of a judge of the High Court or a magistrate of any subordinate court as provided S' under Order LI rule 1(1) of the Civil Procedure Rules, Cap 8. It can therefore not be argued by Mr. Msengi that when the Registrar pronounced the default judgment under Order VIII rule 10 he did so with no jurisdiction. The Registrar had jurisdiction and powers to pronounce the judgment in question. Turning to the gist of the ruling i.e whether the application by J > ■ the applicants which as pointed out earlier is brought under S. 129 of the Civil Procedure Decree and Order XI rule 14 of the Civil Procedure Rules, Cap 8, is competent or properly before the court or not, the first thing to be observed by this court is that, as it has been correctly argued by Mr. Omar it appears that Mr. Msengi is confusing or fails to differentiate a default judgment from an ex- parte judgment. The two types of judgments are totally different in nature. While a default judgment is passed under Order VIII rule 10 of Cap 8, when the defendant fails to present his written statement of defence within the time fixed by the court, an ex parte judgment on the other hand is passed

where the defendant presents his written statement of defence but fails to appear when the suit is ca'led for hearing hence enabling the court to allow the plaintiff adduce his evidence and prove his claims in the absence of the defendant. The relevant provision under which an ex parte judgments is passed is Order XI rule 6(1) (a) of the Civi! Procedure Rules Cap 8 and not Order VIII rule 10. Since the judgment sought to be set aside by the applicants is not an ex parte judgment but a default judgment under Order t 1(5 VIII rule 10 of the Civil Procedure Rules, Cap 8 then Order XI rule 14 of the Civil Procedure Rules, Cap 8 cited by the applicants as one of the enabling provision is not applicable. Rule 14 of Order XI applies in circumstances where the judgment sought to be set aside was passed ex parte against the defendant and not otherwise. Furthermore as correctly argued by Mr. Omar the learned counsel for the respondent the default judgment can also not be set aside under Order LI rule 1(2) of the Civil Procedure Rules, Cap 8 because this provision clearly excludes judgments pronounced or decrees passed by Registrars from being set aside by a judge. It is provided under sub-rule 2 of rule 1 of Order LI that;- l(2 j Any person who is dissatisfied with any order of a Registrar (other than pronouncing judgment or passing a decree) made under this rule may apply by

summons i supported by affidavit to a judge or magistrate as the case may require who may if he thinks fit set aside the order of the Registrar and make such other order as he may deem just'. I Under the circumstances of this matter i.e where the applicants are dissatisfied with the default judgment pronounced by the Registrar under Order VIII rule 10 of the Civil Procedure Rules, Cap 8, the judgment which, as abundantly demonstrated above, cannot be set aside under Order LI rule 1(2) or even under Order XI rule 14 because it is not an ex parte judgment, the only proper recourse for the applicants ought to have been filing an appeal under Order XLVII rule 1(b) of the Civil Procedure Rules, Cap 8 read together with S. 81(l)(i) of the Civil Procedure Decree, Cap 8. An order made under Order VIII rule 10 of Cap 8, i.e a default judgment pronounced under rule 10 of Order VIII, is appealable under Order XLVII rule 1(b) of the Civil Procedure Rules, and S. 81(l)(i) of the Civil Procedure Decree, Cap 8, under which it is provided as follows;- 'An appeal shall lie from the following orders under 18 the previsions of section 81 of the Decree, namely (a)... (b) an order under rule 10 of Order VIII pronouncing judgment against a party for failure to present a written statement". •:A And S. 81(1) (i) of the Civil Procedure Decree, Cap 8 provides as follows;- •'V 81(1) An appeal shall lie

from the following orders, and save as otherwise expressly provided in the body of this decree or by any law for the time being in force from no other orders- (a)... (b)... (c)... (d)... 19 (fu ! | (g)~ (h)... (i) any order made under Rules from which an t appeal is expressly allowed by Rules. Lastly is on S. 129 of the Civil Procedure Decree, Cap 8 which the applicants have cited together with Order XI rule 14 of the Civil Procedure Rules, Cap 8 as the provisions under which the application is made. The question here is whether under the circumstances of this matter the court is properly moved by S.

129. As it has been submitted by Mr. Omar, under the circumstances of this matter, S. 129 is of no help to the applicants. S. 129 of the Civil Procedure Decree, Cap 8 of the Laws of Zanzibar is a provision that gives the High Court inherent power that can be invoked only in proper situations. S. 129 is a serving 20 provision which is applied not only where justice is in danger of being defeated but where there are no any provision of law covering the relevant situation. There must be no any other way from which the required justice can be attained for the court to invoke its inherent power under S.

129. Inherent powers of the court under S. 129 are powers that have to be sparingly invoked by courts only where it is necessary to do so. In the case of Manta Limited vs. Sealand Limited and One Onother, Misc. Civil Application No. 1/2011 (Unreported) it was emphasized by this court thus;- "Inherent powers of the court under S. 129 can be invoked where ordinary rules of procedure result in injustice i.e where the rules can be broken for the ends of justice or where the remedy being sought cannot be attained in any other way. The power cannot be exercised if its exercise is inconsistence with, or comes into conflict with, any of the powers expressly or by necessary implication conferred by other provisions of law'. In short since there are specific provisions of law allowing the default judgment to be appealed against and also because the law expressly does not allow default judgments pronounced by the High Court Registrar to be set aside by a High Court judge then under the circumstances of this matter the inherent powers of the Court under S. 129 of the Civil Procedure Decree, Cap 8 of the Laws of Zanzibar cannot be invoked by this Court. It is for the above given reasons and observations that the preliminary objection raised by the respondent is hereby upheld. The application is incompetent because it is brought under wrong and inapplicable provisions of law. The application is therefore hereby struck out with costs. Abraham 24/03/2015. 2> Delivered in court this 24th day of March, 2015 in the presence of Mr. Isaack Msengi (Adv.) for the Applicants and Ms. Victoria Kamazima (Adv.-) for the Respondent. Sgd: Abraham Mwampashi Judge 24/03/2015. I hereby certify that this is a true copy of the Original.

YESAYA KAYANGE

DEPUTY RESITRAR

HIGH COURT ZANZIBAR. 23 \