Sanyou Service Station Ltd v. Bp Tanzania Limited & two others Civ no 329 of 2002

IN THE HIGH COURT OF TANZANIA

(DAR ES SALAAM DISTRICT REGISTRY)

AT DAR ES SALAAM

CIVIL CASE NO. 329 OF 2002

SANYOU SERVICE STATION LTD………..….DECREE HOLDER/APPLICANT

VERSUS

BP TANZANIA LIMITED…………………………………...JUDGMENT DEBTOR

AND

THE BRANCH MANAGER STANDARD

CHARTERED BANK (T) LTD –

INTERNATIONAL HOUSE BRANCH………………..…………….RESPONDENT

RULING

KALEGEYA, J.:

        In High Court Civil Case No. 389 of 2002, the Applicant/Decree-holder secured a judgment against the Judgment-debtor in the sum of shs. 650 million with costs.  Upon failure to pay the decretal sum, the Decree-holder secured a garnishee order directed to the Respondent to deduct from the Judgment-debtor’s account lying with it, A/C No. 010-6005419900, a sum of shs. 736,331,020, which amount included costs.  The Respondent did not oblige.  Consequently, the Decree-holder filed an application against the Respondent asking the Court to order the latter to “appear and show cause why they should not be committed to prison for disobeying a lawful order” of the Court.

        Mark & Associates Attorneys represented the Applicants while Mawenzi Advocates Chambers represented the Respondents.

        In accordance with the supporting affidavit/counter-affidavit and submissions, further undisputed facts are as follows:

        The Judgment-debtor had two accounts with the Respondent.  At the same time the said Judgment debtor was operating an over-draft facility issued by the Respondent.  The same was secured by the Judgment debtor’s Debenture Deed for Tshs. 14,750,000,000/=, an IBI from Standard Chartered Bank London for US$ 8,000,000 and US$ 12,000,000 and legal mortgages over its buildings and fuel storage tanks.  By the time the garnishee order was served upon the Respondent the Judgment-debtor was indebted to the Respondent in the sum of US$ 18,514,892.90, equivalent to Tshs. 21,106,977,906/=.  After issuance and receipt of the garnishee order the Respondent deducted a sum of shs. 1,758,416.717.15 from the Judgment-debtor’s Accounts to offset the outstanding loan facility.

        On the above facts, the Applicant contend that the Respondent committed contempt of Court by disobeying its order.  The Respondent on the other hand counters by urging that on the strength of the Debenture, as a secured creditor with a first charge on the Judgment-debtor’s monies and property, it was entitled to do what it did.

        On the facts at hand, I am on all fours with Applicant that the Respondent’s action is contempt, pure and simple.  As rightly pointed out by the Applicant, a person in receipt of a Court order can only default in obeying it through legally provided avenues or due to obtaining circumstances which make it impossible for him to comply.  And the latter should be beyond that person’s capability.  In the case at hand, it was a blatant contempt on Respondent’s part.  It decided to pay itself first.  This is so notwithstanding the fact that it was the very provider of the overdraft facility.  Respondent admits that the judgment-debtor’s accounts were liquid enough to allow compliance with the garnishee order.  Paragraph 7 of Mr. Johnson Masabala’s counter-affidavit, the Respondent’s Relationship Manager, speaks for itself as follows:

“That as the Judgment Debtor is indebted to the Respondent to the said sum the Respondent has the first right of lien and accordingly the Respondent has offset the outstanding against the credit balances of Tanzania shillings 1,758,416,717.15 in the Judgment Debtor’s account.”

In the circumstances therefore, failure to obey the garnishee order was intentional in all perspectives.  And, as already expressed it cannot be justified under whatever expression.  The maximum one would have expected the Respondent to do, if it believed it had a right to deduct the said sum, was to garnishee the money held and then apply to the Court to be heard on whether or not it could exercise its alleged right of lien first.  If the Respondent’s behaviour was to be condoned, Court’s orders would be violated and disobeyed with impunity making the courts’ duty impossible to achieve, with disastrous consequences to the machinery of justice [see Kwiga Masa v. Samweli Mtubwata (1989) TLR 103 (HC) and Lampit & Another v Pook Borough Council (Taylor & Another, third Party (1990) ALL.ER 887 – also referred to by the Applicant].

        The Respondent’s action was contempt, again as rightly sourced by the Applicant’s counsel, as defined in both the Black’s Law Dictionary, 8^th Edition, page 336 and the Penal Code, Cap 16 (R.E. 2002).  The former defines contempt as:

“……..a disregard of, or disobedience to, the rules or orders of the legislative or judicial body, or an interruption of its proceedings by disorderly behavior or insolent language, in its presence or so near thereto as to disturb the proceedings or to impair the respect due to such a body”,

while the latter has the following:

“……..any person who willfully obstructs or knowingly prevents or in any way interferes with or resists the execution of any summons, notice, order, warrant or other process issued by court, or any person lawfully charged with the execution thereof is guilty of an offence and shall be liable upon conviction to imprisonment for a term not exceeding one year”.

        The Respondent’s act fits in the four corners of those definitions.

        In conclusion, the Application is found to be meritorious.  It stands allowed with a qualification that sentence is to be pronounced by the court after delivery of the ruling and after the Court has heard the Respondent’s mitigation.

        DATED at DAR ES SALAAM this  day of  2009.

L. B. KALEGEYA

JUDGE

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