TRANSPORT EQUIPMENT LTD v D.P. VALAMBHIA 1993 TLR 91 (CA)

TRANSPORT EQUIPMENT LTD v D.P. VALAMBHIA 1993 TLR 91 (CA)

Court Court of Appeal of Tanzania - Dar es Salaam

Judge Makame JJA, Kisanga JJA and Ramadhani JJA

CIVIL REFERENCE NO. 7 OF 1992 H

12 February, 1993

(From the ruling and decision of a single judge of the Court of Appeal of Tanzania at

Dar es Salaam, Mfalila, J.A.)

Flynote

Court of Appeal Rules - Notice of Appeal - Service of Notice of Appeal out of time -

Reasons for which court may I allow service of notice of appeal out of time.

1993 TLR p92

-Headnote

A This was a reference from the ruling of a single judge of the Court of Appeal of

Tanzania refusing to extend time within which the applicant could serve the

respondent with a copy of the notice of appeal. The applicant advanced two sets of

reasons on the basis of which he prayed the Court to grant the application. First were

extraordinary circumstances at the trial which merit the attention of B the Court of

Appeal. Secondly, that the intended appeal would involve important points of law.

The Court of Appeal considered the two grounds.

Held: (i) There are no extraordinary circumstances meriting the attention of this

Court except perhaps a display of the lack of coming to grips with the rules;

C (ii) When the point at issue is one alleging illegality of the decision being

challenged, the Court has a duty even if it means extending the time for the purpose

to ascertain the point and, if the alleged illegality be established, to take appropriate

measures to put the matter and the record right;

D (iii) The points of law submitted in this case have not succeeded to put in

doubt the legality of the ruling by the judge;

(iv) What is glaring to the eye here is sheer negligence of the advocate,

which is not a sufficient reason to extend time;

Case Information

Reference dismissed.

E Cases referred to:

1. Abdulatiff v. Saada Mohamed, H.C., DSM, Misc. Civil Appeal No. 20 of

1988 (unreported).

2. Kidaha Rashid v. Nasser Mohamed Mbaraka, HC, DSM, Civil Case No.

3 of 1982 (unreported).

3. Abdulhusein Bodalbhoy v. Marekwa, 5 ZLR 44.

F 4. Air Caterers Ltd. v. Air Tanzania Corporation, HC, DSM, Civil Case No.

223 of 1989 (unreported).

5. Continental Agencies v. AC. Berrill & Co. Ltd, [1971] EA 105.

6. Manners v. Pearson and Son [1898] 1 Ch. 58.

7. Theodora v. Gordon, HC, Arusha, Civil Case No. 70 of 1984.

G 8. Milliangos v. George [1976] AC 443.

9. Principal Secretary, Ministry of Defence v. D.P. Valambhia [1992] TLR

185.

10. The Commissioner of Transport v. The A.G. of Uganda and Another

[1959] EA 329.

H Mbuya, for the applicant.

M.G. Maira and M.N. Marando, for the respondent.

[zJDz]Judgment

Ramadhani, J.A., delivered the following considered judgment of the court:

I This is a reference from the ruling of Mfalila JA refusing to extend

1993 TLR p93

RAMADHANI JA

time within which the applicant, Transport Equipment Ltd (hereinafter referred to as

TEL), could A serve the respondent, D F Valambhia (hereinafter referred to as

Valambhia), with a copy of the notice of appeal.

It has not been disputed that TEL was dissatisfied with the ruling of Rubama J on 12

February 1991 and so they filed a notice of appeal on 19 February 1991 but no copy of

that was served on B Valambhia. It is common knowledge, in this litigation, that

Valambhia has retained two advocates: Mr Maira and Mr Marando. The learned

counsel for TEL, Mr Mbuya, admits that two copies of the notice of appeal were put

in one envelope which was then addressed to Mr Marando but was never C

dispatched and that it was seen lying in his (that is Mr Mbuya's) Chambers on 23

April 1991 when a copy of the notice of motion of Valambhia seeking to strike out

that notice of appeal was served on him. It is further not contested that despite that

discovery, Mr Mbuya did not immediately file a notice of motion to extend time

within which to serve a copy of the notice of appeal on Valambhia. On the D

contrary, such notice of motion was filed six months later, on 23 October 1991, when

the notice of motion of Valambhia to strike out that notice of appeal had already been

set down for hearing before Omar JA. E

Before us TEL was represented by Mr Mbuya assisted by Dr Ford, learned advocate

from Ireland who was admitted on a special licence under s 39(2) of the Advocates

Ordinance. For Valambhia, there were the same two counsel: Mr Maira and Mr

Marando. F

Both advocates for TEL instead of pointing out to us the errors of the single judge,

went to a considerable length arguing their intended grounds of appeal. We tolerated

that amid the repeated objections from the learned counsel for Valambhia, simply

because we are solemnly aware of the gravity of this reference purely owing to the

colossal sums involved and the obvious fact that our G word is final.

On behalf of TEL we were given two sets of `sufficient' reasons to extend them. The

first set was on some extraordinary circumstances at the trial which merit the

attention of this Court. The second set catalogued important points of law which, it

was argued, should override the accidental slip in H observing the Rules of this

Court.

As for the extraordinary circumstances at the trial, Mr Mbuya pointed out that in the

High Court Civil case No 210/89, TEL, who was the plaintiff, was ordered to file a

reply to the written statement of defence of Valambhia and also to file a written

statement of defence to the counter-claim of I Valambhia. That was to be done

1993 TLR p94

RAMADHANI JA

A by 25 January 1991 and hearing was set for 1 February 1991. However, as TEL is

registered in Ireland and has its offices there, and also because of the illness of its

Managing Director, that was not possible. Mr Mbuya said that his application for an

adjournment by a letter to the Registrar of the High Court found no purchase. His

renewed efforts on the day set for hearing were also barren of B results. The learned

Trial Judge adjourned the proceedings to 12 February 1991 for his ruling in which,

Mr Mbuya explained, he refused the application for adjournment, dismissed the suit

and granted the counter-claim. Mr Mbuya observed that the application was rejected

because of two C reasons. One, the nature of the illness of the Managing Director

was not disclosed in the medical certificate tendered. Two, Mr Mbuya complained,

the learned judge, suo motu, compared the signature on the letter attached to the

medical report, to the other signatures in other documents in D the case file and

found them different and on that basis rejected the report as a concoction. Mr Mbuya

lamented that he was not given an opportunity to explain the apparent difference. He

also argued that the learned judge ought to have granted the adjournment with costs.

Then as to the dismissal of the plaint, Mr Mbuya protested that he should have been

given an opportunity to prove E his case and likewise, he claimed, he should have

been allowed to contest the counter-claim even without filing a written statement of

defence.

On the other hand Mr Maira submitted that the application for adjournment was

resisted on two F grounds. First, the past conduct of Mr Mbuya in this litigation did

not portray him to be serious. Mr Maira cited a number of examples of this. Second,

Mr Maira said that Mr Mbuya could not even meet the challenge to produce a draft

written statement of defence awaiting the signature of the Managing G Director. Mr

Marando added that the date 1 February 1991 was not for hearing the suit and not for

praying for an adjournment. Mr Marando pointed out further that under O VIII R

11(1) of the Civil Procedure Code, 1966 (hereinafter referred to as CPC) the written

statement of defence to the counter-claim was to be filed within twenty-one days of

service which was 21 January 1991. H However, Mr Mbuya, it was contended, could

have asked for an extension of time. Mr Marando pointed out that the written

statement of defence was neither filed nor was extension of time applied for, instead

Mr Mbuya prayed for an adjournment. For failing to do one of those two things, Mr

Marando remarked, under O VIII R 14(1) of the CPC the Court was free to grant the

counter-claim or I make any other order as it deemed fit. In this case,

1993 TLR p95

RAMADHANI JA

Mr Marando said, the court allowed the counter-claim and that was after he had

prayed for that. A

Mr Marando also observed that Mr Mbuya was not in a position to prove the case for

TEL because he had told the Court that he had four to five witnesses all of whom

were in Ireland and specifically prayed for an adjournment so that the witnesses and

the Managing Director could come at the same B time to save costs.

Mr Mbuya admitted that the learned judge was entitled to know the nature of the

illness of the Managing Director and that the medical certificate was conspicuously

silent on that. At the same C time we cannot fault the learned judge in comparing

the signatures, albeit suo motu, of documents tendered in the same case. Again we

cannot fault the learned judge for refusing the prayer to adjourn which was made on

the date set for hearing, when the reason advanced was a failure to comply with the

rules. These rules are for all litigants; residents and non-residents alike. We might

have been D swayed otherwise if the refusal was to an application to extend time

within which to file a written statement of defence to the counter-claim. It beats us

why that was not done. Mr Mbuya would have been playing within the rules and not

outside them as he sought to do. We then note that Mr Mbuya did not have a single

witness to support the plaint. We also glean that he could not defend the E counterclaim.

This is because Mr Mbuya did not even have enough instructions to prepare a

draft written statement of defence. It is not surprising then that the specific prayers

for the dismissal of the plaint and the grant of the counter-claim were not challenged.

F

Now all of that has to be seen with the backdrop of the previous conduct of Mr

Mbuya in this litigation. It is on that on 19 October 1990 Mr Mbuya was granted an

adjournment he had prayed for to file an affidavit for Mr Mkatte, learned counsel,

who had acted for TEL before him. Mr Mbuya has not G refuted Mr Maira's

assertion that that affidavit has yet to be filed. Then two copies of notices of hearing

were produced. One was for a hearing before the same Rubama J on 1 December 1990

and on that Mr Mbuya endorsed: `the date is inconvenient to us'. The other was for a

hearing before the H same judge on 10 December 1990 which was again annotated

`date unsuitable because of previous engagents sic)'. Obviously the word was

intended to be `engagements'. Not even lame excuses were offered to explain the

endorsement. Denials were out of question because of signatures and his Chamber's

stamp. To crown it all, the discovery that Valambhia was not served with a copy of

notice I of

1993 TLR p96

RAMADHANI JA

A appeal, as already seen, was made on 23 April 1991 yet it took six months, until

23 October 1991, to apply for the extension of time in which to serve them. The

explanation given was that Mr Mbuya's secretary was hospitalised in various places

outside Dar es Salaam including Nairobi and that she had to swear an affidavit in

support of the application, and so the delay.

B We are far from being persuaded that there are any extraordinary circumstances

meritting the attention of this Court except perhaps a display of the lack of coming to

grips with the rules.

The second set of reasons on important points of law was largely marshalled by Dr

Ford. He started C by pointing out that courts would normally extend time

prescribed by their rules if a point of law is involved which would not be dealt with

unless time is so enlarged. Then Dr Ford gave an inventory containing seven points of

law. However, we are of the well settled opinion that only four of the seven D points

merit discussion in this ruling.

The first point of law we address ourselves to is that the Stamp Duty Act, 1972 has

been violated. Mr Mbuya at the end of the day acknowledged that the document of 10

June 1989 between Valambhia and the Ministry of Defence (MOD) is exempted from

stamp duty. As to the unilateral surrender E agreement of 4 January 1989, Mr

Mbuya, after some prevarication, stated that his instructions were that it was an

agreement and so was covered by the Stamp Duty Act. This is the document titled

`Irrecoverable Agreement' in which TEL `irrevocably, unconditionally, unilaterally'

surrendered 45% of F the proceeds of the contract it had entered with MOD to

Valambhia.

Mr Marando had two responses to that. First, he claimed that a unilateral surrender is

not an agreement so is not covered by the Stamp Duty Act. In the alternative it was

argued that the G omission to affix a duty stamp on the document can be cured by

the court ordering that to be done. Mr Marando referred us to two unreported

authorities of the High Court on this point: Abdulatiff v Saada Mohamed (1) and

Kidaha Rashid v Nasser Mohammed Mbaraka (2).

H We have no difficulties in saying that the relevant document is an agreement and

so covered by the Stamp Duty Act. Apart from the fact that the document itself is so

entitled, that is `Irrevocable Agreement', it has been signed by R John Nolan, the

Chairman and Managing Director of TEL, and by Valambhia himself. If it was truly a

unilateral surrender document then there was no need for I Valambhia to sign when

not a party to a unilateral declaration. Now, if it is an agreement then it is subject to

stamp duty.

1993 TLR p97

RAMADHANI JA

Section 46(1) of the Stamp Duty provides: A

No instrument chargeable with duty shall be admitted in evidence for any

purpose by any person having by law or consent of parties authority to receive the

evidence or shall be acted upon, registered or authenticated by any such person or by

any public officer, unless such instrument is duly stamped.' (Emphasis added.) B

Two conditions prescribed in that subsection are relevant here. These are the

admission of an unstamped document in evidence or acting upon such a document.

Now, from the record it is patently clear that Rubama J never `admitted in evidence'

the irrevocable agreement. However, a C copy of the agreement was annexed to the

written statement of defence and the counter-claim and Valambhia craved leave to

refer to it as part of the written statement of defence. As such, though the learned

Trial Judge did not mention the agreement in his ruling, the irrevocable agreement

could be taken to have been `acted upon'. For the purposes of this reference let us

assume that it was. This D offends the above quoted section.

Now, is that a vital point of law in issue to be sufficient cause for us to extend time?

Mr Marando referred us to Abdulatiff and Kidaha Rashid where it was held that an

unstamped E document was admissible provided that an order was issued that it be

stamped. In fact that is provided for by proviso (a) to s 46(1) of the Stamp Duty Act.

Admittedly this, for whatever reason, was not ordered by the learned Trial Judge.

Now, if we extend time, as it asked of us, and the appeal F comes up, what is it that

we are going to do after the hearing? The answer is obvious. We are going to do what

Rubama J ought to have done under the proviso referred to above. Now, is that a vital

point of law for our consideration? We think not. When the outcome is that well

charted out then it cannot be a vital point of law for the consideration of this Court.

G

Of course we are aware that if our assumption that the irrevocable agreement has

been `acted upon' is correct, then we have on record a document which offends s

46(1) of the Stamp Duty Act and it will continue to be so if we refuse to extend time

so that we can rectify it on appeal. However s 4693) H of the same Act says:

(3) Failure by any public officer to examine and impound any instrument as

required by this subsection (sic) shall, in no circumstances affect -

(a) any proceeding under this Act or any other written law. I

1993 TLR p98

RAMADHANI JA

A Without analysing ss (3), on the face of it, we have no doubt that it covers the

present situation where the ruling by Rubama J was made `under . . . any other

written law'. It would appear to us then that no offence is perpetuated.

B So this point of law is not such as would persuade us to extend time.

The second point of law raised was with respect to the proof of the quantum of

damages. The damages awarded have been regarded as implausible. It was also argued

that TEL was not given an opportunity to defend itself.

C On 12 February 1991 after the rejection of the application for an adjournment by

TEL, the dismissal of the plaint and granting of the counter-claim, an order was given

that the proof of the quantum was by an affidavit. It was to be filed by 5 March 1991

and mention was to be on 9 March D 1991. The orders were given in the presence of

Mr Maira and Mr Mbuya.

Valambhia duly filed his affidavit and quantum. On the date appointed for mention

Mr Mbuya was absent. So the Deputy Registrar who conducted the mention placed

the matter before Rubama J on E 19 March 1991 for the assessment of damages. On

that date, too, Mr Mbuya was absent and the ruling on damages was finally given on

22 March 1991. Again the record does show that Mr Mbuya was present.

Two things are conspicuous from the records. First, the copy of the affidavit by

Valambhia is silent F and mum on whether a copy of that was served on TEL. So

TEL was not aware of what was claimed. Then, as already said, the records are loud

and clear that Mr Mbuya was absent from the court on 9 March 1991 at the mention,

on 19 March 1991 at the assessment of damages and on 22 March 1991 when the

ruling on the assessment was delivered.

G We shall start with the second complaint that TEL was not represented in court

for the assessment. As already pointed out Mr Mbuya was aware of the date for

mention. He therefore did not need a notice of hearing from the registry. That he was

absent, he has only himself to blame. Of course, in his absence the date for the

assessment was fixed which sitting he again missed. Now, H was he to be notified of

that date either by the registry or by Valambhia? We are very quick to say no.

An eminent Chief Justice of Zanzibar, Chief Justice Law, as far back as 1939, said in

Abdulhusein Bodalbhoy v Marekwa (3):

I `In my opinion, apart from the official notice in `the Gazette' referred

1993 TLR p99

RAMADHANI JA

to, it is the duty of parties to keep themselves informed as to when their cases

will be tried.' (Emphasis added.) A

We concur with the learned Chief Justice only that instead of reference to the notice

in `the Gazette' we shall refer to the date fixed for mention. B

Now, was Mr Mbuya prevented from challenging the affidavit because of non-service

of a copy thereof? The immediate reaction is to say yes. But upon reflecting that was

not so. First, had he attended the mention on 9 March 1991 he would have

complained of the non-service. Definitely he would then have been served. But,

secondly, and this may be more vital, Mr Marando cautioned that C Mr Mbuya did

not have an automatic right of filing a counter-affidavit according to Bahati J in Air

Caterers Ltd v Air Tanzania Corporation (4). Mr Marando claimed that Mr Mbuya

had to make an application to do that. The submission was not controverted in reply.

D

So we are satisfied that the failure to be heard on the assessment was self-imposed by

Mr Mbuya and that that cannot be a point of law to enlarge time.

It was also submitted that the Tanzania Exchange Control Ordinance, Cap 294,

particularly s 5(b) E thereof, had been violated. This was the third vital point of law

involved, so it was claimed, in the intended appeal. The breach of that statutory law

was coupled with the disregard of the case law that Tanzania Courts can only enter

judgments in Tanzania Shillings and not in foreign currency as was F in this case. As

for the second criticism we were referred to the case of Continental Agencies v A C

Berrill & Co Ltd (5) in which the East African Court of Appeal upheld the then Chief

Justice of Tanzania, Georges.

Mr Marando remarked that the decision in Continental Agencies was based on the

English law as it G was then and according to the case of Manners v Pearson and Son

(6) which was cited in Continental Agencies by Mustafa JA. However, he pointed out,

the position in England has now changed as is witnessed by the Halsbury's Laws of

England 4th ed at 341. The learned advocate H went further to say that there are

certain decisions of the High Court of Tanzania which have awarded damages in

foreign currency. He cited Theodoras v Gordon (7). In that case, Mr Marando

submitted, Chua J gave judgment in pounds sterling.

It is clear that Georges CJ based his decision on the English case. Dr Ford told us that

because of the European Community the legal I

1993 TLR p100

RAMADHANI JA

A position in England has changed as borne out by Milliangos v George (8) where

damages in tort, not contract, were awarded in foreign currency. However, Dr Ford

could not contain his astonishment when the excerpt from the Halsbury's Laws of

England was read out. That para 541 reads, in relevant places, as follows:

B `The Court has power to give judgment for a sum of money expressed in

foreign currency in the case of obligations of a money character to pay foreign

currency under a contract; the proper law of which was a foreign country or where it

is the currency of the contract. . . . Where a plaintiff seeks to obtain a judgment in a

foreign currency he should C expressly state in his writ of summons that he makes

his claim for payment in a specified foreign currency and should plead the facts relied

on to support such a claim.'

Two conditions prominently stand out in that proposition of law. First, the contrast

forming the basis D of the claim must have been in foreign currency. Second, the

plaintiff, or as in this case the defendant in the counter-claim, must have specifically

prayed for relief in foreign currency while proving the basis of that prayer. We do not

need to recapitulate that both of the requirements were met in this case.

E In our opinion if the basis of the case law of Tanzania has changed then there is

absolutely no reason why the case law should not follow suit. That would have been

different if there is a statute to the contrary. We may observe here that Cap 294 is no

longer law in Tanzania. It was repealed by the F Foreign Exchange Act 1 of 1992

which came in force on 16 March 1992 per GN 37/92. The former s 5(b) which is said

to have been violated, prohibited payments within Tanzania to or for the credit of a

person resident outside Tanzania or on behalf of one resident outside Tanzania except

with the G permission of the Treasury. However, the new s 5(b) says:

`any person whether resident or not resident in the United Republic may hold

any amount of foreign currency and raw gold within the United Republic.'

H In fact Bureaux des Change have been established for transactions without

formality and secrecy has been guaranteed except by due process of law.

We are of the well considered opinion that the point of foreign exchange violation

has been overtaken by events and law. That point will only have academic interest

while this is a court of justice and not I an academic institution.

1993 TLR p101

RAMADHANI JA

Admittedly because of the doctrine of stare decisis Rubama J, as well as the other

learned judges, A were bound by the decision in Continental Agencies. But we

cannot help asking ourselves whether we will strike the Continental Agencies in view

of the present legal state, if the ruling of Rubama J comes to us on appeal. It is a

foregone conclusion that we will not. If so, then what is the vital point of law which

we shall deal with if we extend time? B

The final point of law that was propounded was that the learned Trial Judge erred in

law in ordering a third party, the Government through the Ministry of Defence, to

effect payment while not being afforded an opportunity to put up a case. Here there

are three matters. First, the moneys claimed do C not belong to the Government but

were due to be paid to TEL. The fact that the Government owed TEL some money has

been more than adequately testified to by TEL in their plaint in paras 3 to 6 and 10.

The second point is that the Government itself acknowledges having some money for

TEL. D Mr Mrema, Principle State Attorney and the Director of Civil and

International Department in the Attorney-General's Chambers, had said in Court:

`We are aware Government owed TEL certain moneys for goods delivered,

the Government has an obligation to pay E that debt.'

Lastly, the Government is aware of the dispute between TEL and Valambhia and has

agreed to assist the latter to recover what is due to him. There is the agreement of 4

January 1989 between the F Government and Valambhia to that effect. TEL has

acknowledged the existence of that agreement in para 10 of the plaint. As a matter of

fact the Government was just waiting to know whom, as between the parties, should

be paid and how much.

It is clear that the Government was not sued and did not require to defend itself and

the requirement G to pay was not prejudicial to its interests.

As stated much earlier, Dr Ford gave us a list of authorities from outside this

jurisdiction on the fact that this Court could enlarge time prescribed by our Rules if

there is a point of law involved in the H appeal. We agree with that and we have in

fact already done so a number of times. In Principal Secretary, Ministry of Defence v

D P Valambhia (9) we said `In our view when the point at issue is one alleging

illegality of the decision being challenged, the Court has a duty even if it means

extending the time for the purposes to ascertain the point and, if the alleged illegality

be established, to take I

1993 TLR p102

A appropriate measures to put the matter and the record right.' In the case before us

the points of law submitted do not, in our opinion, and as we have shown above,

succeed to put in doubt the legality of the ruling by Rubama J. They are the sort of

points of law fit to be considered in other B proceedings as was the view of the Court

of Appeal for Eastern Africa in The Commissioner of Transport v The AG of Uganda

and Another (10) which we cited in The Principal Secretary. What is glaring to the

eye here is sheer negligence of the advocate, which has often times been held not to

be sufficient reason to extend time.

C So we agree with Mfalila JA that no sufficient reason has been disclosed to extend

time and that application is rejected.

1993 TLR p102

D