MECHANICAL INSTALLATION AND ENGINEERING CO. LTD v ABUBAKAR NDENZA MAPORO AND ANOTHER 1987 TLR 44 (CA)

 

MECHANICAL INSTALLATION AND ENGINEERING CO. LTD v ABUBAKAR NDENZA MAPORO AND ANOTHER 1987 TLR 44 (CA)

Court Court of Appeal of Tanzania - Dar Es Salaam

Judge Omar JA

7 August, 1987

Flynote

Company Law - Appeals - Competence to - Whether court order to wind up a company makes it incompetent to appeal. Civil Practice and Procedure - Appeals - Failure to obtain leave of the High Court - S.5(1) of C the Appellate Jurisdiction Act, 1979 - Rule 44 of the Court of Appeal Rules - Whether makes the appeal incompetent - Delay in filing of notice of appeal - Effect.

Court of Appeal Rules - Appeals - Failure to obtain leave of the High Court - Effect - Rule 44 of the Court of Appeal Rules.

Court of Appeal Rules - Notice of appeal - Delay in filing notice of appeal - Effect.

Civil Practice and Procedure - Notice of motion - Delay in filing notice of appeal - Effect.

-Headnote

This is an appeal against a winding up order of the High Court dated 4th November, 1986. Before this appeal was heard Counsel for the respondents raised a preliminary objection contending that a company becomes incompetent to appeal when a winding up order is given and that appellants failed to obtain High Court leave for such appeal and had delayed to file Notice of Appeal.

Held: (i) Even where a liquidator has been appointed, the company is competent to appeal;

(ii) failure to obtain High Court leave and failure to file Notice of Appeal render G the appeal incompetent.

Case Information

Appeal dismissed.

Cases referred to:

1. In re Union Accident Insurance Co. [1972] 1 WLR 640

2. Re Mawcon Ltd [1969] 1 WLR 72

3. Fowler v Bread Patent Night Light Co [1983]

4. Re Diamond Fuel [1979] 13 Ch.D 400

Rutashobya for appellants

Balonzi, for respondents

Judgment

Omar, J.A.: This is an appeal by Mechanical Installations and Engineering Company Limited against the winding up order of the High Court dated 4th November, 1986. Before this appeal was heard, Mr Balonzi, learned Counsel for the respondents (Mr. B Maporo the Creditor and Mr. Lwiza the Liquidator) raised a preliminary objection. Firstly that the company is incompetent to appeal because with the winding up the directors of the company are dismissed. He quoted Palmer's Company Law, twenty third edition - page 1138 para 85/28:

The winding up order has the further effect of terminating the employment of servants and other agents of the company. The directors are similarly dismissed and their powers to act on behalf of the company ceases.

Three cases were cited by Palmer to illustrate the meaning of the ceasure of the powers of directors. They are:

1. In re Union Accident Insurance Co. [1972] 1 WLR 640

2. Re Mawcon Ltd [1969] 1 WLR 72

3. Fowler v Bread Patent Night Light Co. [1983] E

In re Union Insurance it was held that, notwithstanding the appointment of a provisional liquidator, on a winding up, the Board of Directors of a Company retained the residual powers to instruct solicitor and Counsel to oppose the petition and to appeal against the order and also to act in interlocutory proceedings including a motion to discharge the provisional liquidator.

In Re Mawcon Ltd. [1969] 1 WLR 72 it was held that the order of the court which the provisional liquidator had obtained, authorising the directors to continue the company's business was an effective appointment. The appointment was for some definite duration and subject to the directors making some undertakings.

Mr. Rutashobya, learned counsel for the appellant, in reply to Mr. Balonzi's submission that directors' functions and powers cease with the winding up order, quoted the following case from Palmer's Company Law - Re Diamond Fuel (1979) 13 Ch.D 400 C.A in which it was held that although a liquidator had been appointed, the company was not precluded from appealing. Where a Company also appeals from a winding up order without joining any person responsible for costs, an application for security for costs will be entertained.

This was very effective reply to Mr Balonzi's assertion that in the circumstances of this A case under which the winding up order was made, the company is incompetent to appeal. We are satisfied the company can appeal, provided security for costs is given. The second was that as this suit was instituted under the Companies Ordinance, the appellant would have to obtain leave of the High Court, which was not obtained, under section 5(1)(c) of the Appellate Jurisdiction Act and rule 44 of the Court of Appeal Rules.

Thirdly, the Notice of Appeal was irregular as it was directed at Mr. Lwiza, the liquidator. Later Mr. Balonzi conceded that he received this notice as the advocate of the Creditor, Mr. Maporo, and he was also defending the liquidator by the way of safeguarding the interests of his client Mr. Maporo. But he added, the notice of appeal was filed very late, three months after the order of winding up, and there is no indication that extension of time to file it was applied for. Mr. Rutashobya in his reply stated that Mr. Balonzi must make an application for objection to the filing of appeal, supported by affidavit according to the first schedule of the Rules. He quoted rules 46(1), 82 and 100 of the Court of Appeal Rules.

Therefore, Mr Rutashobya continued, Mr Balonzi's application for the appeal to be stuck out should not be entertained, and rule 3(1) and rule 106 of the Court of Appeal Rules which Mr. Balonzi sought to rely on came too late in the day. Mr Rutashobya further explained that he did not seek leave of the Court to lodge the appeal because he did not F know that he has to send that the previous advocate who handles this case had applied to the court to have the expert winding up order set aside instead of seeking leave to appeal against the said order. It is apparent that both Counsel have not proceeded with due diligence in the presentation of this matter. Mr. Rutashobya was late in filing the notice of appeal and did not apply for extension of time to file the notice, nor has he made any application to the High Court to raise the preliminary objection. Mr. Balonzi failed to give reasonable notice of the objection to the court and to the other party in compliance with Rule 100 and Rule 46 of the Rules. Although under rules 3(1) and 100 of the Rules we have discretion to adjourn the matter to enable Mr. Balonzi to file the appropriate notice in respect of the preliminary objection, we consider that is not a fit case for the exercise of that discretion. The delay in the filing of notice of appeal and the absence of any application to extend the time for filing of the notice of appeal and the absence of any application to extend the time of filing of the notice, and , worse still, the absence of leave to appeal by the High court in the cause are matters which clearly render the intended appeal incompetent.

In which case it would be futile to adjourn to accommodate Mr. Balonzi. These flaws were so fundamental that even if they were not raised by Mr. Balonzi we would have taken cognizance of them and strike out the appeal as being incompetent, which we hereby do. Costs to the respondent. In perusing the proceedings, we could not help noticing certain features which appear to us to be irregular. The application to have Mr. Lwiza appointed a provisional liquidator had been dismissed by Kazimoto, J. and, going by the record, there was no subsequent application for the appointment of a liquidator. More so in view of Mr. Balonzi's concession that the winding up order could have been made without necessary at the same time appointing a liquidator, in which event the official receiver would have stepped in.

Another startling feature is that Mr. Balonzi is shown to be counsel for both respondents, the liquidator and the creditor, whose interests are not necessarily identical. Furthermore, a liquidator is also duty- bound to look after the interests of the company ordered to be wound up. It is unusual for counsel to act for both a Creditor and the Liquidator. In our view, therefore, Mr. Balonzi's involvement with both respondents was quite improper; to say the least.

 Appeal dismissed.

1987 TLR p47