The State Trading Corporation v. Tanganyika Fire Appliance Co. Civ. Case 133-D-70; 19/10/70; Onyiuke J.

The State Trading Corporation v. Tanganyika Fire Appliance Co. Civ. Case 133-D-70; 19/10/70; Onyiuke  J.

Wigglesworth and Co. Ltd. whose assets and liabilities have now been taken over by the plaintiff, The State Trading Corporation, had entered into an agreement with the defendant that in consideration of the defendant ceasing to sell locally manufactured fire fighting appliances and other equipment, Wigglesworth would pay him a Commission on all fire fighting equipment which they sold. The commission earned by the defendant was to be maintained by the parties and from time to time an account was to be made of the dealings between the parties by settling them off against one another. The defendant contended that the promissory notes sued upon were drawn in respect of various purchases of goods made by it from the plaintiff in pursuance of the above agreement. Defendant therefore applied under Order 35 R. 3 for unconditional leave to defend claiming a set off. In a similar suit, ([1970] H.C.D. 320) Georges C. J. refused to grant unconditional leave to defend.

            Held: (1) “No new facts have been adduced in the present application. With respect, I agree with that Ruling and feel bound by it. I may only add that Order 35 Rule 3 (a) gives the right to defend where the affidavits disclose such facts as would make it incumbent on the holder to prove consideration where the suit is not a bill of exchange or promissory notes. (See section 30 (2) of the Bills of Exchange Ordinance Cap. 2i5). Rule 3 (b) of the same Order 35 provides that the Court shall give a right to defend if the affidavits disclose such facts as the Court may deem sufficient to support the application. The power conferred on the court by this sub rule (Rule 3 (1) (b) can only be exercised judicially. I am of the view that in so far as Rule 3 (1) (b) applies to bills of exchange or promissory notes the facts disclosed must amount to a defence under the Bills of Exchange Ordinance. It has been held in an English case that in an action between immediate parties to a bill of exchange the matters relied upon for leave to defend should afford a defence under the Bills of Exchange Acts, in such cases the court treats “the execution of a bill of exchange either as analogous to a payment of cash or as amounting to an independent contract within the wider contract in pursuance of which it was executed and not dependent as regards its enforcement on due performance of the latter”. JAMES LAMONT & LTD v. HYLAND LD. (1950) 1 K.B.  585 at Para 591. I do not think that the facts disclosed in the defendant’s affidavit impugn the title of the plaintiff to the promissory notes. The defendant delivered the promissory notes to the plaintiff unconditionally for the purpose of goods’ made by the defendant from the plaintiff. (See paragraph (6) of he defendant’s affidavit). The defendant may well have a good counter claim or set off but the point remains that the plaintiff is entitled to have judgment for the amount claimed in the promissory notes (see NEWBOLD. P. in CAMILLE v. MERALI (1966) E.A. 411 at p.                             ).”                                                             

(2) “There will be judgment for the plaintiff against the defendant for Shs. 44,000/- with costs to be taxed. Execution of this judgment will be stayed until 19^th November, 1970. if the defendant files a suit on or before that date to enforce his right to commission and credit arising out of the dealings between both parties and/or for damages for any breach of agreement between the parties the stay will continue until the final determination there of with liberty to either party to apply.”