Aquatech Limited & another Vs. Moivaro Investment & Trading Company Limited & 4 others (Civil Case No 16 of 2022) [2023] TZHC 22596 (7 November 2023)

Key Facts

Transaction Type

Issues

• The Defendants alleged the plaint violated Order VII Rule 1(e) of the Civil Procedure Code (Cap 33 R.E 2019) by omitting the exact date of cause of action accrual. The court ruled this factual omission does not render the plaint incompetent.
• The court assessed whether the suit was time-barred under the Law of Limitation Act (Cap 89 R.E 2019) for being 'hopelessly time barred' by section 3(1) and item 7 of the schedule. The judge ruled the Plaintiffs' suit is not time-barred as the cause of action accrued in 2018 when their names were excluded from the register of members.
• The Defendants argued the suit was premature under the Companies Act (No 12 of 2002). The court found no merit, as the Plaintiffs' claim focused on breach of contract, not procedural requirements under the Act.
• The court evaluated whether the Plaintiffs had standing to claim monies payable to PW1 and Breesaap. It concluded the Plaintiffs' interest in the share transfer agreement and their role as shareholders/directors granted them locus standi under equity principles.
• The Defendants claimed the Plaintiffs could not sue on an agreement they were not direct parties to. The court found the Plaintiffs' role as directors and shareholders, and their inclusion in the agreement via abbreviations (e.g., PWI, Breesaap), provided sufficient standing.
• The Defendants argued the agreement was void under the Law of Contract Act (Cap 345 R.E 2019) for uncertainty and improper execution. The court rejected this, as the Plaintiffs' claim focused on breach, not the agreement's enforceability.
• The Defendants contended the suit should be under the Companies Act (section 121). The court affirmed its jurisdiction over the breach of contract claim, as the remedies sought are civil in nature.
• The Defendants claimed the court was functus officio regarding the share transfer's validity. The court clarified that functus officio applies only when a decision has been communicated, which had not occurred here.
• The Defendants argued the Plaintiffs lack a cause of action against the 1st and 5th Defendants, who were not parties to the initial contract. The court dismissed this, finding the Plaintiffs' involvement in the share transfer agreement and subsequent financial statements established a valid cause of action.
• The final issue addressed whether the court had jurisdiction to handle the breach of contract claim instead of the Companies Act. The court confirmed its authority, as the Plaintiffs' relief (damages) aligns with civil procedures.
• The court examined whether the Plaintiffs were estopped by the previous judgment in Misc. Civil Cause No. 1 of 2019. It concluded the issues in the current suit (breach of contract) differ from the prior case (unfair prejudice), making estoppel inapplicable.

Holdings

Legal Principles

• The court rejected the estoppel argument, determining that the issues in the current case differ from those in the previous ruling (Misc. Civil Cause No. 1 of 2019). The doctrine of estoppel was found inapplicable as the parties and facts in issue were not identical to the prior case.
• The court ruled against the functus officio claim, clarifying that a court is functus officio only after a conclusive decision. The prior case (Misc. Civil Cause No. 1 of 2019) did not preclude this suit as the issues remained unresolved.
• The court held that the absence of an exact date for the cause of action does not invalidate the plaint, as it pertains to factual evidence under the burden of proof. Preliminary objections cannot rely on factual issues requiring evidence.
• The court dismissed the res judicata objection, noting that the current suit's focus on breach of contract differs from the prior case's issue of unfair prejudice. The previous ruling did not conclusively determine the present matter.
• The court addressed locus standi, affirming the plaintiffs' standing based on their interest in the share transfer agreement and subsequent breach. The legal relationship and interest in the subject matter were sufficient to establish standing.

Precedent Name

• Cecilia Joachim Ngowi Vs. Thomas Kiwale
• Eshikael Makere vs. Tanzania Telecommunication Co. Ltd and another
• Kigoma Ujiji Municipal Council Vs. Ulimwengu Rashid t/a Ujiji Mark Foundation
• Fortunatus Lwanyatika Masha and another Vs Claver Motors Limited
• Luhumbo Investment Ltd Vs. National Bank of Commerce Limited and 2 others
• CRDB (1996) Ltd Vs. Boniface Chimya
• Mukisa Biscuits Manufacturing Co. Ltd Vs. West End Distributors Ltd
• Jangid Global FZC Vs. Jangid Plaza Limited
• The Attorney General Vs. The Malawi Congress Party and another
• Issa Athuman Tojo Vs. The Republic
• Lujuna Shubi Ballonzi Vs. registered Trustees of Chama cha Mapinduzi
• Bibi Kisoko Medard Vs. Minister for Lands housing and Urban Development and another
• Parvis Gulamai
• Mohamed Enterprises (T) Ltd Vs Masoud Mohamed Nasser

Cited Statute

• Companies Act, No 12 of 2002
• Civil Procedure Code Cap 33 R.E 2019
• Law of Limitation Act Cap 89 R.E 2019

Judge Name

Passage Text

• In the current case, the issue for consideration is whether the Plaintiffs have interest in the subject matter for them to be considered to have locus standi to sue the Defendants... Their interest is much associated with the purported share Transfer agreement...
• Since the date of breach is also considered the date to when the party became aware of the breach, it is without doubt that in this matter the cause of action arose in 2018 when they noted that their names were excluded in the register of members. Exclusion of names is the breach referred thus, 2018 is the period the Plaintiffs became aware of the breach.
• In the upshot, in considering all what had been stated above, all preliminary points of objection raised by the counsel for the Defendants are devoid of merit hence, overruled. The matter is to be determined on merit. Costs shall follow the events.