26 August 1971

     
 

Criminal Appeal No. 25 of 1971

 
     

Court of Appeal for East Africa

     
     

A. P. Hirji & Company

 

v.

A. N. Panjwani

     
     
 

Judgment

 
     
 

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BEFORE:

VICE-PRESIDENT: Spry
JUDGES OF APPEAL: Law and Mustafa

   

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Citation:

A.P. Hirji v. Panjwani, Judgment, File No. 25 of 1971 (CAEA, Aug. 26, 1971)

Represented By:

 

Editor's Note:

Appeal from a ruling and order of the High Court of Tanzania at Dar es Salaam (Biron, J.) dated 31st May, 1971 in Civil Case No. 125 of 1970

 
     
 
 
 

JUDGMENT OF LAW, JA.

[1] This appeal rises out of a suit filed in the High Court of Tanzania in which the plaintiff (now respondent) sued the defendant (now appellant) for damages for fraudulent misrepresentations allegedly made in connection with a contract entered into between the parties. The contract was for the sale by the appellant to the respondent of the goodwill and fixtures, fittings, chattels, machinery, equipment, accessories and all other assets of the appellant's business known as "Jaffer Soap Factory".. Amongst those assets were a number of soap boxes bearing the trade mark "Simba".

[2] By clause 5 of the agreement between the parties ¬

"The purchaser shall be entitled to use the boxes and other equipment bearing the vendor's trade mark "Simba" until the same are exhausted and the vendor hereby undertakes to repay to the purchaser any sums the pur¬chaser might be called upon to pay on account of the use by the purchaser of the boxes and other equipment as stated hereinbefore."

[3] This clause clearly constitutes a contract of indemnity within sections 76 and 77 of the Law of Contract Ordinance (Cap.433). The intention of the parties was that the respondent should use the soap boxes bearing the trade mark "Simba", but that if as a result of such user he became liable to pay any sum as damages for passing-off or infringement of trade mark, he would be entitled to be indemnified by the appellant.

[4] In his plaint, the respondent pleaded amongst his particulars of false and fraudulent representations and warranties allegedly made by the appellant that the appellant had claimed to he entitled to use the trade mark "Simba"; he went on to plead that the appellant had no lawful right or title to use th3t trade mark, and that in consequence the boxes were "useless". The respondent went on to claim in para¬graph 9 of the plaint inter alia the following items of loss and damage ¬
Value of the boxes made useless as per paragraph 6………….……….shs12,162/-
Loss of profits on expected sales of Simba soap in the said boxes…….…shs42,O22/¬

[5] By consent of the parties, two issues of law arising out of the pleadings were tried first, apparently in accordance with order XIV rule 2. I say "apparently", because it is not clear from the record whether the matter Was dealt with In the High Court as a trial of preliminary issues of law under Order XIV rule 2, or as an application to strike out the plaint under Order VII rule 11, of the Civil Procedure Rules.

[6] The appeal was however argued before us by Mr. Lakha as arising out of a trial of preliminary issues of law, and no objection to this course was taken by Mr. Versi. I think we should accept the position as it was presented to us by the advocates, both of whom appeared in the court below, and which is to some extent confirmed by the wording of the formal order.

[7] The preliminary issues of law were, firstly, whether the plaint disclosed a cause of action, an issue which was decided in favour of the respondent and in respect of which no appeal has been brought. The second issue of law was whether the claim for damages in respect of the alleged uselessness of the boxes was maintainable.

[8] This issue was also decided in favour of the respondent, and forms the subject of the instant appeal. In his ruling, the learned judge gave the following reasons for his decision:-¬

"Mr. Lakha is, I think, submitting think that this part of the plantiff's claim is premature. Apart from the fact, as submitted by Mr. Versi, that the claim referable to the use of the boxes and equipment is only part of the claim, with respect, I do not agree that it is incumbent on the plaintiff to wait until he is actually mulcted and has to payout money, and then claim to be indemnified."

[9] Mr. Lakha for the appellant has appealed against this ruling. His first submission is that the learned judge misdirected himself in holding that the issue should be decided against the appellant for the reason that the claim referable to the use of the boxes was only part of the claim".

[10] Mr. Lakha points to the wording of rule 2 of Order XIV, which makes it clear that the case "or any part thereof" may be disposed of on the preliminary trial of an issue of law. I think Mr. Lakha's submission on this point is valid, but it seems to me that the learned judge's main reason for deciding the issue as he did was that he did not consider that the respondent, in respect of the user of the boxes, was bound to wait until he was actually mulcted.

[11] The question for decision in this appeal is whether the res¬pondent, in claiming damages in respect of allegedly useless boxes, has shown on the pleadings a maintainable cause of action.
Mr. Lakha submits that he has not done so. No defect is alleged in the boxes. The only reason put forward by the respondent for not using them is his contention that the appellant is not the owner of the trade mark appearing on the boxes. The respondent does not plead that any other person is the owner, or that he has been threatened with legal proceedings if he uses the boxes.

[12] In these circumstances, as the respondent's claim is based solely on the user of the boxes, Mr. Lakha submits that the only remedy in this respect open to the respondent is the one freely selected by the parties in clause 5 of their agreement, which is that if by reason of using the boxes he is put to expense) he is entitled to be indemnified.

[13] Mr. Versi for the respondent informed us that he could prove that the trade mark "Simba," was owned by a third party, and that the respondent would be in danger of being sued if he used the boxes. I do not see how we can take notice of such matters without amendment of the plaint. Preliminary points of law are argued on the basis that the facts pleaded are correct, see the observations by Sir Charles Newbold in Mukisa Biscuit Co.v west End Distributors [1969] E.A. 696 at p.70l. There is nothing in the plaint to indicate that any third party is the owner of the trademark “Simba” or that the respondent will be at the risk if he uses the boxes. If he does use the boxes, and becomes liable in damages to a third party thereby, he has his remedy under clause 5 of the agreement and can join the appellant as a party to any suit against him or otherwise claim for damages to a third party to any suit against him or otherwise claim to be indemnified. If he decides not to use the boxes, there is nothing pleaded to justify a claim for damages against the appellant in respect of that non-user. The situation which may arise in this case is expressly dealt with by the contract between the parties, and a court will not readily imply any provisions into a contract beyond those stipulated by the parties.

[14] For these reasons I agree with the submissions made on behalf of the appellant according to the facts pleaded in the plaint, the claims made in paragraph 9 items (a) and (b) of the plaint have not been shown to be maintainable. For all I know, the respondent may well be able to use the boxes for the purpose for which he has bought them, without objection from anyone. Certainly nothing to the contrary is stated in the plaint.

[15] I would accordingly allow this appeal, with costs, and Very paragraph 2 of the order appealed from by substituting the following¬ "2. The suit is not maintainable to the extent of the plaintiff's claim as pleaded in items (a) and (b) of paragraph 9 of the plaint,"

[16] I would not interfere with the learned judge's order that the costs of the proceedings before him be costs in the cause.

SPRY, V-P

[17] I have had the advantage of reading in draft the judgment of Law, J.A. I entirely agree with him on the substantial issue, that is, that the fifth paragraph of the contract between the parties was one of indemnity and that the respondent can only use on it in respect of loss actually suffered by him.He cannot anticipate an objection that has not been made to his use of the boxes.

[18] I differ, with respect, on what may seem a very technical point. Mr. Lakha based his arguments on the proposition that the decision against which he was appealing was a decision made under Order XIV, rule 2, on preliminary issues of law and Mr. Versi did not appear to contest it, although it was questioned by the Court.

[19] I cannot accept that that was the position. The case was set down for hearing “on preliminary points only". When it came on for hearing, the learned judge's first note was "Hearing set down for argument on a preliminary point." Mr. Lakha is then recorded as having opened with the words "My submission is that the plaint discloses no cause of action."

[20] He ended his address, according to the judge's notes - "So submit that the plaint does not disclose a reasonable cause of action - so the claim must fail." Mr. Versi is recorded as having said "Submit claim does .disclose a cause of action and ought not to be rejected…" At no stage was any issue framed. From this, it seems to me clear that what was being argued was a submission that the plaint ought to be rejected under Order VII, rule 11.

[21] The learned judge referred to the question before him as a preliminary objection that the claim as pleaded was not maintai¬nable in law and concluded by saying that it was in effect a submission that the plaint disclosed no cause of action. He described his decision as a ruling, on which an order was extracted. Had issues been tried, a judgment would have been delivered, giving rise to a preliminary decree.

[22] Finally, Mr. Lakha applied for, and was granted, leave to appeal, which was unnecessary if he was appealing from a preliminary decree. It is, of course true that we have to look at the substance of the decision and, if it was really a judgment, it would be immaterial that it was described as a ruling, but I can see nothing in the decision itself to suggest that it is other than what it purports to be.

[23] Obviously a submission that a plaint discloses no cause of action must fail when two or more causes of action are pleaded and anyone of them is maintainable. Here the learned judge rejected the objection raised against the claim contained in paragraph 10 of the plaint (a submission that the pleading was defective as regards a claim for moneys had and received) and there has been no appeal against that part of his decision.

[24] It follows that the plaint could not properly have been rejected. It is possible that this was a preliminary objection of the kind referred to by Sir Charles Newbold, P. in Mukisa Biscuit

[25] Manufaoturing Co. Ltd. v. West End Distributors Ltd.[I969] E.A. 696, not based on any provision in the rules, but I do not think this would lead to any different result. Indeed, even if Mr. Lakha is right as to the nature of the proceedings, I think the result would be the same.

[26] If this was a trial of issues under Order XIV, rule 2, the first question for consideration would be what were the issues. As the record stands, I think the answer must be that there was only one issue, that is, whether or not the plaint disclosed a cause of action.

[27] It was argued on two grounds, relating to two different claims, and to succeed on the issue, the appellant had to succeed on both grounds. These difficulties would be avoided if, whenever applications are made or objections taken, it were made clear by the party applying or taking the objection exactly what order he was seeking and under what rule he was applying.

[28] I would add that if I am right in thinking that the learned judge refused to reject the plaint under Order VII, rule 11, or if he was dealing with a preliminary objection, I think this appeal was incompetent.

[29] As, however, this question was not canvassed or argued before us, I prefer not to express a firm opinion on it and it would involve unnecessary expense to no practical purpose to invite the advocates concerned to address us on the point.

[30] I would have dismissed the appeal, but as the other members of the Court are of a different opinion, there will be an order in the terms proposed by Law, J.A.

MUSTAFA,JA.

[31] I have had the advantage of reading in draft the judgments prepared by Spry, V.-P., and Law, J.A. Clause 5 of the agreement between the parties was clearly one of indemnity and as the respondent had not claimed he had suffered any actual loss, his claim on the basis of possible anticipatory loss was not maintainable. The appeal was argued before us on the basis that the learned judge had erred in his decision on a point of law under the provisions of Order XIV rule 2 of the Civil Procedure Rules. At the High Court trial, it was not clear whether the matter was dealt with exclusively as a trial of preliminary issues of law or as an application to strike out the plaint under Order VII rule 11.

[32] It seems to me both these points were taken and argued indiscriminately at the trial.

[33] In these circumstances I agree with Law, J.A. that we should accept the position adopted by both the advocates who argued the appeal before us and deal with the appeal as an appeal from a decision on a preliminary point of law under the provisions of Order XIV rule 2.With great respect, I cannot agree with the view of the learned V-P, that in effect this was only an appeal from an unsuccessful application to strike out a plaint under Order VII rule 11, from which probably no appeal lies.

[34] I therefore agree with the judgment of Law, J.A. that the appeal be allowed and I concur with the order proposed by him.
 

 
 

 

 
     

 

 

 

 

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