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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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