Dar es Salaam. The legal tussle between the National Bureau of Statistics (NBS) and the National Bank of Commerce (NBC) over the alleged fraudulent transfer of Sh466.8 million from the latter’s account without authorisation seems to be far from over.
Although the High Court had struck out case filed by NBS, which accused the bank of authorising suspicious cash withdrawals of its accounts, the Court of Appeal has recently reinstated the case, saying the High Court erred in striking out the suit.
Lady Justice Stella Mugasha struck out the suit in May 2011 after agreeing with NBC that the life span of the suit had expired.
The case was assigned to speed track 2 which is reserved for cases considered by the judge or magistrate to be normal cases capable of being concluded within a period not exceeding twelve months.
The judge was convinced that the speed track to the case, a system designed to ensure speedy disposal of case, had already lapsed and that NBS did not seek extension of the speed track efore expiry.
But Court of Appeal Justices---Shaban Lila, Lugano Mwandambo and Rehema Kerefu---said the striking out of the case was against the law. They ordered that the case file be remitted to the trial court to proceed with the hearing.
“We have no hesitation to hold that the learned judge (trial judge) strayed into an error to strike out the suit because there is no provision in the CPC (Civil Procedure Code) authorising such a course of action.
“The action she took was contrary to the dictates of the law. Instead, she ought to have condemned the party who had contributed towards the delay which led to the lapse of the speed track to pay cost,” said the judges.
Who authorised withdrawal?
The dispute between NBS, the government agency responsible for compiling and analysing economic and social statistics started in 2005 when NBS realised suspicious cash transfer from its accounts with NBC.
The banker-customer relationship between NBS and NBC started in 2000 when the agency opened and operated collection and expenditure accounts at NBC’s corporate branch, Dar es Salaam.
NBS claimed to have started noticing, on several occasions, differences between the balance in bank statement and the actual balance in its books of accounts.
The agency then communicated the anomaly to the bank which initially confirmed the problem but attributed it to technical errors on their part and promised to rectify.
But later, NBS claimed that NBC made a U-turn and started linking the transfer of funds to fraud by some NBS officials.
This NBC’s response irked NBS which brought a suit against the bank 2005 and sought redress. The institution sought declaration that NBC authorised withdrawal of Sh466 million from its accounts without authorisation.
It also asked the court to declare the bank did not exercise vigilance, diligence and care in handling its accounts and the refund of Sh466.
NBS had also sough orders that NBC pay them Sh608 million in costs, damages and loss they incurred in obtaining alternative source of funding and costs of paying an advocated as a result of what it described as blatant and negligent acts of the bank.
NBC strongly disputed the claims and immediately applied and granted a permission to join one, Eva Shoo, in the case. The bank claimed she was legally liable and contributed in full of the amount withdrawn and all other claims of the NBS.
When called for defence, Ms Shoo flatly denied signing for endorsement of any of the cheaques involving withdrawal of money from NBS accounts.
Initially, on 11/09/2006 the case was assigned for Speed Track Two but upon realizing the speed track had expired before the case was concluded, an order to reschedule the case was made and the case was assigned speed track Four.
Speed Track Four is reserved for cases considered by a judge or magistrate to be special and need to be concluded within a period not exceeding twenty-four months.
The case was initially presided over by Judge John Utamwa but was later taken over by Lady Justice Stella Mugasha. Having noted that the speed track had already lapsed, the judge invited counsels of the parties to address the court on the issue of expiry of speed track.
After hearing their submission, the judge struck out the case, saying the arrangements were not introduced for fun or as decoration to the CPC.
She based her decision on Order VIII A of the Civil Procedure Code which she said was to ensure speedy disposal of cases.
NBS protest
NBS protested the decision and lodged an appeal in the Court of Appeal, arguing the judge erred in striking out the suit due to the expiry of the speed track.
They argued that Order VIII of the Civil Procedure Code which governs the speed track arrangement imposed costs as the highest penalty when the speed track of the case expires.
“It was an error of the trial judge to import her own conviction in total disregard of the statutory provisions governing expiry of speed track,” argued NBS lawyer.
The agency further argued that the judge erred by failing to interpret the import of Order VIIIA of the CPC which did not intend striking out of the cases rather to have proper and efficient way in the administration of judicial activities.
NBS was represented by advocate Edward Mwakingwe while NBC and Ms Shoo were represented by Joseph Nuwamanya and Mr Mashaka Mfala respectively.
It was their argument that even where no extension of speed track is sought by either party and granted, the party which delay finalisation of a case within scheduled speed track will only be condemned to pay costs to the other party.
Court reverse decision
The Court of Appeal judge started by citing Order VIIIA Rule 4 of the CPC provides that no party to the case shall reschedule time frame set by the court for hearing of the case unless the court is satisfied that such change is necessary in the interest of justice.
According to the Order, the party in favour of the departure or amendment shall bear the costs, unless the court directs otherwise.
The judges said in the light of Order VIIIA Rule 4 of the CPC, the spirit embraced in assigning a suit to a certain speed track is only to facilitate the expeditious disposal and management of the case.
“It is thus not expected that failure to adhere to a scheduled speed track will have serious consequences of having a suit struck out,” said the judges, adding:
“Instead, judicial officer presiding over the suit is enjoined to ensure that substantive justice is done to the parties by affording them opportunity to be heard and the matter to be determined on merit,”
The judges also said Order VIIIA did not directly impose any legal consequence in the event the scheduled speed track expires.
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