Auto Garage Ltd Ords v. Motokov., Civ. App. 22-D-71; E. A. C. A. 9/9/71; Spry, V. P., Law and Mustafa, JJ. A.

Auto Garage Ltd Ords v. Motokov., Civ. App. 22-D-71; E. A. C. A. 9/9/71; Spry, V. P., Law and Mustafa, JJ. A.

The proceedings arose out of a contract between Motokov, a body incorporated in Czechoslovakia and the 1^st. appellant, Auto Garage Ltd., a company incorporated in Tanzania, for the supply of motor vehicles. Motokov drew some 35 bills of exchange in Czechoslovakia on auto Garage Ltd., in favour of Statni banka ceskoslovenska a parastatal bank, or order. These were accepted by auto Garage Ltd. and endorsed by way of guarantee by the 2^nd and 3^rd. appellants. Statni banka indorsed them over to the National and Grindlays Bank Ltd., Dar es Salaam, for collection but they were dishonoured on presentation. Motokov filed a claim in the High Court for the amount of the bills, interest, charges and costs. The statement of defence contained, inter alia, an express averment that “the plaintiff is not entitled to bring the action as they are not the holders in due course of the bills”. Eventually after various interlocutory proceedings the plaintiff (respondent) applied for leave to amend the plaint in order to insert as an alternative in the pleading “a claim for the price of goods sold and delivered, with interest and expenses”. The appellant raised two fundamental issues: (1) if the plaint disclosed no cause of action under Order VII, rule II,

it could not be amended: (2) in the alternative, if there was power to amend, as the exercise of the power would allow a new cause of action after the expiration of the period of limitation, it ought not to be allowed. The trial Judge decided issure No. 1 in the affirmative but proceeding to allow the amendement.

            Held: (Spry V. P.): (1) “Order VII rule II, ………… so far as it is relevant to these proceedings, it reads as follows – ‘II. The plaint shall be rejected in the following cases: - (a) where it does not disclose a cause of action…’ The provision that a plaint “shall” be rejected appears to be mandatory and it was held to be so by this Court in Hasmani v. National Bank of India Ltd. (1937) 4 E. A. C. A. 55. This decision was expressly upheld in Price v. Kelsall [1957] E. A. 752 at page 763 and the same conclusion was reached, without reference to the earlier authorities, in Sullivan v. Alimohamed Osman [1959] E. A. 239 at page 243.” (2) “The meaning of the words ‘disclose a cause of action’ were first considered in Corbellini v. Twentsche Overseas Trading Co. Ltd. (1933) 1 T. L. R. (R) 483, when in a very short judgment, Sir Joseph Sheridan, C. J., after referring to the failure of the plaintiff to plead a certain material fact, said – “in the absence of the essential pleading to which I have referred, there is no cause of action.” This decision was referred to with approval in Hasmani’s case. This was a suit on a dishonoured bill of exchange but the plaint filed to aver notice of dishonour.” (3) “On the next question, whether a plaint which does not disclose a cause of action can be amended, Sir Joseph Sheridan in Corbellini’s case said – “there is no cause of action and nothing to amend.” This was quoted with approval by Wilson, J. in Hasmani’s case, while Law, C. J. said that the terms of Order VII, rule II (a) – ‘do not give a Court any discretion to allow an amendment.’”” His Lordship then went on to state that the cases cited above “is the main stream of authorities, but there are two apparently diverging side streams” these are central District Maize Millers Assc. V. Maciel & Co. Ltd. (1944) 6 U. L. R. 130 and Gupta v. Bhamra [1965] E. A. 439. He submitted that those decisions “were mistaken”. Lake Motors Ltd. v. Overseas Motor Transport (T) Ltd. [1959] E. A. 603 and Amin El critical Services v. Ashok Theatres Ltd. [1960] E. A. 298 are distinguishable. He concluded: “I respectfully agree, also with the judgment of Sir Joseph Sherdan in Corbellini’s case. What he was saying was, in effect, that where a plaint fails to disclose a cause of action, it is not a plaint at all and you cannot amend a nullity. That must, in my view, be correct.” (4) “There is a long line of East African cases to the effect that discretionary powers should not be exercised so as to defeat limitation. This has arisen particularly in relation to the exercise of the inherent powers of the court (Mehta v. Shah [1965] E. A. 321; Adonia v. Mutekanga [1970] E. A. 429) but I think exactly the same principles apply whenever the court has a judicial discretion. As I understand the position, there is no absolute rule preventing the exercise of a discretionary power so as to defeat limitation, but his

will be done only in exceptional circumstances.” (5) Appeal allowed, Law J. A., concurred. Mustafa J. A. would allow the amendment and dissented from the decision to allow the appeal.