Haji Associates Company (T) Ltd. & Another vs John Mlundwa [1987] TZHC 21 (6 July 1987)


  B Mwalusanya, J.: This is a suit for damages for defamation concerning a libel.  The two plaintiffs namely Haji Associates Company (T) Ltd. (1st plaintiff) and Haji s/o Mugishagwe (2nd plaintiff) are claiming general damages in the sum of Shs.1,500,000/=.
C The preliminary point raised by the defendants in their Written Statement of Defence is that the incorporation of the 1st plaintiff is null and void because the Memorandum and Articles of Association of the company were signed inter alia by two minors; and because the incorporation was obtained by false pretenses and/or fraud.
D I don't agree that the incorporation is null and void.  I stick to what I held in the case of Haji Associates Co. (T) Ltd. v Registrar of Companies Mwanza Misc. Civil Application No. 9 of 1985 (unreported) that once a certificate has been granted no one can question the regularity of incorporation.  That is the import of s. 16 of the Companies Ordinance,   E Cap. 212.  I suggested in that case following the decision of the House of Lords in Powman v Secular Society [1917] A.C. 406 at p. 439 that the only way to challenge the incorporation of a company is by way of prerogative orders, e.g., certiorari, mandamus and prohibition.  Therefore the preliminary point fails.  F
Now what are the issues to be proved to establish the tort of defamation concerning libel?  These are:-
   1.   First there should be communication to third parties.
G    2.   Does the publication or communication refer to the 1st plaintiff as well?
   3.   Whether the statement or publication is calculated to injure the reputation of another by exposing him to hatred, contempt or ridicule.
H    4.   If the communication was made while on qualified privilege then malice must be proved.
   5.   Is the defence of justification available to the defendants?
   6.   Is the defence of fair comment available to the defendants?
I The first issue as regards communication to third parties I find it uncontroverted.  The letter which defendants wrote is Exh.

A B2 in Court and clearly indicates that it was communicated to nine different people or organizations.  So I answer the first question in the affirmative.
Concerning the second issue I also answer it in the affirmative as the letter exh. B 2 is self-explanatory.  The heading of that letter reads: "Re: M/S Haji Associates Company (T) Ltd." and therefore it cannot be gainsaid that the 1st plaintiff  B was not the subject matter of that letter.
On the third issue I also answer in favour of the plaintiffs.  The publication reads:
C    It appears that Haji Mugishagwe has presented himself as the only qualified Architect in Mwanza and has a successful 'practice' in Mwanza which is illegal. He has even swindled clients by charging them up to 1000% of legal fees.  Haji's claim is for sh.588,060/40 which should also come to sh.40,000/= has reached me by coincidence from my client who has disputed his D claim.
I agree with plaintiffs' counsel Mr. Kahangwa that those words in their natural and ordinary meaning import that the   E plaintiffs are operating an illegal practice, they are swindlers and overcharging their clients.  And obviously that is a very bad reputation of the company and its Managing Director.  The publication obviously tended to lower the plaintiffs in the estimation of right-thinking members of society generally.  F
We go to the fourth issue.  Was the publication made under qualified privilege?  In my view only the communication to the Registrar of Board of Architects, Quantity Surveyors & Building Contractors was privileged because there was reciprocal interest.  I agree that the defendant as an architect and a registered member of the National Board of  G Architects, Quantity Surveyors and Building Contractors was duty bound and had an interest in informing the Board or making it aware of any practices that may not appear acceptable practices and procedures of the profession and in particular as in this matter where the issue of calculation of fees is concerned.  However that qualified privilege was  H destroyed by malice as he was reckless in his publication.  By publication of a false statement like - that the plaintiffs were operating an illegal practice obviously destroyed the qualified privilege - see Chimala Stores v Zambia - Tanzania  I Road services Ltd [1970] H.C.D. n. 232.  The plaintiffs are in fact doing their business legally.  They

A are registered and have their business licence alright.  And again the qualified privilege is destroyed because the communication was made to persons other than the Board.  That communication to unconcerned people like Town Director Bukoba or Municipal Director Mwanza was not privileged at all - see the case of Jonathan v Athuman Khalfan [1980] T.L.R. 175 by Lugakingira J.  That sufficiently answers issue number four.  B
Now issue number five says, is the defence of justification available to the defendants?  I don't think so.  As this Court stated in the case of Novati s/o Joseph v Sebastian Muzo [1978] L.R.T. n. 14 (Mfalila J.) for the defence to succeed  C the defendant must prove that the allegations were true, made in public interest and not motivated by malice.  As I have mentioned above it is not true that the plaintiffs are operating an illegal practices;  they are operating legally.  Therefore the defence of justification equally fails.
D Finally is the defence of fair comment available to the defendants?  For the defence of fair comment to succeed it should have been made in good faith and without malice upon a matter of public interest namely the professional conduct of the plaintiffs.  As I have said above the defendant in this case was motivated by malice because he was reckless in his   E language.  It was not fair comment to state that the plaintiffs operate an illegal business a fact which is not true.  I accordingly reject that defence.
In the event, I find the defendants liable.  Now to what relief are the plaintiffs entitled to?  Libel is actionable per se in that   F you don't have to prove damages.  And general damages are compensatory in nature;  they are intended to take care of the plaintiffs loss of reputation as well as to act as a solatium for mental pain and suffering.  The plaintiff's have stated that their otherwise successful business was substantially affected by that defamation.  Many potential clients began to decline   G to offer them business, e.g., Kauma as evidenced in their letter Exh. E.  And the interesting thing is that the defamatory letter was addressed mostly to the plaintiffs' clients.  The other effect of the letter was that Mwanza Municipal Council refused them a business licence for two months (see Exh. C and Exh. D) until it was clarified that the plaintiffs were in fact  H operating legally.  It is said the turnover per year of the 1st plaintiffs' company is about sh. 60,000,000/=.  The defendants themselves have conceded in their defamatory letter that plaintiffs were conducting a 'successful practice' though an illegal one.  For the reasons given, I find that a compensation of sh.1,500,000/= is a  I

A reasonable one.  I accordingly enter judgment for the plaintiffs as prayed plus costs of the suit.
Order accordingly.


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