TELFORD GEORGES

A.P. Hirji & Co. v. A.N. Panjwani (1970) HCD 269

Civ. Case; 94-D-70; 12/8/70; Georges, C.J.

This was an application for unconditional leave to defend. The plaintiff sued on 9 Promissory Notes falling due on various dates for a sum totaling Shs. 26,000/- all of which had been dishonoured on presentation. The affidavit in support of the application for leave to defend was sworn to by Hussein Moledina Jaffer. He described himself as a former partner of the defendant A. N. Panjwani in the business known as Jaffer Soap Factory and at the time of the suit a shareholder and director in Jaffer Soap Factory (Tanzania) Ltd. a limited liability company incorporated in Tanzania in which the defendant is his fellow shareholder. Paragraph 2 of the affidavit recited that the defendant was then in Kampala, Uganda, undergoing medical treatment. The affidavit set out that the Promissory Notes sued on were given in payment of the purchase price of a business known as Jaffer Soap Factory sold by the plaintiff to the defendant. In paragraph 5 the deponent stated that in order to induce the defendant to make the said bills the plaintiff falsely and fraudulently represented orally to the defendant and warranted certain things which representations were false. However, the defendant continued to be in occupation of the premises and was apparently operating as a soap manufacturer there. The Counsel for the plaintiff argued inter alia that under Order 35. R. 3 an affidavit supporting a leave to defend must be sworn by the defendant himself or his duly constituted attorney; that there was nothing in the affidavit to show that the deponent had been authorised by the defendant to make it and in any case the affidavit did not disclose a defence since it involved the setting up of an oral contract which appeared to contradict the terms of the written agreement subsequently signed by the parties.

 Held: 

(1) “I can see nothing in the language of the rule itself which makes it necessary that the defendant should himself be the deponent. Had it been the intention that there should be so, one would have expected to see added after the word affidavit the words sworn to by the defendant. There is no good reason why such a gloss should be added to the section”. “The affidavit sets out a sufficient number of facts from which a clear inference can be drawn that the deponent was authorised to swear on behalf of the defendant. He is a former partner in the business which has now been transferred to a limited liability company. He is a shareholder in that company and co-director of the defendant. The business they operate is the business the purchase price of which is the subject matter of the suit. The connection is close enough to support an inference of authority in the absence of any evidence to the contrary”. 

(2) “As I have indicated the main plank of the defence is an allegation of fraudulent oral representation made in order to induce the defendant to enter into the contract. It is clear from paragraph 8 of the affidavit that this allegation has been made by the deponent on information given to him by the defendant. It is true that in paragraph I the deponent also states that he is personally conversant with the facts of the case, but since there is no statement in the affidavit indicating that he was present during the course of negotiations. I can only infer that his only source of knowledge as to fraudulent oral representation Was information from the defendant It appears to me that the whole purpose of Order 35 R. 3 is to compel defendant to set out his defence on oath. If he is able to evade this responsibility by allowing someone else to swear the affidavit in support of the application setting out information obtained from his, then the sanction of the oath which is clearly intended to bar frivolous and false defences would be completely removed. Where, as in this case, the allegation is one of fraud the necessity for n affidavit from a person able himself to substantiate that allegation seems even more vital”. “For reasons which will appear later I do not think that I ought to give leave to defend in this case, but had I thought that I should, it would have been necessary to grant an adjournment and give leave to the defendant to file a supplementary affidavit so that the position could be regularized.” 

(3) “The (other) ground of objection was that the affidavit in fact, even if taken as sound, did not set up a defence to the action but rather set up matters which could be the basis of a counter-claim for damages and no more. The damages which the defendant has suffered by reason of the alleged fraudulent representation were not in any way quantified. They would have to be assessed. As I have indicated the agreement itself was made in April 1969, and payments were made under it as late as September 1969. The defendant made no efforts to file suit to have the contract rescinded. He is still in occupation of the premises carrying on business with the assets which he obtained under the agreement. To ask the plaintiff, therefore, to wait for judgment on his promissory notes while there is an investigation as to what damages, if any, may be due to the defendant, would not be reasonable. Accordingly the application for leave to defend is refused and there will be judgment for the plaintiff in the sum claimed. Execution, however, will be stayed until 31^st August, 1970. if the defendant by then has filed suit for damages for the alleged fraudulent false representation the stay will continue until the final hearing and determination for the suit.” 

(4) “The question as to whether or not oral evidence may be admitted to vary the terms of a written agreement is one of some complexity. In May cases some evidence may be necessary before this issue can itself be determined. I would myself prefer to hold that final decision of such an issue should not e reached on an application for leave to defend but rather that leave should be granted and the question of the admissibility of the evidence determined at the trial. A defendant ought not to be shut out of his right to a defence except in the clearest circumstances. But as I have already indicated this matter does not directly arise since in any event I do not think that the defendant has made out his defence in this case.” 

(5) Application dismissed.