STANBIC BANK T LTD VS BOAZ SAIMON ILOMO COMM CASE NO

1

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA

COMMERCIAL DIVISION

AT PAR ES SALAAM COMMERCIAL CASE NO. 68 OF 2023 STANBIC BANK TANZANIA LIMITED....................................... PLAINTIFF

VERSUS BOAZ SAIMON ILOMO................................................................. DEFENDANT AND BOAZ SAIMON ILOMO....................................................... COUNTER CLAIMANT

VERSUS STANBIC BANK TANZANIA LIMITED........................ 1st COUNTER DEFENDANT YELLA HAWONGA............... ...................................... 2nd COUNTER DEFENDANT

JUDGMENT March 7th, 2024 & May 31st, 2024 Morris, J Lenders and borrowers' initial meetings are oftentimes over a cup of coffee. When objectives of the business relationships created by such meetings are unsuccessful, the otherwise parties' boardroom agenda items escalate into courtroom issues. This case is an archetypal of such state of affairs. The parties in this case are suing one another. The rivalry is knitted in cross-allegations that each opposite party breached the loan facility 2 agreements between them. Hence, the suit by the plaintiff meets the defendant's cross-suit. Stanbic Bank Tanzania Limited (the plaintiff - 1st counter defendant; or lending plaintiff) alleges that Boaz Simon Homo (the defendant - counter claimant; or borrowing defendant) is in default to repay the loan amount to the tune of Tshs 754,793,054.88 as at March 20th, 2023. On his part, the defendant - counter claimant claims that the former delayed to disburse the loan to him and also mismanaged his account thereby causing him substantial loss. However, the 2nd counter defendant is impleaded herein on an allegation that he wrongly advised Mr. Homo that disbursement of the loan would be timely; following which advice the latter ordered and part- paid for the merchandise from China. But payout was allegedly delayed thereby causing the borrowing defendant to lose the stated down payment and the

intended business as a whole. The genesis of this case dates back June 7th, 2022. The defendant­ counter claimant secured a two-tier loan facility from the plaintiff-1st counter defendant on such date. The total amount borrowed by him was Tshs 750,000,000/- comprising of Tshs 350 million and Tshs 400 million for 3 Business Revolving Short Term Loan (BRSTL) and Business Term Loan (BTL) facilities respectively. While Tshs 400m/- was for repayment of the loan which Mr. Boaz Homo had earlier on secured from Equity Bank Tanzania Ltd (Equity); Tshs 350m/- was to cater for his business capital to purchase stock of garments (jeans) from China. The total loan was secured by a mortgage over Plot No. 547 Block "B" Kinyerezi, Ilala - Dar es Salaam under Certificate of Title No. 166679 (elsewhere, the mortgaged property). One of the terms of the BTL facility (for garment business) was that the money borrowed by the defendant - counter claimant was payable directly to the supplier of garments by the lending plaintiff. However, the borrowing defendant was required to supply the invoice for the goods to the former. Further, 80% of the invoice amount was payable by the lending plaintiff (the bank) leaving 20% thereof to be picked by the borrowing defendant (Mr. Homo). While the bank contends that it followed all banking rules and procedures, Mr. Homo refutes such allegations and hits back

that no money was paid to his garment suppliers by the subject plaintiff - 1st counter defendant. 4 Reliefs sought by the parties are rather diverse. Primarily, the plaintiff- 1st counter defendant prays for an order of payment of Tshs 754,793,054/88; 18% interest from the day of default to judgement; 10% default interest from judgment to full payment; court rate interest; costs of the suit; and other discretionary remedies by the court. Nonetheless, the defendant-turn- counter claimant seeks the orders for: dismissal of the main suit; cancellation of the interest on the loan amount; repayment of the principal sum of the term loan only; payment of general damages; reimbursement of USD 85,000.00 he deposited with the garment supplier; costs of the suit; and any other reliefs per the court's whims. Unsurprisingly, each side denies the opposite party's allegations constituting the respective reliefs. The above rival claims by the parties led to the framing of issues below; i) Whether the banking facility letters dated June 7th, 2022 were breached by either party. ii) Whether in executing SWIFT transfers to the Chinese garment supplier either party was in breach of the banker-customer relationship. 5 iii) Whether there was wrong advice given by the 2nd defendant in the counter claim to the plaintiff (counter claimant) regarding loan approval in December, 2021. iv) To what reliefs

are parties entitled. For the trial, each party enjoyed the legal representation. Advocate Albert Lerna acted for both the plaintiff- 1st counter defendant and the 2nd counter defendant. The defendant-counter claimant had Mr. Daniel Ngudungi, learned advocate, on his side. The plaintiff- 1st counter defendant paraded three (3) witnesses including the 2nd counter defendant; while the defendant- counter claimant called and relied on the testimony of one (1) witness. Respectively, Messrs. Baila S. Baila, Ibrahim Musyani and Yelia Hawonga testified as PW1, PW2 and PW3. For the defence against the main suit, Boaz Simon Homo appeared as DW1. All the above witnesses filed their respective statements which were adopted by the Court as evidence in chief in purview of rules 48, 49 and 50 of the High Court (Commercial Division) Procedure Rules, 2012. Further, the witnesses were subjected to cross and re-examination sessions 6 each. Parties also tendered several exhibits. The plaintiff - 1st counter defendant tendered a total of seven (7) exhibits; while the defendant - counter claimant caused eight (8) exhibits to be admitted in evidence. That is, exhibits P1-P7 and D1-D8 correspondingly. Largely, every witness who appeared in Court recapped the general contents of the parties7 respective pleadings. That is, avowals in their witness statements; and oral testimonies during cross and

re-examination proceedings, were consistent that own side of the suit was entitled to victory. PW1 (plaintiff's recovery team leader), PW2 and PW3 (both plaintiff's business bankers) were steady, inter alia, that; the defendant- counter claimant secured the loan in two segments: for offsetting his previous loan with Equity (Tshs. 400m/-) and for purchase of garments from China (Tshs 350m/-). Furthermore, the troika averred that, the money in the foregoing loan facilities was disbursed in appropriate channels as covenanted in the respective agreements (exhibit Pl). To them, the defendant - counter claimant intentionally defaulted to repay the loan amount and should, thus, be condemned accordingly. In specific aspects, PW3 (2nd counter defendant) 7 testified that he did not advise Mr. Homo (borrowing defendant) about internal affairs regarding loan processes nor did he promise him of the claimed fast-tracked disbursement of money. He instead stood firm that he merely urged him not to commit himself to or engage garment suppliers and third parties before the funds were actually released by the lending plaintiff. In addition, PW2's testimony was that, in line with the loan facility agreements (Pl); the defendant - counter claimant supplied the plaintiff - 1st counter defendant with the supplier's invoice (DI) from Chen Mei Quin. That, the said invoice was for USD 190,000.00 payable

by the plaintiff and defendant on 80:20 per cent ratio. Moreover, he reiterated that the plaintiff - 1st counter defendant settled his proportion amounting to USD 127,000.00 directly to the supplier on August 2nd 2022. He also maintained that, if the supplier did not comply with the contract between him and the defendant - counter claimant, the latter has a recourse against his supplier. To counter the foregoing averments, DW1 (defendant-counter claimant) acknowledged that he applied for two loans from the plaintiff-l51 counter defendant in December 2021. However, he was hasty to deny the allegations that he breached the facility agreements. He also stated that, 8 basing on the advice from PW3 (2nd counter defendant) regarding disbursement of the money to him being expedited; he not only ordered the garments from China but also deposited 20% of the amount in the invoice of the supplier (Canaan Export Cloth Market of China). That is, he paid the subject supplier a total of USD 85,000.00 but the plaintiff - 1st counter defendant did not settle his 80% balance as covenanted. Consequently, that supplier did not deliver the garments despite pocketing the deposited down payment. DW 1 as well testified that, after a 9-month delay in disbursing the loan amount by the plaintiff - 1st counter defendant, he (DW1) was advised further by PW3 (2nd counter defendant) to purchase the garments

from the second supplier (Chen Mei Quin). He also averred that, such advice and/or recommendation notwithstanding, the plaintiff - 1st counter defendant did not pay his 80% share of the invoice amount (DI) totally. To DW1, the unyielding behaviour of the latter was a total breach of the facility agreements. It was DWl's additional testimony that, the non-payment by the plaintiff-1st counter defendant aside, he had signed the Telegraphic Transfer 9 Forms (TTFs - exhibit D6) authorising such payment; paid his 20% share of the invoice amount to the supplier; and his account was debited by the plaintiff-1st counter defendant with the money meant to cater for the 80% of the supplier's invoice amount. He further stated that the plaintiff-l51 counter defendant breached the facility agreements; banking rules and procedure; and wrongly advised him, the combination of which illegalities caused him significant losses. Further to the rival testimonies summarised above, on March 7th, 2024; the Court's leave was successfully sought for the parties to file respective written closing speeches. Both sides lodged the submissions per the filing schedule. The Court appreciates the expressive submissions received from each counsel. Predictably, the said submissions abridge strengths and outline weaknesses of own and opposite cases respectively. This general comment notwithstanding, I will summarise

the basic tenets of such submissions. Further, the Court will refer to them in reasoning for or against the framed issues where necessary. The first issue herein, involves the Court to interrogate if the banking facility letters dated June 7th, 2022 were breached by either party above. 10 them. Apparently, the agreements were tendered in evidence, admitted and collectively marked as exhibit Pl. From the outset, parties are not at loggerheads in regard to existence, validity and bindingness of the said agreements. For this issue, the plaintiff - 1st counter defendant submitted that the defendant - counter claimant is not specifically disputing being given two loan facilities by the former. To him, the disbursement of the money in favour of the defendant - counter claimant was completed on 14.06.2022 for the Term Loan (BTL) while the Business Revolving Short Term Loan (BRSTL) was credited to the borrowing defendant's account in two phases: on 01.08.2022 and 12.08.2022 respectively. Further, the plaintiff - 1st counter defendant argued that according to the exhibits, specifically the facility agreements (Pl); notice of default (P3); bank statement (P4); Mr. Homo's letter of 29.12.2022 (D3); Mr. Homo's letter of 15.09.2022 (D4) and Mr. Homo's letter of 05.12.2022 (D5) together with paragraphs 7 and 8 of PWl's witness statement; the defendant-counter claimant refused or neglected

to pay the instalments as contracted. 11 It was the plaintiff-l51 counter defendant's further submission that the money for the BRSTL facility was paid directly to the defendant's garments supplier in line with clause 4.6 of the facility agreement (exhibit Pl). Thus, according to him, the defendant-counter claimant was not supposed to access such fund howsoever. He reinforced his argument hereof by referring to witness statements of PW3 (para 10); PW2 (para 7); TTFs (P6); emails of 26.7.2022 (P7); invoice from Chen Mei Qin (DI); and Mr. Homo's letter of 15.09.2022 [D4 (page 2 para 3)]. Regarding the defendant-counter claimant's allegations that the amount of money paid to the supplier (if any) was different from the figure in the facility agreement (Pl); the plaintiff-l54 counter defendant submitted that this point should not be considered in favour of the former party on three reasons. One, the defendant-counter claimant did not plead this fact anyhow. Two, while testifying DW1 did not give any evidence to prove such allegations. Three, the difference in figures between the disbursed amount and the facility letter (Pl) was justifiable. Accordingly, he argued that clause 5.4 of the said letter allowed him to subject the disbursement to charges, fees and deductions. Further, the contract was concluded on the basis that 12 the lender-plaintiff would pay 80% of the invoice (DI)

leaving 20% thereof as the borrowing-defendant's responsibility. He also buttressed his stance that, not only parties are bound by their pleadings; but also, whoever alleges on existence or otherwise of a fact in his favour must prove. He cited section 110 of the Evidence Act, Cap. 6 R.E. 2022; and Lupiana Michael Lupiana v Mkombozi Commercial Bank, Civ. App. No. 207 of 2023 (unreported) to drive his point home. On such foundation, he prayed that the first issue should be resolved by finding the defendant-counter claimant liable for the breach of the banking facility agreements hereof. The foregoing submissions are incongruent with the defendant­ counter claimant's arguments. To him, it is the plaintiff- 1st counter defendant who breached the agreements between them (Pl). In this connection, he argued that terms of the contract were that the latter would pay 80% of the invoice amount but he not only failed to do so in time, but also the disbursement made 9 months later involved less amount than the money he had instructed the lender plaintiff to pay through the TTFs (D6). 13 Amplifying the foregoing contention, the defendant-counter claimant stated that the breach by the plaintiff-l51 counter defendant is fourfold. To begin with, instead of paying Tshs 400m/-, the latter paid Tshs 389,871,455.53 which not only was short by Tshs 10,128,544/47; but also, no explanation was given

to the borrower defendant (see D7 page 5). Further, instead of paying Tshs 350m/- as contained in the agreement (Pl), the plaintiff-l51 counter defendant disbursed Tshs 344,750,000/- leaving the whereabouts of Tshs 5,250,000/- unknown to the borrowing defendant (per D7 page 7). Moreover, to him, while the defendant-counter claimant is cognisant of the deductions under clauses 4.4 and 5.4 of Pl. However, the requisites of applying such terms were not satisfied by the plaintiff-lst counter defendant. That is, for any deductions to be done under the stated clauses, the borrowing defendant must be served with a prior notice. The lender plaintiff did not give such prior notice to the borrower defendant. Lastly, the plaintiff-1st counter defendant covenanted to pay 80% of the invoice amount (working to USD 150,000) but ended paying USD 145,000 to the supplier, if at all he did. That is according to SWIFT confirmation and emails between 14 the lending plaintiff and the garments supplier (exhibits P6 and P7 respectively). To the defendant-counter claimant, such reduction was not justified in law. Consequently, the defendant-counter claimant reiterated that the first issue should be determined against the plaintiff-lst counter defendant. Dispassionately, I have considered the parties' pleadings, evidence and submissions. While resolving the first issue, emphasis is cast on the

strength of evidence and supporting arguments from each side. In civil suits, the rule says: the matter should be resolved on the basis of balance/preponderance of probability. See, for example, Jasson Samson Rweikiza v Novatus Rwechungura Nkwama, Civ. Appeal No. 305 of 2020 (unreported). From the pleadings, evidence and submissions herein, it is noticeable that each party admits a number of facts. I will state them in the interest of clarity. One, that the plaintiff-l5* counter defendant and the defendant­ counter claimant executed two loan facilities for Tshs. 750m/- (exhibit Pl). Two, the money in the loan facilities were payable directly to Equity and the garments suppliers respectively. Three, the garment supplier's invoice was to be procured by the borrowing defendant and served to the lending 15 plaintiff. Four, the invoice amount was payable by the parties on 80%:20% proportions by the lending plaintiff: borrowing defendant respectively. Five, the 80% was payable by the former directly to the supplier of stock. Six, the defendant - counter claimant had an outstanding loan with Equity which was to be settled by the plaintiff- 1st counter defendant using money from one of the facilities. The undisputed aspects above notwithstanding, parties are locking horns on a number of facets regarding the first issue. While the plaintiff-l51 counter defendant alleges that the

defendant-counter claimant breached the loan facilities, the latter contends that it is the lending plaintiff who should be held as the breacher of the subject contract. That is, both parties appreciate that the loan facilities were breached but each points a blaming finger at the opposite party. The task to the court, therefore, remains to be the determination of the person who breached the subject facilities between the lender and borrower herein. For the above question to be answered satisfactorily, the Court must analyse the way parties performed or failed to comply with the fundamental terms of the loan facilities. One of the prime terms for the plaintiff- 1st 16 counter defendant was to disburse the loan amounts to the defendant­ counter claimant. The evidence marshalled for the main suit were that the former adequately performed his duty hereof. For instance, statements of PW1 (paras 18 and 19); PW2 (paras 9 and 10); and PW3 (para 6) are consistent that the plaintiff-1st counter defendant disbursed the loan amounts as, and in the mode, stated in the facilities. The defendant-counter claimant denies such payments. I will start from the foregoing rivalry. From the record, there are plentiful cursors on the disbursements being made by the plaintiff- 1st counter defendant. First, throughout his pleadings, the defendant-counter claimant does not allege that his loan with

Equity was not settled by the plainitiff-lst counter defendant. Further, he did not plead or lead evidence to prove that Equity still demands repayment of his loan with such bank. Without overemphasis, law makes it a specific principle that parties are bound by own pleadings. Reference is made to Salim SaidMtomekela vMohamed Abdallah Mohamed, CoA Civil Appeal No. 149 of 2019; Scan Tan Tour v The Catholic Diocese of Mbuiu, CoA Civil Appeal No. 78 of 2012; Lawrance Surumbu Tara k The Hon. Attorney Genera!and2 Others, 17 CoA Civil Appeal No. 56 of 2012; (all unreported); and James Funke Ngwagilo v Attorney Genera! [2004] TLR 161. Secondly, according to the bank statement for the defendant-counter claimant's account no.9120002476256 (D7); on 14.06.2022 the plaintiff-l51 counter defendant credited the former with Tshs 389,871,455.53 for repayment of the Equity loan (debt). This position is also bolstered by plaintiff- 1st. ■counter defendant's witnesses and DW1 (during cross examination). Thirdly, DW1 testified that he part-paid a portion of his liability to the plaintiff-l5* counter defendant in this connection. In precise terms, he averred that the lending plaintiff paid Tshs 389m/- to Equity out of which he settled Tshs 125m/- such that his outstanding debt hereof was Tshs 264m/- only. Hence, I subscribe to the arguments by the counsel for the plaintiff- 1st counter defendant

that the defendant - counter claimant's obligation with Equity was settled by the plaintiff-lst counter claimant as covenanted in the respective loan facility. Fourthly, regarding disbursement of the loan for purchasing the garments stock from China (BRSTL facility), the defendant-counter 18 claimant's refutation is somewhat clearer and specific. On the one hand, he maintains that no money was paid to the supplier; and that if there were any disbursements (which he disputes), the same were delayed thereby amounting to breach of contract and causing him significant losses. Out of the foregoing rebuff, arise three critical questions: was the money paid to the garments supplier or not; if yes, was it paid in time; and if the first two queries are in disaffirmation, did such anomaly amount to breach of the loan facility by the lending plaintiff? The first question is rather technical to determine. According to DW1 (para 9 of his statement; on being cross examined; and exhibit D4), he opted for the second supplier (Chen Mei Quin) after the first one (Canaan) refused to supply him with goods due to non-payment of the 80% of the purchase price by the plaintiff-l51 counter defendant. For clarity, part of D4 was authored by the defendant-counter claimant stating that: "Kutokana na tofauti ziiizojitokeza na supplier wangu wa kwanza niiiiazimika kutafuta supplier mwingine ndipo

tarehe 2/8/2022 bankiHHpa fedha kwa supplier mwingine ambaye sijawahi fanya nae kazi kwa ajiii ya mzigo mwingine kutoka kwa supplier buya.. "(bolding for emphasis). 19 From the excerpt above, it is the former who sanctioned Chen Mei Quin (second supplier) to be paid by the lending plaintiff. Further, he gave the supplier's invoice (DI) to the lending plaintiff for payment. Accordingly, he signed TTFs (D6) authorising payment to that supplier. Moreover, on 26.07.2022 (per exhibit P7), the plaintiff-l51 counter defendant inquired from the supplier if the lodged invoice (DI) originated from him to which enquiry the response was in affirmative the next day (27.07.2022). The said supplier also acknowledged payment of USD 87,000.00 by the defendant-counter claimant; and confirming that the due balance was USD 150,000.00 due from the plaintiff- 1st counter defendant (P7). Likewise, on 27.09.2022, the supplier confirmed that he was exporting part of the consignment to the defendant-counter claimant and the other portion would follow in due course (P7). In addition, according to exhibit P6 (SWIFT Transfer confirmation) the said supplier was paid USD 127,000.00 and USD 18,500.00 on 02.08.2022 and 15.08.2022 respectively. Besides, exhibit D7 (bank statement) indicates that on 01.08.2022 and 12.08.2022 the defendant-counter claimant's account was credited with a total of

Tshs 344,750,000/-. According to PW2, this amount was also debited for onward 20 disbursement to the garment supplier. Further, under paragraph 3(iv) of the written statement of defence, the defendant- counter claimant avers partly that the plaintiff- 1st counter defendant "deposited the loan into the defendant's account no. 91200002476254". Paragraph 11 of the defence reiterates such asseveration. The Court holds that the foregoing payments were made to the supplier because his particulars on the invoice supplied by the defendant­ counter claimant (DI) especially the SWIFT code (CZCBCN2X); account no (15606142110300015446); and beneficiary name/holder (Chen Mei Quin) were identical to the corresponding details in the SWIFT transfer confirmation (P6); and telegraphic transfer forms (TTFs - exhibit D6). Additionally, the record does not hold it evidence that the defendant-counter claimant alleges that the supplier complained against non-payment; or that the goods were not supplied by the said Chen Mei Quin for want of 80% payment from the plaintiff-l51 counter defendant; or that he sued the supplier for non-delivery of the goods; or that he procured him to come and testify in his favour. 21 Fifthly, the defendant-counter claimant duly acknowledges being indebted. In such connection, he repeatedly wrote to the plaintiff-1st counter defendant pleading for the repayment grace

period; and/or relaxation of payment schedules; and/or restructuring of the loan. In this connection, the Court refers to DWl's witness statement (paragraph 9); and his letters to the lending plaintiff (exhibits D3, D4 and D5 respectively). Identically, the heading of the subject letters run as "maombi ya nyongeza ya muda wa marejesho ya mkopo" Indeed, the whole texts of the letters above did not bear complaints about disbursement of different amounts of money from the figures reflected in the loan facilities. Hence, the Court views the allegations that the subject difference constituted breach of the facility agreements as an afterthought strategy on the part of the borrowing defendant. The remaining two enquiries are easy to answer. Regarding the delay in disbursement, I have keenly passed through the loan facility agreements (Pl). Not a single term was spotted as fixing the time-line within which to disburse the loans. In law, the written terms in the contract cannot be modified or replaced by oral covenants. See, for example, Simon Kichete 22 vAveline M. KHawe, Civ. App. No. 160 of 2018; and Joseph Mbwiliza r Kobwa Mohamed Lyeseelo Msukuma & Others, Civ. App. No. 227 of 2019 (both unreported). Henceforth, in the absence of the special term which fixes the disbursement date, the allegations that the loan amounts were paid inordinately late remain vague and unsubstantiated.

Consequently, payments made by the plaintiff-l^ counter defendant in June and August 2022 respectively do not, in my view, constitute breach of the facility letters by the lending plaintiff. I so hold. In view of the findings above, the Court is set to consider if the defendant-counter claimant repaid the whole loan. The plaintiff-l^ counter defendant contends that the defendant - counter claimant is in default to pay his debt. The latter, however, does not plead that he settled the same. Nevertheless, during cross examination, the defendant- counter claimant (DW1) stated that he part-paid the debt thereby leaving Tshs 264m/- as outstanding amount for the Equity loan which was repaid for and on his behalf by the lending plaintiff. Still, there was no specific proof of when, how and to whom such money was paid. 23 Be that as it may, assuming the foregoing part-payment was done; a number of queries emerge. For instance, pursuant to the facility agreements (Pl); the tenors for the BRSTL (loan for the garment stock) and BTL (Equity­ repayment loan) were 12 months and 29 months respectively. Nevertheless, payment was subdivided in monthly installments. Pursuant to the default notice of 21.09.2022 (P3), the borrowing defendant was put on notice that his loans were not being serviced thereby holding him in default of the facility agreements. Instead of responding that he was not in

any due arrears, he conceded and requested for the lending plaintiff's indulgence (exhibits D3, D4 and D5 respectively). In addition to the above, through his pleadings (in the counter claim, to be exact) the defendant- counter claimant is making it categorical in the prayer (iv) that the Court should give "an order allowing the plaintiff to pay principal sum only for facility agreement (Term Loan) dated 7th June 2022". Without repeating myself, such prayer equates him to acknowledging the loan from the lending plaintiff; avoiding to state the exact quantum notwithstanding. In addition, according to clause 10 of the facility 24 agreements (Pl), the events of default include the borrower's failure to pay any sum due to the bank. Consequently, the first issue is answered positively. That is, the banking facility letters dated June 7th, 2022 were breached. For avoidance of doubt in this regard, the same were breached by the defendant-counter claimant for failure to repay the loan amount therein. The Court now turns to determine the second issue. This issue surveys whether in executing the SWIFT transfers to a Chinese garments supplier, either party was in breach of the banker-customer relationship. Parties' advocates submitted on this issue at length too. In brief, the plaintiff- 1st counter defendant submitted that the way the transfers were handled, none of the parties breached

the banker-customer relationship. He contended that PW2 consistently testified that he did not fill the TTFs (D6). To him, DW1 also failed to substantiate that PW2 really filled the forms for him. And that, not only did he fail to provide a forensic report showing that the signature on the forms is not his; but also, he clearly admitted during cross examination that by signing them, he ratified the contents therein even if the TTFs (D6) were filled by another person. On 25 such foundation, the plaintiff-l51 counter defendant concluded that the banker-customer relationship was not breached by anyone howsoever. On his part, the defendant-counter claimant contended that the plaintiff- 1st counter defendant breached the relationship under reference. He linked such conclusion with the nature of the subject relationship. To him, the banker-customer relationship is fiduciary one whereby the former keeps in trust the customer-beneficiary's property. Accordingly, the banker who has an upper hand on the latter's money, the onus of proving the security of such money lies on him. Back to this case, the defendant-counter claimant argued that, the incidences of the breach of such relationship are pentad. That is, the plaintiff- 1st defendant did not: prove disappearance of the defendant-counter claimant's money stated in the first issue; get the defendant-counter « withdraw any of his money;

disburse any money to claimant's instruction to the garments supplier despite the defendant-counter claimant's instructions vide the TTFs; pay the exact amount of money authorised by the defendant­ counter claimant (i.e. he authorised USD 190,000 but only USD 145,000 was 26 paid); and supply the TTFs which corresponds with the paid sum (USD 145,000). He concluded by submitting that the plaintiff- 1st counter defendant was supposed to prove that all the above transactions were both sanctioned by the defendant-counter claimant and that he strictly complied with such sanction. His authorities in this regard include sections 110 and 111 of the Law of Evidence /1c^sljpra); Bareiia Karangirangi v Asteria Nyaiwambwa, Civ. Appeal No 237 of 2017; AG and Others v Eiigi Edward Massawe and Others, Civ. Appeal No. 86 of 2022; Ikizu Secondary Schoo! v Sarawe Village, Civ. Appeal No. 163 of 2016; Anthony M. Masanga v Penina @Mama Ngesi and Another, Civ. Appeal No. 118 of 2014 (all unreported). Prior to addressing the present issue, I prefer to preface the underlying fundamentals of banking and financial transactions involving transfer of money internationally. Literally, the international banking community exchanges financial transactions electronically. This modal is through coordinated networks of financial institutions and the international banking community. The most common method of

electronic transfer of funds is the 27 telegraphic transfer (popularly known by its acronym TT or colloquially 'wire transfer'). Depending on the region in which the system operates, TT requires coordination through clearing houses or specially organised societies. For instance, overseas wire transactions involving UK use Clearing House Automated Payment System (CHAPS); and other international transfers in other countries depend on the Society for Worldwide Interbank Financial Telecommunications (SWIFT) network. The latter is the mode which is subject of this suit. For security reasons SWIFT transfers pass through ascertainable procedures. The basic ones are; one, the sender (paying customer) provides the receiver (payee)'s necessary information to his bank including the latter's name, bank name and SWIFT code, account number, amount payable and the currency. By this step, the sender instructs his bank to pay the receiver­ payee accordingly. Two, his bank verifies such information through internal mechanisms. Three, the client's instructions to his bank are complied with by his bank authorising transfer of funds to the payee. If the money needs 28 to be converted into the client's currency of choice, his bank does so before sanctioning the transfer. Four, the corresponding banks' network (SWIFT) facilitates movements of transfer instructions up to the receiver (payee)'s bank.

Five, the bank to which the money is sent, credits the receiver (payee)'s account with the money transferred by the sender (payer)'s counterpart bank. Six and finally, the payment confirmation is sent to the sender (payer) from the payee's bank through the reverse network processes. That is how the international money transfer through SWIFT simply works. The above background is given with the view to making it clear in resolving the parties' dispute under the second issue. To sufficiently answer if the bank-customer relationship was breached in this matter, the court makes three related inquiries: (1) what were the instructions of the client to the bank in this transaction; (2) did the lending plaintiff implement them? (3) if he did not oblige, did the omission lead to breach of bank-customer relationship? For the first limb of enquiry, the obvious reference relates to the client's instructions to the bank for payment of 80% of the invoice amount to the garments' supplier. 29 Parties in this case did not join issue regarding the defendant-counter claimant filling in the TTFs - exhibit D6. If anything, the borrowing defendant alleged that the forms were filled in by staff of the bank for him to sign only. However, at the same time, the former states that the lending plaintiff did not execute his instructions he gave in the forms he filled. This blow-hot- and-cold strategy is

somewhat weird. That view aside, as alluded to earlier, the mere filling of the TTFs signifies that the bank was duly instructed to pay the suppliers in line with the details filled in the subject TTFs (D6). However, something unusual in this matter is that the defendant­ counter claimant filled the said transfer forms more than once. That is, at first, he authorised payment of USD 190,000.00; and later on, USD 110,000.00. Though no express proof justifying the adopted approach, in my view, the bank was duly instructed by the borrowing defendant to specifically pay his China-based supplier. Regarding the plaintiff-counter defendant implementing his client's instructions the Court finds that the response to such enquiry is twofold. To begin with, yes it did. The plaintiff-bank paid the garments' supplier who was identified to him by the defendant- counter claimant. I have already analysed 30 this aspect densely while examining the first issue above. Nevertheless, the amount specifically filled in the TTFs was not disbursed to the subject supplier. Instead of USD 190,000.00 per D6; the plaintiff-counter defendant paid USD 145,500.00 in two installments (USD 127,000.00 and 18,500.00 respectively). Hence, as correctly argued by the counsel for the defendant­ counter claimant, the amount paid by the plaintiff- 1st counter defendant does not correlate with exhibit D6. If the lending

plaintiff paid on the basis of USD 190,000.00 the balance was not paid; and there is no authorisation of the borrowing defendant for allocation of such balance. All the same, there is no proof that the banker's client sanctioned the reduction or over disbursement. Further, I have taken time to read the said TTFs (D6). None of its contents indicates that the sender's authorisation was subject to certain deductions. Thus, from such anomaly, the specific instructions of the bank customer were not implemented by his bank. Consequently, I subscribe to the arguments and authorities cited by the counsel for the defendant­ counter claimant that banks must adhere to specific instructions of their clients so as to uphold the sanctity of the fiducial relationship between them. 31 The Court's holding in the cases of Ecobank (T) Ltd v Future Trading Co. Ltd, Civ. Appeal No. 82 of 2019; and International Commercial Bank Ltd v Jadecam Real Estate Ltd, Civ. Appeal No. 446 of 2020 (both unreported) are accordingly followed. The above general conclusion notwithstanding, the Court moves to examine if such anomaly constituted breach of the duty under analysis. It is a settled rule of practice that banking transactions are subject to charges and fees. However, the rates applicable must be made known to the banking customer. In the present case, though such conditions were not reflected in the

forms; plaintiff-l51 counter defendant (PW2 and his counsel's submissions) argued that the payment was subject to deductions permitted under Clauses 5.4 of the facility agreement (Pl). Furthermore, it was argued by the counsel for the plaintiff-1st counter defendant that the transactions hereof were subject to changes in the Tshs- USD exchange rates. In law, submissions from the bar are not evidence \Bish International B.V. & Rudolf Teurnis Van Winkelhof v Charles Yaw Sarkodie & Bish Tanzania Ltd, Land Case No. 9 of 2006; (unreported)]. In this connection however; I am led to consider such 32 argument on two bases. First, I take judicial notice under sections 58 and 59 of the Evidence Act, ,(s^that international trade operates on the basis of foreign currencies. That is why, the defendant-counter claimant authorised payment vide TTFs in USD while his account with the plaintiff -1st counter defendant was in Tshs. Logically, through his authority to pay in USD was an implied consent to the bank to convert his money into the indicated currency. Consequently, his money was to be converted from Tshs into USD accordingly before the SWIFT transfer. Second, Clause 3.2 of the facility agreement (Pl), is categorical that "any risk inherent in the exchange rate fluctuations in respect of the Facilities shall be borne by the borrower". That term by itself, it is evident that parties were

bound by the contractual term that exchange rates would apply to the payment transactions between the lending bank and the garments' supplier. However, as there is no pleadings and/or evidence that the defendant­ counter claimant was made aware of the total deductions and/or exchange rate applied at the time of effecting the payment, I hold that the bank breached its duty to communicate with its customer accordingly; and or act according to his exact instructions thereby prejudice his money kept in the 33 form of trust by the plaintiff-1st counter defendant. This conclusion, therefore, discharges the second issue accordingly. The third issue is whether there was wrong advice given by the 2nd defendant in the counter claim to the plaintiff regarding loan approval in December, 2021. The plaintiff-1st counter defendant blatantly refuted DWl's assertions that he was advised by the 2nd counter defendant (PW3). According to the former, the defendant-counter claimant did not prove existence of any formal agreement between him and PW3. Further, in reinforcing this argument, it was submitted by the plaintiff-l51 counter defendant that PW3 testified (paragraph 9 of his statement) that he never advised the subject defendant howsoever. Nevertheless, the defendant-counter claimant insisted that DWl's testimony (paragraph 7 of his statement) proves that he banked on the advice given to him

by PW3 which trust was abused by the plaintiff-l51 counter defendant. Further, such breach in the form of lateness in disbursement of the respective proportion of the purchase price, was considered as the cause of loss to him. 34 My immediate investigation on the rival arguments above lands me one obvious remark: it is the word of one party against the opposite's. To determine which of the two is to be used in resolving the current issue, the Court is guided by the standard of proof in civil cases. Indeed, civil suits are determined on the basis of balance of probability as this Court remarked earlier in this judgment. Further, an examination of a couple of related aspects to the above standard of proof is necessary here. Firstly, the defendant-counter claimant did not lead evidence to the effect that he had an agreement with the 2nd- counter defendant for the latter to advise him on matters subject of this case. That is, there is no proof that the said defendant was a duly registered consultant and failed in his duty after being engaged by the defendant­ counter claimant. Secondly, though there is no dispute that the 2nd- counter defendant handled the defendant-counter claimant's application for the loan facilities; it was not proved that the former was officially mandated by his employer (plaintiff-l51 counter defendant) to give advice to the defendant­ counter claimant in so

far as the timeframe of loan disbursements is 35 concerned. In other words, none of the tendered exhibits from the bank to the borrowing defendant bear such powers to the 2nd counter defendant. Thirdly, the kind of advice given to the defendant-counter claimant was not proved specifically. For instance, in his counter claim (para 9); and witness statement (paras 6, 7 and 8), borrowing defendant/DWl states that he was advised/promised by the 2nd counter defendant that the loans would be approved by December 2021. But there is no proof of the medium through which such advice was given. If it was vide written document; or telephone conversations; or messages; the corresponding document(s); or recorded voice notes; or print-out(s) were not exhibited in Court. In my unflustered evaluation of the foregoing parties' rival allegations, the line of defence by the 2nd counter defendant is more plausible than that of the plaintiff in the counter claim. Perchance, let me expound the justifications for the foregoing conclusion. It is evident that the defendant counter claimant alleges (para 9 of the counter claim) that the bank breached its promise and trust by its failure to approve the facility (as early as December 2021). However, such pleadings (and later in evidence) do not establish any link between the purported advice by the 2nd counter defendant 36 and the plaintiff-l51 counter

defendant. For instance, there is no formal communication or proof or contractual term that the lending plaintiff committed itself to disburse the funds at that hoped-for time. The defendant-counter claimant was thus duty bound to specify in the pleading the nature of advice, the legal mandate of the adviser, the time of breach of such duty on the party of the adviser, et cetera, et ceteraX It is a sound rule that pleadings must be precise. The justifications of this rationale are so obvious. One, pleadings demarcate the existence and extent of disputes. Two, pleadings assist courts to gauge if they are seized with requisite jurisdiction. Three, through pleadings, the courts draw issues for determination. Thus, contentions in the evidence and/or submissions cannot override the parties' pleadings. Four, pleadings are, per the law, supposed to be free of extraneous matters. That is, afterthoughts and inessentials that may be included in the evidence or submissions are weeded at the earliest. Five, pleadings lead to ascertainable evidence. It is not the other way round. Aligning myself with the pronouncements in Simon Kichele r Aveline M. Kiiawe, Civ. App. No. 160 of 2018; and Joseph MbwiHza v Kobwa Mohamed Lyeseelo Msukuma & Others, Civ. App. No. 227 of 37 2019; Unilever Tanzania Ltd vBenedictMkasa t/a Bema Enterprises, Civ. App. No. 41 of 2009; and Phiiipo Joseph Lukonde v

Faraja Ally Said, Civ. App. No. 74 of 2019 (all unreported); I find it valuable to restate that parties to a contract remain bound by what is contained therein; and that, written contractual terms cannot be superseded by subsequent oral agreements. The 2nd counter defendant is, consequently, not found to had wrongly advised the defendant- counter claimant regarding the time within which the loans would be approved/disbursed. On that note, I rest the Court's determination of the third issue. Having determined the above issues, the Court now turns to the fourth and last issue. This is in respect of the reliefs which parties are entitled to. Obviously, the conclusions of the Court regarding the previous issues are the foundation of the present one. In support of his reliefs, the plaintiff-1st counter defendant started by submitting that the witness statement of DW1 should not be considered because it was not signed before a lawyer. The case of Saada Soman v Prema Sarah La/ji & 10 Others, Civ. Appeal No. 208of 2019 (unreported) was cited in this regard. 38 Further, he argues that the defendant-counter claimant does not dispute the fact that the term loan at Tshs 264m/- was paid by the plaintiff- 1st counter defendant. To him, this admission is extractable from the testimony of DW1 during cross examination and the defendant-counter claimant's prayer (iv) of his counter claim. In

addition, he argues that the defendant-counter claimant failed to substantiate how and for what he paid USD 85,000/-. That is; despite pleading it, he did not prove such specific damage. Consequently, he finalised by contending that the same along with other reliefs in the counter claim should not be allowed; and prayed that the plaintiff-l51 counter defendant's relief be granted wholly instead. To the contrary, the defendant-counter claimant argued that he proved his counter claim fully. To him, evidence from PW1 and PW2 (on being cross examined) together with DW1 (paragraphs 15-19 of the statement); point to one clear answer that the plaintiff-l54 counter defendant did not disburse the full amount to the garments supplier which omission led to his loss. He explicated further that the loss he suffered include severe financial injuries; being pushed out of business; shock; and related damages. In consequence, 39 he prayed for dismissal of the main suit and decree for the reliefs stated in the counter claim. It is clear from the findings above that; whereas the first and third issues were determined in favour of the plaintiff - 1st counter defendant and 2nd counter defendant respectively; the second issue was partly resolved in disfavour of the former. I prefer to start with the remedy under the counter claim. The reason is obvious. The relief therein is straight forward. One

of the reliefs claimed by the defendant-counter claimant is to pay the principal sum of Tshs 264m. As correctly stated by the advocate for the plaintiff-l51 counter defendant; this amount is uncontested by the defendant-counter claimant. Indeed, the plaintiff lst counter defendant albeit unprocedurally endeavoured to move the Court to grant judgment on admission during cross examination. Hence, I proceed to hold that the same is justifiably payable to the lending plaintiff. Moreover, the Court has already resolved that the lending-plaintiff breached the fiducial relationship between him and the defendant-counter claimant. It was clearly stated that the amount involved therein is the difference between the amount on TTFs and the actual sum paid to the 40 supplier. Technically put, the difference between USD 190,000.00 and USD USD 145,500.00 was not sufficiently justified by the plaintiff-1st counter defendant. The Court holds that the said amount belongs to the defendant­ counter claimant because it was debited unscrupulously and/or without specific sanction from the defendant. That is, there was no proof that the I lending plaintiff was justified to transact with the money of his customer without his requisite sanction. The difference hereof, (USD. 45,000) is thus payable to the defendant-counter claimant. This holding notwithstanding, the defendant-counterclaim craved for more

reliefs. For want of establishment of the plaintiff-l^ counter defendant and the 2nd counter defendant's liability herein, as determined above; the additional remedies sought by the borrowing defendant will not be considered under this issue. The rationale is that even with the established breach of bank-customer relationship, in this matter the defendant counter claimant has a stake in the mismanagement. For example, he gave out overriding instructions to the lending plaintiff by signing TTFs more than once without recalling the ones that he considered inapplicable. Further, as a responsible banking customer, he would be expected to inquire about 41 obvious aspects as foreign exchange rates to be applied in the payment of goods to the supplier based in a foreign country. More so, when the money was payable directly to such supplier by the lending plaintiff. Nevertheless, the position of the plaintiff-l51 counter defendant is different in view of the Court's findings under the first issue. To recap his reliefs, the plaintiff-l51 counter defendant claimed for repayment of the loan amount to the tune of Tshs 754,793,054.88 as at March 20th, 2023. Further, he prayed for the following: interest at 18% per annum with effect from April 23rd, 2023 to the date of judgment; court-rate interest of 12% per annum on decretal sum from the date of judgment to full settlement thereof;

costs of the suit; and discretionary reliefs by the Court. To determine the foregoing remedies; the Court will, briefly, reiterate the holding that the defendant- counter claimant breached the loan facility letters between him and the lending-plaintiff. In line with the monetary relief payable to him under the counter claim, the plaintiff-l51 counter defendant is entitled to the total outstanding loan amount hereof. That is, though the defendant counter claimant conceded being indebted for Tshs 264m/- for the BTL, he did not sufficiently prove that he was not liable to pay interest 42 from the time he claims that he repaid the loan up to such outstanding balance. The absence of evidence to the contrary, I find that the loan amount was still subjected to covenanted interest in the respective facility agreement (Pl). Hence, the claimed amount at Tshs 754,793,054.88 is payable to the plaintiff-1st counter defendant. Moreover, the claim for 18% interest is with justifiable cause. I have gone through the entire documents of this case and it is clear that the defendant-counter claimant exhibits no legitimate basis of not repaying his debt. In addition, the plaintiff-l5* counter defendant states such claim in the pleadings and PWl's statement. The facility agreements contain interest chargeable too. Primarily, law prescribes that claims for interest must be pleaded, particularised and

proved for them to pass. See, for instance, National Insurance Corporation (T) Limited v China Civil Engineering Construction Corporation, Civil Appeal No. 119 of 2004; Zanzibar Telecom Ltd v. Petrofuel Tanzania Ltd, Civil Appeal No. 69 of 2014; Alfred Fundi v. Geied Mango and Two Others, Civil Appeal No. 49 of 2017; and Ami Tanzania Limited v Prosper Joseph Mseie, Civ. App. No. 159 of 2020 (all unreported). 43 Furthermore, I am cognisant of the principles laid down in cases like Yara Tanzania Limited v Ikuwo General Enterprises Limited, Civil Appeal No.309 of 2019; and Amani Safari Adventure Limited v Petrofue!(T) Limited, Civil Appeal No. 67 of 2023 (both unreported) that, on the basis of mercantile practices, interest may be granted to the winning litigant even where he has not proved it specifically. I find value thereof. In addition, the loan facilities contain ordinary and penal interest payable by the borrowing defendant. Accordingly, I hold that the lending plaintiff is entitled to 18% interest from the day of filing of this case to the date of this judgment. Likewise, the plaintiff-l51 counter defendant is entitled to 7% interest on the decretal sum from the date of this judgment to full payment. Interestingly, the plaintiff-l51 counter defendant presented a separate prayer in alternative. He states that, should the defendant-counter claimant fail to pay the amount

adjudged herein; the Court should order sale of the mortgaged property for recovery of the decretal sum. I am loath to consider such prayer on a number of reasons. To begin with, parties did not litigate on mortgage transactions and allied rights and obligations. 44 Further, the scope of mortgage has not been established. For instance, the Court is unsure of existence or otherwise of other incumbrances such as second or third mortgages. Moreover, there are contractual aspects therein which did not feature in any of the previous issues above. Furthermore, the prayer is technical infusion of execution proceedings in this matter. Its couching grips it all. That is, the phraseology itself suggests that the alternate order being sought here should only be engaged only after the would-be judgment debtor's default to satisfy the decree. To me, such approach fits well in the ambits of the executing court. Hence, I decline this prayer. To conclude, I note that general damages were not pleaded, proved or prayed for. I rest here in that regard. Consequently, both the main and cross suits partly succeed. For avoidance of doubt, all allowed reliefs from the two suits are merged to the effect that: the plaintiff-1st counter defendant shall be paid by the defendant - counter claimant, the difference between the claimed outstanding loan amount (Tshs. 754,793,054.88) and the money unjustly

deducted from his account under the TT transactions (USD 44,500.00); 18% interest from the day of filing of this case to the date 45 of this judgment; interest at 7% from the day of this judgment to full settlement of the decree; and costs of this suit. It is so ordered. The right of appeal is explained to parties. Judge June 14th, 2024 Judgment delivered this 14th day of June 2024 in the presence of Advocates Albert Lerna for both the plaintiff-l54 counter defendant and the 2nd counter defendant; and Bernadetha Fabian for the defendant-counter claimant. Judge June 14th, 2024