19990618 TZCA Dar es Salaam

--- ............ ~--·------- _______ -·--•-·,~.,--, ... ,: ·--· rn THE COl.BT OF .'1.I-'f-E:\L OF TANZANIA ,, ) I AT DA...-q ZS SALAAM I -•♦•• . . . . . . ..., . . . . . . . . . . - • ···--- ( / .... -"' ~~£,. C.J,, MFALILA 2 J.A., LUBUVA, J.-A_., .5AMAT'-1:~._A: " ,_, ,- / And LUGAKINGrnA 1 J .A.) ,_, . MISC. CIVIL AI'PEAL NO. 1· OF 1999 ··-~ . ABUALY ALIBI-LU AZIZI APPELLANT 1 -_. -. ~"" ·-: T VE:iSUS BF.ATIA BROTRF.P.S LTD. RESPONDENT (In !::atter of Misc. Civil Appeal No. 1 of 1999 and in the :natter of Conflict of Decisions in Court of A,ppeal in Civil Ap-s,eal No. ·15 c,f 1988 and- in Civil Appeal Ifo. 19 ,:,f 4995 and in the matter of the full bench of the Court) RULING OF T.EE COURT NYALALI 1 C.J.: By ·Order dated 30th "f\!,wember 1998, a bencn of -three justiecs • the Coll!"t of Appeal sitting as an ordinary court under Article ef 122. ( 1) of the Constitution of the United Hep-c.blic of Tanzania, referred a matter of law for d,'=ciision by the same court sitting as a Fvl Benf'h of five _justices und~r Article 1'i8. (1) of the same- C~nstitution. Th.e matter arose in. Civil Appeal Nn. 42 of 1995 between AEUAL'L ALDHAI AZIZI, Appellant, and "BHATIA BROTHERS Ltci., Respondent. That ~rder stated,. ••After discussions b~tweel'l. the Bench and the representatives of the parties, it is directed that .the matter of the legal effef't of lack ii.f consent t0 a sale of registered land be referred for decisio~ by the Fhll Benoh, as there are conflioti~g decisions by the Court !rt the issue, anc that pend:.ing such decisioa . by the Full Ber..,-h, the ce,se is stayed and 1·1ill be fixed for continuation ~f hearing afteT such decisicn. Amicus Curiae to be appointed.,_· 1 ! I ,::1 ' ,,-1 ! l " ;/ I I1! :; !', ;11 "., :t f, 2 i '. Obviously the court follov1ed this procedure in the light of E·.E..?. what is stated in the case of ...... - ·1 R (1960) E.A. 62, i=•oole ·-··-·· ....... ---··· , ........,,. .......... •- .............. -·- that is: :A full Court of :'i.ppeal has no greater powers than a division of the court, but if it is to be contended that there are grounds, upon which the court cou·ld act, for departing from a 1)revious decision of the court, it is obviously desirable that the matter should, if practicable, be considered by a bench of five judges:' . The parties in the proceedings before this Full Bench are the same as the parties in Civil Ai::peal No. 42 of 1995. As in li I : I that appeal curr.ently pending in the court, the Appellant is I represented· in thesP. proceedings by Mr. Mustafa Chandoo, learned- :1: advocate. The Ilespondc,nt, who is not represented by counsel in ! i the pending appeal, is represented before us by Mr. Jadeja, learned 11 !. .,·j advocate. Fursw.:-.nt to the tenns of the court order which initiated '! these proceedings, :i."-rofessor Fimbo, learned advocate, was appointed ,1, r: by the court to be Amicus Cm·iae. de must at this stage express our 1 ,, j' profound appreciation for the industrious research made by all I advocates in general, and by Mr. Jadeja and Professor Firnbo in i particular. As it will presently be apparent, this·extensive research has had '"· direct impact on the quality of our decision. 'rhe matter referred to us relates specifically: to a conflict .,i . between the decision of t:iis Cou.rt in thP. case of NITIN CO}'FEE ;! i \ ·,;;sTAT-ZS Ltd &: 4 OTI·G,:;:; vs T_TNI'filD ::.NGINEZTIIl'iG ,,rorncs Ltd g, ANOTHER (1938) T.L.R. 203 and t1-, 0 decisicn of the same Court in the most !!, :I recent case of GEORGZ :31-{AMB~-IE vs l'1i,TICNAL ?RH!Til'K~ CO. Ltd, Civil !, Appeal Ho. 19 of 1995, as elator;.ted upon toth in the majority and 'I I II ·1 ·l 3 :,, 'I 1: dissenting opinions in Civil Application No. 58 of 1995. · Basically ' I r the conflict concerns the interpretation end application of statutory !' ,. provisions requiring a contract f~r the sale of land to be approved .1 or consented to by a specified public authority. ?rofessor ;<':i.mbo; s research has revealed a long history of these provisions. This history includes ,,rticle 6 of the B.."lITISH MANDA'r~ FOR EAST AFRICA, R8SUL:~TION 2 OF Tff:~ Lf,ND REGUL!...TIONS, 1926; . REGULATION 2 OF THE LAND Ri~GULl\.TIOl; 1931; REGULATION 3 OF THE LAND P.EGIJLATIONS 1948 and P.EGUL/1.TION 3 017 nr~ LA.ND REGULATIONS, 1960. As to precedents, the research by both Professor Fimbo and Mr. Jadeja similarly reveals a long history of judicial decisions en the status of a contract of sale Hhich lacl-::s the requisite conse::it. These precedents include the folloi-;ing cases in their chronological order: t-!On,'\MEDBHAI Kl!.!1.HBBAI ?~ BP.OS vs rfi\.•""O BIHTI Tf,.FAMRI BIN SA.LUM & OTKSRS (1955) 22 EA.CA 84; ArnXAil!DER GRAY ?N.CTZRSON & ANOTHER vs BANDRUDU: MOH:U-1.':'.D .S.\LEH EANJI & ANOTfBR ( 1956) EACA 106; MOTIBHAI 1 !i MANJI vs KHURSHID BrDGU11i ( 1957) E.A. 101; T.H. FA'rBL vs R. LA .·.'R)I:NSON & ANCTRER ( 1957) E.A. 249; FA'Z,AL Ki\:3S/•.i"i (MILLS) Ltd vs ABDUL NAGJI KASSAM & 3HUBA!·1U BAI GULA.Ml:IU~~SEIN ( 1960) E.A. 1o42:; MIAY vs PROW...AS ( 1968) Z. A. 563; SYv-Zi·:I HUS HUNGA vs THEONESTINA RWEKANIKA ( 1974) LRT. NO. 30; CPJillR.'\,.fKAT VINUBHAI PAT'EL vs FRANK LIONEL MAP.EALLE & AN0rHER (1984) T.L.Il. 31; HET:IDSEIA P/lJJL NYAG1:!ASWA vs CHRISTOPHER MBOTE N'IIRABU (1985) T,L.R. 103; NE'IN COFFEE ESTATES Ltd & 4 C-THEP.S I 'j . I vs UNITED E.t-!GII'F..ERINS !·/OfJ<S Ltd !!.: A!'!OT~l::~'1 (1988) T.L.R. 203; 1:JAYAI LONGOI &. ANOTHSR vs LS.RACL SOLOMON KIVUYO (1988) T.L •.q. 263; PETER KAPJ\NTI & L,8 QTK:.;;ns VS J1..'!' 1'0HKZY -G:.:;t::-E,RC\.L g, 3 ffi'HERS ' CIVIL APP'ZAL No. " 3 OF 1988 (not yet repQr.ted); .J .!'!, K.A,SUKA vs GEORGS !HJ113A, CIVIL AP:=-·EAL NO. 35 CF 19'?,0 (not yet reported) am:. GEOBGE DEAl-iB\•lE vs reported). 4 The relevant statutory provisions which are pertinent to Civil Appeal No. 42 of 1995 currently pending before three justices I I of this court_, and w:-,ich is the origin of these proceedings· before ' i I us are contained in regulc>.tion 3 (1) to (3) of the Land Regulations I I ' I. 1,6oi These state as follows: 1: ::3 - (1) A disposition of a right of occupancy shall not ·ne operativi, unless it is in writing and unless and until it is approved by the Governor. (2) In this regulation ·:disposition:' means - (a) A conveyance or assignment other than .,i by ,,ay of mortgage, or a gift, settle- ment, deed of partition, assent, vesting declaration, or a sale in execution of a.~ order of .court; (b) a mortgage other than - .\ ( l.1 an Equitable mortgage by deposit of title deeds; or 'I I (ii) a Mortgage which by law is only ' effectual if registered in the Register of Documents or the Land Register; (c) a deed or agreement or declaration of trust binding any party thereto to make any such disposition as afores~id, including a deed or agreement entitling a party thereto to require any such ,, disposition to be made; ·r. (d) a decrE:e of foreclosure of a mortgage.:: The aq:,--umcnts for the Appellant, v:hich have been very ably put by i'1r. Chandoo, learned ~.dvoca~e: a.re to the effect that non- compliance with the provisions of regulation 3 of the La.."1.d Regulations ' i '• '; I I : Ii I '' I ! i ., ; ! , .. I. I. I 5 1960 does not render such contract to be void. Mr. Chandoo cited the provisions of sub-section (2) of section (2) of the Law of Contract Ordinance, Cap. 433 of the Revised Laws in support of that· I. I position. 'l'hat sub-section (2) states: Notwithstanding the provisions of paragraph (g) or (j) of sub-section (1) of this section, \-1here any 1.vritten law in force in Tanganyika on the date 1-1hen this Ordinance comes into operation provides that an agreement (howsoever described), of the ki..>1.d specified therein, shall not be enforceable by action unless or until certain requirements specified therein are complied with, ;' or certain consents are obtained, no such agree- • I :,,I ment sh:J.11 be void by reason only that it is not enforceable by action under the provisions of that law for want of com"!;'liance with any such requirement or the obtaining of any such consent•; • . ! The provisions of paragraphs (g) and (j) referred to under I: sub-s.ection (2) sta-::e as follows: ,:(g) an ae;reement not enforceable by law is said to be void:·; ::(j) a contract v1hich ceases to be enforce- able by la,.., becomes void when it ceases to be enforceable;:~ It is Nr. Gha;1doo' s conte:.1tion in effect that the words, shall not be operative:· contained in sub--regulation (1) of regulation (3) cannot be construed to mean :··shall be void';, because such a construction would be contrary to the express provisions of stili-section (2) of section 2 of the Law of Contract Ordinance. It is part of Mr. Chandoo 1 s contention that the cases decided prior to 1960 arr: re.levant only to tha.t period, but not thereafter. Accordi..>1.g to him, a transaction falling within the 6 I ~pe-· of regulation 3 is v~lid. IY:ltwithstandi..'1e ~;he. :faj.lUIT,· -t,,-.. comply.-· .J . with the. requirements o.f .. .sub-s-octicns ( 1) to· (3)'~ · I I To that· cxtend·1 Hr.. Jadeja and Profcs·oor .. Fililbo ! j I with· Mr-. ,_Chandc.c in submitting to thE: e:c'f0ct that sunh..r.ontrad ;- .:·.:·.:: ···· .•-. , ./ I . thaugh -valid, is UU:F•:rativc, hy virt~J.:;. r.f sub-regulation (1). '.)-f., ·· I! re~at icn 3,. -.. I I ,l -~ed.ents: oited · to us by c(;~s1~l •. These pre•.::~~~e::..;.ts appear to ..... . transactionr which dc,-,,.s not fµl.fill thu-·:l.'equi.s.i.t,2; c,cndit-i_,::r-..c is · vc"id -in. tc-tality •. Such cases includ.(, r.he c.:-,.j,•:.: :. :;, '·10":IBHAI r::t-d',JI substantial misdescripticm of its subje,:.t Giatter. and alsc a ;:r.i.ilurc· · to submit for -the Govcx·nor'·s i::-cuside:r-ation the··a.g~~eern,.nt as ;:;. whcl-c. ., I'. ·..,tile think that the ;I.earned·t:rial. judge -cor:r-ectly held tha-t· tho -- agr~ent was prohibited by law and was· therefore void -~~t_i,::-~- ,·· That being so, nothing d,:ine subsequently could .:ouvert. it into. an · 1'ilfo~able c.·mtrad';. Similarly_ iri. the case r-.l FAZAL KASSAM (MIT...,I,S) Ltd vs ABDUL NAGJI KASSAM AND" SHUBA.NU BAI CiULNvIT-IUSSEI:i'\/- (1960) .. E.A. _-1042 1o.1herein it was· stat-.'.ldt :. • • • Tho allcgod agreement· that th~ first defendant .should· not mortgage hi.s right. r:f occupancy tr., the I j · want c1rf .. the Governor' c consent, and this. r.cnct .!"las· r.-- power to - I tirder apcoif±-~ per::ormarn-.e of t:t,3.t a.g:c-~c,:::,.m.t. I !t. . •· would make no· difference if fraud was proved· aga.i.,1st the first I ·I I ,, I·' I '):~ .. XI / 7 - I· defend.ant. The plaintiff company must be assUllled to have known the law::. Undoubtedly, these cases were decided before the Law of Contract Ordinance, hence Gub-section (2) of section 2 therein, had not come into being in this country, The position however was essentially reaffirmed in subsequent decisions, including the case of CHA.DRAf<.ANT VINUBHAI PATEL vs FRANK LIONEL MAREt,.LLE & ANOTIIBR (1984) T.L.R.31 where it was stated, :; ••• '-4e are of the view that the agreement i.s void and since the trial judge has based his decision entirely on a void i. agreement, his judgement is vitiated as it is based on a fundamental ., / .naw;;• A similar position- is to be found in the case of ML'THUSZLAH PAUL N'f.AGWASWA VS c::I'iRIS'!.'O:dER :·mors NYI.1:'J-1.BU (1985) T.L.R.103, where it was stated, ·,, ••• I am of the view that the sale by Patrick to the appellant of the land in Mbezi was void and ineffectual as it took pl.ace without the approval of the village ccuncil ••• :;. These cases of course do not purport to interpret the specific expressions to (3) used in regulation 3 (1)Lof the La.'1d Regulations, 1960, To that extent, they are not very help!ul to us apart from being part of the frame1o1orlt within which we must make our decision. The second category of cases are those in which it was decided to the effect that a transaction which does not comply with the requisit~ -conditions i.s in~PQ!'atrie only as to change of title, otherwise, it is operative. Such cases include the case of MLAY vs PHONEAS (1968) I:.A,563 wherein it WaB stated, ,: • . • In my opinion l a distinction must be drawn between those terms of the agreement which '. I·. concern the disposition and those which are collateral to it so that while the former may be inoperative, the later remain operative i, and can be enforced L~ the event of the Commissioner failing or refusing to ~ive consent, of course I if the Corrunissioner r,1erely fails ' • I r-.. 8 to give consent it may be that a new agreement can be drawn up an.d rosubmitted to him':.. This ca.:;e gives an indication of the meaning that may. be attached to the w"'rd r inoperative' used in regulation_ (3). By using the expression that, :-the later rer.rain aperative and can .be enforced 7 ' a clear· indication r,i the meanitlg of the opposite. that is · The second case in· this category · is the case of ALEXANDER G?..AY PATTERSON & Al'!OTEER vs BAr,,'DRUDIN MCHAMED SALE...tf KANJI e,. fl.~lCY".i:...9:ER i i: ·! (1956) EACA 106 wherein it was stated, ::r do r.ot think the respondez:t can. get assistance from the. variation in the wording. ,..-f the -·1926 and 1948 Regulations. Hew far the lJresent retulation nullifie~ a -.dealing wb.ich is not subsequently aI-prov:ed may .be a mat.ter. of. argument. Such a tr~action may still be valid for some purposes e.g. if there are collateral underta~ings. But at least it is olear that without approval no dealing ean opl!rate to effect e. sale or m_ortgage or to cr"late a charge or a sublease:=..... This·--case is significant in its pronouncement to the effect th:?.t a transaction which does not comply with the requisite conditions is .not totally___ -devoid 4f legal cffeet but, ;;may still be valid fer some purposes, . e._g.- if. there a.re coJlatere.l undertakings· • Th1' positi•n that a transaction which ~es not ~ornpmy 1-1ith the, statutory· condi t_ions is not necessarily devoid· of· an:r' legal ;ffe~t had of course been stated the year betorc in the case of MOH.AHEP HU3.SZE! Al.LADI'l'TA vs ABDALU. '3IN s:-,:cnr & OTh'~::lS ( 1955) ,, ;1 whorein it was stated, :;,I'he que::ition whether the ai:;reement is ·..;holly inoperative, or ,:,peratj_ve t" the lii:!ittid extent suggested,_ must; i,;e think ·depend ~n, whether its terms ak'e s~verabla., ~~ as to create an independent and absolute·preli!nir.ary-~bligation. t~ convey, which is eon di t ional on the Governor 1 .e c~.a.s,u.t. . v!e are far from l!layi.1.g that .such ar. a~reement could l"jot be lawfully a.,d l I' i " 9 i>fflketively made, th6ugh it seems unlilcely that it would be sp~ificaJ.ly enforced and it is difficult. to see what damages could. ~~ pr1ved on its breach; but h~wever that may be we· think this is ~;t suoh·an agreement •. There is no express under~aking to do either ; ~ $ •f th~· things contencad for. At best a duty t- d~ them may b~ - ·:i.mrlied. There is ne separate or ,severable Nnsideration for:: the pNrnises which are said to be eeverablo , • ,:: • The signifi;:ance of the de~ision in this case lies •f eourse in the pronouncement t~ the ~ffeet·• that an agreement. which does not eomply with the· statutory eonditi~IhS may be partly inoperative and partly operative depending on the nature "If the agreement. The fourth ease in t;i.is second. category of cases is .}IUS_.HUNGA vs ·RWE,~NIKA (1974) S.f-1.318 ·.,.fr:erein it 1,·a..s stated :r think regulation 3 of.;..the Land Regclations 1~48 :nay be a·oused by un.s~rupu.loµ,s se.llers. I Ur.ink regulation 3 is applicable only to situation 1·1here the President 1 ·.e ·consent has been ~ought and refused.. A r."'lntract "'l·f. sale is not eontemplated by regulation 3, This regulation refers tt'l dispositions which ar-:? defined... to mean conveyances·~r· assignments. A AJntr.act of sale is neither of these . .. .. Th~ decision in this case was of course per incuria.m to the I. •xtent that it excluded contra•t~ from th~ scope of regulation 3~ as corr~tly pointed ~ut by th-u, court in the NITIN COL•'J!~"iE ESTATE c.ase • . H~wGver, the significance of this case- in the history of judicial decisiln.s relevant t& the matter before us is tho prono'llllCement therein that ·• ••• I think regulation 3 is applicable "'enly t" ·-situations where the .}'resident's eensent has been sought and refused • , • the lac~:;, of coru:,ent is only a defe.n.ee h ?-n action for specific perform2.nee o:::- damages, but ea.."l.r,ct be a· rea.son for holding the agr~ement t~ sell void·:. ,--- 10 The other case in tl,i;; c:1te.1,;;r:-,, i:-: the recent case of GEORGE SI{AMBWE vs N;\TIONi:.L f'?.IN' 1:ING COVi;·,U!Y Ltd, Civil Appeal No. 19 of 1995 (not yet reported) wi1erein it 1-,as stated inter alia: 1 dith res",)ect, 1•;e are unable to accept t·~r. Ser,1galawe's argument i that· there was no binding agreement because the Commissioner for. ,. Lands had not s.:mctioned the sale tr;;nsaction. We agree with Mr. Ser.igalawe 1 s statement t:,&t under the Land Regulations, 1948, the sale agreer.1ent was inoper.:.1.tive, a.s the correct riosition of the law on this point ••. ·However, though th.:1.t is the pot,ition of the law on this 9oint, we \,ish to mai·:e it clear that Mr. Semgalawe, learned counsel is not, with rospect, correct in his a<=sertion th.,:,.t because the \ I approval of 'the Co;.::::issioner was net :forthcoming t!:.er-e was t!1erefore l no agreement for sale beb,een t!1e 2.prelLrnt ;,t.,."1C1 the respondent. Th(': lea2"Tl.ed trial jt1dge cnrred:ly in our view took the view \. that the apt,e:Llant, the '.rcndor was ir: breach cf the agreement even though the ai:!J:;-cval of tLe Corn!ilissioner ha.d not been obtained •••• 0 .. • O O O " O e O ~ O 4- &, U I, ,. '1 ~• " v O ., .;: -. U " ., • O " .., .; c; ,. ., C: C: " ,i;o ;, ., O O • • •• ._ O Q <I ~ •> Cl .., ". O ;.. 0 .. u • ,I (, o 0 ·As foll.'1d by the lea::-ned trial. judge, it \•1e.s at the stage when the appellant was required to execute the sale a~reement that he refused to Gign the C!oct.:ment. With this refusal to sign, nothi..'1g further could be done in exec.utir:g the agreement. As a result, the ·I approval of the Commi.ssi•:;ner could not be obtained. ~·er that reason, li L... we agree with the learr.ed tr:i.al _judge '.:1,at t:ie aIJpellant was in breach of the sale agree1;-.ent reached between him and the respondent, the buyer. Ha vinz. breac'.'.,.ed t.he ag-rcem,=nt in these circum,3tances, the appellc.-.nt cannot valir:lly re::3or·i::. ·::o re;;ulation .3 (1) of tlie Lands I: I. Regulations, 191+8 in de±'ence • " o . . . . . . . . . . . . .,, .. Cl'O~uc~ .. o o • v < i o • • o • o o e .. o o , . c , : , o • 11 •. ::t1.s the relief sougfit e.t the trial was a declaratory judgement that the agreement 1•:as inoperative and as there 't1as no count erclairn filed by the reSl)ondent for specific perforr.:ance or c.ama13es the learned trial judge correctly rr.o.de no further orders. The respond~r.t ·~ ha.uing spent sums of mone:r tov;ards t:1e redemption of the mortgage and '?ther liabilities of be a;.pel:!.z,nt, the r.iatter is left open for fur~~-c prooe.ssing·a.nd -e>:ecution of the documAnts in order to effect the transfer in terms of the law·:. This decision was subsequently confirmed in a majority opinion in Civil Applicatio:n No. 58 of 19'~5 between t'.1e same parties. In a .£1.i.:;.,,.en.t.ing opinion, Ha.-nadhani, J •.0•• , stated, inter a.lia, As I have said, I would t-2.ve no diffic1_1lty to refuse this application for ~iew if !H~IH had oeen distinguished or eve!1 departed from as being bad law. Since neit:.er was done, and in fact NITIN was not even ~ntioned i11 the judgement, despite the fact t:iat it was cited I to the court, then the decision waG per incuriam<. -...... The significance of the decision in GEORGS Sl-L<\i,iB'-·fi:: 1 ;'o case both in the appeal and in the application for review 1 is the statement to the effect th:J.t t).1~ contr,,ct of sale 1-12.s binding bet1-1een the parties, nob1ithstandi?1 6 ti:e lac!~ cf t1:e requisite ccnsent. The decision ·,. however is unc}.ear as to it:::. effect- upon the Commissioner for Lands. If the decision me0.11t thr,t the binding contract between the parties obliged the Con::,;issioner to consent to the disposition; then? f,or the rea.i;:o:ns a:,,par2;1t hereinafter, such :;;. decision. would be wrong. '::'he third and 12.st cai;egory ..,f c;o".ses is that i1, which it was decided to the effect tiHt a transaction 1-1hich does not cor.;ply ,·ii-th tlie statutory co,1ditions L:: inoper.".tive and unenforcP.able. ,Such 'I I 'I'Af'AKARI & i-'iBOf,'I ( 1953) 'I, LP.. 4 33 ,,:herein it •:1as i:-tated, In r,1y I !. r I 12 judgement the pl.s.intiff ca.r,not succeed in the absence of the Governor's approval to the transaction •• , section 11 of the Law of Property and Convey.:mcir..f; Ordin;;,.nce, 1923 provides that such a disposition · shall n0t be o:i;ierative unless it is in ,.-,riting and unless and until it is a;;:iroved t,y the Governor. The plaintiffs h2.ve not fulfilled the condition precedent to their right to enforce the con..-eyance and in the absP.nce of the performt~nce of the condition, apart from a..,y other ccn.sideration, the ccurt is powerless to give effect to the transaction· • 'fhe si•:mifica11ce of this dee is ion lies ili the clarity :L."1 which it explains the helples.'.mes.s of the court in providing relief to an aggrieved party. It is clear according to this case that an inopera.tive tr'3.ns,:1ction is wholly unenforceable. The second case under this category is 'I'.H. PATEL vs L. Ll\·lRENSON :k ANOTIIBR (19.57) i::.A. 249, wherein it was stated tha.t .:r am satisfied the whale agreement is inoperative because of a lack of ayproval and tha.t beinis so this court is precluded from enfor-cinE; any part of the agreement. It is 1·1rong to suppose that any position in which the appellant find.s h:i.mGelf could be rendered by aL order for specific ~erformance up to the stage of the first I respondent executing a transfer of the right of occupancy to see 1· whet:1er or not ar:proval could now be obtained. Th:;.t in effect, ~,ould be for this court to defy the laH t-y o_rd.ering dealing without. approval in pursuance of an a.;-;reern<?!1t which itself is inoperative-- The significance of ~his case is that it ie the strongest voice against the enforce,·:1ent of any part and a.'1y stage of a transaction I j which does not comply witii the atatutcry conditions. The third case witbin this c:-.tegory fa, t,1e far.,ous c:.~se of ANOTHER (1988) T.L.:rl. 203, ';1h0reL, it was stated inter alia,.that, 13 - • -, .1: !j/ . ' nrn my view an oral agreement of the type sued on to sell land held under a right of occupancy is inoperative and of no effect. There .J.-. . ~ ~ oi authority to that effect ........ " .••••• , •••••••• •·#• •.., e • . 0 •I••••·••••••·• ••• • . • • • • G• •.• 0 OI •4 •· IJ O ••••it••· d,411 • • ·••• ••• •• ;··Mr. Marando for the respondents submitted that there is so~e .,nfusion on this matter in the High Court. He referred to .-, I ! a High Court decision in SYLVENI MUSHUNGA vs THEONESTINA R'.{8KANIKA .I (674) L.R.T. No. 30. Mfalila, J. in that case purported to ,distinguish it from Patterson vs Kanji (supra). M"falila, J. stated~- 'I think that Regulation 3 of the Land Regulations 1948 :nay be abused by unscrupulous sellers. I think t~at regulation 3 is applicable to only situations where the Fresident's consent has been sought and refused. A contract of se.le is not contemplated by regulation 3- This regulation refers to dispositions which are defined •.• to ni.ean conveyances or assignments. A contract of sale is neither of these'. obv.i.ously Mfalila, J. had. O"l'erlooked Regulation )(3) Cc) •: 1 where such a contr&Ct is a disl)O'Sition. With ~ e c ; , that decision of M"falila, J, was wrong. :;out. -G-r courtesy for Mfalila, J 1 and other judges of his w.ay o-f : thinktng, perhaps. SOfRf3 ~idiary o~l"Yfil.-ti.ons. mcq ~in-order. A R_igh.t o.:f ~:pan-cy .is something in the nature o-f --. lease- .and a holder of a right of occupancy occupies the position ~fa _eort of l.e5see v i s - ~ the superior landlord. A right of occu:?ancy is for a term, and is ~ J . d - ~ ~.t::iin. -oo;o.d.itions. .One or ~cond:Lt.io.ns is that ,- d~Fitj,pn. .of the said ri.g:ii: -can oe ~ ..wit.boUt the .co-nsent of th~ ii-1-Perior landlord. There is n.ow no freehold tenure in Tanzania. All land is vested in the Republic. So land held.wider a right of iccupancy is not a freely di.spo~able or marketabl~ ~ i t y like I·· 1,. 1i I I I i,; I' i lj a motor car. Its.disposal is subject to the consent of the supArior iii er pc.ramount landlord as provided for under the relevant Land 1, i' Regulations·:. This case is fr.tmous not only because it was the I basis of t11e dissent inf$ opinion of Ramadhani, J .A., i..'1. George Shambwe• s ca.s.a~ but al,s., because it states the principle underlying regulation 3, '.i.'h., l,'l.st ca2e in thi.-; c-3.tegory is the case of '.:~YANI LONGO ANO'I'IlER vs ISR.t;.EL 30LOMOf•; KIVUYO (1983) T.L.R. 263, wherein it was stated that, "The view th.:,t ,:i.n agreement to sell a right of occupancy, 1yhich agreement has received no consent under the Regulation is i_n.l..perat ive I and hence u..n.enforcer.:ble at law, was re-affirmed by this court in ~nore recent ca.ses of F:l'l''.:L vs t,;.~_:r::,:ALLE &: ANOl'l-[m, Civil vs D1HTSD i::NGPiS:ZJirG 1 :0R!CS Ltd A;-;J) ANOTriEK, Civil Appeal No. 15 ,f 1988. It therefore follows that the judgement of the High Conrt based as it was 1-,holl·r on an agreement which was inoperati•:e at .:I law, ea.'1.not be sustained a.,"1::i it must be set aside--. It must be clear by now th?.t the decisions of the courts both in this country and in. :82,st ,\frica on the matter before us has not been consir;te:-it, contrary to 1·1hat appears to be asserted in NITIH' s c2,se. .r-..s we ha.ve atte!::pted to der:1onstrate, three zoEiticns can be discerned fror.i tl:e mm1erous precedents. If our decision is going_- to depart from any of these positions,it·,cannot be construed to be violative of the rule laid down in the case of JIVR1..J vs DEVRA.,J (1908) B.A, 263, ·,1herein it \-/as stated that ::There is a princi:pJ.e of law, ho.)ever, th?.t 1;1here a court ha.s interpreted the la·:1 in ~ certain rc2.nner particularly an interriretation which affects property right", and that interpretation has been acted upon for a considerable ti.me, then that inter:;,retation should not be departed from unl9sG it is i::le.;.rly •,,rong ar':d gives rise to iDju.-::tice--. : :. I 15 In ascertainin;::, 1·1hat we con::,ider to be the correct interpretation of the expression, ··shall not be operative· in regulation 3 of the Land Regulations, 1o/+8 and 1968, we are going to be guided by two under- lying principles. 'l'he firs7. principle is explained in NI'!'H!' s case, the.t i;3, ·:a Right <if Occui.)ancy is something in the nature of a lease . ,, . ,· and -3. hold~r of a Tiight of OcC\.lpancy oe-cupies the position of a sort ..r le&.see vis-e.-vis tha .superior le.nd.lord:, The coll~rary of this pri.~ciple is that a trensaction for the disposition of a right of oc.cupancy is necessarily a tripartite transaction· involving not only the holder of the right of occupancy and the purchaser or donee, but al.::so involving the superior le-ridlord, The seeor.c principle .concerns the law of contract and originates from the English Common Law. That principle is the principle of SANCTITY Oi CC>N'i':Ri1CT as stated in CHIT:-Yls U.1·1 OF ccr,!TRAC'I'S, Vol. I, 24th Edition, at page 5 thus: ,:·A concomitant of the doctrine of treedom of contract is th.-:>.t of sanctity ,,f contracts; and it is still a .car<li:1.al ~rinciple ef English law because it suits the needs of a commercial comii:unity • ., "o .... It" ...... o u o o;) < o • • • o • • • • • • ., • ., • • ,... English law i.!I consistently reluctant to admit excuses for non-performance where there is no inc,:,p2'city, no fraud (actual or construc- tive) or misrepresentation, and no pri~ciple of public policy prohibiting enforcement ; • It is our consider.id opinion that since there is nothing .in the Law of Contract Ordina1:ce, Cap, 433, 1vhich excludes this principle, there can be no doubt thF.•.t it is part of the law of contract of this countr·,, by virtue of the provisions of sub- sect ion (2) of section 2 of the ,Judicature ;:,_nd .'\pplicatior. 0f Laws Ordin3.11ce, C.t.2, 453 of the :~evi2eci La t1s. 1 J 16 Thus guided by these tl-10 principles and the provisions of sub-section (2) of section 2 of the Law of Contract Ordinance, we are satisfied that the expression, :1shall not be operative:: as used under regulation 3 of the Land Regulations 1948 and 1960, does not mean I void I or another mea..,ing to the same effect. We i are satisfied that this must be the correct interpretation in view of the provisions of sub-section (2) of section 2 of the Law •f Contract Ordinance. \'le r.ote that the decisions of cases made be fore the enactment of the Law of Contract Ordi!lance and which ..,i I i held to the effect that non-complie.nce with the statutory require- ment of consent or ,!riting rendered a contract void 1 ',Jere correct according to law applicable then, but ceased to be precedents on the matter after 1960. As to the decisions which were made t:1ere- after and which were· to the same effect :;ts if the provisions of sub-section (2) above mentioned did not exist, there is no doubt in our minds thE•.t such decisions were made per incuriarn. He have -9.sked ourselves if the expression ''shall not be operative;: does not entail invalidity, what then does it mean" L.,gically, it r::eans at least that the contract in question is valid. According to Mr. Chandoo, such valid contract has all the attributes of a valid contract. That submission is consistent with the doctrine or principle of sanctity of contract. He note however, and Mr. Chandoo is likely to agree with us, that the principle of sanctity of contract is qualified by certain factors, i I: including that of public policy as stated in the para 5 raph we have ,cited from CHITTY' s LA\/ OF CONTRACTS. The factor of public policy in contracts for the disr-osition of a. right of occupancy is consistent with th<::; second principle guidi."l.g us, and which concerns the relationship between the holder of a right of occupa..,cy and tb.e i ,;,, paramount landlord as exi~la.ined fr:. i-UTIN' s case. It. is our 'i'.; II ,4 I 1¢:' I ~· I II 17 Ii 1: I· I, ',,I; l I;i considered opinion that a contract falling within the scope of I, t :J i I ' i regulation 3 has all the attributes of a valid contract 1 except i\! i. "I' ;1 thos~, of which performance before the requisite consent is sought .1: ! ;· I and .obtained~ U! prejudicial to the interests of the paramount :Ii I ' landlord. Such are, for example, terms of which performance has Ii ): ! the effect of replacing the holder of a right of occupancy with I ~ I· another person without the consent of the paramount landlord. Such Ii I terms, though valid, are unenforceable on the gr9unds of public policy ~hich protects the interests of the paramount landlord. In our considered opinion, this unenforceability of a valid contract ,) is what is meant by the e:icpression nshall be inoperative;: under regulation 3! The corollary oi what we have stated is that a contract for the disposition of land, which otherwise is proper but for the lack of required consent, is inoperative, that is, unenforceable to the extent that such enforcement is prejudicial to the interests of the paramount landlord, However, where such enforcement is not I thus prejudicial, a party who has performed his or her part o: the bar.gain may be assisted by the court to enforce the contract against , .. \ the defaulting party. So a party who defaults to suh~it a written contract for consent or refusal by the specified authority may be ..:'I ....fcompelled to do so if the other party has performed his or her part of the bargain. Of course where such consent .... is sought . and ,i is refused, the contract becomes wholly unenf~rceable, thoush valid, and any expenses incurred by the parties mayi.i be recovered by legal action, if necessary. In conclusion, we are now in the position to say that of all the precedents cited to us, those falling within the second category are closer, though not completely in accord with the correct position I ,, ,! I L 18 which we have endeavoured to eXplain. This means NITIN's case is bad in law since it undermines the sanctity of contract; and GEORGE SHAMBWE's case is only partly sound because it does not safeguard 'l \ the interests of the paramount landlord. We consequently direct that the ord.inaey bench of this court before whom Civil Appeal I'' ! i> No~ 42 of 1996 is currently pending, be informed accordingly, so that the hearing of the appeal may resume. i-le so order. DATED at DAR ES SALAAM this 18th day of June, 1999 • F. L. l\7YALALI CHIEF JUSTICE L. M. MFALILA JUSTICE OF APPEAL D. Z. LUBWA JUSTICE OF APPEAL B. A. SAflATTA ~~§TICE OF APPEAL K,S.K. LUGAKINGIRA JUSTICE OF APPEAL I l I eertify that this is a true copy of the original. i; ·'7:)i' ..' < A.d1, i1WARIJA ) DEPUTY REGISTRAR ------·------ ! I t.