CIVIL APPEAL NO

IN THE UNITED REPUBLIC OF TANZANIA HIGH COURT OF TANZANIA DAR ES SALAAM SUB REGISTRY AT DAR ES SALAAM CIVIL APPEAL NO. 6232 OF 2024 (Arising from Civil Case No. 282 of 2022 at the Resident Magistrate Court of Dar es salaam at Kisutu ) BETWEEN ANDREW FILINGSON SWILA.......................................................APPELLANT VERSUS NAOMI WILSON ASUMWISYE..................................................RESPONDENT Date of last Order: 26.09.2024 Date of Judgement: 13.12.2024 NGUNYALE, J. Before the trial court, the respondent sued the appellant herein for breach of contract whereby the respondent claimed to have entered three loan agreements with the appellant where she gave the appellant the total sum of TZS 60,000,000/= and they agreed that in each Tsh. 20,000,000/= the appellant will pay the respondent the sum of Tsh. 2,500,000/= as profit in every three months. The appellant did not honour the agreement, he only paid the respondent the agreed profit the tune of 10,000,000/= and no further payment of profit were paid as agreed. The default prompted the respondent to file the civil suit before the trial court praying for the following reliefs a) payment of Tanzania shillings sixty million being the 1 principal amount which she advanced to the appellant b) payment of Tsh. 17,500,000/= being the agreed profit c) interest at courts rate on the decretal sum d) general damages and e) any other relief deem fit by the court. The matter was subjected to hearing and after a full trial judgment was entered in favour of the respondent. The court ordered the appellant to pay the respondent the sum of TZS sixty million (60 million) being the principal sum, payment of 17,500,000/= the accrued profit, interest at the rate of 7% from the date of judgement to the date of full payment and costs of the case. The appellant was not amused by the judgement and decree of the trial court hence this appeal on the grounds that: 1. The trial court erred in law and fact due to failure to evaluate and analyse the evidences adduced by parties and the witness during the trial. 2. The trial court erred in law and fact after deciding on favour of the respondent against her pleadings and testimony. 3. The trial magistrate erred in law and fact due to failure to invalidate the endless contract which he considered to be as the loan agreement. 4. The trial court erred in law and fact due to failure to recognize that according to their contract the parties were two persons (partners) who own the business (shop) together sharing loss and profit and not as lender and lendee. 2 5. The trial magistrate erred in law and fact due to failure to consider the issue of sickness of the appellant. The hearing of the appeal was by way of written submissions, the appellant was represented by Mr. Kelvin Modestus Challe, Advocate while the respondent had the service of Mr. Qassim Mussa Abdalah, Advocate. Both parties filed their written submissions as ordered by the court. Having passionately gone through the rival submissions by the parties, I am in a position to determine the appeal sufficiently. I proceed to determine the grounds of appeal in seriatim. I start with the 1st ground of appeal where allegations are directed to the trial court that evidence was not evaluated and analysed. Submitting in support of the ground, Mr. Kelvin submitted that the evidence on records indicates that the parties entered into an investment agreement where the respondent was required to get a profit of Tsh. 2,500,000/= after every three months and it was not a loan agreement as observed by the trial court. He added that the trial Magistrate raised his own issue on whether the contract was loan agreement; the issue which was not agreed by the parties. In his reply Mr. Qassim stated that the issue of investment has been invented by the appellant because it is not reflected from the proceedings of the trial court. The trial court evaluated the evidence accordingly in regard to the subject matter in controversy, the ground of 3 appeal carries no merit at all. On the issue that the trial Magistrate raised Suo motu, he insisted that nothing new was raised by the trial Magistrate other than what was reflected from the proceedings and issues set during trial. As the ground stands, it is founded on two limbs; the first touches the nature of contract between the parties the second is; whether the trial Magistrate framed an issue out of the issues framed by the court during final pre trial conference. In resolving these two issues, the court being the 1st appellate court is invited to re evaluate the evidence on record as received by the trial court. I wish to start with the 2nd limb on whether the trial Magistrate raised an issue in the judgment which was not agreed by the parties while framing issues. The trial court judgement indicates that four issues were raised to wit: - “1. Kama kulikua na Mikataba halali baina ya Wadaawa; 2. Kama Mdaiwa amevunja masharti ya hiyo Mikataba; 3. Kama kulikua na makubaliano ya ubia (partnership agreement) baina ya Wadaawa; na 4. Kwa kiasi gani kila mmoja wapo anastahili shufaa katika shauri hili” On whether these issues were the ones agreed at the final pretrial conference, the trial court proceedings dated 26.09.2024 indicates that: 4 “Court: The agreed issues are as follows: 1) Whether there were valid contracts 2) Whether the defendant breached the said contracts 3) Whether there was existence of partnership business between the parties 4) To what reliefs are the parties entitled” Comparing the two sets of issues, it is of no doubt that they are the same. I have tried to read between the lines the judgment of the trial court, I could not find new issues raised. The issue of a loan agreement was observed by the trial Magistrate when he was answering the 3rd issue on whether there was a partnership business between the parties. On the 1st limb which touches the nature of the contract between the parties, I find the same to have been well resolved by the trial Magistrate when answering the 3rd issue as to whether the parties had a partnership business. The evidence reveals that the parties entered into an agreement according to exhibit P1, P2 & P3 where the respondent gave the appellant the total sum of Tsh. 60,000,000/= (sixty million) in three equal instalments for the activities of the appellant who was supposed to return profit of 2.5 million after every three months. The appellant did not dispute entering into such contracts, but he claimed that they entered a partnership business in which loss occurred. Because it was a partnership 5 respondent cannot claim anything against him. Partnership agreements are regulated by the law of contract. Section 190 of the Law of Contract Act (the LCA) defines the word Partnership and section 191(1) & (2) of the LCA provides for circumstances that determines the existence of a partnership. Section 191(2) (c) provides: “The receipt by a person of a share of the profits of a business is prima facie evidence that he is a partner in a business, but receipt of such a share, or of a payment contingent on or varying with the profits of a business, does not of itself make him a partner in the business, and in particular the receipt of such share or payment” As it was well elaborated by the trial Magistrate, a partnership is said to exist where the parties agreed to contribute capital and share profit and losses. The partnership must be registered. See the case of Anthony Ngoo & another versus Kitinda Kimaro, Civil appeal no. 25 of 2014. Further, the exhibits P1, P2 and P3 indicates that the respondent gave the appellant an amount of money and she was required to receive profit, the agreements did not speak about partnership rather the money was given for the activities of the appellant. See the case of Magambazi Mines Company Ltd & 4 others versus Kidee Mining (T) Limited, Civil appeal no. 238 & 239 of 2018 where the Court of Appeal stated that: 6 “That is so because, under section 191 (1) of the LCA, it is provided that the relationship of partnership arises from contract and not from status. In this case, it is beyond clarity that the thirty-four holders of the PMLs, did not come together by contract or agreement, rather, they are joined together by their status as to ownership of the PMLs.” Furthermore, throughout the defendant evidence there is no where the court was told about his share in the partnership he is claiming and the amount of profit he was getting. Considering the prevailing circumstances, and the evaluation above, it is my conclusion that the agreement entered by the parties is a normal loan agreement and not a partnership as rightly observed by the trial court. The 1st ground of appeal fails. On the 2nd ground of appeal, the appellant complain that the trial court decided in favour of the respondent against the pleadings and evidence. In support of this ground of appeal it was Mr. Kelvin submission that the trial Magistrate decided out of the contents of the pleadings by accusing the appellant that he took loan and he failed to fulfil the terms of the loan agreement which the parties had entered while the pleadings indicates that the parties were in business relationship as partners who have shared capital in one business and they share the profit. On his reply to the submission of the appellant Counsel Mr. Qassim stated that the appellant was punished for breach of the three contracts he entered with the respondent, the argument that they had a partnership relationship was 7 not proved. On whether the parties were partners or not has been resolved while determining the 1st ground of appeal, I refrain from repeating the same because no evidence supported existence of partnership. The submission that the parties shared capital and profit are afterthought since they are submissions from the bar which the court cannot make reliance on them as they are nowhere to be found in the trial court proceedings. On whether the trial Magistrate decided the matter out of the pleadings by deciding that the appellant failed to honour the terms of the loan agreement. This ground also have been answered under ground one that nature of the relationship between the parties reveals that they were under a normal loan agreement. Thorough scrutiny of the pleadings and evidence adduced, it is my finding that the trial Magistrate was right in ordering reliefs based on the principles of breach of contract. Therefore, the third ground of appeal is rejected. On the 3rd ground of appeal that the trial magistrate erred in law and fact due to failure to invalidate the endless contract which he considered to be as the loan agreement I will fairly determine based on law and argument of the parties. It was Mr. Kelvin submissions that the contracts entered by the parties were endless hence they were illegal and the court ought not 8 to justify them. Mr. Qassim made a reply that the appellant did not cite any law which requires contract to have an end in terms of time. He made reference to section 10 of the LCA which mentions the elements of a valid contract and insisted that the parties contract met the elements under the section. As pointed out above, I had time to pass through the contracts (Exhibit P1, P2 and P3) it is true that time was not mentioned; but does that invalidate the contract between the parties? A contract became void if the contract misses the elements stated under section 10 of the LCA which includes free consent, capacity to enter into the contract, lawful object and consideration and that there was no any form of misrepresentation. See the case of Simon Kichele Chacha versus Aveline M. Kilawe, Civil Appeal No. 160 of 2018. Nowhere in the LCA time was mentioned as an element of a valid contract. Since the elements of a valid contract were met between the parties, I hold that the parties were in the lawful contract. The appellant submitted nothing new on the 4th ground of appeal other than repeating the arguments he made in support of 1st ground of appeal regarding the nature of the contract. From that view the 4th ground of appeal is covered by the other grounds of appeal, I therefore refrain from considering it. 9 Finalising on the last ground of appeal that sickness of the appellant was not considered I will not spend much time on it. It was Mr. Kelvin contention that the trial Magistrate ought to consider that the appellant was sick and that the sickness was the source of the problem in their business hence neither was to be blamed. In his reply Mr. Qassim stated that the trial Magistrate was right for not considering the same for the good reason that the same was not stated in the pleadings hence the principle of parties are bound by their pleadings was proper to resolve the controversy about sickness. Through the parties’ evidence was clear that the appellant at sometime was sick, the question is; does sickness stand as a ground for failure to perform the terms of the contract? Is there any express term in their contract that sickness to be considered in case there is non performance of the terms of the contract? I have managed to pass through exhibit P1, P2 and P3 there is no such term. It is settled law that parties are bound by the agreement they freely entered into and this is the cardinal principle of the law of contract. See the case of Simon Kichele Chacha (Supra). It is also settled that excuse in performing a contract which meets the essential elements of the contract as provided for under section 10 of the LCA is not permissible. This was the position of the Court of Appeal in the case of Abualy Alibhai Azizi v. Bhatia Brothers Ltd [2000] T.L.R 288 at page 289 that: 10 “The principle of sanctity of contract is consistently reluctant to admit excuses for non-performance where there is no incapacity, no fraud (actual or constructive) or misrepresentation, and no principle of public policy prohibiting enforcement” Guided by the above cited case, this court also become reluctant to accept the excuse of sickness for the reason that the contracts between the parties have no terms about excuse incorporated therein. The agreements have been found to be sound for qualifying the essential elements of a valid contract, then, the principle of sanctity of contract should be observed. All said and done, the raised grounds of appeal are unmerited, I find no need to disturb the findings of the trial court. The appeal is accordingly dismissed with costs. Order accordingly. Dated at Dar es Salaam this 13th December 2024. D. P. Ngunyale Judge 11 Judgment delivered this 13th December 2024 in presence of the respondent in person. D. P. Ngunyale Judge 12