Caroline Gabriel Loibanguti

IN THE HIGH COURT OF UNITED REPUBLIC OF TANZANIA MOROGORO SUB REGISTRY AT MOROGORO CIVIL CASE NO 26022 OF 2023 BETWEEN CAROLINE GABRIEL LOIBANGUTi(As an Administratrix of the Estate of late Gabriel Loibanguti) ....PLAINTIFF VERSUS ALOYCE KITAMBI (As an Administrator of the estate Of the late Joseph Kitamb!).. DEFENDANT JUDGMENT MRUMA,J The Plaintiff Caroline Gabriel Loibanguti suing as an administratrix of the estate of the late Gabriel Loibanguti instituted this suit against Aloyce Kitambi who is the administrator of the estate of the late Joseph Kitambi claiming for payment of a total sum of Tanzania Shillings 139,200,000 (say Tanzania Shillings One Hundred and Thirty-Nine Million, Two Hundred Thousand only), being unpaid debt plus accrued interests computed from 4^^ day of April 2019 from the loan advanced to the late Joseph Kitambi by the late Gabriel Loibanguti. It is the Plaintiff's statement in the plaint that on 4^^ April 2017 the late Gabriel Loibanguti and the late Joseph Kitambi entered into a loan agreement in which Joseph Kitambi borrowed Shillings 120,000,000/= (say One Hundred and Twenty Million) only. The borrowed money plus interest at the rate of 20% per annum were to be paid within a period of two years. It is further statement of the Plaintiff that during the entire cdntractual period the defendant managed to pay Shiliings 28,000,000/= (say Twenty Eight Million) only leaving Shillings 168,000,000/= (say One Hundred and Sixty Eight Million) interest inclusive unpaid. It is further contention of the Plaintiff that before his death the late Gabriel Loibanguti tpok several initiatives to remind the iate Joseph Kitambi to settle the borrowed money timely but without success. According to the Plaintiff, the late Joseph Kitambi did not give any reason for his failure to pay back the money he borrowed. The plaintiff stated that after the demise of Joseph Kitambi, the present defendant Aloyce Kitambi who is the administrator of estate of late Joseph Kitambi was informed of the debt left behind by the deceased but he did not take any step to settie the same and hence this suit which is for the following orders:- 1. A declaration that the defendant breached the contract dated 4^" April 2017 for his failure to pay back the loan money as agreed. ii. An order for payment of TZS 139,200,000 being the unpaid amount arising from the ioan contract, ill. An order forpayment of interest on the principal sum at the commercial rate of24% from the date when the amount was due till the date of the judgment and; iv. Costs of the suit. li : The Defendant denied the claim and filed a written statement of defence to that effect. At the trial and in view of the provisions of Rule 2(1) of Order XVIII of the Civil Procedure Code (Amendment of the First Schedule) Rules 2021, evidence in chjef were given by way of witness statements. Two witnesses testified for the Plaintiff. They were Caroline w/o Gabriel Loibanguti the wife of the late Gabriel Loibanguti who testified as PWl and Bertha d/o Joseph Kitambi, daughter of the late Joseph Kitambi who testified as PW2. On the other hand the Defendant called one witness Aloyce Ellas Kitambi (DWl), the Defendant who is the administrator of the estate of the late Joseph Kitambi. Caroline w/o Gabriel Lolbanguti(PWl)testified to the effect that she was the wife of the late Gabriel V/Vavi Oie Loibanguti and now she is the Administratrix of his estate. She recalled that on 4^^ April 2017, the late Gabriel ioibanguti entered into a loan agreement with the late Joseph KitambI who was trading as Hiiux Hoteis Ltd. In that agreement Gabriel Ioibanguti was the iender while Joseph KitambI was the borrower. The amount borrov\/ed was Tanzania Shillings 120,000,000/= (say One Hundred and Twenty Million) only. It Is the evidence of PWl that the loan was repayable,jWithin a period of two years from the date of the agreement. She said that the loan was to attract an interest at the rate of 20% per annum amounting to shillings 24,000,000 (Say Twenty Four Million) per year or 48,000,000/= in the entire loan period of two years. According to PWl the agreement was witnessed by herself as the wife of the iender Gabriel Lobainguti and one Fatuma Yusuph Machozi an estranged wife of the late Joseph KitambI who is currently living in the United State of America and it was attested by Prof Cyriacus Stanslaus Binamungu,ah advocate of the High Court. It was further evidence of PWl that the contracting parties agreed that in case of death of the borrower, the debt (i.e. the loaned amount) will be paid through his estate and that in case of death of the lender his wife (i.e. Caroline Gabriel) or his beneficiary will receive those money. According to PWl before his demise the late Joseph KitambI managed to pay shillings 28,800,000/= only out of the totah loan of Shillings 168,000,000/= he was obliged to pay. It Is the evidence of PWl therefore that until his demise, the late Joseph Kitambi was still indebted to the late Gabriel Loibanguti to the tune of shillings 139,200,000/= which she is now claiming. Further to that, it was the evidence of PWl that on 5'^'^ November 2020 she wrote a Demand Notice to the administrator of the late Joseph Kitambi, reminding him of the debt but the administrator now the Defendant did not respond. On her part Bertha Joseph Kitambi (PW2),the daughter of the late Joseph Kitambi testified that sometimes in 2020 their father convened a family meeting involving his family. In that meeting, the late Joseph Kitambi informed them that he had borrowed money from Gabriel Lobanguti and that he was indebted to him. The late Joseph Kitambi informed them that in the event he passes away before repaying the loan, the borrowed money should be re-paid through his estate. PW2 mentioned persons who were present as her mother Fatuma Yusuph Machozi and a brother one Nyaso Joseph Kitambi among others. On his part, the Defendant Aloyce Elias Kitambi called one witness that is himself and testified as DWl. He told the court that upon demise of the iate Joseph Elias Kitambi^ his elder brother who passed away on 23^^ November 2020 together with one Michael Elias Kitambi they were appointed as administrators of his estate. They were so appointed by the High Court of Tanzania at Dar Es Saiaam District Registry on September 2021. He said that in the cause of administering the said estate he was served with summons and other documents in connection with this case. He said that he did not know about the agreement before he was served with summons in this case. • '' • • I -t.- 9 • . ■ • '' . It was the defendant contention that despite the fact that PWl testified that before his death the Defendant had paid shiliings 28,800,000/= towards iiquidating the alleged borrowed, nothing in terms bank deposit slips were produced to prove that assertion. It was therefore the Defendant's contention that since the Plaintiff failed to tender any bank document regarding payment of shillings 28,800,000/= by the deceased, her claim that the purported loan is still unpaid is doubtful. He said that in absence of evidence of the alleged part payment, there is great possibility that the loan (if any) was settled by the deceased himself before his demise in 2020, otherwise it is the Defendant's statement that the alleged loan agreement is known to the Plaintiff herself. Further to that it was the Defendant's contention that the claimed interest of 20% per annum is illegal since the Plaintiff is not a financial Institution doing money business and therefore eligible to charge interest in the money it lends to borrowers. On the validity of the agreement between the parties, it was the Defendant statement that because the validity of the agreement was dispute, the Plaintiff had the duty to call an advocate who attested it to give evidence on her behalf and because she did not ^o so, court should draw adverse inference against her. It was further testimony of the Defendant that the estranged wife of the late Joseph Kitambi one Fatuma Yusuph MaChOzi was also a material witness for the Plaintiff in this case and that the duty to call her. Further to that the Defendant has questioned the Plaintiff's witness statement's reference to Commercial case No. 26022 of 2023 instead of the present case which is Civil Case No. 26022 of 2023 of this registry. At a final pre-trial and Scheduling Conference the following issues were framed for determination 1. Whether or not the parties entered into a loan agreement of TZS 120,000,000 payable in two years period; 2. If the first issue is answered in affirmative whether or not the loan had an interest clause at the rate of 20% per annum; 3. If the second issue is answered in affirmative whether the interest clause was legal; 4. To what reliefs are the parties entitled. Before delving onto determining the issues mentioned above, it is pertinent to restate the principle in the law of evidence that whoever desires any court to give judgment as to any legal rights or liability dependent on the existence of facts bears the duty to prove that those facts exist. That is to say, the plaintiff herein bears the duty to prove such fact for the court to grant what is asked for. This ancient principle is embodied under section 110 (1) of our Law of Evidence Act [Cap 6 R. E. 2022]. The said law provides that:- 'Whoever desires any court to givejudgmentas to anyiegairight or iiabiiity dependent on the existence offacts which he asserts mustprove that those facts exist." In the instant case the legal right which the plaintiff desires this give judgment in her favour is payment of shillings 139,200,000/= interest and costs. Now starting with the first issue which; is whether parties entered into a idan agreement, the plaintiff alleged existence of loan agreement under paragraph 4 of the plaint. The Defendant denied it and stated that the said loan (if any), is known to the plaintiff herself. Further it is the Defendant's contention that in any event the claim of 20% interest per annum is illegal since the plaintiff is not a financial institution and therefore has no capacity to lend money and charge interests. In her bid to prove existence of the alleged contract PWl tendered in evidence a written agreement that was received as Exhibit PI. Exhibit PI is signed by the parties. It is a "MKATABA I^TI YA JOSEPH KITAMBI T/A HILUX HOTEL LTD (BORROWER) NA GABRIEL WAVI OLE LOIBANGUTI (LENDER)". The agreement was executed on 4^"^ April 2017 before CyriaCus Binamungu an advocate of the High court. The document shows that Caroline Wavi Ole Loibanguti (PWl) signed both as a witness and wife of the late Gabriel Wavi Loibanguti (the lender), and one Fatuma VusLiph Machozi, the wife of the late Joseph Ellas Kitambi signed both as a witness and the wife of the borrower. The Defendant objected adrhission of the document on the ground that the late Joseph Kitambi signed it on behalf of Hiiux Hotels Ltd. His objection was dismissed on the ground that the document Jacked official seal or stamp of the said Hiiux Hotels Ltd and that its contents showed dearly that it was an agreement between Joseph Kitambi and Gabriel Loibanguti. The defendant also contended that advocate Binamungu who attested the document and Fatuma Yusuph Machozi, the alleged wife of the late Joseph Kitambi were both material witnesses for the plaintifFs case and court should draw adverse Inference against the plaintiff for her faiiure to call them to testify on her behaif. I have carefully perused Exhibit PI and I find it to be a gienuine agreement therefore contract entered by the parties. The exhibit is duly signed by the contracting parties that is to say Gabriel Loibanguti and Joseph Kiatmbi.Tt is also signed by PWl the wife and witness of the lender and one Fatuma Yusuph Machozi, the wife and witness of the iate Joseph Kitambi (i.e. the borrower). It has been contended that where a party fails to call a material and available witness who can support his case, court may draw adverse inference against him. This old dictum was established about 100 years ago in the case of R Versus Hepworth 1928 AD 265 biit it holds true today. In that case which was a criminal case the Court held that:- "/I criminal triaiis not a game where one side is entitled to claim benefit ofany omission or mistake made by the other side...." I agree with the holding in that case that a judge's position in a criminal trial is not merely that of an umpire to see that rules of the 10 game are observed by both sides but that he is an administrator of justice who has the duty to make sure that both the rules of law and justice are done. In criminal trials the burden of proof is beyond reasonable doubt and it never shifts. A judge in criminal trials is not merely a figure-head who has to direct and control the proceedings according to the criminal procedure rules, he has a duty to make sure that justice prevail over any procedural requirement! Unlike in criminal in civil trials a judge is an administrator of justice who has to direct and control the proceedings according to the rules of procedure. In civil trials, the burden of proof is on the balance of probability and the burden may shift to the Defendant to prove on the balance of probability that the plaintiff's assertions are not true. The role of a judge in civil cases is to weigh the evidence adduced and see which is most probable than the other. Thus, in civil cases the burden is on he who asserts to prove his assertions by calling material witnesses to support his case. In the case of Hemedi Said Versus Mohamed Mbilu [1984]TLR 113 which was decided 4o years ago this Court (Sisya J) held that:- "777e duty to call witnesses Is not the court's butItIs for the party who wants to be believed in his story and win the 11 case. Where a party for undisclosed reasons faffs to caff a materfaf witness courts are entitled in faw to an inference that if the witness was called he would give evidence which is contrary to the interest ofthatparty" The court went on to hold that It is not the number of witnesses whom a party calls on,his side, which matters, but rather,the quality of evidence adduced. The court concluded that a party whose evidence is heavier than the other is the one who wins the case. As stated hereinbefore, two witnesses gave evidence on the existence of an agreement between Joseph Kitambi (the borrower) and Gabriel Lobangiuti (the lender). PWl claim to have been present when the Mkataba (Exhibit PI) was signed. sShe signed it as one of the witnesses to its being entered into. She explained that she signed it at her capacity as the wife of the lender (i.e. Gabriel LOibanguti) and also as a witness. Her evidence was corroborated by that of Bertha Joseph Kitambi PW2, the borrower's daughter who testified that before his death her father disclosed to his family that he was heavily indented to Gabriel Lobairiguti. On his part the Defendant stated that since the validity of the said agreement is disputed, the Plaintiff was duty bound to call material 12 witnesses namely Fatuma Yusuph Machozi (wife of the late Joseph Kitambi) and Professor Cyricus Binamungu (advocate who attested the purported loan agreement). Admittedly, both advocate Cyrlacus Blpamungu who attested Exhibit PI and Fatuma Yusuph Machozi who Is alleged to be the wife of the late Joseph KItambI could be material witnesses In this case. However, their evidence would have been crucial to either side and In my view the two witnesses would have been more material to Defendant's than to Plaintiff's case. I say so because the Plaintiff's assertion that Fatuma Yusuph Machozi was the wife of the late Joseph KItambI and that she witnessed the signing of exhibit PI was confirmed by her daughter Bertha Joseph KItambI (PW2) who stated In paragraph 4 of her witness statement that:- "Iremember in 2020 before the demise ofmy father, my father in presence ofmy mother Fatuma Yusuph Machoziand mysibling Nyaso Joseph Katambi, he toid us that when he dies, he wouid ieave us with a iot of debts. further he toid us he owed huge debt to Gabriei Wavi Oie Loibangutr This piece of evidence was not challenged by the Defendant In cross- examination. Since the Defendant did not seriously challenge the evidence that Fatuma Yusuph Machozi Is the mother of Bertha Joseph ■ 13 Kitambi (PW2) and wife to the late Joseph KitambI, and taking into account the fact that this case is actually against the estate of the late Joseph Kitambi which estate both PW2 and the said Fatuma Yusuph Machozi may have interest the Defendant ought to have called her to challenge the testimonies of both PWl and PW2. Failure by the Defendant to call Fatuma Yusuph Machozi, the wife of the late Joseph Kitambi entitles this court to draw adverse inference that if the witness was called by the Defendant she would have given evidence contrary to the interest of the estate. On the part of advocate Byamungu, I have no doubt that in attesting the documents the said advocate was acting for both signatories, accordingly either party could have called him to testify in this case. The Defendant did not give any reason why he did not call him instead, the Defendant is blaming the Plaintiff for not calling him. Requiring the opposite party to bring evidence to prove his assertion is not evidence to challenge that assertion. It amount to a mere denial of the facts alleged which falls within pleadings of a party. In fact it is surprising that the Defendant is requiring the Plaintiff to call Fatuma Yusuph Machozi, the Wife of late Joseph Kitambi to give evidence agaihst the estate of her own husband which she has vested interest. 14 As stated hereabove, this could be a material witness of the Defendant and no reason was given not to call her to challenge her alleged presence during the sinning of Exhibit PI. On the party of the advocate who attested Exhibit PI, either party would have called him to build her/his case. It is common knowledge that the said advocate has his offices here in Morogoro.and therefore could be reached easily. As stated hereinbefore, the duty to call relevant witness is on the party who wants to be believed in his story and win the case. In the case at hand and more so where evidence in chief is given by way of witness statements, the Defendant was better placed to challenge the Plaintiff's evidence because by the time he opened defence case, he had all the evidence given by the Plaintiff. It follows therefore that failure to call witne.sses who would counter the Plaintiff's evidence is tantamount to conceding. Still on the issue of validity of the agreement there is an argument that if at all there was a contract, then the same was between the late Gabriel Loibanguti and Hilux Hotel Ltd. I find no difficult to reject this argument. It is commonly known that a limited liability company is a person in law. The legal status of a limited liability is that its assets 15 and debts are separate from the personal assets of its owners. It works through its mandated directors and officers who are governed by relevant laws and regulations. One of the most crucial element of a deal that involves a limited liability company is the use of the company's official seal in papers involved In the transaction in question. I have carefully perused exhibit PI, and I find that it bears no official seal or even stamp of one Hilux Hotel Ltd, thus there is nothing in exhibit PI that suggests that Hilux Hotel Ltd is a limited liability company or that it was in anyhow involved in the said agreement. The wording used in exhibit PI would at most suggest that Hilux Hotel Ltd is simply a trade narne of Joseph Kitarribi. That can be deduced from clause one of the agreement which states clearly that:- "Mr Gabriel Wavi Die Loibanguti atamkopesha Mr Joseph Kitambi KiasichaTshs 120,000,000/='' In clause No 7 Joseph Kitambi signed as a borrower and not in any capacity of the alleged Hilux Hotel Ltd, therefore his legal representative (i.e. the Defendant), cannot be heard telling the court that the loan was granted to Hilux Hotel Limited. It is therefore my findings that there was a loan agreement i.e. Mkataba (Exhibit PI) . 16 between Joseph Katambi and Gabriel Lobainguti. Thus, the first issue is answered in the affirmative. The second issue is that; if the first issue is answered in the affirmative, whether or not the ioan agreement ''Mkataba" (Exhibit PI), had an interest clause of 2.0% per annum. This issue wiil not detain me much: Paragraph 3 of the Mkataba (Exhibit PI), states cieariy that:- "Mkopo huu utatoma Riba ya Kiasi cha asHimia 20 tu Kwa Mwaka'' This means that parties had agreed an interest at the rate of 20% per annum. The question however is; whether interest is chargeable in a private lending and borrowing arrangement. The term interest in the world of business and commerce entails profit of a financial nature (See Black's Law Dictionary by Bryan A. Garner 10^'' Edition page 934). It is money charged by a financial institution for the service and benefit of borrowing money. Section 6(1)of the Banking and Financial Institutions Act [Cap 342 R.E. 2019], prohibits a non-licenced person to engage in banking business. The term banking business is not defined in that law, but generally, it entails accepting deposits 17 from the public and give loans to make a profit through charging interests. While I am not aware of any law which prohibits individuals to give loans or to borrow money to or from a friend, the aforesaid provisions of the law prohibits a person with no banking iicence from doing banking business. In other words unless one,holds a business licence, he cannot lend or borrow money on profit but on non-profit basis. The agreed interest of 20% per annum which is a profit and therefore a consideration in the said agreement is therefore contrary to the law and illegal. Accordingly the second issue is answered in the affirmative, that is to say the agreement (Exhibit PI) had an interest clause. However as stated above the legality of the agreed interest is questionable both under the Banking and Financial Institutions Act and the Law of Contract Act. Section 23(1) of the Law of Contract Act provides that: "The consideration or object of an agreement is lawfully, unless, (a) It is forbidden by law; In this case interest is forbidden by section 6(1) of the Banking and Financial Institutions Act therefore it is illegal and the Plaintiff cannot claim it. 18 The final issue is about reliefs. Having found that the Loan Agreement (Exhibit PI) was valid, it follows that the late Joseph Kitambi entered in to a loan agreement(Exhibit PI) with the late Gabriel Lobanguiti in which, Joseph Kitambi borrowed Shillings 120,000,000/=(Say One Hundred and Twenty Million) only from Gabriel Lobanguiti. According to the agreement (Exhibit PI) the borrowed money was to be repaid within a period of two years which was due on 30^^ April 2019. It is the evidence of PWl that by 2020 only Shillings 28,800,000/= (Say Twenty Eight Million, Eight Hundred Thousand) only was paid. This evidence is corroborated by that of PW2 who told the court that in 2Q20 her father informed his family that he was heavily indebted to the late Gabriel Lobainguti. According to the Letters of Administration (Exhibit Dl) granted to the Defendant aloyce Elias Kitambi and another, Joseph Kitambi (deceased) passed away on 23'"'^ November 2020. Since there is evidence to the effect that by 2020 he had managed to pay shillings 28,800,000/= only; it follows that the remaining balance of Shillings 91,200,000/= is unpaid to date (i.e. Shillings 120,000,000/= the total sum of money advanced to the late Joseph Kitambi by the late Gabriel Loibanguti Minus Shillings 28,800,b00/=the arriount he re-paid before his death). 19 , Thus, having done away with the ciaim of interest, the Plaintiff (on behaif of the estate of the iate Gabriel Loibanguti) is entitled to payment from the Defendant (on behalf of the estate of the late Joseph Kitambi) of Shillings 91,200,000/=(Say Tanzania shillings Ninety One Miiiion), only being the unpaid balance of the borrowed shillings 120,000,000/=(Say Tanzania Shillings One Hundred and Twenty Miiiion) only which was borrowed by the iate Joseph Kitambi from the iate Gabriel Loibanguti. In summary, therefore this court enters judgment for the Plaintiff and against the Defendant as follows 1. The estate of the Defendant shall pay to estate of the Plaintiff Shillings 91,200,000/= (Say Ninety One Miiiion) only being the unpaid loan balance. 2. The decretal sum shall attract court's interest at the rate of 3% per annum from the date of this judgment to the date of payment in full; 3. The Plaintiff is also awajxlBcLcQ§ts of the suit. A.R. MRUMA foURTo^ -t- Uj JUDGE X 2 •vv 5. 9. 2024 20