20170929 TZHC Dar es Salaam

1 IN THE HIGH COURT OF TANZANIA AT DAR ES SALAAM CIVIL APPEAL NO 143 OF 2015 SOPHIA EUGEN KALUKA .... .............. .............. APPELLANT VERSUS LEUS YAZIDI ... ■ ■ •• ■ ■ ■ ■ ■ ■ ■ ■ ■ •• ■ ■ ■• ■• CI ■ • ■ ■ ■• B ••• ■ ■ ■ ■ ■■ •• ■■■ RESPONDENT JUDGMENT t At the trial court, Respondent filed a suit for recovery of thirteen million, he advanced appellant at a different time as capital in her business. On being served appellant, then defendant, refuted plaintiff claims. On her written statement of defence at paragraph 2, 4, 3 admitted to have received the amount of thirteen million, as basic needs from plaintiff now respondent, ·- -· ~ . ~-•.:.;-••· :( following marital relationship she had with plaintiff. It was :~,/..- further· a·v'erred that, on Febru~ry 2012 Sophia Eugen Kaluka received summons from Morogoro Central Police. On arrival she was commanded to sign an agreement before inspector of police, after paying 200,000 as security for bail. The agreement was a basis for the respondent suit at the trial court. On conclusion of the trial, Judgment was entered for the 1 ; .... plaintiff now respondent, followed with attachment of appellant's car Harrier Reg. No T904 to satisfy the decree. Being dissatisfied, appellant filed present appeal raising two grounds of appeal namely. 1. The learned trial Resident Magistrate erred in fact and in law to hear and determine the case out of the agreed time frame as per the scheduling order of 13/4/2013 without an order for extension of the same. 2. The learned trial Resident Magistrate erred failed to evaluate the evidence on record particularly the relationship of the parties and the circumstance leading to coercive execution of exhibit Pl. Hearing was conducted by way of written submission. Parties complied with the schedule hence this Judgment. For reason that I will explain later, I wish to deal with ground two first. Appellant J' submitted in support of ground two that, one; the evidence, on relationship of the parties as lovers has not been cross examined, to the evidence remain unchallenged. Two; Exhibit Pl bank statement of Leus Timber and Auto works has no relationship with the respondent. More so, Leus Timber and Autoworks is not party to the proceedings. 2 Three; exhibit Pl the contract has not been registered for it to . be relied as exhibit and to have legal force. Appellant counsel referred this court to the case of Josephat L. K. Lugaimukamu V. Father Canute. J. Mzuwanda [1986] TLR 69 HC, where judge Bahati J. held that, The ruling by the trial court on the admissibility of the written agreement was erroneous because section 46 of the stamp Duty Act, 1972 clearly stipulates that under No circumstances may an unstamped document which requites to be stamped be admissible in evidence·. Basing on the three ground, appellant asked this court to see that 2nd ground, has merits and allow the appeal. Respondent on the other hand submitted on ground two that relationship if any between the appellant and respondent has nothing to do with the amount advanced to the appellant. More, so, respondent denied to have any other relationship with appellant apart from the business. Respondent was trading as Leus Timber and Autoworks. There is no way appellant can separate respondent and Leus, Timber and Autoworks, on the following reasons: 3 • • -- ··- - •:"- ~· ••< ~ - ~ I : (i) during examination in chief clearly states that apart ,\ from being a police officer, he is also has business for selling timber and Auto motor spare works. (ii) At page 17 of the proceedings, Stephen Archie PW2 testified that he was asked by Leus Yazid, the respondent to deposit the money to the appellant's account. (iii) At page 22 of the proceedings Rashid Abdul Mhaku (DW2) witnessed the appellant writing an agreement to pay back the loan to the Respondent at Morogoro Police Central Station. This was one of person accompanied the appellant from Ifakara to Morogoro Police Station and he also signed the agreement written by the appellant in his presence as a witness. On the issue of none payment of stamp duty, on exhibit Pl, respondent submitted that, it was not an issue at the trial court, thus cannot be raised on appeal. To support his argument, respondent referred this court to the case of Hotel Travertine and two others Vs National Bank of Commerce Ltd 2006 TLR 133 where it was held that, 4 Acceptance by conduct, is a matter that could not be raised on appeal as it was not pleaded or argued in the High Court. In the end, respondent pressed for dismissal of the appeal. Insisting that appellant is illegally in need of unlawful rights by using legal technicalities. Courts of law need to dispense justice without being tied up with legal technicalities that in one way or another takes or delays right of others. This court having heard both parties in their submissions, went through trial court records, and grounds of appeal, I wish to state on the outset that statement showing depositing and receiving of the money has not been tendered as exhibit in the trial court. So issue of Leus Timber and Auto works statement of accounts, will not be referred as evidence. What we have on records is exhibit PE1, referred as contract. For avoidance of doubts, hereby reproduce exhibit PE1, in it's wording and format. 5 I' Sophia Eugen Kaluka Box442 IFAKARA 15/2/2012 YAH: MAKUBALIANO YA KULIPA DENI SIMU 0784 - 409977 - 0652 - 470360 Mimi Sophia Eugen Kaluka nathibitisha nadaiwa Jumla ya sh 13,000,000 milioni Kumi na tatu tu, na ndugu Leus Yazid pesa zilizotokana na kukopeshwa hivyo mwezi was aba nitpunguza shs 3,000,000 naahidi kwa maandishi natarajia kuma/iza amwezi wa 12 kumi na mbili 2012 Mungu akinijalia. Signed ........................ 15/02/2012. Mbele ya Mashahidi (1) George Mwmbeta. Signed (2) Lwotiko Sikana Signed 15/02/2012 Mkataba umewekwa mbele ya mkaguzi msaidizi wa po/isi. A/INSP David, K. Signed Above quoted words are the basis qf the suit before the trial I I court. From the content of exhibit PE1, following issue arises: (i) It is not a contract rather, it is a commitment by appellant to pay. (ii) Respondent Leus Yazid is mentioned by appellant to have advanced sum in dispute. 6 (iii) Respondent did not sign or witness the commitment to be paid. (iv) The commitment to pay was written and signed by the appellant and her two witnesses in the presence of Assistant Inspector David K. of Morogoro central police. From the observation above, it is very clear that, appellant was to bind herself to pay in the absence of the respondent (a police) who under normal circumstances is supposed to be part of the contract by signing the same, for it to be called contract under the eyes of the law. To support the binding nature of the commitment, assistant Inspector David K. supervised the commitment and signatures of the appellant and her witnesses. Can this be said a contract or commitment made willfully? Certainly not!! Why should it be witnessed by Assistant Inspector of Police? And on his capacity {rank}. According ~ to the evidence of DW1 Sophia Eugen Kaluka, (the appellant), she was arrested by the police and made commitment before Assistant Inspector as shown. According to the evidence DW2 and DW3 who· witnessed DW1 making Commitment before Assistant Inspector David K. testified that they were arrested and paid 200,000 Tshs, as bond for Sophia Kaluka to be released on 7 bail. It is also on record according to the evidence of DW1, (appellant) and respondent were lovers, and that there was a promise to get married. Same evidence was said by DW2 Rashid Abdul Mhaku at page 22 of typed proceedings I hereby quote. I am a driver, I know the plaintiff since 2003. I also know the defendant he is my sister in law. The plaintiff told me the defendant is her boyfriend. I met them at bar drinking each one lived in her own house. The first day to know him I was at the bar. I did not hear that the plaintiff gave the loan to the defendant. On the same issue on relationship DW3 George Mwambete testified that, at trial court that I hereby quote:- 1 know the defendant she is my in law. I saw the plaintiff in police Morogoro. I came in Morogoro with defendant and her husband Lutiko Sikana. When we arrived at police Morogoro the police officer showed the bank statement to defendant. The police asked me do you know Leus Yazid, replied yes. Then the police said he gave 13 million. We went outside and then later the defendant wrote that she received a loan which she will pay. My uncle Lutiko Sikana Married the Defendant I don't remember when. At police we paid 400,000 for bail. The defendant wrote the 8 ~-- --- . statement that she will return the 13 million loan. Sorry we paid 200,000 for bail. From evidence of DW1, DW2, and DW3 appellant, former defendant was arrested before making commitment, and paid 200,000 before being released on bail. The said commitment witnessed by DW2 and DW3 was the basis for the claim of 13 million by the plaintiff now respondent. From the sequence of events and evidence of DW1, DW2 and DW3, commented by exhibit PE1, the commitment was procured by coercion. It was not willfully obtained. Thus relaying on the same is not safe in law. In the book of General Principles of Contract Law in East Africa by Nicholous N.N. Nditi, 2004 at page 111, Coercion contract is defined as the act of committing or threatening to committing or threatening to commit any act forbidden by the Penal Code or unlawful detaining or threatening to detain any property or person to prejudice with intention of causing him or her to enter into agreement. In short, coercion contract is a contract obtained by forcing one of the party to enter into agreement without his or her free will. 9 ■ ---::: In the case of Universe Tankships vs. International Transport Workers Feferation {1983) 1 AG 366, House of Lords, Lord Scarman is of the view that in order to plead that, the contract were obtained by coercion two element of duress must be identified; 1. There must be compulsion of the will - threat (absence of choice) 11. Illegitimacy of the pressure. The party claiming that, the consent in the contract was obtained by coercion must prove that, it compulsion which led to enter into the agreement. In the book of Law of Contract by Cheshire, Fifoot & Furmston (13 ed) 1996 at page 318, the authors are of the view that, it must be established that the threats were a reason for entering into the contract but it need not be shown that they were only or even the main reason. Once it has been proved that unlawful threat were made, it is for threatener to show that they were not a reason for the other party contracting. Summarizing the landmark case on duress, the case of Barton Vs. Armstrong (1976) AC 104, [1875] 2 All ER. 465, H.G Beale, WD Bishop MP. Funston, in their Book of Contract cases and Materials, 2001, at page 895, noted that; 10 1. Duress is a ground in which an executed contract may e set aside. Equally a "gift" made under duress may be set aside. 2. The contract made under duress to the person is voidable. In case of economic duress it has the contract is voidable and that the right to have· it set aside may be lost through the affirmation or delay. 3. Presumably the contract would equally be voidable if the threat were to destroy or damage the property want only. The effect of coercion contract in Tanzania is provided under section 19(1) of the Law of Contract, Cap. 345 R.E. 2002. When consent to an agreement is caused by coercion under influence, fraud or misrepresentation, the agreement is a contract voidable at the option of the party whose consent was so caused. The general rule is that, where an illegal contract has been made, neither courts of law nor equity will interpose to grant any relief to the parties. Examples of where the issue of illegality has been dealt with. 1. Contracts to commit an unlawful act. Where the purpose of the agreement between the parties is to commit a crime, a tort or a fraud against another party, 11 . such a contract it illegal and unenforceable. Section 23 (1) © The Law of Contract Act provides that the consideration or object of an agreement is lawful, unless is fraudulent. 2. Contracts which are immoral or contrary to public policy. Section 23 ( 1) € The Law of Contract Act provides that the consideration or object of an agreement is lawful, unless-the court regards it as immoral or opposed to public policy. (a) Contracts promoting sexual immorality. In Pearce v. Brooks (1866) LR 1 Ex 213, the plaintiff agreed to hire a horse and a carriage to a prostitute, knowing that it would be used, in some way to assist her in her enterprise. Held: the plaintiff could not recover the hire charge when the defendant refused to pay it. Lord Pollock explained (at 218) that: "I have always considered it as a settled law that any person who contributes to the performance of an illegal act by supplying a thing with the knowledge that it going to be used for that purpose, cannot recover the price of the thing so supplied ... Nor can any distinction be made between an illegal and an immoral purpose; the rule which is applicable to the matter is ex turpi causa non oritur ation, and whether it is an 12 • immoral or an illegal purpose in which the plaintiff has participated, it comes equally within the terms of that maxim, and the effect is the same; no cause of action. can arise out of either the one or the other." (b) Contracts which are contrary to public policy. (i) Interfere with marital relations. (ii) Contracts which pervert the course of justice. (iii) Contracts to deceive public authorities. (iv) Trading with an enemy. (v) Undue restriction of personal liberty. (vi) Constraints in restraint of trade. 3. Section 23(1) (b) The Law of Contract Act provides that the consideration or object of an agreement is lawful, unless - is of such a nature that, if permitted, it would defeat the provisions of any law. Further, pursuant to Section 28 of the Law of contract Act CAP 345 R.E.- 2002, Every ag_re_ement, by whi_ch any party thereto is restricted absolutely from enforcing his rights under or in respect of any contract, by the usual legal proceeding in the ordinary tribunals, or which limits the time 13 . within which he may thus enforce his rights, is void to that extent. ............. . 4. Contracts promoting corruption in public life is explained in the case of Parkinson V. colleged of Ambulance Ltd and Harrison (1925). 5. Contracts which are contrary to the law. a. Where making of the contract it forbidden by law. b. Where the object of the contract it contrary to law. c. Where the contract my cause injury to the person or property of another. d. Where the agreement is for a fraudulent purpose. Section 17 of the Law of Contract Act 345 R.E. 2002. The general rule with illegality is that; a contract would require one or both parties to breach a law. Also, if the parties are not in pari delicto and only one party is violating a law and the other party has no knowledge of the illegal activity, the contract becomes voidable at the latter party's option (party with no knowledge of the illegal act). In weighing the issue of illegality the court will look at Public Policy, the conduct of the parties making the contract, and if justice will be served by making the contract void or voidable. It is generally accepted that where both parties participate equally 14 in a transaction which is illegal in itself, then neither can enforce the agreement against the other. In Tanzania, the consequences of illegal contracts are provided for under Section 23(2) the law of contract Act Cap 345 R.E. 2002 as follows. " ... Every agreement of which the object or consideration is unlawful is void and no suit shall be brought for the recovery of any money paid or thing delivered, or for compensation for anything done under any such agreement, unless. a. The court satisfied that the plaintiff was ignorant of the illegality of the consideration or object of the agreement at the time he paid the money or delivered the thing sought to be recovered or did the thing in respect of which compensation is sought, and that the illegal consideration or object had not been effected at the time when the plaintiff became aware of the illegality and repudiated the agreement; b. The court is satisfied that the consent of the plaintiff to the agreement was induced by fraud, misrepresentation, coercion or undue influence; or c. The agreement is declared to be illegal by any written law with the object of protecting a particular class of persons of which the plaintiff is one" 15 The ~following passage in the Judgment of Lord Morris of Borth- Gest in the Case of Mistry Amar Singh V. Kulobya [1963] EA 408 at page 414 Letter D, admirably sums up the position of the courts with respect contracts founded on an illegality. "Ex Turpi Causa mon Oritur action. This old and well known legal maxim is founded in good sense and expresses clear and well recognized legal principle which is not confined to indictable offences. No court ought to enforce and illegal contract, or allow itself to be made an instrument of enforcing obligations alleged to arise out of a contract or transaction which is illegal, if the illegality is brought to the attention of the cour6t and if the person invoking the aid of the court is himself implicated in the illegality. It matters not whether the plaintiff has pleaded the illegality or whether he has not. If he evidence adduced by the plaintiff proves the illegality the court ought not to assist him". In the text book Chitty on Contracts Twenty-Eighth Edition Volume 1 general Principles page 839 where the learned authors have given the following opinion: 16 "Where a contract is illegal as forme~ or it is intended that it should be performed in a legally prohibited manner, the courts will not enforce the contract, or provide any other premedies arising out of the contract. The benefit of the public and not the advantage of the defendant, being the principle upon which a contract may be impeached on account of such illegality, the objection may be taken by either of the parties to the contract. "The principle of public policy' said Lord Mansfield "is this ex dolo malo non oritur action. No court will lend its aid to a man who founds his cause of action upon an immoral or illegal act. If, for the plaintiff's own stating or otherwise, the cause of action appears to arise ex turpi causa, or the transgression of a positive law of this country, there the court says he has no right to be assisted. It is upon that ground that court goes; not for the sake of the defendant but because they will not lend their aid to such a plaintiff. So if the plaintiff and the defendant were to change sides, and the defendant was to bring his action against the plaintiff, the latter would then have the advantage of it; for where both are equally at fault, potior est condition defendentis'~ The rules on illegality have been criticized as being unprincipled but a better was of viewing them, as the previous dictum form Holmon. 17 1 Johnson illustrates, is as 'lJeing indiscriminate in their effect and are capable therefore of producing injustice. 11 The effect of illegality is not substantive but procedural'; it prevents the plaintiff from enforcing the illegal transaction. A principle of public policy that courts will not assist a plaintiff who has been guilty of illegal ( or immoral} conduct of which the courts should take notice. It applies if in all the circumstances it would be an affront to public conscience to grant the plaintiff the relief which he seeks because the court would thereby appear to assist or encourage the plaintiff in his illegal conduct or to encourage others in similar acts'~ Lord Mansfield, C. J. expressed himself that, in HOLMAN V. HOHNSON [1775 - 1802] All E.R.98 at p. 99. "The objection that a contract is immoral or illegal as between plaintiff and defendant sounds at all times very ill in the mouth of a defendant. It is not for his sake, however, that the objection is allowed; but it is founded in general principles of policy which the defendant has advantage of, contrary to the real justice, as between him and the plaintiff, by accident, if Imay say so. The principle of public policy is this ex dolo malo non oritur action. No court will lend its aid to a man 18 who founds his cause of action on an immoral or an illegal act. If, from the plaintiff's own stating or otherwise, the cause of action appears to arise ex turpi causa, or the transgression of a positive law of this country, there the court says that he has no right to be assisted. It is on that ground the court goes; not for the sake of the defendant, but because they will not lend their aid to such a plaint off. So, if the plaintiff and defendant were to change sides and the defendant was to bring his action against the plaintiff the latter would then have the advantage of it for where both are equally at fault, potior est condition defendenties". To my mind, the policy for the legal provisions which preclude any party from seeking the assistance of the court, in the enforcement of immoral on illegal contracts cannot be over- emphasized. In WILD V SIMPSON [1918-19] All E.R 682, bankers L.J. held that a champertous agreement was unenforceable. He said that neither the promise by a solicitor, in an action upon champertous terms, nor the work done under such a promise, was good consideration. He cited the following 19 words of A.L. SMITH L.H. in Scott Vs. Doering, McnAB & Co; [1982] Q.B.724 at 734, to elaborate on the legal justification and scope of the policy:- "If a plaintiff cannot maintain his cause of action without showing, as part of such cause of action, that he has been guilty of illegality, then the courts will not assist him in his cause of action" It is important to re-echo herein the effect of the illegality upon a contract. DEVLIN L.J. in Archbolds (Freightage) LTD Vs. Spanglett Ltd [1961] 1 Q.B. 374 at 388, stated: "The effect of illegality upon a contract may be threefold. If at the time of making the contract there is an intent to perform it in an unlawful way, the contract, although it remains alive, is unenforceable at the suit of the party having the intent; if the intent is held in common, it is not enforceable at all. Another effect of illegality is to prevent the plaintiff from recovering under a contract if in order to prove his rights under it he has to rely upon his own illegal act, he may not do that even though he can show that at the time of making the contract he had no intent to break the law and that at the time of performance he 20 ,.. ___________ -- -·- did not know what he was doing was illegal. The third effect of illegality is to avoid the contract ab initio and that arises if the making of the contract is expressly or impliedly prohibited by statute or is otherwise contrary to public policy". In view of the foregoing legal position, it is crystal clear that where the agreement upon which the cause of action was founded is in breach of the law, it would follow that the same is void ab intion, and that therefore, the plaintiff cannot sustain a claim in any court of law. According to the trial court records respondent is a police. Appellant was summoned to appear at Morogoro central police. On arrival she was required to sign commitment to pay respondent 13,000,000 she received as loan. After signing she paid 200,000 as security for bail consideration. At time of signing she was under the custody of police. This fact not only proved by evidence of DW1, DW2 and DW3 but also exhibit PE1 in which Assistant inspector David K. witnessed the same on his capacity as police officer. Exhibit PE1 for sure was procured by coercion and or duress. Thus it was not willfully obtained. There was no compulsion of the will. Therefore, exhibit PE1 lack evidential value. 21 Assuming exhibit PE1 was procured legally which is not the case here, yet, there is another irregularity committed by the trial court in the course of receiving exhibit PE1, referred as contract in the judgment. Exhibit PE1 is not endorsed as required by the law. It lacks evidential value due to the following. (i) It does not show who tendered the same. (ii) It does not show the name of the trial magistrate and signature. (iii) It does not show the number of the case. (iv) It does not show when it was received. (The dates). (v) It does not show the name of the court, that received the same. In essence, failure, to indorse the received exhibit, with five items mentioned above, is fatal irregularity that cannot be cured at appellate stage. Thus, exhibit PE1 cannot be left to stand on the court record. Accordingly exhibit PE1 is expunged from the court records. Having expunged exhibit PE1 from the court records, nothing left to relay as evidence to prove the loan repayment agreement/commitment. What we have on records as evidence for the amount of thirteen million is the admission of appellant that she was given money by respondent who was his lover. The 22 • question to be answered by this court, is whether the sum given under natural love and affection can be claimed back?. Issue of gifts between spouses section 61 of the Law of Marriage Act is of help. It reads: "Where, during the subsistence of a marriage, either spouse gives any property to the other, there shall be a rebuttable presumption that the property thereafter belongs absolutely to the donee."· Court was confronted with issue of spouse gift in SALUM MATEYO v MOHAMED MATEYO [1987] TLR 111. The court observed and opined as follows at page 113: "It would appear from the facts of the case as given to the trial court as accepted by that court that the appellant had acquired title to the house by way of a gift inter vivos. Was it open for the respondent to revoke the gift when their personal relationships changed? ... So, in the absence of evidence to the effect that the respondent had reserved a power of revocation, and as there is no claim that the gift was induced by fraud, undue influence, mistake or misrepresentation, or was tainted with 23 • illegality, I am constrained to hold that the gift was absolute and irrevocable." Issue of gift between the lovers was discussed by this court by Muruke J. in the case of Rosemary Stella Chambe lairo Vs David Kitundu lairo Civil Appeal No. 79 of 2013, (unreported). In which the court held that:- Traditionally, one will give a gift to show his or her appreciation for a thing well done or for something good done to him/her. Unless there is evidence to the contrary, one will not expect the donor to claim back the gift. It is my considered opinion that it is against morality to claim back a gift given under natural love and affection, to a spouse. Throughout the proceedings I have not come across piece of evidence not only to prove but even to suggest that 13,000,000/= given to appellant Sophia Uegin Kaluka by respondent Leus Yazidi was a conditional gift to be returned when relation come to an end. Having expunged exhibit PE1 in the court records, and in the absence of evidence that 13,000,000/= was a conditional gift it cannot be said that plaintiff now respondent proved his case in 24 • balance of probabilities in term of section 110 of the Evidence Act Cap. 6 R. E. 2002. This case is disposed basing on the 2nd ground only, because adjudicating on first ground will be for academic purposes. Accordingly, appeal allowed, Judgment and decree against the appellant dated 27 May 2015 is hereby set aside. In the cause of execution of order of the trial court, Property International Limited was appointed to attach appellant Toyota Harrier Registration number T. 904 DCP. Having set aside Judgment and Decree of the trial court, it is ordered that, court broker trading by the name of Property International Limited to release the car Toyota Harrier Reg. No. T. 904 DCP forthwith. I have considered, facts of this case, and how the cause of action arose, each party to bear own costs. It is so ordered. Z. G. JUDGE 29/09/2017 25 • Judgment delivered in the presence of Keregero Keregero for the appellant and in the absence of Respondent having notice. ,. Z. G. JUDGE 29/09/2017 26