cOOPERATIVE rural development

THE UNITED REPUBLIC OF TANZANIA JUDICIARY IN THE HIGH COURT OF TANZANIA M BEYA DISTRICT REGISTRY AT MBEYA CIVIL APPEAL NO. 5 0F 2023 (Originating from the District Court of Mbeya at Mbeya Civil Case No 28 of 2021) COOPERATIVE RURAL DEVELOPMENT BANl(-CRDB BANK PLC ........................................................ APPELLANT vEirsus LUCY DANIEL MAKOMBE T/A MBOITEY GENERAL BUSINESS COMPANY ..................,....................... 1ST RESPONDENT FIIANCIS AGGREY MB0lTEY T/A MB0TTEY GENERAL BUSINESS COMPANY ......................................... 2ND RESPONDENT JUDGMENT Date of Last Order: 27/08/2024 Date of Judgement: 10/01/2025 NDUNGURU, J. The respondents in this suit jointly sued before the District court of Mbeya at Mbeya the appellant claiming for among others, payment of specific damages to the tune of Tanzanian Shillings One Hundred and eighty-eight Million, five hundred and fifty thousand only (188,550,000/=), 1 payment of interests to the rate of 5 percent per month from the date of cancellation of the order to the date of payment, the payment of court interest, payment of general damages and the costs of the suit. Upon full trial the case was decided in favour of the respondents where the court granted the respondents all the reliefs as prayed in the plaint The case before the trial court was that; the first and the second respondent were running business in the name of MBOITEY GENERAL BUSINESS COMPANY, dealing with fire equipments services and laboratory equipments under the business licence No 8 2553731 and the certificate of registration No. 133235. That the lst respondent is the client of the appellant bank with the account No. 0150290631300. That in 2018 the lst respondent secured loan facility from the appellant to the tune of 15,000,000/=. On 28th April 2028 the first respondent deposited a total of 50,000,000/= in her account, the respondent deducted from it a total of 15,000,000/= as a principal amount and the interest thereon to recover the loan facility given to the first respondent. She remained with a balance of 29,121,353.99. That on 2/5/2018 the respondents received an order for supplying laboratory equipments from UFTC worth 188,550,000 and she was supposed to supply the said instruments within four days that is from 23rd May to 27th in 2018. That following the receipt of the order, the first respondent drew a cheque of 29,000,000 which remained in her account for the purpose of settling the order. On 21/05/2018, the respondents received delivery note from DANEP GENERAL SUPPLIES CO. of the equipments required to supply to UFTC. That without knowledge of the lst respondent, the appellant cancelled the cheque, the act which made the lst respondent fail to top up the amount for the order and thus failed to supply the equipments to UFTC whom on 28th day of May, 2018 cancelled the order. The cancellation made the respondents suffer a loss of paying the actual amount of 135,000,000 for received items from DANEP GENERAL SUPPLIES CO. Sequel to the foregoing, the respondents claimed to have suffered specific damages in terms of loss of profit to the business. From the outset, the appellant denied the accusation that she cancelled the lst respondent's cheque without her knowledge. But did not deny the lst respondent being her customer with a bank account with her. Further did not deny the fact that in 2015 the lst respondent secured loan facility to the tune of 20,000,000/= and that her account was credited with TZS 50 million and the bank deducted the amount of loan secured plus interest and charges accrued there from. However, the appellant contended that on 3rd May 2018, the lst respondent at her personal capacity presented the cheque worth 29 million at Mwan].elwa branch, but she was told the balance she had was insufficient to withdraw the amount she wanted. She was advised either to deposit some amount so that she could be able to withdraw the amount or to withdraw the amount below 29m. Acting on the second option availed, she on the same date went to Mbalizi branch and withdrew cash 28 million by cheque. From the pleadings, the trial court framed four issues for determination as I reproduce for easy of reference. One, whether there was partnership between the lst and 2nd plaintiffs, two, whether the agreement between the parties to the suit breached/terminated, three, whether the breach of contract caused the damages which both plaintiff claims and four, to what relief(s) are the parties entitled. Having heard the contending evidence in support and in opposition to the suit, the learned trial magistrate pronounced I.udgment and found out that, the respondents have proved the case to the standard required which is the balance of probability. She granted the respondents all the reliefs as prayed in the plaint. Dissatisfied with the decision of the trial court dated llth day of October, 2022, the appellant seeks to overturn the decision of the trial court. She has preferred memorandum of appeal armed with seven (7) grounds of appeal as reproduced herein below: i. The trial court erred.in law when entertained a commercial suit while it had no jurisdiction. That the trial court erred both in law and in facts when decided that there was partnership between the first and second respondent while there was no legal proof on the existence of the said partnership. iii. The trial magistrate erred both in law and fact when failed to catch and grasp well the ev.idence from the part.ies as a resu/t failed to analyse it wel/ and reached to wrong decision. iv. The trial magistrate erred in /aw when heard and composed a judgment contrary to the law. y, The trial magistrate erred in law when awarded the reliefs claimed while the respondents failed to prove their case on the standard required. Vy, The trial magistrate erred in law when admitted exhibits of the plaintiffs now respondents which lacked qualities for the same to be adm.itted. vii. The trial magistrate erred in law when awarded interests which are not recognized by the law. The appellant prayed the appeal be allowed, judgment and decree of the trial court be quashed and the respondent be ordered to pay costs of both this court and the court below. Before me, at the hearing, on 6/3/2024 Mr. Mbwilo learned counsel for the appellant informed the court that the 2nd respondent had passed away and to that date there no application for legal representation. Mr. Mwampaka who appeared for respondents on the very date confirmed the position and told the court that he has communicated with the deceased family on the appojntment of the legal representatjve and prayed for extension of time to make follow up. From 06/3/2024 to 11/6/2024 when the case was again scheduled for hearing there was no any application for 6 legal representation made by the family of the deceased, Neither the counsel, Ms. Tumaini who appeared for respondents had anything useful to address the court on the matter. The appeal was by agreed by consensus to be disposed by way of written submissions. In the written submissions, Mr. Mbwilo brought to the attention of the court on the abatement of the case against the 2nd respondent. He addressed the court to the effect that Order XXII Rule 3(1) of the CPC requires a legal representative to be joined in the suit in case the party to it dies and the right to sue survives. He further submitted that since it was reported that the 2nd respondent had died since llth November 2023 and since there was no application for joining legal representative made within 90 days from the death as per item 16 of Part Ill to the schedule of the Law of Limitation Act Cap 9 then the appeal against the second respondent abated. Further that the second respondent ought to be removed to the citation. In his reply to the submission which appears to had been filed by the lst respondent in person unrepresented appreciated the submission on the abatement of the appeal against the 2nd respondent. It follows therefore that the appeal against the 2nd respondent abated and his name therefore is as good as if not there at the citation. Going back to the submissions for the appeal, as regards the first ground of appeal, it was contended by Mr. Mbwilo that the fact the appellant and the lst respondent had banker -customer relationship, their dispute is commercial one not normal civil dispute. In the premises the respondent had to file commercial case not normal civil case. The counsel referred section 2 of Cap 11 which defines what is commercial case, the case of National Bank of Commerce Ltd v. Sykes Travel Agents Limited, Civil Appeal No. 53 of 2014, HCT at DSM (unreported) and National Bank of Commerce Ltd v. Maisha Mussa Uledi (Life Business Centre), Civil Appeal No. 501 of 2022. The counsel was of the submission that the fact that the dispute between the parties was commercial in nature, the trial court had no pecuniary jurisdiction to entertain it as the amount claimed was more than 70 million which the trial court has jurisdiction to entertain. He urged the whole proceedings be nullified. As to the second ground of appeal, it was the counsel's submission that section 191 of the Law of Contract provides for the rules and 8 regulations for determining the existence of partnership. Notwithstanding the agreement tendered as exhibit whose content is to the effect that the respondents are sharing profit that alone does not create a partnership. The agreement tendered is not a deed of partnership. That the ``memorandum of understanding" between the respondents Exh PE7 did not qualify to establish partnership and it cannot be a proof of the existence of partnership between the respondents The counsel fortified his argument by referring the case of Anthony Ngoo & Another v. Kitinda Kimaro, Civil Appeal No. 25 of 2014 where the court defined Partnership to mean: "A business owned by two or more persons that is not organized as a corporation. A voluntary contract betl^/een two or more competent persons to p/ace their money, effect labour and skills or more or all of them in lawful commerce or business with the understanding that there sha// be a proportional sharing of the profit and losses between them..." The counsel went on submitting that the certificate of registration and the Extract from the Registrar of Titles has no name of the first respondent. The names appearing as partners are Francis Aggrey Mbottey 9 and Tuntufye Mwakajonga. The counsel went on submitting that, the fact that there was no partnership between the two, it follows therefore, that the orders for supply of laboratory equipments the lst respondent claimed has nothing to do with her. Thus, the specific damages claimed with arose from the cancellation of the cheque and supply order have no base to stand on. Regarding the third ground of appeal, the counsel contended that the trial magistrate failed to catch up the testimonies of both parties. That failure to catch up the testimonies of the parties has made the trial magistrate fail to analyse and evaluate such evidence objectively. Thus, the conclusion arrived at was not evidence- based. He said the appellant's evidence was that the lst respondent was told that she could not withdraw the amount she wanted because she did not have enough money in the account ton enable her to withdraw the amount she wanted. Further that she was advised either to deposit some amount so as to enable her to withdraw the amount she wanted or to reduce the amount. That she followed the second option and drew 28m. at Mbalizi branch instead of 29m. That she was informed all the steps the cheque passed up to its cancellation. He said despite such evidence by the appellant's witnesses 10 and the lst respondent such evidence was not analysed and evaluated as a result she reached into a wrong decision. He bolstered his argument by referring to the case of Kaimu Said v. The Republic, Criminal Appeal No. 391 of 2019, CAT at Mtwara(unreported) and Leonard Mwanashoka v. The Republic, Criminal Appeal No. 226 of 2014 (unreported). Regarding the 4th ground of appeal, Mr. Mbwilo submitted to the effect that the trial, magistrate failed to consider the defence evidence and the pleadings where it was not disputed that the respondent would not withdraw the money she wanted (29 million) because of insufficient fund in the account and instead she drew 28m at Mbalizi branch. That that fact was not considered when determining the issues framed. As to the 5th ground of complaint, the counsel for appellant was of the submission that he respondent failed to prove partnership due to the fact that nothing was produced to prove the establishment and existence of partnership such as partnership deed, the specific loss suffered by producing financial accounts for at least three or more years and other damages she had suffered. 11 With regard to the 6th ground of grievances, the counsel for appellant submitted to the effect that the trial court admitted documentary exhibits which under the law of evidence they do not qualify to be admitted as exhibits. The counsel referred Exh. PX9, the letter for cancellation of the Order which was not a primary document but was admitted without adhering to the law governing admissibility of secondary evidence. As to the 7th ground of discomfort, Mr. Mbwilo was of the submission that the interest of 5% per month was improper likewise the award of interest of 8% was not stated from which time it accrued which is contrary to O.XX rule 21(1) of the CPC. The counsel urged the appeal be allowed with costs, Judgment and decree of the trial court be quashed. Responding to the appellant's submission, respondent filed her submission supporting the decision of the trial court. As far as the lst ground of appeal, the respondent was of the submission that the suit filed was not commercial one but a normal civil suit because the respondents being partners but had not have any account with the appellant as partners. That respondents did not sue in their own names. Likewise, the 2nd respondent did not have account with the respondent. That being the normal civil suit, the court had jurisdiction to entertain it. The respondent 12 went further submitting that the court is created under section 4(1) of the Magistrates' Court Act, Cap 11. The Act does not provide the mode of filing the norma` sui.t as agai.nst commerci.a' sui.ts. The fact that the 2nd respondent had no contractual relationship with the appellant the case cannot be commercial in nature but a normal suit. He thus held that the first ground of appeal is devoid of merit and should be dismissed. As to the 2nd ground of appeal, the respondent was of the submission that the evidence of the PW2, the second respondent is quite clear that the respondents with the other who is not party of the case were partners that they were agreed to divide the shares. That the evidence tendered in court, Exh. PE7 that is the partnership deed proves that there existed partnership between the respondents. She went on saying failure to object the partnership deed (Exh. PE7) by the appellant connotes that the appellant agreed its validity, thus cannot challenge it at the appellate stage. She prayed the ground of appeal be dismissed for lack of merit. Regarding the 3rd ground of complaint, the respondent was of the contention that respondents had strong evidence and had tendered 10 exhibits which were relevant to the case. That the evidence was correctly caught up well analysed and evaluated. She said the respondents had 13 heavier evidence which made them to win the case. She referred the case of Hemed Said vs. Mohamed Mbilu [1984] TLR113. As to the 4th ground of appeal, the respondent was of the submission that the content of judgment is provided under 0.XX Rule 4 of the CPC. She said the trial court's judgment followed the law in composing its judgment. That upon evaluation the trial court properly ignored the testimony of Dwl and DW2. She went on submitting that according to the evidence of Pwl and the exhibits tendered and the evidence of DW2 and the Exh. DE2 is that Pwl having withdrawn 28 million she was left with 29 million. In the circumstances it cannot be said that the respondent did not have sufficient fund in her account. That the evidence of Dwl and DW2 was irrelevant. She urged ground No. 4 be dismissed. As regards the 5th ground of complaint, respondent submitted to the effect that the case was proved to the standard3 required. She said the respondent through her witnesses and exhibits tendered before the trial proved the case to balance of probabilities. As to the 6th ground of appeal, it was the respondent's submission that all exhibits tendered by the respondent had legal qualities for their 14 admissibility and that is why the appellant never objected them during trial. Thus, the ground of appeal be dismissed. On the 7th ground of grievances, the respondent submitted to the effect that the magistrate did no error in awarding the respondents interests. That from the pleadings, the respondent was claiming for specific damages, general damages and interests thereof. She said the general damages awarded is from the discretion of the court. She referred the case of Cooper Motor Corporation Ltd v. Moshi Arusha Occupational Health Services [1990] TLR 96. Further, specific damages are from the loss the respondent incurred. She urged the ground be dismissed. In making reply, Mr. Mbwilo reiterated his submission in chief insisting the relationship between the appellant and the respondent was of the commercial nature. That the respondents had not established the existence of partnership between them. He added that memorandum of understanding is not a partnership deed. Further that, the trial magistrate failed to catch up and analyse the evidence at hand, he did not consider the evidence that the respondent was told the amount available was insufficient for her withdraw 29m that she was advised either to deposit some amount so as to meet the requirement or to reduce the withdrawing 15 amount. That the case was not proved as the respondent failed to prove the existence of partnership. On interests, he insisted that they are not recognised by law and are contrary to 0. XX rule 21(1) of the CPC. He prayed the appeal be allowed with costs. Having gone through the lower court record and the submissions for the parties in the light of the grounds of appeal placed before me the pertinent question for determination at this juncture is whether or not the present appeal is meritorious. As to the first ground of appeal the issue is whether the case filed to the trial court was a commercial one or not. At the outset I find it prudent to state that the District Court is vested with the jurisdiction to entertain commercial cases. This is per section 40(3) of the Magistrates Court Act, Cap 11 R.E 2022. The pecuniary jurisdiction in commercial cases is limited to 300 million for recovery of immovable properties and 70 million for a matter which is capable of being estimated at money value. This is as per section 40(3) (a) and (b) of the Act. Section 2 (iii) of the act has defined what a commercial case is as also contained in the submission of the counsel for the appellant. From the counsel for appellant submission what drives him to find that the case was commercial is the said existence of 16 banker - customer relationship between the appellant and the lst respondent as she had Bank account with the appellant. But the respondent is of the position that the case was a normal civil not commercial one. Her reason is that the 2nd respondent had no such a relationship with the appellant. He had no bank account with the appellant. From the rival positions and the hybrid of the respondents, find that the fact that there is no guidelines or rules in place pertaining commercial cases at the District Court unlike at the High Court Commercial where there are court Rules to my thinking the governing law is CPC. But as already noted above on the hybrid of the respondents who sued the appellant at the trial District court, I am of the position that the case cannot be categorised as commercial but normal civil suit to which the trial court has jurisdiction to entertain it. The cited case of National Bank of Commerce Ltd v. Sykes Travel Agents (supra) referred by the learned counsel for appellant is distinguishable from the facts of the present as stated because the 2nd respondent had no relationship with the appellant. Thus, the first ground of appeal is bereft of merit thus dismissed. Going to 2nd ground of appeal, that is on whether there existed partnership between the respondents. I wish at the outset to state that 17 Partnership is governed by law. Its creation management and even dissolution. For instance, section 191 of the Law of Contract Act provides for the condition requisite for existence of Partnership and Order XX Rule 15 of the CPC provides for specific procedure of dissolution. In the case of Anthohy Ngoo & Another v, Kitinda Kimaro, civil Appeal No. 25 of 2014 the CAT defined partnership to mean: "A bus.iness owned by two or more persons that is notorganized as a corporation. Avoluntary contract between two or more competent persons to place their money, effect labour and ski/ls or more or all of them in lawfu/ commerce or business with the understanding that there shall be a proportional sharing of the profiit and losses between them. An association of two or more persons to carry on, as owners, a business for profit.,, The basis of the presence of partnership to the respondents takes root from paragraph 1, 2 and 4 of the amended plaint. At paragraph 1 and 2 the respondents are introducing themselves to be partner directors who trade as MBOITEY GENERAL BUSINESS COMPANY. Whereas at paragraph 4 it is stated that the two are running a business in the name of MBOITEY 18 GENERAL BUSINESS COMPANY as shown on its Certificate of Registration (Exh. P5). The same is the testimony PW2. But the testimony of Pwl is that the 2nd respondent has a company but he is shareholder to the company. The question is whether a shareholder and partner is the same thing. To my view I not. A partner applies to the partnership whereas shareholder to that context applies to the company. This can be inferred from the testimony of Pwl who told the court that the 2nd respondent had a company. The Company law makes it very clear that a company is different from its shareholders. See the landmark case of Solomon v. Solomon (1897) AC 22. I had time to look at what was tendered as deed of partnership (Exh. PX2) of which to my perusal of the pleadings, it has never been referred anywhere neither in the proceedings to have been tendered. What is seen in the pleadings is the ``memorandum of understanding'' between the two respondents and it has only two names and that is what has been referred in the parties' submissions and in the proceedings is the Exhibit PE7. The contents of the said alleged Partnership deed are that the parties to the partnership were Francis Aggrey Mbottey, Tuntufye Mwakajonga and Lucy Daniel Makombe who constituted themselves into a firm of partnership 19 under the name and style of MBOITEY GENERAL BUSINESS. It is not clear on the way the same was entered into the court record thus it must be looked with circumspection. Notwithstanding, what is referred in the plaint at paragraph 1, 2 and 4 is MBOITEY GENERAL BUSINESS COMPANY. Under the law a company and partnership are two different things. Thus, even if it is true that there was a partnership between the two respondents in the name of MBOITEY GENERAL BUSINESS but the order for the supply of laboratory facilities was directed to MBOITEY GENERAL BUSINESS COMPANY which is different from its shareholders. The testimony of PW2 was that the partnership was in the name of Mbottey General Company that is deferent from the appear in the said deed of partnership. From the above chronology, to say a little, I am very much convinced that there was no partnership between the two. Taking the other side that there was a partnership. The question to ponder is that was it related to the business of to MBOITEY GENERAL BUSINESS COMPANY and if so was the claim of specific damages proved There is no evidence to that effect. The law on the claim of specific damages is settled. The law is that special damages must be specifically 20 pleaded and proved specifically and strictly. See Stanbic Bank Tanzania Limited versus Abercrombie & Kent T. Limited, civil Appeal no. 21 of 2001 CAT, Zuberi Augustino v Anicet Mugabe (1992) TLR137 and Masolete General Supplies v. African Inland Church (1994) TLR192 to list but a few. From the record at hand it is quite discernible, specific damages has not specifically pleaded. There are no particulars of specific damages states. A mere listing of the laboratory facilities done at paragraph 8 of the amended plaint is not a proof of specific damages or loss the respondent incurred. Having so said, it is my firm view that the second ground of appeal has merit. On the 3rd ground of appeal, I find the ground meritorious. From the pleadings what gave rise to the case is the claim for damages, specific and general ones and the loss of profit resulted from the cancellation of cheque as pleaded at 5, 11,12 and 13 of the amended plaint that is all. So that being the case the matter to be delt with was on the appropriateness of cancellation of the cheque. The rest of the grounds responses would have depended on the whether the cheque cancelled following legal and proper procedures. 21