crdb bank plcv vs the registered trustees of kagera farmers trust fund others 2024 tzca 94 23 february 2024

IN THE COURT OF APPEAL OF TANZANIA

AT DARES SALAAM fCORAM: MWAMBEGELE. J.A.. MAIGE. J.A And MDEMU. J.A.:1 CIVIL APPEAL NO 496 OF 2021 CRDB BANK PLC .......... ........... ................................................... APPELLANT

VERSUS

THE REGISTRED TRUSTEES OF KAGERA FARMERS TRUST FUND.................................... .................... 1st RESPONDENT KAGERA COOPERATIVE UNION (1990) LIMITED .................2nd RESPONDENT TANZANIA COFFEE BOARD.................................................. 3rd RESPONDENT (Appeal from the judgment of the High Court of Tanzania, at Dar es Salaam) (Mihayo. J.) Dated the 28th day of October, 2009 In Civil Case No. 257 of 2003

JUDGMENT OF THE COURT 13th & 23rd February, 2024. MAIGE, J.A: In the High Court of Tanzania at Dar es Salaam, the first respondent instituted a suit against the appellant for the following reliefs: first, declaration that the appellant's withdrawal of TZS 525,000,000/= from the first respondent's account was in breach of contract and unlawful; second, i payment of TZS 525,000,000/= being the amount unlawfully withdrawn from the first appellant's account; third, payment of TZS 739,800,151.87 being interest at compound rate of 21% per annum in the first three years and 13% per annum for the following two years up to 31st December, 2003 and a further interest at compound rate of 13% from 1st January, 2004 till payment of the same in full; fourth and in the alternative, payment of TZS 330, 750,000/= being simple interest at 21% per annum from the date of accrual of cause of action to 31st December, 2003; fifth, general damages to be assessed by the court; sixth, payment of TZS 100,000,000/= as punitive damages; and seventh, interest on the decretal sum at the court rate from the date of judgment to the date of full payment of the same. Aside from a written statement of defence against the suit, the appellant presented a third-party notice against the second and third respondents for indemnity should the first respondent procure a judgment and decree against her. As it is the

procedure, both the second and third respondents presented written statements of defence against the third-party notice. On top of that, the third respondent filed a written statement of defence against the suit. It is to be noted that, in both her written statements of defence, the third 2 respondent had raised a preliminary objection to the effect that the third- party notice was violative of the provisions of order I rule 14(2) of the Civil Procedure Code (the CPC). The trial court (Mlay, J.) overruled the preliminary objection and found the third-party notice substantially in order. Eventually, the matter went for full trial. It would appear that, the trial judge (Mihayo, J.) elected to deal with both the main suit and third-party proceedings simultaneously. As it may be apparent from the record of appeal, the parties in both the suit and third-party proceedings produced witnesses who testified accordingly. At the end of the trial, the trial judge awarded the first, second and third reliefs as herein stated. Moreover, it awarded general damages of TZS 200,000,000/= and punitive damages of TZS 90,000,000/=. Besides, it awarded interest at the court rate on the decretal sum from the date of judgment to the date of full payment of the same. In relation to the third-party notice, the trial court observed at page 269 and 270 of the record of appeal that, the same was defective

for non- compliance with order I rule 14(2) of the CPC and for being drawn and filed by a person who is not an advocate. Having said that, it expunged the third party notice from the record. 3 Being aggrieved by both the judgment and decree, the appellant has filed the instant appeal faulting the trial court on the following grounds: 1. That the trial court erred in iaw and facts in determining the validity o f and dismissing the third-party notice which had already been determined before by another Judge o f the High Court as weii as the evidence o f the third party's witness.

2. Alternatively, the learned trial judge erred in facts and law in determining the validity o f the third-party notice suo motu without affording an opportunity to the appellant to be heard.

3. The learned trial judge strayed into grave error in holding that the third-party notice was incompetent by the reason o f the alleged non- compliance with the provisions o f the Advocate Act,, Cap. 341 [R.E.2019J.

4. The learned trial judge erred in awarding general damages to the Respondent over and above compound interest on the principal sum.

5. Alternatively, the trial court erred in iaw and facts in awarding generaI damages in the sum o f TZS 200,000,000/- only which was too excessive and without sufficient materials evidence to support the amount awarded in the circumstances o f the case.

6. The learned trial judge strayed into error in holding that the Respondent had established a case for award o f punitive damages over and above general damages.

7. Alternatively, the learned trial judge erred in fact and in law in awarding TZS 90,000,000/= oniy punitive damages which amount was too excessive in the circumstances o f the case.

8. Alternatively, the learned trialjudge erred in enteringjudgement for the 1st respondent On 4th day of October, 2023, the Court granted leave to the appellant to amend the record of appeal to reflect her current name which had changed from CRDB Bank Limited to CRDB Bank PLC. The order was made under rules 50(2) and 111 of the Tanzania Court of Rules, 2009. In compliance with the order, the appellant filed, on 4th December, 2023 an amended record of appeal containing documents bearing her current name. At the hearing, the appellant was represented by Mr. Deogratius J. Lyimo Kiritta and Juvenalis Ngowi, both learned advocates. Dr. Mutabaazi Lugaziya assisted by Mr. Robert Rutaihwa, both learned advocates, represented the first respondent whereas Mr. Wilson Edward Ogunde, learned advocate, appeared for the second respondent. The third respondent enjoyed the services of a team of three learned state attorneys: Mr. Mahushi Thomas, Ms. Joyce Yonazi and Mr. Mkama Musalama. 5 Before the hearing could commence, Dr. Lugaziya drew our attention that the 3rd and 8th grounds in the amended memorandum of appeal were not in the original memorandum of appeal. He thus, urged us not to consider them as the order allowing amendment was limited to change of name of the appellant and not the contents of the memorandum of appeal. Mr. Kiritta concurred with that proposal and in effect abandoned the

third and eighth grounds of appeal. We accepted this unopposed prayer and accordingly marked the 3rd and 8th grounds of appeal abandoned. In his oral submission, Mr. Kiritta fully adopted his written submissions in so far as they relate to the first, second, fourth, fifth, sixth and seventh grounds of appeal and made some clarifications. On their parts, Dr. Lugaziya, Mr. Ogunde and Mr. Thomas for the first, second and third respondents, respectively, each adopted his written submissions with some clarifications. We express our sincere appreciation to the counsel for their resourceful submissions which have added value to this judgment. We regret, however that; having established that this appeal may be disposed of basing on the first two grounds, we will not consider a large part of their submissions. In the first and second grounds of appeal, the appellant faults the trial judge in the first place for determining the issue of the propriety of the third party notice which had already been conclusively determined by his fellow judge. It was submitted that, as the prior determination of the issue at the preliminary stage was conclusive, the trial judge was functus officio to entertain the same. It was concluded, therefore that, in as much as the trial judge lacked jurisdiction to deal with the issue, his decision was a nullity. In the second place, it was submitted, since the

issue of the third-party notice being incompetent was raised and determined by the trial judge without involving the parties, it was violative of the right to be heard and thus a nullity. We were thus called upon to allow the appeal on the strength of the said grounds. On what should be the way forward, it was proposed for the appellant that the judgment and proceedings of the trial court be nullified and the record remitted to the trial court for retrial. For the first respondent, it was submitted that though the trial judge was functus officio to deal with the issue of third-party notice, the determination of the same has effect only to the third-party proceedings and not to the claim against the appellant in the suit. It was proposed therefore that, since trial of the suit between the appellant and the first respondent was proper, the appeal should be considered to the extent of the correctness or otherwise of the trial court's determination of the suit. In the alternative, it was submitted, since the irregularities complained of pertain to the judgment and not the evidence, an order for retrial will not be in the interest of justice considering that a quite long time has passed since the trial was conducted and it may be difficult to procure witnesses. It was, therefore, proposed that; should the whole judgment be found fatally defective in the circumstances, let it be

quashed and the file remitted to the trial court for fresh composition of judgment based on evidence. For the second respondent, while it was conceded that the trial court acted without jurisdiction in entertaining the issue of the third-party notice, it was submitted that, it being a first appeal, the Court should step into the shoes of the trial court and determine the merit or otherwise of the third party notice. It was so insisted since both the appellant and the last two respondents gave testimonies for and against the third-party notice. For the third respondent, aside from being conceded that the trial court dealt with the issue of propriety of third-party notice without jurisdiction, it was proposed that retrial was the right approach. In rejoinder, it was submitted that, this Court cannot step into the shoes of the trial court as suggested for two main reasons: First, as the 8 substance of the third-party notice was not adjudicated upon by the trial court, it cannot be a subject for reappraisal of the Court as the first appellate court. Second, this being the final appellate court, determination of such issue will in effect deny the appellant a right to appeal. The option to have the judgment composed afresh, it was submitted, is not available because the third-party proceedings are not in the record having been erased there from by the order of the trial judge. He

reiterated, therefore, that retrial is the appropriate approach. Let us, in determining the issue, start with a brief discussion on when does a court becomes functus officio. As we understand the law, a court becomes functus officio after having finally and conclusively determined an issue before it. Once that happens, it is settled law, the same court cannot, whether by the same judicial officer or a successor judicial officer, entertain the issue. It has been said so in a number of decisions. For instance, in Bibi Kisoko Medard v. Minister for Land, Housing and Urban Development [1983] T.L.R. 250, it was observed: "In matters o f judicial proceedings once a decision has reached and made known to the parties, the adjudicating tribunal thereby becomes functus officio". As we said above, the propriety of the third-party notice was doubted by way of preliminary objection on account that it was violative of the provisions of order I rule 14(2) of the CPC. Upon hearing, the trial court (Mlay J.), made a final order that indeed the third-party notice was in order. It, therefore, overruled the same. That notwithstanding, in its final judgment, the trial court (now Mihayo, J) reopened, at his own motion, the same issue and eventually came out with a different view that the same was not proper for among others, violating the same provisions. That was exceedingly inappropriate. For, the

issue having been finally and conclusively determined by his fellow judge, the successor judge was barred, by being functus officio, to determine the same. More or less a similar instance occurred in the case of Maria Chrysostom Lwekamwa v. Placid Richard Lwekamwa, Civil Application No. 549/17 of 2019 (unreported) where a successor judge dealt with a matter which had already been fully determined by her predecessor. On revision, the Court stated: "It is trite law that when a court finally disposes o f a matter, it ceases to have jurisdiction over it The 10 application o f this principle was emphasized in the case o f Tanzania Telecommunication Company Limited and Others v. Telecommunications Tanzania Limited [2006] I EA 393. Indeed, as stated above, after Makuru 3. had determined the objection on the matter being resjudicata on a matter that is founded on the administration o f the estate o f Richard Lwekamwa, there was no need for another judge to decide on the same issue as what transpired in the instant case. In consequence, we find this ground has m erit" In view of the foregoing, we agree with the appellant that the trial court acted without jurisdiction and in violation of the law in entertaining a matter which had already been finally and conclusively determined by the same court. The first ground of appeal is, therefore, allowed. Even if we were to assume, for the sake

of argument, that the matter was not functus officio, yet, the decision under discussion would remain a nullity for curtailment of the parties' right to be heard in so far as it was unilaterally raised and determined by the trial court; without involving the parties. It is trite law that, any decision affecting the rights or interest of any person which is arrived at without such person being afforded a right to be ii heard, is a nullity even if the same decision would have been arrived at had the affected party been heard. See for instance, Charles Christopher Humprey Kombe v. Kinondoni Municipal Council, Civil Appeal No. 81 of 2017, John Morris Mpaki v, NBC Ltd and Another, Civil Appeal No. 95 of 2013 and Deo Shirima and Two Others v. Scandinavian Express Services Limited, Civil Application No. 34 of 2008 (all unreported). Thus, assuming that we did not allow the appeal on the first ground, we would have allowed it on this second ground. The obvious question that follows is, what should be the appropriate way forward? As already alluded above, for the first respondent, it was proposed in the first place that, we should vary the defective part of the judgment which concerned with third-party notice and uphold that part which deals with the suit, should the other grounds of appeal be found baseless. The reason being that in law the third-party notice and the suit in the

plaint were two different proceedings. Much as it is true that the two are different proceedings, the position of law is clear under order I rule 17 of the CPC that, once a third-party notice is lodged, the third-party has option either to defend the claim in third-party notice only or to defend the claims in both the third-party notice and the suit. It provides as follows: 12 "17 When a thirty party notice has been served on the third party, the third party shall, if he wishes to dispute the plaintiff's claim in the suit against the defendant presenting the third party notice or his own liability to the defendant, within twenty-one o f the service o f the third party notice upon him or such longer period as the court may have directed or as the court may, on the appiication o f the third party, direct, present to the court a written statement o f his defence, "[Emphasis is ours] It has further to be noted that under order I rule 18(1) of theCPC, where a third-party elects to dispute both the claims in the suitandin the third-party notice, the liability in third-party notice may be determined nat or after the trial o f the suit", meaning in our view that the said claim may be tried simultaneously with the claim in the suit or separately in the third-party proceedings. In here, the third respondent disputed the claim both in suit and in the third party-notice. The trial court,

it would appear, opted to deal with the two proceedings simultaneously. Certainly, that was the basis of the trial judge to receive evidence for both the two proceedings. In our view, therefore, since the locus standi of the second and third respondents to participate in 13 the suit they were not parties in, emanated from third-party notice, the validity of the judgment cannot be decided in isolation of the third party proceedings. We have also considered that in the judgment, the evidence of the second and third respondents was taken into account. We were also advised by the counsel for the second respondent that since the evidence in respect of both the suit and third-party proceedings is in the record, we should step into the shoes of the trial court and determine the merit or otherwise of the third-party notice. For the appellant, it was contended, such option was not available as the trial court has not at all acted on such evidence. In effect, it was further submitted, the proposed approach will deny the appellant a right to appeal, this being the final appellate court. We start our deliberation on this issue by putting it clear that; in terms of article 117(3) of the Constitution of the United Republic of Tanzania, 1977 as amended from time to time (the Constitution), the jurisdiction of the Court is in essence "to hear and determine every appeal brought before it

arising from judgments or other decisions o f the High Court or o f a magistrate court with extended jurisdiction. "This has been restated in section 4(1) of the Appellate Jurisdiction Act pursuant to article 117(4) of the Constitution. Truly, 14 under section 4(2) the Appellate Jurisdiction Act, the Court, while in pursuit of its appellate jurisdiction under subsection (1), has power, authority and jurisdiction vested in the court from which the respective appeal emanates. It is our humble view however that for the Court to have power under subsection (2) of section 1, it must have the substantive power and jurisdiction under subsection (1). This means that there must be a judgment or decision of the High Court or a Resident Magistrate with extended jurisdiction deciding the matter which is the subject of the appeal. The basic business of the Court being, in our view, to decide the correctness, validity or legality of the decision appealed against. In here, while the substance of the suit was heard and determined on merit, the substance of the third-party notice was not decided at all. It can, therefore, not be said that; whether or not there was sufficient evidence to establish the claim in the third-party notice, was part of the judgment of the trial court so that such issue may fall within the substantive jurisdiction of the Court under subsection (1). For that reason

therefore, we think, this is not a fit case for the Court to exercise its derivative power and jurisdiction under section 4(2) of the Appellate Jurisdiction Act. 15 For the appellant and third respondent, we were called upon to remit the record to the trial court for retrial. The question which may be necessary to consider is when should retrial be ordered. The answer can be found in the decision of the Court for East Africa in the cerebrated case of Fatehali Manji v. R [1966] E.A. 343 where it was stated that, retrial would be ordered only "where the original trial was illegal or defective." In here, the legality and validity of the trial is not at issue but the legality of the judgment. That being the case, retrial may not be necessary. We have also taken into account that this dispute has been there since 2003. The parties have thus been litigating for more than twenty years which is not common and, therefore, should be discouraged. The order for retrial, we have no doubt, will lead to unnecessary prolongation of the litigation and, therefore, against the spirit under the overriding objective principle in article 107 A of the Constitution and section 3A of the CPC which is to decide cases without unnecessary delay. For the first respondent, it was proposed in the alternative that, the record should be remitted to the trial court for composition of the judgment afresh where

both the claim in the suit and third-party notice will be considered. For the appellant, it was submitted, that was not the right approach as, in the 16 first place, there are no third-party proceedings at the trial court as they were expunged from the record. With respect, the contention is without merit. The reason being that; the decision expunging the third-party proceedings is part of the judgment. Therefore, once the judgment is quashed, the status quo is restored. There was also a submission that as the trial judge is no longer in office, retrial will be conducted by a judge who did not have the advantage to observe the demeanor of the witnesses. We do not see merit in this submission. Much as it is true that, a judgment would ordinarily be composed by he who tried the case, that is a general rule which is not without exceptions. As for instance, under order XVIII rule 10(1) of the CPC, where a judge or magistrate is prevented by death, transfer or other cause from concluding the trial, his successor may proceed to take further evidence if any, and may compose a judgment basing on the same evidence if the recording of the evidence was complete. Having said that and upon considering the circumstances of this case in totality, we agree with the counsel for the first respondent that justice of this case requires that the record be remitted to the trial court for composition

of a fresh judgment. 17 t + In the final result, we allow the appeal to the extent as afore stated. Consequently, we quash the judgment of the trial court and set aside the decree and consequential orders thereof. We furthermore, remit the record to the trial court for composition of a fresh judgment. The same should be made without undue delay. The respondents should pay the costs for prosecution of the appeal. DATED at DAR ES SALAAM this 21st day of February, 2024. J. C. M. MWAMBEGELE

JUSTICE OF APPEAL I. J. MAIGE

JUSTICE OF APPEAL G. J. MDEMU

JUSTICE OF APPEAL The Judgment delivered this 23rdday of February, 2024 in the presence of Mr. Wilson Edward Ogunde, learned counsel for the 2nd Respondent who took brief for Mr. Juvenalis Ngowi, learned counsel for the Appellant, Dr. Mutabaazi Lugaziya and Robert Rutaihwa, both learned counsel for the 1st Respondent, and Mr. Thomas Mahushi, learned State Attorney for the 3rd Respondent, is hereby certified as a true copy of the original. A. L. KALEGEYA

DEPUTY REGISTRAR

COURT OF APPEAL 18