LAND APPEAL NO

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA ARUSHA SUB-REGISTRY AT ARUSHA LAND APPEAL NO. 152 OF 2022 {Arising out of Land Application No. 144 of 2018 before the District Land & Housing Tribunal for Arusha at Arusha.) CRDB BANK PLC 1ST APPELLANT NGILA JONAS NGILA 2nd APPELLANT VERSUS ELIHURUMA PAUL KASIAN (Administrator of the Estate of NAOMI MOILO LAIZER)RESPONDENT JUDGMENT 08/04/2024 & 07/06/2024 BADE, J. The matter at hand commenced at District Land & Housing Tribunal for Arusha (herein referred as "the tribunal")- The Respondent herein successfully sued the Appellants at the tribunal claiming that 1st Appellant illegally sold the house owned by Naomi Moilo Laizer who is now deceased to the 2nd Appellant. It is on record that the late Naomi Moilo Laizer took a loan from the 1st Appellant and mortgaged the said house. It seems that the late Naomi Laizer made some payments and Page 1 of 18 there were arrears in tune of TZS 57,228,812.11. After she had defaulted to repay the loan, the late Naomi Moilo Laizer entered into agreement with 1st Appellant through a Deed of Settlement on how to pay the remaining amount. The Appellant failed to abide by the terms of the agreement and the 1st Appellant sold the house to the 2nd Appellant. The chairperson of the tribunal heard the evidence of the Respondent ex-parte and held that the transfer of the mortgaged house to the 2nd Respondent was illegal due to the reason that 1st Appellant did not adhere to the rules governing sale of mortgaged properties. The Chairperson of the tribunal proceeded to order that the said house be returned to the Administrator of the Estate of the late Naomi Moilo Laizer for administration. The Appellants being aggrieved by this decision lodged the instant appeal on grounds that: 1. The trial chairperson erred in law and fact for failure to properly evaluate evidence on record that was tendered before it causing the trial chairperson fail to make rational judgment. 2. The trial chairperson seriously erred in law by delivering an ex- parte judgment without issuing notice to the Appellants. Page 2 of 18 The appeal was disposed by way of written submissions, with the Appellants being represented by Mr. Francis Pius, leaned advocate, while the Respondent enjoyed the service of Dr. Romilick E.K Mchami, also a learned advocate. To get the ball rolling, Mr. Francis started on the 2nd ground of appeal, submitting that Order XX Rule 1 of the Civil Procedure Code, Cap 33 R.E 2019 [hereinafter referred as "the CPC") provides that the Court shall pronounce judgment in an open court, and due notice shall be given to the parties or their advocate. He argued further that matters in the tribunal are regulated by the Land Disputes Courts (the District Land and Housing Tribunal) Regulations 2003 if there is inadequacy in the said Regulations as the case to issuance of due notice to parties when pronouncing judgment, the CPC is applied to cover the lacuna. To support his position, he cited section 51 (2) of the Land Disputes Courts Act. The learned counsel contended that tribunal when it delivered its judgment on 24/08/2022 never issued due notice to the Appellants in accordance with Order XX Rule 1 of the Civil Procedure Code. In his opinion since this omission is against a mandatory legal requirement which goes to the root of a fair trial the same cannot be overlool^ed Page 3 of 18 but must be complied with, insisting that it is even more so for ex- parte hearing than for a case that proceeds inter parties. To support his argument, he cited the case of Cosmas Construction Co. Ltd vs Arrow Garments Ltd [1992] TLR 127. With regard to the 1st ground of appeal, Mr. Francis submitted that it is undisputed that the issue drawn during the trial was whether the sale of the Respondent's house was valid as appearing under page 5 of the judgment. He argued that it is an undisputed fact that the trial tribunal nullified the sale of the house in dispute based on evidence of PW1 as appearing on page 6 of the judgment. That, since the auction documents concerning the mortgaged properties are normally in the custody of the mortgagee, it is goes without saying that for a person to prove that the auction has been carried out in accordance with the law, such documents must be produced before the court for scrutiny. He argues that where a mortgagee fails to so produce such documents in court inference will be drawn in favor of a person disputing the auction. In further argument, Mr. Francis submitted that in ex-parte proceedings as in the Application No. 144 of 2018 such documents ought to have been called for court's scrutiny by issuance of Page 4 of 18 summons to produce documents under Order XI Rule 12 of the Civil Procedure Code, and it is on the record that no such summons was ever issued to the 1st Appellant nor was it served and the 1st Appellant refuse to produce. Arguing further, he reckoned that since the gist of the case was premised on the issue drawn during the trial on whether the sale of the house of the Respondent was legal, failure to have called such document is fatal as such omission is against rules of evidence. He added that since the Respondent failed to employ Order XI Rule 12, the tribunal should have considered it when composing judgment for the Respondent had failed to prove its case within the ambits of section 110 (1) of the Evidence Act, [Cap 6 R.E 2019]. He gravely noted that when the case is ordered to proceed ex-parte does not mean that one is exempted from complying with the procedural legal requirements or rules of evidence, concluding that since during trial the Respondent failed to comply with above said provisions of the law, judgment and decree entered thereto should be quashed in favor of the Appellants. On further argument, he maintains that the issue of sale of the property in dispute was a creature of the Deed of Settlement^under ' Page 5 of 18 exhibit P2, but the trial chairperson failed to properly evaluate the terms agreed therein to understand that the 1st Appellant exercised her rights based on the terms stated in the said Deed of Settlement following a breach of the terms therein as well captured by the tribunal. He referred this court at page 5 of the tribunal's typed judgment. In his view, because of the breach of the Deed of Settlement, the 1st Appellant employed clause 6 of the said Deed to sell the house in question under the mandate given on the deed. In his opinion, since the 1st Appellant and the deceased who is now represented by the Respondent executed the Deed of Settlement, the tribunal was supposed to interpret the intention of the parties to that deed. To support his position, he cited the cases of Philipo Joseph Lukonde vs Faraji Ally Said, Civil Appeal No. 79 of 2019 and the case of Karatta Ernest D.O & Others vs The Attorney General, Civil Appeal No. 73 of 2014. Opposing the appeal, Dr. Mchami, picked on the 2nd ground of appeal arguing that the Respondent is not protesting the fact that Judgment before the tribunal was delivered ex-parte in the absence of the Appellants on 24/08/2022. Rather, his contention is that Order XX Rule 1 of the Civil Procedure Code does not place the duty of issuing notice to the parties or their advocates, of the date of delivering the judgment to any of the parties in the civil suit, but rather that duty is placed on the court itself as the rule use the word "the court" In his opinion due to the position of the law the Respondent ought not be condemned on the failure to notify the Appellants of the date on which the judgment was to be delivered. Moreover, Dr. Mchami explained that Order XX Rule 1 of the Civil Procedure Code does not legislate that once a court of law fails to notify a party in a civil case the date of pronouncing an ex-parte judgment, then prescribes the remedy on appeal to be quashing and setting aside the judgment delivered ex-parte. In his view, the case of Cosmas Construction Co Ltd (supra) as cited by the Appellants' counsel did not decide that once a court of law fails to notify in a civil case the date of pronouncing an ex-parte judgment then the remedy on appeal is to quash and set aside the ex-parte judgment. He is of the view that if this Court grant the prayer of the Appellants' counsel to quash and set aside the tribunal's ex-parte judgment and its decree, what will follow is to order retrial and this will made the order given by tribunal to proceed ex-parte to be disobeyed bearing in mind that the order has never been set aside despite three attempts made Page 7 of 18 by the Appellants to so do. He insists that to allow the Appellants' prayer is to go contrary to Article 107A (2) (e) of the Constitution of the United Republic of Tanzania (1977) which requires courts of law not to be bound by technicalities in deciding a matter. Dr. Mchami maintains that there are valid legal reasons that made the tribunal grant the prayer to proceed ex-parte and ultimately to deliver an ex- parte judgment against the Appellants. In his opinion, failure by the tribunal to issue a notice to the Appellants on the date of delivering the ex-parte judgment ought not to be used to cause the Appellants to comply with the mandatory provision of Order XX Rule 14 (1) of the Civil Procedure Code. Further he argued that another reason why this Court should reject the prayer by the Appellants is the coming into operation the principle of overriding objectives as it is provided for under section 3A and B of the Civil Procedure Code. In his opinion the aim of the provisions is to see that substantive justice is seen to be done in the courts of law. He insisted that the Appellants failed to comply with Order VIII Rule 14 (1) of the Civil Procedure Code after being given an extension of time twice. They so failed to comply with the tribunal's order to file Page 8 of 18 their defense because they both breached the terms of Exhibit P2 and the procedures of selling the house mortgaged to the first Appellants. In his opinion, this court should order the record of the tribunal to be returned to the tribunal's registry and order the chairperson of the tribunal to issue notice of delivering its ex-parte judgment to the Appellants. He further agitates that in case this ground is allowed, it should be allowed without any costs to the Respondent because the error of not issuing the notice was not occasioned by the Respondent, and secondly, the Appellants are the main cause as they contravened Order VIII Rule 14 (1) of the Civil Procedure Code when they failed to file their Written Statement of Defense twice, even after being granted with an extension of time to so do. Concerning the 1st ground of appeal, Dr. Mchami argued that according to exhibit P2 the Respondent was to finish paying the loan on 26/06/2020, and if she had failed to do so, is when the first Appellant after this date, could, after giving her a notice, have to sell the mortgaged house. That, the first Appellant acting in contravention of exhibit P2 sold the house of the second Appellant on 30/06/2018, two years before the expiry of exhibit P2. Dr. Mchami contends that the first Appellant sold the mortgaged house on 30/06/2018 without Page 9 of 18 neither notifying the Respondent, nor first attaching the said house nor a proclamation of sale through the auction of the house to the general public, nor informing the Government leaders where the house being auctioned is located. He referred to this court on page 6 second paragraph of the tribunal's typed judgment. I have given due consideration to the parties' rival submissions and considered the record of this appeal. The task before me is to determine whether the tribunal's decision was erroneous. In answering this issue, I shall address the grounds of appeal as raised by the counsel for the Appellants, starting with the second ground that, an ex-parte judgment was delivered by the tribunal without issuing a notice to the Respondents. Order XX Rule 1 of the Civil Procedure Code provides: "The court, after the case has been heard, shall pronounce judgment in open court, either at once or on some future day, of which due notice shall be given to the parties or their advocate". In the case of Cosmas Construction Co. Ltd vs Arrow Garments Ltd [1992] TLR 127, cited by the counsel for the Appellant, it was held that: Page 10 of 18 "A party who fails to enter an appearance disables himself from participating when the proceedings are consequently ex-parte, but has to be told when the judgment is delivered so that he may, if he wishes, attend to take it as certain consequences may follow." It is an undisputed fact that the Appellants were not given notice of the delivery of ex-parte judgment which was delivered on 24/08/2022. Now the crucial question is what is the remedy. Counsel for the Appellants argues that the proceedings, ex-parte judgment, and decree resulted therein should be quashed and set aside. On the contrary counsel for the Respondent, counter argued that the case of Cosmas Construction Co. Ltd (supra) cited by the counsel for the Appellants is not helpful as it did not hold that the remedy for failure to notify the other party of the pendency of an ex-parte judgment is to nullify proceedings and set aside the ex- parte judgment. Rather, he was of the opinion that the remedy is to order the record of the tribunal be returned to the registry for the chairperson of the tribunal to issue notice of delivering its ex-parte judgment to the Appellants. It is on the record that Appellants then Defendants were given a notice of hearing, that is why they made an appearance on 12/07/2018 when they were ordered to file their Written Statement Page 11 of 18 of Defense but for unknown reasons, they did not abide by the order. It is trite law that if a party is aggrieved by the motion of the court to proceed ex-parte he is required to make an application to set aside an order for ex-parte judgment on the same court which passed such judgment or order, see the case of Dangote Industries Limited Tanzania vs Warnercom T. Limited, Civil Appeal No. 13 of 2021. In the case at hand the Appellants did not exhaust the said remedy, instead, they wanted to use a back door to make their way through this court for a retrial. I do not think ordering a retrial will do justice for the Respondent. To order the case to start afresh on the negligence of the Appellants who for reasons known to themselves failed to file their WSD as ordered by the tribunal is to encourage sloppiness and negligence shown by the Appellants in defending their case. The Appellants also failed to state how they were prejudiced by not being notified of the date of the delivery of the ex-parte judgment, bearing in mind that they filed this Appeal on time, meaning that they got the knowledge of the existence of that ex- parte judgment timely. Having said so this ground is dismissed for want of merits. Page 12 of 18 I must observe in passing, that the Appellant would have had the option to appeal the exparte judgment on merit, but this would be without recourse to setting aside the order that resulted in the ex parte judgment in the first place (see the analysis in the Dangote's case supra) I shall now turn my attention to the first ground of appeal. Mr. Francis submitted that the chairperson of the tribunal failed to evaluate the evidence as a result he reached an erroneous decision. Mr. Francis argues that the tribunal was required to call for auction documents concerning the mortgaged house. In his view, failure to call for such documents is fatal as such omission is against the rules of evidence. Mr. Francis added that if the chairperson of the tribunal evaluated the evidence properly, he would have noted that by selling the mortgaged house to the second Appellant, the first Appellant was exercising their right as per the Deed of Settlement following a breach of the terms therein especially clause 6 of the said deed by the Respondent. In reply to this argument, Dr. Mchami argued that according to the deed of settlement, (exhibit P2) the Respondent was to finish paying the loan on 26/06/2020 but the first Appellant in Page 13 of 18 contravention of the Deed of Settlement sold the house on 30/06/2018, two years before the due date. According to the Deed of Settlement, under clause 4, the Respondent was required to pay on monthly basis and on each month, she was required to pay a total of TZS 1,589,689.23. The period of payment of the loan was 36 months, which is equal to three years. The Respondent was required to finalize her payment within the said period of three years. However, under clause 6, it was agreed that failure to start making monthly payments after the expiry of three months would entitle the first Respondent the right to sell the mortgaged property to enable him to recover the outstanding amount together with all interest and costs accrued therein. Now, the question is did the 1st Appellant follow the procedure for exercising their right to sell the mortgaged property which was the security for the loan after the Appellant defaulted according to their contract terms? There is no proof that 1st the Appellant did write a default notice to the Respondent to inform them that they were in default of payment of the loan according to the Deed of Settlement; and that they have to rectify the default within 60 days. The Land Act, [Cap 113 R.E 2018] provides in sections 127 (1) and (2) that Page 14 of 18 where there is a default in the payment of any interest or any other payment or any part thereof or in the fulfillment of any condition secured by any mortgage or in the performance or observation of any covenant, express or impliedly, in any mortgage, the mortgagee shall serve to the mortgagor a notice in written of such default. The impetus of the said notice is to inform the borrower the nature and extent of the default, the remedies that the mortgagee may proceed to exercise against the mortgaged land, the action that the debtor must take to cure the default, and duly notify them that after the expiry of sixty days following receipt of the notice by the mortgagor, the entire amount of the claim will become due and payable; and the mortgagee may exercise the right to sell the mortgaged land. The Law provides further in section 132 (1) of the Land Act that a mortgagee may, after the expiry of sixty days from the date of receipt of a notice under section 127, sell the mortgaged land. Thus, from the above-cited law, the right to sell the mortgaged land is exercised after the lapse of the 60 days since the borrower was served with default notice without taking action to cure the default. age 15 of 18 In the case at hand, there is no evidence to prove that the Respondent was served with the said default notice. In such circumstances, it was wrong for the 1st Respondent to proceed to exercise their right to sell the mortgaged land to the 2nd Respondent. In the case of Joseph Kahungwa vs Agriculture Inputs Trust Fund and 2 Others, Civil Appeal No. 373 of 2019, the Court of Appeal of Tanzania sitting at Mwanza, while discussing the requirement under section 127 (1) of the Act for the mortgagee to serve the default notice, the Court held: "Such is the law regarding the mandatory requirement to serve the mortgagor a notice of default. The law does not only require the mortgagee to notify the mortgagor of the default but also requires the mortgagee to adequately inform the mortgagor a number of issues as spelt out in section 127 (2) of the Land Act." The effects of failure to serve the mortgagor with a notice of default is to make the process of the sale of the mortgaged land null and void. See the case of Registered Trustees of Africa Inland Church Tanzania vs CRDB Bank PLC and 3 Others, Commercial Case No. 07 of 2017. Page 16 of 18 From the position in the above cited cases, I cannot but concur with the counsel for the Respondent that the 1st Appellant was supposed to serve the Respondent with a default notice, failure of which renders the process of the sale of the mortgaged property a nullity. Under the circumstances, this court declares that the sale by 1st Appellant to the 2nd Appellant is null and void. While I join hands with the chairperson of the tribunal that the sale of the mortgaged land to the 2nd Respondent was illegal, I completely disagree with the order of the chairperson of the tribunal that the mortgaged house should be put and enlisted under the estate of late Naomi Moilo Laizer for it to be administered as part of the estate. This is based on the ground that the mortgaged property is still a security for loan taken by the late Naomi Moilo Laizer, and until her debt is satisfied, the said property is a valid security. The 1st Appellant is at liberty to exercise their right to sell the mortgaged property after issuing and serving the default notice to the Respondent according to the prescribed law. In the upshot, this Appeal is allowed to the extent discussed above. The rest is dismissed with the costs. It is so ordered. ige 17 of 18 DATED at ARUSHA this 07th day of June 2024 A. Z. Bade Judge 07/06/2024 Judgment is delivered in the presence of the parties / their counsel I representatives on the 07th day of June 2024. HIG A. Z. BADE JUDGE 07/06/2024 /Page 18 of 18