eagle microcredit tanzania limited another vs osward john njole 2023 tzhc 21504 3 october 2023

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA (IRINGA SUB REGISTRY) AT IRINGA CIVIL APPEAL NO. 6 OF 2023 (Originating from Civil Case No. 8 o f2020 o f the Resident Magistrate's Court oflringa before Hon. E A. Nsangaiufu, SRM) EAGLE MICROCREDIT TANZANIA LIMITED...................... 1st APPELLANT HUGO BRIXIO LUGENGE .......................................... 2nd APPELLANT VERSUS OSWARD JOHN NJOLE .......................................... RESPONDENT JUDGMENT 1st August & 3d October, 2023 I.C MUGETA, J: Allegedly, the respondent invested a total of Tshs. 35,000,000/= into the 2nd appellant's business at the instance of the 2nd appellant who is the Managing Director of the 1st appellant. The 1st appellant is a microfinance company engaging in credit financing. The money was paid vide exhibits PI and P3 which are bank deposit slips and acknowledged through issuance of dividend certificates. The certificates were admitted as exhibits P2 and P4. Their contents acknowledge that Tshs. 15,000,000/= and Tshs. 20,000,000/= had been contributed by the respondent as capital investment in the 1st appellant respectively. According to the dividend certificates, the investment had to yield to the respondent a return of 15% Page 1 of 10 per month of the income generated by the business of the 1st appellant after tax. The respondent decided to sue to recover the principal sum plus the expected income as neither the investment nor the profit has been paid. In his evidence in defence, the 2nd appellant admitted receipt of the Tshs. 35,000,000/= but not as an investment in the 1st appellant. He testified that it was a personal loan arrangement between him and the respondent. That the duo are friends who used to lend each other money and the loan has been repaid by cash, bank deposits and mobile money transfers. He tendered exhibit D3 which are bank deposit slips worth Tshs. 4,500,000/= to prove part of refunded payments. His attempt to tender documents of refund through mobile money transfers failed. The concerned document was adjudged unauthentic. He did not mention the amount of money he refunded by cash but Mashaka Aggrey Lwanda (DW2) who is the 1st appellant's board member said he refunded Tshs. 15,000,000/ in cash on behalf of the 2nd appellant. The 2nd appellant disputed to have executed exhibits P2 and P4 which he believes were forged by the respondent. Page 2 of 10 The trial court found in favor of the respondent and ordered the appellants to pay Tshs. 35,000,000/= as specific damages, general damages to the tune of Tshs. 30,000,000/= and costs of the suit. The appellants are aggrieved, hence, this appeal on three grounds namely: 1. That the honorable trial court magistrate erred in law and fact by deciding the matter in favor o f the respondent who did not prove his case on the balance o fprobability. 2. That the honorable trial magistrate erred in law and fact by delivering its judgment which is full o f contradictions. 3. That the judgment o f the honorable trial court is notjudgment at all in accordance with the requirements o f the law. The appeal was argued by way of filing written submissions. The appellants are represented by Leonard Sweke, learned advocate whereas the respondent enjoys the legal services of Theresia Charles, learned advocate. Counsel for the appellants supported the first ground of appeal by contending that the respondent failed to prove that he had an investment Page 3 of 10 agreement with the 1st appellant. The reason, he argued, being that the respondent failed to state the business capital of the 1st appellant. Even if counsel for the respondent did not respond appropriately to this argument, I hold, the same is unfounded. Exhibits PI and P3 proves that the money was deposited in the 1st appellant's account. The argument by the 2nd appellant that it was paid on private arrangement between them is untenable because the 1st and 2nd appellants are separate legal personalities. Money paid to the 1st appellant cannot be for private use of the 2nd appellant. Further, the evidence of DW2 that he knows that the respondent borrowed the money to the 2nd appellant cannot corroborate him because DW2 was not present when the arrangement was set. His evidence in that respect, therefore, is hearsay. Exhibits P2 and P4 (the dividend certificates) are acknowledgement of the purpose to which the money was to be applied. Both exhibits say it was a contribution towards capital investment in the 1st appellant. The repudiation about execution of those documents by the 2nd appellant is incredible. I hold that view because upon alleging at paragraph 6 of their joint amended WSD that the same are fake, the respondent brought Gasta Mdegela (PW2) to support his case that those certificates were genuine. He Page 4 of 10 is an advocate before whom they were created. I have no reason to doubt his evidence. Further, on cross examination, DW2 conceded the genuineness of the 1st appellant's logo and stamp thereon. He also acknowledged the signature thereon resembles that of the 2nd appellant which support the evidence of the respondent that that the 2nd appellant is one of its signatories. It is settled that allegations of fraud, by any standard, are serious which ought to be proved through cogent evidence. The former court of Appeal for East Africa in the case of Ratilah Gordhanbhai Patel v. Lalji Makanji [1957] EA314 held: "Allegations o f fraud must be strictly proved. Although the standard o f proof may not be as heavy as beyond reasonable doubt, something more than a mere balance o f probability is required". The appellants have not tendered any evidence to prove that exhibits P2 and P4 are fake. When asked, on cross examination, why he has not initiated criminal processes against the respondent for forging exhibits P2 and P4, the 2nd appellant said he values more his friendship with the Page 5 of 10 respondent. I do not buy this story. Consequently, I hold that the appellants did not prove that exhibits P2 and P4 were fake. I understand under the 1st appellant's structure outlined in exhibit D2 (the memorandum and articles of association), the respondent could not be entitled to dividends as stated in the dividend certificates (exhibits PI and P4) due to the fact that the 1st appellant is not a public limited company. I am also live to the fact that the appellants pleaded and spent considerable time in evidence trying to establish that the 1st appellant had no share to offer to the respondent which is true. However, those exhibits prove that the respondents paid the money, whatever the purpose. The appellants ought to refund it as they have not proved any consideration for the payment other than that stated in the dividend certificates. I, therefore, hold that the respondent proved that he paid Tshs. 35,000,000/= to the 1st appellant under the auspices of the 2nd appellant. The foregoing also addresses the second limb of the complaint in the 1st ground of appeal that the respondent was awarded specific and general damages that were not pleaded and proved. While I agree with the counsel for the appellants that specific damages ought to be specifically pleaded and proved as held in Zuberi Augustino v. Anicet Mugabe [1992] TLR Page 6 of 10 137, it is my view that the claim for 35,000,000/= was pleaded and has been proved by evidence as above indicated. However, I find that the trial court erred to award it at that sum because the appellant proved to have refunded Tshs. 4,500,000/= through exhibit D3. The trial court, unfortunately, did not address its mind to this fact which has led to the complaint in the third ground of appeal. The evidence by DW2 that he refunded cash Tshs. 15,000,000/ is unreliable because being a board member he does not run the day to day activities of the 1st appellant. If he acted in individual capacity as he alleges to be a friend of both the 2nd appellant and the respondent, he did not say that the 2nd appellant gave him the money and asked him to deliver it to the respondent. It follows, therefore, that the specific damages due to the respondent is Tshs 30,500,000/= because Tshs. 4,500,000/= was paid. The trial court erred to award Tshs. 35,000,000/=. Regarding general damages, they are discretionary to the trial court. The trial court awarded it at Tshs. 30,000,000/=. Considering the inconvenience endured by the respondent, I find no reason to disturb it. Page 7 of 10 The respondent prayed for interest at 10% and the trial court said nothing about it. I am of the view that the trial court misdirect itself in that respect. However, since there is no cross appeal, I leave it at that. The complaint in the 2nd ground of appeal is that the trial court's judgment contained contradictions. That the learned trial magistrate held that the respondent failed to prove Tshs. 84,850,000/= which he pleaded as specific damages but proceeded to award Tshs. 35,000,000/= and general damages to the tune of Tshs. 30,000,000/=. The learned advocate has further assailed the trial court judgment for awarding specific and general damages and costs of the suit without specifying who between the two defendants shall pay the same. While it can be said in all fairness that the trial court judgment is somewhat unclear, the same is not contradictory. The learned trial magistrate did her best considering the nature of the pleadings and evidence tendered. There was no separation in the pleadings between what amount was the principle sum and the expected profit. This challenge caused me to resummon counsel for the parties on 1/8/2023, which was the judgment date, to address me over the issue. Be as it may, the claim for Tshs. 84,850,000/= pleaded includes the money invested and monthly Page 8 of 10 15% expected income. The trial court found, and I agree, that only the Tshs. 35,000,000/= investment was proved. The rest was disallowed. Therefore, the trial court rightly held that Tshs. 84,850,000/= was not proved as, indeed, no evidence was tendered to prove that the 1st defendant got any profit from the investment. The complaint in the third ground of appeal is that the trial court did not consider the defence evidence particularly exhibits D l, D2 and D3. This complaint is partially true. The trial court, indeed, did not discuss the value of exhibits D2 (the memorandum and articles of association of the 1st appellant) and exhibits D3 (the refund deposit slips) in its judgment. However, exhibit D l was considered because it is just the original copy of to exhibit P3. This shortcoming, however, does not stripe off the trial court judgment the status of a judgment. Hereinabove, I have already considered the value of exhibits D2 and D3. Exhibit D3 has led to the reduction of the amount of the specific damages to be paid by the defendants while exhibit D2 has been found helpless. As first appellate court, I am entitled to step into the shoes of the trial court to do what is amiss. The complaint in the third ground succeeds to the stated extent. Page 9 of 10 In the final analysis, the appeal has partly succeeded by the reduction of the specific damages to be paid from Tshs. 35,000,000/= to Tshs 30,500,000. The awarded general damages in undisturbed. As the appeal has partly succeeded, the appellants shall pay three quarters (3A) of the costs of the case in this court. Court: Judgment delivered in chambers in the presence of the 2nd appellant who is the Managing Director of the 1st appellant, Leonard Sweke, learned advocate for the appellants, the respondent in person and Moses Ambindwile, learned advocate for the respondent. Sgd. I.C. MUGETA JUDGE 3/ 10/2023 Page 10 of 10