land case no

IN THE HIGH COURT OF TANZANIA (LAND DIVISION) AT PAR ES SALAAM LAND CASE NO. 326 OF 2022 ELIZABETH THOMAS OLOTU.................................................................... PLAINTIFF VERSUS MILTON LUSAJO LAZARO........................................................................DEFENDANT JUDGMENT 16th to 25th October, 2024 E.B. LUVANDA, J In this suit, the Plaintiff named above is claiming against the Defendant above- mentioned for a declaration that a suit property situated at Plot No. 121 Msasam Area, Uganda Avenue, Oyster Bay, Kinondoni Municipality, Dar es Salaam is jointly owned by the Defendant along the Plaintiff; an order of specific performance compelling the Defendant to transfer part of the interest in the suit property to the Plaintiff; the Defendant to take all necessary steps to ensure the name of the Plaintiff is registered as a joint owner in the certificate of occupancy which was issued in the name of the Defendant alone through fraudulent means. According to the evidence presented by the Plaintiff (PW1) suggest that the duo (Plaintiff and Defendant) happened to be workmate as Pilots at Air Tanzania Corporation (ATC). The Plaintiff was staying in the staff quarter owned by ATC i as well as the Defendant was staying in the suit property owned by ATC. Sometimes in 2001 ATC advertised sell of its landed properties by way of bidding and first priority was for sitting tenants (employees). ATC prepared the value for each property, where the suit property was valued at TZS 90,000,000/= but the highest bidder had offered TZS 215,000,000/=. PW1 contended that since the Defendant had no financial wherewithal to bid for such amount, the Defendant approached and requested the Plaintiff to assist financially for a promise that the Plaintiff will be allotted and own 49% of the suit property, where the Defendant will own 51%. It is when the idea of joint venture agreement was introduced and executed on 3/08/2002, as per exhibit Pl. According to exhibit Pl, the value of the suit property was TZS 215,000,000/=, where at the time of executing exhibit Pl, the Defendant had paid to ATC TZS 2,000,000/= and USD 1,400, meanwhile the Plaintiff handed over to the Defendant a sum of TZS 1,000,000 along USD 27,860. Seemingly this this contribution per each partner formed the bases of 25% for initial purchase, although exhibit Pl is silent as to the actual remained balance due to ATC, nor stated the exchange rate for the sum of USD contributed by each party at the time of executing exhibit Pl. It was asserted by PW1 that it was agreed that apart from cash contributions, the remaining purchase price would be financed by the bank loan, thus the Defendant and PW1 approached Exim Bank Tanzania 2 Limited (the Bank) and requested a facility of TZS 140,000,000, as per the facility letter dated 11/10/2002, exhibit P2. PW1 stated that she guaranteed the said loan by her house situated on Plot No. 935 Mbezi Beach Area as collateral to the loan, as per the mortgage of a certificate of occupancy, exhibit P3. PW1 stated that they opened a joint bank account, to wit account No. 5200326002 at the Bank, as per the statement of US Dollar account exhibit P5, for servicing the loan along collection of proceed for payment of rent for leased suit property. PW1 contended that it was her understanding with the Defendant that after the transfer of the suit property from the seller (ATC) to the buyer (Defendant), PW1 will be joined as co-owner of the suit property by 51%/49% basis. PW1 tendered a letter which was crafted by the Defendant addressed to the Assistant Treasury Registrar (Reform) dated 15/04/2007, exhibit P6, where the Defendant requested for inclusion of his partner (PW1) in the sale agreement, along a letter of response from the Director for Debt Collection and Asset (Consolidated Holding Corporation) dated 18/08/2008 Ref. CHC/DLR/M.03/VOL.XII, exhibit P7. PW1 contending that exhibit P7 was to the effect of no objection to the idea of joint venture ownership of the suit property. According to PW1, they agreed in exhibit Pl for the purchased property to be operated commercially. To this end they renovated the suit property and upgraded, thereby leased to Norwegian Embassy and thereafter to Ms. Ulla 3 Elizabeth Muller for a period of four and half years thereafter five years, as per the lease agreements exhibit P8 and PIO, respectively. PW1 asserted that she (PW1) and Defendant smoothly serviced the bank loan by regularly depositing money into the loan account, and she made most of the deposit, where the Defendant only deposited few transactions, citing exhibit P5 along a bundle of deposit slips exhibit P4. PW1 stated that despite several follow up, the Defendant was not giving her any update regarding the question of incorporating her name in the certificate of title, which entailed her to register a caveat on 2/04/2009, as per exhibit P9. Thereafter conducted official search on 17/02/2016 only to find that the suit property was registered solely in the name of the Defendant, as per exhibit Pll. PW1 stated that she also learns that the Defendant had wrote a letter to the Bank asking closure of a joint account unilaterally without consulting PW1, as per a letter dated 23/04/2016, exhibit P13. PW1 stated that the Defendant crafted a letter to the tenant one Ms. Ulla Elizabeth Muller informing her regarding cessation of business association with PW1, as per a letter dated 20/06/2016, exhibit P14. PW1 contended that she sued the Defendant vide Land Case No. 62 of 2016, where after PW1 had closed her case and the Defendant had called one witness, they were informed by this Court that the court file went missing under mysterious circumstances, which 4 entailed this Court to issue an order (exhibit P12) allowing the Plaintiff to re­ file, hence this suit. In view of the above, the Plaintiff claimed for the following reliefs: One, a declaration that the Plaintiff is a rightful joint and co-owner with the Defendant of the suit property; Two, a declaration that the Defendants act of transferring of the suit property and obtaining the certificate of occupancy in his name as the owner in concealment of the joint venture agreement with the Plaintiff and their vivid initiation of joint ownership is fraudulent and without colour of any right; Three, a declaration that the certificate of title number 12458 which was issued exclusively in the name of the Defendant was illegally obtained thus null and void; Four, an order that decree of the Court be served on the Registrar of Titles for a certificate of occupancy bearing the name of the Plaintiff and Defendant, as joint owners of the suit property, be issued by operation of the law, in pursuance of the parties' joint venture agreement; Five, a permanent injunction restraining the Defendant, his agent and assignee and successor in title in the interest from disposing, transacting with the property or trespassing upon or in other manner whatsoever interfering with the Plaintiff's ownership, quiet and peaceful use and enjoyment of the suit property; Six, that the Defendant be ordered to pay the Plaintiff general damages in the amount as shall be assessed by the court; Seven that the Defendant be ordered to pay 5 punitive damages as shall be assessed by the court; Eight, that the Defendant pays 18% interest of the decretal amount; Nine, the Defendant be ordered to pay costs of the suit; Ten, any other reliefs as the court may deem just and equitable to grant. Issues framed for determination: One, whether the Plaintiff and Defendant entered into a joint venture agreement to acquire the property in dispute; Two, if the above issue is answered in the affirmative, what were the terms and conditions of the agreement; Three, whether the Plaintiff and the Defendant operated a joint account; Four, what are the reliefs entitled to the parties. Issue number one. Arguably parties entered into a joint venture agreement, as per exhibit Pl. At clause 1.1 of exhibit Pl, it states generally that parties shall become co-partners in the business of acquiring, owning and leasing real properties. Again, at clause II. 1 of exhibit Pl, it specifically states that parties were desirable to jointly acquire a suit property for their joint venture purposes to be operated commercially. At clause II.2.A and B, indicate that at the time of executing exhibit Pl, the Defendant had paid to ATC TZS 2,000,000/= and USD 1,400, meanwhile the Plaintiff handed over to the Defendant a sum of TZS 1,000,000 along USD 27,860. But exhibit Pl is silent as to the remained balance due to ATC nor stated the exchange rate for the sum of USD contributed by each partner to the joint venture at the time of executing exhibit Pl. The 6 balance for purchase price seemingly was disclosed in the facility letter and mortgage deed exhibit P2 and P3 respectively, being a sum of TZS 140,000,000/= for which under clause III.l connote the balance for purchasing price will be financed by the Bank loan. However, exhibit Pl is silent as to whom that loan belongs. But PW1 contended that it was her personal liability, on that in case of default, it was her who could suffer for the explanation that her house mortgaged vide exhibit P3 could be auctioned. This fact differs with what parties had contemplated in exhibit Pl, where at clause III.l suggest the bank loan ought to be secured by the title of the suit property and the loan ought to be negotiated by the Defendant. Exhibit Pl does not explain to whom a loan amount it belongs, nor stated as to how and who will service the loan, neither stated or apportioned any percentage of liability for each partner. Indeed, did not align the liability to the contribution of 51% by the Defendant and 49% by PW1 towards acquisition of the suit property, as provided for at clause III.3 exhibit Pl. At clause III.2 of exhibit Pl, state that 25% of the purchase price- will be raised jointly by the parties at the onset in order to meet the terms of the tender set by ATC. However as indicated above, according to exhibit Pl specifically clause II.2.A and B, suggest at the time of executing it, the Defendant had paid to ATC TZS 2,000,000/= and USD 1,400, meanwhile the Plaintiff handed over to the Defendant a sum of TZS 1,000,000 along USD 7 27,860. Mathematically a ratio of 51% by 49% cannot be realized from the face of this figure, rather suggest PW1 paid over and above, far beyond what was contemplated by the parties. No wonder in the plaint, if you read closely the averments by the Plaintiff, portray she had majority shareholder, lion share if not the entire purchase was muscled from her personal pocket. My undertaking is grounded on the following facts: a contribution of TZS 1,000,000 along USD 27,860 by PW1 in comparison of a peanut amount a sum of 2,000,000/= and USD 1,400 contributed by the Defendant; a loan of TZS 140,000,000 wholly secured by the collateral mortgaged by PW1 vide exhibit P3, although constituted breach of clause III. 1 of exhibit Pl. PW1 on cross-examination, asserted that the Defendant was hand caped and crippled off financially, thus incapable of purchasing the suit property on his own, and whenever he visited for borrowing at whatever bank or financial institution, he was rejected all over outrightly. PW1 asserted that its only her personal reputation with the Banker at Exim Bank, managed to solicite for the loan to facilitate purchase of the suit property, which also was against clause III.l exhibit Pl. My simple arithmetic calculations of a contribution of TZS 1,000,000 along USD 27,860 by PW1 in comparison of a peanut size a sum of 2,000,000/= and USD 1,400 contributed by the Defendant. First step, I have converted the sum of 8 USD into TZS, where today exchange rate of 1 United States Dollar is equal to TZS 2,712.49 times USD 27,860 is equal to 75,820,711.4 and USD 1,400 times TZS 2,712.49 is equal to 3,810,086. Therefore, a contribution by PW1 will be TZS 1,000,000 plus TZS 75,820,711.4 (converted form USD 27,860) will make a total of her initial contribution TZS 76,820,711.4. While the Defendant his total initial contribution TZS 2,000,000 plus TZS 3,810,086 (converted from USD 1,400) will be a total of TZS 5,810,086 only. If you compute these figures in terms of percentage of hundred percent, PW1 will have 92.96861923% against the Defendant with only 7.03138077%. That is why I said everything was done contrary to what parties had contemplated and agreed. Back-to-back, the 25% as provided for under clause III.2, exhibit Pl, was not made clear, the loan of TZS 140,000,000 was not made clear as to whom it belong, no percentage wise was articulate by aligning to clause III.3, including a question as to who will take responsibility, obligation to service it, were not made clear. That is why in the plaint at paragraph sixteen, the Plaintiff made the following averment, 'That, the Plaintiff used her resources to substantially renovate and upgrade the suit premises to make the same marketable while servicing the said loan with Exim Bank (T) Limited' That is why I have said repeatedly that it looks like it is the Plaintiff who financed for a total purchase, borrowing, renovation, servicing loan, looking for lucrative 9 and royal tenants. However, in her testimony PW1 made a departure to her averments in the plaint by stating that she accepted the offer to finance part of the purchase price and that the loan was serviced partly by rent paid by the tenants in lease agreement exhibit P8 and PIO. In a bundle of cash deposit receipt for foreign currency exhibit P4 for servicing the loan, fourteen receipts totaling USD 134,550 bears the names of both parties, but majority were signed by PW1; six receipt totaling USD 6,160 and TZS 3,600,000 were deposited by the Defendant; six receipts totaling USD 6,200 were deposited by PW1. Again, in her testimony in chief, PW1 asserted that it was her understanding with the Defendant that after the transfer from the vendor (ATC) to the purchaser (Defendant), PW1 will be joined as co-owner of the suit property by percentage of 51/49 basis. But this version of the so called understanding regarding transfer and registration from ATC to the Defendant then to partners, was not clarified in exhibit Pl. Exhibit Pl specifically clause III. 7 talks of re-registration, that the title deed shall be re-registered in the name of the Defendant and PW1. But how and at what time or stage, exhibit Pl is silent. PW1 asserted that the Treasury Registrar had allowed and made no objection to the joint purchasing or sale agreement. But my close look on exhibit P7, the io author was smart and avoided the proposal by the Defendant made vide exhibit P6 pushing the agenda for inclusion of PW1 (partner) into the sale agreement and transfer of the suit property from ATC direct into the names of the two partners. The author in response addressed the Defendant as follows, 'Kwa mara nyingine tena tunapenda kusisitiza kuwa Shirika bado Hnakutambua wewe Ndugu Milton Lusajo Lazaro kuwa ndiye mnunuzi wa nyumba tajwa hapo Juu na haiina pingamizi kwa wewe kumshirikisha mtu mwingine. Msimamo wa Shirika ni kwamba uendeiee na taratibu za uhamishaji wa nyumba hiyo kama iiivyokusudiwa hapo awaii biia kuiishirikisha Shirika ietu' In short, the author avoided completely to recognize or mention the name of PW1, secondly it made a total disclaimer to the future dispute, by exonerating completely to the transfer procedures afterward. Therefore although, the author said had no objection for the inclusion of a third party, but it made it clear that the transfer ought to proceed as was agreed initially. That is transfer from ATC into the name of the Defendant. To me I think it is what was contemplated by the parties in exhibit Pl clause III.6, by inserting the phrase re-registration. But as to how, who will facilitate, at what stage or when, are all missing in exhibit Pl. Again, in exhibit Pl although parties apportioned shares by percentage of 51/49, the wording of exhibit Pl suggest it was a joint occupancy in respect of 11 the suit property. It is in exhibit P6 where the Defendant was forcefully pressing hard to have the sale agreement revised by way of inclusion of the name of PW1 and transfer deed to reflect the same status to facilitate the issuance of a joint deed, it is when the Defendant tried to rectify the anomaly by inserting wordings that the occupancy was tenancy in common. It seems to me that at a later stage, parties realized some mistake, ambiguity and lacuna or gaps in exhibit Pl, then they were trying to fill them by unofficial addendum. Example in exhibit P6, it is when they awake that the names for both partners ought to have been reflected from the initial sale agreement between ATC and Defendant, in that it could had facilitated automatic transfer and registration of title deeds into the names of both partners at the first transfer. But still this could be against clause III.6 exhibit Pl, which entailed and braced a procedure for re-registration, that is registration from ATC to the Defendant and thereafter from the Defendant to both partners, which process ended at impasse following reluctant on the part of the Defendant to have both names re-registered in the title deed. Up to this moment, no breach on the part of the Defendant can be traced. In a sense that it was a conditional precedent for the title deed to be transferred and registered into the names of the Defendant thereafter to be re­ registered into the names of the partners. Unfortunately, as usual there is a serious gap and lacuna in exhibit Pl, as at what exactly time or stage the re­ 12 registration could had been effected. In this situation, it will be hardly impossible to say on express terms or with certainty that one party is acting fraudulently or concealment as far as transfer procedures are concerned. As I have said, exhibit Pl suggest division of shares by percentage wise between partners, however wording of the terms reflect it was a joint occupancy. Section 159 of the Land Act, Cap 113 R.E. 2019, provides, '(1) In this Act, co-occupancy means the occupation of land held for a right of occupancy or a lease by two or more undivided shares and may be eitherjoint occupancy or occupancy in common. (2) Where, subject to the provisions of this Act, two or more persons not forming an association of persons under this Act or any other law which specifies the nature and content of the rights of the persons forming that association occupy land together under a right specified by this section, they may be either joint occupiers or occupiers in common. (3) An instrument made in favour of two or more persons and the registration giving effect to it shall show- (a) whether those persons are joint occupiers or occupiers in common; and (b) where they are occupiers in common, the share of each occupier. (4) Where the land is occupiedjointly under a right of occupancy or /ease no occupier is entitled to any separate share in the land and, consequentiy- 13 (a) dispositions may be made only by all the joint occupiers; (b) on the death of a joint occupier, his interest shall vest in the surviving occupier or occupiers jointly; (c) a joint occupier may transfer his interest inter vivos to all the other occupiers but to no other person, and any attempt to so transfer his interest to any other person shall be void. (5) Where any land, lease ormortgage is occupied in common, each occupier shall be entitled to an undivided share in the whole and on the death of an occupier, his share shall be treated as part of his estate. (6) No occupier in common shall deal with his undivided share in favour of any person other than another occupier in common, except with the consent in writing or in any other manner which signifies clearly that the consent is given freely and without undue pressure, of the remaining occupiers, but such consent shall not be unreasonably withheld. (7) Joint occupiers, not being trustees, may execute an instrument in the prescribed form signifying that they agree to sever the joining occupancy and the severance shall be complete by registration in the prescribed register of the joint occupiers and occupiers in common. (8) On and after the commencement of this Act, and except with leave of a court, the only joint occupancy that shall be capable of being created shall be between spouses, and any joint occupancy other than that between spouses which is purported to be created 14 without the leave of a court shall take effect as an occupancy in common' As per the law above, it is a prerequisite condition for an instrument made in favour of two or more persons and the registration giving effect to it to show whether those persons are joint occupiers or occupiers in common. The law is clear that only occupiers in common, entail demarcation of separate share of each occupier. Joint occupier is reserved to spouses only, who are capable of creating and registering as such. For the rest occupier to attain the status of joint occupier; if they are not spouse, they must obtain court leave to do so. However, the provisions of subsection (8) in section 159 Cap 113 (supra) uses soft wording to the effect that any joint occupancy other than that between spouses which is purported to be created without the leave of a court shall take effect as an occupancy in common. Now, as I have stated that the wording in exhibit Pl portray joint occupancy at the same time apportioned shares to partners. Notwithstanding this scenario, the occupancy by the parties it takes effects as an occupancy in common. Now having ruled that the occupancy by parties take the effects of occupancy in common. And having ruled that it is the Plaintiff who contributed majority shares in purchasing the suit property. Irrespective of anomaly explained above, 15 I rule that PW1 is entitled to regain her 49% shares in the suit property as stipulated at clause III.4 of exhibit Pl which provides, 'That the ownership of the house shall be 51% by Tonny and 49°/o by Betty' To me this clause takes a condition precedent and it is what parties had contemplated throughout the initial stages of purchasing the suit property that it could be owned jointly, the Defendant dominating the majority shares. The above adumbration takes into board issue number two as well. Therefore, it can be said that indeed he Plaintiff and Defendant entered into a joint venture agreement to acquire the property in dispute, with a condition precedent that ownership of the suit house shall be 51% by the Defendant and 49% by the Plaintiff. Issue number three, whether the Plaintiff and the Defendant operated a joint account. PW1 stated that they opened a joint bank account, to wit account No. 5200326002 at the Bank, as per the statement of US Dollar account exhibit P5, for servicing the loan along proceed for payment of rent for leased suit property. It true that exhibit P5 bears names of PW1 and the Defendant, meaning that indeed it was a joint bank account. However, going by exhibit Pl nowhere parties had contemplated to open or operate a joint bank account. Therefore, opening and operating joint bank account was something of PW1 and 16 Defendants own initiative not supported by the terms of the joint venture agreement exhibit Pl. Above all, the said bank account was frustrated by the Defendant, as per explanation of PW1 that she learns that the Defendant had wrote a letter to the Bank asking closure of a joint account unilaterally without consulting PW1, as per exhibit P13. Mr. Denice Maringo learned Counsel for Defendant made an argument that the suit is of commercial nature. Mr. Juvenalis Ngowi learned Counsel for Plaintiff on the other hand, argued that his client is claiming ownership of share of a suit house. Arguably the facts of the case, in particular reliefs prefaced above suggest the Plaintiff is claiming for specific performance of a contract which fall under the domain of commercial disputes. However, as ruled above, the corner stone of the dispute was hinged under clause III.4 of exhibit Pl which on the face of it cater ownership of the house with a shareholding structure of 51% by Tonny and 49% by Betty. It is to be noted that the suit proceeded in the form of ex-parte hearing, after the written statement of defence by the Defendant was struck out under the fiat of the provisions of Order VIII rule 41(b)(i) and (ii) of the Civil Procedure Code, Cap 33 R.E. 2019. This was after the Defendant was found guilty for deliberately banking into frustrating court proceedings despite several reprimand deterring his course. On 30/06/2023 the Defendant filed a notice of 17 appeal against an order overruling his preliminary objection, where the proceedings were halted for a while, but on 19/07/2023 this Court opted to proceed with first pre-trial conference and subsequent events. When the matter was due for hearing, it is when the Defendant re-introduced the question of notice of appeal filed on 30/06/2024, whereby on 20/06/2024 I made an order to the effects that the said notice was invalid in the eyes of the law, for reason that it was filed in contravention of the provision of section 5(2)(d) of the Appellate Jurisdiction Act, Cap 141 R.E. 2019, which prohibit and bar appeal against preliminary or interlocutory orders or decision. To me, an invalid notice of appeal could not frustrate court proceedings. Following this order, the Applicant preferred multiple applications: 1. Miscellaneous Land Application No. 16390 of 2024 filed on 10/07/2024 seeking stay of hearing of Land Case No. 326 of 2024 (sic, 2022) pending determination of the notice of appeal; 2. Miscellaneous Land Application No. 16509 of 2024 filed on 11/07/2024 seeking stay of hearing of Land Case No. 326 of 2022 scheduled for hearing on 22nd, 23rd and 24th July, 2024, pending determination of the notice of appeal; 3. Miscellaneous Land Application No. 17442 of 2024 filed on 19/07/2024 seeking stay of hearing of Land Case No. 326 of 2024 set for hearing on 18 22nd, 23rd and 24th July, 2024 pending determination and outcome of the Miscellaneous Land Application No. 16390 of 2024. 4. Miscellaneous Land Application No. 20177 of 2024 filed on 19/08/2024 seeking stay of hearing of Land Case No. 326 of 2024 set for hearing on 26th August, 2024 for reason that there is a pending notice of appeal. All these applications were struck out for offending the provisions of Order VIII rule 23 Civil Procedure Code, Cap 33 R.E. 2019, which prohibit amendment or departure to scheduling order without leave of the court. After the Defendant was penalized having been found guilty for delaying court proceedings (cause listed twice in two sessions for backlog cases, all were frustrated) which occasioned expiry of the speed track of the case on 13/09/2024 prior conclusion of the trial, still was allowed to participate court proceedings by way of cross-examining the witness for Plaintiff or objecting admissibility of evidence tendered by the Plaintiff. But the Defendant did not seize this opportunity to prosecute his counter claim. As such the same is deemed to have been abandoned. And is accordingly struck out. Reliefs to parties. As ruled above, 49% of the shares of the suit house is allotted to the Plaintiff and Defendant will retain 51% of shares. The certificate of title number 12458 should reflect this share holding structure. The Registrar of 19 Titles to be served with order to rectify the land registry for a certificate of occupancy number 12458 to reflect the name of the Plaintiff and Defendant, as in the form of tenancy in common of the suit property. 20