EQUITY BANK V MAASAI LAND

IN THE HIGH CORT OF THE UNITED REPUBLIC OF TANZANIA [ARUSHA SUB-REGISTRY] AT ARUSHA CIVIL APPEAL NO. 3 OF 2024 (Arising from the Judgment and Decree of the District Court of Arusha at Arusha (Hon. Ndossy, SRM) Delivered on 30th October 2023 in Civil Case No. 8 of 2023) BETWEEN EQUITY BANK (TANZANIA) LIMITED......................................... APPELLANT VERSUS MASAI LAND SAFARIS LODGE LIMITED................................. 1st RESPONDET NORTHEN ZONE MASAI LAND SAFARI LTD......................... 2nd RESPONDENT JUDGMENT 24/10/2024 & 11/12/2024 MWENDA, J.: Dissatisfied by the decision of the Resident Magistrate Court of Arusha at Arusha through Civil Case No. 08 of 2023 delivered on 30th day of October 2023, the appellant has filed this appeal with a total of 5 grounds challenging the said decision as being unfair. ■» s A The brief background of the matter is that before the trial court, the appellant filed an application claiming for payment of USD 16, 820/= (say United State Dollars Sixteen Thousand Eight Hundred and twenty) being unauthorized 1 | Page chargeback to the plaintiff. The basis was that the defendant acted fraudulently and deceptive by making false payments of the said amount which the card holder did not authorize resulting in monetary damages and loss to the plaintiff. In the event he prayed the court to declare the defendant in breach of the terms and conditions of merchant Service Agreement. On his side, the 1st defendant, while denying the allegation through DW1, said that they received an email from the plaintiff claiming that their clients' account was fraudulently transacted, and thus demanded documents to for authentication (confirm). In further defence he testified that they however, at the same time, received emails from the said clients claiming that they have arrived and authorized the said transactions. He added in that the said clients provided virtual credit card details, and in turn they charged them through POs device. After the hearing of the parties' evidence, the trial court held that the plaintiff's case (Appellant herein) has no merit as the claim were not proved on required high standard more than that of ordinary civil cases as no fraud was proved neither damage nor breach of contract. Thus, the suit was dismissed with costs. 2 | Pa ge Aggrieved with the decision of the trial court, the appellant preferred the present appeal based on grounds listed hereunder: - 1. That the trial court erred in law and fact in holding that the Appellant had no contractual arrangement for the year 2021 that covers the alleged fraudulent transaction while the parties were not in dispute as to the existence of such an agreement at the time. 2. In the alternative to ground 1 above, the court raised an issue Suo motto and made an erroneous decision without giving the parties a right to be heard on the same. 3. That the trial court erred in law and fact in holding that the appellant did not tender a complaint from the cardholders with respect to the fraudulent transaction while to prove the same while it failed to properly evaluate and consider "Exhibit P2 Collectively". 4. The trial court erred in law and in fact in failing to consider and properly evaluate all the evidence tendered by the Appellant during the hearing. At the hearing of this appeal which was by way of written submission, the appellant was represented by MR. DENIS MWORIA AND KERRY MRA, learned counsels whilst the respondent was represented by MR. COLLIN MONGI, Learned counsel. The appellant filed his submission timely and served the 3 | Page respondent whom for the reasons best known to himself, opted not to file any reply to the submission made by the counsel for the appellant. Submitting in support of the appeal, starting with the 1st and 2nd grounds of appeal, Mr. Mworia complained that at the trial court only two issues were raised which are: 1. Whether there was a fraud that led to the breach of the agreement between equity bank and Maasai Land Safari Lodge Ltd. 2. To what reliefs are the parties entitled to. Having reproduced the said issues, the learned counsel had it that to their surprise, trial Magistrate Suo motu raise the issue pertaining the absence of a contractual arrangement for the year 2021 and decided on it without providing the parties with an opportunity to address the court on the same. The learned counsel added in that based on the evidence submitted by the appellant at the trial court, it proved there was an ongoing contractual relation between the parties herein as evidenced by Exhibit P2 Collectively. Further to that, he said as there was no dispute regarding the existence or lack of the contractual arrangement between the parties for the year 2021, and according to him that was not among the issues framed at the trial court. 4 | Page Mr. Mworia referred this court to several authorities including the case of CHARLES CHRITOPHER HUMPHREY KOMBE V. KINONDONI MUNICIPAL COUNCIL 9 CIVIL APPEAL NO. 81 OF 2017 [2020] TZCA 295 (9 JUNE 2020) (TANZLII) and Article 13 (6) of the Constitutional of the United Republic of Tanzania, 1977 which delve on the right to be heard to the parties before any court or tribunal. As for the 3rd ground of appeal, Mr. Mworia submitted that the trial court failed to properly analyze Exhibit P2 Collectively alongside with the appellant's witnesses regarding the questionable transaction. He submitted further that looking at page 18 to 21 of the trial court proceedings, the appellant explained how they became aware of the fraudulent transaction and issued demand notice and chargeback notification to the 1st respondent. He said that as the 1st respondent failed to share documentation with the appellant, Civil Case No. 8 of 2023 was then filed against them. It was his further submission that if the trial court had properly analyzed the evidence on record, it could have realized that the appellant discharged his duty as per their contract, by notifying the 1st respondent and issuing him a with a demand notice. He added that the 1st respondent's counsel did not even question them regarding the demand notice and chargeback 5 | Page notifications received on 27th day of February 2022. He supported his argument by citing the case of ROBERT SCHELTENS V. SUDESH KUMRI VERMA (CIVIL APPEAL 203 OF 2019) [2022] TZCA 508 (16A UGUST 2022) (TANZLII). As for the last ground of appeal, Mr. Mworia complained that the trial court Magistrate failed to properly evaluate the evidence tendered before her. While referring this court to the case of MATERU LEISON & ANOTHER V. R [TLR] 102, he said that the appellant submitted comprehensive evidence which was not evaluated by the trial court. He added that nothing was submitted to prove that the 1st respondent had any communication with the card holders to get their approval of using their cards to pay the alleged costs. Also, he said DW1 did not submit any proof to that effect. More so he said that the 1st respondent got the authorization of using the cards from the 2nd respondent who was a privy to their contract, the facts which were not taken into consideration by the trial Magistrate. Thus, as the trial Magistrate, for neglecting the duty of evaluating the evidence, she reached to an unjust judgement. So, he prayed for this appeal to be allowed, and the judgment of the trial court be quashed and set aside. 6 | Page Having considered the submissions by the counsel for the applicant together with the records of this appeal I am now called to determine the merit of the appeal. Starting with the first ground of appeal, the appellant complains that the trial court erred in holding that she (the appellant) had no contractual arrangement for the year 2021 that covers the period when the alleged fraudulent transactions occurred while the parties were not in dispute as to the existence of such an agreement at that time. In a bid to answer this ground, this court perused the merchant service agreement between the parties herein. At clause 8.1 it was agreed by the parties that the agreement was to remain in force and bind them for a period of one (1) year, but it should be reviewed by either party upon expiry. Although there is no evidence to show that either of the parties herein renewed the said agreement, the conduct by the parties indicates there was an implied extension of the contractual period since after expiry of the contractual term they continued to perform the terms of their agreement. This is gleaned through the evidence from both DW1 and DW2. performance of the terms of. On that basis this court is of view that the trial court erred to hold that 7 | Page there was no contractual arrangement for the year 2021.This ground therefore succeeds to the above extent. Coming to the second ground of appeal, the appellant complained that the issue in ground number one was raised Suo motu by the court and the parties were denied their right to be heard. This ground does not need to detain me much. As I was reading the trial court's judgment, two issues formed the basis of the trial court's findings. The issue of contractual obligation of the parties was not raised as a substantive issue as suggested by the appellant but the same appears to feature in the court's discussion on the first issue. In that regard I find no merit on this ground of appeal, and it hereby fails. I now turn to the third and fourth grounds of appeal. In these grounds the appellant stated that the trial court erred in holding that the appellant did not tender any complaint from the cardholders with respect to the fraudulent transactions to prove the same, while it failed to properly consider Exhibit P2 collectively. The position of the law on allegations of fraud has long been settled. In Ratilal Gordhanbhai Patel v. Lalji Makanji [1957] E.A 8 | Page 314 at 316, the erstwhile Court of Appeal for East Africa articulated: "Allegations of fraud must be strictly proved: although the standard of proof may not be so heavy as to require proof beyond reasonable doubt, something more than a mere balance of probabilities is required." I have reviewed the appellant's evidence on record and found it wanting for the following reasons: that the evidence from the record shows that the appellant is claiming against the defendants USD 16,820/= being unauthorised chargeback arising from false payments which the card holders did not authorise, resulting in monetary damages and loss to the appellant. To substantiate the claim, the appellant tendered the chargeback notification and the transaction details. Despite the allegations that the there was moneys which was fraudulently drawn from the cardholders' accounts, there is however no evidence suggesting that the cardholders whom, according to the evidence of DW2 are the defendants' clients, complained of any amount being drawn from their respective accounts. Moreover, there is no evidence that the alleged fraudulent transaction was reported and dealt with by the relevant authorities (the police). It should be remembered that DW2, while testifying before the trial court informed that the payments were done by the clients through the bank, and they were the ones who were to authorise 9 | Page any transaction(s). I have further examined exhibit DI, these are email print outs showing the correspondence between the clients and DW2 on the payments but in it, there is no indication of any complaint about any false payments or being defrauded. At this stage, I hasten to say that the cardholders were the key witnesses in this case. In fact, one would wonder how the appellant initiated the allegation of fraud in the absence of complaints from the card holders. The appellant ought to have given sufficient proof on how the false payments were made through the accounts of the cardholders, and in absence of evidence from cardholders, the plaintiffs allegation remains to be a hearsay. On that basis this ground also fails for being unmerited. From the foregoing reasoning this appeal is dismissed to the extent explained above. Otherwise, each party shall its own costs. Ordered accordingly. DATED at ARUSHA this 13th day of December 2023. 10 | P a g e