20171219 TZHC Mwanza

- cf . !,f' ).; •l IN THE HIGH COURT OF TANZANIA IN THE DISTRICT REGISTRY AT MWANZA LAND APPEAL NO. 133 OF 2015 (Arising from the decision of the District Land and Housing Tribunal of Mwanza _, District at District at Mwanza in Land Case No. 279 of 2012) ERASTO DOMINIC WAMARA ------------------------------APPELLANT VERSUS NMB BANK PLC KENYATTA ROAD BRANCH----------- RESPONDENT JUDGEMENT Ebrahim,, J.: The appellant herein -initially filed Land Application at the District Land and Housing Tribunal for Mwanza at Mwanza claiming that he is the lawful owner of the suit house No. 003/075 located at Kahasa Street, at Bukengwa, Ilemela Municipality. The house is on un- surveyed and the appellant claimed that he bought it without any notice of defect in title of the respondent. The appellant claimed further that he is an innocent purchaser of the property hence acquired good title. He thus prayed for the trial court to issue among others a declaratory order that he is a lawful owner of the suit property. 1 In further appreciation of the matter, it is important to briefly state • the facts of this case as could be depicted from ·the court records. The u . -~'11 -::,J appellant herein purchased the disputed premises from one Nidhamu id ·il ··- ( Hashimu on 25 th June 2012 at ·a price of Tshs. 8,500,000/-. According to ·f."1 the testimony of the appellant who testified as PWl, he said that he conducted due diligence to the Sub-Ward Chairman who introduced him to the legal owner of the house. The appellant was further assured by the Ward Executive Officer of Ilemela that the seller, Nidhamu Hashimu is the lawful owner. He even consulted Land Office in Mwanza and was told that the house has no problem. The appellant tendered sales contracts which were admitted as exhibit Pl and P2. The appellant admitted however that he did not check with any bank to know the status of the house. He renovated the house to the tune of Tshs. 28,000,000/- only to be informed on 15th August 2012 that _the house has been mortgaged for Tshs. 6,000,000/- to NMB Bank by Nidhamu Hashim which is two months after purchasing the suit house. · The appellant called Julias Paul as his witness (PW2) - Sub Ward Chairman from 2004 to 2014. PW2 testified to know Nidham Hashimu because he_ was his neighbour and he admitted to witness the 2 sale agreement. He testified that the house was mortgaged in 30/11/2011 for Tshs. 3,000,000/- and he witnessed the mortgage between the seller J . V and NMB Bank. PW2 testified further that he came to know in April 2012 that the house in no longer on a mortgage as he was shown evidence by Nidhamu. He evidenced further that the said Nidhamu Hashimu went to ,l him again in July 2012 wanting to mortgage a house that has already been i . ·-l , sold to the Applicant. When cross examined he admitted to witness the loan contract on 30 th November 2011. He also admitted to tell the Applicant that the house was once mortgaged but the mortgage has already been repaid. Mr. Evarist Bakashare testified as PW3 who basically testified being the one who searched for the house that the appellant bought. He witnessed the sale in May 2012. Jumanne Hamisi, PW4 testified on his role as the witness to the sale agreement between the seller· and the appellant. He told the Court that they were not told by the Chairman that the house was mortgaged. In this case, when the case continued with the. plaintiff's witnesses on 05.08.2015, the respondent did not appear nor did he defend his case hence the matter proceeded ex-parte. 3 .-_ ~-! :._ .. , ,·'. I < i, ~'!j The trial Chairman after hearing the appellant and his witnesses, :·r,.l ·l differed with the opinion of the assessors and decided in favour of the respondent on the reasons that the appellant ought to have exercise due ·,i ,:1 diligence before purchasing the house. He also based his decision on the . ·• ··; ·l "1 :i fact that the seller was not joined in the suit so as to conceal the truth. Aggrieved the appellant filed the appeal in this court raising four grounds of appeal as follows: 1. That the Hon. Chairman erreo in law and facts by concluding that the suit property was legally mortgaged to the respondent at the .time of its purchase by the appellant without proof of same thereof. 2. That the Hon. Chairman erred in law and facts by ignoring the witness's testimony that the said mortgage between respondent and one Nidhamu Hasimu Ibrahimu occurred after the applicant had purchased the said house. 3. That the Hon. Chairman erred in law and facts, basing his findings on extraneous matters that were not before the Tribunal and granted unsought remedies. 4. That the Hon. Chairman erred in law and facts by basing his decision on the point that appellant's failure to call the seller amounted to hiding of the truth of the situation. 4 At the hearing of the appeal, the appellant was represented by Mr . . Kiyenzi learned advocate and the respondent had the services of advocate Dr. Mwaisondola. Advocate Kiyenzi argued the 1st and the 2nd grounds of appeal together and he also consolidated the 3rd and the 4th ground of appeal. Submitting on the first ground .of appeal, Mr. Kiyenzi referred to the l pleadings and told the court that the house was mortgaged to the 1 i I ·1 respondent after the. house has been sold to the appellant. He referred to the annexture marked GLC/NMB/KNY/WSD/2 in WSD which indicated that the loan was to be repaid within six months which meant that it had to be paid by May 2012. However, said Mr Kiyenzi that the sale agreement exhibit Pl indicates that the sale agreement was executed on 25 th June, 2012; meaning sale agreement was executed after first loan has been fully serviced. Furthermore according to annexture 3 of wso,· the other loan was advanced on 16th August, 2012 where the disputed house was alleged to have been put as collateral; 2 months after the house has been sold to the vendor. In that case, Mr. Kiyenzi stated that it was the seller who defrauded the bank the observation that is supported by testimony of PWl and PW2 5 ... ·;.tj . who witnessed the first loan contract between the Bank and the vendor -::,. j \;1 and the sale agreement between the vendor and the appellant on ! v 25.06.2012. Submitting on the second ground of appeal on the issue of raising extraneous matter, Mr. Kiyenzi referred to Order 1 Rule 3 of the Civil Procedure Code, Cap 33. RE 2002 which allows joining defendants whom a party has remedy. He explained that the transaction between the Bank and the vendor occurred while property has already been transferred . 1 l to the Appellant; therefore the appellant had no any cause of action I, against the vendor since he had already acquired good title. He challenged that the issue of joining the seller was raised suo motto by the Tribunal in composing the judgment; hence the appellant was not given right to be heard on the issue. Citing the provisions of Order 14 Rule 5 and (2) of Cap 33; Mr. Kiyenzi said that the Court can ·add amend/frame issue but it has to invite parties to address on the same. He added that since the respondent did not appear, therefore the testimony by the appellant was not challenged at the trial TribunaL He wondered therefore as to where did the trial Chairman obtain information that the house was. mortgaged. Therefore the appellant discharged his liability in the balance of probability. 6 Referring to the case of Sylvester Nyanda V. Inspector General, Civil Appeal No. 64/2014, Mr. Kayenzi submitted that the trial chairman V awarded reliefs that were n~t asked. He thus prayed for the appeal to be allowed with costs. Dr. Mwaisondola supported the decision reached by the trial Chairman and stated that the appellant purchased the house which was already mortgaged by Nidham Hashim (Vendor) in favour of respondent. He referred to the evidence in record that the appellant purchased the · mortgaged house on 25.06.2012 but by then the house had already. been mortgaged a transaction that was concluded in November 2011. Dr. Mwaisondola prayed for the Court to peruse the documents and that exhibit GLC/NMB/KNY/WSD/2 dated 29 th November 2011 is on informal mortgage and informal mortgage and exhibit GLC/NMB/KNY/WSD/3 is a loan agreement dated 16th August, 2012. The only security was the the disputed house. Dr. Mwaisondola stated further that Local Government Authority Sub - Ward Chairman, Julius Paul was involved and he signed on 13th November 2011 as well as WEO. He stressed that the loan agreement of August 2012 was between Nidham Hashim and Respondent but does not 7 ,._, say anything about the suit premises. He was of the view therefore that when the appellant purchased the suit premises in June 2012, it was tj) mortgaged in favour of the respond_ent hence the appellant was a victim of the operation of the maxim "Caveat Emptor" and he. should have conducted proper "due diligence". Dr. Mwaisondola stated that the fact that the appellant did not check but others close him had information then the appellant had imputed notice as per Section 67 (b) (i) (ii) of the Land Act. Recapitulating the evidence on record, Mr. Mwaisondola referred to the testimony of PWl in cross - examination where he said to have consulted sub - Ward Chairman who informed him that Nidham Hashim was the lawful owner. He stated further that PWl also said that he did not check whether the suit premise was mortgaged to another person but replied to have been told by Sub - Ward chairman that the loan on the house has already been serviced.- Furthermore PW2 - Ju1ius Paul testified to know that in November 2011, Nidham Hashim had mortgaged the suit premises in favour of the respondent but was not sure whether he had finished paying the loan or not. He also witnessed the mortgage of the suit. premises it was therefore obvious that ~he house was mortgaged. He 8 . argued therefore that grounds number 1 and 2 of the appeal are devoid of merits . .Dr. Mwaisondola refuted the complaint raised on the 3rd and 4th grounds of the appeal that the trial chairman based his findings on matters which were not pleaded or evidenced in court by responding that the . decision of the trial chairman based the issues that were frame on 1ih May, 2015. Those issues were "Whether the applicant acquired a good over a suit property under the sale agreement dated 25.06.2012"; and the second issue was on relief. Dr. Mwaisondola submitted on the point that the trial chairman found out that the appellant did not acquire good title guided by the doctrine of "Caveat Emptor'~ He submitted further that the trial chairman made findings that the appellant bought the mortgaged premises while it was already mortgaged and he speculated collusion on the reason that the -appellant did not sue the vendor or call him as a witness though it was not basis of his decision. Dr. Mwaisondola also challenged the award of special damages of Tshs. 28million incurred to renovate the house whilst no receipts were produced to prove the claim. He stated that being a specific damage it 9 ·1 ·r I must be strictly proved. He also challenged the order of the trial Chairman 1 against Nidham Hashim who was not a party to a suit. ·1 He challenged also -the claim the trial Tribunal awarded reliefs not prayed that it was not a ground of appeal and there was no leave sough to add the same. Nevertheless, the order that the suit premises be sold by public a1.Jction was proper because the appellant was trying to restrain sale by public auction, said Dr. Mwaisondola. He finally prayed for the appeal to be dismissed with costs for want of merits. In rejoinder, Mr. Kilenzi challenged the documents referred by Dr. Mwaisondola as being not part of the record because they were annextures to the Written Statement Of Defence and not exhibits. Therefore, they are not evidence until properly tendered and admitted in court. That being the case therefore, the trial Chairman was not entitled to rely. on them in his judgement. Mr. Kilenzi rejoined further that PW2 testified that vendor had discharged the loan. . He also rejoined on the issue of making search that PWl said in his testimony that he made search at sub - Ward Chairman and it is on record 10 ... :'l that the loan was for the term of six months. He stated that the issue of id .J none calling of the Vendor was extraneous and not obita. i . As for selling the suit premises by public auction, Mr. Kiyenzi said that the remedy was not sought or contemplated. Again it is covered on the .l ground of appeal on extraneous matter. He_ repeated their prayers that l ·1 appeal be allowed with costs. Before embarking on addressing the grounds of appeal; I would like to point out here that this being a first appeal, this court is obliged to subject the entire evidence to an objective scrutiny and arrive at its decision thereon. This principle was well illustrated in the case of Japan International Cooperation Agency (JICA) V Khaki Complex Limited, Civil Appeal No. 107 OF 2004; and Charles Mato Isangala and 2 others V R, Criminal Appeal No 308 of 2013, CA,(Unreported). I have thoroughly gone through the proceedings on record as keenly followed the submissions by both Counsels. Mr. Kiyenzi in his· submissions referred to GLC/NMB/KNY/WSD/2 an annexture to the WSD. Further Dr. Mwaisondola has made his arguments supporting the decision of the trial Tribunal basing on annexture 11 GLC/NMB/KNY/WSD/2 and GLC/NMB/KNY/WSD/3. He called those documents as exhibits. With respect those documents cannot in any way 0 be termed as exhibits. I am so saying so because, neither the trial Tribunal nor this Court can take cognizance of those documents as they were mere annextures. It is the principle of the law that a document which is not admitted in evidence cannot be treated as forming part of the record hence to form basis of the decision as held in the case of JICA (supra). Further ' .J still, an annexure relied upon by a party in a suit. must be tendered and ·, I I . tested before the Court or the Tribunal in our case. The principle was well elaborated in the case of Rashid Nkungu V Ally Mohamed [1984] TLR 46 (HC) that I fully subscribe to. That being the case therefore, the purported annexures cannot form basis of decision in this case. It is not disputed in this case that the house that was purchased by the appellant was the property of one Nidhamu Hashim. The bone of contention here is whether when the appellant bought the said house; it was still mortgaged to the respondent. 12 As intimated earlier, the respondent in this case only entered j ·1 appearance on 12.05.2015 when PW1 and PW2 adduced their evidence. v That being the case therefore, he did not bring any witness nor tendered l any exhibit to challenge the evidence of the appellant. The appellant in this case testified to have bought the house on 25.06.2012. His testimony was · supported by PW2 a Sub-Ward Chairman who witnessed the transaction. The sale of the said house was also witnessed by PW3 and PW4. He presented exhibit Pl and P2 to show the sale agreement between himself and Nidhamu Hashimu. I am alive that the documents tendered were photocopies contrary to the provision of Section 66 of the Evidence Act, CAP 6, R.E. 2002 of Cap 6, RE 2002. The above notwithstanding, as stated above,. the appellant brought witnesses who witnessed the sale. To the contrary the respondent apart from filing Written Statement of Defence, the respondent did not disapprove the claim by the appellant. The trial Chairman dismissed the Appellant claim on the basis that he ought to have brought Nidhamu Hashim to prove that he sold the disputed 13 ' II house to the appellant; With respect to the trial Chairman, none joining of· Nidhamu Hashim as a party does not have the effect of dismissing the case in terms of Order 1 Rule 3 and Rul~ 9 of the Civil Procedure Code, V Cap 33. RE 2002 as correctly observed by the Counsel for the Appellant. If at all, the only issue would does the appellant seeks remedy from? Moreover as also correctly observed by the counsel by the appellant, the trial Tribunal upon seeing that it was an important issue, he ought to have called parties to address him on the issue. More importantly even in the absence of Nidhamu Hashimu, there are witnesses including the Sub-Ward Chairman who witnessed the said sale. The trial Chairman raised the issues of collusion since the Appellant did not report the matter to the police. It is clear here that the Chairman was making his own case and raised extraneous matters which were uncalled for. The trial Ch~irman in differing with the opinion of the assessors said that the appellant did not make proper due diligence and that there is no proper ·evidence that he took precaution. Again with respect to the. trial Chairman, the issue here in the absence of any other evidence to prove that the house was mortgaged when the house was sold to the appellant, 14 it cannot defeat· that the appellant proved to have bought the disputed house. Moreover, PWl told the Court that he asked the Sub-Ward v Chairman who told him that the house was the property of Nidhamu i l 1. Hashimu and he had· already discharged the mortgage. The same evidence was confirmed by PW2 that he witnessed the first loan agreement and he knew that Nidhamu had repaid it. There is no other evidence that has been provided to disapprove the appellant. For all purpose and intent, I find that the appeal has merits and I allow it. This Court declares the appellant to be the rightful owner of the disputed property and the respondent has no right to auction or do any act that would alienate the right of the Applicant on the disputed property. The appellant shall have his costs from the trial Tribunal. ~ . ~ ~~-- R.A b ahim JUDGE 19/12/2017 15