evodia

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA MOROGORO SUB-REGISTRY [AT MOROGORO] PC CIVIL APPEAL NO. 10184 OF 2024 {Arising from Civil Appeal No 33 of2023 at the District Court of Morogoro originating from Morogoro Urban Primary Court in Civil Case No 161/2023 before Hon John-RM) EVODIA WERNERY HEKELA APPELLANT VERSUS THERESIA MASSAWE RESPONDENT JUDGEMENT 22/05/2024 & 25/07/2024 KINYAKA, J.: The present appeal stems from the decisions of the Morogoro Urban Primary Court hereinafter "the trial court" and the District Court of Morogoro hereinafter "the first appellate court" in Civil Case No. 161 of 2023 and Civil Appeal No 33 of 2023, respectively. In the former, the appellant instituted civil proceedings against the respondent claiming for payment of Tanzania Shillings Three Million and Nine Hundred Thousand Shillings (TZS 3,900,000) being the amount of money which the appellant extended to the respondent herein and a sum of Tanzania Shillings Six Hundred and Forty Thousand Shillings (TZS 640,000) being the debt for curtains that the appellant sold to the respondent by way of loan. Upon hearing both parties, the trial court adjudicated the matter In favour of the appellant and ordered the respondent to pay the claimed amount. The said decision did not please the respondent. She preferred an appeal against the decision at the District Court of Morogoro praying for the court to quash and set aside the decision of the trial court basing on three grounds of appeal listed below; i. That the trial magistrate erred both in law and fact In evaluating and analysing the evidence presented by the appellant hence leading to the wrong and biased decision; a. That the trial magistrate erred both in law and fact by deciding in favor of the respondent herein without dear and conclusive evidence; Hi. That the trial magistrate erred both In law and m factfor awarding the amount which is not owed in dues. In its decision, the first appellate court allowed the respondent's appeal. It quashed the judgment of the trial court and set aside all orders emanating therefrom on the ground that the trial Court did not have jurisdiction to entertain the case as the same arose from a purely commercial transaction falling squarely in the definition of a commercial case prescribed under section 2 of the Magistrate Court Act, Cap. 11 R.E. 2022, hereinafter "the MCA". Aggrieved by the first appellate court's findings, the appellant lodged the present appeal armed \A/ith two grounds as reproduced below; i. That the first appellate court erred in both law and in fact while ascertaining the issue of jurisdiction; and ii. That the first appellate court erred in law and in fact while evaluating and analyzing the evidence presented resulting in the wrong and biased decision. By the order of this Court dated 22"^ May 2024, the hearing of the appeal was conducted through written submissions. As for appearance, both parties were unrepresented. In compliance with the court's scheduling orders, they dutifully drew and filed the respective submissions on their own. Submitting for the appeal, the appellant silently consolidated the two grounds of appeal and argued them as one. Her entry point was sections 3(1) and 18(l)(a) (i) and (iii) of the MCA which provides for the jurisdiction of primary courts. She submitted that at the trial court, she did not sue the respondent demanding her to perform the obligation arising out of their agreement, but rather that she sued her in order to recover her money given to the respondent herein as cash and the other was from curtains and as such, the trial court properly exercised its jurisdiction conferred by virtue of section 18(l)(a)(i) and (iii) of the MCA. Elaborating further, the appellant cited the cases of Goodluck Kyando V R.[2006] TLR 376, Bahati Makeja v. Republic [2010] T.LR 49(CA) and Yara Tanzania Limited v Ikuwo General Enterprises Ltd(Civil Appeal No 309 of 2019) [2022]TZCA 604 and averred that the first appellate magistrate was under misconception to hold that the trial court lacked jurisdiction basing on the testimony of an untrustworthy witness and departing from the pleadings of the appellant herein as adduced at the trial court that the amount claimed arises from the money collected by the respondent herein. She said, the appellant never claimed any interest or general damage resulting from the respondent's breach of the agreement. From the above submission, it was the appellant's conclusion that the first appellate court's finding that the case adjudicated by the trial court was a commercial case and its subsequent holding that the court lacked jurisdiction to entertain the matter was based on the improper evaluation and analysis of the evidence tendered at the trial court, he appellant implored the court to allow the appeal with costs and uphold the trial court's decision. On her part, the respondent submitted against the grounds of appeal in the manner they were presented in the appellant's petition of appeal. As for the first ground, the respondent supported the first appellate court's holding in as far as the jurisdiction of the primary court in entertaining the matter between the parties is concerned. She highlighted that the transaction between the parties were of commercial nature as there was the issue of interest upon the return of the money owed contrary to the appellant's averments. On the second ground, it was the respondent's contention that there was nothing erroneous with the first appellate court's analysis and evaluation of evidence which led to the court's finding that the primary court was not clothed with jurisdiction to adjudicate the matter as the appellant claimed interest resulting from the respondent's breach of the agreement. In light of her submissions, the respondent's prayer was for this Court to dismiss the present appeal by upholding the first appellate court's decision which ordered for nullification of the judgement and all consequential orders of the trial court. In her rejoinder, the appellant attacked the respondent's adverse submission for being mere narrations which lacks an appropriate legal basis that could have otherwise contradicted the appellant's main submission. As such, she reiterated what had already been submitted in her main submission. Upon completion of the rival submissions of the parties, I now turn to determine the merit of the two grounds of appeal preferred by the appellant in the present appeal. I will start with the first ground of appeal on the jurisdiction of the Primary Court to entertain the dispute between the parties relating to appellant's claim for repayment from the respondent, of TZS 4,540,000, being a total sum of TZS 3,900,000 she extended to the respondent, and TZS 640,000 being the value of curtains that she extended to the respondent. The appellant was aggrieved by the decision of the first appellate court which held that the trial court lacked powers to entertain the matter of a commercial nature. The excerpt of the decision of the first appellate court found on page 6 of the judgement is as below:- 'T/7/5 court upon its own findings aiso manage to discover that the transaction between the parties were of commercial nature as there was issue ofinterest upon the return of the money owed. This means that the trial court had no jurisdiction to entertain the matter as is ofcommercial nature as per the interpretation ofsection 2ofthe Magistrates Court Act(Cap 11 R.E. 2022) where the definition of commercial case arises. That there was relationship between parties with regard to owed money stipulated and elaborated by the respondent That the Jaw is very dear about the requirements and procedures ofissuance ofloan as there must be a valid and signed contractual agreement as per the Law of Contract Act [Cap. 345 R.E. 2022] from a registered company as per Business Licensing Ac] having taxed and bear stamp duty as per Stamp Duty Acf [Cap. 189 R.E. 2019] It is clear from the above reasoning of the first appellate court that it considered the dispute bet\A/een the parties as of commercial nature based on its finding that the parties contracted a loan which carried interest on it and hence, disapplied section 18(l)(a)(iii) of the MCA in favour of section 2 of the MCA. The evidence of prosecution at the trial court adduced by the appellant, who testified as SMI, Sophia Lazaro (SM2) and Vaileth Kitete Said (SM3), was that the appellant extended TZS 3,900,000 and curtains worth TZS 640,000 to the respondent, and the respondent failed to repay the amounts except for TZS 100,000 that she paid and which the appeiiant deducted from the curtains debt. SM3, the registered broker testified that he was contracted by the appellant to pursue the claims against the respondent. The evidence as to repayment of the amount with interest of TZS 450,000 was testified by the respondent (SUl). However, in the prosecution evidence, nowhere it was stated that the appellant extended the money to the appellant for repayment of the amounts with interest. This was evidenced by Exhibit El which is the appellant's acknowledgement of the 7 debt of TZS 3,900,000. In exhibit El, the respondent acknowledged her indebtness to the appellant of TZS 3,900,000 without any portion of interest. Had it been that there was interest component in the debt, the same wouid have either been stated in the ciaim preferred at the trial court, testified by the appellant or her witnesses in their testimonies, or contained in Exhibit El which was procured on 23''^ October 2022 after the respondent had defaulted to repay the debt. On balance of probability, on whether the amount was extended by the appellant to the respondent with or without interest, the evidence of the appellant was heavier than that of the respondent. The testimony of the respondent that the loan had interest element was a mere allegation without substantiation. With regard to whether the dispute was of a commercial nature, the evidence of both the prosecution and the defence is very clear that It was the respondent who approached the appellant for loan of TZS 3,900,000 to pay for operation costs of the respondent's sick mother at Muhimbili hospital. According to SM2, she was the one who directed the respondent to the appellant, her sister in law, after she was unable to extend the said money to the respondent. Later on,the appellant extended curtains worth TZS 640,000 to the respondent. These facts were not denied by the appellant except that the appellant admitted to have borrowed TZS 3,000,000 and curtains worth TZS 800,000. There has been no evidence before the trial court that the appellant was running a business of lending with or without interest. No evidence was adduced to the effect that the appellant was conducting such business and registered or ought to have registered her business under the Business Licensing Act Cap. 208 R.E. 2019. To the contrary, the evidence at the trial court clearly established that the respondent was introduced to the appellant by SM2 and she went to the appellant's home where she was given the money in trust and confidence, and without any written agreement. Section 2 of the MCA defines a 'a commercial case' to mean:- "commercial case" means a civil case involving a matter considered to be ofcommerdai significance including but not limited to— (i) the formation of a business or commerdai organizations; (ii) the governance of a business or commercial organization; (hi) the contractuai reiationship of business or commerdai organization with other bodies or persons outside it; to- (^v) the liability ofa commercial or business organization orits officialarising outofits commercialor business activities; (v) the iiabiiities of a commerciai or business person arising out of that person's commerciai or business activities; (vi) the restructuring orpaymentofcommerciai debts by or to business or commerciaiorganization or person; (vii) the winding up or bankruptcy of commerciai or business organization or person; (viii) the enforcement ofcommerciai arbitration award; (viii) the enforcement of awards of a region court or tribunal of competent jurisdiction made in accordance with a Treaty Mutual Assistance arrangement to which the United Repubiic is a signatory an which forms part of the iaw of the United Repubiic; (ix) admiralty proceedings; and (x) arbitration proceedings. On the meaning of a commercial case, see also the decision of the Court of Appeal in the case of Dangote Industries Ltd. Tanzania v. WARNERCOM T. Limited, Civil Appeal No. 292 of 2022 [2024] TZCA 359(14 May 2024) on page 10. Based on the above evidence adduced before the trial court, and the meaning of a commercial dispute reproduced above, I am of a firm view that the dispute is not of a commercial nature. It was not established at 10 the trial that the appellant was conducting any business of lending money with or without interest. It was also not established that the respondent was a business person whose liability from conducting such business would lead to a commercial case. The dispute does not fall under any of the meaning of a commercial case section 2 of the MCA. Contrary to the reasoning of the first appellate court, I find the dispute between parties relates to a civil debt arising from a contract whose claim amount was TZS 4,540,000 which was within the pecuniary jurisdiction of the Primary Court. Section 18(l)(a)(iii) of the MCA provides:- 18. Jurisdiction ofprimary courts (1)A primary court shali have and exercisejurisdiction (a)in ail proceedings ofa civil nature- (iii) for the recovery of any civil debt arising out of contract^ if the vaiue ofthe subject matter ofthe suit does not exceed thirty million shillings, and in any proceeding by way ofcounterclaim and set-offtherein ofthe same nature notexceeding such value.[Emphasis added] I hold that the trial court had requisite Jurisdiction both of subject matter and monetary value to entertain the dispute between the parties in Civil Case No. 161 of 2023. I hold that the first appellate court's finding that the dispute was of a commercial nature is incorrect in the circumstance of the nature of the dispute between the parties. 11 I now move to consider the second ground of appeal that the first appellate court erred In the evaluation and analysis of evidence which led to wrong conclusion. The relevant part of the decision of the first appellate court is as below:- ''What I have gathered from the above pieces ofevidence is that the appeiiant herein had cieariy estabiished that the respondent owed money but amount is not what was awarded. That no any contract or document proving the amount alleged or awarded by the trial courtas testimony are different one. The essence of the decision of the first appellate court is that though it was proved that the respondent owed money to the appellant, the amount was not substantiated. At the onset, I join hands with part of the decision of the first appellate court that it was well established through the testimony of the appellant and the respondent that the respondent owed the appellant some money. The evidence establish that the respondent admitted to have borrowed TZS 3,000,000 and curtains worth TZS 800,000. I also join hands with the first appellate court that the amount awarded was incorrect and does not reflect the amount claimed. The appellant claimed TZS 3,900,000 that the appellant borrowed and TZS 640,000 as the value of curtains, totaling TZS 4,540,000 which the appellant claimed in the suit before the trial court. However, the appellant admitted during 12 ^ cross examination by the respondent that she was paid TZS 100,000 which she deducted from the curtains debt. On the other hand, the respondent argued that she borrowed TZS 3,000,000 and curtains worth TZS 800,000 totaling TZS 3,800,000. The respondent adduced to have paid TZS 240,000 by herself and TZS 100,000 was paid by her family. But apart from the TZS 100,000 that SU2 testified to be paid by the appellant's sister and which the appellant admitted to have been paid, the TZS 240,000 was not proven as paid either in cash, or through mobile payment or bank transaction. I find the debt of TZS 3,900,000 that the appellant extended to the respondent was proven through the testimony of SUl and Exhibit El which the respondent duly signed together with other witnesses including SM2, evidencing the respondent's acknowledgment of the debt of TZS 3,900,000 that she borrowed from the appellant. In my view, if the appellant had borrowed TZS 3,000,000 as she claimed, she could not have signed Exhibit El acknowledging that she borrowed TZS 3,900,000 from the appellant Further, I find the debt of TZS 640,000, being the value of the curtains that the respondent borrowed, was also proven. The appellant admitted to have borrowed curtains worth TZS 800,000 which is higher than the appellant's claim TZS 640,000. However, as the suit before the trial court to" 13 was instituted by the appellant who had the obligation to prove her claims, I find that it was correct for the trial court to base on the figure alleged by the appellant in her claim. Although I agree with the decision of the trial court that the respondent borrowed curtains worth TZS 640,000 as adduced by the appellant, I disagree with the awarded amount as the trial court erred by not deducting TZS 100,000 that the appellant admitted to have been paid by the respondent and which she deducted the same from the curtains debt. It means that the trial court ought to have deducted TZS 100,000 from the total TZS 4,540,000 that the appellant managed to prove as debt owed by the respondent, making the remaining debt to be TZS 4,440,000. I allow the second ground of appeal to the extent that the appellate court erred to evaluate and analyze evidence that led to an incorrect decision which did not award the appellant any amount despite the respondent's admission of indebtness, and proof by the appellant of the same. As the first appellate court determined and made a decision on the appropriateness of the amount to be awarded which it opined that the same was incorrect, it ought to have made a decision as to the correct amount to be awarded in the circumstance. In the upshot, the present appeal is allowed by reversing the decision of the first appellate court in Civil Appeal No. 33 of 2023. Consequently, the 14 decision of the trial court in Civil Case No. 161 of 2023 is restored to the extent that the appellant managed to prove her case on the required standard. However, as the trial court did not consider the TZS 100,000 repaid by the respondent, I hold that the correct amount that the appellant is entitled is TZS 4,440,000 after deduction of the TZS 100,000 which the appellant also admitted to have received from the respondent. Based on the relationship of the parties, the respondent's indebtness, and avoidance of protracted litigation, I find it prudent not to order costs. I order each party to bear its own costs. It is so ordered. Right of appeal fully explained. DATED at MOROGORO this 25^^ day of July 2024. / /t'T^ H. A. KINYAKi JUDGE 25/07/2024 15