exim bank t ltd vs christopher eliasaria malley ta t arts heritage gallery 2022 tzhccomd 137 26 may 2022

IN THE HIGH COURT OF TANZANIA (COMMERCIAL DIVISION) AT ARUSHA COMMERCIAL APPEAL NO. 1 OF 2021 (ARISING FROM CIVIL CASE NO. 2 OF 2019 AT KARATU DISTRICT COURT) EXIM BANK TANZANIA LIMITED.................................... APPELLANT VERSUS CHRISTOPHER ELIASARIA MALLEY t/a TANZANIA ARTS HERITAGE GALLERY............................RESPONDENT Date of Last 0rder:18/05/2022 Date of Judgement: 26/05/2022 JUDGEMENT IN APPEAL MAGOIGA, J. The appellant, EXIM BANK TANZANIA LIMITED aggrieved by the decision of the District Court of Karatu by Hon. Kuppa, R.M. in favour of the respondent now appeals to this honourable court against the whole judgement and decree on the following grounds, namely:- 1. That the learned trial Resident Magistrate erred in law by making a finding that the question of fraud could not be proved or acted by a mere letter from a foreign country, while the transaction carried out by Master and Visa Card Holders and the respondent via a point of sales machine issued as per the Merchant Establishment Agreement by the i I appellant, are transactions which are regulated by International Visa and Master Card Transaction Laws which are binding upon the appellant bank; 2. That the learned Resident Magistrate erred in law by making a finding that the question of fraud could not be proved or acted upon by mere letter from a foreign country, while there were also proof of complaints from Master and Visa Cardholders who previously dealt with respondent via the machines issued by the appellant as per the Merchant Establishment Agreement in that there were fraudulent Card Not Present (CNP) transaction carried out by the respondent which they did not authorize, on the basis of which the appellant put those funds on hold, and charged them back to the respondent and refunded the Master and Visa Card Holders who submitted their complaints; 3. That the learned Resident Magistrate erred in law in his failure to make a finding that the transaction on which the respondent dealt with his clients were International Transaction which are regulated by contract and its addendum, on which the appellant bank is bound and existence of these fraudulent transactions at the respondent's place of business by using machines, waived the requirement of issuance of the 2 ninety(90) clays' notice of termination of the Merchant Establishment Agreement; 4. That the learned Resident Magistrate erred in law by failing to make a finding that the appellant bank is not liable in the event of Card Not Present (CNP) transactions made at the respondent's place of business by using the Point Of Sale (POS) machines, in that in the event of any loss, the loss said lies on the respondent as per the agreement and its addendum; 5. That the Resident Magistrate erred in law by his failure to make a finding that the respondent failed to specifically prove the claim of USD.53,370.00 which are amounts charged back against the respondent by the appellant bank and refunded to the Master Card and Visa Holders (complaints) as per the agreement and grossly misdirected himself by awarding the respondent general damages of Tshs. Ten Million (10,000,000.00; 6. That the learned Resident Magistrate erred in law by making a finding that the respondent had proved his case on the required standard, while his evidence and the evidence of the appellant via DW1, DW2 and Dw3 as well as exhibits DI, D2, D3 and D4 proved to the contrary; 3 7. That without prejudice to grounds 1, 2, 3, 4, 5 and 6 above, the learned Resident Magistrate erred in law by delivering a vague judgement and consequently a vague and unexcitable decree, contrary to Order XX rules 4 and 6 of the Civil Procedure Code [Cap 33 R.E.2019] On the strength of the above grounds of appeal, the learned advocate for the appellant asked this court to be pleased to allow the appeal by nullifying the judgment and decree of the district court of Karatu and hold that the appellant was justified to withhold amounts on the reported fraudulent transaction and charged them and refunded the Master/Visa Cards Holders with costs in this appeal and the court below. The facts pertaining to this appeal are simple and not complicated. By Merchant Establishment Agreement dated 27th July, 2016, parties' herein entered into agreement of accepting Master/Visa cards through the service of the respondent's business of selling curios, carvings and other tourists related products to foreigners. The same was followed by Addendum to the main agreement dated 26th August 2016 for provisions of Card Not Present (CNP) on the same terms as to the original agreement. Since then, the business went on well but in earlier 2017, when the appellant based on letter dated 4 13th April, 2017 from VISA terminated the services and took the POS from respondent without notice and charged back the amount in dispute and refunded back the Master and Vida cards holders. The above state of affairs triggered several communications between parties but which culminated into Civil Case No.2of 2019 against the appellant herein at Karatu District. After hearing parties on merits, the learned Resident Magistrate entered judgment and decreed in favour of the respondent. Aggrieved with the judgement and decree of the District Court, the appellant preferred this appeal on the above grounds of appeal, hence, this judgment in appeal. Before this court the appellant is represented by Mr. John Ignace Laswai, learned advocate from Locus Attorneys and the respondent at all material time has been enjoying the legal services of Mr. Dismas Philipo Lume, learned advocate from Salvage Attorneys. The appeal was argued by written submission as ordered by madam Mteule, judge, who upon being transferred to another station; this appeal has been placed before me for its determination. 5 Having gone through the pleadings, the proceedings of the lower court and exhibits tendered and the written submissions of the learned advocates in support of their respective stances in this appeal, I noted that there are some facts which are not in dispute between parties and which I find it apposite to point out as will assist the court in the determination of the merits or demerits of this appeal. These are: one, there is no dispute that, the appellant and respondent had written agreement dated 27th July, 2016 for merchant to accept and honour cards on the terms and condition as agreed and which was followed by Addendum to it dated 26/08/2016 for Card Not Present (CNP). Two, there is not dispute as well that, the amount in dispute was charged back from the account of the respondent by the appellant upon getting complaints. Another legal point worth of noting is that, he who alleges must prove for the court to give the decision in her or his favour as provided for under section 110 of the Tanzania Evidence Act, [Cap 6 R.E.2019]. Mr. Laswai argued grounds 1,2, 3 and 4 together which basically all boils down to prove of fraud by letter from foreign country, regulation of the transactions and prove of complaints by Visa Holders and failure to make a 6 finding that by virtue of Addendum to the Merchant Establishment Agreement the appellant bank was not liable in the event of the CNP transactions. According to Mr. Laswai, the issue of fraud was proved by the testimony of DW1 and exhibit D3. Mr. Laswai went on arguing that the bank statement exhibit DI showed that the transactions before the incident was USD.200,300,500 but abruptly the figure grew to USD.5,100/=, 8,700/= and 18,000/= raising suspicious of fraud. The learned advocate for the appellant pointed out that, exhibit P4 showed transactions of USD.5,100 for the card ending with numbers 7964/=, USD.8,700/= for the card ending 777, USD. 18,000/= for the card ending with number 4020 but could not see the figure of the cards ending 0150 and 5108 because were faint. On the totality of the above testimony and exhibits, Mr. Laswai invited this court to find and hold that there was amble evidence to prove fraud and theft of these funds. The learned advocate faulted the trial court findings which were arrived after failing to evaluate evidence on record and equated it as vague and unreliable for failure to state how fraud was to be proved. According to Mr. Laswai, much as there was fraud, then issue of notice was not necessary and the bank was justified to intervene as it did to protect the innocent. Mr. Laswai on the above reasons defended the appellant act of 7 charging back of the respondent account on the reason of fraud. The learned advocate for the appellant attacked the evidence of the respondent as unworthy of credit because the lied to court while on oath for being inconsistence as to how the transaction was done. Lastly Mr. Laswai argued that much as all disputed transactions were CNP, then, the appellant was not responsible and the loss, if any, was to be attributed to the respondent by virtue of last clause in the Addendum which was admitted as exhibit D2 and that the procedures of carrying out CNP was not followed as reflected in exhibit P4. On that note urged this court to find merits in these 4 grounds argued together and allow the appeal. In response, Mr. Lume learned advocate for the respondent at the outset submitted that after going through the entire submissions by the appellants counsel, he found them lack merits in all four corners. Mr. Lume strongly argued that the submissions of the appellant did not address the issues framed during trial and that the transactions in dispute were not done on CNP as alleged by the appellant. According to Mr. Lume, no fraud has been proved and the conduct of the appellant was maliciously done to deprive the respondent's rights from his lawful business. In this, Mr. Lume went on to insist that, the appellant 8 terminated the contract without notice which was mandatory as stipulated under clause 14.1 of exhibit Pl. The learned advocate for the respondent pointed out that the appellant conducted herself against the provisions of the agreement at the detriment of the respondent as stipulated in clause 16 and 17 of the exhibit Pl for failure to issue notice and commence investigations into the matter. As to the arguments that the figure of sales raised, he countered it that nowhere in exhibit Pl put limits to the transactions using the POS. As to exhibit D3, Mr. Lume pointed out that is not a document relating to the respondent but someone by the name of TANZANITE ART GALLERY GA and the respondent at all. And, even the amount charged back was for the unknown entity and is more than what was claimed. On that note, Mr. Lume invited this court to find and hold that the 1st, 2nd, 3rd, and 4th grounds of appeal are devoid of any useful merits and proceed to dismiss them. The counsel for appellant for unknown reasons never filed a rejoinder as ordered. 9 Having dispassionately considered the rivaling arguments on four grounds of appeal argued together, gone through the pleadings, proceedings and exhibits tendered by both parties, with due respect to Mr. Laswai, I find these grounds devoid of any useful merits in this appeal. I will try to explain. One, as correctly argued by Mr. Lume, and rightly so in my opinion, exhibit D3 was referring to a different entity and not the respondent and no explanation was given by the appellant's sole witness (DW1) that TANZANITE ART HERITAGE GA is the same as TANZANITE ART HERITAGE GALLERY. Two, not only that but even if it can be taken that is the same, still the contents of exhibit D3, which the appellant alleges to have proved fraud is devoid of any iota of proof of fraud but alert of exceeding the threshold of USD.50,100/=. Three, it is trite law in our jurisdiction that in cases where fraud is alleged, which is a criminal conduct in civil cases, the proof by the person who alleges fraud must be higher than on balance of probability and not beyond reasonable doubt. The above stance was stated by the Court of Appeal in the case TWAZIHIRIRWA ABRAHAM MGEMA vs. JAMES CHRISTINA BASIL (as administrator of the estate of the late Christina Basil Kiria) CIVIL APPEAL NO. 229 OF 2018, (CAT) DSM (Unreported) in which it was held that "allegations of fraud must be strictly proved: although the standard io of proof may not be so heavy as to require proof beyond reasonable doubt, something more than more balance of probability is required." Much as no other investigations report was tendered in court on how the fraud investigation was done, to unveil fraud, in my considered opinion, I find that no fraud was ever proved by the appellant's sole testimony of DW1 and exhibit D3. Four, if one reconcile the data entries and dated between exhibits D3 and D4 are at variance and do not support each other. It is on the totality of the above reasons, I agree and associate with Mr. Lume that the four grounds raised and argued are without merits in the circumstances of this appeal, hence, are dismissed in their entirety. This takes me to grounds numbers 5 and 6 argued jointly which boils down to the prove of the amount claimed in the plaint of USD.53,370/=. According to Mr. Laswai, no evidence was tendered to prove the amount claimed for failure to make analysis of evidence by the trial Magistrate. In this, Mr. Laswai pointed out that much the claim of USD.53,370/= was specific damages, then, they were supposed to be proved strictly and cited the case of GAHIZI A. AHMED vs. MIKIDADI MWAMBELEKO HAMZA, HC, (TANGA) (UNREPORTED) in which it quoted the case of ZUBERI AGOSTINO vs. ii ANICET MUGABE [1992] TLR. 137 CAT, in which it insisted special damages must specifically pleaded and strictly proved to be granted. According to Mr. Laswai, much as the claim of USD.53,370 was specific claim, no proof of the amount was proved at all for want of EFD receipts, stock available before and after to prove actually transaction took place. On general damages awarded was his arguments that much as no prove of I I the amount claimed no way general damages could be granted. And further arguments were that what the bank did was not breach of contract but was done to combat theft by preventing the monies from entering and used by the respondent, of which, the respondent was not entitled. Mr. Lume on these two grounds argued together told the court that the amount of USD.53,370/= was claimed as follows: USD.53,120/= was for goods sold and USD.250/= was money wrongfully withheld by the appellant after same was deposited into the account of the respondent. According to Lume, the amount was specifically pleaded and strictly proved by evidence on record. As to general damages granted, Mr. Lume argued that were given after breach of contract was proved and cited section 73 (1) of the Law of Contract Act, [Cap 345 R.E. 2019] to substantiate the finding of the trial court both to specific and general damages. 6T 12 I have careful followed the rivaling arguments of the learned advocates on these two ground which boils down to prove of specific damages and grant of general damages, and I am with due respect to Mr. Laswai, entitled to find and upheld the holding of the trial Magistrate on these points. I will explain why I am taking the above stance. One, the plaint by the respondent is clear at paragraph 5 and 9 the amount was specifically pleaded and exhibits P2 which was admitted without any objection because the objection was eventually withdrawn showed and proved the amount in dispute was USD.53,120/=. So to argue that the amount was not proved at this stage is not true and cannot be accepted by any court of justice. These receipts, because of lapse of time are not readable now but at least during trial were readable and shows were of the same date and had codes different from the ones in exhibit D4. So the argument that there was no strict proof on the amount claimed is not supported by evidence on record and is rejected. As to general damages, as correctly argued by Mr. Lume, much as there is prove of breach of contract is shown, then, the respondent was entitled with general damages as provided for under section 73(1) of the Law of Contract Act, [Cap 345 R.E.2019]. 13 On the totality of the above reasons, grounds 5 and 6 are akin to fail in this appeal and are dismissed for want of merits. This trickles this appeal to the 7th ground which boils down to the composition of the judgement of the trial court that it was vague and unexecutable decree. According to Mr. Laswai, the judgement of the trial court offends Order XX rule 4 of the CPC for want reasons, and that, the decree is defective for failure to specify reliefs granted. To substantiate his arguments, the learned advocate for the appellant cited the case of MANTRAC TANZANIA LIMITED vs. RAYMOND COSTA, CIVIL APPEAL NO. 74 OF 2014, CAT (MWANZA) (UNREPORTED) in which the Court of Appeal declared the whole proceedings emanating from vague decree as nullity. On that note and guided by the above decision of the Court of Appeal, the learned advocate for appellant prayed that this appeal be allowed on this point and nullify the proceedings of the trial court. Mr. Lume was not moved by the submission by Mr. Laswai and equated this ground as having no legal basis at all. According to Mr. Lume, the decree subject of this ground legally complied with the law, in particular, Order XX rules 6(1) and 7 of the CPC. Mr. Lume distinguished the case of MANTRAC 14 (supra) cited by Mr. Laswai in a number of ways and pointed out that the decree subject of the suit before district court is proper. Having carefully considered the rivaling arguments of the learned advocates for parties and having gone through the disputed decree, with respect to Mr. Laswai, I am not inclined to associate myself with him on this point. The decree as correctly argued by Mr. Lume, and rightly so in my own considered opinion, is at home and dry with the law, in particular, Order XX rules 6(1) and 7 by having all the requirements in those provisions. The reference to paragraph (a) to the plaint which was clear the plaintiff was claiming USD.53,370/= is enough and is in agreement with the law. On that note and for the foregoing reasons, I find the entire appeal devoid of any useful merits and is hereby dismissed in its entirety with costs. It is so ordered. 15