19951027 TZCA Dar es Salaam

4 - IN THE COURT OF AP?AL OF TANZANIA ATDARES SALAMi -- (CO RAM: MNZAVAS 2 J.A. MFALILA J.AAfldL, UBUVA J • A.) , CIVIL APPEAL NO. 49 OF 1995 BE NE EN CPC INTERNATIONAL, INC. . . . . • . • APPELLANT - AND INAB GRAIN MILLERS LTD. . . . . . RESPONDENT (Appeal from the decision of the High Court of Tanzania.at Dar es Salaam) dated the 30th in Civil Case Noizf UDGIENT OF THE COURT This is an appeal from an interlocutory order of the High Court (Mwaikasu, J.). The matter arose at the corn enceznent of the trial of the suit in Civil Case No. 121 of 1993. In that case, the sppellant• filed a suit against the respondent, Zainab Grain Millers Ltd. The appellant was the proprietor of a trade mark "MAZOLA" which was registered in Part A, Class 29 (Schedule III) under the Trade arks Ordinance Cap. 394 of the Laws. Its registration number was 14645 dated 2.8.1971 which was last renewed with effect from 2.8.1992. Under the registered trade mark tMAZOLAtt the appellant's company has for a number of years been marketing and selling in Tanzania edible corn oil extracted from maize in plastic cc tlrr and bottles bearing a distinctive yellow and green device with the word "MAZOLA". / IN THE COURT OF APPEAL OF TANZANIA AT DAR ES SALAAM .4 (COM: OMARr J.A,ZAVAS, J.i., And LUBUVA, J.A.) CIVIL APPEAL NO. 19 OF 1995 BETWEEN GEORGE SHANBWEO - . APPELLANT AND NATIONAL PRINTING COANY LTD.. • RESPONDENT (Appeal from Judgement of the High Court of Tanzania at Dar es Salaem) (Nkude, J.) dated the 9th day of Narch, 1994 in Civil Cause No. 123 of 1990 JUDGENENT OF THE COURT LUBUVAJ.A.: - This appeal arises from the decision of the High Court (Nkude, J.) in Civil Case No. 123 of 1990. In that case the plaintiff, George Shambwe (hereinafter called the appellant) had instituted a suit against the defendant, the National Printing Company Limited (hereinafter called the respondent) seeking among other reliefs, a declaratory judgment that the sale agreement between the appellant and the respondent for the purchase of the house was in operative and an order for vacant possession of the suit premises by the respondent. - The, background to the case is simple and the facts are tpw also not disputed. The appellant owned a house on Plot No. 86 Wakulima Road, Kinondoni District within the City of Dar es Saleam. The house was mortgaged to the National Bank of Commerce as security for the loan which the appellant had raised from the bank. For the . - . ./2 2 - initial period up to 30.7.1987 the respondent/defendant had rented the house from the appellant/plaintiff. While still in occupation of the house under rental arrangement, the respondent expressed his interest to purchase the house from the owner, the appellant. Negotiations started and it was agreed that the purchase price for the house would be shillings 850,000/=. It was further agreed that the respondent would pay part of the purchase price to the National Bank of Commerce in order to redeem the mortgage and the balance of shillings 143,000/= to be paid to the appellant through his lawyers M/S Kijugo and Company, Advocates, who, it was intended would settle the appellant's other financial commitments. On the other hand, for the purpose of effecting the sale transaction of the house, the defendant company had sought the services of the Tanzania Legal Corporation. It is apparent however, that though the respondent company had as agreed, paid certain sums of money towards the redemption of the appellant' s mortgage, the mortgage still remained unredeemed at shillings 483,631/= by December, 1989. In these circumstances, the appellant decided to redeem the mortgage directly. With the assistance of his wife, the appellant paid to the National Bank Of Commerce Shs. 455,000/=. The respondent was notified by letter from the appellant that whatever amount of money the respondent had paid to the bank would be treated as rent for the period that the respondent had Occupied the house. This, it appears sparked off controversy between the appellant and the respondent over the house in dispute. The appellant was pressing for the respondent * to vacate the house in which he wanted to effect repair works. On the other hand, the respondent was refusing to vacate the house for . . . .13 I - - 3 - which he was demanding the plaintIff to effect the transfer in terms of the sale agreement. Before the High Court at Dar es Salaam, as indicated, the appellant/plaintiff instituted a suit against the respondent company. The learned trial judge dismissed the suit with costs to the defendant. Aggrieved by that decision, the appellant has appealed to this Court. Mr. Semgalawe, learned advocate for the appellant has filed and argued the following two grounds of appeal:- That the trial Honourable Judge erred in law in holding that the appellant was in breach of the sale agreement, which agreement was not executed, and consented to by the Commission.r for Lends. 2. That the Honourable Judge erred in law in not granting reliefs sought by the appellant because he found it would beinequitable to grant reliefs as the appellant was in breach of the sale agreement. Arguing on ground one before us Mre Semgalawe, learned Counsel was brief but Dertinent. He strongly critisized the learned trial judge in holding that the appellant was in breach of the sale agreement. Learned Counsel took the view that the decision of the matter depended on thelaw governing the disposition of a right of Occupancy as provided in the Land Regulations, 1948. Repeating the dppellantis argument before the High Court,' learned Counsel submitted that in terms of Regulation 3(1) of the Lend Regulations, 1948, a disposition of a Right of Occupancy is .... I! - 4 - inoperative if it is not in writing and is not approved by the Commissioner for Lands. In support of this proposition, Mr.Semgelawe referred us to the decided cases listed at page 94 of the proceedings others which among L include our decision in: 1. Peter Karanti and 48 Others V Attorney General 4 Civil A81 No. 3 o1988 (Unreported)., 2. Civi l_Appeaj_No of 1990J.M.Kasuka _qe.SF ge (Unreported) and 3. çiil Appeal N o. 28 of 1992,Miller Richard V jbHa (Unreported). On the basis of these Regulations and the fact that the Commissioner for Lands had not approved the disposition,. Mr. Semgalawe maintained, there was no agreement which the appellant was held by the learned trial judge to have breached. Alternatively, it was Mr. Semgalawe's submission that if there was such an agreement, it was not legally enforceable. This aspect, the learned Counsel asserted, was not taken intb account properly by the learned judge. Mr. Maira., learned Counsel for the respondent submitted that the learned trial judge' s decision could not, in the circumstances of the case be faulted. Elaborating on this, Mr. Maira referred to the time honoured maxim "he who resorts to equity must come with clean hands". He submitted that it would be inequitable, unjust and repugnant to justice to sustain the appellant's appeal because his case was fraught with fraud which was admitted by the appellant at page 56of the proceedings. He also submitted that having regard to the backgroUnd of the case as a whole, it was clear that the appellant and the respondent had entered into a sale agreement which was legally binding upon them. That on the basis of the agreement, there was consideration from the respondent which the appellant benefited i.e. the appellant had his mortgage with the ... Mr .1 - - National Bank of Commerce satisfied as the respondent effected the payment for the sale price to the bank (NBC) as agreed. It was Mr. Maira's further submission that the appellant should not be allowed to benefit from his own conduct which resulted in the breach of the sale agreement at a time when the respondent had complied with the terms of the agreement. In conclusion, Mr0 Maira argued that by refusing to sign the sale agreement, the approval of the Commissioner for Lands could not be obtained as there was no executed legal documents upon which such approa1 could be sought. We have given anxiOus and close consideration to these submissions. It is our considered view that the decision of this case turns around a narrow issue0 That is, whether •there was an agreement which was breached by the appellant/plaintiff0 With - respect, we agree with Maira, learned Counsel for the respondent that in order, to determine the issue concerning the agreement, it is necessary to take full account of the historical background and circumstances of the case. As already indicated, it is common, ground that the appellant and the respondent had come to an agreement to have the appellant' s house purchased by the respondent. Thatit was agreed that out of-the purchase price of shillings 850,000/= part of it was to be paid to the National Bank of Commerce in order to redeem the appeLlant' s mortgage and the balance was to be paid to the appellan.t through his lawye'.M/S Kijugo and Company advocates. The issue as raised by Mr.Semgalawe, learned Counsel for the appellant is that there was no binding agreement because the approval of the Commissioer for Lands was. not obtained after the ini'tial agreement between the appellant .. . /6 . - 6 - and the respondent. Mr. Naire, on the other hand ardently submitted that the appellant was in breach of the sale agreement. In order to have a clear picture of the historical background to the case we deem it appropriate to closely examine the following document on record. First, there is the letter of 11.11.1986 which was addressed to N/S Kijugo and Company, Advocates for the appellant by the Ta.nzahia Legal Corporation, on behalf of the respondent. With that letter, three copies of the sale agreement were enclosed for execution by the appellant. The appellant was required to return the copies of the sale agreement after signing for further proceaing and Capital Gains Tax assessment. This, as indicted earlier, the appellant did not comply. There is also the letter of 28.7.1988 addressed to the Chief Corporation Counsel by the Appellant's advocates M/SKijugo and Conipany, Advocates. In that letter it is clearly stated that there was an agreement between the appellant and the respondent regarding the sale cf the house and the conveyancirg process that was being handled by the Tanzania Legal Corporation. It is also inclicated in the letter that any balance of the purchase price if any, was to be paid to the advocate in order to settle the vendor's (appellant) other liabilities. Then there is the letter of 28.2.1990 exhibit D6 written to the NBC by N/S Kijugo and Company, advocates for the respondent in connection with the sale of the house and the outstanding balance on the mortgage. In it, it is shown that the respondent had as at 5.9.1985 peid Shs. 540,000/= for the mortgaged amount of Shs. 593,407/50. Specifically, the respondent's advocatesrequest for a statement of account on the mortgage so that 'Ywe may pay the balance of the amount owirgincluing interest in order that 41 - 7 - the mortgage could be discharged in our favour". On these facts, which are not disputed, it seems clear to us that an agreement for the sale of the house had been reached between the appellant and the respondent. Following on the agreement, the various correspo- ndences including the letters referred above ensued. They all refer to an existing agreement which the parties i.e. the appellant and the respondent had entered. On the basis of this evidence, we are satisfied that the learned trial judge was entitled to the conclusion that there was a concluded agreement fdr sale between the appellant and the respondent. The evidence was duly considered. With respect, we are unable to accept Mr. Semgalawe's argument that there was no binding agreement because the Commissioner for Lands had not sanctioned the sale transaction. We agree with Mr. Semgalawe' S statement that under the Lands Regulations, 1948, the sale agreement was inoperative, as the correct position of the law on this P0flt e Needless to labour more on it, suffice it to say that the cases cited by the appellant at the hearing of this appeal and the trial Court, have among other points underscored this position of the law. That list of authorities includes the decision of this Court in Kasuka V George HurnJlAlNo. 35 of 1990 (Unreported and Millen Richard V Ayub Hoza, Civil .Lp2p2ea l No. 28 of 1992, (Unreported). However, though that is the position of the law on this point, we wish to make it clear that Mr. Semgalawe, learned Counsel is not, with respect correct in his assertion that because the approval of the Cnmmissioner for Lands was not forthcoming there was therefore ./8 114 a - 8 no agreement of sale between the appellant and the respondent. This is so because, in the instant case though the agreement for sale of the house was inoperative as it was not approved by the Commissioner for Lands, it did not also mean that there was no binding agreement as borne out by the evidence. Inoür understanding an agreement for a disposition of a right of occupancy is inoperative in the sense that property does not pass unless and until the approval of the Commissioner for Land.s is obtained. In this sense, being inoperative, and as we stated in the case of J.M6 Kasuka V .2eHurnba (supra), where a disposition is inatieirtue oL relation3 (1) it is void terms o thegeeme nt to thesit ion are voi a nd uneforceable. In the instant case, the situation is distinguishable. The learned trial judge correctly in our view took the view that the appellant, the vendor was in breach of the agreement even. th'ugh the approval of the Commissioner had not been obtained. In his judgement, the learned, judge Stated:- "The position as it is now is that it is the vendor who is guilty of breach of contract by refusing to sign the sale. agreement. The reason he has given for not signing the agreement is a' lame excuse which he has concocted against his agreement with the purchaser/ defendant. By refusing to sign the agreement and return it to N/s Tanzania Legal Corporation for further prr'cessing to its logical conclusion he has brought everything to a stand still. It would be A letting the plaintiff benefit from his own breach to give (L) (sic) .... /9 - 9 - him the remedies he is seeking...." From this, it is crystal clear that in this case, unlike the situation obtaining in the case of J.M. Kasuka V George Humba (supra) and Fazal Kassam (Mills) Ltd. (1960) EA 1042 an agreement for sale had been reached prior to the stage when the Commissioner's approval was to be sought. As found by the learned judge, it was at the stage whenthe appellant was required to execute the sale agreement that he refused to sign the document. With his refusal to sign, nothing further could be done in executing the sale agreement As a result, the approval of the Commissioner could not be obtained0 For that reason, we agree with the learned trial judge that the appellant was in breach of the sale agreemet reached between him and the respondent, the buyer. Having breached the agreement in these circumstances, the appellart cannot validly resort to Regulation 3 (1) of the Lands Regulat2ions, 1948 in defence. The Commissioner's approval is sought after all the initial formalities including the signing of the sale agreement are completed. Due to the appellant's conduct, execution formalities could not be accomplished and the Commissioner's approval could not be obtained. It is our considered view that the learned judge's finding that the appellant had breached the agreement was justified. Therefore, ground one fails. Before dealing with the next ground, we wish to make brief mention of an aspect which was raised by Mr. Maira, learned Counsel for the respondent. This he did when he was addressing on - ground one. As already pointed out, Mr. Maira had submitted that the appellant' s appeal should not be entertained because the - 10 - appellant did not come to seek justice with clean hands. He referred to page 58 of the proceedings in which the appellant had admitted to have told lies in Court. On record, the appellant had stated: "I wrote • a personal letter to Mr0 Kusaga, the NPC GM on 22/4/85 irr which I said I had signed the agreement. By this time I had not signed the agreement so I lied to Mr. Kusaga because I was in a hurry." During the hearing of the appeal, at the prompting of the Court, Mr. Naira, learned Counsel correctly in our view, did not press any further on the issue of fraud. This is because, it is common knowledge that as the issue of fraud was not raised in the pleadings, that issue was never before the High Court0 With respect, we find n basis upon which this Court as an appellate Court could entertain at this stage the issue of fraud. We come to the last ground of appeal i.e. ground two4 This ground is closely linked with ground one. Under this ground, the appellant seeks to fault the trial judge for not granting the reliefs sought. Arguing this ground, Mr. semgalawe briefly raiterated his arguments in support of ground one. Essentially, it was his submission that there was no legally binding agreement which could be enforced against the appellant. He urged that in the absence of an enforceable agreement the trial judge should have granted the reliefs sought by the appellapt. Having taken the view that the appellant was in breach of the sale agreement, we think it is i unnecessary to go any further into this matter. The reliefs sought Vwk LU I-. were based on whether or not there was a breach of the agreement. This ground also fails. As the relief sought at the trial was a declaratory judgment that the agreement was inoperative, and as there was no counter- claim filed by the respondent for specific performance or damages the learned trial judge correctly made no further orders. The respondent having spent sums of money towards the redemption of the mortgage and other liabilities of the appellant, the matter is left open for further processing and execution of the documents in order to effect the transfer in terms of the law. In ev.ent, the appeal is dismissed with co.sts to the respondent. DATED at DAR.S SALAAN this 27th day of October, 1995. - A.M.A. OMAR JUSTICE OF APPEAL N.S.NNZAVAS JUSTIC'E OF IPPEAL D.Z. LUBUVA JUSTICE OF APPEAL I certify that this is a true copy of the original. - - ( M.S. AHiG1I ) - DEPUTY REGISTRAR