20181019 TZHC Dar es Salaam2

_.,,,,.· IN THE HIGH COURT OF TANZANIA DAR ES SALAAM DISTRICT REGISTRY. AT DAR ES SALAAM. LAND CASE NO 30 OF 2015 GOODLUCK KOMBE T / A ALPINE BOOKS ....................... PLAINTIFF. VERSUS KCB BANK TANZANIA LIMITED ........................... 1 ST DEFENDANT. NSOMBO AND COMPANY LIMITED ...................... 2N° DEFENDANT. NUSURAN BATON MWEBA ........ ~ .................. ,........ 3Ro DEFENDANT. NATIONAL MICRO FINANCE BANK PLC (NMB) ...... 4TH DEFENDANT. Date of last order:01/ 10/ 2018 Date of judgement:19/10/2018. JUDGEMENT. MAGOIGA, J. The plaintiff, GOODLUCK KOMBE, through the legal clinic of Chabruma and co. Advocates instituted this land case severally and jointly against the defendants in this honourable court for the following reliefs, namely: - i. A declaration that the sale and disposition of CT 100968 Plot no 613 Block "E" Kihonda area in Morogoro Municipality is unlawful, null and void. 1 ii. Payment of compensation for the loss of business to the tune ofTshs. 200,000,000/=. iii. General damages. iv. Costs of the suit. v. And any other relief (s) this court shall deem just and equitable to grant. The first and second defendants through the legal clinic of Makoa Law Chambers (Advocates) filed joint Written Statement of Defense seriously disputing the claims of the plaintiff and prayed that this suit be dismissed with costs. The third defendant was served by way of publication but could not appear and suit proceeded ex parte against him. The fourth defendant through the legal clinic of Maleta & Ndumbaro advocates filed a Written Statement of Defense distancing herself from this case and like the first and second defendant prayed that this suit be dismissed with costs as the plaintiff has failed to disclose any course of action against herself. This suit went the normal due legal process and eventually was set for hearing after mediation failed. 2 The factual background of this suit are that on 08 th December, 2011 the plaintiff secured a loan facility of Tshs. 50,000,000/= form the first defendant and the house with CT 100968 located at Kihonda area in Morogoro municipality was mortgaged as security for the loan. The facts go that the plaintiff went on servicing the loan as agreed and with hopes that by November 2012 the parties to the mortgage will review their loan arrangement as per the terms of the agreement and that during the subsistence of the loan the plaintiff was tied to deal with the first defendant only. The plaintiff's effort to have the loan agreement reviewed were not met positively by the first defendant even after his lawyers wrote the first defendant. The plaintiff while awaiting a response from the first defendant about sitting down to review the loan facility he was surprised on 14th April 2015 to be told by neighbours that the mortgaged house is to be sold by the second defendant under the instructions of the first defendant. That the first defendant through the second defendant on 02/05/2015 unlawful sold the disputed house without any notice as required by law, without any default and without following due procedures. As to the second defendant it is alleged equally failed to issue legal notice, sold house hold belongings which were not part of the mortgage and failed to follow the auction procedures as such selling the disputed house far below the 3 'i i forced market price of Tshs 104,000,000/=. The plaintiff further alleged to suffer business loss to the tune of Tshs. 200,000,000/=. It was against this background that this suit was instituted, hence this judgement. Before hearing this suit, the following issues were agreed and recorded for determination of this suit, namely: - i. Whether the first defendant breached the terms and conditions of the loan agreement dated 8th December, 2011, as between the plaintiff and defendant. ii. If the answer in issue number one is answered in the affirmative, whether the plaintiff suffered substantial loss amounted to Tshs, 200,000,000/= as loss of business. iii. Whether the sale and disposition of plot number 613 Block "E", Kihonda area Morogoro Municipality by the first and second defendant to the 3rd defendant by way of auction was lawful. iv. What reliefs are the parties entitled to. When this suit was called for hearing the plaintiff appeared in person and unrepresented and was ready for hearing. The first and second defendant were enjoying the legal services of Mr. Emmanuel Kessy, learned advocate. 4 .• t The fourth defendant was enjoying the legal services Mr. Edward Magayane and Mr. Daibu Kambo, learned advocates. All parties were ready for hearing of the suit. The plaintiff testified himself and called two witnesses to advance his case. The defendants called two witnesses too. GOODLUCK KOMBE-PWl introduced himself as businessman trading in the name of ALPINE BOOKS under oaths testified that he resides at Morogoro and he deals with selling books. PWl testified that he went to the office of the first defendant in Samora branch and met a branch manager whom upon discussion they agreed to do business. PWl testified that on 8th December, 2011 was given loan of Tshs. 50,000,000/= to enhance his business capital and the house in dispute was put as security. According to PWl the signed agreement had terms and conditions to observe by the parties. PWl testified that according to clause 11 of that agreement, the plaintiff was to close all his accounts with others banks namely Akiba Commercial Bank and CRDB of which he obliged to the letter. PWl tendered the loan agreement that was received in evidence without objection from defendants and marked exhibit "Pl". s PWl went on testifying that according to exhibit "Pl" all his business transactions were to be routed through the bank and clause 11:7 had it that the said loan was to be reviewed by 31/11/2012. PWl tried to tender bank statement but which was legally objected and same was not admitted for being a photocopy and for not complied with the law. PWl testified that he who wrote a letter on 20/01/2013 to the first defendant concerning contract review and top up finance. This letter was received in evidence without any objection from the defendants and was marked as exhibit "P2". PWl testified that the first defendant never replied to his letter. Upon not getting no the reply, PWl instructed his lawyer to write a demand notice to the first defendant. The said demand notice was received in evidence without objection on the part of the defendant and marked exhibit "P3". This letter was not replied by the first defendant, insisted PWl. PWl testified that in he got information that the second defendant through the instructions of the first defendant on 02/05/2015 unlawful sold the disputed premise. PWl testified that he has never been issued with any notice to sale the disputed premise by the first defendant. PWl testified that the sale was done unlawful because no notice was served on him by both first and second defendant, he is not in any arrears, it was not their term to sell the house and the personal 6 i' belongings were sold which were not part of the mortgage and no advertisement in the newspaper was done. PWl testified that when they came to court they said the house was sold at Tshs. 39,000,000/- while the actual value was Tshs. 104,000,000/= according to their own valuation and forced market value was Tshs. 78,000,000/=. PWl testified further that upon suspicion he wrote the District Registrar of Dar es Salaam registry to inquire of the second defendant status and the District Registrar replied by a letter. PWl tendered that letter without objection from defense and was received in evidence and marked exhibit "P4". PWl testified that he did not end there but wrote a letter to Brela to inquire the legal existence of the second defendant but this letter was not admitted following an objection taken from the defense. PWl concluded his evidence by inviting this court to allow his prayers as contained in the plaint. Under cross examination by Mr. Kessy, learned advocate, PWl admitted he borrowed from KCB and he put his house as security and that if he was in default the bank had right to sell the disputed property. PWl admitted the words "change of radar" are not in the contract. PWl testified that by 30/11/2012 he had paid all the loan in full. When pressed to have any prove of payment of the loan PWl admitted he never tendered any receipt nor bank 7 statement to prove payment. PW1 when shown exhibit Pl in clause 11: 7 he replied it was referring to review and not top up. PWl when pressed with question regarding exhibit P2 he replied that it was a new deal as per contract and it was never completed. PW1 replied that he had finished paying the loan and he had never asked for the CT because he believed the deal is still on. But when he was pressed further PW1 changed his stance and stated am still indebted with the bank. PW1 testified under cross examination that he declined to pay the loan because the bank failed to fulfil its financial obligation. As to the house holds taken PW1 replied that he has a list of items taken but he does not intend to tender it. PW1 further under cross examination replied that the Tshs. 200,000,000/= was an expected income, which never materialize. On further cross examination by Magayane, learned advocate, PW1 replied that no valuation report was tendered to prove the value. PW1 admitted when the house was sold he was not present. When asked by the court as to who reside in the disputed house he said he don't know though he knows it was the third defendant as a buyer. That was all about the testimony of PW1. HOBOKELA MAGALE- PW2 was the second witness for the plaintiff. PW2 under oath introduced herself as the secretary general of Booksellers of Tanzania. 8 . f PW2 testified that she remembers in 2013 there was a project called BAE or "exchange of radar". PW2 testified that the project was called so because the money was that change from UK. The project, PW2 testified was including booksellers and publishers. Alpine Books was among the company that was a distributor and it was involving personal working capital, PW2 told the court. PW2 testified that Alpine Books was appointed because she shows to have financial capacity to supply the books. PW2_ testified further that later they realize Alpine Books had no enough capital they reduced the areas of distribution. PW2 told the court that earlier they had allocated the plaintiff to the regions of Dar es Salaam, Mororgoro, Coast, Singida and Tanga. But later the plaintiff was given some schools in Morogoro urban, PW2 testified. PW2 went on testifying that the plaintiff was dealing with Ben and Company books and had sixty schools in total. PW2 testified the plaintiff was being trusted by the association and publishers and it was the reason why they gave him five regions but ended up only to supply Morogoro urban. PW2 ended up stating the plaintiff got a loss. Under cross examination by Mr. Kessy, learned advocate PW2 replied that she has been in the association since 2004. Booksellers are members of the association. And that after doing their evaluation they realized the plaintiff 9 was unable to proceed with the project. PW2 pressed further under cross examination told the court that she knows exactly that the plaintiff got a loss of Tshs. 200,000,000/= money he was to get upon supplying the books. PW2 finally when asked if she knew the plaintiff had a loan she replied it was not her duty to know if he has a loan or not. ALBERTUS KERARYO- PW3 was the third and last witness for the plaintiff. PW3 under oath introduced himself the editor of Ben and company who are publisher, distributor and sellers of books. Like PW2, he testified of the radar change from UK. PW3 testified that they had as publishers many books of English, maths, Kiswahili, science, historia and Tehema. PW3 told the court that he knows Alpine as a bookseller they have been dealing with from Morogoro. PW3 told the court that publishers agreed with booksellers to supply the books. PW3 told the court that Alpine asked many regions but they could not give him because his financial muscle was not able to do the job as such he ended up being given Morogoro urban. PW3 testified that don't know how much he was affected. Under cross examination by Mr. Kessy, learned advocate, PW3 replied that he did not know Kombe had a loan from KCB and that he has defaulted. PW3 distanced himself knowing the private affairs of PW1. PW3 pressed under 10 cross examination testified that his testimony is all about PWl involved in the "change of radar" which was about supplying of books to schools. Mr. Magayane, learned advocate had nothing to ask PW2 and PW3. This marked the end of the prosecution case on the part of the plaintiff. The first and second defendant defense was done by Mr. MASOUD ALLY MANYA- DWl who under oath introduced as KCB Bank Head of Recovery. DWl testified that he has been with KCB since 2003 to date. DWl testified that his duties are supervision, follow up of all bad debts to the bank arising from loans agreements. DWl testified he know the plaintiff- Goodluck Kombe as one of their customer. DWl testified that PWl was in default of the loan taken from their bank on 08/12/2011 in which the plaintiff was given Tshs. 50,000,000/= which was to be repaid within 3 years. DWl was shown exhibit Pl and said this is the letter of offer to the loan between Goodluck Kombe trading as Alpine Books and KCB Bank. DWl testified that according to exhibit Pl the loan was of Tshs. 50,000,000/= for 36 months at the rate of 3% interest. The loan was secured by legal mortgage in the landed property with CT no 100968 situate at Kihonda area Morogoro Municipality in the name of Goodluck Kombe as personal guarantee for the loan. 11 DW1 testified that this loan was not paid as per the agreement. On 08/07/2013 the client was given a default notice requiring him to pay the money. The said default notice was admitted in evidence without objection from the plaintiff and marked exhibit D1. DW1 testified that the plaintiff was in default of Tshs. 43, 340,687.51. The notice was requiring the plaintiff to pay the money plus interest within sixty days and if he fails the notice was telling him the bank will take the property as enshrine under section 127 of the Land Act, [Cap 113 R.E 2002]. DW1 went on testifying that after this notice PW1 never paid the money nor take any action until 2015 when the bank had no option but to appoint the court broker to sell the property after following all the procedures. The auction was advertised in the daily newspaper dated 16/04/2015. The said newspaper was admitted in evidence and marked as exhibit D2. The second defendant after following all due procedures on 02/05/2015 sold the disputed premise to the third defendant for Tshs. 39,000,000/= and issued him with certificate of sale, testified DW3. The said certificate of sale was not admitted following a legal objection from the plaintiff which was sustained. DW1 testified that after ~ale they gave the buyer transfer of power of sale and the loan was discharged and it enabled the buyer to transfer the CT into his 12 name. The said power of sale was admitted in evidence and marked as exhibit P3. DWl testified that after this they were satisfied with recovery and gave all the necessary documents to the buyer who was able to transfer to his own name. DWl testified that the plaintiff was in default and the bank was exercising her right as agreed in the agreement. DWl testified that review in banks is normal in business to see how the repayment goes and the payment schedule. The defaulting party can be heard only if he is paying the loan. DWl concluded by reiterating that they sold the disputed premise after following the procedures, he conclusively invited this court to dismiss this suit with costs for want of merits. Under cross examination DWl explained that exhibit D1 was sent to Morogoro to post office box which belongs to the plaintiff. DWl explained that the plaintiff had two addresses, that of Morogoro and Dar es Salaam and both were in use and the contract was allowing the use of any. DWl replied that even in exhibit Pl Morogoro address was there as well and other communications were done via that address. DWl testified that they appointed auctioneer, the second defendant who was dealing with auctioneering. DWl being pressing with cross examination told the court that the mortgage was for Tshs. 50,000,000/= and in public auction the disputed 13 house fetched only 39,000,000/= and the buyer was Nusuran Baton Mweba. DWl told the court that the official documents were power of sale. As to the utensils, DWl told the court that they were never sold. DWl told the court that review was to see if payment of the money was going on okay and is a self-check between the parties over payments. DWl testified they opted to sale as way of recovery after the plaintiff breached the contract. This was the end of the defense for first and second defendant. It should be noted that the case for the third defendant was ordered to proceed ex -parte. ANDREW MILINGA- DW2 under oath introduced himself as the employee of the 4th defendant as Relation Manager -Loans SME Morogoro branch since 2015. DW2 testified that he knows Nusuran Baton Mweba, the third defendant, as their client. DW2 told the court that the said Nusuran Baton Mweba had a loan with their bank and the security for that loan is the house situate on Plot no 613 Block E with CT no 100968 and that they have no problem ·with their client in repaying the loan. DWl told the court that the said CT reads in the name of Nusuran Baton Mweba. DW2 testified not knowing someone by the name of Goodluck Kombe, but he heard of the name that there was a case. DW2 testified that in that case though they are being sued 14 but there is nothing to show he has any issue with NMB and he has no genuine claim against the Bank. DW2 prayed this court to dismiss the suit with costs against them. Under cross examination by the plaintiff DW2 told the court that the loan given to Nusuran Baton Mweba is Tshs. 70,000,000/= and it was a one- year contract ending 2016. He equally told the court that they still have the CT with them belonging to Nusuran Baton Mweba. This was the end of the hearing of this case. Let me point out that the only task of this court now is to determine the merits or otherwise of this suit. However, from the parties evidence as testified and the documentary evidence tendered, this court has noted some notorious facts not in dispute. One, there is no dispute that the plaintiff secured a loan on 08/12/2011 of Tshs. 50,000,000/= form the first defendant. Two, there is no dispute that the said loan was secured by legal mortgage of the house situated on Plot no 613 Block E, CT no 100968 Kihonda area within the Municipality of Morogoro. Three, there is no dispute that the said house was sold to Nusuran Baton Mweba by the second defendant under the instructions of the first defendant and the transfer to the buyer is complete. Four, there is no dispute that the said house is mortgaged to NMB bank, Morogoro branch and by the 15 third defendant. It is my considered opinion that these will assist the court in answering the framed issues. The approach I find apposite in determining this case now is, to test the issue framed against the evidence on record. The first issue is whether the first defendant breached the terms and conditions the loan agreement dated 08th December, 2011 as between the plaintiff and the first defendant. The plaintiff testimony was that the first defendant breached the terms and conditions of the agreement by not giving him notice of default, he was not in default and that even the second defendant did not follow the legal laid down procedures of sale as nowhere was the advertised and that the second defendant was not a court broker and the district registrar confirmed so. According to PWl all these faulted procedures suffices to nullify the sale and everything be declared a null and void. On the other hand, DWl testified that all procedures were dully followed and nothing was jumped and that they exercised their rights according to the contract between them and PWl. DWl tendered exhibit D1 and D2 to show that the followed all laid down procedures as agreed. Let me say this issue has tasked my mind a great deal in order to do justice to the parties in this suit. This has taken me to clause 19 of exhibit Pl. Clause 19 is all about Notices and the manner of communicating between the parties. 16 Apart from exhibit "P3" the rest of the exhibits tendered by parties in this suit were not registered. Looking at exhibit "P2" which was a letter addressed to the first defendant was not registered but was received in evidence without objection, which to my opinion was received and failure to object and dispute not received by the addressee, I hold that the same was sent and received by the addressee and is a valid notice in terms of the agreement. Now I come to exhibit "Dl". This exhibit was equally sent by the first defendant post office of the plaintiff in Morogoro. This exhibit was received without objection on the part of the plaintiff. The only issue that plaintiff took up the matter of the said exhibit was that the address and not receiving the said notice. According to him all notices were to be send to Dar es Salaam and not Morogoro address. This point I said tasked my mind in the circumstances. DW1 when cross examined told the court that the address of Morogoro was one of the address to be used along with the Dar es Salaam one because from Exhibit "Pl" the rubber stamp at page 15 of the letter of offer was showing two addresses so from day go the parties contemplation was the use of the two. Not only that this court has looked into the address of the plaintiff in exhibit "P2" same also shows two addresses of the plaintiff, one of Dar es Salaam and that of Morogoro. It is on the above circumstances, am of the considered firm opinion 17 that the plaintiff post addresses were either that of Morogoro and Dar es Salaam and by the first defendant sending to the Morogoro address is well within the intended address as envisaged in the contract at clause 19.1.3. In other words, plaintiff had a correspondent duty to notify the first defendant that was to use the Dar es Salaam address only. Having so hold, I find that the notice of default sent via the registered post of Morogoro to be proper and the plaintiff received it through that address. Another point to consider is whether the plaintiff was in default or not. This point will not detain this court, however, it is imperative to address it. In his testimony in chief the plaintiff testified that he is not in breach and that he paid the loan to its fullest. But upon cross examined PWl was bold and gentleman enough to state he did not pay the whole loan because review was not done. According to him failure to do review the bank hand breached the terms and conditions of the contract as such was justified not to pay the loan. The term "review" is not defined in the facility agreement. According to the plaintiff review was for top up of the loan. But according to the DW1 review was for seeing how the payment is going on in loan payment schedule as provided for under clause 4 of exhibit Pl. The review in my opinion was meant as correctly testified by the DW1 was a condition, even if I tend to agree with 18 the plaintiff, the intended review could make sense, if and only if, the payments are good to open up room for top up, if any. Common sense cannot even agree with the plaintiff on this point, as by July 2013 was in default of Tshs. 43,340,687.51. Now, the question is, can review go to a party for top up for someone who is in default of more than fifty per cent of the loan taken. Definitely NO! It is clear by July 2013 the plaintiff was in default and now way a serious bank can add its money to non-performing client. It is on those reasons I hereby decline to buy the argument of the plaintiff on this point. For the reasons above am inclined to find that issue number one stand to fail. It is the plaintiff who was in breach of the term and conditions of the loan granted. This take me to the second issue which without much ado stands to fail. Issue number is in respect of the special damages that the plaintiff suffered. This issues, even if issues number one was to stand still on available evidence was prone to fail for want of evidence. This being special damages, was strictly to be proved. It is a trite law even without citing a case law that special damages are to be specifically pleaded and strictly proved before the court can decide in favour of the person claiming them. 19 --- c:IA Next is the third issues whether the sale of the disputed dispute was lawful. The fact that there was breach and the plaintiff admits that breach, then no way, the plaintiff was entitled as per exhibit Pl tendered and as admitted by the plaintiff to exercise the sale of the security. Clause 2 is very clear of the consequences that may follow under the mortgage. On the above note this issue stand to fail as well. The last issue is what relief(s) parties are entitled to. The plaintiff has utterly failed to prove his case to the standard required in civil cases. There the only option available is one. I hereby proceed to dismiss this suit with costs. It is so ordered. Dated at Dar es Salaam this 19th day of October, 2018. JUDGE. 19/10/2018 20