Kaizari Gen v Keda Ceramic

1 IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA COMMERCIAL DIVISION AT DAR ES SALAAM COMMERCIAL CASE NO. 3520 OF 2024 KAIZARI GENERAL SUPPLIES LIMITED ……………………………… PLAINTIFF VERSUS KEDA CERAMIC TANZANIA COMPANY LIMITED........................... DEFENDANT JUDGMENT Sept. 18th, 2024 & Nov. 1st, 2024 Morris, J The plaintiff sued the defendant claiming that the latter breached a contract between them. It was claimed that the defendant failed to pay TZS 188,840,940/= to the plaintiff being transport and hiring charges due to the latter. The plaintiff stated further that he transported mountain kaolin materials (the cargo) for the defendant from Lugono to Chalinze at TZS 173,736,940/= and lent to him the loading machine (the loader) at TZS 15,104,000/=/ but the defendant refused to pay accordingly. Armoured with such allegation, the plaintiff sued the defendant for breach of contract claiming for immediate payment of the stated amount; 2 general damages of TZS 50m/=; interest on the due amount; costs of the suit and any other reliefs at the Court’s discretion. Nevertheless, the defendant denied all these claims and prayed for dismissal of the suit with costs. The background of this case is easy to unveil. The plaintiff is a registered and licenced transporter. He claimed that he maintained in a transporter-customer relationship with the defendant. Allegedly, between 12.09.2023 and 04.11.2023; and from 31.08.2023 to 27.09.2023, the plaintiff transported cargo for the defendant; and the defendant hired the loader of the cargo from the plaintiff respectively. It was pleaded further that the parties above had agreed that, after transporting the cargo; the defendant was required to prepare the statement of the work performed on the basis of which the plaintiff was to issue the applicable invoice together with receipts for payment by the former. The present suit resulted from the outstanding debt which the plaintiff claimed that the defendant neglected to settle the due debt. 3 Following the defendant’s express denial of the plaintiff’s claims, the Court framed four (4) issues in order to adjudicate the parties’ dispute as indicated below. i) Whether there was an agreement between the parties ii) If issue number (i) is answered in the affirmative, whether the agreement was breached by the defendant iii) If issue number (ii) is confirmed, did the plaintiff suffer loss? iv) To what reliefs are parties entitled. Correspondingly, each party to this case was represented by his legal counsel. Whereas Mr. Charles Tumaini was advocated for the plaintiff, the defendant had advocate John James for his defence. Further, the plaintiff’s witnesses were three while the defendant called and relied on testimonies of one witness. Respectively, Messrs. Prosper Alex Mallya, Haji Seifu Salum and Godbless Rodgers Maimu testified for the plaintiff as PW1, PW2 and PW3. Moreover, DW1 for the defence was Mr. Junhao Gao. Pursuant to rules 48, 49 and 50 of the High Court (Commercial Division) Procedure Rules, 2012 (the Rules) the witnesses named above lodged respective statements which were adopted by the Court as their evidence in chief. In 4 addition, each witness was subjected to cross and re-examination sessions per the law. Through his witnesses, the plaintiff tendered a total of six (6) exhibits. In essence, all such exhibits were tax invoices and Electronic Fiscal Device (EFD) receipts of diverse dates save for exhibit P4 which comprised of two demand letters for the alleged outstanding debt. However, the defendant did no tender any exhibit. The Court makes reference to the relevant exhibits while assessing the parties’ evidence. Largely, each witness reiterated the theory of respective case. PW1, PW2 and PW3 (plaintiff’s Managing Director, Finance Manager and Driver respectively) testified, among other things that; the plaintiff transported the cargo for the defendant from Lugono mining site to Chalinze where the latter had established his factory. They also asserted that the subject services were rendered to the defendant between September 2023 and November 2023. Moreover, it was testified by PW1 and PW2 that, around September 2023, the defendant hired the loader from the plaintiff with which machine he used to load the cargo at his mining site. Likewise, the trio averred that, the relevant invoices (P1- P3; and P5-P6) were issued to the defendant who did not pay accordingly. 5 To them, such omission on the part of the defendant constituted breach of contract. In addition, two of the plaintiff’s witnesses (PW1 and PW2) attested that the defendant’s alleged breach of contract caused loss to the plaintiff. The primary loss was stated to be TZS 188,840,940/= constituting about TZS 173.7m/= transport charges and about TZS 15.1m/= costs for hiring the loader. Upon being cross examined, PW1 confirmed that: the plaintiff did not tender any contract between the parties herein; his statement did not contain evidence for oral contract between them; none of the tendered invoice indicated that the same was received by the defendant; the plaintiff did not tender the defendant’s instruction to the plaintiff for the alleged transportation or delivery notes to acknowledge that the cargo was received at Chalinze. On his part, PW2 also reaffirmed the previous witness’ assertions. In addition, he stated that some of the presented invoices indicated that the cargo was of soap stone (not mountain kaolin) and that the route was Dodoma (not Lugono-Morogoro) to Chalinze. Furthermore, the plaintiff’s driver (PW3) averred that he was actively involved in transporting the cargo 6 to the defendant’s premises at Chalinze. However, he did not disclose the vehicle(s) which he used to transport such cargo. Likewise, he confirmed that he had no confirmatory proof that the cargo he transported was received by the defendant. For the defence, DW1 (the defendant’s Business Director) asserted that the defendant maintained and operated his business under strict procedures including executing contracts with all his venders. He was hasty to add that the parties above did not have any contract howsoever covering the duration stated by the plaintiff. Nevertheless, he averred that the plaintiff and defendant had previously executed the transportation contract covering between August 2022 and August 2023. He also stated that the said contract was discharged on 11th August 2023. Upon being cross examined, DW1 testified that the VAT registration number on the EFD receipts (exhibits P1- P6, save P4) was of the defendant but added that he did not know of any such receipts nor were they submitted to his office. Further to the testimonies above, on 18th September, 2024; parties were allowed to file respective written closing speeches. Both sides complied with the filing schedule set by the Court. Unsurprisingly, the subject 7 submissions summarised strengths of own case and highlighted weaknesses rooted in the opposite side’s case. Dispassionately, I have considered the parties evidence and the one-side submissions while resolving the framed issues. Each issue is determined below on the strength of the parties’ evidence and supporting arguments. I will start with the first issue. The answer sought from the Court under this issue is existence or otherwise, of the contracts for transportation of the cargo and hiring the loader. That is, whereas the plaintiff pleaded and argued for existence of two-but-related contracts with the defendant, the latter denied each allegation in such regard. What is apparent hereof and undisputed is the fact that the two parties, at some point, established the transporter-customer relationship. Nevertheless, there is a two-limb departure of the parties in this suit. First, while the plaintiff asserted that the said relationship existed up to November 2023, the defendant affirmed that the transportation business between them hereof was only under the written agreement which ran from 11th August, 2022 to 12th August, 2023. That is, to the defence, from mid- August 2023 and beyond; the parties had no existing contract for 8 transportation of cargo howsoever. Second, the plaintiff pleaded that the defendant hired a loader from him between 31st August 2023 and 27th September 2023 but did not pay the applicable charges. However, the defendant not only denied entering into the alleged hire contract with the plaintiff but also, he avowed that he was completely not indebted. The foregoing rivalry notwithstanding, I record from the outset that no contract was tendered by either party during the trial. In other words, even the contract which both parties made reference to (running from 11.08.2022 to 12.08.2023) was not produced in evidence. Hence, no contract for transportation of cargo (the previous or the one subject of the dispute); or for hiring the loader forms part of the record in this case. However, there were adequate effort by the plaintiff to establish that under circumstances of the present matter, the parties herein could be considered that they maintained both formal/written contracts and implied contract by their conduct. In the final submissions, the plaintiff’s counsel accordingly made reference to sections 9 and 10 of the Law of Contract Act, Cap 345 R.E. 2019 (the LCA); and the case of Sasa Kazi Fuel Co. Ltd v Ferrant Processing Co. Ltd, Civ. Appeal No. 20 of 2021 9 (unreported) to reinforce such argument. To him, not all valid and enforceable contracts are written down but some can be inferred from the parties’ conduct. The plaintiff’s allegations about existence of agreement were strongly argufied by the defendant. To the defence, the plaintiff failed to clarify the terms of the alleged agreement which was a mandatory obligation upon him per the holding in Mussa M. Nyekuli v Al-Sagri & Others [1987] TLR 70. It was also argued that the plaintiff could not legally rely on the previous contract because the claims related to the duration outside the tenure therein; and that under such contract, the goods transported thereunder was not mountain kaolin material (from Lugono to Chalinze) but black clay (from Mwarusembe and Kisarawe to Pingo Chalinze). Further, to the defendant, the plaintiff did not also prove important aspects such as how he arrived at the alleged payment rate; the quantity of the materials transported; the commencement date of the transport; and/or evidence that the parties had an oral agreement in that regard. It was the defendant’s conclusion that the identified omission on the plaintiff’s part undermined the case of the latter. Reference was made to Makori 10 Wassanga v Joshua Mwaikambo & Another [1987] TLR 88, regarding the emphasis that the burden of proving the existence of a contract lies with the party alleging it. Having stated expressly that none of the parties produced a written contract for admission in this case, it would be a bootless errand for this Court to hold that the parties herein maintained any written transportation agreement (between 12.09.2023 and 04.11.2023); and/or the loader-hire contract (from 31.08.2023 to 27.09.2023). With this conclusion, the Court is left with the examination of whether the alleged conduct of parties founded the contract between them. In principle, a company may enter into a valid oral agreement with another company or individuals. See, for instance, Engen Petroleum (T) Limited vs Tanganyika Investment Oil & Transport Limited, Civ. Appeal No. 103 of 2003; and Leonard Dominic Rubuye t/a Rubuye Agrochemical Supplies vs Yara Tanzania Limited, Civ. Appeal No. 219 of 2018 (both unreported). The basis hereof is that the corporate body is a juristic person capable of executing a binding contract. However, proof of existence and terms of the oral contract is a clear question of facts. 11 Further, inference from parties’ conduct and circumstantial evidence prior to or at or post effectuation of the alleged agreement; the Court may make a finding as to existence of a contract between parties [Sudhir Kumar Lakhanpal v Rajan Kapoor and Regalia Tanzania Ltd, Civ Case No. 125 of 2019; and Mathias Erasto Manga vs M/S Simon Group (T) Ltd, Comm. Case No. 1 of 2012 (both unreported)]. To answer the query hereof, the Court will embark on analysis of the relevant circumstances as presented in the pleadings, testimonials and submissions of the parties. In principle, the plaintiff asserted that him and the defendant had the contract (by conduct) through which he carried the defendant’s cargo from Lugono to Chalinze. Amongst the major indicators of such alleged agreement were tax invoices; statements of work done (worksheets); and EFD receipts in the name of the defendant (all exhibits, save P4). But there are several flaws on such exhibits which need to be addressed in details. I will do so immediately. One, it is on record that all the tax invoices and EFD receipts were under the authorship of the plaintiff. It is also apparent that the same were not served upon the defendant. Ostensibly, according to PW1 and PW2, the 12 plaintiff did not exhibit that the subject exhibits were received or acknowledged by the defendant. That is, there is no stamp, signature, executed dispatch or acknowledgement by the defendant to the effect that the subject invoices or receipts were received by the addressee howsoever. Two, the worksheets (P2, P3 and P6 collectively) did not indicate who the author was. In other words, they did not contain logo, express heading, signature or stamp of the author of the same. However, paragraph 6 of the plaint alleged that upon the plaintiff completing his part of the bargain, “the defendant would prepare statement (sic) showing the work done…” The plaintiff’s PW1 and PW2 also reiterated that such duty was of the defendant. Nevertheless, upon being cross examined, they both affirmed that there was no proof that the statements originated from the latter. Indeed, I also note that, the record does not indicate that even the plaintiff acknowledged receipt of the alleged statements (worksheets) from the defendant. However, through pleadings and testimonies of PW1 and PW2, the plaintiff averred that he prepared the taxi invoices and receipts only. More so, as the defence sturdily controverted the plaintiff’s assertion that such statements were authored by the defendant, the Court settles at a conclusion 13 that the presented exhibits were of the plaintiff’s exclusive creation or collected from the source known to him without express involvement of the defendant. Consequently, in line with the first and second points above, it goes without much emphasis that the conduct exhibited herein is that of the plaintiff alone. That is, in the absence of the reciprocal or corresponding conduct/reaction of the defendant; it becomes difficult for one to reason that the defendant conducted himself in a manner that can be inferred as being connected to the alleged transactions. For example, if the defendant had acknowledged receipt of the plaintiff’s claims, however slight or vague; or that he corresponded with the plaintiff in the said connection; or if the plaintiff produced the bank statements/transactions which unveiled that the defendant effected certain payments in response to the presented invoices/claims, it would have been a bit easier to draw the defendant closer to the alleged incidents. Thus, unless both parties’ conducts are assessed conjointly, it is unsafe to offload all allegations of one party to the opposite party whose corresponding involvement is not revealed or exhibited at all. In my 14 respectful view, a contract by conduct cannot be inferred from the exclusive transactions of one party. Simply put, a single party cannot make a valid contract. Three, if the invoices, receipts and worksheets were credentials to go by in establishing the contract between the parties above, the Court noted therein a number of inconsistencies with significant impact on the plaintiff’s claims. I will cite the basic ones. To begin with, as opposed to the other evidence which indicated that part of the claims related to transportation charges from 12.09.2023 and 04.11.2023; exhibit P1 (for TZS 49,496,460) indicated that the amount was claimed for 71 trips “from 22/07 - 27/07/2023”. That means therefore, such claim has no bearing whatsoever with the duration of dispute. More so, there is no corresponding pleadings by the plaintiff that the suit herein contained claims carried forward from the alleged previous (discharged) contract between the parties. The plaintiff was categorical that the dispute arose from the transactions between the parties effective from mid-September to early-November 2023. 15 Besides, whereas the suit is hinged on the plaintiff’s pleadings that the cargo constituted mountain kaolin materials from Lugono to Chalinze, a great part of exhibit P6 indicated that the materials transported was soap stones and under the Mlowa (Dodoma) - Chalinze route. In this regard, PW2 confirmed the correlation between the stated exhibit and the materials transported. Nonetheless, PW3 expressly testified that he was only involved in transporting the cargo along the Lugono-Chalinze route. No witness was procured by the plaintiff to corroborated the transportation of soap stones from Dodoma to Chalinze. Even then, the pleaded cargo in the matter at hand was circumscribed to mountain kaolin materials only. Moreover, to make the situation even more unpleasant to the plaintiff’s case, exhibit P4 (the demand letter dated 24.01.2024) was express that the plaintiff did not have any claims against the defendant for routes other than the Lugono - Chalinze path. Precisely, paragraph 3 of the said correspondence was categorical that; “3. That our client was paid all other routes (sic) except for the Lugono to Chalinze route as per the statements attached herein for easy (sic) of your reference.” 16 Four, generally EFD receipts signify having been paid. Receipts serve as a proof of purchase thereby authenticating that the individual has received the goods or services he has paid for. A receipt thus, usually signifies that the unveiled transaction or goods were paid for. Literally rendered, a receipt acts as a shield not as a sword. That is, it is unconventional for the payee to use the receipt to claim payment from the purchaser. Rather, the payer is expected to rely on the receipt to substantiate that he really paid the money indicated thereon. To controvert the foregoing overall business canon, one should specifically prove any divergent or contrary modus operandi. Despite stating in his pleadings that he raised the “VAT receipt to the defendant for payment” (para 6 of the plaint), the plaintiff through witnesses’ statements and testimonials of PW1-PW3; did not explicitly prove how the parties in the present suit adopted the unusual rule/mode of business operation. Hence, in the absence of proof to the contrary, the logical conclusion would remain to be that, the amounts indicated on the said EFD receipts were paid to the plaintiff; or the receipts were issued without the justified corresponding transactions between the parties. 17 In line with the foregoing reasoning, the defendant testified that he was not indebted to the plaintiff howsoever. Although the plaintiff argued in the submissions that DW1 did not prove how such payments were effected and the amounts thereof, the role to prove non-payment rested on the former. It is a general principle of law that, the burden of proof should not be shifted to the opposite party until the party on whom onus lies discharges his [Jasson Samson Rweikiza vs Novatus Rwechungura Nkwama, Civil Appeal No. 305 of 2020; Paulina Samson Ndawavya vs Theresia Thomasi Madaha, Civil Appeal No. 45 of 2017 (both unreported).] Five, despite the fact that the plaintiff did not produce any contract to prove that the defendant hired the loader from him, the Court was not supplied with corroborative evidence to substantiate his demands in that regard. First, he did not prove that he owned or had the requisite legal title over the alleged loader. Second, the details of the loader (e.g. registration number, model, capacity, etc.) were not stated/proved to the Court. Third, the specific price for the hire per hour/day/week/month remained undisclosed. Not even in passing did the plaintiff’s witnesses unveil such crucial details for the Court to evaluate. 18 Fourth, the plaintiff did not disclose or produce evidence in line with who operated it; who drove it to or removed it from the site; purchase of fuel to run/operate it; and the hours he worked per day or any other specified duration. As Monday follows Sunday, it is now the established /clear principle/norm in our jurisdiction that a party’s failure to call the material witness equals courting adverse inference from the adjudicator. This position was augmented in Hemedi Saidi v Mohamedi Mbilu [1984] TLR 113; and Simon Kamoga v SHANTA Mining Co. Limited, High Court Labour Revision No. 08 of 2020 (unreported). I do not wish to over stress the position of law that, pleadings bind the pleader thereof. Reference is made to Salim Said Mtomekela v Mohamed Abdallah Mohamed, CoA Civil Appeal No. 149 of 2019; Scan Tan Tour v The Catholic Diocese of Mbulu, CoA Civil Appeal No. 78 of 2012; Lawrance Surumbu Tara v The Hon. Attorney General and 2 Others, CoA Civil Appeal No. 56 of 2012; (all unreported); and James Funke Ngwagilo v Attorney General [2004] TLR 161. Six, the debt amount alleged by the plaintiff in the present suit as being due to him from the defendant was TZS 188,840,940. Allegedly, this 19 amount comprised of TZS 173.7m/= and about TZS 15.1m/= being transport charges and costs for hiring the loader respectively. However, through exhibit P4 (demand letters) the plaintiff stated that, by 22.12.2023 his outstanding claim against the defendant was TZS 309,409,500/=; but by 24.01.2024 it had declined to TZS 248,158, 820/=. Nevertheless, the plaintiff’s pleadings did not indicate how the three figures could exist in harmony. That is, the plaintiff did not give pleadings to show how the reduction in figures from TZS 309m/= to TZS 188.8m/= came about. Be that as it may, the plaintiff’s counsel submitted that the defendant settled the balance before the date of filing of the suit at hand. But, as alluded to earlier, there was no proof of such payment (e.g. copies of respective cheques or bank statement) from the defendant. Such trail of payments from the defendant to the plaintiff would have been a significant pointer to the business plexus between them. Having given the above analysis, arguments, reasoning and conclusions; the Court answers the first issue in the disaffirmation. To be precise, it has not been fully proved that there was any agreement between the plaintiff and the defendant for the duration under dispute. 20 The second issue is inherently dependent on the outcome of the first issue. The former issue invited the Court to determine if, after holding that the parties had executed the binding contract; the defendant breached it. However, in the present case, the first issue did not attract the positive determination. Hence, the parties’ contention regarding the alleged breach in untenable at this stage. In other words, without the purported valid contract between them, neither party can be tasked to prove or disprove its breach. Consequently, I find it a futile undertaking for the Court to give any thought about the alleged breach. I desist to deploy the Court’s precious and professional resources to the undertaking which goes up in smoke. Therefore, I proceed to conclude that the second issue is equally answered in the negative. Regarding the third issue, the reasoning rendered for the second issue is reaffirmed hereof. The framing of the third issue wanted to achieve the objective of determining if the plaintiff suffered loss after the Court’s confirmation that the defendant breached the alleged contract. As explained above, the defendant was not found in breach of the claimed contract. Likewise, this issue is determined in the plaintiff’s disfavour. That is, he did 21 not suffer any loss hereof due the purported breach of contract. That is, this issue is accordingly negated for want of existence of the contract between the parties; and breach of the same by the defendant. The reliefs to which the parties are entitled, constitute the gist of the fourth and final issue in this matter. Discernibly, this issue also treads on the Court’s answer to the previous three issues. Without over repeating myself, the three issues above have been determined in disaffirmation. Consequently, the present issue will not detain the Court for long. If the plaintiff suffered any damages, as pleaded and/or testified herein or otherwise; such losses cannot be legitimately adjudged on the defendant in the absence of the contract between them and/or breach thereof by the defendant. Naturally, the plaintiff’s claims go belly up for lacking the requisite legal foundation. Thus, in so far as the plaintiff’s reliefs are concerned; the fourth issue stands determined in line with such interrogation. Nonetheless, the defendant prayed for dismissal of the suit with costs. I am inclined to pass such payer as this suit is unmerited. 22 The upshot of this case is, therefore, dismissal for want of merit. The defendant has earned the costs accordingly. It is so ordered. The right of appeal is explained to parties. C.K.K. Morris Judge November 1st, 2024 Judgement delivered this 1st day of November 2024 in the presence of Messrs. Charles Tumaini and John James, Learned Advocates for the plaintiff and defendant respectively. The plaintiff’s Principal Officer, Prosper Mallya, is also in attendance. C.K.K. Morris Judge November 1st, 2024