CIVIL APPLICATION NO 624 08 OF 2021 KASELELE MAKWIMHUMU COMPANY LTD VS DOMINIC A MUNISI

IN THE COURT OF APPEAL OF TANZANIA AT MWANZA fCORAM: MWARIJA. J.A.. KENTE. J.A. And MASOUD. J.A.) CIVIL APPLICATION NO. 624/08 OF 2021 KASELELE MAKWIM'HUMU COMPANY L T D ................... ............ APPLICANT VERSUS DOMINIC A. M UNISI..... ........................................................RESPONDENT (Application for leave to appeal against the Judgment of the High Court of Tanzania, at Mwanza) (Manvanda, 3.) dated the 2nd day of July, 2021 in Land Appeal No. 13 of 2020 RULING OF THE COURT 8th Nov, 2023 & 25th April, 2024 KENTE, 3.A.: On 13th February, 2018, Kaselele Makwim'humu Company Limited (the applicant) and Dominic Munisi (the respondent), executed a written Tenancy Agreement pursuant to which, the applicant rented one room at the respondent's premises on Plot No. 77 Block "KK" Nyakato Area in Mwanza City. It was then agreed that the applicant would pay for every six months, TZS 720,000.00 as rent. i Having made advance payment of TZS 360,000.00, the applicant entered into the leased premises. In addition, it was agreed that the balance of TZS 360,000.00 would be paid at the end of the first six months period. However, contrary to the above mentioned terms of the agreement, at the end of the initial six months, the applicant paid TZS 288,000.00 only after allegedly deducting TZS 72,000.00 and paid it to the Tanzania Revenue Authority (the TRA) as withholding tax on the respondent's rental income. Unhappy with the applicant's unirateral decision to pay him less than the agreed amount of rent, the respondent refused to accept the said TZS 288,000.00. Instead, in a move that was intended to compel the applicant either to abide by the terms of the tenancy agreement or quit the premises, the respondent allegedly disconnected electricity supply to the rented room. In response, the applicant refused to vacate. However, being aggrieved by the manner in which the respondent sought to enforce the Tenancy Agreement, she lodged a complaint in the Mwanza District Land and Housing Tribunal (the DLHT) accusing the respondent of breaching the Tenancy Agreement and claiming for, among other reliefs, a declaration that, she was still a lawful tenant in the suit premises and that the respondent had breached the terms of the Tenancy agreement. On the other hand, the respondent denied the applicant's allegations. He stated that, it was the applicant who was in breach of the Tenancy Agreement because of her failure to pay the agreed amount of rent. He also denied to have disconnected the power supply to the rented room saying that, it was the applicant who had failed to foot the bills for her electricity usage in advance. Furthermore, he accused the applicant of using the rented room as a residence rather than a classroom as originally intended. With regard to the applicant's unilateral decision to pay TZS. 72,000.00 to the TRA as withholding tax on the rental income, the respondent maintained that, that was not part of their understanding as he used to pay government taxes and dues by himself. In the premises, the respondent countered that, it was the applicant who was in breach of the Tenancy Agreement and therefore, her claims ought to be dismissed with costs. At the conclusion on the trial, it was found by the DLHT that, contrary to the applicant's claims, it was herself who was in breach of the Tenancy Agreement. Accordingly, the applicant was ordered to pay all rental arrears accrued from the date of default to the date of judgment and to immediately give vacant possession of the rented room to the respondent. 3 Aggrieved, the applicant appealed to the High Court which, after hearing the parties on merit, went on dismissing the appeal on 2nd July, 2021. Dissatisfied and, obviously intent on appealing but knowing that, the intended appeal did not automatically lie to the Court, the applicant, in a rather misconceived application as in the circumstances of this case, a certificate on point of law was not necessary, vainly applied to the High Court purportedly in terms of section 47 (2) and 5 (1) (c) of the Land Disputes Courts Act together with section 5 (1) (c) of the Appellate Jurisdiction Act seeking certification that there were some points of law involved in the matter worth of determination by this Court. Seeing that the intended appeal remedy had been blocked from that side, but still unbowed and eager to plow ahead, the applicant brought this application seeking the indulgence of this Court to grant her the leave to appeal. The essence of the application as can be gleaned from the applicant's complaint is that: (i) It was not correct for the DLHT and the first appellate court to find that it was not proper for the applicant to pay rent income tax to the TRA by deducting it from the rent payable to the respondent; (ii) It was not proper for the DLHT and the first appellate court to hold that the applicant was in breach o f the Tenancy Agreement, and (Hi) It was not proper for the DLHT and the first appellate court to award costs to the respondent Before us, whereas Mr. Mathias Kaselele Makwi, the applicant's Managing Director, appeared in person and unrepresented, the respondent was represented by Mr. Venatus Makori, learned advocate. We must at the outset state that, pursuant to Rule 106 (1) and (7) of the Tanzania Court of Appeal Rules, 2009 both parties had filed their respective written submissions each in support of its position. The applicant submitted very briefly that, he had to deduct TZS 72000.00 and pay it to the TRA being 10 % of the respondent's rental income pursuant to section 82 (1) (b) of the Income Tax Act, Chapter 332 of the Revised Laws. He then went on to argue that he did so as a withholding agent and that, so long as what he did was a requirement of the law, it did not matter that it was not stipulated in the Tenancy Agreement. In the applicant's estimation, he was raising a very important point of law and fact which should have been resolved by the lower courts in his favour and therefore, should not have led to an order for costs being made against him. He thus implored us to grant him the leave to appeal so that the above raised issues can be addressed and resolved by this Court. In opposition, Mr. Makori submitted that, it was not proper for the applicant to deduct 10% of the respondent's rental income and pay it to the TRA as that was not agreed upon in the Tenancy Agreement. Mr. Makori submitted further that, in the circumstances of this case, it was the respondent and not the applicant who, for the purposes of the Income Tax Act was mandated to act as the withholding agent. Without pursuing that argument any further, the learned counsel referred us to the decisions of the two courts below and subsequently submitted that, what is more is the fact that, it was not proved that the alleged income tax was really paid by the applicant to the TRA. On the whole, the learned counsel for the respondent blamed the applicant for technically exploiting the Income Tax Act to evade his contractual obligations under the Tenancy Agreement. He urged us to dismiss the application for want of merit. Having gone through the concurrent judgments of the DLHT and subsequently the High Court in Land Appeal No. 13 of 2020 against which it is intended to appeal, we are decisively of the view that, the most fundamental question we are enjoined to determine as it was before the lower courts, is whether or not the applicant had paid TZS 72,000.00 to the TRA as the respondent's income tax. H ie two lower courts having considered the above-posed question in view of the evidence on the record, held in the negative. Moreover, the first appellate Judge took the view that, since the terms of the Tenancy Agreement did not provide for payment of withholding tax by the applicant, she ought to have engaged the respondent to review the terms of the said Agreement with the view to including a clause on payment of withholding tax. On our part, we begin by addressing ourselves on the law regarding leave to appeal. In this connection, there are two judicial pronouncements made by this Court regarding the guiding principles in determining the applications for leave to appeal. The first principle is that, it is within the discretionary powers of the Court to grant an application for leave to appeal which is to be exercised judiciously and on the available materiai evidence. To prove that the threshold for grant of leave to appeal is not low, it is also the principle that, while the factors to be considered in the grant or refusal of leave to appeal are not spelled out in section 5 (1) (c) of the Appellate Jurisdiction Act, leave to appeal would be granted where the grounds of appeal raise issues of general importance or a novel point of taw or where the grounds show, prima facie, that the appeal stands the chances of success. Leave to appeal may be also grantable where the proceedings of the lower courts as a whole reveal some disturbing features as to require the guidance of the Court of Appeal. (See Mohamed Abdalla Hamis v. Pandu Haji Hamis [2008] T.L.R. 267 and Harban Haji Mosi And Another v. Omar Hilali Seif and Another [2001] T.L.R. 132). In the earlier cited case, we quoted with approval the pertinent question which we had asked ourselves in the unreported case of Wembele Mtumwa Shamte v. Asha Juma, Civil Application No. 45 of 1999 thus: Has the intended appeal got any merits? In our determination of the present application, we have gone through the concurrent judgments of the two lower courts and found as they did that, the issue arising out of this dispute is primarily whether or not the disputed income tax was really paid by the applicant to the TRA. Having closely examined the entire evidence led by the applicant before the DLHT, we are of the respectful view that, the intended appeal stands no reasonable prospects of success and there is no other compelling reason for the appeal to be entertained. As rightly held by the first appellate court, there was no proof of payment of the disputed income tax. It should be very elementary that, the application for leave to appeal must meet the threshold set out by the law before the Court could grant leave to appeal. This is so because, only meritorious appeals should be allowed to come to this Court. In the circumstances, we accept the argument by Mr. Makori that, it was not enough for the applicant to simply allege before the DLHT that he had paid TZS 72,000.00 to the TRA without leading evidence to substantiate the said allegations. Furthermore, we do not see the need to delve into the question as to whether or not the applicant was a withholding agent under the Income Tax Act. Given the circumstances obtaining in this case, payment of the disputed TZS 72,000.00 to the TRA was a pre-requisite condition for the claim by the applicant that he was a withholding agent. It follows therefore that failure to prove that he had withheld the disputed amount of money from the respondent's rental income and paid it to the TRA, renders spurious the claim that he was TRA's withholding agent. Going foward, we find nothing in the record of proceedings and the decisions of the two lower courts which shows any disturbing features as to require the interference and guidance of this Court. Whatever is raised by the applicant in the present application is a matter of evidence which was sufficiently canvassed by the two lower courts before they reached to their impugned decisions. This being the case, we accept Mr. Makori's submission that there is no sufficient material for us to exercise our discretionary powers in the applicant's favour. In the ultimate result and for the reasons stated above, we find no merit in the application which we hereby dismiss with costs. DATED at DAR ES SALAAM this 15thday of April, 2024 A. G. MWARIJA JUSTICE OF APPEAL P. M. KENTE JUSTICE OF APPEAL B. S. MASOUD JUSTICE OF APPEAL The Ruling delivered this 25th day of April, 2024 in the presence of the Applicant, appeared in person, vide video link from High Court Mwanza, and in the absence of the Respondents who was dully notified, is hereby certified as a true copy of the original. 10