20190520 TZHC Dar es Salaam

IN THE HIGH COURT OF TANZANIA (DAR ES SALAAM DISTRICT REG_ISTRY) AT DAR-ES-SALAAM CIVIL CASE NO. 194 OF 2017 (Arising from Misc. Application No. 743/2015 and Misc. Civil Application No. 440 of 2015) KCB BANK TANZANIA LTD ............ ~ ............................... PLAINTIFF VERSUS TANZANIA CONFERENCE SERVICES LTD ...................... DEFENDANT JUDGMENT MASABOJ. This is an exparte judgement. The Plaintiff, KCB Bank Tanzania Limited, instituted a suit against Tanzania Conference Services seeking for the following remedies: 1. Payment of USD 129, 658.80 or its equivalent in Tanzania Shillings 2. Interest at the rate of 10% per annum from 18th June 2017 to the - date of the judgment 3. Interest at the courts rate of 7% per annuum from the date of Judgement to the date of final settlement 4. Costs ofthe suit 5. Any other relief (s) and orders that this court may deem just to grant Upon institution of the suit the Plaintiff made several attempts to serve the Defendant at no avail. On 12th December 2017 this court granted an order 1 71 ( Upon institution of the suit the Plaintiff made several attempts to serve the Defendant at no avaiL On lih _December 2017 this court granted an order for substituted services. The same was effected through Mwananchi Newspaper of 15th May 2018 at no fruition. An order to proceed exparte was consequently granted on 8th October 2018 and the matter was fixed for hearing. On the date of hearing, Mr. Walter Massawe appeared for the Plaintiff. Only one witness PWl, Mr. Hilorims Mayombo, an officer in the Debt Collection Unit of the Plaintiff testified in support of the case. The facts discerned from the plaint are that the suit sum is an outstanding balance of a credit facility of USD 225,000 advanced to the Defendant by the Plaintiff as a term loan on 25th February 2014. The facility was advanced under the Plaintiff's Nyumba Yako Finance arrangement to facilitate acquisition by the Defendant of a landed property identified as apartment No. 2 on Plot No. 289, Mbezi Beach area, Kinondoni Municipality in Dar es Salaam. To secure the facility the Defendant deposited as mortgage the title of the above-named apartment. According to the facility letter, the credit sum together with an interest at rate of 10% per annum was to be realized on five years on a monthly instalment of USD 4,780.59. The Defendant defaulted. Consequently, on lih June 2017 the Plaintiff sold the apartment to realise the loan which at the material time had accumulated to USD 260,844.1. However, only Tshs 317,000,000 was realized from the sale leaving an outstanding sum of USD 129'658.80 which the Plaintiff seeks to recover in this suit. 2 The issues for determination are two, namely, whether the Defendant is in breach of the agreement and whether the Plaintiff is entitled to any remedy. As already stated, the Plaintiff's counsel paraded only one witness to support he claim. The Plaintiff also tendered as exhibit, a Resolution of the Board of the Directors of Tanzania Conference Services Limited of 12th December 2013 (Exhibit PlA) and the Loan Facility Letter dated 20th February 2014 (Exhibit PlB). He also tendered a copy of the Defendant's electronic statement of account extracted from the electronic database of the Plaintiff (Exhibit P2), Notice of default (Exhibit P3), and an Auction Report together with a Certificate of Sale of the apartment which were both admitted and marked as Exhibit P4A and P4B, respectively. Pursuant to Section 78(1), (2) and 79(1) of the Evidence Act [Cap 6 RE 2002] the Defendant's electronic statement of account details extracted from the electronic database of the Plaintiff (Exhibit P2) was supported by two affidavits, by Rojas Mdoe (a Principal Officer of the Plaintiff) and Eusebia Victor ( an IT Manager Banking Applications, Compliance and Service Delivery of the Plaintiff). On the first issue, the Plaintiff avers there was a valid contract between him and the Defendant and that the failure by the Defendant to repay the loan as per the repayment schedule constitutes a breach of agreement. Before I proceed with evaluation of the facts and testimony thereto, I wish to state that a contract, defined under section 2 (1) (h) of the Law of contract Act [Cap. 345 RE 2002] to mean all agreements that are capable of being 3 enforced by the law, is formed when there is an offer and acceptance. The offer and acceptance thereto may be provided expressly or by way of performance/implied from the conduct of the offeror (see section 6 and 7 of the Law of Contact Act [Cap. 345 RE 2002]. PWl testified that the Defendant had qualified for the grant of the mortgage loan and that upon meeting all the requisite conditions he was advanced the sum of USD 225,000. In support of this testimony he tendered a Resolution of the Board of the Directors of Tanzania Conference Services Limited of 1ith December 2013 (Exhibit PlA) and the Loan Facility Letter dated 20 th February 2014 (Exhibit PlB). Upon reading Exhibit PlB, I have found that the Facility Letter signed by Juma Abdul, Head of SME and Mortgage Business and Christopher Mmbanga, Relationship Manager for the Plaintiff contains detailed terms and conditions for the loan. Clause 2.2.1, 3 and 4.1 of the Facility Letters which has 13 clauses in total reads: "2.2.1 This is a 5-year mortgage facility in the amount of 225,000.00 United States Dollars" ''3. The facility shall be for Mortgage Finance to purchase one apartment ...... on Plot No. 289, Mbezi Beach area in Kinondoni Municipality, Dar es Salaam city" "4.1 This facility shall be repaid for 5 years on monthly· installment of 4,780.59." 4 In paragraph 13, the Facility Letter concludes with the following words: 11 The offer contained in this letter is available to the borrower for acceptance .... provided in this letter. " I have found further that, the Defendant responded to this Letter on 25th February 2014. The acceptance is annexed to Exhibit PlB. Referring to the Loan Facility Letter, an acceptance letter signed by Martha Yeronimo John and Edith Yeronimo Mulebo, identified as Director 1 and 2 respectively of the Defendant states, that: 11 0n the terms and conditions contained therein I am pleased to accept such offer on such terms and conditions. " After a thorough evaluation of the testimony of the PWl and the content of the Facility Letter and the Defendants letter, I am of the settled view that the Loan Facility Letter constituted an offer from the Plaintiff bank and the reply thereto constituted an acceptance. The two documents together constituted a valid agreement. I am also satisfied that the agreement was concluded out of free will of the parties and that the Defendants knew very well the nature of his obligation repay the loan in accordance with the agreed repayment schedule. Exhibit PlA is an expression of the Defendant's free will to enter in a contractual relationship with the Plaintiff. Part of the content of this exhibit reads as follows: 5 • 11 RESOL VED THAT, the company apply for the credit facility from KCB (T} Ltd, the facility will be in the form of a mortgage loan facility of US$ 225,000 which is subjected to be liquidated in 60 months. " The same is attested further by the letter of acceptance in which apart from explicitly stating acceptance of the terms, the Defendants states that: We further confirm that we· have obtained independent legal advice and opinion on the meaning of the terms and conditions contained therein as well as their full purport effect and tenor It was therefore upon the Defendant to comply with the terms of the loan as stated in the Loan Facility letter. Accordingly, I find the failure by the Defendant to repay the loan as per the agreed schedule to be a blatant breach of the terms he unreservedly accepted . . Having answered the first issue in the affirmative, I also proceed to answer the next issue in the affirmative. The Plaintiff is entitled to the relief. Considering that the Defendant has not made any payment in respect of the loan, the Plaintiff is· entitled to recover the principal sum and the interest thereto in full. It is however clear from Exhibit P4A and P4B that Plaintiff was able to realise part of the sum due from the proceeds of the auction of the Mortgaged Apartment. Considering that the total sum realized from the public auction was Tshs 317,000,000/= being the highest bid obtained 6 during the auction and that the same did not satisfy the amount due to the Plaintiff, the Plaintiff is entitled to recover from the Defendant the outstanding balancing. From the foregoing, I am certain that the Plaintiff has proved his case and I hereby order the Defendant to pay the Plaintiff a sum of USO 129, 658.80 (or its equivalent in Tanzania Shillings) plus an interest at the rate of 10% per annum from 18th June 2017 to the date of the judgment. The decretal sum shall attract interest at 7% p.a. from the date of judgment to that of full payment. The cost for this suit shall be on the Defendant. DATED at DAR ES SALAAM this 20th day of May 2019. ~~ J.L. MASABO JUDGE Judgement on admission delivered this 20th day of May 2019 in the presence of Advocate Sued Ismail representing Mr. Walter Massawe for the Plaintiff. J.L. MASABO JUDGE / I 7 I r