LUNCHTME ROYAL INN COMPANY LIMITED scanned

IN THE HIGH COURT OF TANZANIA (LAND DIVISION) AT PAR ES SALAAM LAND CASE NO. 27815 OF 2024 LUNCHTIME ROYAL INN COMPANY LIMITED...................... 1st PLAINTIFF FRANK SIMON MWAKATWILA................................. ............... 2nd PLAINTIFF VERSUS NCBA BANK TANZANIA LIMITED........................................ 1st DEFENDANT KOTIBROTHERS COMPANY LIMITED................................. 2nd DEFENDANT RULING 11/02/2025 & 20/02/2025 A.MSAFIRI, J This is a Ruling on the preliminary objection raised by the herein above defendants while filing their joint written statements of defence pertaining this suit. The defendants raised a point of objection as follows; The suit is "res judicata" in fight of the proceedings in Land Application No. 494 of 2018 at District Land and Housing Tribunal for Kinondoni at Mwananyamaia, between LUNCHTIME ROYAL INN COMPANY LIMITED & FRANK SIMON MWAKATWILA and NCBA BANK TANZANIA LIMITED & SAINTS AUCTION MART COMPANY LIMITED; and in the light of a similar suit filed at the Resident Magistrate Court of Dar es Salaam at Kisutu (Civil Case No. 12261 of2024), LUNCHTIME ROYAL INN COMPANYAND FRANK i SIMON MWAKA TWILA VS NCBA BANK TANZANIA LIMITED AND NAMPULA AUCTION MART COMPANY LTD) where the court ruled that the suit is res judicata and it was dismissed with costs on 27th August, 2024; and the Appeal thereon pending in the High Court (The Resident Magistrate's Court of Dar es Salaam- Extended Jurisdiction) Extended Appeal No. 25916 of 2024 LUNCHTIME ROYAL INN COMPANY AND FRANK SIMON MWAKATWILA VS NCBA BANK TANZANIA LIMITED AND NAMPULA AUCTION MART COMPANY LTD. The preliminary objection was argued by way of written submissions and I have gone through the whole submissions in support of and opposition of the objections and I commend the parties with their learned counsels for the well-researched and articulated submissions which have greatly assisted this court in determining whether the preliminary objection have merit or not. In the submissions, the defendants were represented by Mr Shiza Ahmed John, learned advocate, while the plaintiff was represented by Mr. Augustine Mathern Kusalika, learned advocate. The defendants through their advocate submitted that the instant case meets the criteria of the principle of res judicata. That the dispute between the plaintiffs and the 1st defendant emanates from the loan facility advanced to the 1st plaintiff guaranteed by the 2nd plaintiff which accumulated to the tune of TZS 472,462,637/= 1 2 That the plaintiffs failed to repay the loan and the 1st defendant's efforts to recover the loan resulted into the institution of Land Application No. 494 of 2018 at the District Land and Housing Tribunal for Kinondoni at Mwananyamala (herein the trial Tribunal). That the said Application was fruitfully finalised on 01st February 2021 by the parties' settlement whereby the plaintiffs were required to pay a sum of Tshs. 4,150,438/= every month till satisfaction of the loan. The counsel for the defendants submitted further that, in February 2024, the plaintiffs filed Civil Case No. 12261 of 2024 at Kisutu Resident Magistrate Court where the matter was found to be res judicata and dismissed. Aggrieved, the plaintiffs lodged an Extended Appeal No. 25916 of 2024 at Dar es Salaam Resident Magistrate Court at Kisutu (with extended jurisdiction) where the appellate court upheld the decision that Civil Case No. 12261 of 2024 was res judicata to Land Application No. 494 of 2018, hence the appeal was dismissed. The counsel for the defendants was of the view that this instant suit is res judicata to Land Application No. 494 of 2018 at the trial Tribunal and Civil Case No. 12261 of 2024 at the Resident Magistrates Court at Kisutu. He averred that the instant case meets all the criteria to fall under the principle of res judicata i.e, the same subject matter, the same dispute, same parties, same title and the dispute has been finally determined by 3 the court of competent jurisdiction. He urged the court to dismiss this case with costs. The plaintiffs replied in opposition of the raised preliminary objection and through their advocate, they submitted that the cause of action in the instant case arose on 26th October 2024 following the labelling of the house of the 2nd plaintiff by the 2nd defendant, with intention to sell the same under public auction. That, by this, the 1st defendant herein was not carrying out the execution of Land Application No. 494 of 2018 at the trial Tribunal. That, by labelling the house of the 2nd plaintiff and putting the same to the public by using different machinery with the intention of conducting public auction, it is a new cause of action and the new dispute between the plaintiffs and the defendants. The plaintiffs maintained that the matter at hand is different from Land Application No. 494 of 2018 hence the preliminary objection be overruled and the matter allowed to proceed on merit. The defendants rejoined in contest and submitted through their counsel that the critical issue in dispute is whether the matter in dispute directly and substantially mirrors an issue already determined by a competent Tribunal. The counsel argued that the current dispute allegedly labelling of the property in dispute and the threat of auction is simply an extension of the enforcement of the settlement agreement made in Land Application 4 No. 494 of 2018. That this does not amount to a new cause of action but rather a continuation of the same contractual dispute. He reiterated his prayers. Having dispassionately considered the submissions by the counsels for the parties, my determination of the raised preliminary objection is on whether the instant suit is res judicata to Land Application No. 494 of 2018 before the trial Tribunal. As correctly observed by the counsel for both parties, the principle of res judicata is established under Section 9 of the CPC and elaborated much in plethora of authorities in our legal jurisdiction including the one cited by the counsels for the parties in dispute. In the case of Badugu Co. Ltd vs CRDB Bank Pic & 2 others, Civil Appeal No. 265 of 2019, CAT at Mwanza, (Unreported), the Court of Appeal reiterated the principle set under Section 9 of the CPC as follows; "Section 9 of the CPC provides for circumstances under which courts are barred from entertaining suits for being resjudicata. It reads: "No court sha/i try any suit or issue in which the matter directly and substantially in issue in a former suit between the same parties under whom they or any of them claim litigating under the same title in a court competent to try such subsequent suit 5 or the suit in which issue has been subsequently raised and has been heard and finally decided by such court" Also, in the case of NSK Oil and Gas Ltd & another vs National Microfinance Bank Pit Civil Application No W of 1, CAT 31 DSM, the same Court of Appeal cemented its position on the principle of res judicata as follows; It is recalled that the Court has reiterated that the principles of resjudicata and functus officio aim at barring the courts from entertaining multiplicity of suits or applications for that matter which may cause endless litigation. See- Paniei Lotta v Gabriel Tanak and others [2023] T.L.R 312. Moreover, it is common knowledge that, for the two principles to apply, the following essentials have to be established and proved; one, the subject matter in the previous case and in the subsequent suit is substantially the same; two, both the suits involve the same litigating parties or privies; three, the court which decided the former suit and the one trying the present one have competentjurisdiction; and four, the matter in issue has been decided to its finality', (emphasis added). For the principle of res judicata to be applicable, all conditions as set in the above cited authorities should be met. 6 M It is not in dispute that the dispute emanates from the loan facility advanced to the 1st plaintiff, guaranteed by the 2nd plaintiff. The loan facility was secured by a legal mortgage on a property comprised of Plot No. 1153 Block F, Manzese Area, Kinondoni Municipality, Dar es Salaam (herein the suit property), which was claimed to be the property of the 2nd plaintiff. The plaintiffs failed to repay the loan and the 1st defendant's recovery measures lead the plaintiffs to institute Land Application No. 498 of 2018 contesting the intention of the defendant to dispose of the suit property bay sale. They also sought for an order of injunction against the 1st and 2nd defendants. In the said Application No. 498 of 2018, (herein the former suit), parties were Lunch Time Royal Inn Company and Frank Simon Mwakatwila were the applicants and they are also the plaintiffs in the present suit (herein as subsequent suit). The respondents were NCBA Bank Tanzania Limited as the 1st respondent (who is also the 1st defendant in the subsequent suit), and the 2nd respondent was Saints Auction Mart Company Limited who is not a party to this suit. It should be noted that the 2nd respondent was appointed by the 1st respondent to conduct the disposal of the suit property. In the former suit, the parties were litigating over a suit property which is also the same in the subsequent suit. The cause of auction in the former. 7 suit was that the respondents were intending to sell the suit property by public auction following the applicants' failure to repay the loan. The reliefs/orders sought in the former suit was the declaration that the intended sale of the suit property was unlawful and the restraining orders against the respondents. In the subsequent suit the cause of action is claimed to be breach of contract founded on the credit facility following the act of the 1st defendant to label the suit property that is being sold under public auction. The reliefs sought is for the declaratory orders that the defendants' act of breach of contract is unlawful and that the intended sale of the suit property amounts to breach of contract. The plaintiffs also seek for restraining orders against the defendants. Having analysed the facts in both cases as they appear in the pleadings, it is clear that the first and the second conditions of the principle of res judicata have been met. The first condition is that the subject matter in the previous case and in the subsequent suit is substantially the same. The dispute in both cases emanates from the loan facility advanced to the 1st plaintiff and guaranteed by the 2nd plaintiff who mortgaged the suit property. The plaintiffs failed to repay the loan and the 1st defendant have been trying to recover the loan. 8 This dispute has already been litigated and determined finally by the trial Tribunal whose competency has not been disputed. At the trial Tribunal, the parties (i.e. the plaintiffs and the 1st defendant) entered a Settlement Agreement which was registered and became a decree. According to the decree, the plaintiffs (applicants) were supposed to pay the respondent (1st defendant) a total of TZS 199,221,043 whereby they were to pay the said amount by monthly instalment of TZS 4,150,438/=. It was also ordered that the 1st defendant would keep on withholding the security (suit property) and in case of default, the 1st defendant would sell the security to recover the loan money. Upon default of payment as per the decree, the 1st defendant is intending to sell the suit property by auction and has labelled the property for that purpose. The plaintiffs have instituted the subsequent suit claiming that by labelling the suit property with intention to sell it by auction, the 1st defendant has breached the contract of credit facility. It is my finding that the cause of action in the subsequent suit is not new as the counsel for the plaintiffs is trying to convince the court. Here the subject matter in the former suit which has been determined finally by the Tribunal is the same as the subject matter in respect of which the plaintiffs are claiming relief/ orders of this court in the subsequent suit. It is also clear that the cause of action in the former suit, i.e the 1st. 9 defendants intention to sale the suit property is the same/ relates directly with the claimed cause of action in the subsequent suit i.e; the labelling of the suit property with the intention of selling the same by public auction. To cement this, I find guidance in the case of Badugu Co. Ltd vs CRDB Bank Pic & 2 others (supra) whereby the Court of Appeal while analysing the conditions set for res judicata, cited the book by Mulla, Code of Civil Procedure, 13th edition, Vol.l where the phrase 'matter directly and substantially in issue! was expressed at pages 55- 56 as follows: "The law is accordingly well settled that to invoke the bar of res judicata, it is not necessary that the cause of action in the two suits must be identical. It is only required that the matters directly and substantially in issue should be in both suit....." (emphasis added). By this, it is my view that it is not necessary that the cause of action in the former suit and the subsequent suit to be identical but the matters which are directly and substantially in issue are the same in both suits. On the second condition that both the suits involve the same litigating parties or privies, as already said, it has also been met.JVi 1 I ~ io The parties in the former suit and the subsequent suit are the same save for the 2nd defendant Kotibrothers Company Limited who was not a party in the former suit. The counsel for the plaintiffs have argued in his submission that the parties in the two suits are different. With due respect to the plaintiffs' counsel, the parties are the same. It should be noted that the then 2nd respondent in the former suit; Saints Auction Mart Limited was an agent of the 1st respondent acting under the instruction of the 1st respondent, appointed to effect the loan recovery. In the subsequent suit, the now 2nd defendant is also an agent of the 1st defendant, appointed to carry the same duty as it was to be carried by the then 2nd respondent in the former suit. Therefore, change of these agents does not negate the fact that the two parties were the agents of the 1st defendant acting under the same title. By changing the 2nd defendant in the subsequent suit does not change the fact that substantially, parties in the former suit are the same parties in the subsequent suit, hence still the principle of res judicata applies. On the third condition that the court which decided the former suit and the one trying the present one must have competent jurisdiction; as pointed earlier, the competency of the trial Tribunal which entertained the ii former suit and the competency of this court on the subsequent suit are not disputed by either party. The fourth condition is that the matter in issue has been decided to its finality. As founded area, the subject matter on the two suits is the same, the cause of actions both rounded on the default on the loan repayments, and the recovery measures. All these was finally determined by the trial Tribunal in the former suit whereby the parties agreed to settle the matter as per the terms which were adopted by the Tribunal as a decree. The decree of the Tribunal was conclusively determining the rights of the parties with regard to any matter in controversy. In addition, the fact that the subsequent suit is res judicata to the former suit has already been determined by the Resident Magistrate's Court of Dar es Salaam at Kisutu Civil Case No. 12261 of 2024 where the plaintiffs have also instituted the said suit claiming exactly the same reliefs which are being claimed in the matter at hand. The Resident Magistrate's Court found that the suit was res judicata as the District Land and Housing Tribunal for Kinondoni at Mwananyamaia (trial Tribunal), has already decided the matter vide Land Application No. 494 of 2018. The matter was dismissed with costs. Jm n. 12 Following the same stance, I find that the instant suit is res judicata to Land Application No. 494 of 2018 at the trial Tribunal and also res judicata to Civil Case No. 12261 of 2024 at the Resident Magistrate's Court of Dar es Salaam at Kisutu. I hereby dismiss the instant suit, with costs. It is so ordered. A. MSAFIRI JUDGE 20/02/2025 13