mahamud mohamed vs vivo tanzania limited 2023 tzhclandd 16893 19 september 2023

IN THE HIGH COURT OF TANZANIA (LAND DIVISION) f/ AT DAR ES SALAAM LAND CASE NO. 22 OF 2023 o MAHAMUD MOHAMED PLAINTIFF VERSUS VIVO ENERGY TANZANIA LIMITED DEFENDANT JUDGMENT to 19/09/2023 E.B. LUVANDA,J In this suit the Plaintiff named above proprietor of a Plot No. 64 Block 42 Morocco Kinondoni Dar es salaam as per certificate of occupancy exhibit PI, had entered into a long term lease agreement of twenty five years in respect of the suit Plot No. 64 Block 42 Morocco Kinondoni Municipality which was executed on 12/05/2021, as per exhibit P2 with the Defendant named above, for the later to construct petrol station; According to the Plaintiff Mahamud Mohamed Duali (PWl) it was agreed for the Defendant to pay an up front amount of USD 180,000 and thereafter the Defendant could be paying rent after each three years. However, sixteen months after execution of a lease agreement and registration thereof(on 31/05/2021), on 22/09/2022 parties 'mutually terminated the lease agreement as per the termination of long term lease agreement exhibit P4. The Plaintiff still maintained that he is entitled to payment of initial payment of USD 180,000/= being three years rent. The Defendant Flora Obeto(DWl)is of the view that exhibit P4 means both parties are releaved from their obligations as of the termination date and that there is no clause which indicate that the contract will survive after termination, in a sense that the rights of the Plaintiff including payment of three years rent a sum of USD 180,000 was not surviving. Issues framed at the pre trial conference; One, Whether there was a breach of payment of rent on the part of the Defendant; Two, whether the mutual termination of a lease agreement had any effect to the rights of the parties; Three, to what reliefs are parties entitled to. For purpose of logical sequence I will start tackling issue number two. When PWl was cross examined by Mr. Privaty Patlensi Rugambwa learned Counsel for Defendant, stated that in termination he explained that he have a claim against the Defendant. PWl stated that when a contract is terminated, it means an agreement is no longer existing but money will be paid. DWl on the other hand was of the view that termination (exhibit P4) means both parties are releaved from their obligation as from the termination date. DWl stated that there is no any clause which indicate that the contract will survive 'after termination, adding that rights of the Plaintiff including payment of a sum of USD 180,000 was not surviving. It is true that in exhibit P4 is silent regarding to any clause in the contract or any right of the parties which will survive after termination. However, the said termination (exhibit P4) was silent also as to whether the accrued rights of parties are extinguished or abolished. To my view, the wording of exhibit P4, the termination did not affect any accrued right. This is because the wording there are clear that the effect date of termination will be from the date of registration of a termination of lease agreement. More importantly, termination exhibit P4 was preceded by a notice of intention to terminate lease dated 08/08/2022 which was executed by both parties exhibit P3. The said exhibit P3, made it clear that any obligations under the lease accruing prior to the effect termination date will survive. For appreciation, I reproduce and bold the portion which is of interest to me, 'TOR GOOD CONSIDERA HON,Lessee andLessor, HEREBY GIVE OUR NOTICE of our intention to terminate the iease between parties on the ground of mutuai agreement to cancei the said iease effective on this day ofAugust 2022 and all rights and obligations under the lease shall thereupon be cancelled exceptonlyforany obligations under thelease accruing prior to the effective termination'^ Therefore, the argument for the learned Counsel for Defendant that the mutually terminated lease agreement has effects to the rights and obligations of parties in that parties are revealed from their obligation, is legally unsound. As alluded by Mr. Respicious Ishengoma learned Counsel for the Plaintiff, of which I agree, that if at all the Defendant had not agreed with the Plaintiff with regard to rights accrued prior termination in exhibit P3 then would have categorically and specifically stated it in express terms in the termination (exhibit P4). Suffices to say exhibit P3 bind the Defendant regarding surviving rights and obligations under the lease agreement, accrued prior effective termination date, and of which are in tandem with the termination exhibit P4, which by implication take into board surviving rights and obligations under the lease agreement, which accrued prior termination. Therefore, issue number two is answered in the negative. Issue number one, PWl stated that after registration of the title deed the Defendant ought to pay him money but did not pay and after refused to pay, PWl demanded or else asked to terminate, where the Defendant wrote a notice to terminate a lease agreement. DWl stated that among the conditions of the lease agreement was initial three years payment of USD 180,000 upfront after registration. DWl stated that commencement date was when a title deed is registered at Ardhi. DWl stated that prolongation was due to delayed internal payment approval process due to Covid 19 pandemic where most approvals were not easily available, accurance of management change resulted to financial difficulties the Company had suffered, approval involve different units, including group level approval due to heavily investment and lampsum money involved, and after giving the plaintiff confort that approval process was being finalized, the Plaintiff informed them that he secured a potential lucrative customer who is willing to effect payment immediately. It is to be noted that the alleged Covid Pandemic and internal prolonged and bureaucratic approval process, was not pleaded in the written statement of defence, neither featured as among reasons for termination. Equally the alleged lucrative customer secured by the Plaintiff pleaded in the written statement of defence is not reflected any where be it in the notice exhibit P3 or termination exhibit P4. Therefore they are taken as a mere defence and an afterthought. According to a lease agreement exhibit P2, clause 4.2 read together with clause 4.1, stipulate that a sum of USD 180,000 shall be payable in one lumpsum as an advance rental payment to the lessor (Plaintiff), from the 'date of registration. Clause l.l(n) define and interprete registration date to mean the date upon which the lease agreement is registered against the certificate of title by the Land Registry in Dar es Salaam. According to exhibit P4, depict the lease agreement was registered on 31/05/2021 under file Document No. DSM 0008032. Therefore the argument of DWl that exhibit P2 say payment will be made from registration or that they inserted in exhibit P2 specific word from commencement date and not on commencement date due to the nature of the lease agreement and internal procedures for approval of pament, or else that could not proceed and procure approval prior being certain whether registration at the Land Registry will be honoured or not. To my view are mere defence which have no place to be accommodated here. First and foremost DWl conceded a fact that there is no clause which specifically provide that payment will be subject to procurement of internal approval. DWl conceded a fact that the Plaintiff is not privy to the so called internal approval process. Therefore, the stipulation in the lease agreement takes precedent. According to clause 1.1(e) of exhibit P2, provide that commencement date mean the date upon which the lease shall have been registered against the certificate of title of the property. Herein, registration of a lease agreement was completed on 31/05/2021 as a foresaid. A notice 'to terminate exhibit P3 was executed on 08/08/2022 and lease agreement was terminated on 22/09/2022 as per exhibit P4. Indeed the Defendant admitted that ail along no payment whatsoever were made to the Plaintiff. In the case of Abualy Alibhai Azizi vs. Bhatia Brothers Ltd (2000) TLR 288, cited by the learned Counsel of the Plaintiff, at page 289, it was held, I quote, ''The principle ofsanctity of contract is consistently reluctant to admit excuses or nonperformance where there is no incapacity, no fraud (actual or constructive) or misrepresentation, and no principle ofpublic policyprohibiting enforcement'' Therefore, the Defendant is held to have been on breach of payment of rent on his part. The second issue is in affirmative. Issues number three. Having adjudged the Defendant to have orchestrated the breach of payment, it follows automatically that the Plaintiff is entitled to a redress of a claimed sum USD 180,0000 equivalent to Tshs. 425,880,000/= which will attract interest at the court rate of 7% from the date of judgment to the date of full payment. A claim for general damages is refused, because no evidence was forthcoming from the Plaintiff as to how and why is entitled for the same. A suit is granted to extent demonstrated above with costs. e> X E. J. UdVANDA .rr- /3UDGE "XT/l 9/09/2023 Judgment ^^efed througlV virtual court attended by Mr. Respicius Ishengoma learned Counsel for the Plaintiff and Mr. Privaty Rugambwa learned Counsel for Defendant E.Bi LUVANDA > H lUDGE 5^- M)9/2023 Z) 0]vis^2